Sustainable Jurisdictional Approach

Demonstrating and promoting district level sustainable commodity production in Indonesia

palm crops

The challenge

Consumers increasingly want to know that the products they buy are produced sustainably, and several major global markets are working to ensure that only commodities produced legally and without causing deforestation or infringing upon human or labour rights can be imported. 

However, demonstrating sustainability can be challenging. There are many certification schemes, both mandatory and voluntary, covering different countries and commodities. Such schemes can be difficult to access for small-scale producers, who often lack the knowledge and resources to achieve certification and may struggle in meeting some criteria, such as proof of land ownership.

Most commodities are also produced on formerly forested land. This means that certification can provide only a partial solution to deforestation unless all producers are certified, and commodities produced on land deforested after a cut-off date are excluded. This is a challenging and time-consuming task.

But another way is possible. Through a jurisdictional approach, sustainability can be measured across subnational areas, such as districts and provinces, to complement product certification and support mapping of commodity supply chains across producers, traders, processors and markets. All actors, from large companies to independent smallholders can be included and can share in the benefits of sustainable production and trade.
 

Sustainability through a jurisdictional lens

Indonesia has made great strides in reducing deforestation and transitioning to sustainability in the agricultural commodities sector. It is now looking to communicate this progress to global markets so that districts can be recognised and rewarded for their efforts in meetings relevant requirements. 

To this end, Indonesia has adopted the ‘Sustainable Jurisdictional Approach’ to help meet the growing need to demonstrate and track the sustainability of its districts and the commodities produced. The approach uses a set of ‘Sustainable Jurisdictional Indicators’ to allow districts to demonstrate that agricultural commodities like palm oil are produced sustainably, without causing deforestation and in compliance with the law. 

Global markets, consumers and investors can use the indicators to guide their purchasing and investment decisions. Ultimately, this should benefit and encourage progress in districts where forests are protected, farmers are supported, and laws are upheld. Districts where progress towards sustainability is less advanced can receive targeted support, so that they too can benefit from growing markets for sustainable commodities.

This approach represents a simpler and cheaper, yet objective, way to promote sustainability and reduce deforestation. It complements certification through its inclusive approach for all actors, helping smallholders and indigenous people to access supply chains for sustainably produced commodities.

 

Evolution of the approach

The Sustainable Jurisdictional Approach began in 2018 as the ‘Terpercaya Initiative’, a European Union-funded initiative implemented by the European Forest Institute. Terpercaya aimed to demonstrate and track district-level progress towards sustainability. 

Through the multi-stakeholder Terpercaya Advisory Committee co-chaired by the Indonesia Ministry of National Development Planning (Bappenas) and the EU, a set of 23 indicators to measure sustainable and inclusive commodity production at the district level were developed. A data platform to facilitate analysis and dissemination of data on the indicators was also developed to inform policy makers and market actors. 

Wheel loader and logging truck in Central Kalimantan, 1994 (Source: Jeremy Broadhead)
Terpercaya: Building a supply chain of understanding and trust

Learn more about the development of Terpercaya in our blog post

Multistakeholder participation was at the core of Terpercaya, and continues to be with the Sustainable Jurisdictional Approach. Representatives from national and district government agencies, the private sector and civil society organisations have provided critical input in developing the sustainability indicators and improving data sources and continue to support and expand the initiative.

The Terpercaya approach
Crop worker
Key elements
Legality: Indicators align with Indonesian legal and policy frameworks.
Legitimacy: Indicators developed through stakeholder consultation and draw on available, objective data.
Scale: Indicators and traceability efforts cover all jurisdictions, producers and forests.
Mutual benefits: Indicators align with the SDGs and Nationally Determined Contribution (NDC) under the Paris Climate change agreement.
Supportiveness: A stepwise approach aims to promote progress.
Complementarity: Indicators complement product-based certification.

 Terpercaya handover

In November 2021, the data platform was handed over from the EU to the Government of Indonesia in a ceremony presided over by the EU Ambassador to Indonesia and the Minister of Bappenas. One year later in November 2022, the Sustainable Jurisdictional Approach and data platform were launched and formally adopted as a national initiative reporting on district progress towards sustainability.

