Blogs: Cadena de suministro

In Indonesia, a country home to dense rainforests and extensive biodiversity, agribusinesses often receive criticism for deforestation, habitat destruction, and monoculture. GAR has been addressing these key issues for many years, striving to maintain the balance between palm oil production and the protection of sensitive ecosystems.

One such ecosystem is Rawa Singkil Wildlife Reserve landscape in Aceh.

Although we do not have any direct operations in the area, we do source from third party suppliers there. We have been engaging with suppliers in Aceh, to comply with our GSEP (GAR Social and Environmental Policy) and ensure more responsible production practices, since its implementation in 2015.

A RAN report in 2019 highlighted the potential risks to GAR’s supply chain as a result of mills allegedly receiving Fresh Fruit Bunch (FFB) from sources that had encroached into the Rawa Singkil Wildlife Reserve.

GAR immediately launched investigation into the allegations. But based on our knowledge of the complex dynamics in the area – Aceh as province operates under unique laws in Indonesia and has had a history of conflict – GAR also wanted to take more proactive and positive action.

We held a Focus Group Discussion with suppliers in the area, to refresh their understanding of our policies, and address the risks of procuring from non-compliant sources. The event was co-presented by Musim Mas, another Indonesian palm oil company, and attended by representatives of nine suppliers and mills, representatives from agents and farmers, BKSDA (Natural Resources Conservation Agency of Indonesia), and three civil society organisations who have done work in Singkil (Earthworm Foundation, USAID Lestari and KfW Germany), and our consultant Aidenvironment.

Key takeaways

We learnt that agents were not aware of the Rawa Singkil Wildlife Reserve borders. They shared that there has been little to no information about the area, and there are no border markers. There is a need for more information about the Rawa Singkil Wildlife Reserve regulations for locals, such as a detailed map and signs that indicate environmentally sensitive areas. BKSDA addressed this, sharing that while socialisation had been conducted, not all villages were reached because of the large population and the agency’s lack of manpower. They have plans for more socialisation to be conducted in the future.

Suppliers and dealers agreed that traceability was much needed as a solution to avoid allegations of deforestation and negative impact on the environment. They showed a willingness to conduct Traceability to Plantation (TTP) in their operations with support and guidance from the stakeholders present including the government and NGO representatives.

Building on traceability efforts

During the event, one supplier declared their TTP progress, and since then four other suppliers have sent their TTP progress to GAR. Among the four, one of them is now 100% traceable and the others are on track to achieve their targets by the end of 2020. There has also been an increase in farmers registered in our Ksatria Sawit traceability programme. To date in Aceh, nine mills are participating in Ksatria Sawit, registering 136 agents and 6,364 farmers – a healthy sign for our traceability commitment.

Traceability is just a means to an end. Our goal is to establish networks with the mills, dealers and farmers to assist them in improving environmental, social and labour practices. GAR will also continue engaging stakeholders to jointly collaborate in achieving the No Deforestation, Peat and Exploitation (NDPE) commitment and compliance of GSEP.

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