Palm kernels being harvested © 123RF
Palm kernels being harvested © 123RF

Indonesian palm oil producers make sustainability progress

10 March 2016

Two of Indonesia’s largest palm oil producers have taken major steps towards promoting sustainability in their supply chains.

The world’s second largest palm oil producer, Golden Agri-Resources (GAR), has mapped its supply chain to 489 individual mills in Indonesia.

The company said it now knows the location and other details of all mills which supply crude palm oil and palm kernels to its processing facilities in eight different locations in Indonesia.

In 2014 GAR extended its sustainability policy to its entire supply chain.

“We see a clear industry trend where buyers want more information on the impact of the palm oil they purchase,” said Paul Hickman, head of global vegetable oils and oilseeds, trading at the Singapore-based company.

“If we can trace the oil back to its source we can engage more effectively with the suppliers and share what we have learned in our own operations to help them improve their environmental and social practices.”

GAR owns more than 480,000 hectares of plantation managed directly or through its plasma smallholders but also buys significant amounts of palm oil and kernels.

Meanwhile Indonesia’s Astra Agro Lestari has signed the Indonesian Palm Oil Pledge (IPOP) whose signatories promise to eliminate deforestation, peatlands conversion and human rights abuses from their supply chains.

Other companies who have signed the pledge include GAR, Wilmar, Musim Mas, Asian Agri and Cargill. These companies control the bulk of Indonesian palm oil refining as well as the Indonesian Chamber of Commerce and Industry.

IPOP is lobbying the Indonesian government to change the law so that it can legally enforce the terms of the pledge in courts. At present Indonesian law only protects certain types of forest.

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