Indonesia's Palm Oil Diplomacy Under Sustainability Transitions: A Qualitative Analysis of Key Diplomatic Relationships

Indonesia's palm oil sector has become increasingly embedded in global sustainability governance, particularly through regulatory frameworks such as the European Union Renewable Energy Directive (RED) and the European Union Deforestation Regulation (EUDR). This study examines how Indonesia manages its key diplomatic relationships amid sustainability transitions and explores the role of palm oil trade diplomacy in maintaining market access, international legitimacy, and regulatory sovereignty. Drawing on the Multi-Level Perspective (MLP) and Institutional Theory, the study conceptualises Indonesia's palm oil diplomacy as a process of adaptive institutional mediation, through which global sustainability pressures are translated into domestic policies and diplomatic strategies. A qualitative research design was employed, using semi-structured interviews with 15 stakeholders representing government agencies, palm oil companies, smallholders, and non-governmental organisations. The data were analysed using a combination of Thematic Content Analysis and Thematic Analysis. The findings reveal that Indonesia's palm oil diplomacy operates through a multi-level governance system involving state actors, industry, smallholders, and NGOs. Stakeholder triangulation identifies patterns of convergence, complementarity, and divergence in sustainability governance and trade diplomacy. While government and industry actors largely agree that sustainability is a prerequisite for export competitiveness, significant divergences remain over access to certification, compliance burdens, and the distribution of economic benefits, particularly for smallholders. The study further demonstrates a transition from defensive diplomacy towards more adaptive and transformative strategies, including institutional collaboration, regional coalition-building, and sustainability-based diplomatic narratives. Theoretically, the study advances the concept of adaptive institutional mediation, illustrating how developing countries negotiate global sustainability pressures while preserving domestic policy autonomy. The findings suggest that legitimacy in contemporary sustainability governance is achieved not only through compliance but also through institutional innovation, diplomatic adaptation, and the strategic negotiation of sustainability norms.