8.3 Agency Patterns: State Reemergence Amid Transnational Actors
189
historically low in Indonesia, where most financing is foreign. Indeed, social and
environmental standards have been pushed mostly by foreign buyers and investors.
However, Indonesia started to assert itself in the 2010s by creating its sustainability
certification scheme (ISPO) and dismantling collective action attempts from the
private sector to govern oil palm expansion (Dermawan and Hospes 2018). Such a
dependence on the state or foreign partners to elevate social, environmental, and labor
standards reveals inadequate levels of corporate social and environmental responsibility in those countries—and, therefore, how unreliable voluntary self-regulation is
in those contexts.
Fifth, the state has also performed a key advocacy role. Whereas most studies
on policy advocacy tend to focus on non-state actors, the biofuels case seems quite
exceptional in that the state itself is the leading policy proponent. Although nonstate actors have also done lobbying and advocacy, there has been perhaps a more
forceful movement in the opposite direction. That is, governments have operated to
buy private and civil society actors into their bioeconomy agendas with subsidies,
discourses, and regulations. In a way, this suggests that biofuels have received the
same treatment as other strategic sectors such as oil—though crucially, unlike the
latter in emerging economies, the bioeconomy requires additional actors such as
farmers and private agroindustries to operate. Hence, the need to get such other
actors on board.
Finally, the state has also played an active diplomacy role seeking international
support on their bioeconomies and biofuels, as discussed in Chap. 4. Such a role has
been particularly notable from Brazil, especially during its “ethanol diplomacy” years
under president Lula da Silva, with biofuel partnerships being actively established in
Africa, Central America, and elsewhere (Bastos Lima 2012). This role has been less
relevant in the Indian case, which has a more domestic-oriented sector. Indonesia, in
turn, has also engaged in so-called “palm oil diplomacy,” albeit with limited success.
If key Western markets such as the EU indeed phase out Indonesian palm oil, this
diplomacy role might either fade or turn more forcefully to other parts of Asia that
continue to import it.
All these roles amount to an unusual prominence of state actors related to biofuels’
strategic nature—closely associated with national economic and political interests—
and a state-centered approach to development that emerging economies frequently
favor. In this sense, the private sector’s reluctance and poor performance in adhering
to the government biofuel agendas—particularly regarding smallholder inclusion—
has led to further state control. This state prominence appears to go beyond that
of highly industrialized countries, where private companies tend to play the market
roles of biofuel production, blending, and distribution.
Perhaps more notably, biofuel promotion in emerging economies has also been
different from that of least developed countries. In the latter, without much of a
domestic institutional framework, investments are mostly foreign-led (even if with
the approval of national or local authorities) and oriented towards exporting raw
feedstocks or unprocessed vegetable oil for value addition abroad (see Vermeulen
and Cotula 2010; German et al. 2011; Schoneveld et al. 2011). Table 8.3 provides an
189
historically low in Indonesia, where most financing is foreign. Indeed, social and
environmental standards have been pushed mostly by foreign buyers and investors.
However, Indonesia started to assert itself in the 2010s by creating its sustainability
certification scheme (ISPO) and dismantling collective action attempts from the
private sector to govern oil palm expansion (Dermawan and Hospes 2018). Such a
dependence on the state or foreign partners to elevate social, environmental, and labor
standards reveals inadequate levels of corporate social and environmental responsibility in those countries—and, therefore, how unreliable voluntary self-regulation is
in those contexts.
Fifth, the state has also performed a key advocacy role. Whereas most studies
on policy advocacy tend to focus on non-state actors, the biofuels case seems quite
exceptional in that the state itself is the leading policy proponent. Although nonstate actors have also done lobbying and advocacy, there has been perhaps a more
forceful movement in the opposite direction. That is, governments have operated to
buy private and civil society actors into their bioeconomy agendas with subsidies,
discourses, and regulations. In a way, this suggests that biofuels have received the
same treatment as other strategic sectors such as oil—though crucially, unlike the
latter in emerging economies, the bioeconomy requires additional actors such as
farmers and private agroindustries to operate. Hence, the need to get such other
actors on board.
Finally, the state has also played an active diplomacy role seeking international
support on their bioeconomies and biofuels, as discussed in Chap. 4. Such a role has
been particularly notable from Brazil, especially during its “ethanol diplomacy” years
under president Lula da Silva, with biofuel partnerships being actively established in
Africa, Central America, and elsewhere (Bastos Lima 2012). This role has been less
relevant in the Indian case, which has a more domestic-oriented sector. Indonesia, in
turn, has also engaged in so-called “palm oil diplomacy,” albeit with limited success.
If key Western markets such as the EU indeed phase out Indonesian palm oil, this
diplomacy role might either fade or turn more forcefully to other parts of Asia that
continue to import it.
All these roles amount to an unusual prominence of state actors related to biofuels’
strategic nature—closely associated with national economic and political interests—
and a state-centered approach to development that emerging economies frequently
favor. In this sense, the private sector’s reluctance and poor performance in adhering
to the government biofuel agendas—particularly regarding smallholder inclusion—
has led to further state control. This state prominence appears to go beyond that
of highly industrialized countries, where private companies tend to play the market
roles of biofuel production, blending, and distribution.
Perhaps more notably, biofuel promotion in emerging economies has also been
different from that of least developed countries. In the latter, without much of a
domestic institutional framework, investments are mostly foreign-led (even if with
the approval of national or local authorities) and oriented towards exporting raw
feedstocks or unprocessed vegetable oil for value addition abroad (see Vermeulen
and Cotula 2010; German et al. 2011; Schoneveld et al. 2011). Table 8.3 provides an