Volume XIV, March—June 2015
Indonesia Business Council for Sustainable Development
CEO Column We announced our “No Deforestation, No Peat, and No Exploitation” policy in December 2013. This integrated policy establishes mechanisms to ensure that palm oil from Wilmar’s own plantations and companies from which we source are delinked from deforestation and human rights abuses. As an industry leader in palm oil, we felt that it was our responsibility to steer the industry towards sustainable production, having witnessed the environmental and social impacts of unethical practices, resulting in palm oil garnering a bad reputation among consumers and investors. To ensure that our integrated policy is implemented appropriately across our supply chain, we have been mapping and tracing supply flows from ports and refineries back to palm oil supply bases. Having detailed supply chain maps builds greater transparency and accountability by facilitating the monitoring of practices on the ground. Our Sustainability Dashboard, launched in January this year, complements these efforts. It is a microsite that provides information on traceability of supply flows, supply chain maps, as well our list of suppliers in each region. The Dashboard also features a grievance mechanism for reporting suspected policy breaches and status updates on grievances filed against us. The targets, timelines, and level of transparency we have committed to are some of the most ambitious in the agri-business industry. Meeting these commitments will only be possible with continued support from our internal and external stakeholders and partners.
Jeremy Goon Chief Sustainability Officer Wilmar International Limited
Sustainability is a shared responsibility, requiring the cooperation and coordination of multiple stakeholders, including not just agri-business companies and civil society organisations, but also provincial and national governments. With collective endeavour, we believe that it is possible to produce palm oil in a way that protects forests, improves local livelihoods, and contributes to economic development.
Editor in Chief Tiur Rumondang Dear Readers, We are pleased to bring you the 14th Edition of IBCSD Newsletter with the highlight on sustainability in forestry sector. In this edition, we would like to share about our important dialogue about forestry through join event with The Forest Dialogue in Riau. Taking into account the urged commitment of 'deforestation-free', we would like to explore various perspectives of sustainability standard in forestry and whether 'deforestation-free' implementable among diverse of development agenda of Indonesia. Outlook from the Chief Sustainability Officer (CSO) of Wilmar International Limited, bring us about the vision towards forest sustainability. Some other IBCDS events such as Workshop on Palm Oil Traceability, Tropical Landscape Summit, Advancing Business Innovation in Financing Zero-Deforestation Seminar, and Business Case Competition on Sustainability will update you on remarkable work of IBCSD in educating and promoting the business community relate to forestry. We are also providing you best practice on forest from Cargill with their collaborative program on building Oil Palm Educational Farm. Moreover, we are proud to inform you the recently announced Forest Management Policy by RAPP being part of the commitment in strengthening their forest protection. Happy Reading!
Volume XIV, March—June 2015
Page 2
Understanding Deforestation-Free in Indonesia Riau, 29 Mei—2 April 2015
Indonesia Business Council for Sustainable Development (IBCSD) jointly convened a field dialogue with The Forests Dialogue (TFD) titled "Understanding Deforestation-Free” in Pekanbaru
Indonesia Business Council for Sustainable Development (IBCSD) jointly convened a field dialogue with The Forests Dialogue (TFD) titled "Understanding Deforestation-Free (UDF)“. The dialogues held in Pekanbaru from April 29 May to 2 April also supported by KADIN Indonesia, which is aims to encourage governments along with companies that produce palm oil, for better forest management and implementing deforestation-free commitment. The dialogue brought together approximately 80 international and Indonesian forest sector players from wide range of business and industry, civil society, NGOs, provincial government of Riau, and non-governmental and intergovernmental organizations. Riau Dialogue stands upon the workshop held at the end of 2014 by
IBCSD and KADIN Indonesia in supporting the Indonesia Palm Oil Pledge (IPOP) activities, which is expected to be a milestone in the improvement of the palm oil operation in Indonesia. By involving key figures across various sectors in Indonesia, the participants are prepared to capture insights on key challenges in implementing such commitment and living with deforestation-free policies. Moreover, to motivate the strong political support for implementing potential solutions", said Tiur Rumondang, Executive Director of IBCSD. The field visit covers substantial sites of communities which are attached with forest area in the Riau province, especially local communities interconnected with companies operating locally. At the first stop, the group visits Taman Hutan Raya
(TAHURA) Sultan Syarif Hasyim – a forest management and conservation area managed by Riau province government – where 70% of the park has been converted to palm oil and rubber plantations by smallholders. The second site visited was 42 hectares forest within APP pulpwood plantation, which is managed as one of numbers of protected areas to help its minimum conserved area as required by Indonesian law. The place called
