When it comes to making the palm oil industry more sustainable, the plantations themselves can’t do it alone. Agus Purnomo, managing director for sustainability and strategic stakeholder engagement at Singapore-headquartered palm oil company Golden Agri-Resources, said the collaboration of governments and consumers is vital, especially as the industry faces additional challenges amid the COVID-19 pandemic.
Sustainable palm oil production works to conserve the environment, safeguards social interests, fulfills food demand, contributes to poverty reduction, and supports affordable food prices. This means working with farmers to eliminate deforestation and the clearing of land by burning. But such sustainability creates additional cost, Purnomo said, which is something that consumers need to understand.
“The cost, big companies like us can manage, but for the millions of smallholders, definitely they will not be able to afford it. So if our consumers in Europe, North America, and in Asian countries would like to consume sustainable products, they need to share the burden, know the challenges on the ground, and find a way to help alleviate those,” he said.
In Indonesia, GAR’s palm oil plantations span 500,000 hectares, yet that still equates to less than 4% of the country’s total plantation area. “So there is no way GAR itself can deliver sustainable oil products for the whole of Indonesia. … We need the collaboration of many parties — not only other growers, but also the Indonesian government and, more importantly, the customer and end-use consumers,” Purnomo said.
Speaking to Devex, Purnomo explained the specific challenges in becoming a sustainable palm oil producer, how those have been exacerbated by COVID-19, and how technology can help.
This conversation has been edited for length and clarity.
What challenges does the palm oil industry face when it comes to implementing sustainability, and how have those been exacerbated by the pandemic?
The implementation of sustainability in the last years [has been] challenging. There are issues with various activities, processes, and transfers of ownership from the smallholder farmers to the processing facility of the palm oil, etc. All of these processes are quite complicated, and they need to comply with the same standards of sustainability, so those are the complications of achieving sustainable palm oil products throughout our supply chain.
As an example, in collaboration with agritech company Satelligence, recently we have been working to reduce the risk of deforestation throughout the company's supply chain by utilizing satellites and ensuring that our supply chains do not infringe or get into the forest areas. The forest and fires continue to threaten the sustainability aspect of our operation.
Like many others who are operating in remote areas, we also have to adapt to the constraints of having a pandemic around us. Starting with the implementation, it’s definitely more challenging because of travel restrictions and social distancing. And of course, we need to ensure that our workers and local communities surrounding our operations [are safe]. ... We want to ensure that sustainable implementation can continue while taking all precautionary activities in regards to COVID-19.
How is GAR working to overcome these challenges?
We have innovated our engagement activities with our suppliers, ensuring that they comply with our corporate values through developing a sustainable information system featuring an electronic database combined with satellite usage. … This enables us to deliver up-to-date information, which assures sustainability auditors that we are still able to implement what is required to maintain our sustainability certifications.
In [regards to] overcoming the pandemic, aside from supporting agriculture practices, we also help through the Alternative Livelihood Programme, where we help farmers achieve a healthy and nutritious food supply for their family while encouraging them to not use fire when they're preparing their own home garden or plantations.
What role can technology play in ensuring the industry operates sustainably, especially during the pandemic?
Technology helps us a lot. For example, in the second semester of this year, there is a prediction that the dry season will be occurring in Indonesia. Satellite technology, drones, and other technology can help us to monitor and deploy staff for a quick response on the ground and prevent and verify hot spots for small fires, preventing them from becoming bigger. This will also help us to ensure that our canals, firebreaks, dams, and water reservoirs are in full operation.
We were, in a way, a bit blessed by the climate that last year, in that we did not have El Niño, so … overall the rain was sufficient for our plantations. If we had had an El Niño, then technology would also [help] because we’re moving into operations that use a water-dripping system to maintain the moisture in our palm oil trees so that they can still bring about the same productivity that we could harvest during a normal season.
Implementing new technologies, satellite-based technology, cellular phones, and internet connections is all very useful. However, technology, at the end of the day, cannot replace human resources or the specific roles of human assets. Technology needs human assistance in its operations. We need staff members who are trained to work with those new technologies, can analyze the data, and come up with the context of the data.
Though we have implemented new technologies, at the end of the day, agricultural work is human-based work. We cannot leave it to the machines, because a big part of the sustainability criteria also relates to social issues including workers’ rights and human rights. So we need to continue demonstrating that palm oil plantations respect workers’ rights and human rights, including those of women and children.
What advice would GAR have around taking a sustainable approach to palm oil production?
The big challenge in sustainability practice is to know where your product is coming from. What that means is if you buy soaps or chocolates that use palm oil ingredients from our refineries, the manufacturer of your soap and chocolate can tell where the oil is coming from, who owns the palm oil trees. We, at GAR, call it “traceability to the plantation.”
At GAR, we aim to have 100% of products sold traceable to the plantation. Unfortunately, the pandemic last year prevented us from achieving that target. We are now at the level of having more than 90% of products traceable to the plantations. … We're hoping that this year, with the help of technology — and hopefully with the vaccine lessening restrictions of movement — we can achieve 100%.
We also use the services of a satellite company and of an IT [information technology] company to collect data from our regular suppliers, specifically the independent smallholder farmers, because there are millions of them in Indonesia. We are buying from between 70,000 and 90,000 individual farmers, so traceability is key to implementation of sustainable practices.
Key to palm oil sustainability practices is also the ability to prevent forest fires. In the last four or five years, less than 1% of our plantation areas were affected by fires. In fact, last year 99.9% were not affected by fires. But still, there is a perception that palm oil creates the fires.
Therefore, we are also helping the communities surrounding us to participate in the effort to not use fire in their agricultural operations and to create awareness that using fire for agriculture is dangerous. We help schools with comic books, train teachers so that they can have special sessions with their students, and encourage them and their parents to prevent the occurrence of forest fires.