Implementing sustainable policies in practice

Tuesday, 13 Mar 2018
Implementing sustainable policies in practice
This bird's-eye view shows an oil palm plantation in Dumai, Riau. (Antara Photo/Rony Muharrman)

Nature resource-based industries, including the palm oil sector, are frequently cited as the major cause of deforestation. As the largest oil palm grower in Indonesia and a member of the Roundtable of Sustainable Palm Oil (RSPO), Golden Agri-Resources (GAR) believes that socio-economic growth can go hand-in-hand with environmental protection and sustainable practices. How? What sustainable programs are GAR implementing?

To give you a comprehensive picture of GAR’s sustainable policies, its implementation and social, economic and environmental impacts, The Jakarta Post’s Sudibyo M. Wiradji talks with Agus Purnomo, GAR’s managing director of Sustainability & Strategic Stakeholder Engagement.
Following are the excerpts of the interview:


Question: Could you tell us GAR’s strategy on sustainability in palm oil production?
Answer: There are several elements in sustainability. The most widely known is the environmental aspect. Plantation companies have been accused of causing deforestation and pollution. Acting sustainably in environment terms means protecting forests, protecting biodiversity, avoiding the use of dangerous chemicals that can harm people and other creatures. For us right now, the environmental element is relatively manageable because on top of 500,000 hectares of our plantation land, more than 70,000 hectares is set aside for conservation areas.

What do you do with your conservation areas?
We have identified about 70,000 ha of forests that we have voluntarily set aside for conservation because they have high conservation values or high carbon stock. These values indicate the forests are important for ecosystem health or include sites with cultural significance. We have set these aside and we monitor them to ensure they remain standing.

We use a range of tools to monitor these areas. We have a satellite monitoring program. If through satellite imagery we see disturbances, then we immediately send a team to the area with a drone to check the area. Drones have become increasingly useful as you cannot go to the forest area as there is no road. You need to fly the drone to see what is happening inside the conservation forest area.
We also collaborate with partners who have the expertise we lack as an agribusiness. For example we collaborate with orangutan experts to help us to properly treat and conserve orangutans found within or nearby our estates. As an agribusiness we have a lot of agronomists but we do not have many biologists nor foresters and therefore, we collaborate with certain institutions, universities and NGOs to bring their expertise into our business.

What are other widely known elements in sustainability?
Social issues. These deal with local communities, getting their permission and consent, adapting to their needs. We work with many parties, including researchers who measure the state of local people’s welfare and with organizations on community development. We also have about a dozen staff who hold mediator certification. So if there is a conflict, we send our staff to find a win-win or agreed solution. We are sometimes brought in to address disputes that do not directly involve the company, such as disputes over boundaries between villages. We may be affected by the dispute because the villages are within our plantation area, but we are not the direct cause of the dispute. Our teams work to find solutions on border disputes using methods such as participatory mapping, where we map their land and then have both village leaders sign the map to demonstrate their agreement on the boundaries between the villages.

Do many villages tend to request participatory mapping?
We have a lot of requests for support to conduct participatory mapping. Securing clear boundaries and having your land mapped is a requirement to receive the government’s village development funds. Villages ask us to help make the map and draw up an agreement with the neighboring villages. By helping support the aspirations of the local community we maintain a conducive climate for our plantations to flourish and play our part as a good corporate neighbor.

What about the issue of workforce?
We provide employment to 170,700 people. We ensure they have freedom of association and can freely join any labor union if they choose to do so. Normally, in one plantation company, we have three or four labor unions. So they can access their right as workers.

We also support our workers with education and health services. We have more than 200 schools and 250 plantation health clinics. Our schools currently teach about 28,000 students, not only children of our workers but also those from neighboring villages. If you have a headache handling one school, can you imagine handling 200 schools? Teachers are part of supporting our worker’s needs.
Medication is provided for free. If nearby villagers need health support, they can go to our clinics. We also provide regular medical examinations for our workers who deal with pesticides and chemicals. We prohibit pregnant workers from carrying out any activities that could involve contact with chemicals. This is part of our safety program. Everybody must wear personal protective equipment (PPE), and those dealing with chemicals have to wear a special mask and clothing to prevent the chemicals from coming into contact with their skin.

We are also looking at natural ways to deal with pests that don’t involve chemicals. We use owls to deal with rats and other pests. We are like Harry Potter. We have many barn owls and have done for many years. Instead of using chemical pesticides we use plants that discourage pests, owls and other natural methods. A single owl can take care of quite a few hectares.

