Certification and the Pursuit of Knowledge Sovereignty
Another defining milestone in Belayan Sejahtera’s development has been its commitment to sustainable palm oil certification.
The cooperative began its Roundtable on Sustainable Palm Oil (RSPO) certification journey in 2022 with 157 independent smallholders managing approximately 578 hectares of plantations. In the following phase, participation expanded to 331 farmers covering roughly 1,331 hectares, reflecting growing confidence among members and stronger institutional capacity.
Also Read: Mitigating impacts of ideological shift from a market economy to state capitalism
Certification is often viewed simply as a gateway to premium markets. For our cooperative, however, it has represented something far more significant.
The certification process required us to build comprehensive member databases, map plantations, verify land legality, establish traceability systems, improve waste management, strengthen environmental protection, enhance occupational safety, and create a robust Internal Control System (ICS).
In doing so, the cooperative acquired forms of knowledge that had previously been concentrated in the hands of plantation companies and external consultants.
Also Read: KPBN CPO Tender Stays Firm at IDR15,600/kg, No Deals Reached
Gradually, data concerning farms, production, membership, environmental performance, and supply chains came under the management of the farmers’ own organization.
This transformation matters because control over data is inseparable from control over the economy.
Farmers who lack reliable information remain dependent on explanations provided by others. Cooperatives that manage their own data, by contrast, can plan strategically, evaluate productivity, identify operational risks, negotiate more effectively with commercial partners, and make evidence-based decisions for their members.
In this sense, certification has become an exercise in institutional learning rather than merely a compliance requirement.
The benefits generated through RSPO certification have likewise extended well beyond direct financial returns.
Income from the sale of RSPO credits has been reinvested into strengthening the cooperative’s productive assets. Funds have supported the purchase of heavy machinery, construction of community facilities, improvements in local infrastructure, educational and health programmes, and the development of alternative livelihood opportunities.
Also Read: Indonesia Targets Higher Palm Oil Productivity and Downstream Growth in 2026
Rather than distributing all proceeds as short-term cash payments, the cooperative has transformed incentives from global sustainability markets into long-term economic assets that remain within the village economy.
Alongside RSPO, Belayan Sejahtera has also pursued certification under the Indonesian Sustainable Palm Oil (ISPO) scheme.
Unlike RSPO—which is primarily driven by international market expectations—ISPO is Indonesia’s national sustainability standard established by the government. Compliance requires improvements in land legality, plantation governance, traceability, occupational health and safety, and environmental management.
Also Read: Prabowo Launches B50 Biodiesel, Declares Indonesia First Nation to Mandate 50% Palm-Based Fuel Blend
Yet every stage of this process has been financed independently by the cooperative.
Audit fees, plantation mapping, technical assistance, document preparation, strengthening internal control systems, and governance improvements have all been funded from our own resources.
The government has established national sustainability standards, but meaningful financial support for farmer cooperatives that are genuinely implementing them has remained limited.
Also Read: Bahlil: B50 Biodiesel Will Drive Palm Oil Demand and Bolster Energy Independence
This reveals a striking contradiction in public policy.
On one hand, the state requires smallholders to improve legality, environmental performance, workplace safety, and governance. On the other hand, when cooperatives invest significant resources to meet these obligations, they receive little assistance.
At the same time, the government is prepared to allocate substantial public resources to establish entirely new cooperatives that may not yet have active members, productive businesses, or functioning markets.
As a result, established cooperatives are expected to finance their national obligations independently, while newly created organizations receive buildings, warehouses, capital, and operational facilities before demonstrating economic viability.
Such priorities appear misplaced.
If the government’s objective is genuinely to strengthen Indonesia’s cooperative movement, its first investment should be directed toward organizations that have already demonstrated their value.
Support should focus on financing ISPO certification for independent smallholders, accelerating land legalization, strengthening farm data systems, improving production infrastructure, enhancing member education, and raising agricultural productivity.
The state should not impose national obligations while expecting farmers alone to bear the full financial burden of implementation.
The Merah Putih Village Cooperative Programme: When Institution Building Precedes Economic Reality
Against this backdrop, the government’s Merah Putih Village/Subdistrict Cooperative (Koperasi Desa/Kelurahan Merah Putih) programme deserves careful scrutiny. The initiative seeks to establish tens of thousands of new cooperatives across Indonesia while providing legal status, financing, retail outlets, warehouses, and other operational facilities.
The issue is not the government’s commitment to strengthening rural economies. The real concern lies in the sequence of its intervention.
Successful cooperatives emerge from the economic needs of their members and are subsequently strengthened by public policy. Under the current programme, however, the state first creates the institution and then expects communities to generate the economic activity needed to sustain it.
