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STAKES / Cases / Indonesia

Indonesia · Palm oil

Can a plantation ever be responsible? Sumatra is where the EU deforestation rules meet the EU trade deal.

A German discount grocer is among Europe's largest buyers of Sumatran palm oil, on a seam where one EU regime restricts imports and EU trade negotiators work to expand them.

Sector
Palm oil
Places
North Sumatra · Riau · Jakarta
Case lead
Jason Miklian
Work package
WP2
Questions
RQ3, RQ4, RQ7, RQ8
Fieldwork window
2028
Cleared and planted land on an oil palm concession in Riau, Sumatra, stretching to the horizon.
An oil palm concession in Riau, October 2007. Cleared ground planted to the horizon. Photo: Hayden, CC BY 2.0, via Wikimedia Commons. Source

The ground

Sumatra has a long history of resource extraction, and of the conflict and corruption that tend to accompany it, running through oil, coffee, rubber and now palm. Land tenure disputes, smallholder economics and forest loss are the same problem seen from three directions.

The corporate question

A German discount supermarket group, one of the larger European importers of Sumatran palm oil, buys under an EU import regime designed to keep deforestation-linked commodities out of the European market, while EU trade negotiators work on an agreement intended to increase Indonesian exports into that same market. The firm sits between two European policies pulling opposite ways.

What we ask here

Can plantation-model sourcing be environmentally sustainable and rights-respecting at the same time? Or is the honest answer that it cannot, and the reporting exists to avoid saying so?

Further reading

  1. Hanoteau, Miklian & Barkemeyer. Business and violent conflict as a multidimensional relationship: The case of post-Reformasi Indonesia (2025). Business Horizons. doi.org/10.1016/j.bushor.2025.02.014
  2. Miklian. Contextualising and theorising economic development, local business and ethnic cleansing in Myanmar (2019). Conflict, Security & Development. doi.org/10.1080/14678802.2019.1561624