Local Communities

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Bringing Benefits to Local Communities


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The production of Palm Oil is a powerful engine for rural development and can raise millions out of poverty. In Indonesia where the bulk of our upstream operations are situated, the World Bank estimates that there are still 28 million* Indonesians living below the poverty line, despite significant economic progress over the last 15 years.

Socially responsible companies operating in a remote area offer tremendous opportunities in the fight against rural poverty, by providing jobs and basic amenities such as roads which provide access to facilities, medical services and education to the rural population. Modest investments in the poorest regions can make a huge difference. 

The largest employer in Indonesia is the agricultural sector, which employs approximately 35% of the workforce. Indonesia is the world’s largest producer of Palm Oil . In comparison, the manufacturing sector accounts for 24% of the Gross Domestic Product (GDP) and employs 13% of the workforce. 

Our integrated business straddles both the agricultural and manufacturing sectors, providing jobs for 37,000 people globally, especially in Indonesia where the bulk of our estates and manufacturing plants are located. 

We are committed to a mutually beneficial growth that will incorporate the well-being of our workers and local communities, allowing all to reap the benefits from a sustainable model of oil palm development. We strive for sustained long-term partnerships with community organisations, which allows us to address issues important to the company and to the communities where we operate. 

*http://www.worldbank.org/en/country/indonesia/overview 

Community Investment

 
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We have a foundation that is dedicated to community investment in areas where we operate – the Anwar Karim Foundation. First established in 2006 in Surabaya in commemoration of the late founder of Musim Mas, Mr Anwar Karim, the Foundation was later expanded to other parts of Indonesia to carry out social welfare and environmental activities. 

In his lifetime, Mr Anwar Karim was a magnanimous figure with a passion for providing education to children and youth, public health and other programmes. His kindness and contribution to society benefited many, particularly in Medan where Musim Mas has its roots. 

Perguruan Sutomo in Medan, Indonesia, was one of the earlier educational foundations where Mr Anwar Karim dedicated his time and energy. He developed an early childhood education programme, with the intention to provide education opportunities to all children. In continuing his legacy, the Anwar Karim Foundation and Musim Mas continue to provide scholarships for underprivileged and deserving elementary students, in continued pursuit of Mr Karim's vision to extend equal opportunities to education. 

The Anwar Karim Foundation’s dedication to education was extended to our Group's plantations in Riau, West Sumatra, South Sumatra and Central Kalimantan. We built elementary schools to provide free education to all students. Other than basic education, the schools also emphasis on extra-curricular activities in sport, music and leadership development. These schools have been rated as top schools in their respective regions. 

Other than educational programmes, the Anwar Karim Foundation has also carried out free public health programmes in Medan and Surabaya, Indonesia. In 2010, the foundation started operating a polyclinic in Mabar area of Medan to provide free medical services for the poor in the area. Similar programmes were also established in Surabaya. 

In addition, the Anwar Karim foundation has been a regular supporter of orphanages and old folks’ institutions in Surabaya. This programme provides a shelter for orphans and elderly and takes care of the livelihoods of the underprivileged. The programme also looks into ensuring that the children will become literate and self-reliant individuals. 

The Foundation actively supports national efforts to tackle the impact of natural disasters such as the devastating tsunami in Aceh in 2004. The Foundation contributed to the Aceh recovery programmes, including immediate dispatch of food and other basic necessities to the disaster stricken areas. Subsequently it was actively involved in community reconstruction, such as building and housing, place of worships and schools.

Free Prior and Informed Consent before Development


We adhere to the international norm of engaging with the local community when developing new areas, also known as Free, Prior and Informed Consent (FPIC). This means that the negotiations and compensation for lost benefits and/or relinquishing of rights are conducted in a non-coercive manner and agreed upon voluntarily by the communities.

 
The process of socialisation is carried out prior to land development through open sharing of all relevant information including impact assessment, proposed benefits and legal arrangements. 

We respond constructively and promptly to requests for information from stakeholders and other affected or interested parties through open and transparent methods of communication and consultation between growers and/or millers, as well as the local community.
 
We also discuss with the village heads and villagers on the possible community development projects and subsequently report on the progress of implementation.

There is frequent interaction with workers' representatives via bilateral meetings and joint consultative committee meetings, as part of our standard operating procedures.

All negotiations concerning compensation for loss of legal or Customary rights , or other complaints and grievances are fully documented.

Find out more about our FPIC process here or via WWF's case study on our work. 

The following diagram is a summary of the FPIC process: 
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