Terpercaya Study: A Model for Sourcing Palm Oil from Sustainable Jurisdictions in Indonesia
Expanding agricultural landscapes, used to export increasing amounts of commodities such as palm oil, are one of the key drivers of tropical deforestation globally. There is now a great demand, from consumers and governments, for goods companies and supply chain actors to source products sustainably, deforestation free. Jurisdictional approaches offer a potential large-scale solution to sustainable sourcing. But how would these approaches work in practice? This case study explains how Indonesia has developed such an approach, through its Terpercaya platform.
The Terpercaya platform is an instrument for monitoring the performance of Indonesian districts according to environmental, social, economic and governance principles. It incentivises districts to improve performance as a means of attracting investment and drawing in buyers seeking sustainably produced commodities.
This briefing, Briefing 11 in the series, explains how consumer goods companies and other supply chain actors can utilise the Terpercaya system to source commodities from sustainable and deforestation-free districts. It also investigates how the system can help demonstrate that the commodities sourced are both legal and deforestation free. The case study then highlights potential complementary measures, such as district wide blacklists and whitelists, to simplify operators’ due diligence processes and maintain market access for sustainable and deforestation-free producers located in lower-performing jurisdictions.