Every year, Nestlé touts its progress toward a “deforestation-free” supply chain. But the story on the ground often falls short of that rosy narrative. In palm oil-producing villages, roads remain muddy, palm oil prices fluctuate, and the fate of smallholder farmers remains precarious.
The world is too quick to pat a Company on the back for following global ethics.
However, the actual development is far too slow, giving rise to a new, more subtle form of dependence on economic sovereignty. This is particularly true when it’s packagedunder the label of sustainability, and the word “green” becomes merely a mere expedient.
The State and Shrinking Space for Maneuverability
Foreign investment is often seen as a sign of progress, especially when packaged in a green economy narrative. But beneath the euphoria, a crucial question arises: how much control does a country still have over the direction of its own industry? In many cases, policies are designed to attract investors, not necessarily to benefit local communities. Developing countries like Indonesia find themselves in a difficult position, having to maintain economic growth while adapting to global pressures. As a result, the state appears to be active, when in reality, it is simply reacting to external forces.
Sovereignty in the Shadow of Certification
Previously, Nestlé had refused to purchase palm oil from suppliers who only held ISPO (Indonesian Sustainable Palm Oil) certification, the official sustainability system approved by the Indonesian government. The reason was simple: ISPO was deemed inadequate to meet global sustainability standards like the RSPO (Roundtable on Sustainable Palm Oil), established by a consortium of multinational companies and international organizations.
This statement has implied that in the world market, global standards can easily shift and replace a country’s authority in determining the direction of economic development.
Here, the Indonesian government actually wants to prove that the policies it makes will be able to regulate the cycle without constantly being subject to pressure from global standards.
regarding MNCs. However, market reality shows that countries may appear sovereign on paper, but in practice, they must once again adapt to external rules.
Green Certification and Grey Power
Global certifications like the RSPO do promise higher ethical standards, but they also create new, often invisible layers of power. Companies that control market access and certification essentially control who enters and exits global supply chains.
In this case, Nestlé is not just an economic actor, but also a global political actor capable of shaping norms, determining values, and implementing policies through economic mechanisms. Governments, which should act as regulators and protectors, often adapt to avoid being abandoned by investors. As a result, economic sovereignty becomes a rhetorical concept, present in speeches but evaporating in practice.
Global Ethics or Local Exploitation?
When viewed from a broader perspective, smallholder farmers, particularly those who supply palm oil to large corporations like Nestlé, often face a double burden. On the one hand, palm oil farmers are required to meet complex sustainability standards, while on the other, they also experience the selling price of their products being continually suppressed to meet global efficiency standards.
According to reports from environmental organizations such as Greenpeace and the Rainforest Action Network, serious challenges remain in the global palm oil supply chain, ranging from unequal access to certification to weak protection for smallholder farmers.
Ironically, the global ethics promoted by multinational corporations often place local actors in the most vulnerable position. Sustainability, which should bring justice, has instead become a market mechanism that limits the freedom of local farmers.
Nestle and the New Face of Green Capitalism
MNCs, including Nestlé, are currently competing to demonstrate their concern for the earth. Jargon like “sustainable supply chain” and “zero deforestation” sound convincing, but in practice, they are not as simple as they sound. Here, they symbolize how global ethical values are implemented through business and market mechanisms. This can lead to better industrial practices, but it also risks the burden of adaptation falling on the most vulnerable local actors. Paradoxically, sustainability intended to improve old systems can actually prolong new forms of dependency.
