PALMOILMAGAZINE, JAKARTA – After a long wait, Indonesia’s new Presidential Regulation (Perpres) No. 16 of 2025 on the Indonesian Sustainable Palm Oil (ISPO) Certification System was officially issued on March 19, 2025. While this marks a significant step forward, it also raises critical concerns—especially from smallholder farmers under APKASINDO (the Indonesian Oil Palm Farmers Association).
Since the public consultation stage, APKASINDO has consistently emphasized that the ISPO should guide, not burden, the palm oil sector. A formal letter expressing these views was even submitted to President Prabowo last year. Although some of these concerns have been accommodated in the new regulation, many have gone unaddressed.
One of the most controversial aspects is the expansion of ISPO obligations into the downstream industry. Logically, if upstream (plantation) operations are already ISPO-certified, their downstream products shouldn’t be required to go through the same process. Every additional certification requirement means higher production costs—and ultimately, it’s the smallholder farmers who feel the pinch the most, especially with further pressure on Fresh Fruit Bunch (FFB) prices.
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Even more alarming is the extension of ISPO certification to the bioenergy sector, such as biodiesel. Isn’t this counterproductive to the energy self-sufficiency agenda currently championed by President Prabowo? In a recent National Economic Dialogue, the President himself stressed the need to simplify regulations and avoid burdening the people. Ironically, the expanded ISPO scope seems to contradict this directive.
This leads to a pressing question: How nationalistic was the ISPO drafting team? Are we witnessing, once again, the hidden influence of foreign interests channeled through domestic NGOs—organizations that claim to advocate for sustainability but may ultimately undermine the national palm oil industry?
Unlike Perpres No. 44 of 2020, which limited mandatory ISPO certification to plantation businesses, the new Perpres 16/2025 significantly broadens the scope to include downstream industries and bioenergy, thus expanding the burden across the value chain.
Although ISPO certification for smallholders won’t be mandatory until 2029, the challenges remain formidable. Without revising the core principles and criteria—transitioning from an absolute ISPO to a relative ISPO—progress among smallholders will remain stagnant. Currently, only 0.86% of smallholder plantations (out of a total 6.94 million hectares) are ISPO-certified.
To address this, APKASINDO has proposed a cluster-based relative ISPO model with tiered certification categories: Platinum, Gold, Silver, Bronze, and Iron. This model is designed to accelerate certification among smallholders and provide a more inclusive framework.
There are, however, some positive aspects in the new regulation. Notably, the certification costs for smallholders will be covered by the Palm Oil Plantation Fund Management Agency (BPDPKS). This includes business registration, internal control system (ICS) training, assistance, certification, and inspection.
With the newly expanded ISPO Committee structure—which includes the Coordinating Minister, relevant ministers, and business associations—there’s growing hope that groups like APKASINDO will have a real seat at the table in shaping the updated ISPO principles and criteria.
Because ultimately, the future of Indonesian palm oil should not rest on the shoulders of a few. This is a collective endeavor—a partnership between the government, private sector, academia, and above all, the farmers who sustain the industry on the ground.
By: Eko Jaya Siallagan
Deputy Secretary General II for Research and Sustainability, APKASINDO