Indonesia’s own cooperative history offers repeated warnings about this approach.
Legal and political studies of the cooperative movement have shown that, at various points in the country’s history, cooperatives became instruments of state policy rather than independent organizations of their members. They were established according to uniform administrative designs, subjected to government intervention, and gradually lost the autonomy that distinguishes genuine cooperatives from government agencies.
The experience of the former Village Unit Cooperatives (Koperasi Unit Desa/KUD) should serve as an important lesson. Many survived only as long as they received government assignments, subsidized credit, preferential distribution rights, or administrative protection. Once those forms of support diminished, a significant number proved unable to sustain viable business operations. Their legal status remained intact, but their organizational life had effectively disappeared.
This outcome was not simply the result of poor management.
Rather, many cooperatives were created to implement government programmes instead of responding to the actual economic needs of their members. The state determined their organizational structure, business activities, and strategic direction, while local communities were expected merely to occupy institutions whose purpose had already been defined from above.
The same pattern risks re-emerging through the Merah Putih Village Cooperative programme.
Although village consultations are formally included in the establishment process, consultation during implementation should not be confused with meaningful public participation in policy formulation. By the time communities are invited to deliberate, the programme’s objectives, institutional model, branding, and implementation framework have already been decided.
Villagers are not asked whether they genuinely need a new cooperative. They are not invited to consider whether existing cooperatives or Village-Owned Enterprises (BUM Desa) could instead be strengthened. Nor are they encouraged to identify whether their most pressing economic constraints lie in market access, infrastructure, technology, financing, logistics, or price certainty.
Instead, they are primarily asked to discuss how a predetermined policy should be implemented.
Such participation is procedural rather than substantive. Citizens are invited into the conversation, but not into the decision-making process itself.
Yet cooperatives cannot be built simply by instructing people to gather under a common organizational banner.
Indonesia’s founding cooperative thinker, Mohammad Hatta, envisioned cooperatives as voluntary associations founded upon solidarity, mutual responsibility, and democratic ownership. Members are not merely beneficiaries of services; they are co-owners responsible for protecting, governing, and advancing the organization they collectively possess.
That sense of ownership cannot be created through administrative decree.
The programme also arrives at a particularly challenging economic moment. Indonesia’s economic growth in early 2026 has relied heavily on government expenditure, while household consumption has expanded more slowly. The rupiah has weakened, production costs have increased, layoffs have affected multiple industries, and many households face growing uncertainty over future incomes.
In such circumstances, committing substantial public resources to constructing tens of thousands of cooperative buildings, warehouses, and retail facilities warrants careful evaluation.
Infrastructure spending undoubtedly generates short-term economic activity. Construction contracts are awarded, materials are purchased, workers are employed, and government budgets are disbursed. Yet none of these expenditures automatically creates sustainable cooperative enterprises.
Without capable management, active members, reliable markets, and commercially viable business activities, newly constructed facilities risk becoming underutilized assets. Villages may ultimately inherit the ongoing costs of maintenance, operations, and debt without securing corresponding economic benefits.
Government spending may contribute to headline economic growth, but expenditure alone does not necessarily build enduring economic capability.
The most fundamental challenges facing Indonesia’s cooperative movement are not the absence of buildings. They are weak organizational capacity, limited market access, inadequate governance, low member participation, and unequal bargaining power within agricultural value chains.
Nor are villages empty economic spaces waiting to be organized.
They already contain small retailers, traders, farmer groups, transport operators, long-established cooperatives, Village-Owned Enterprises, artisans, and household businesses. If newly created cooperatives receive generous state capital, infrastructure, supply arrangements, and institutional support while existing local enterprises continue operating with their own limited resources, the resulting competition cannot be described as equitable.
Rather than strengthening rural economies, the state may inadvertently create publicly subsidized competitors that displace organizations which have spent years building local trust and commercial relationships.
A more sustainable approach would begin by organizing and strengthening economic activities that already exist.
Small retailers could cooperate through collective purchasing networks. Farmer groups could collaborate in input procurement and marketing. Village-Owned Enterprises and cooperatives could divide responsibilities according to their comparative strengths. Local products could be connected to broader regional and international markets.
Public policy should therefore begin with careful mapping: Who is already working? What constraints do they face? Which institutions already exist? Which segments of the value chain remain beyond local control?
Only after these questions have been answered should the creation of a new cooperative be considered—and only if it genuinely provides the most appropriate institutional solution.
Establishing cooperatives first and searching for economic activities later risks producing little more than empty buildings and administrative reports rather than vibrant institutions owned and sustained by their members.
