This document summarizes a perspective on the sustainable palm oil industry in Central Kalimantan, Indonesia over the next 30 years. It outlines the growth of palm oil production in the region from 2000-2006. A SWOT analysis identifies strengths, weaknesses, opportunities and threats. The vision is for a responsible palm oil industry that is environmentally friendly, economically sound, and socially acceptable. Strategies are proposed for government, industry and society to work together transparently towards this vision through initiatives like Publish What You Pay and Produce, strengthening government oversight, the Roundtable on Sustainable Palm Oil certification, and establishing a Palm Oil Industry Board.

1. ECOSUS-CK
2011
Sustainable Palm Oil Industry in Central
Kalimantan:
A 30 Years Perspective
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2. Group 3
Chartina Pidjat
Palangka Raya University
Elodie Hanff
International Institute for Water & Env. Engineering
Hera Nugrahayu
Government of Palangka Raya City
Joanita Jalianery
Palangka Raya University
Orencio Pedcris Miralles
Hokkaido University
Prawira Atmaja R. P. Tampubolon
Bogor Agricultural University 2

3. Overview of the palm oil sector
60
50
Percentage (%)
40
1st oil consumed worldwide
30
20
Price 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. 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…
Internal
External
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
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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 green
policies and added value strategies that protect
biodiversity, market competitiveness and quality
of life for present and future generations
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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. Responsible
Government
• 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. OBJECTIVE STRATEGIES
1. Sustain the 1. Adherence/compliance to regulations
• Tax payments (i.e.land, 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 nutrients
Industry
• 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. 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 immediate
Society
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. « 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
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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
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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
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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
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13. International Community
RSPO Incentive
RSPO 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
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14. Thank your for your attention and
your concern for a better world
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