CSPO from the heart of Kalimantan

Producing Certified Sustainable Palm Oil (CSPO), according to RSPO principles means that our smallholders will be able to build a secure and sustainable livelihood for themselves and their families, while being committed to protecting their environment for their future generations.

If you look at the ingredients list in a product from your local supermarket or grocer, more often than not, you will see palm oil listed as one of the ingredients. This is because palm oil is one of the most versatile vegetable oils around, and can be processed and blended to form a wide range of products for many different uses. Further to that, oil palm, the tree that produces palm oil, is one of the most efficient oil-producing crops, requiring 10 times less land and producing far more fruits per hectare than other oil-producing crops

The high demand for palm oil means that it plays an important role in the socio-economic development of palm-oil producing nations. Developing countries like Malaysia and Indonesia, and more importantly their people, depend on palm oil as a source of income. In Indonesia, outgrower schemes such as the Kredit Koperasi Primer Anggota (KKPA) scheme and the Plasma Scheme, allows local communities to become smallholders of palm oil plantations, and share in the profit of palm oil plantations developed in their area. For example, in Indonesia, approximately 25,000 families make a living out of the Sime Darby smallholder schemes in its plantations.


KKPA 1, PT Sanjang Heulang

Mr. Kusrin, from KKPA Sebamban for example, has been a part of the KKPA scheme since 2000. Before joining KKPA, Mr. Kusrin planted rice, corn and vegetables. Life was a struggle back then. Now, with 2 ha of land capital, he shares that KKPA has improved the lives of his family. “Our children now has the chance to study in higher education. In addition, almost everyone can afford owning a car in the community. This just made our life easier,” said Mr. Kusrin. His first child graduated from the Mid-wife Academy and is now working as a mid-wife while his second is currently in his fourth semester at the Lambung Mangkurat University in Banjarmasin (UNLAM).

The KKPA and Plasma schemes have allowed the local communities to reap the benefits of this economic changing cash crop. However, not all palm oil are equal. Palm oil has long been associated with social and environmental issues such as deforestation, biodiversity destruction and land-grabbing. As the world becomes more informed, consumers in developed nations are becoming more aware of how the products they purchase can affect the lives of others worldwide and also the environment. It is important for consumers to know that the products they consume does not come at the expense of others.

Which is why Certified Sustainable Palm Oil is becoming an increasingly important phrase in the hearts and minds of modern consumers. CSPO tells consumers that the product that they are purchasing contains palm oil that has been produced sustainably. It tells consumers that the palm oil does not cause deforestation and does not threaten the lives and livelihood of indigenous people. It tells consumers that the palm oil does not endanger rare species that are important to the biodiversity of our world.

Deep in the South of Kalimantan, palm oil farmers in Pamukan are playing an important role in delivering products made with sustainable palm oil. In the estate of Sebamban, owned by Sime Darby Berhad’s subsidiary, PT Minamas, palm oil produced by smallholders under the KKPA scheme is certified by the Roundtable of Sustainable Palm Oil. This means that here, palm oil is grown sustainably, following the 8 RSPO principles and criteria:
  • Commitment to transparency Compliance with applicable laws and regulations
  • Use of appropriate best practices by growers and millers
  • Responsible development of new plantings
  • Commitment to continuous improvement in key areas of activity
  • Environmental responsibility and conservation of natural resources and biodiversity
  • Responsible consideration of employees, and of individuals and communities affected by growers and mills

A preschool in the smallholder community in Sime Darby's Sebamban Estate

On a day to day basis, everyone working on the estate has to ensure that there is no environmental damage during the production process, and that the welfare of the people living around the area of ​​plantation and mill are taken care of. The safety and health of workers and families in the estate is also a priority.

The KKPA scheme in Sebamban Estate is made up of 1,957 families, who together, hold about 16,000 hectares of land in the estate. The estate is divided into 5 KKPA sections, and they produce approximately 340,000 metric tonnes (MT) of Certified Sustainable Palm Oil Fresh Fruit Bunches (FFB), which are sent to Minamas’ Mustika Palm Oil Mill and Angsana Oil Mill. These mills only receive FFB from the Sebamban smallholders and thus, the mills have been given segregated status under the RSPO Supply Chain Certification System (SCCS), as 100% of their supplies are RSPO Certified FFB. This goes a long way in ensuring traceability of CSPO along Sime Darby’s supply chain.

The 5 KKPA’s achieved certification on 5 July 2013. This was ahead of the target date set by Minamas for smallholder certification, a success in its own right, as it reflects the commitment of our smallholders towards our sustainability journey.

For Sime Darby, which produces 5% of the world's palm oil, CSPO is at the heart of its operations. Sime Darby is already the world’s largest producer of CSPO and is currently on a journey to produce 100% CSPO by 2020, a move that will ensure that Sime Darby can continue to meet the demands of the world’s oil and fat supply while contributing to the development of local communities and without compromising on the environment. Smallholders are an important aspect of this journey, as approximately 42,008 ha of Sime Darby’s plantation in Indonesia are under smallholder schemes. It is not a journey without challenges, but Sime Darby, Minamas and their smallholders are determined to maintain RSPO status and expand it to its other estates in the country. Openness between the company and the smallholders continue to be at the crux of ensuring that the certification status of the Sebamban Estate remains intact.

For the smallholders, producing certified sustainable palm oil, according to RSPO principles means that they will be able to build a secure and sustainable livelihood for themselves and their families, while being committed to protecting their environment for their future generations.

“With KKPA, my children get the chance to study. My first child currently at the Indonesian Islamic University (UII) in Yogyakarta Faculty of Medicine. The second one is graduated from renowned University of Banjarmasin. My third child had graduated from high school and going to college, while the fourth child is still in grade 5 of primary school,” says Mr. Wayan, the head of KKPA Tuwuh.

So the next time you pick up a cookie, remember, it’s not only company’s like Sime Darby who are working hard to ensure that the palm oil in it is certified sustainable, but it’s also the small farmers like Mr. Kusrin and Mr. Wayan, who are committed to creating a better future for their children and their children’s children.
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