Otto Hospes

Governing the Palm-Oil Sector through Finance: The Changing Roles of the Indonesian State

By analysing the different roles of the Indonesian state in arranging finance schemes for palm-oil development since 1945, this article aims to answer two questions: What are these roles? And to what extent have they prioritised or balanced economic growth, social equity, and environmental protection? We conclude that the state has never been absent from the palm-oil industry but has had different and changing financing roles that are historically contingent and shaped by the evolving economic and political landscape. Furthermore, these roles reflect Indonesia’s priorities of achieving economic growth through palm-oil development, furthering social equity, and, recently, promoting environmental sustainability.

The disciplining of illegal palm oil plantations in Sumatra

Abstract The Indonesian state has issued many regulations to control palm oil expansion, but they have been weakly enforced, resulting in widespread illegal plantations. During the last decade, Indonesian authorities have used force to reduce illegal plantations. This article analyses the drivers behind these actions and questions to what extent they reflect the rise of eco-authoritarianism. By investigating six cases of disciplinary action in Sumatra, we conclude that the Indonesian state is neither practising eco-authoritarianism nor constituting a green state. The disciplinary action, however, has had limited success in environmental terms due to policy incoherence, violent contestation and the sector’s historical context.