Blogs: Supply Chain

In December 2015, we completed mapping our supply chain to the mill. This meant that we identified all the individual mills – nearly 500 – which supply our downstream refineries in eight locations in Indonesia. This mapping is referred to as achieving traceability.

But identifying our suppliers was only the first step in a process of deepening engagement with them with the end goal of helping them adopt and strengthen sustainable practices. As we highlighted in a recent article on traceability, the true value of mapping our supply chain lies in the process of engagement, of gaining real knowledge and better understanding of our suppliers.

And as part of this ongoing process of engagement, GAR held a workshop for about 80 suppliers in Medan on March 30 2016.

The purpose of the one-day workshop was to highlight how adopting more sustainable practices is in the best interests of the suppliers. We didn’t just want to tell our suppliers they have to adopt sustainable practices because it is required by GAR policy. We wanted them to realise that adopting sustainable practices is the best strategy for them to become more competitive and achieve business longevity. We wanted them to understand that we believe environmental sustainability can go hand-in-hand with economic growth and we are here to help them do that.

At the workshop, participants got to hear from government officials such as the Chief Executive of Indonesia Oil Palm Estate Fund, Bayu Krisnamurthi. They also had the chance to exchange views with NGOs, smallholders and end customers. Suppliers were also guided through the process of self-assessment so that they can check and report on how far they are complying with GAR’s sustainability principles.

A panel discussion with multiple stakeholders

Response from the suppliers was enthusiastic.

“Our suppliers told us that for future events they would like to have more time for Q&A sessions and would also like us to target specific issues such as how to help independent smallholders get legal titles and necessary permits,” said Daniel Prakarsa, Head of Downstream Sustainability Implementation, who together with his team organised the workshop. The next one is scheduled for August and about 200 suppliers will be invited for that event in Jakarta.

A lively Q&A session

Aside from this feedback from the suppliers, Daniel added that he was encouraged by the suppliers’ attitudes: “If I had to narrow down one key thing that I took away from this workshop, it’s that I was really encouraged by how willing and open our suppliers are to adopting sustainable practices and how much they want to learn from us and our experiences.”

To continue sharing views and developments with our suppliers, Daniel and his team are launching a supplier support email system. Feedback and inputs will be used by the team to design action plans to help support suppliers adopt better environmental and social practices.

Our team giving the thumbs-up

While achieving sustainable palm oil is a process with no shortcuts, events like these encapsulate our approach to our suppliers – we see them as key partners in the effort to transform the palm oil industry, making it more sustainable, productive and competitive.