Due to its controversies, oil palm has been targeted by several regulatory innovations aimed at enhancing the sector’s sustainability. Among these, transnational efforts—such as the Roundtable on Sustainable Palm Oil (RSPO) and corporate commitments to zero deforestation—and consumer country initiatives have been highly influential. Nonetheless, there has been little focus on the domestic efforts of producing countries. This article presents an analysis of the extent to which the governance models of palm oil producing countries can be better equipped to reconcile conservation and development goals, more precisely domestic demands such as economic development and poverty alleviation, and transnational concerns about forest conservation. In the Brazilian case, the government intended to drive oil palm expansion in the Amazon through a program that simultaneously only allowed expansion into already degraded areas and offered companies incentives to engage smallholder farmers in their supply chains. The findings suggest that domestic governance strategies can be a valuable way to minimize the socio-environmental footprint of commodity production, and are not necessarily strategies to greenwash or circumvent transnational regulations. In Brazil, however, the sector’s overall economic viability is beset with constraints and dilemmas. This suggests that any attempt to enhance the socio-environmental standards of commodity production should be grounded in economic viability.

This research was conducted with the financial support of the DfID-funded KnowFOR (Forestry Knowledge) program. This work is part of the CGIAR Research Program on Forests, Trees and Agroforestry (FTA). This research is supported by CGIAR Fund Donors. For a list of Fund donors, please see: www.cgiar.org/ about-us/our-funders/.