Multi-stakeholder dialogue aimed at generating the creation of guidelines for developing and implementing an effective policy of deforestation-free to have broad impact
Page 3
Field trip to Taman Hutan Rakyat , Arboretum, and indigenous people of Riau (SAKAI Community and DOSAN village) regarding implementation of “deforestation-free”
Arboretum is open for public including for education, research and recreational activities as well as for elephant training facility. From here, we went to a village of Sakai tribe – one of customary group of Riau. In this site, the participant may learn the complexity of forest industry management when it linked with native tribes who had already settled in the vicinity of the pulp and paper industry. The fourth site was Dosan Village that obtained assistance from the government in establishing the palm oil plantation. We found a strong leadership of a village citizen that may lead the community to
develop the village economy by maximizing palm oil productivity as well as protect the remaining natural forest and peat-land, as well as to using management practices design to prevent forest fires. The final site was a productive group of Amanah Association under guidance of PT. Asian Agri as well as Binjai community under guidance of PT. Riau Andalan Pulp and Paper (RAPP). Both communities developed from the consciousness of companies to attain sustainable business engaging local community either as partner in managing the environment or as suppliers of their business.
At the national level, the field dialogue will form a sharp perspective and a strong network of stakeholders that may support policy initiatives supporting the deforestation-free concept. Internationally, the findings from the field dialogue in Indonesia may provide dynamics experience and interaction about the concept of “deforestation-free” in Indonesia, and also provide a real knowledge on various cases, especially in Riau, a province that is highlighted on 2 main activities of the forestry; industry and agriculture.
Collaborative thinking discussion in identifying problem and seeking opportunity on the implementation of “deforestation-free” in Indonesia
Volume XIV, March—June 2015
Page 4
Workshop on Sustainable Palm Oil Supply Chain of Indonesia: Achieving Traceability and Transparency Jakarta, 23 April 2015 Palm oil remains crucial as part of many consumer goods products and positioned as one of the most important global vegetable oils. As the numbers of palm oil producer companies that have committed to perform transparency in producing and sourcing palm oil fruits increases, there is growing awareness that traceability is an essential part and highly required for meeting that commitment. Companies throughout the supply chain need to be able to prove sustainability at source in order to safeguard their globally business performance and to comply with internal or customer sourcing guidelines, allowing companies to move to a full traceability policy. However, unless the industry is aligned and articulates clearly what traceability means and how it can be achieved, traceability will remain an ambiguous notion, and at the scale required to make it economical will be impossible. As part of a discussion series focusing on facilitating the implementation of reducing deforestation in Indonesia,
KADIN Indonesia, Indonesia Business Council for Sustainable Development (IBCSD) and IDH Sustainable Trade Initiative are collaborating to convene a workshop on palm oil traceability in Indonesia. The workshop took away key points of the discussion for followed up. It is clear that third party suppliers is one of the biggest challenges that need to be tackled, especially because traceability-transparency is one of commitment of some palm-oil companies under Indonesia Palm Oil Pledge (IPOP). Thus, we obviously need the government strategy, from local to central government, which hopefully to solve the issue on One Map Initiative and spatial planning that eventually influence better land tenure practice. Palm oil industry may also learn from timber commodity such as SVLK that also have similar sensitive issue of traceability and transparency. Some tools may available for palm oil commodity that may combine or complete each other, and eventually to deliver action on the ground as the ultimate goal. Thus, the role of groups that bring the tools such as IDH, WRI,
SHARP and Geotraceability become more important to work hand in hand with IPOP.
Highlight Conclusions: 1. Third party supplier is one of the biggest challenges that need to be tackle. Not only environment side but social conflict and landscape collaboration is also required; 2. We need the right government strategy, from local to central government. Hopefully it will solve the issue on One Map Initiative and spatial planning; 3. There is an internal business case too to make your business more efficient and for better business engagement; 4. We can learn from other commodities such as timber (SVLK), seafood, etc.; and 5. The most important factor is to mix all of the ingredients together. The challenge is to make it happen.
Page 5
Volume XIV, March—June 2015
Tropical Landscape Summit: A Global Investment Opportunity Jakarta, 27-28 April 2015
economic development. The outcome of this summit could be input for government and multi-sectors in establishing further framework on green investment.
