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Book part
Publication date: 12 February 2021

Munirah Khamarudin, Norkhazzaina Salahuddin and Normalisa Md Isa

The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited…

Abstract

The Malaysian oil palm has seen steady progress. Started in Malaysia as an ornamental plant, it has turned into a huge industry. Oil palm production has yielded unlimited economic profits and is currently an emerging Malaysian economic sector. Malaysia currently accounts for an overwhelming contribution to the production and export of palm oil worldwide, which is 39% and 44%, respectively. From around 4.49 million hectares of land, a massive 17.73 million tons of palm oil and 2.13 tons of palm kernel oil were produced. It has been widely use as food products, cosmetics, livestock feed, as well as in bioenergy industry. This is in line with the fast-growing global demand for the palm oil products. Nevertheless, it is currently experiencing a period of slow or less growth in terms of contributing naturally to gross national productivity. Issues such as extreme weather, aging trees, and plant diseases are most prominent among the natural factors that are hindering the growth of the industry. The global pandemic of COVID-19 is also contributing to the current slow growth of palm oil sector. Malaysia has a crucial role to play in meeting the growing global need for oils and fats, as Malaysia is one of the palm oil and palm oil products' major producers and exporting countries.

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Modeling Economic Growth in Contemporary Malaysia
Type: Book
ISBN: 978-1-80043-806-4

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Article
Publication date: 17 May 2021

Ratna Wardhani and Yan Rahadian

Global palm oil production is growing rapidly, especially in Southeast Asia, with Indonesia and Malaysia as the biggest producers. Despite significant contributions to…

Abstract

Purpose

Global palm oil production is growing rapidly, especially in Southeast Asia, with Indonesia and Malaysia as the biggest producers. Despite significant contributions to these countries’ economies, environmental and social aspects continue to be debated within this industry. The sustainability strategy is very important for the palm oil industry. This study aims to explore the sustainability strategy using six elements, namely, stakeholder engagement, governance and leadership, sustainability view and the economic, environmental and social strategies of Indonesian and Malaysian palm oil companies.

Design/methodology/approach

This study observes 21 Indonesian palm oil companies and 44 Malaysian palm oil companies from 2014 to 2018 with a total observation of 280 firm years. The methodology used in this study is a qualitative content analysis of six themes based on the sustainability strategy elements, which was further developed into 40 indicators. Content analysis is carried out on information published in annual reports and sustainability reports.

Findings

The study results indicate that stakeholder engagement, governance and leadership and strategic view of the palm oil companies in Indonesia and Malaysia are still likely to be weak. Palm oil companies have not demonstrated their focus on implementing economic, environmental and social strategies. Although the results indicate that there is a greater emphasis on environmental and social strategies than on economic issues, attention to both issues is still very low.

Practical implications

Palm oil companies need to integrate sustainability strategies in their business models and communicate them well to stakeholders to increase their competitive advantage in the palm oil industry. The government also needs to issue stricter rules and incentives to encourage companies to implement sustainability strategies.

Social implications

The study results provide implications for the communities around palm oil plantations to provide better social control so that companies can implement sustainability strategies in their business processes.

Originality/value

This study highlights the importance of sustainability practices integrated into palm oil companies’ business models, which have not been well implemented in the palm oil industry in the world’s largest producing countries.

Details

Sustainability Accounting, Management and Policy Journal, vol. 12 no. 5
Type: Research Article
ISSN: 2040-8021

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Book part
Publication date: 11 November 2015

Paul K. Gellert

Placing expansion of oil palm plantations in Indonesia in the context of the global land grab, this paper analyzes the contemporary extent and early historical periods of…

Abstract

Purpose

Placing expansion of oil palm plantations in Indonesia in the context of the global land grab, this paper analyzes the contemporary extent and early historical periods of plantation expansion via the theory of accumulation by dispossession (ABD).

Methodology/approach

After reviewing the empirical debate about the land grab, this paper examines the importance of ABD to understand the land grabs in general and for oil palm plantations in Indonesia in particular. Rather than a new phenomenon of the last four decades of neoliberalism, ABD has a history of several centuries.

