Financial Opacity and Challenges to Forest Governance in Indonesia and Malaysia

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Award Year: 
2020
Principal Investigator: 
Jonathan Sullivan, University of Michigan
Alice Lépissier, University of California, Santa Barbara


Abstract: 
Global land-based commodities, such as palm oil, are a leading driver of tropical forest and peat loss, land conflict, and livelihood change in Indonesia and Malaysia. To address these environmental and social harms, in recent years, oil palm companies have pledged to comply with No Deforestation, No Peat, No Exploitation (NDPE) policies, which cover approximately three-quarters of the palm oil-refining capacity in Southeast Asia. NDPE governance strategies rely on companies’ transparency of their land assets and management practices. However, these companies are notably opaque. It is still largely unknown whether NDPE has any implications on oil palm practices and socio-environmental outcomes. This project will contribute to the literature on supply chain governance through data synthesis to uncover relationships between corporate transparency and environmental governance. It examines relationships of capital, land, and governance in Indonesia and Malaysia using network structures of corporate land ownership, existing data on palm oil concessions, and records of NDPE compliance. The research asks:

  1. What are the structures of company ownership, subsidiary, and land assets networks?
  2. Does financial secrecy allow companies to circumvent NDPE policies?
  3. Do different modes of NDPE policy avoidance associate with forest and peatland outcomes

Our work will contribute to scholarship on supply chain governance by synthesizing data and methods from fields of remote sensing, econometrics, firm behavior, and environmental governance.

Participants: 
Andini Desita Ekaputri, University of Hawaii
Ami Golland, Stockholm University - Stockholm Resilience Centre
Alexander Michels, University of Illinois
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