Indonesia jointly hosted the “Tropical Landscape Summit (TLS): A Global Investment Opportunity” on 27-28 May 2015 in order to attract investor into green development that ensure sustainable future in Indonesia. As the organizer, BKPM (Investment Coordinating Board of the Republic of Indonesia) engaged UNORCID, KADIN Indonesia and IBCSD to bring together green funding sources and corporations that contribute substantially to Indonesia economic development with huge consequences to environment and social life within the country. The urgency of protecting Indonesia’s tropical landscape is underlined in the
summit and aimed to be the center strategy of both country and investment attitude. The Tropical Landscapes Summit convened more than 1,500 stakeholders from government, private sector, research and civil society to stimulate green investment with a view to sustaining Indonesia's tropical landscapes whilst simultaneously driving forward
Private sectors as agent of changes have a role in shaping economic, social, and environmental development of nations
“Private sectors as one of the stakeholders and agent of changes have a role in shaping economic, social, and environmental development of nations. Regarding their contribution on Global GDP and their capacity to absorb labour markets in creating many jobs opportunity, private sectors have great power on global and national on economic and political influence” said Luhut Pandjaitan, Head of Presidential Staff Officer.
“The challenge of us — as private sector – is putting the government in the same page of investment behavior which adopting sustainable future as the ultimate goal. Thus, the incentive and disincentive may also facilitating the sustainability principle and eventually the responsible business is no longer for compliance purpose, but also a business opportunity” - said Tiur Rumondang, the Executive Director of IBCSD, one of the speakers in panel session on the second day of the TLS summit.
Support Sustainability Education through Business Case Competition Yogyakarta, 18 March 2015 On 18 March 2015, Tiur Rumondang, the Executive Director of IBCSD become the jury member of Gadjah Mada Business Case Competition that was held in University of Gadjah Mada (UGM), Yogyakarta, where the semi-finalists consisted of students from Indonesia, India, and Malaysia, grouped in 8 teams. The competition was the annual event organized by Faculty of Economic and Business of Gajah Mada University. The business cases provided by PT. Great Giant Pineapple and PT. Branita Sandhini (Monsanto), the two member companies of IBCSD. Mr. Julius from PT. Great Giant Pineapple was also present and gave his insight and experiences. IBCSD participation on the competition is an effort to educate young generation on the implementation of sustainability in business operation.
Page 6
Volume XIV, March—June 2015
Advancing Business Innovation in Financing Zero-Deforestation Jakarta, 3 March 2015 Written by Margot Clarvis
Financial institutions investing in
Shinta Widjaja Kamdani, CEO of the
Indonesia’s high-growth sectors have
Sintesa Group and President of the
an
Indonesia
opportunity
investments
to
with
align
the
their
Business
Council
on
corporate
Sustainable Development (IBCSD)
pledges to zero deforestation as a
said “I would like to convey my
way to manage their risk exposure.
gratitude to Earth Security Group who has been willing to inform and
The Earth Security Group (ESG)
facilitate this dialogue that I believe
convened
a
financial
will result in the development of
workshop
in
Jakarta
innovation on
March
5thhosted by one of Indonesia’s
new
insurance
and
investment
mechanisms.”
largest banks, Bank Negara Indonesia with
The workshop focused on advancing
the Indonesia Business Council for
three areas of business innovation
Sustainable
outlined in the Earth Security Group
(BNI),
in
partnership
Development
(IBCSD) and the Indonesian Chamber of Commerce and Industry (Kadin). The workshop, led by ESG’s Chief Executive Alejandro Litovsky, brought together banks, insurers, investors, large Indonesian palm oil companies and government representatives to discuss ESG’s Innovation Brief on Indonesian Palm Oil, which was presented by Margot Hill Clarvis, Senior Manager of Earth Security Group.
Indonesian banks, insurers, investors, large Indonesian palm oil companies and government representatives discuss ESG’s innovation proposals to finance zero-
brief: conflicts and land use related carbon 1.
A
new
product
weather
that
insurance
promotes
zero
emissions associated with palm oil. Regulatory risks given the industry’s
deforestation
reliance on production subsidies and
Indonesia’s insurance sector will
government buyers (Pertamina and
grow by double digits in the next
PLN) were also identified in the
few years from currently some of
session. Investors must monitor closely
the lowest rates in the world.
the emerging biofuels scheme being
Agriculture insurance that offer risk
developed
by
the
premium discounts to sustainable
Sustainable
Palm
Oil
palm oil companies can contribute
strategic direction.