What about the forest fires, which are frequently cited as the cause of deforestation, are they a threat to sustainability?
In 2015, El Niño hit Indonesia creating conditions that helped to cause the worst forest fires we have seen. GAR was very fortunate that due to our long term Zero Burning Policy and our trained emergency response personnel, only a small proportion of our plantation was lost to fire, only 0.5 percent of our total estate. So 99.5 percent of our plantation was not touched by the fire. We had 10,000 firefighters and we used all kinds of measures, but we also know that 0.5 percent of our plantation got burnt, which means we could not escape from the burning outside our plantation.

In 2016, we started programs in 17 villages to engage local communities in preventing forest fires. We provide them with 3 things: training, firefighting equipment and incentives. Through our local estates we provide equipment such as water tanks, pumps, fire water towers and everything else. We also provide incentives for villages.

Could you explain more about this? And how does community engagement in fire prevention contribute to the reduction of fires?
If a village can prevent the occurrence of fires throughout the year, then they will get Rp 100 million from us for community infrastructure projects, to build classrooms, roads or bridges, mosques or churches… it’s up to them. Last year, we were able to completely prevent fires in about 12 of 17 villages. Four or five villages still had small, short fires within their village area, so they received Rp 50 million. We were very pleased with the success of the program in 2016 and expanded the program this year to include food security aspects with the same 17 villages.

We teach the villagers about how to create a rice field, how to plant crops and organic farming, all without using fires. The measures actually improve their livelihoods because they do not have to spend too much money on buying fertilizer from other villages. That way they can reduce costs and they do not have to use fire, which means they do not have to spend money on dealing with health issues caused by forest fires and haze. This year we have had an even better result so we are convinced this is the right approach.

Involving the community plays a contributing role in supporting the government’s plan to reduce fires, at least in the villages surrounding our plantations. We are not the only company making this effort, but we are proud to report that the success rate of our own programs is high.

Let’s move to the issue of production, which is becoming increasingly crucial given the rising demand from the domestic and global markets. Could you just tell us GAR’s programs to boost production?
Firstly, we are developing better seeds and implementing best agricultural field practices with precision agriculture to achieve the full potential of the palms, lastly we are transforming our operations through mechanization in order to increase efficiency. We are now at the level of 7.5 to 8 tons of CPO yield per hectare at prime production age and optimum condition. Our new planting material will produce up to 10 to 12 tons of CPO per hectare.

So the seed is the most effective attempt to increase productivity or yield without expanded plantations. That way, we can fulfill the rising demand from the global market.

In addition, we have been applying precision agriculture. We fertilize every tree using the right amount of mineral fertilizer and/or by recycling the organic waste produced in our mills and in the element form of the fertilizer. So we do not use compounded fertilizers like nitrogen phosphorus and potassium (NPK). We measure and monitor our palm trees, soil and weather conditions and then calculate the additional fertilizer elements that are needed. If you do not have the technology and research capability, you may waste a lot of money by using all kinds of fertilizers that do not contribute to the fruit of your trees. We are continuously improving our plantation upkeep, harvest, transport of fruits and processing through mechanization and the internet of things.

What are the reasons behind applying precision agriculture?
We use precision agriculture because we can increase productivity with very efficient use of water, energy and fertilizers. Being an integrated agribusiness, we also link our plantations and refinery processing with market needs. CPO can be used in a range of different products that require different characteristics, such as specifications for baby food, soap, cosmetics and other products, including recyclable plastic bags. So we grow palm trees based on what products we would like to have from the oil produced.

What about the replanting for smallholders program initiated by President Joko Widodo, which is expected to increase their production? How does the program benefit smallholders and palm oil companies?
If the program can run as the President hopes, then the smallholders’ production can double or triple from the current average 2 to 3 tons per hectare. With the increased production and yield, the farmers’ income can be increased, and thus the poverty alleviation or eradication in remote areas where most farmers are living can be addressed significantly.

For us as an integrated palm oil company, we buy a lot of palm oil as a raw material from smallholders. With the smallholders able to increase their production, we can buy more from them and we can sell more products.

Could you tell us the contribution made by the palm oil sector to the stage budget?
Palm oil is now the biggest contributor to the foreign exchange revenue. The export value from the palm oil sector stands at US$18.6 billion per year (in 2016), the largest contributor to the budget.

What are oil palm growers, including GAR, hoping for?
We are hoping that we will get more support from the government. And in the last few months we are happy to see that President Joko Widodo has made a number of policies to help the smallholders to replant their low quality or old trees.