Sustainable Palm Oil


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Sustainable Palm Oil

  1. 1. ECOSUS-CK 2011 Sustainable Palm Oil Industry in Central Kalimantan: A 30 Years Perspective 1
  2. 2. Group 3 Chartina Pidjat Palangka Raya University Elodie Hanff International Institute for Water & Env. Engineering Hera NugrahayuGovernment of Palangka Raya City Joanita Jalianery Palangka Raya University Orencio Pedcris Miralles Hokkaido University Prawira Atmaja R. P. Tampubolon Bogor Agricultural University 2
  3. 3. Overview of the palm oil sector 60 50 Percentage (%) 40 1st oil consumed worldwide 30 20Price Jan 2000 – Aug 2008 10 0 Increasing Price Kalimantan 17% 2006 2005 2004 Year 2003 2002 Increasing Sumatera & Production Others 2001 83% 2000 0 200 400 600 3 Area for Palm-oil Plantation (Ha)
  4. 4. SWOT analysis of palm oil industry Positive Negative WEAKNESSES STRENGHTS Health hazards (smog, dust, noise, chemicals) Job creation Outsourcing labor that created conflict with/ in the company Local economic growth Soil erosion Experienced people managing the big businesses Cultural differences work (ie.attitude towards works) High profitability because of high local and international Big numbers of competitors demand Weak payback to communities Good climate for increased production Uncertainties in job condition for the worker, etc…InternalExternal OPPORTUNITIES THREATS Strong policy for regulating plantation Weak implementation monitoring (tax collection, community development, anomalies) University involvement in system improvement Overlapping ownership of land (individuals) Strong demand for palm oil products Forest/land fire Government provides conducive environment for investment Decreasing biodiversity Infrastructure development is one of the major focus of government Scarcity of water/water pollution/ sedimentation NGO’s denouncing the practices to ensure sustainable Multicultural conflicts between local and transmigrant development High footprint of biofuels and competition for food oil Availability of organic farming method, etc… Instability of political environtment 4
  5. 5. Vision To achieve a responsible palm oil industry in Central Kalimantan that is environmentally friendly, economically sound and socially and culturally acceptable, operating in transparent and accountable government, with greenpolicies and added value strategies that protectbiodiversity, market competitiveness and quality of life for present and future generations 5
  6. 6. OBJECTIVE STRATEGIES 1. Provide good 1. Develop transparency and accountability of government image/reputation to • PWYPP - Publish What You Pay and Produce stakeholders (investor, • Allocation of land for production (concessions, timber lease NGO’s, industry, agreements, plantation, mining), forest protection, and customary society), avoid conflict lands (limited area) and overlapping • Coordinations, integration, syncronization and simplification of jurisdiction regulatory processes across different level) 2. ResponsibleGovernment • Prioritization of local ownership/investment/employment government service for sustainable 2. Strengthen governments HR for implementation of policies management of local and regulatory resources • Monitoring and evaluate of MoU (area, taxes, license, 3. Providing sustainable environtment) between company and government product for • Monitoring the implementations of 20% community development sustainable local (Plasma) development • Monitoring complain to labor act (health insurance, minimal wage, 4. Improving quality of working hours, etc.) local resources for 3. Compulsory RSPO certification sustainable local • Implementation of green policy development 4. Support research and development linked to oil palm 5. Manage the change of industry political leadership to • Provision of financial and facilities ensure sustainable • Promotion of agricultural profession in high school local development 5. Integrate the overall policies and regulation in the long term plan (25 years)
  7. 7. OBJECTIVE STRATEGIES 1. Sustain the 1. Adherence/compliance to regulations • Tax payments (, export) license, • EIA/AMDAL (initial and subsequent monitoring reports) prevent it’s • Labor act (i.e. work contract, health, salary) cancellation • Transparency in financial statements and ensure • Land clearing (report on timber stock/ collected) continuity of 2. Recommend profitable environmental strategies industry and • Use of recyclable waste for energy production • Use high producing varieties of palm oil to maximize returns government • Use organic farming for pest control services. • Use cover cropping technique to protect soil from erosion and improve the soil 2. Protect the nutrientsIndustry • Implementation of buffer zone or man-made gap environtment 3. Involvement in community development to ensure • Consulting local communities prior to decision-making (attendance to monthly sustainable meetings) productivity • Publize activities and programs for social awareness (i.e. bi-annual print; annual with low cost media; quarterly hearing) of production • Share the industry’s technology to individuals (i.e. 20% community development