This report aims to build knowledge about forestry and plantation companies’ engagement in corporate environmental responsibility (CER) practices in Indonesia. The report is a product of a joint research project undertaken by the Asia Pacific Network for Environmental Governance (APNEG), Crawford School of Public Policy at The Australian National University, Australia, and Forest Research and Development Agency (FORDA), Indonesia. The report addressed the following three research questions:

• Why do Indonesian forestry and plantation companies engage in CER? • How do companies in the Indonesian forestry and plantation sector undertake CER in the contexts of sustainable forest management and forest conservation? and, • What are the implications for further CER research and reducing deforestation and degradation in the forest and plantation sectors?

The research recognized that external and internal factors of the forestry and plantation companies can have significant influence on companies’ engagement in corporate environmental responsibility (CER) practices in Indonesia. The project sought to test this assumption by exploring the above research questions that might be of help in promoting sustainable forest management and reducing deforestation and degradation in the forestry and plantation sectors in Indonesia.

The project involved a combination of desk-based research using comparative case study approach and face-to-face interviews involving three groups of stakeholders including

(1) government policy-makers; (2) practitioners involved in the forestry and plantations sectors; and (3) NGO activists and academia.

Interviewees included individuals from government officials within the forestry and environment ministries, senior managers of forestry and plantation companies including industry bodies, environmental and social development practitioners, and academia. A number of factors appear to be the driving force of the evolution and engagement of CER in the Indonesian forestry and plantation companies, including:

• Economic and market pressure • Regulatory interventions • Scrutiny of environmental NGOs (eNGOs) • Peer pressure • Competitive advantage

Forestry and plantation companies in Indonesia adopt a range of strategies as part of their CER engagement process by:

• Producing and publishing sustainability/annual reports • Seeking opportunities for certification of companies production and processes • Engaging with communities, government and NGOs • Incorporating business sustainability into corporate structures and hierarchy • Hiring and training/workshop

Finally, a number of strategies were identified that could help investigate the implications for further CER research and its potential role in reducing emissions from deforestation and degradation (REDD+) in the forest and plantation sectors, including:

• Understanding the governance issues in sustainable forest management. • Implementing CER at the sub-national and local levels. • Wider use of mapping of natural and/or national resources. • Improving the social mapping in the forestry context.