Three leading palm oil companies, Kao Corporation, Apical Group and Asian Agri, have launched a new sustainability initiative to help independent oil palm smallholders in Indonesia improve their yields, obtain international certification and eventually secure sales premiums from the sale of certified palm oil
Known as SMILE or Smallholder Inclusion for a better Livelihood & Empowerment programme, collaboration exists between downstream producer Kao Corporation, mid-stream processor, exporter and trader Apical Group, as well as upstream producer Asian Agri.
The 11-year initiative seeks to continue building a more sustainable palm oil value chain by working with independent smallholders. Independent smallholders contribute more than 28% of Indonesia's overall palm oil market.
The collaboration recognises that independent smallholders are private business owners who are challenged to increase their yield and productivity but may neither have the knowledge nor the technical expertise to do so.
As the most widely used vegetable oil in the world, palm oil has a wide range of uses, including processed foods, cooking oil, biodiesel fuel and as a raw material for the production of detergents. Global palm oil production is 75 million tonnes per year and is expected to grow to 111,3 million tonnes by 2025.
There is now a greater focus in Indonesia on improving the productivity of palm oil while minimising the need to extend existing agricultural land. This not only helps to safeguard food security but also serves to balance social, environmental and economic needs.
The companies are implementing activities in accordance with the framework provided by the Roundtable on Sustainable Palm Oil (RSPO). They are working to ensure traceability as far as oil palm plantation is concerned, to build an environmentally friendly, socially responsible supply chain.
While the palm oil industry has moved forward with national certification schemes such as Indonesian Sustainable Palm Oil (ISPO) or multi-stakeholder collaborations such as RSPO, certification for independent smallholders has only recently gained momentum. SMILE seeks to bridge the knowledge gap of independent smallholders by partnering with them and building on the success that companies such as Asian Agri have shown in their long-standing partnerships with smallholders.
SMILE will bring together a team of experts with extensive experience in the field of plantation management and agronomy to work with 5,000 independent smallholders who manage approximately 18,000 hectares of plantations in the North Sumatra, Riau and Jambi provinces. Through customised seminars and workshops, the team will:
-Educate farmers on how to improve their yields and manage their farms sustainably, as well as on the importance of remaining committed to sustainable practises such as non-deforestation and zero-burning, without exploitation.
-Provide support for RSPO Certification.
-Provide training on how to implement robust safety measures across their estates, and safety equipment (including safety helmets, gloves, and fire extinguishers).
This upgrade and provision of equipment will be implemented from 2020 to 2030 to help independent smallholders secure RSPO certifications by 2030. Once certified, these smallholders will be eligible to receive certified palm oil premiums of an average of 5% higher than non-certified palm oil.
As part of the RSPO requirements as well as the commitment of companies to help the community collectively achieve the UN Sustainable Development Goals (SDGs), SMILE includes initiatives that promote greater inclusion and better livelihoods through community empowerment initiatives.
The objective of improving the livelihoods of independent smallholders will be through increased productivity with no deforestation, no peat-land and no exploitation. Throughout the implementation of SMILE, the three companies will regularly engage various stakeholders, such as NGOs, NPOs and community leaders, to ensure the competent delivery of training, adequate equipment allocation, timely provision of needs at the estate and community level, as well as optimised collaboration to build a more sustainable and traceable supply chain.
