Palm Oil Alliance Initiates Blockchain Solution to Drive Sustainable Practices

A group comprised of oil palm growers, palm oil processors, consumer goods manufacturers, nonprofit organizations and technology companies recently gathered to initiate a blockchain solution aimed at improving traceability and accelerate the push for compliance with the 'No Deforestation, No Peat, No Exploitation' principle in the palm oil chain. (Photo courtesy of Asian Agri)

By : JG | on 11:59 AM September 13, 2018
Category : Corporate Updates

Jakarta. A group comprised of oil palm growers, palm oil processors, consumer goods manufacturers, nonprofit organizations and technology companies recently gathered to initiate a blockchain solution aimed at improving traceability and accelerate the push for compliance with the "No Deforestation, No Peat, No Exploitation" principle in the palm oil chain.

The Sustainability Assurance and Innovation Alliance (Sustain) brings together relevant stakeholders in the palm oil industry to collaboratively address sustainability issues and create cooperation among industry players by establishing a common blockchain-based platform for palm oil.

Companies that attended the Sustain launch included palm oil producers Apical and Asian Agri; renewable diesel producer Neste, consumer goods manufacturer Kao, facilitation team Core and technology partner SAP.

More collaborators from across the palm oil supply chain are expected to join the alliance as it further develops an industry solution.

"The key focus of Sustain is to promote collaboration and align efforts in solving issues by leveraging technology to address shared challenges in the supply chain," Apical Group president Yeo How said in a press release on Wednesday (12/09).

"We aim to work together with industry partners in creating an industry solution towards greater transparency and sustainability assurance through the successful integration of sustainability good practices with the latest technological solutions," he added.

Sustain will provide open access to a system with downloadable tools that can be employed by a wide range of users, such as dealers and smallholders. Parties can use the tools to establish traceability, monitor policy compliance, efficiently trade fresh fruit bunch, obtain best practice guides, and access innovative microfinancing.

The new industry alliance launches at a time when palm oil continues to play a vital role in satisfying global demand for vegetable oils, driven by exponential growth of the global population.

Palm oil remains the most feasible option for consumer products due to its unique properties and yield-per-hectare ratio, which is the highest of all vegetable oils. The alliance aims to build on the increasing push towards collaborative effort and landscape approaches the palm oil industry is driving.

"Sustain will capitalize on the advantages of blockchain technology to encourage industry-level collaboration and wide adoption of a common blockchain-based platform as a practical solution to drive supply-chain transformation to improve market access for palm oil products," Yeo said.

"The initiative has been created to acknowledge the critical roles of palm oil mills, dealers, agents, and smallholders in the supply chain and works towards inclusion and progressive transformation," he said.

SAP, as a technology partner, has been working with more than 60 enterprises across industries to create blockchain use cases in supply chain, manufacturing, transportation and pharmaceuticals.

"SAP believes innovation is driven from a deep understanding of our customers' businesses and the environment in which they operate and the communities they serve. We are delighted to be working with Sustain as their technology partner," said Jim Cook, vice president of industries and digital leader of SAP Southeast Asia.

"SAP Leonardo, our innovation platform supporting new technologies such as machine learning, artificial intelligence and blockchain, will be used as a platform for Sustain. Collaboration across the many stakeholders in this industry is vital to protect the livelihoods of those who work in the industry and the environment," Cook said.

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