Q&A: Ensuring Sustainable Palm Oil Production amid a Pandemic

Golden Agri-Resources’ Agus Purnomo explains how governments and consumers’ collaboration is vital in sustainable palm oil production. Photo by: © 2021 Golden Agri-Resources Ltd. All Rights Reserved.

When it comes to making the palm oil industry more sustainable, the plantations themselves can’t do it alone. Agus Purnomo, managing director for sustainability and strategic stakeholder engagement at Singapore-headquartered palm oil company Golden Agri-Resources, said the collaboration of governments and consumers is vital, especially as the industry faces additional challenges amid the COVID-19 pandemic.

Sustainable palm oil production works to conserve the environment, safeguards social interests, fulfills food demand, contributes to poverty reduction, and supports affordable food prices. This means working with farmers to eliminate deforestation and the clearing of land by burning. But such sustainability creates additional cost, Purnomo said, which is something that consumers need to understand.

“The cost, big companies like us can manage, but for the millions of smallholders, definitely they will not be able to afford it. So if our consumers in Europe, North America, and in Asian countries would like to consume sustainable products, they need to share the burden, know the challenges on the ground, and find a way to help alleviate those,” he said.

In Indonesia, GAR’s palm oil plantations span 500,000 hectares, yet that still equates to less than 4% of the country’s total plantation area. “So there is no way GAR itself can deliver sustainable oil products for the whole of Indonesia. We need the collaboration of many parties — not only other growers, but also the Indonesian government and, more importantly, the customer and end-use consumers,” Purnomo said.

Speaking to Devex, Purnomo explained the specific challenges in becoming a sustainable palm oil producer, how those have been exacerbated by COVID-19, and how technology can help.

1. What challenges does the palm oil industry face when it comes to implementing sustainability, and how have those been exacerbated by the pandemic?

The implementation of sustainability in the last years [has been] challenging. There are issues with various activities, processes, and transfers of ownership from the smallholder farmers to the processing facility of the palm oil, etc. All of these processes are quite complicated, and they need to comply with the same standards of sustainability, so those are the complications of achieving sustainable palm oil products throughout our supply chain.

As an example, in collaboration with agritech company Satelligence, recently we have been working to reduce the risk of deforestation throughout the company's supply chain by utilizing satellites and ensuring that our supply chains do not infringe or get into the forest areas. The forest and fires continue to threaten the sustainability aspect of our operation.

Like many others who are operating in remote areas, we also have to adapt to the constraints of having a pandemic around us. Starting with the implementation, it’s definitely more challenging because of travel restrictions and social distancing. And of course, we need to ensure that our workers and local communities surrounding our operations [are safe]. We want to ensure that sustainable implementation can continue while taking all precautionary activities in regards to COVID-19.

Irpan Kadir, supply chain compliance lead at Golden Agri-Resources, explains how an integrated ecological farming approach helps improve productivity and reduce deforestation. Via YouTube.

2. How is GAR working to overcome these challenges?

We have innovated our engagement activities with our suppliers, ensuring that they comply with our corporate values through developing a sustainable information system featuring an electronic database combined with satellite usage. This enables us to deliver up-to-date information, which assures sustainability auditors that we are still able to implement what is required to maintain our sustainability certifications.

In [regards to] overcoming the pandemic, aside from supporting agriculture practices, we also help through the Alternative Livelihood Programme, where we help farmers achieve a healthy and nutritious food supply for their family while encouraging them to not use fire when they're preparing their own home garden or plantations.

3.What role can technology play in ensuring the industry operates sustainably, especially during the pandemic?

Technology helps us a lot. For example, in the second semester of this year, there is a prediction that the dry season will be occurring in Indonesia. Satellite te