Terpercaya handover

Launch at the B20 investment forum

The event, at the B20 investment forum in Bali prior to the G20 summit, was hosted and led by Bappenas, the Ministry of Investment and the Indonesian Chamber of Commerce and Industry (KADIN) and was supported by EU and USAID, LTKL, GIZ and others. The platform has been positioned by the Government to attract green investment, inform domestic policy processes and fiscal transfer mechanisms, and demonstrate sustainability progress towards global commodity markets.

Launch at the B20 investment forum

A data-driven view of sustainability

Sustainable Jurisdictions Indicators (SJI)

The 23 indicators developed under Terpercaya are now known as the Sustainable Jurisdictions Indicators (SJI). The indicators measure sustainable and inclusive commodity production at the district level, and are grouped under four pillars: environmental, social, economic and governance. They also align with the UN Sustainable Development Goals (SDGs) and complement the Indonesian Sustainable Palm Oil (ISPO) and Roundtable on Sustainable Palm Oil (RSPO) certifications. For each indicator, data representing the whole of Indonesia is collected from ministries and districts to provide a comprehensive picture of subnational progress towards sustainability.
 

Sustainable Jurisdictions Indicators (SJI) indicators graphic
Sustainable Jurisdictions Indicators (SJI) graphic

Data platform

The SJI data platform provides a comprehensive overview of the district-level data collected for each indicator. It facilitates analysis and dissemination of data on each of the 23 indicators in order to inform planners and policy makers and provide companies with information to perform due diligence assessments and make sustainable sourcing decisions. The data platform can also show trends and progress over time, highlighting on a national scale where districts have made significant strides towards sustainability, as well as where support is needed. Further developments will include the addition of a palm oil supply chain traceability module to help meet new due diligence requirements for access to global markets.

Data platform screenshot
Data platform screenshot

Outreach

A series of SJI outreach workshops aims to raise awareness of the initiative, indicators and data platform at the national and district levels, and to create a roadmap for implementation and further development. 

Government policies and processes

Indonesia is using the SJI data platform to inform a number of national and district-level processes, formally adopting the approach into planning, development and fiscal transfer policies. The Sustainable Jurisdictions Indicators have already been incorporated into, or otherwise used to inform:

  • The 2020-2024 National Medium-Term Development Plan (RPJMN, Presidential Regulation 18/2020)
  • Regional Action Plan on Sustainable Palm Oil (RAD-KSB)
  • Sustainable Investment Guidelines (Ministry of Investment)
  • District fiscal transfer policies

KAMI support

The Sustainable Jurisdictional Approach and the Sustainable Jurisdictions Indicators data platform are supported by the EU-funded KAMI project, which facilitates dialogue between stakeholders in the EU, Indonesia and Malaysia on palm oil sustainability. Through KAMI and earlier projects, EFI supported the indicator and data platform development process under Terpercaya, and continues to support enhanced data collection and data platform improvements.

Moving forward, KAMI is working to incorporate traceability into the SJI data platform, develop additional indicators tailored towards global market requirements, including those under the EU Deforestation Regulation, and support districts to improve data collection, smallholder mapping and registration. 

Key to these activities is the Sustainable Jurisdictions Indicators Working Group, a multistakeholder group comprising representatives from government, civil society, the private sector and academia, which provides technical input and expertise.

Expected benefits

The jurisdictional approach and information provided through the SJI data platform aim to offer benefits to a range of stakeholders in Indonesia and globally. 

Districts 

Opportunity to demonstrate and communicate progress towards sustainable and deforestation free commodity production to attract palm oil buyers and green investment.

Palm oil industry

Improved visibility in global commodity markets of the progress made towards sustainability and reducing deforestation, and an improved image for Indonesian palm oil.

Smallholders/indigenous communities

Support for inclusion in palm oil and other commodity supply chains, helping to realise benefits from international markets. 

Operators in EU and other global markets

Improved access to objective information from the SJI to guide sourcing decisions and help inform due diligence processes. 
 

