First RSPO Certification For Sime Darby Plantation's Indonesian Smallholders

Certification achieved a year ahead of schedule

Kuala Lumpur, 9 January 2014 – Sime Darby Plantation Sdn. Bhd., the plantation arm of the Sime Darby Group, has achieved its first ever Roundtable of Sustainable Palm Oil (RSPO) certification for smallholders under Indonesian subsidiary, PT Minamas Gemilang.

The achievement, which comes under the Kredit Koperasi Primer Anggota (KKPA) scheme, was one year ahead of the mid-2014 target set for any PT Minamas smallholders to be RSPO certified.

The certified KKPA scheme is located at the Estates in Sebamban, South Kalimantan in Indonesia, covering a total operational area of 16,639 hectares (ha) with a total production capacity of 347,749 metric tonnes (MT) of Fresh Fruit Bunches (FFB). The KKPA scheme is divided into five sections and KKPA 2, 3, and 5, which supply FFB to PT Minamas’ Mustika Palm Oil Mill were the first smallholdings to be RSPO certified. They were soon followed by KKPA 1 and 4 which were RSPO certified during the recent Annual Surveillance Audits. KKPA 1 and 4 are the respective FFB suppliers to Angsana Mini Oil Mill and Angsana Oil Mill.

As a result of this achievement, the three PT Minamas Mills – Mustika, Angsana Mini and Angsana Oil Mill - have now achieved segregated status under the RSPO Supply Chain Certification System (SCCS), as 100% of their supplies are now RSPO Certified FFB from PT Minamas’ KKPA smallholders. This has raised the number of PT Minamas’ segregated status Mills to 17 out of a total of 21 RSPO certified Mills.

“This is a significant milestone for Sime Darby Plantation. To be able to achieve the first RSPO certification for our smallholders one year ahead of the target we have set reinforces our overarching commitment to sustainability in our operations,” said Datuk Franki Anthony Dass, Managing Director of Sime Darby Plantation.

“The segregated status of our three Mills will also provide traceability of our palm oil along the entire value chain and will give us the advantage of gaining further access to the international sustainable palm oil market. This is yet another step forward for Sime Darby Plantation in our quest to produce and supply only certified sustainable palm oil and palm products, and it will further strengthen our position as a leading CSPO producer in the world,” added Datuk Franki.

The segregation status requires that CSPO is kept separated from non-CSPO at every stage of its production, from the mills to the refinery, the entire manufacturing process and also its transportation to storage and bulking facilities. It is supported by a proper management system in accordance with the RSPO SCCS, and is independently verified and certified by RSPO-accredited Certification Body.

Although RSPO offers other options for the production and procurement of CSPO and its derivatives such as Mass Balance and Book & Claim, the Segregation Module offers a higher level of commitment and thus assurance to customers.

“We trust the RSPO Certification awarded to the smallholders will have a positive impact on yield while improving efficiency as a result of the systematic management system. Smallholders are important stakeholders in our sustainability effort and we hope this achievement will also further raise awareness on the benefits of certification, not just among the smallholders in our outgrower schemes but also in other smallholder communities in Indonesia,” said Mohd Ghozali Yahya, President Director of PT Minamas.

“PT Minamas will continue to be actively involved in further increasing its production of CSPO and certification process. We will do this through intensified engagement activities, facilitation and support in terms of training, consultation and assistance for our smallholders in achieving RSPO Certification. We are committed to ensure that our current remaining outgrower schemes that have not been RSPO certified will achieve their certification by the year 2020,” he added.

Currently, there are two types of outgrower schemes under PT Minamas, which are intended to provide local communities with the means to make a living and raise their quality of life.

The first is KKPA, which is essentially a cooperative scheme where land for the development of smallholder oil palm plots is held by cooperatives. Individual smallholders are allocated share certificates for two hectares. Smallholders receive income via dividends issued from the profits made by the cooperative and wages earned. Meanwhile, for the second type of outgrower scheme which is called Plasma, PT Minamas assists locals to be independent growers of oil palm by undertaking land preparation, planting and maintenance for at least 48 months before handing over to the plasma participants for them to manage on their own. PT Minamas will purchase their FFB once they start to harvest their crop.

To date, PT Minamas has developed approximately 42,008 ha under the outgrower schemes in Indonesia which has improved the livelihood of more than 25,000 families.
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