Indonesian system
for
to create a step-change in how
The workshop convened 50 key
resilience is valued in the market.
3. SME credit to help smallholders
industry
Bank
The workshop brought together
avoid forest fires:
(BNI),
Willis Group, one of the largest
While smallholders account for a 40%
the
global insurance brokers, with the
share of palm oil production in
Association
General Insurance Association of
Indonesia, insecure land tenure is both
(GAPKI), the Oil Palm Smallholder
Indonesia, for a first discussion of
a driver of land conflict and a barrier to
Union
this opportunity, with outcomes
obtain formal credit. The innovation
being followed up.
workshop
players
Negara Wilmar,
including
Indonesia Cargill, Sinar Mas,
Indonesian
Palm
‘Serikat
Oil
Petani
Kelapa
Sawit’ (SPKS), the General Insurance Association of Indonesia, Maipark Reinsurance,
Willis
Group,
Supervisory Board Bank Indonesia,
featured
Serikat
Petani
Kelapa Sawit (SPKS), one of Indonesia’s 2. Biodiesel energy investments
largest
in sustainable palm oil
director announced a sustainability
the
government
increases
smallholder
unions.
SPKS’
First State Investments Indonesia,
As
HSBC Indonesia, IFC, World Bank, and
biodiesel targets, energy investors
meeting and discussed with large
the Ministry of Planning.
will be increasingly exposed to land
banks the innovations outline.
pledge
from smallholders
at the
Page 7
Source: http://earthsecurity.org/indonesian-financiers-industry-palmoil/
Volume XIV, March—June 2015
Page 8
Energy Efficiency Building Lab
The Indonesia Business Council for Sustainable Development (IBCSD), the World Business Council for Sustainable Development (WBCSD) and the Green Building Council Indonesia (GBC Indonesia), is hosting the Indonesia Energy Efficiency in Buildings Laboratory (EEB Lab). The laboratory is part of global initiative of WBCSD’s Energy Efficiency in Buildings (EEB) market transformation. The EEB Lab Indoensia will seek to convene Indonesia’s critical building market stakeholders from policy makers, developers, investors, designers, engineering firms, facility managers, owner-occupiers, and corporate tenants - to facilitate series of interview, round table dialogue, define action, and gain commitments around 4 core topics: 1) Awareness (benefits of EEB), 2) Business models/Investing and Financing, 3) Verifying value and return on investments, 4) Policy and regulation. Date Venue Topic Contact Person
: : : :
28—29 July 2015 Jakarta Indonesia EEB Lab Ms. Faiza (faiza@ibcsd.or.id)
IBCSD Member Council Meeting 2015
Page 9
Page 10
WBCSD Working Group in Protecting Forest: Forest Solution Group (FSG)
WBCSD provides business leadership in expanding sustainable forest solutions to meet the needs of people now and in the future, namely Forest Solution Group. It is the leading platform for strategic collaboration for the global forest-based industry and its value chain partners – driving scalable business solutions to advance sustainable development.
Solution and Action: Value Chain Action Team expands markets for sustainably pro-
Forest Resources Action Team delivering ecological ser-
duced & sourced forest products.
vices, sustainable management, social benefits and economic development on a renewable basis.
Focus
Progress Sustainable Procurement & Sourcing practices
Focus
Highlight fresh & recycled fiber complementarity
Implement forest certification leadership strategy
Engage and collaborate with The Consumer Goods Forum,
Engage and work with The Forests Dialogue
TFA2020 and the World Resources Institute
Promote the role of productive forests
Carbon System Action Team articulates the carbon benefits of
Communicators Team supports and guides the FSG in max-
sustainable forest management, forest products and energy
imizing its impact through targeted communications
from forest biomass, to be fully integrated and leveraged in global regulatory processes to address climate change mitiga-
Focus
tion and adaptation.
