Unilever has this week struck a partnership agreement with Indonesia’s state-owned palm oil plantation firm PT Perkebunan Nusantara (PTPN) that will see the two work together to support local mills and farmers in producing palm oil that aligns with zero deforestation standards.
The memorandum of understanding, which was announced yesterday, will help accelerate production standards in the country in accordance with NDPE policies – no deforestation, no development on peat, and no exploitation of people and communities.
As part of the partnership, Unilever will support PTPN’s mills and supplying farmer base in their efforts to obtain sustainability certification through a combination of resources, funding, and technical expertise. Unilever said it would help ensure farmers are better positioned to enter the palm oil supply chain and enable them to increase their productivity and yield.
Marc Engel, chief supply chain officer at Unilever, said the firm’s ambition was to make sustainable palm oil “mainstream”, having worked hard in recent years on developing its approach to the issue.
“We are involved in various partnerships to help smallholder farmers improve their yields while protecting the environment and local communities,” he said in a statement. “The MoU with PTPN is the first time we can apply the produce-protect model at scale – our partnership will have a positive impact in Indonesia from an environmental, social and economic perspective which makes it unique to the industry.”
PTPN said the agreement provided an important incentive for smallholder farmers to adopt sustainable agricultural practices, as it provided a strong business case for embracing environmentally friendly palm oil production.
Erwan Pelawi, operating managing director at PTPN’s holding company, explained that the firm had an extensive network of smallholder farmers, with 61 per cent of the area it manages made up of palm oil plantations.
“We are committed to continuing sustainable palm oil management,” Pelawi said. “The MoU with Unilever is expected to improve the quality of how smallholder farmers manage palm oil cultivation and will also accelerate the process of sustainable palm oil certification which will in turn provide better benefits for the welfare of oil palm farmers in Indonesia.”
Separately yesterday, Unilever joined 60 other international companies including Tesco, McDonalds, and Marks & Spencer in signalling support for the ‘Cerrado Manifesto’ – a pledge to end the clearance of native vegetation in the Brazillian Cerrado region.
It also follows Unilever CEO Paul Polman’s call earlier this week for the wider global consumer goods industry to take more concerted action to reduce plastic packaging waste, an issue over which he said the sector was at a “critical juncture”.