New Constellations of Social Power: States and Transnational Private Governance of Palm Oil Sustainability in Southeast Asia

ABSTRACT

This article considers whether private sustainability standards can lead to lasting change in corporate and state agricultural practices implicated in the environmental damage and social conflicts caused by oil palm cultivation in Indonesia and Malaysia by examining in detail the social processes through which non-state actors engage in governance. Sceptics of private regulation point to the powerful state–business patronage networks in these countries as structural impediments to reforming this sector. Drawing on the literature on global production networks, I show how producers deeply embedded within such supportive local political economies nevertheless choose to comply with stringent global private standards to reduce risks to their global operations. It was the renewed emphasis on supply chain “traceability” to demonstrate responsible corporate behaviour to investors, buyers and consumers that served to embed globally-oriented palm oil plantation firms and their upstream suppliers into emerging ethical supply chains. Embedding occurs through three social processes – surveillance, normalising judgement and knowledge transfer. The private regulatory developments analysed in this article, though relatively recent, are supported by a diverse transnational coalition of principled and instrumental interests and have created significant openings for a new, or at least, parallel, and more progressive, private regulatory order in Malaysia and Indonesia.