Sustainable financing for palm oil, pulp and paper sectors
Organization
TuK Indonesia
Activities under this Agreement were discontinued as of 06 April 2018, upon the request of the agreement partner.
The expansion of palm oil and pulp and paper sectors are major factors behind deforestation and degradation of forests in Indonesia. It is also a factor behind abuse of community rights, livelihoods and land conflicts.
This project will promote sustainable bank financing in the palm oil and pulp and paper sectors in Indonesia. This will be done through research, CSOs capacity building and advocacy. Holding banks accountable may help improve their client’s business practices.
Why
The financial sector is important in the work to reduce deforestation as they have the power to influence on their clients in the palm oil and pulp and paper sectors in Indonesia. They provide loans, shares and underwrites, and therefore their sustainability policies can trickle down on companies that operate near or in rainforest areas.
The expansion of palm oil and pulp and paper sectors in Indonesia is a major factor behind deforestation and degradation of forest. This increases land based greenhouse gas emissions. Some private sector actors are also responsible for abuse of community rights, livelihoods and land conflicts.
Budget
Norad intended to offer NOK 5,6 million in total for the period 2016-2017.
Activities under this Agreement were discontinued as of 06 April 2018, upon the request of the agreement partner.
In total, NOK 4.046.000 were disbursed to the partner.
What
Transformasi untuk Keadilan Indonesia (TuK INDONESIA) in close partnership with Profundo (Netherlands) will jointly implement this project.
Profundo will undertake activities on the finance research analysis updates.
The organization will provide analyses and updates on financial policies, capital flows and power influences. This feeds insights and establishes tools for CSOs capacity building to engage and demand regulation by Indonesian financial services authority (OJK).
They will also develop finance campaign tools. TuK INDONESIA will be responsible to undertake various activities in national and sub-national regions in Indonesia.
The expected short-term results are:
- NGOs and media put pressure on banks
- More transparency in laggard and progressive banks
- Progressive banks adopt policies and strengthen implementation
- Progressive banks put pressure on peers and on the Indonesian financial services authority (OJK) to create a level playing field
- The OJK authority understands issues with the OJK and demand regulatory options
- CSOs lodge case studies with the OJK and demand regulation
- CSOs confront banks with case studies and propose accountability mechanisms.
Expected results
TuK and Profundo’s overarching aim is that private sector actors have implemented social and environmental policies and practices that reduce the pressure on forests.
They will also work for the private sector’s engagement in global public private partnerships.
The desired project outcomes are:
- Sustainable investment policies adopted and implemented by banks active in the Indonesian palm oil and pulp & paper sectors
- Achieving sustainability criteria in bank regulation
- Strengthened position of civil society groups versus banks and companies
- Improved business practices in the palm oil and pulp & paper sectors
Partners
Profundo, the Netherlands
About the project descriptions
The project descriptions give insight in the NICFI portfolio for civil society organisations supported by Norad.
The descriptions presented are written by the project partners. Only minor edits have been undertaken by Norad. Their presentations and conclusions do not necessarily reflect the views of Norad.