Cargill Smallholders Receive European Certification for the Supply of Sustainable Biofuels

PT Hindoli’s plasma scheme stems from the Indonesian government’s transmigration program in the 1980s, where Indonesians were relocated from densely populated areas in Java to plantation areas in Sumatra and Kalimantan. They were subsequently trained and developed to become smallholders.

13 Aug 2012 --- Smallholders at Cargill's palm oil plantation, PT Hindoli in South Sumatra, Indonesia, recently became the one of the first smallholders to receive official certification for sustainable palm oil supply for biofuels, according to the International Sustainability and Carbon Certification (ISCC) standards within the European Union (EU). ISCC is a certification scheme approved by the EU to cover the EU Renewable Energy Directive (RED). This means that Cargill is able to provide its customers with palm oil destined for energy applications that are working towards compliance with the RED which is being written into law by EU member countries.

The ISCC-EU certified smallholders are members of the Mukti Jaya smallholder cooperative and are participants of PT Hindoli’s plasma scheme.  The Mukti Jaya cooperative is also the first of 17 smallholder cooperatives in PT Hindoli to be certified.

PT Hindoli’s plasma scheme stems from the Indonesian government’s transmigration program in the 1980s, where Indonesians were relocated from densely populated areas in Java to plantation areas in Sumatra and Kalimantan. They were subsequently trained and developed to become smallholders.

“We congratulate our smallholders in PT Hindoli on their successful certification by the ISCC. This certification, the latest in a series of international endorsements of our sustainable practices, is tangible proof of the successful partnership with our smallholders in PT Hindoli,” said John Hartmann, Chief Operating Officer, Cargill Tropical Palm Holdings.

“Cargill is a firm supporter of a fully sustainable palm oil supply chain in not just the food industry but also in the arena of energy production. Together with our smallholders, we are committed to creating and implementing changes to the status quo in order to protect our environment, while at the same time, helping meet increasing global demand for more sustainable energy applications through the use of biofuels,” he added.

The ISCC is a certification system that promotes responsible farming by allowing a differentiation of sustainable products from non-sustainable ones, including the greenhouse gas emissions at the different stages of the value chain.

This latest smallholder ISCC-EU certification comes on the heels of PT Hindoli’s own certification upgrade from ISCC-Germany to ISCC-EU, further demonstrating Cargill’s commitment to producing palm oil in an environmentally sustainable and socially responsible manner.

“KUD Mukti Jaya is very happy and proud to be one of the first smallholder groups to receive the ISCC-EU certification. Cooperation – within our smallholder group as well as between us and Cargill – is the key to our success. Cargill’s continued support, in terms of training in sustainable practices as well as guidance in the running of a sustainable oil palm plantation in accordance with international standards, has helped us better appreciate and utilize our resources in order to participate in the global supply of sustainable palm oil,” said Bambang Gianto, Head, Mukti Jaya smallholder cooperative in PT Hindoli.

In 2010, these same smallholders from PT Hindoli were also part of the world's first smallholder scheme to be certified under the RSPO's Smallholder Principles & Criteria for sustainability. Through a formal contract, PT Hindoli – also RSPO certified – shares premiums from certified sustainable palm oil produced by the smallholders. Since 2011, PT Hindoli smallholders have been receiving premiums from the sale of RSPO-certified sustainable palm oil which they produce.

Cargill's PT. Hindoli crushing mills in South Sumatra process fresh fruit bunches from its owned palm oil estates and the fruit bunches it purchases from the smallholders' scheme. The smallholders' scheme at Cargill’s PT Hindoli plantation consists of 8,800 smallholders organized in 17 cooperatives with 17,594 hectares planted with oil palm.

The ISCC certification was independently audited by SGS Germany GmbH. SGS was involved in the development and testing of the sustainability certification from the beginning and has established a worldwide network of more than 70 auditors.

”As SGS we define our duty in putting forward our experience and expertise for continuous improvement of standards. We are pleased to contribute to this smallholder certification and will share this experience with the standard owners to work on practical and safe solutions for certification” states Betina Jahn, Product Manager, SGS Germany GmbH.

In addition to adhering to global standards, Cargill has its own policies in place for responsible palm production, including commitments to not plant on high conservation value forests (HCVF); to not develop new plantations on deep peat land or land that would threaten biodiversity; and a strict no-burn policy for land preparation.