RESOURCES

Briefings
  • Strengthening sustainable oil palm plantation governance through the Revenue-Sharing Fund for Oil Palm Plantations (DBH Sawit) – English - Bahasa Indonesia (July 2024)
  • The feasibility of establishing district-level registries of palm oil producers in Indonesia – English - Bahasa Indonesia (July 2024)
  • Smallholder registration (STD-B) – challenges and strategies for acceleration – English – Bahasa Indonesia (July 2024)
  • ISPO certification for smallholders: process and challenges – English – Bahasa Indonesia (June 2024)
  • History of the Sustainable Jurisdictional Approach - English - Bahasa Indonesia (May 2023)
  • A model for sourcing palm oil from sustainable jurisdictions in Indonesia – English - Bahasa Indonesia (July 2022)
  • Jurisdictional palm oil traceability in Indonesia – English - Bahasa Indonesia (June 2022)
  • Lessons learnt from the Terpercaya Initiative - English - Bahasa Indonesia (November 2021)
  • The Terpercaya system: claims, verification and assurance - English - Bahasa Indonesia (November 2021)
  • Exploring options for traceability in the jurisdictional approach to sustainability - English - Bahasa Indonesia (November 2021)
  • Testing indicators of district sustainability - English - Bahasa Indonesia (February 2020)
  • Monitoring jurisdictional sustainability in Indonesian commodity production: Progress and next steps - English - Bahasa Indonesia - Spanish - French (July 2019)
  • Why jurisdictional sustainability matters for commodity producers and how it can be measured in Indonesia - English - Bahasa Indonesia - Spanish - French (June 2019)
  • Tracking progress to jurisdictional sustainability: Towards a shortlist of key indicators - English - Bahasa Indonesia - Spanish - French (February 2019)
    • Annex: List of indicators of jurisdictional sustainability for discussion – Draft - English (February 2019)
  • Bridging Indonesian laws, the SDGs and commodity certification criteria for defining district sustainability - English - Bahasa Indonesia - Spanish - French (October 2018)
  • Tracking sustainable palm oil and defining jurisdictional sustainability at scale in Indonesia - English - Bahasa Indonesia - Spanish - French (April 2018)
Technical documents
  • Joint gap assessment of the EUDR information needs and information availability from the Indonesian Sustainable Palm Oil (ISPO) certification – English - Bahasa Indonesia (July 2024)
  • National guidance – Data collection and analysis of Sustainable Jurisdictions Indictors - English - Bahasa Indonesia (February 2023)
  • Operationalising the Terpercaya Indicators and Data Platform – English – Bahasa Indonesia (September 2022)
  • Making the transition to sustainable agricultural production: A practical guidebook for district governments in Indonesia – Draft - English (March 2021)
Reports/papers
  • Working paper - Environmental instruments to support Indonesia’s NDC at the district level - English (March 2021)
  • Working paper - An assessment of roles, authority and capacity of district governments in solving tenurial conflicts in the forest area - English (March 2021)
  • Working paper - The value proposition of the Terpercaya platform - English (March 2021)
  • Working paper - Terpercaya data collection report - English (March 2021)
  • Validation of Terpercaya indicators at district level – Report - English (March 2021)
Communications
  • Infographic – Sustainable Jurisdictional Approach - English - Bahasa Indonesia (May 2023)
  • Sustainable Jurisdictional Approach flyer - English - Bahasa Indonesia (May 2023)
  • Webinar: Terpercaya – Finding trusted jurisdictional models of sustainable palm oil production and trade in Indonesia - recording - event page (March 2021)
Advisory Committee meeting minutes
Working Group meeting minutes
  • Minutes of the I-Trace consultation, May 2024 – English
  • Minutes of the Working Group on Indicators – traceability consultation, June 2023 – English
  • Minutes of the Working Group on Indicators – traceability consultation, April 2023 - English
  • Minutes of the Working Group on Indicators – traceability consultation, March 2023 – English
  • Minutes of the Working Group on Indicators – district outreach planning, March 2023 – English
  • Minutes of the Working Group on Indicators, February 2023 – English
  • Minutes of the Working Group on Indicators, September 2022 – English
  • Minutes of the Working Group on Indicators, February 2022  - English - Bahasa Indonesia
Links