Findings

Accumulation by dispossession (ABD) is a powerful and appropriate lens by which to understand the land conversion and social displacement occurring in Indonesia. Building on historical understanding of ABD, this paper applies the theory to the Indonesian oil palm case, making the case that the multiple and uncertain sequences of engagement with oil palm expansion are reflective of a broader struggle against dispossession.

Originality/value

ABD is not just a global financial process of corporate-led neoliberalization but also shaped importantly by domestic state and local elites. These elites have shaped ABD differently in colonial, authoritarian, and neoliberal periods.

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States and Citizens: Accommodation, Facilitation and Resistance to Globalization
Type: Book
ISBN: 978-1-78560-180-4

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Article
Publication date: 13 January 2021

Emel Kasim, Johanna Stöhr and Christian Herzig

The study aims to enhance our understanding of strategizing sustainable palm oil at company level and to bridge the gap between strategy formulation and implementation. In…

Abstract

Purpose

The study aims to enhance our understanding of strategizing sustainable palm oil at company level and to bridge the gap between strategy formulation and implementation. In this case-based study, the way a food company is tackling the challenges faced during the promotion and incorporation of sustainable palm oil into core business strategy is explored. By taking a strategy-as-practice approach, this research sheds light on the microlevel activities and the role of formulated plans, implemented actions and engagement in activities.

Design/methodology/approach

An ethnographic case study was carried out using participant observation, semi-structured interviews, informal interviews and documentary review.

Findings

The findings demonstrate the complexity of implementing a sustainability strategy for a controversial commodity such as palm oil in supply chains. External pressure was one of the most important drivers for taking action regarding environmental and social sustainability issues. Moreover, formulating and implementing supply chain strategies for sustainable palm oil required effective communication and collaboration between different departments within the organization.

Research limitations/implications

Although important insights were obtained through this six-month long ethnographic case study, additional valuable information could have been obtained if the research had been carried out for longer.

Practical implications

The paper includes implications for strategizing sustainability at company level from a strategy-as-practice perspective.

Originality/value

Through this study, a better understanding of the challenges faced from the downstream perspective in sustaining food supply chains can be obtained.

Details

Qualitative Research in Organizations and Management: An International Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-5648

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Article
Publication date: 26 January 2021

Almasdi Syahza and Mitri Irianti

The purpose of this study is to analyze strategies for controlling potential environmental impacts as a result of developing oil palm plantations.

Abstract

Purpose

The purpose of this study is to analyze strategies for controlling potential environmental impacts as a result of developing oil palm plantations.

Design/methodology/approach

Research sites in the first year have been carried out in potential areas for the development of oil palm plantations, both through plasma through Badan Usaha Milik Negara (state-owned enterprises) and Badan Usaha Milik Swasta (private-owned companies) and self-help by the community. The research locations were carried out in the Riau mainland areas, including Kampar, Rokan Hulu and Kuantan Singingi regencies. In contrast, the Riau coastal areas were Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. The two research areas have different productivity caused by differences in soil fertility. The method used for data collection is the rapid rural appraisal method, which is a participatory approach to obtain data/information and general evaluation in the field in a relatively short time.

Findings

Oil palm commodities are the most popular, especially in the Riau region. This is evidenced by the rapid development of oil palm plantations, namely, 1,119,798 ha in 2001 and increased to 2,372,402 ha in 2013. During the 2001–2013 period, the average growth rate was 6.46% per year, whereas other plantation commodities such as rubber and coconut have decreased. #R2.6 An increase follows the expansion of the plantation area in the production of fresh fruit bunches (FFB). Crude palm oil (CPO) production from 1,792,481 tons in 2001 increased to 7,570,854 tons in 2013, with an average annual growth of 12.76%. CPO production capability in Riau is supported by 172 palm oil mill (POM) units with a processing capacity of 7,800 tons per hour. POM is not spread evenly but is concentrated in nucleus and plasma plantations. Independent smallholders with their scattered land located far from the existing POM. This condition causes the low quality of FFB to the mill due to the distance between the plantation and POM.

Originality/value

The virtue of this research is to find an institutional arrangement strategy for oil palm agriculture to spur growth through the development of the downstream palm oil industry. The strategy is intended to create economic added value so that efforts to accelerate community economic development can be increased.

