By Carolyn Lim
Speech by Senior Manager of Corporate Communications, Carolyn Lim, during a CDP disclosure insight action speaking session – Transformation towards a sustainable palm oil supply chain in Indonesia.
Our sustainability journey over the years
In 2015, we launched our first Sustainability Policy. Back then, the immediate task ahead was to map out our supplier mills. Soon after we mapped out the mills, we started our process of tracing back to the plantations.
We soon realized that deforestation outside the concessions was the hardest nut to crack because these areas are outside of our suppliers’ operations.
Around the same time in 2015, we collaborated with the International Finance Corporation (IFC) to work with independent smallholders. To date, we’ve trained over 36,000 smallholders across Indonesia. Since then, we proudly say that our work has been recognized publicly.
Having been with Musim Mas for over a decade, I want to share three things we learnt to trust blindly in our sustainability journey.
#1: Trust in certification
Sustainability certification systems across various commodities have been both praised and criticized.
At Musim Mas, we strongly believe that certification provides a structure for engagement and demonstrating progress. The basis for our management system revolves around the Roundtable on Sustainable Palm Oil (RSPO) and the Indonesia Sustainable Palm Oil (ISPO) principles.
Over the years in implementing our policy, we have found ISPO very effective in getting the buy-in of our suppliers, who often need help to implement the system.
A certification scheme offers a structured approach to ensure sustainable practices are implemented consistently and efficiently throughout the organization. The same goes for smallholders too.
#2: Trust in building smallholder relationships for the long term
I learnt that smallholders are essentially small business operators. Like all business relationships, it takes time to build good ones.
If we build an environment with the right incentives, we can trust them to be more sustainable: Economically, socially, and environmentally.
Over the years, with the help of the IFC, we built up substantial experience in engaging independent smallholders for the long term. The farmers’ associations were part of the IFC-Musim Mas smallholders program (IPODS). IPODS has been Indonesia’s largest independent smallholders’ program for palm oil, with over 35,000 smallholders engaged.
Over the years, Musim Mas efforts included connecting smallholders to the international market. In 2021, Unilever, PepsiCo, and Nestlé purchased RSPO Credits from farmers associations in Musim Mas’ Smallholders Program. Between the year 2020 to 2022, Musim Mas has helped independent smallholders achieve RSPO Credits worth over USD 1.3 million.
We learnt that building a relationship takes time before meaningful interactions can occur. When my colleagues on the ground get invited to weddings and funerals, we know we’re in the community for the long haul.
#3: Trust in working with others
We also strongly believe in working with others. One important stakeholder is the government.
We envision building the capacity of Village Extension Officers (VEO) to train smallholders in their areas on growing oil palm sustainably. Musim Mas works with the district governments to deliver a training for trainers program to the VEOs. We also call this our Smallholders Hub approach.
The training strengthens the knowledge and skills of Good Agricultural Practices (GAP), No Deforestation, Peat, and Exploitation (NDPE), and Financial Literacy.
We’ve since implemented seven Smallholder Hubs across Indonesia, and more are in the process of being implemented.
We’ve also since expanded our work to work on the entire landscape. In November 2020, we launched a five-year roadmap for the Aceh landscape, with a vision of working with key stakeholders for a thriving eco-environment that’s also sustainable for livelihoods.
If you look at our traceability stats, you can see that we hardly source from Aceh. But over the years, we realized that the last forested areas are where we’re most needed, even when we don’t have a supplier in the area. We started engaging the mills in the area on our NDPE policy and worked with our peers to extend our reach.
We’re also proud to note that we’re working with several big consumer goods companies such as Nestlé, Unilever, Pepsico, and Mars on these smallholder projects.
Conclusion
You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something.
Over the years, at Musim Mas, we’re proud of our progress in our journey to provide a solution to the pressing issues of the day. We had only 10 on the team when I first joined the group. Today, we’ve grown to about 150 full-time staff working on the MM sustainability team – more than 10 times the original number.
We strongly urge companies to assess their strengths and join in our cause, contributing in whatever way they can.
