Palm oil producer launches peatland protection project in Indonesia

Golden Agri-Resources (GAR) has launched its peat ecosystem rehabilitation project in one of the company’s properties in West Kalimantan, where peatland treatment will be carried out across an area of about 2300 hectares.

It said the project will help to develop fire prevention measures and is a commitment to the long-term protection of the area. 

The project will also aim to deliver 100% traceability for palm oil production from the final product back to its mills. Its overall cost is yet to be finalised.

The company is working with environmental charity TFT to hold more frequent conversations with non-governmental organisations (NGOs) and governmental bodies, and engage with local communities on environmental and social issues related to palm oil production.

It ties in with an Indonesian government announcement to end development on peatland and restore degraded peatland, the company said.

GAR’s announcement follows similar commitments by other major palm oil producers including Wilmar, Cargill and Bunge, which have all pledged to work towards eliminating deforestation from their palm oil supply chains.

A long-term mission​

Agus Purnomo, GAR’s managing director for sustainability and strategic stakeholder engagement, told us that although peatlands form a relatively small part of the company’s plantations – about 3% of its total area – it is taking the rehabilitation commitment seriously.

“The protection and rehabilitation of peatland is a continuous, long term priority for us. We are not and will not be developing on peatland,​” he said.

“One of the core objectives of our peat rehabilitation project (...) is to help Indonesia to address the economic demands that pressure local communities and other actors outside of our supply chain into developing peatland​.”

Among the ways this may be achieved is by working with local communities to provide equipment to improve crop yields, funding for alternative livelihoods or training and even offering a role in the company’s supply chain. Local communities will also be involved in joint efforts to ward off illegal encroachment into the peatland.

Hilary Thompson, TFT’s director, told us her organisation had discussed the project with GAR in detail, advising the producer to seek the services of peat experts to ensure the rehabilitation’s success.

Third party suppliers will also be brought into line with the requirements of the palm oil producer's social and environmental policy.

Driving wider change​

GAR is a member of the not-for-profit Roundtable on Sustainable Palm Oil (RSPO), and trades RSPO-certified products. The producer’s traceable palm oil is above RSPO standard guidelines of non-development of primary rainforest, Purnomo said.

The RSPO’s 2014 progress report revealed GAR handled 12,007 tonnes of certified crude palm oil in the year employing the book & claim system, whereby producers sell GreenPalm certificates to end users directly, giving end users the right to claim equivalent volumes of oil as having 'contributed to the production of RSPO-certified sustainable palm oil'.

Purnomo said TFT will provide an additional layer of scrutiny alongside its own monitoring of the project.

One example of the company’s commitment to transparent palm oil production is its Sustainability Dashboard​, he said, which allows free access to details of GAR’s supply chain.

“If we can show that our policies work, that economic growth is compatible with environmental protection and that the smallest smallholder can benefit we can support much wider change.​”