Smallholders - Indonesia

Our supply chain in Indonesia comprises of 10 Kredit Koperasi Primer Anggota (KKPA) smallholders and 9 Plasma Scheme smallholders. Through this scheme, the KKPA land holdings are managed by Sime Darby Plantation (SDP) while the smallholders are allocated share certificates for oil palm cultivation in their concessions. In exchange for the share certificates, the smallholders receive an income from the profits generated while the local communities enjoy additional work opportunities as well.

Plasma smallholders, on the other hand, are those who took part in the Plasma Transmigration Program (Perkebunan Inti Rakyat, also known as PIR-Trans), set up by the Indonesian government in 1987. Plasma schemes are managed by the community farmers who sell their Fresh Fruit Bunches (FFB) to SDP.

We received our first Roundtable on Sustainable Palm Oil (RSPO) smallholder certification for KKPA smallholders in Indonesia in 2014. The total operational area under the smallholder certification was 16,639 hectares with a total production capacity of 347,749 metric tonnes of FFB. As a result of this first smallholder certification, three mills achieved segregated status under the RSPO Supply Chain Certification System (SCCS).

Since then, we have certified 50% of our smallholders in Indonesia (5 KKPA and 2 Plasma) with a total smallholder area of 22,506 hectares and fresh fruit bunch production capacity of 404,108 metric tonnes.

Our original certification target was 2020. We have experienced some delay in delivering that target, primarily due to the process of obtaining land cultivation rights or Hak Guna Usaha (HGU). We expect to complete the application process for the rights by 2022. In the meantime, we continue to engage with the farmer cooperatives to help improve their sustainability practices to align with RSPO's certification requirements. 

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