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When the State Brings Itself Back into GVC: The Case of the Indonesian Palm Oil Pledge

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During the last decades the role of the state in governance of Global Value Chains (GVC) for sustainability has been largely ignored. This paper contributes to the re-centering the state in GVC analysis. We provide an analysis of the rise and fall of the Indonesian Palm Oil Pledge (IPOP). IPOP is a commitment of some biggest palm oil companies towards zero-deforestation in Indonesia, but was dissolved after serious critique from the Government of Indonesia (GoI). Our question is: why and how did the GoI decide to put an end to the IPOP? We show that the GoI orchestrated the IPOP's demise by framing it as a danger to smallholder development, as not acknowledging public standards, and as an illegal cartel. The GoI's counter-framing re-asserts its sovereignty over producers, rule-making and economic organization. We argue that when a state perceives that when non-state-driven GVC governance threatens its sovereignty over producers, rule-making and economic organization, it will engage in discursive power struggle with non-state actors. More specifically, collective action of non-state actors can particularly trigger a state to engage in discursive power struggle with non-state actors.

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    Dermawan, A.; Hospes, O.




    oil palms, supply chain, governance, deforestation



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