Golden Agri-Resources (GAR) kicks off pilot project to achieve Traceability to the Plantation and create a Sustainable Palm Oil Supply Chain

 

GAR is taking another step forward in mapping its supply chain. It has kicked off a pilot project at its Ujung Tanjung Mill to trace its supply of palm oil all the way to the plantation. At the end of 2017, GAR aims to know all the sources of palm oil Fresh Fruit Bunch (FFB) which go to GAR-owned mills and by the end of 2020 for independent mills which supply its refineries in Indonesia.

This follows on from the first stage of mapping its supply chain to the mills which GAR completed at the end of 2015. It knows all the 489 mills which supply its eight downstream locations. And now it has started working with those mills to map supplies to the plantations.

GAR’s team is working out the technical ways to map and verify sources of Fresh Fruit Bunches (FFB) of palm. This will involve strengthening processes to document the procurement of FFB all the way from the farmer to the mill.  GAR will use the lessons learnt at Ujung Tanjung to replicate the process at the rest of the mills.

GAR

Photo above: processing palm oil fresh fruit bunches at a GAR facility

It will be a complex task. GAR will have to convince all third party mills to adopt these systems and to report back to GAR. Some mills which buy from a handful of plantations will find it easier to finish their mapping, while other mills, which may be buying from middlemen who in turn buy from many different small growers, may find that the process requires more effort and takes much longer.

“The engagement effort to reach out to around 450 supplier mills and have them in turn reach out to their suppliers, which includes other plantations, middlemen and smallholders, is a challenging endeavour. But we also see this bringing opportunities to engage an even more extensive range of stakeholders in our efforts to improve sustainability and production practices,” says Daniel Prakarsa, Head of Downstream Sustainability Implementation.

GAR sees this mapping to the plantation as key to transforming its palm oil supply chain and by extension the industry into a more sustainable sector.

Not many people outside the palm oil sector realise how much it is dominated by smallholders.  But the reality is that over 40 percent of all planted palm oil land is in the hands of around two million smallholders in Indonesia. One of the greatest challenges for  is to find ways to help those millions of smallholders improve their environmental practices while boosting their yield, productivity, incomes and welfare. It’s a huge task, but it is only by helping them on those fronts that GAR can truly say it has created a sustainable palm oil supply chain and transformed the industry. And by taking the next step to map the supply chain to the plantation GAR is intensifying its efforts to know and reach those smallholders.

Go to GAR’s Sustainability Dashboard and GAR blog for more details