Details

Journal of Science and Technology Policy Management, vol. 12 no. 1
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 30 December 2020

Safriyana Safriyana, Marimin Marimin, Elisa Anggraeni and Illah Sailah

This study aims to construct models to classify independent smallholder farmers’ (ISFs) plantation suitability and its competitiveness index. It proposes the models with…

Abstract

Purpose

This study aims to construct models to classify independent smallholder farmers’ (ISFs) plantation suitability and its competitiveness index. It proposes the models with the objective to accommodate ISFs as the main source of raw material for the palm oil industry. It was predicted that the supply of oil palm fresh fruit bunch would depend on ISFs’ plantations due to the government policy that restricts the expansion of the plantations.

Design/methodology/approach

The study was designed using a geographic information system approach and analytical hierarchy process for mapping the suitability of smallholder farmers’ oil palm plantation in the Kampar Regency. The competitiveness index was measured using a modified Diamond Porter framework and competitiveness index quantification. The model was conducted on 177 respondents from five districts in Kampar Regency.

Findings

The results indicated that it mapped 128,936.759 hectares area of ISFs’ oil palm plantation in the Kampar Regency. The results of plantation suitability showed that only 13.88% of plantations owned by ISFs were potential, 71.21% of them were in the developing category and 14.91% of plantations were non-potential. The competitiveness index showed there were only 7.91% of them at the developed competitive position, 73.45% at developing a competitive position and 18.64% at the least-developed position.

Practical implications

The paper includes implications for developing ISFs’ capacity building and best practice management for oil palm optimization, resulting in bargaining positions and social well-being.

Originality/value

The study had succeeded to visualize ISFs’ plantation area suitability and competitiveness at Kampar Regency, Riau Province. The model provides a brisk understanding and valuable information about ISFs’ conditions spatially. It offers specific outcomes and becomes important in optimize and develop the existing plantations at the right time and exact location.

Details

Journal of Science and Technology Policy Management, vol. 12 no. 2
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 20 January 2020

Almasdi Syahza and Brilliant Asmit

This paper aims to present the development of palm oil sector and future challenge in Riau Province Indonesia, which includes sustainable plantation development.

Abstract

Purpose

This paper aims to present the development of palm oil sector and future challenge in Riau Province Indonesia, which includes sustainable plantation development.

Design/methodology/approach

This research was conducted through a survey with developmental research method. The research location is in the Province of Riau, which is the potential development of oil palm plantation. The land areas of Riau are Kampar, Rokan Hulu and Kuantan Singingi, while the coastal areas are Pelalawan, Siak, Bengkalis, Indragiri Hilir, Indragiri Hulu and Rokan Hilir. The socio-economic and environmental aspects of sustainability level of palm oil plantations were analyzed using a multi-dimensional scaling approach that was modified into a Rap-Insus-Pom.

Findings

Development of palmoil plantations results in land conversion, posing potential erosio. In anticipating environmental damage, the Government of Indonesia imposes the Indonesian Sustainable Palm Oil (ISPO) policy. The results of ISPO policy show that Indonesian crude palm oil products are environmentally friendly.

Originality/value

This research is one of few studies that investigate the development of palm oil sector and future challenge in Riau Province, Indonesia. Riau Province still needs 13 units of palm oil mills with capacity of 60 tons per hour. Find strategies to regulate palm oil farming institutions and derivative products to enhance growth and economic development in the region and find production centers and development areas for palm oil local industries in potential regions.

Details

Journal of Science and Technology Policy Management, vol. 11 no. 2
Type: Research Article
ISSN: 2053-4620

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Article
Publication date: 23 February 2010

Jordan Nikoloyuk, Tom R. Burns and Reinier de Man

This paper sets out to report on a study of the Roundtable on Sustainable Palm Oil (RSPO) as an instance of “partnered governance” oriented to advance sustainable

Abstract

Purpose

This paper sets out to report on a study of the Roundtable on Sustainable Palm Oil (RSPO) as an instance of “partnered governance” oriented to advance sustainable development in a supply chain. After briefly discussing the conceptualization of partnered governance, its social organizational features, and its drivers, the paper aims to outline the history and structure of RSPO and then to assess the effectiveness, efficiency and level of legitimation of this innovative governance structure. The paper points out several of the limitations as well as potentialities of partner governance arrangements such as that of RSPO.

