Transnational Private Regulations for Sustainable Palm Oil in Indonesia
This study serves as preliminary remarks for further investigating the global trade regulatory framework for the sustainable palm oil industry. Concerns over several key aspects are discussed, including market regulation, corporate governance, and contractual structure to ensure the quality of the self regulatory regime; the governance structure of RSPO as the private regulatory institution, the incentive structure of the private regulatory regime, and its impact on the formal legal system. The general assumption of the study is that, despite their voluntary nature, private standards have a trade protectionist effect that restrict market access, in addition to the notion that the dominant market player can influence market-driven regulation more easily. The study finds that RSPO serves as a complementary institution to advance the sustainable palm oil agenda. In the implementation, RSPO has shaped the development of Indonesia's national legislation, most notably in the establishment of the government-backed mandatory standard of ISPO. In this regard, RSPO must be viewed as a system connected with the existing national legal system, with which RSPO can co-exist, collaborate, or compete