Palm Oil

Integrated Approaches Deliver Results

In Colombia, palm oil producers and industry leaders have committed to eliminating deforestation from their palm oil supply chains. Colombia is the first country to present a national agreement on deforestation. In West Kalimantan Indonesia, 1,885 farmers were trained in good agricultural practices and 1,891 farmers were trained in financial literacy. In the village of Sepulut, a total of 14,16 hectares of communal forest was mapped and a regent decree was secured to ensure the forest’s protection.

Number of producers and workers supported

 

Total hectares under sustainable management

 

Achievements

In West Africa, Solidaridad supported independent smallholder farmers to obtain certification from the Roundtable on Sustainable Palm Oil. In Sierra Leone, Solidaridad facilitated dialogue among stakeholders on land acquisition processes for large-scale palm oil investments by the company Natural Habitats Group. A permanent platform for engagement is now in place.

In Indonesia, Solidaridad supported farmers to sustainably manage oil palm farms. A total of 1,885 farmers were trained in good agricultural practices, 1,891 farmers were trained in financial literacy and 7,354 hectares of land, owned by 2,726 smallholders, was mapped. Solidaridad received a letter of support from the Indonesian Coordinating Ministry of Economic Affairs as its preferred partner. In India, Solidaridad launched the Palm Oil Sustainability Framework to promote sustainable and robust edible oil industries and trade.

In Colombia, Solidaridad is among the parties who signed the first deforestation-free agreement. It also established a partnership with the largest private group in Peru for deforestation-free palm oil among smallholders. This partnership is aligned with new milestones set by members of the Sustainable Trade Platform for 2020. A new partnership with Wilmar International began to reduce deforestation, peat and labour exploitation among small producers.

The Mesoamerican Palm Oil Alliance consolidated activities in capacity building, and the formalization of strategic partnerships with the private sector, government, civil society and producer organizations. Achievements include RSPO National Interpretation and the development of a smallholder inclusive business model in Nicaragua. Solidaridad is working with innovative partnerships to establish an RSPO Compensation Fund in Guatemala and launched 10 smallholder Farmer Field Schools in Mexico. In addition, Solidaridad reached palm oil sector engagement at the sustainable landscape level in Honduras and Nicaragua.

Regional Commodity Programmes

  • Central America

    The Mesoamerican Palm Oil Alliance consolidated activities in capacity building, and the formalization of strategic partnerships with the private sector, government, civil society and producer organizations. Achievements include an RSPO National Interpretation and the development of a smallholder-inclusive business model in Nicaragua. Solidaridad is working with innovative partnerships to establish an RSPO Compensation Fund in Guatemala, launched 10 smallholder Farmer Field Schools in Mexico and reached palm oil sector engagement at the landscape level in Honduras and Nicaragua.

  • South America

    Solidaridad is among the parties who signed the first deforestation-free agreement in Colombia. It also established a partnership with the largest private group in Peru for free-deforestation palm oil among smallholders. This partnership is aligned with new milestones set by members of the Sustainable Trade Platform for 2020. A new partnership with Wilmar International began to reduce deforestation, peat and labour exploitation among small producers.

  • South & South-east Asia

    In Indonesia, Solidaridad supported farmers to sustainably manage oil palm farms. A total of 1,885 farmers were trained in good agricultural practices, 1,891 farmers were trained in financial literacy and 7,354 hectares of land, owned by 2,726 smallholders, was mapped. Solidaridad received a letter of support from the Indonesian Coordinating Ministry of Economic Affairs as its preferred partner. India’s Palm Oil Sustainability Framework was launched to promote sustainable and robust edible oil industries and trade.

  • West Africa

    The palm oil programme focussed on the integration of independent smallholder farmers into the supply chain by earning certification from the Roundtable on Sustainable Palm Oil through increased capacity building. This includes technology demonstrations on best management practices, as well as group formation and its management. In Sierra Leone, Solidaridad facilitated dialogue among stakeholders on land acquisition processes for large-scale palm oil investments by the company Natural Habitat. A permanent platform for engagement is now in place.

