© 2020 All rights reserved
Conservation, supply chain sustainability and sustainable economic development in Central Kalimantan
Unilever and Inobu started the Mosaik Initiative to improve the sustainability of commodity production. Through jurisdictional certification, commodities should be produced in a way that protects forests and other ecosystems, reduces poverty and upholds human rights.
The jurisdictional approach to the certification of palm oil in practice refers to the application of the Roundtable on Sustainable Palm Oil (RSPO) Principles and Criteria at the level of the jurisdiction. Ideally, it should simplify and reduce the costs of certification thus expanding RSPO coverage while improving social and environmental outcomes. These benefits include improved habitat for wildlife, including ecological corridors and social benefits such as greater institutional support for smallholders and protection of human rights. All actors in the palm oil supply chain, from independent smallholders, medium to industrial scale plantations, mills, traders and transporters should be covered.
Seruyan and Kotawaringin Barat are two of the largest palm oil producing districts in Central Kalimantan, Indonesia. They supply palm oil to markets throughout the world, including major consumer goods companies. Overall, 27 mills across these two districts have been identified as being directly or indirectly part of Unilever’s supply chain.
The Mosaik Initiative aims to protect and restore habitat and ecological corridors vital for wildlife such as orangutan, proboscis monkeys, gibbons and sun-bears while improving the welfare of farmers and indigenous peoples by increasing their income and livelihoods as well as providing access to bigger markets through the RSPO certification. These landscapes are also the places where globally important commodities, such as oil palm, rubber and copra are produced. The Seruyan-Bedaun Landscape incorporates the two districts of Seruyan and Kotawaringin Barat, in Central Kalimantan, which also encompasses the globally renown Tanjung Puting National Park.
Jurisdictional certification focuses on engaging with the democratically elected local government authority to achieve sustainable development. The overall approach of the strategy proposed is to work within a jurisdiction—a formal political geography, such as districts or provinces. It moves away from project-based interventions or a “mill- to-mill” approach to a larger administrative area.
KUD Tani Subur is a village cooperative in Pangkalan Tiga Village, which has grown into a multi-billion rupiah cooperative with diversified assets including a two-billion rupiah credit and loan facility: cattle, fish and poultry breeding facilities; a two-story supermarket and a popular sprawling agrotourism center set up in the middle of an oil palm plantation. Read the success story of the KUD here.
The initial project results included oil palm smallholders mapped and formally registered, trained and audited; smallholder plots incorporated into SIPKEBUN (the Central Kalimantan’s government plantation monitoring system); sustainable palm oil action plans incorporated into village development plans; and capacity smallholder organisations strengthened.
The results have been impressive, with all KPIs met or exceeded, and more than 1,000 independent smallholders certified by the end of 2019. Unilever has now purchased RSPO independent smallholder credits from these independent smallholder farmers through RSPO’s PalmTrace platform, which increases the diversification and business ventures of the cooperatives, directly improves the livelihoods of the smallholder, and increases the incentives for them to conduct sustainable practices.
The most valuable lesson learned through the collaboration so far is that significant time and investment are required to support smallholders to achieve sustainability certification standards and to offset the costs of audits. The support from local governments such as land mapping, registration and obtaining all the relevant legal documents, are critical to addressing the systemic challenges that independent smallholders face when trying to achieve certification.
The success of phase one of the program between Unilever and Inobu has the potential to catalyze other producer and buyer companies, as well as existing and potential public and private foundations, to contribute to improve the sustainability and inclusivity of commodity production in the districts and landscape as a whole.
Unilever’s commitment to prioritize commodity sourcing from areas that are pursuing comprehensive forest climate programs, including from jurisdictions committed to sustainability, will provide support and engagement to local governments and producers to continue their progress towards sustainability.