InfoSAWIT, JAKARTA — Indonesia’s push for more sustainable palm oil financing took a major step forward as Transformasi untuk Keadilan Indonesia (TuK INDONESIA) and the Center for Agrarian Studies–International Research Institute for Social, Economic, and Regional Development at IPB University (LRI IPB University) officially launched the Palm Oil Plantation Sector Exclusion List. The initiative, unveiled on 18 November, arrives amid rising greenwashing practices and limited transparency within the industry.
TuK INDONESIA Executive Director Linda Rosalina emphasized that the Exclusion List is not a punitive tool, but a guide to help financial institutions strengthen governance and avoid high-risk financing.
“Greenwashing remains widespread, especially when public data is lacking. The Exclusion List helps financial institutions identify and avoid high-risk financing. The goal is to reinforce Indonesia’s sustainable finance ecosystem,” she said in a statement released on Saturday (22/11/2025).
LRI IPB University Head Prof. Dr. Arya Hadi Dharmawan explained that the list was designed based on sustainability ethics, stressing that every economic activity carries negative externalities, from pollution to biodiversity loss.
“This ethical standard is not merely about punishment. We want to ensure the palm oil industry provides intergenerational benefits aligned with sustainability principles,” he said. The instrument also draws on the concept of purpose-oriented finance to ensure each financing decision aligns with sustainable development goals.
Most Companies Fail Basic Requirements
The assessment of 185 palm oil companies revealed troubling results. Only 36 firms passed the basic administrative check, according to TuK INDONESIA Head of Advocacy and Public Education, Abdul Haris.
“How can a company be called sustainable if it cannot even meet basic administrative obligations? This reflects weak oversight and limited data availability, including within ISPO and RSPO systems,” he stressed.
Bayu Eka Yulian, Chair of the IPB University Center for Agrarian Studies, added that sustainability is only possible with transparency.
“The Exclusion List is a collaborative tool. Transparency is key to ensuring Indonesia’s palm oil development remains credible,” he said.
The government welcomed the initiative. Togu Rudianto Saragih from the Directorate General of Plantations noted that the list aligns with regulatory mandates, including Law No. 39/2014, which highlights the role of public oversight.
“This effort deserves appreciation. The Exclusion List can help ensure companies remain compliant and transparent,” he said.
The Exclusion List is expected to become a new reference point for responsible financing decisions while strengthening corporate governance and protecting community rights and the environment. (T2)
