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Cargill takes steps to meet growing demand for sustainable palm oil 

January 08, 2015

Cargill has acquired the Poliplant Group, a move that will improve the company’s ability to meet increasing demand for traceable and sustainable palm oil. The acquisition was completed on Dec. 30, 2014. 

The new operations comprise approximately 50,000 hectares of contiguous, planted smallholder and company land adjacent to Cargill’s existing palm oil operations in West Kalimantan, Indonesia.

For John Hartmann, chief executive officer of Cargill Tropical Palm Holdings Pte Ltd, the long-term success of the acquisition will require Cargill and its stakeholders to make a concerted effort to address deforestation and other environmental issues associated with the palm oil sector.

“Cargill’s oil palm plantations in West Kalimantan and South Sumatra have established strong track records in sustainable practices and operating to a strict code of conduct,” said Hartmann. “As we work towards RSPO certification for our new operations, our broader goal for a fully sustainable and transparent supply chain can only be accomplished with the support of multiple stakeholders.”

“We are firmly committed to collaborating with our customers, suppliers, NGO partners and local communities to bring Poliplant to its full potential, starting with the required HCV and HCS field assessments,” Hartmann added.

Taking care of the land and the people

Cargill has enlisted the help of independent consulting firm Daemeter to perform a variety of social and environment-related tasks, including field assessments to identify High Conservation Value (HCV) and High Carbon Stock (HCS) land areas – critical steps towards ensuring no deforestation as pledged in its Sustainable Palm Oil Policy launched last July.

"To achieve sustainable production in Indonesia, it's vital for all stakeholders involved to work towards a common purpose,” said Gary Paoli, director of research and project development at Daemeter. “This process begins with transparency, and we applaud Cargill’s openness about our engagement to assist with HCS and HCV assessments in Poliplant.”

Cargill has long recognized the essential role of smallholders in the global palm oil supply chain. To ensure their inclusion at its new operations and to understand the needs of the local community, Cargill has partnered with Solidaridad, an international NGO specialized in building fair and sustainable supply chains.

“Agriculture remains one of the key economic activities in Indonesia, and it is important for smallholders to start adopting sustainable farming practices to preserve their future livelihoods,” said Hendry Yang, coordinator for palm oil, Solidaridad South and South East Asia. “Through our partnership with Cargill, we will focus on developing a long-term roadmap to help smallholders and local communities succeed and sustain a good livelihood for generations."  

Walking the walk

In its first Palm Oil Progress Report, published in November, Cargill outlined its progress towards a fully sustainable and traceable palm oil supply chain. The new acquisition’s milestones towards RSPO certification will be documented in subsequent reports.

"Cargill is working hard to ensure that it is fully implementing its palm oil policy in its own plantations, including this recent acquisition. Prior to the completion of the acquisition, Cargill Tropical Palm had already opened discussions with leading experts on social and environmental management of palm oil, demonstrating their seriousness in implementing best-in-class practices. Their reporting commitments will ensure that these actions are undertaken in a transparent manner,” said Robin Barr, director of The Forest Trust (TFT), an NGO that helps companies deliver responsible products.

“I am grateful for the support of Daemeter, Solidaridad and TFT in helping us build a traceable supply chain for certified palm oil,” said Hartmann. "There is much work ahead of us, but we are on the right path."