Design/methodology/approach

The paper shows through a focused multi‐method case study how the RSPO developed as consumer‐oriented businesses partnered with civil society organizations and palm oil producers to address what was seen as a long‐term threat to rain forests, on the one hand, and to financial interests, on the other.

Findings

In the case of deforestation caused by oil palm expansion, national government intervention was absent and international regulation could not be mobilized. While the RSPO's system of partnered governance may have many shortcomings, the paper stresses that there are few real alternatives that have been as successful in addressing this type of sustainability issue. A major structural problem with such partnerships for sustainability is that their emergence and development typically depend on powerful players.

Originality/value

The originality/value of the paper lies in its identification of several of the strengths and weaknesses of partnered governance based on a focused case study, and suggests ways in which partnered governance can be developed and optimized in addressing sustainability issues.

Details

Corporate Governance: The international journal of business in society, vol. 10 no. 1
Type: Research Article
ISSN: 1472-0701

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Article
Publication date: 1 August 2019

Fabio Verneau, Francesco La Barbera, Mario Amato and Valeria Sodano

Palm oil is a versatile ingredient of many food and non-food products. Yet, over the last year it has rapidly become a controversial product due to its alleged harmful…

Abstract

Purpose

Palm oil is a versatile ingredient of many food and non-food products. Yet, over the last year it has rapidly become a controversial product due to its alleged harmful health and environmental effects. Palm oil has rapidly become a controversial product. As a consequence, many food companies have introduced alternative fat sources into their products, in order to meet consumers’ concerns. The purpose of this paper is to: first, investigate consumer purchase intention by assessing whether the environmental, social and health concerns (HCs) act as drivers with regard to the choice of not consuming products containing palm oil; and second, estimate the direct effect of participants’ information seeking (IS) upon their intention, and whether IS mediates the effects of the attitudinal latent constructs on intention.

Design/methodology/approach

A quantitative survey of 608 respondents was performed. A structural equation modelling (SEM) procedure was implemented.

Findings

Results show that: first, HC is the main driver of participants’ intention to reduce palm oil consumption; second, consumers’ attitudes towards environment and social fairness exert significant direct effects upon intention; third, IS exerts a direct effect on intention; also, it partially mediates the effects of environmental and social concerns, whereas it totally mediates the HC effect.

Originality/value

This is the first study to address the issue of comparison between different drivers of sustainable consumer intentions using a formal test by SEM. Moreover, findings add insightful discussion points to some important issues concerning the role of consumers in the current food system organisational structure and strategies.

Details

British Food Journal, vol. 121 no. 9
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 7 August 2017

Chiara Riganelli and Andrea Marchini

This research considers a current problem statement: mandatory indication of palm oil among the list of ingredients (Regulation No. 1169/2011). The purpose of this paper…

Abstract

Purpose

This research considers a current problem statement: mandatory indication of palm oil among the list of ingredients (Regulation No. 1169/2011). The purpose of this paper is to analyse the effects of company choices about palm oil on consumer demand and company performance.

Design/methodology/approach

The data collection covers two years, 2013 and 2014. Financial data from the AIDA database are matched with information on palm oil certification and replacement. A panel data analysis is conducted to evaluate the impacts of certification and replacement on consumer demand and company performance.

Findings

Considering consumer demand, positive significances have been found in terms of both palm oil certification and replacement. With regard to performance, there are positive significances only for palm oil replacement.

Research limitations/implications

The research is a first step in the study of palm oil phenomenon. Furthermore, the study takes into consideration only one specific industry that uses palm oil as an ingredient.

Practical implications

There is a consumer demand expression for these two kinds of disclosures, considered in terms of both environmental (certification) and health (replacement) issues. However, only palm oil replacement leads to improved performance.

Originality/value

This study considers the market effects of the labelling programme through a new empirical application related to the palm oil issue. Starting from palm oil concerns, a new way through which an increase in the provision of information to consumers is likely to impact the behaviour of companies is pointed out.

Details

British Food Journal, vol. 119 no. 8
Type: Research Article
ISSN: 0007-070X

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