Developments

Palm oil remains the most traded and consumed vegetable oil globally. Its production continues to grow at a rate of 7% per year. On the one hand, the sector is becoming increasingly transparent. Many companies have committed to a “halt deforestation” pledge as well as for zero peat and exploitation in their supply chains. Meanwhile, the sector is still confronted with alarming reports by civil society organizations. Accusations include continued environmental destruction, loss of livelihoods, and the exploitation of workers.

Certification systems such as the Roundtable on Sustainable Palm Oil (RSPO) and the Indonesian and Malaysian Sustainable Palm Oil play a valuable role in creating change. However, on their own, they are unlikely to solve the sector’s challenges. To address this, integrated solutions are needed that move beyond the traditional supply chain based approach as well as engagement and cooperation from national and local governments. Solidaridad is working toward this in the following three ways:

1) Fostering cooperation with national and local governments to support the implementation of sustainability improvements at a national or regional level;

2) Stimulating industry frontrunners such as Henkel and Chanel to continue buying sustainable palm oil materials, while also investing in regions where poverty and environmental issues are outside of their direct supply chains;

3) Working with investors, mills and farmers to develop business cases to rehabilitate badly managed palm oil smallholdings. This will enable much larger groups of smallholders to raise yields on existing lands, and comply with demands for legal and sustainable production.

Partnerships

Solidaridad worked closely with corporate partners such as Henkel, BASF, Chanel and Unilever, as well several palm oil mills, traders and cooperatives. The organization partnered with national governments of many producer countries and civil society groups such as the World Wildlife Fund, SNV Netherlands Development Organisation, IDH and the Sustainable Trade Initiative.

In Colombia, a new partnership with Wilmar International was agreed upon to reduce deforestation and peat and labour exploitation among small producers. The Roundtable on Sustainable Palm Oil (RSPO) is an important partner that contributes to globally sustainable palm oil value chains. Since 2012, Solidaridad has led the RSPO Working Group on Smallholders. In 2017, a new RSPO strategy on smallholders was adopted. This strategy incorporated all key messages provided Solidaridad.

Solidaridad partners with governments and industry players to develop and implement domestic palm oil standards. In 2017, it set up field projects in three regions in Malaysia to start the implementation of a Memorandum of Understanding that was signed in 2016 with the Malaysian Palm Oil Board. Cooperation with the Solvent Extractors' Association of India resulted in the development and publication of the Indian Palm Oil Sustainability Framework.

In Colombia, a new partnership between palm oil producers and other stakeholders has been signed to eliminate deforestation from their palm oil supply chains. Monitoring the declaration will be conducted by the Colombian Institute of Hydrology, Meteorology and Environmental Studies, a government agency of the Ministry of Environment and Sustainable Development of Colombia.

Challenges

Many companies have made a “No Deforestation, No Peat and No Exploitation Commitment” by 2020. However, it is increasingly evident that it will be impossible to live up to this commitment. Solidaridad believes, therefore, that rather than creating ever higher standards, efforts should be focused on creating change on the ground.

Solidaridad focuses its activities where there is most potential to achieve measurable improvements, and not necessarily on operators who have a supply chain to Europe. Solidaridad was honoured to expand its portfolio of projects with Henkel with two new projects in Colombia and Ghana. Henkel is taking a leading approach by investing in projects not necessarily linked to their own supply chain.

A big challenge is to create scale across interventions. So far, Solidaridad has conducted a significant number of pilots, but in most geographies, its interventions have not reached scale. In 2018, Solidaridad will continue its work on innovative digital solutions so more smallholders can be supported to comply with sustainable practices, raise yields and incomes.

Within the sector, an important global topic has been the use of palm oil for biofuels. It is estimated that globally, around 10 million tonnes of palm oil is used for biofuel each year. Europe accounts for 3.4 million tonnes of palm oil annually. Solidaridad experts see enormous potential generated by palm oil to improve livelihoods and development. Solidaridad also believes that, with the transition from fuel power to electrical power, the use of palm oil for fuel should be phased out.

Marieke Leegwater

International Programme Coordinator, Palm Oil