Supporting sustainable palm production

We believe that palm oil should be produced sustainably and our commitments are to build a traceable palm oil supply chain and seek compliance throughout the supply chain relative to RSPO policies on no deforestation, no peat, and no exploitation.

We are also committed to responsible and sustainable palm production on our own palm plantations. For some time, we have had clear social and environmental policies for each of our palm plantations in Indonesia and we want to play our part by working with the industry and the Indonesian government to encourage the adoption of more sustainable production practices. Before beginning any proposed development or expansion we perform a thorough environmental assessment. We will not develop land areas if surveys reveal the presence of high conservation value forest (HCVF). We comply with local laws on forest clearance — and we always obtain relevant government approvals.

  • We will not plant on areas of high conservation value forest (HCVF).
  • We will not develop new plantations on deep peat land.
  • We have a strict no-burn policy for land preparation.

In August 2010 we started a collaboration with the World Wildlife Fund (WWF) to assess progress amongst our Indonesian palm oil suppliers to implement the principles and criteria established by the Roundtable on Sustainable Palm Oil (RSPO). The findings from the WWF assessment will enable us to continue to work with our suppliers to focus on improvements to sustainable practices, to promote RSPO compliance and support progress towards our commitments.

In July 2012 we announced our collaboration with one of Indonesia’s leading agriculture institutes, Institut Pertanian Bogor (IPB), to build Indonesia’s first oil palm teaching farm. The “IPB-Cargill Kebun Pendidikan Kelapa Sawit” (IPB-Cargill Oil Palm Teaching Farm) will provide high quality training to students on the latest plantation production and management techniques. It will also serve as the reference for the application of the RSPO and the ISPO (Indonesian Sustainable Palm Oil) standards.

Supporting local smallholders
Read the case study (PDF) to learn more about the Cargill and FFI/Wild Asia partnership.

We are partnering with FFI and Wild Asia to help smallholders adopt sustainable production practices. Click to enlarge and view the Cargill and FFI/Wild Asia partnership case study.

Oil palm smallholders in Indonesia are a significant contributor to the success of our plantations. We are helping local landowners develop their fallow land into income generating palm estates at no cost as we pay for the development, rental fees and crop royalties to the landowner. Our smallholder program at our PT Hindoli plantation is working directly with thousands of farmers to help them increase yields, improve incomes and raise their standards of living. Our investments are enhancing agricultural production, developing infrastructure and supporting education, healthcare and the community’s other economic and social needs. We want to ensure that smallholders have a market for their crops, therefore, we accept smallholder fresh fruit bunches (FFBs) ahead of even our own company crop.

In August 2010 smallholders at our PT Hindoli palm plantation in Sumatra, Indonesia became the first to be certified under the RSPO’s Smallholder Principles & Criteria. Through a formal contract, we share premiums from certified sustainable palm oil produced by the smallholders and in June 2011, these smallholders received their first premiums from the sale of RSPO-certified sustainable palm oil which they produced. Premiums received from the sustainable palm oil have helped improved the living conditions of smallholders and their families significantly. The success of this program has seen Cargill recognised by the South Sumatran government and by the Indonesian Ministry of Social Affairs for our efforts to support sustainable economic and community development. Smallholders at PT Hindoli have also become amongst the first to receive official certification for sustainable palm oil supply for biofuels according to the International Sustainability and Carbon Certification (ISCC) standards.

In partnership with Fauna and Flora International (FFI), we are also working in Malaysia and Indonesia to help smallholders understand the RSPO criteria. FFI is also leading an environmental sustainability assessment of our Malaysia smallholder supply chain. Additionally, we are working with the RSPO and Control Union Certification – an RSPO approved certification body – to provide training to our crude palm oil suppliers in Malaysia.

Supporting local community land rights
Cargill News. A Plantation Grows in Borneo and Guardians of the Rainforest.

Cargill News, Cargill's employee magazine, regularly features stories about how our businesses and employees support responsible sourcing. Read the following stories from this issue (PDF):

We are committed to not threatening or diminishing the resources or tenure rights of indigenous people. We ensure that we have the legal right, and are recognized by the country’s government as the rightful entity, to use and manage the land.

Poorly defined land rights between the local population and the government and multiple claims over the same area of land do result in disputes. We consult with local communities on land rights issues and provide fair compensation for any loss or damage.

In Indonesia, we negotiate directly with individual landowners and local community leaders. The entire process is witnessed by local officials and requires us to compensate the local community leaders for existing crops, together with full notarization of agreements documenting our ownership of the land rights. We ensure that all mutual agreements with communities and individuals are clearly defined, documented and legally established.

Protecting local water systems

We monitor and treat all wastewater we produce to ensure that it complies with the applicable legal standards. Wastewater generated from our milling operations contains organic materials from crushing palm fruits, which we reduce by passing the water through a series of cooling, settling, mixing, anaerobic and aerobic ponds. By relying on the natural activities of anaerobic and aerobic bacteria to breakdown the organic materials, wastewater can be treated to legal standards without adding chemicals. Where permitted, some of our plantations use the treated wastewater from this process to irrigate and fertilize the trees on our plantations, enabling us to conserve water and reduce the need to apply additional fertilizer.

Supporting employee rights

We abide by the laws in the countries in which we operate, pay competitive wages and offer performance bonuses to attract and retain our employees. Our policies include the rights of workers to organize, join a union and voluntarily negotiate on our plantations as outlined in International Labor Organization (ILO) Conventions 87 and 98.

Ensuring responsible labor practices

We do not accept or support the use of illegal, abusive, or enforced labor in any of our operations anywhere in the world. We adhere to national laws that require those working on farms to be at least 15 years old in Indonesia. This is on the proviso the work does not disrupt school attendance and these employees are fully protected from potential economic exploitation, moral and physical hazards.

Improving access to health and education

As part of our long-standing commitment to ensure employee health and safety, we provide free basic healthcare where we operate, as well as free day-care and free housing to most permanent plantation employees. We fund the building of schools and the expansion of classrooms and teaching facilities. In addition, we employ teachers for kindergartens and primary schools, and sponsor government and teacher association programs to help improve the competency of teachers and the quality of education in the communities around our PT Hindoli plantation. We also build medical clinics and other healthcare facilities while providing medical equipment to schools. We provide free medical services and facilitates health awareness programs to the community and employees on subjects such as reproduction and family planning. This is done both independently and together with local governments.