PRESS RELEASE: RSPO-ISPO Collaboration Key to Smallholder inclusion in Sustainable Palm Oil Ecosystem

JAKARTA, 11 May 2022: The Roundtable on Sustainable Palm Oil (RSPO), in collaboration with the Jambi Provincial and District Government and local organisations, have launched a memorandum of understanding (MoU) programme aiming to scale up oil palm smallholder inclusion in the sustainability ecosystem through ISPO certification.

Indonesia’s Jambi province has been appointed as the base of the pilot project. In 2021, the total number of independent oil palm smallholders in Jambi comprised over 290,000 households, making it the third largest after Riau and South Sumatra provinces, according to the Ministry of Agriculture of Indonesia. The MoU represents a collective effort to encourage more independent oil palm smallholders to engage in the sustainable palm oil market, given the low number of certified smallholders to date. According to data from the Ministry of Agriculture Indonesia, smallholder production makes up 40% of land used for oil palm development in Indonesia, yet less than 1% of Independent Smallholders have been certified by either RSPO or ISPO.

The MoU programme will provide mutual assistance and support while upholding Indonesian laws and regulations to implement ISPO certification for Independent Smallholders in Jambi. The programme will be announced on 11 May 2022.

“This is the first RSPO pilot scheme that leverages government policy in order to support sustainable practices in smallholder oil palm production, and we hope to instil genuine and effective engagement,” said Guntur Cahyo Prabowo, Senior Manager, RSPO Smallholder Programme Indonesia.

“By working with governments and other actors – including national schemes, standards or initiatives – we can address structural barriers for smallholders and ensure consistent enforcement of policies to enable change at scale. Through targeted government relations, RSPO seeks to link interested governments and policy influencers with the necessary technical resources and knowledge to advance certified sustainable palm oil in both policy and in practice.”

Dedi Junaedi, Director of Estate Crops Products Processing and Marketing of the Directorate General of Plantation, Ministry of Agriculture Indonesia said, “ISPO certification at the country level paves the way for more sustainable palm oil production, and collaboration with stakeholders is the way forward to drive systemic sustainable change and improve the competitiveness of Indonesian palm oil.”

“As land is becoming scarce, the current low yields of the Independent Smallholders provide an exceptional opportunity to significantly increase the production of certified palm oil from the existing planted area,” added Agus Rizal, Head of Jambi Provincial Plantation Office.

Challenges in Smallholder Inclusion

RSPO and ISPO share a common struggle in incentivising smallholders to produce certified sustainable palm oil. One of the main constraints has been the requirement to formally register land prior to certification, which depends on the capacity and resources of third parties to help smallholders. Another issue that discourages Independent Smallholders from applying for certification is the requirement to comply with land legality documentation, which can be cumbersome.

“Despite ongoing efforts to include and incentivise smallholders to adopt sustainability standards, it has not been enough to propel a large-scale inclusion of smallholders essential to achieving the RSPO’s mission,” Guntur said.

“Moving away from a ‘one size fits all’ approach to a more focused, impact-led strategy with well-defined, scalable models in key regions and countries such as Indonesia, RSPO intends to tailor the services provided to Independent Smallholders.”

Responding to these challenges, the RSPO Board of Governors (BoG) requested the RSPO Secretariat to look into avenues of potential collaboration with national standards. The Secretariat proposed providing technical support for farmers in gaining national certification, as this would help farmers, especially in Indonesia, to join a programme facilitating the acquisition of land legality.

In terms of obtaining legal acquisition of oil palm agricultural land, ISPO already has its own capacity to support farmers, yet the authority belongs to the local government, entailing support for national standards.

Against this backdrop, the RSPO BoG has approved the allocation of technical support to smallholders using national standards. Implementing such programmes needs collaboration among relevant authorities in the country to gain support, including at the provincial level.

“Collaboration with local governments is key to establishing an enabling environment that helps bring in more smallholders into the sustainable palm oil sector,” Guntur said. “The MoU intends to help foster collaboration, in order to help smallholders adopt the sustainability agenda by supporting them in complying with national sustainability standards through ISPO certification.”

In designing the MoU, it became apparent that the Indonesian government holds the key to market transformation, and legal compliance currently presents the greatest burden for smallholders, he added.

RSPO is collaborating with the Jambi provincial administration, which will facilitate data collection to meet the legal requirements of smallholders, as well as the district administrations of Tebo, West Tanjung Jabung and Sarolangun, which will coordinate the issuance of the cultivation registration certificates (STD-B) and statements of ability to manage the environment (SPPL). They will also provide local facilitators to train and assist Independent Smallholders in implementing oil palm plantation practices in line with ISPO standards. SETARA, a Jambi-based NGO, will likewise collaborate for local implementation.

Benefits for Smallholders

Independent Smallholders can reap numerous benefits from the programme, including knowledge transfer, capacity and skills building towards better plantation management practices according to applicable national and international requirements.

This includes improved organisational capacity to work together as a group, thus providing value to their members; better access to tools and training that respond to their specific needs; reducing the rejection rate of Fresh Fruit Bunches (FFB) at the mill with better FFB production practices and compliance to social and environmental sustainability requirements; improved harvesting practices; improved efficiency of fertiliser usage; improved waste management; more efficient plantation operations and reduced costs for agri-inputs.

“Smallholders can play a critical role in enhancing ecosystem services and protecting biodiversity – improving soil health, minimising air, water and soil pollution, supporting protected areas, access to resources, and protecting cultural landmarks,” Guntur shared. He expects the programme to demonstrate the commercial value in scaling up certification and that the success stories of smallholder achievements would further inform the sustainability narrative.

Looking ahead, a successful collaboration model for smallholder support could be further developed, refined and scaled to other provinces.

Guntur highlighted that increased activities and investments by the government and the support of other actors in addressing barriers for the adoption of sustainable practices would lead to a better environment and inclusive growth, foster more smallholder participation, as well as an increase in certified hectares and volumes.

“The programme is expected to open the pathway for effective government engagement and bring positive stakeholder sentiment, awareness and trust of RSPO and its standards,” stated Guntur.

ABOUT RSPO SMALLHOLDER PROGRAMMES

RSPO actively supports Independent Smallholders in achieving certification. In November 2019, the RSPO Independent Smallholder (ISH) Standard was launched, making it easier for smallholders to be part of the certification system and have a more inclusive role within RSPO.

Smallholders who have obtained ISPO certification are expected to obtain RSPO certification more easily, given that land legality requirements will have been fulfilled.

As of February 2022, RSPO has certified a total of 10,675 Independent Smallholders in Indonesia with a total area of 26,191 hectares. Compared to the previous year, this represents a 35% increase in certified smallholders and a 39% increase in total certified area.

About RSPO:

The Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004 with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders. RSPO is a not-for-profit, international, membership organisation that unites stakeholders from the different sectors of the palm oil industry including oil palm producers, palm oil processors or traders, consumer goods manufacturers, retailers, banks and investors, environmental or nature conservation NGOs, and social or developmental NGOs.

This multi-stakeholder representation is mirrored in the governance structure of RSPO such that seats in the Board of Governors, Steering Committees and Working Groups are fairly allocated to each sector. In this way, RSPO lives out the philosophy of the “roundtable” by giving equal rights to each stakeholder group, facilitating traditionally adversarial stakeholders in working together to reach decisions by consensus, and achieving RSPO’s shared vision of making sustainable palm oil the norm.

The seat of the association is in Zurich, Switzerland, while the secretariat is currently based in Kuala Lumpur with satellite offices in Jakarta (ID), London (UK), Zoetermeer (NL), Beijing (CN) and Bogotá (CO).

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