Inform and implement FSG Communications Plan Support and coordinate coordinated outreach and tar-
Focus
Scale-up Action2020’s Forests and Forest Products as Carbon Sinks Inform on and promote carbon benefits of forests and forest products
Joint outreach & advocacy with ICFPA network on Biomass Carbon Neutrality
geted advocacy
Coordinate internal communications
Page 11
Volume XIV, March—June 2015
Forest Continuum Infographic
The FSG llaunches Forest Continum Infographic , in order to raise awareness on the crucial role of forests. This infographic digs deeper into the role forests play in our daily lives including food production, storage and preparation. Forests play a crucial role in achieving global sustainability goals. Demands from forests to supply wood, paper, food and fuel are expected to triple by 2050 to more than 10 billion cubic meters per year. It is responsibility of all sectors, including in the food supply chain, to ensure forests sustainably and manage forest products wisely.
Page 12
Embracing Sustainable Forest Management to Reach Global Markets APRIL Group is moving forward with sustainable landscape management, which it says is positive for business, community and country. Asia Pacific Resources International Limited (APRIL) Group has made a number of interesting recent moves to demonstrate that it is ‘walking the talk’ in balancing economic, social and environmental progress. Earlier this month the company launched its updated Sustainable Forest Management Policy (SFMP 2.0) and was awarded the first Programme for the Endorsement of Forest Certification (PEFC) sustainable forest management certification for an Indonesian forestry company. APRIL Group’s SFMP 2.0 and PEFC certification is an example of how the private sector in Indonesia is increasingly addressing expectations of stakeholders for strong, transparent and sustainable practices. The SFMP 2.0 content with 9 key points, which is: 1. Long-term Sustainability: APRIL will not acquire any new land, or forestry licenses; or receive wood from land licensed to third parties, where after 3 June 2015 the seller has knowingly cleared HCV or HCS forests or forested peatlands. 2. Forest Protection and Conservation: APRIL enforced a moratorium on natural forest clearance pending the outcome of High Conservation Values (HCV) and High Carbon Stock (HCS) assessments by 15 May 2015 3. Peatland management: No new development by APRIL and its suppliers on forested peatland. A Peat Expert Working Group (PEWG) will be established to provide inputs and recommendations to APRIL. 4. Continuous Reduction of Carbon Footprint: APRIL will improve its material and energy efficiency throughout the supply chain, and will track its carbon emission. 5. Proactive Support of Local Communities: APRIL will support of local communities through creation of jobs and pro-active CSR. 6. Respect the right of indigenous people and communities: Respect of the rights of indigenous peoples and communities to give or withhold their Free, Prior and Informed Consent (FPIC) to operate on lands where they hold legal, communal or customary rights prior to commencing any new operations. 7. Responsible Practice in the work places: APRIL commits to provide a safe, productive and conducive work environment. 8. Legal compliance and certification: APRIL participates in global SFM certification schemes,and has a robust Chain of Custody (CoC) tracking system and mill wood sourcing monitoring system
Connecting the Dots : Engaging Private Sector with Research University
Cargill has been building partnership with Insitut Pertanian Bogor (IPB) – one of Indonesia’s leading agriculture institute launch first palm oil plantation education in Indonesia, namely “IPB-Cargill Kebun Pendidikan Kelapa Sawit” (IPB-Cargill Oil Palm Educational Farm) since 2012. The educational farm, essentially a small scale of commercial palm oil plantation, will also be the first such pilot project collaboration between a commercial oil palm grower and an educational institute.
Cooperation between Cargill Indonesia and Institut Pertanian Bogor
Located in the Jonggol sub-district of Bogor in the area of 47 ha, the educational farm provides high quality and industry standards training to students and academicians on the latest plantation production and management techniques. While Cargill optimizes the educational farm to conduct training for its employees as well as lend its expertise to joint research projects with IPB.
This partnership has started since 2012 and aligns with Cargill’s corporate responsibility initiatives, of which education and community development are they key focus. This innovative sustainable business model, helps IPB as educational institute to meet the knowledge of industrial standards on palm oil sustainability, and also helps Cargill to expand their employee’s insight on product innovation toward research and development based.
About IBCSD The Indonesian Business Council for Sustainable Development (IBCSD) is a CEO-led associations of companies operating in Indonesia, who share a commitment to promote sustainable economic growth, ecological balance and social progress. To learn more about IBCSD membership, please contact: info@ibcsd.or.id Indonesia Business Council for Sustainable Development (IBCSD) Menara Duta Building, 7th Floor Wing B —> we are moving to 7th floor Jl. HR. Rasuna Said Kav. B-9 Jakarta 12910 T: +62 21 5290 1941-42 F: +62 21 5290 1949 www.ibcsd.or.id
PARTNERS
MEMBERS