and passing the quality control) 3. Avoid conflict • Installation/construction of infrastructure facilities (i.e. road, waste treatment, by legitimize electricity, health center, clean water) the activities • Contribute to local employment and skills development (i.e. decrease unemployment rate) 4. Provide skilled 4. Improvement of human resource management and motivated • Provision of incentive systems (housing, scholarship for children, extended insurance health workers including family) that increase • Provision of safety systems (i.e. gears for employers) • Monitoring accidents encountered by employees and working on solutions the productivity • Provide health facilities for employees and annual check-up for employees • Install announcement/info boards for periodic activities • Provision of security (i.e. insurance, long term contracts) for employees including daily wage earners • Allow formation of union of workers
  8. 8. OBJECTIVE STRATEGIES 1. Bridge understanding 1. Strong community participation in decision-making among civil society, • Form a pool of representatives of diverse persons from local government and community (village level) company (including • Allow communities (including NGO’s, locals) to visit/enter the investors) to resolve palm oil industry problems, issues and • Create dialogues, venue for open communication concerns to palm oil • Take part in the MoU between companies and government company • Inform government and/or company about the immediateSociety priorities needed, as part of community development programs 2. Communicate the rights 2. Establish a sounding board to elevate concerns to of people (individuals companies and government in CK and groups) manage • Collect/gather concerns and issues, and communicate these to expectations and responsible persons in companies and government minimize class actions • Facilitate communication for problem-solving activities to government and • Form a pool of diverse persons from different sectors companies (university, ethnic group, local community) • Facilitate mediation (use of alternative dispute resolutions) • Ensure regular reporting system on concerns and resolved issued • Implement information, education and awareness program to encourage sustainable practices
  9. 9. « Publish What You Pay and Produce »• Inspired by the worldwide « PWYP » coalition designed by the civil society in 2002 to manage incomes from extractives industries in developing countries (70)• PWYPP -> Promoting transparency in the palm oil industry by sharing the information on products and incomes/taxes generated and re- distributed• Shareholders: civil society, companies and central and local government – Palm oil companies publish « what they pay and produce» according to their licence – Central government publish « what they receive and redistribute » to local government – Civil society gather the information from both sides and publish: • the financial informations (taxes collected) • the licences and contracts of exploitation -> Check the conformity of datas from both sides  Promotion of an understable, transparent and responsible management of public funds, but also products and natural ressources 9
  10. 10. « Palm Oil Industry Board »• Mediation body (alternative dispute resolutions) based in CK• Representatives of the Board : civil society (local NGOs, different ethnic groups), government, company members and universities• Objectives: to resolve problems, issues and concerns related to palm oil company• Activities: – Collect/gather concerns and issues, communicate this to responsible persons in company/government – Facilitate communication for problem solving – Regular reporting system on concerns and resolved issued – Information, education and awareness program to encourage sustainable practices 10
  11. 11. Roundtable on Sustainable Palm Oil• The RSPO is a global, multi-stakeholder initiative on sustainable palm oil• Objective: “to promote the growth and use of sustainable palm oil through co-operation within the supply chain and open dialogue between its stakeholders.”• RSPO’s current members produce about 40% of the world’s palm oil and are processors or users of more than 30%.• Responsible buyers are willing to pay a premium for responsibly produced products 11
  12. 12. RSPO Guiding principles of RSPO• Commitment to transparency• Compliance with applicable laws and regulations• Commitment to long term economic and financial viability• Use of appropriate best practices by growers and millers• Environmental responsibility and conservation of natural resources and biodiversity• Responsible consideration of employees and of individuals and communities affected by the growers and millers• Responsible developing of new plantings• Commitment to continuous improvement in key activity RSPO Executive Board elected for 2 years 12
  13. 13. International Community RSPO IncentiveRSPO Certified Products CISS Government University Research and Human Resource CK LT Plan PWYPP MOU Board Industry Society Human Resources Product, Community Development ACTOR- ACTION MODEL 13
  14. 14. Thank your for your attention and your concern for a better world 14