Have you ever questioned how past land clearing violations can be accounted for in a fair and transparent manner? Within the context of the sustainable palm oil industry, this question is addressed through the Remediation and Compensation Procedure (RaCP) developed by the Roundtable on Sustainable Palm Oil (RSPO). RaCP is designed as a corrective mechanism to ensure that non-compliant land clearing conducted since 2005 does not end at administrative acknowledgment alone, but is followed by tangible remediation and compensation processes.
As one of the world’s largest palm oil producers, Indonesia plays a strategic role while simultaneously facing significant challenges in the implementation of RaCP. Extensive plantation expansion prior to the adoption of stringent sustainability standards has resulted in many companies carrying historical liabilities related to land clearing undertaken without High Conservation Value (HCV) assessments. This condition positions RaCP not merely as a compliance instrument, but as a concrete test of the national palm oil industry’s commitment to sustainability principles, accountability, and responsible environmental governance.
RaCP as a Corrective Mechanism
RaCP has been implemented since 2015 to address land clearing conducted since November 2005 without High Conservation Value (HCV) assessments. This mechanism applies globally to all RSPO members and prospective members, covering parent companies, subsidiaries, owned, leased, or managed land, as well as scheme or tied smallholders.
The primary objectives of RaCP:
- Remediate and/or compensate for HCV losses;
- Safeguard the integrity of RSPO standards; and
- Provide a pathway for companies to move toward certification without absolving past responsibilities.
Through the RaCP process, companies are required to disclose non-compliant land clearing, prepare a Land Use Change Analysis (LUCA), and implement environmental remediation as well as conservation and social compensation obligations. In 2020, a total of 673 RaCP cases were recorded globally, with the majority originating from Asia and Oceania. Given Indonesia’s substantial contribution to global palm oil production, a significant proportion of these cases are associated with operations in Indonesia, either directly or through corporate group structures.
Implementation Challenges on the Ground
Despite relatively high levels of case disclosure, the completion of RaCP obligations remains suboptimal. Only approximately 45% of cases have an approved LUCA, and merely 18% have completed the entire process. In Indonesia, these challenges are influenced by complex permitting systems, limited availability of historical data, and varying levels of technical capacity among companies.
From an environmental perspective, differing interpretations of remediation and conservation compensation continue to occur. Forest restoration activities as a form of compensation are generally implemented outside plantation areas; however, evidence of long-term implementation and effectiveness in the field remains limited. Another critical aspect is the alignment between RaCP obligations and national regulations. In several cases, remediation or compensation plans required under RSPO standards are not fully aligned with national forestry regulations, spatial planning frameworks, or government-regulated land rehabilitation mechanisms. This lack of synchronization has the potential to delay implementation, particularly when companies must navigate compliance with both international voluntary standards and mandatory national legal requirements.
Beyond environmental considerations, RaCP also encompasses significant social dimensions, particularly when past land clearing intersects with the rights and interests of local communities. Remediation in this context is not limited to ecological restoration, but also includes social compensation, land conflict resolution, and the strengthening of community participation. Challenges arise when historical documentation related to community consent is unavailable or insufficient, necessitating reassessment processes and intensive dialogue. If not managed in an inclusive and transparent manner, RaCP obligations may inadvertently trigger new conflicts or prolong distrust between companies and affected communities.
Implications for Indonesia
The implementation of RaCP carries important implications for palm oil plantation governance in Indonesia. On one hand, RaCP promotes improved transparency, reporting, and corporate accountability for past environmental and social impacts. On the other hand, it demands enhanced technical capacity, reliable spatial and historical data availability, and effective coordination among stakeholders. For Indonesia, RaCP can serve as a learning instrument to strengthen policies on deforestation prevention, ecosystem restoration, and the protection of community rights, while simultaneously improving the global image of Indonesian palm oil in international markets.
Experience from RaCP implementation demonstrates that, conceptually, this mechanism represents an important instrument for bridging the gap between past practices and current sustainability demands. However, its effectiveness is highly dependent on corporate commitment, clarity of technical guidance, and the presence of a supportive national policy environment. For Indonesia, strengthening synergy between RSPO standards and domestic regulations, accompanied by capacity building for business actors and local stakeholders, is essential to ensure that RaCP does not remain a mere administrative obligation, but genuinely contributes to environmental recovery and social justice in sustainable palm oil development.
Reference:
Newing, H. 2020. An Independent Review of the RSPO Remediation and Compensation Procedure (RaCP) 2015. Roundtable on Sustainable Palm Oil.
