Jakarta. Golden Agri-Resources, the parent company of Sinar Mas Agro Resources and Technology, or SMART, is committed to completing its internal supply chain traceability report by the end of 2017, the company said on Thursday (15/09).
Currently, Singapore-based GAR has 489 supplier mills across Indonesia, but only 44 of them are wholly-owned by the company.
“We are 100 percent committed to providing a [supply chain] traceability report for GAR-owned mills by the end of 2017 and for other suppliers by 2020,” Bambang Chriswanto, GAR’s national corporate and sustainability communications head, said.
This is on track with the firm’s sustainable practice goals to promote transparency in their supply chain, including with third-party suppliers.
“We have more than 440 independent mills run by our suppliers and our sustainability criteria must be adhered to throughout the supply chain,” Agus Purnomo, GAR Managing Director for sustainability and strategic stakeholder engagement, said.
"If a supplier does not meet our criteria, we will then consider other suppliers who share similar conservation practices with GAR that adhere to principles of sustainability," he said.
With a large number of external suppliers, the company stresses that it cannot act alone to achieve its goals.
“This is why we’re starting with our 44 mills. We are learning what incentives will drive our suppliers, and we plan to have that answer by 2017,” Agus said.
"Sustainable palm oil is possible and it’s not that hard for companies. For independent farmers, however, is a different story," he said.
“These independent farmers get into bad debts and they get bad harvests because they buy uncertified palm oil seeds. This drives them away from adopting sustainable methods,” he explained.
The GAR sustainability report covers a two-year reporting period between January 2014 to 2015 and will be published annually.
With close to 500,000 hectares of palm oil estates scattered across the country, Agus said that GAR’s focus on fostering sustainable practices in palm oil management has heightened.
In 1997, the company was the first in Indonesia to establish a zero burning policy. In 2010, a zero development on peatland policy was adopted and a forest conservation policy followed the year after.
“In 2015, the sustainability unit only consisted of 50 members and this year it has grown to 300, with 120 staff in Jakarta and 180 on the field,” Agus said.
In its report, GAR claims that less than one percent of its land has been affected by forest fires, with Agus adding that the fire was put out within three to five hours.
“You can check the satellites, but even sometimes they are wrong,” Agus said.
The company has also launched the Desa Siaga Api (fire ready village) in 17 villages around West Kalimantan and Jambi in March to help villages stay fire-free and trained more than 100,000 emergency response personnel to suppress fires.
To ensure the credibility of palm oil sustainability practices, 263,777 hectares of the company's plantations are RSPO-certified. Additionally, 128,971 hectares of the company's plantations and 21 mills are ISPO-certified.
The company plans to complete the RSPO certification process by 2020, which include an additional 39 mills and 385,004 hectares of plantations.