Indonesia’s key exports and the importance of water stewardship

This post was originally published as part of the Australian Water Partnership’s Kini Initiative. To see original post, click here.

The Alliance for Water Stewardship is involved in a number of demonstration projects across Indonesia. Here is why the success of these projects in modelling good water stewardship is important to the country.

Basja Jantowski’s interview on Water Stewardship in Indonesia and the work that she has been involved in with the Alliance for Water Stewardship is highly relevant as Indonesia is the fourth most populous nation in the world. Furthermore, as Basja mentions, Indonesia’s geographical position makes it a key exporter to the rest of the region, with agribusiness forming one of three major sectors in Indonesia.

Indonesia is ranked number 16 in the world by GDP and is reliant on a number of water-intensive exports such as:

• Palm kernels, oil, and its liquid derivatives worth over US $11bn

• Rubber (accounts for 18.6% of agricultural exports)

• Coconut products

• Coffee, tea and spices (accounts for 25.9% of agricultural exports)

• Cocoa

With exports representing 19% of GDP and agribusiness responsible for employing 45% of the 127 million person strong Indonesian labour force, the agricultural sector plays an important role in addressing the SDGs. In fact, the current government’s National Medium-Term Development Plan 2015-2019 ties in to the SDGs with its emphasis on social, economic, and environmental development, as well as on the development of law and governance structures.

The importance of water stewardship in Indonesia 

Basja mentions the need for greater awareness on the linkages between risks such as deforestation and urbanisation, and water stewardship. Issues of water stewardship in the context of agribusiness are just as important. An example of an initiative that aims to bridge the current knowledge gap that exists around critical water risks to business is the CEO Water Mandate – an aspirational commitment to the management of water in areas of business relating to:

• Direct operations;

• Supply chain and watershed management;

• Collective action;

• Public policy;

• Community engagement, and

• Transparency.

How water intensive is palm oil cultivation and production?

Indonesia is the world’s largest producer of palm oil, and together with Malaysia, supplies over 86% of the world’s palm products. Although highly productive and an important source of income for many poor rural communities in the region, meeting the increase in global demand means that the industry is a main contributor to the deforestation of intact tropical rainforests and loss of biodiversity in one of the most ecologically diverse places on Earth. Palm oil cultivation also results in the decline of water quality and the release of greenhouse gases from wide-scale deforestation and draining of mature peatlands.

Photo of roadways surrounded by palm plantation, by Pablo García Saldaña on Unsplash.

There is a clear need to better understand the impact that palm and other monoculture plantations have on the quality of local freshwater sources and resulting downstream stresses. Water footprint studies have shown that water consumption by palm plantations depends on location of the plantation and growing period of the oil palm, with seasonal rainfall potentially supplying most of the water requirements for oil palm growth and irrigation making up any shortfall. The methodology for calculating water requirements over a crop cycle requires further development, with the 2014 Muhammad-Muaz study recommending that a “water stress index” local to the growing area also be incorporated into any calculation.

What does this mean for water stewardship?

Basja highlighted that we need to work on addressing existing knowledge gaps relating to the role of water in creating sustainable and prosperous communities. Key to achieving this is building trust and close relationships between various stakeholders. In addition to direct engagement with businesses, governments and the community, there also still exists a knowledge gap relating to water consumption patterns of one of Indonesia’s key export commodities – oil palm products. In any numerical modelling exercise, appropriate input data and assumptions are crucial to providing accurate and meaningful results on which policy decisions can be based. Therefore water footprint modelling should be conducted carefully when discussing large scale water consumptive activities in any country or context.