Engagement in Aceh
Supply Chain Base and the Leuser Ecosystem
We have approximately 25 supplier mills located near the Leuser Ecosystem (Kawasan Ekosistem Leuser (KEL)).
As can be seen on the map, an Aceh Tamiang supplier mill, PT Pati Sari (Pati Sari) is located on the boundary of the Leuser ecosystem. We have been engaging Pati Sari on policy commitment matters and they are currently complying with our policy commitments.
We have engaged nine suppliers on our sustainability commitments, including five mills which undertook assessments by independent auditors commissioned by Musim Mas.
From the engagement, some common issues were identified, including:
- Gaps in suppliers’ operational practices to baseline sustainability standards, such as in identifying HCV and HCS areas, traceability to third-party suppliers, Occupational Health and Safety management etc.
- Gaps in Smallholders ’ productivity which stem from limited knowledge on Good Agricultural Practices, compared to large Plantation companies.
- Legality uncertainty in supply sheds is common, especially related to plantations operating in the vicinity of the Leuser Ecosystem.
Solutions Based Approach
Understanding supplier challenges
Five mill assessments were conducted in Aceh, which covers approximately 20% of our third-party supply base across the landscapes. We have analysed the results of these assessments and developed an aggregated understanding of the issues. Our mill assessment efforts form the basis of the joint landscape work and our outreach programmes (see below).
Participative Collaboration on Landscape work - As the Leuser region supply chain links to multiple stakeholders, we are collaborating with industry peers and partners via the Areal Prioritas Transformasi (APT) coalition. Much of the work in coming months will involve supporting the regency/district level governments on spatial and land use planning efforts. The buy-in and support from the regency Bupatis will be instrumental to the success of landscape work.
Building Supplier Capacity
Supplier workshops - To create awareness, understanding, and acceptance of our Sustainability commitments we conducted broad-level engagement workshops and individual supplier workshops.
Independent Smallholders programmes - To improve the standards of our suppliers' supply chain (independent Smallholders ), we will be implementing our Extension Services Programme (ESP).
The ESP serves to elevate industry standards by supporting independent Smallholders with good agricultural practices and best practices, and improved access to finance and good farming materials (seeds and fertilisers).
We will also encourage and support the Smallholders to pursue ISPO/ RSPO certification, which in the long run would enable them to actively participate in the global marketplace.
Our supplier within proximity of the Leuser ecosystem, PT Pati Sari has agreed to the implementation of ESP to its supply chain. We are currently (December 2017) preparing for the project to this supply base.
Supplier specific support programmes - These are customised and catered to close the gaps for suppliers. We are discussing the implementation of traceability with mills (PT Ensem Sawita in collaboration with industry peer Golden Agri-Resources).
We are collaborating with an industry peer to assist Ensem Sawita with tits action plan for sustainability.
To read more, please click here.
We have identified the key risks within the supply base of Pati Sari, and the opportunities via practical and effective solutions for a sustainable supply chain.
To read more, please click here.
Lessons Learnt and Action Plan
- Adopt an emphatic approach in the wider conservation dialogue. It is important to recognise and understand the reasons for apathy or inertia by suppliers, and work towards resolving issues.
- The common thread of the issues is a systemic one concerning the need for long-term spatial and land use planning. A systemic issue requires thoughtful planning to balance the socio-economic and environmental needs, adoption of a longer time horizon, and sensitivity in its handling.
- Public-Private Partnership (P3 framework) is critical to addressing the wider issues. Neither the public nor private sector can go alone. Collaboration between the different sectors is critical not just in terms of monetary resources and knowledge sharing, but more importantly, in terms of forging critical relationships and supporting the crafting of legislation/ regulation. The collaboration will also provide a consistent and conducive environment for pursuing the main agenda of conservation (environmental needs) and equitable development (socio-economic needs), and enhance accountability.
- We will continue to fine-tune our ESP implementation through regular evaluation and monitoring. This includes integrating components on educating and training supplier Plantation companies and Smallholders on NDPE , good agricultural practices (GAP) and social issues in the three priority districts.
We learnt that the success of ESP largely lies in considering the drivers and barriers to Smallholders ’ behavioural change. Insights from our groundwork lay the basis to developing a robust district-level plan that is smallholder-centric. We close the feedback loop with our field colleagues as they share insights on drivers and barriers Smallholders face. For instance, collaborating with partners to develop alternative income sources as Smallholders experience decreased income during replanting periods, making it a challenge to adopt GAP or comply to our NDPE policy if it is more costly. Several researchers have also pointed out the heterogeneity in smallholder profiles, which helped shape our engagement approach.
- Musim Mas will explore more multi-stakeholder projects and share our experience in engaging Smallholders and third-party suppliers.
Download our progress update on the Aceh landscape here:
Progress Update 2019/2020