UNODC Works with Palm Oil Industry in Combatting Corruption

From the food we eat to the soap we use, palm oil is everywhere, fueling industries and driving economies. Indonesia produces over 30 million tonnes annually, contributing 4.5% to its GDP and providing jobs for millions. However, corruption within the industry—for example, through bribery, illegal land acquisition, and regulatory violations—prevents the full realisation of the contribution the palm oil industry could make to Indonesia’s economic growth.

Corruption further risks undermining livelihoods, damaging the environment, and disrupting global supply chains. The industry is determined to change this, supported by the United Nations Office on Drugs and Crime (UNODC), which works with countries on the implementation of the United Nations Convention Against Corruption (UNCAC).

“We can’t afford to ignore corruption any longer—it threatens the very foundation of our industry," said the Chair of the Indonesian Palm Oil Association (GAPKI) East Kalimantan, Rachmat Perdana Angga. "We must actively enforce good management and sustainability practices in the palm oil industry. This means embedding transparency at every level to strengthen business integrity and combat corruption."

Palm industry at a crossroads

The private sector plays a crucial role in preventing corruption by promoting ethical practices, ensuring compliance with regulations, and fostering accountability. Through collective action and the implementation of robust anti-corruption policies, companies in the palm oil industry can contribute to a more transparent and responsible business environment, supporting long-term sustainability and growth.

A recent workshop in Balikpapan, East Kalimantan, brought together various stakeholders to tackle corruption in Indonesia’s palm oil industry through joint commitments. Through the “Anti-Corruption Policy and Development of Collective Actions with Companies and Associations in Palm Oil Industries” workshop, the Corruption Eradication Commission (KPK), the Indonesia Global Compact Network (IGCN) and UNODC are working with the industry towards increased transparency and integrity. The workshop marked the first time all stakeholders came together to openly discuss and combat corruption in the sector. 

To hear the commitments articulated by some of those present, watch our video below.

“We are here not just to talk but to act. The decisions made and the actions taken in the coming months will determine the trajectory of the industry for years to come,” said Erik van der Veen, Head of UNODC Indonesia.

UNODC serves as the custodian of the UNCAC, with a mandate to support countries in combating corruption. Article 12 of UNCAC focuses on preventing corruption in the private sector, urging countries to create standards, codes of conduct, and internal auditing controls to protect business integrity. UNODC works closely with governments, businesses, anti-corruption experts, civil society, youth, and academia to fight corruption at all levels.

Decision-makers across the nation's palm oil industry sector attended the workshop. Mr Angga signalled a commitment to confronting the challenges that have long plagued the industry. “As the Chair of GAPKI East Kalimantan, I understand our industry's urgent need for transparency and integrity. This workshop is a crucial step in addressing these issues head-on,” he said.

The strength of unity

“Corruption is a complex issue that requires a collective effort. The government cannot tackle this alone; we need the cooperation of the private sector and the community,” said Satya Pambudi, the Auxiliary Inspector of Economic Affairs in East Kalimantan Province.

During the sessions, participants developed anti-corruption policies, compliance measures, and a framework for collective action, all designed to help companies integrate these practices into their operations.

The event concluded with the signing of a Collective Action Agreement, a formal pledge by the participating companies to uphold business integrity and combat corruption.

While significant challenges remain, the groundwork established at the workshop positions Indonesia’s palm oil sector to move forward with a renewed commitment to ethical practices.

“This workshop marks a crucial step where transparency and accountability become the industry's foundation,” said Mr Van der Veen. “Together, we can build an industry that not only thrives economically and that stands as a model of integrity and transparency–not just for palm oil, but across all sectors.”

This article was published at the UNODC Regional Office for Southeast Asia and the Pacific's website https://www.unodc.org/roseap/en/indonesia/2024/10/palm-oil-corruption/s…