Jakarta, Indonesia – On August 15, 2022, the Roundtable on Sustainable Palm Oil (RSPO) and the United States Agency for International Development (USAID), through its Sustainable Environmental Governance Across Regions (USAID SEGAR) activity, signed a Memorandum of Understanding (MoU) to support more responsible and sustainable palm oil production in Indonesia.
Activities under the agreement include increasing the number of RSPO certified smallholders, working with local governments and member companies to improve the quality of land-use planning and management of areas with high conservation value, and improving the implementation of Remediation and Compensation Procedures (RaCP).
Smallholder wellbeing and climate resilience
RSPO’s Chief Executive Officer, Joseph D’Cruz, said that the key to turning certification commitments into real, systematic change is supporting the players across the palm oil supply chain who are making that change. “We must strongly support smallholders to enable them to apply more sustainable farming practices, leading to higher yields, increased income and improved livelihoods. This collaboration is an opportunity to establish closer links to empower every actor to participate in sustainable production, no matter where they are in the supply chain,” he said. “The increased prosperity and wellbeing of smallholder producers go hand in hand with climate resilience.”
USAID SEGAR is working to support the Government of Indonesia and a range of Indonesian stakeholders to improve environmental governance, especially in the land-based sector. One important aspect of USAID SEGAR’s work is engaging with Indonesian companies, and the organisations that represent them, to improve their compliance with environmental, social and governance (ESG) standards, promote sustainable production practices, enhance land management, and ensure that local communities benefit economically from sustainable business practices.
“Through this cooperation, USAID is pleased to support a more sustainable Indonesian palm oil supply chain,” said Brian Dusza, Director of the USAID Indonesia Environment Office. “We believe that a greener and more sustainable palm oil sector will generate inclusive development that respects environmental and social values.”
The growth of the palm oil industry in Indonesia has contributed significantly to the development of local and national economies. However, this growth has also raised legitimate concerns about its environmental impact and sustainability. While there is an increasing number of palm oil companies that are making space for sustainability across the palm oil supply chain, this trend needs to be amplified to engage more companies and smallholder palm oil producers. Cooperation between key stakeholders – including the private sector, the government, and international development agencies –can support greater sustainability within the palm oil value chain.