Due to growing demand from consumers and regulators, the palm oil industry must prioritize sustainability and traceability in its supply chain systems. As of April 2023, the European Parliament has approved a Regulation on the Deforestation-Free Supply Chain (EUDR) that requires traceability to the plantation level for the palm oil sector, underscoring the need for transparency in the industry.
The palm oil industry is one example of how implementing supply chain traceability and engaging with suppliers can bring favorable environmental and social results. The industry has successfully transitioned towards more sustainable production methods through government, private sector, and public collaborative efforts.
For over a decade, Golden Agri-Resources (GAR) has been at the forefront of promoting sustainable practices in its operations and third-party supply chain. Since 2019, Koltiva has supported GAR (Golden Agri-Resources) to achieve its 100% Traceability to Plantation target. Koltiva has mapped over 120,000 smallholder farmers within GAR’s supply chain.
Through our KoltiTrace platform and Supply Chain Mapping and Verification 'Boots-on-the-Ground' services, we have been able to help GAR to move closer to achieving their Traceability to Plantation targets and ensure that smallholders can be included in sustainable supply chains despite the upcoming EU Regulation on deforestation-free supply chains.
However, traceability is not the end goal. To build on the traceability efforts, since 2021, GAR has developed the Sawit Terampil program, which aims to upskill farmers with Good Agricultural Practices (GAP). Supported by partners such as Mars, Fuji Oil, Nestle, and Inisiatif Dagang Hijau (IDH), this program equips farmers with the necessary skills to obtain sustainability certifications (such as Indonesia Sustainable Palm Oil and Roundtable on Sustainable Palm Oil certification). The Sawit Terampil program has successfully mapped over 5,500 smallholders in North Sumatra and Aceh and has provided them with over 6,500 learning opportunities, including individual coaching, mentoring, and workshops.
In conclusion, traceability is the first step in promoting sustainable practices in the palm oil industry. Adopting a traceability platform and conducting supply chain mapping and verification activities can enable companies to identify and mitigate environmental and social risks within their supply chain and comply with upcoming regulations.
The success of initiatives like the Sawit Terampil program illustrates how implementing sustainability measures and upskilling farmers can help smallholders prepare for certification while improving their livelihoods. By continuing to prioritize traceability and sustainability in the palm oil industry, we can promote environmental protection, social responsibility, and economic growth.
This article is adapted from GAR's Official Website: “Trust, Tech, and Traceability: What Can the Palm Oil Supply Chain Teach Us About Sustainability?”, published on 5th of April 2023, goldenagri.com.sg