MOU Between RSPO, PTPN III and IDH to Drive Sustainability Amongst Independent Smallholders

Under the MOU with PTPN III, IDH will provide a ‘match funding’ in the form of a grant, the same amount as initial investment made by PTTPN II and/or RSPO at the most.

27 April 2012 --- PT Perkebunan Nusantara III Persero (PTPN III), a government-owned oil palm plantation company based in Indonesia, recently signed a Memorandum of Understanding (MOU) with Sustainable Trade Initiative (IDH), a Netherlands-based organization funded by the Dutch government and the Roundtable on Sustainable Palm Oil (RSPO).

The MOU aims to govern a program that provides assistance to the independent smallholders working in PTPN III’s 8,000-hectare plantation located within the regions of Simalungun and Labuhan Batu in North Sumatra to achieve RSPO certification. Under the MOU with PTPN III, IDH will provide a ‘match funding’ in the form of a grant, the same amount as initial investment made by PTTPN II and/or RSPO at the most.

In response to the MOU signing, RSPO Secretary General Darrel Webber stated, “The cooperation between IDH and PTPN III is not only the first in Indonesia; it is first of its kind in the world for smallholders. This partnership is established at an opportune time when Indonesia is recorded as the largest producer of CSPO in the world concurrently with a recent milestone when the RSPO achieved 6 million metric tonnes of CSPO production. The RSPO takes this opportunity to applaud our Indonesian grower members for their continuous drive towards sustainability.

“The challenges confronting the responsible cultivation oil palm continue to be multifaceted. But this underscores even more so the enormous importance of sustainable practices in transforming markets. The RSPO thanks and commends PTPN III and IDH for coming forward with this pioneering exercise. As a pilot project, the PTPN III program will hopefully create a path for other palm oil players in all markets around the world who wish to be certified to emulate.”

PTPN III’s CEO, Megananda Daryono, pledged his commitment to the MOU and appreciates IDH and RSPO’s continued commitment to fostering independent smallholders so that they can be equipped with adequate knowledge, skills and funding to manage their plantations sustainably. “It is PTPN III’s commitment, as a state-owned enterprise, to improve the welfare of the independent growers who are important partners and stakeholders in our company. I hope that the cooperation with IDH and RSPO will help the independent smallholders improve their productivity, income generation and, also, access to global markets and funding. The MOU well serves our corporate philosophy to develop a sustainable and eco-friendly agribusiness.”

IDH’s Program Director for Soybean and Palm Oil, Jan Nicolai, stated, “PTPN III is one of the front runners of oil palm plantations in Indonesia that is committed towards sustainable palm oil production, including those come from independent smallholders. IDH sees efforts in incorporating independent smallholders into RSPO certification scheme as an immense challenge, but nevertheless one that needs to be started. As an organization that manages fund from the government and private sectors in the Netherlands, IDH considers this initiative as a strategic commitment through active participation and support from the market towards the shift to full production and use of Certified Sustainable Palm Oil (CSPO)”.