SESSION 4: RSPO FOR SMALLHOLDER PRODUCTION Chair: Johan Verbug (Oxfam International) 117
INDONESIAN SMALLHOLDERS WORKING GROUP (INA-SWG) WORK PROGRAM PART III 1 2 PARTS I AND II: I. INTERACTION OF SMALLHOLDINGS WITH HCV AND CHARACTERISTICS OF OIL PALM SMALLHOLDERS II. DEVELOPMENT OF SMALLHOLDER P & C AND SUBMISSION TO THE EB - Multistakeholders - Public consultations - Field trials 3 CHARACTERISTICS OF SMALLHOLDERS NON-PROJECT SMALLHOLDERS Small plots Lack of access to information Lack of access to technology Use of uncertified planting materials Lack of management Lack of capital Family-run operation Low productivity No or weak organization Land rights 4 118
PROJECT SMALLHOLDERS - Planting materials ) - Technologies applied ) - Management ) - Capital ) - Plantation development ) - Organization ) - Land certificate ) Arranged by nucleus plantation OVERALL CONDITIONS OF PROJECT SMALLHOLDERS ARE BETTER THAN Phase I Nucleus (nu) tasks: - Develop and take care of plantation - Transfer technology to smallholders - Assist smallholders get their land certificates - Assist smallholders form their organizations Plasma tasks: - Sign the agreement - Learn oil palm management from nu - Join a smallholder organization - Sell oil palm fruits to nu - Manage plots under nu supervision - Settle loans Phase II - Prepare plantation for conversion - Hand over management of plots to smallholders - Assist smallholders manage their plots - Process smallholder fruits - Sell oil palm fruits to nu - Manage plots under nu supervision - Settle loans Phase III - Assist smallholders - Process smallholder fruits Phase I: Development of plantation; Phase II: Conversion: Transfer of credit from government to smallholders; Phase III: After conversion FOR NON-PROJECT ONES 6 After conversion, the plots are managed by the smallholders themselves under nucleus supervision. The project smallholders are de facto independent, very much like independent smallholders - a situation to be considered in preparing the generic P&C for certifying smallholders. At present, INA-STF use STF use different indicators for project smallholders and independent smallholders. P&C RSPO Generic - Laws, regulations, norms P&C RSPO Generic -Laws, regulations, norms - Smallholder characteristics National Interpretation P&C Smallholder P&C 7 8 5 119
2. 2.1 2.2 2.3 2.4 INA-TFS WORK PROGRAMME 2007 1. Draw up Draft 1 (Smallholder P & C) based on generic RSPO P&C, national regulations and survey of smallholdings 2. Draw up Draft 2 - refinement of Draft 1 3. Put Draft 2 on website for public comment 4. Field tests whether the indicators are applicable (reasonable) 5. Draw up Draft 3 with inputs from field tests 6. Hold public consultation workshop 7. Draw up Final Draft 8. Submit to RSPO EB for approval WE ARE HERE! 9. RSPO P&C for Indonesian Smallholders 10. Socialize the Smallholder P&C 11.. Trial certification process Trial certification of smallholdings - study challenges in compliance with the standard - develop mechanism for certification of smallholders Selection of pilot areas. The areas have been decided (South Sumatra, Riau, and East Kalimantan) Field assessment & gap analysis and survey of smallholder organisations by a team from INA-TFS and auditor. Questionnaires have been distributed to smallholders and their organizations o to complete. Training material for smallholders (booklet) prepared. Capacity building plan and implementation to correct the gap (based on the results from 2.2) Training for smallholders and smallholder organisations (if necessary, from 2.3), linked to the activities in 1.3 11 1. 1.1 1.2 1.3 2.5 2.5.1 2.5.2 2.6 2.7 2.8 INA-TFS Projects for Year 2008/09 and Activities Finalise and promote smallholder P&C Waiting for Generic P&C for smallholders Revise and finalise smallholder P&C, to include recommendations from RSPO EB Waiting for Generic P&C for smallholders Produce booklet on the endorsed smallholder P&C Waiting for endorsement of P&C for smallholders Socialisation and awareness of RSPO P&C with smallholders Waiting for endorsement of P&C for smallholders Trial certification to verify compliance with smallholder P&C: Waiting for endorsement for P&C for smallholders Development of group certification mechanism for smallholders INA-SWG has asked BioCert to draft the certification mechanism for smallholdings. BioCert and Mutu Agung Lestari are menbers of INA- SWG Certification assessment in smallholdings by auditor and INA-SWG Waiting for group certification mechanism Results of trial certification assessment Evaluation of results from trial certification assessments Modul preparation: - Endorsed P&C for smallholders - Group certification system for smallholders - GAP related to the P&C - Simple management system for smallholder organizations and smallholders 10 12 9 120
THANK YOU 13 121
SMALLHOLDER AWARENESS ON SUSTAINABLE PALM OIL PRODUCTION IN MALAYSIA K.Ilangovan 1 and Razuwan Che Rose 2 1 Felda Agricultural Services Sdn. Bhd, 2 FELDA MALAYSIAN OIL PALM AREA IN 2007 Source : MPOB (2008) (Total = 4.30 million ha) 3 OVERVIEW 1. Oil palm area in Malaysia - Smallholders 2. Current extension system for smallholders 3. Formal exposure to SPO, by current system 4. Exposure to SPO By Malaysian Smallholders Working Group (MSWG) 5. Programs under MSWG 1. Train the trainers 2. Smallholder awareness 3. Smallholder outreach 6. Conclusion 2 SMALLHOLDER BREAKDOWN (by category in 2007) Source : MPOB (2008) 4 FELDA : Federal Land Development Authority FELCRA : Federal Land Consolidation and Rehabilitation Authority RISDA : Rubber Industry Smallholder Development Authority 1 122
CURRENT SYSTEM (of extension services* to SH) Organized smallholders In-house agronomists/extension officers 1. FELDA - Felda Agricultural Services Sdn Bhd 2. FELCRA - Felcra Bhd 3. RISDA - ESPEK Independent smallholders Extension officers 1. MPOB - TUNAS 2. DOA - Extension officers * Mostly on economic and GAP aspects EXPOSURE TO SPO through P&C (Organized by MPOA, funded by RSPO) Malaysian Palm Oil Association (MPOA) Took responsibility for the wholesome development of RSPO in Malaysia, irrespective of plantation size and area. A MSWG was formalised on 19 th July 2008 Comprising: Governmental organizations Private associations Environmental NGOs Social NGOs 7 FORMAL EXPOSURE TO SPO/RSPO ORGANISED SMALLHOLDERS FELDA : 2006 Regional Awareness campaigns Internal Publications, Training courses Translated P&C to Bahasa Malaysia (available @ RSPO website) SALCRA : 2006 Workshops INDEPENDENT SMALLHOLDERS MPOB : 2008 Trainings, Demonstrations Lectures, Exhibitions Focal group discussions Includes smallholders Malaysian Smallholder Working Group Chairman (MPOA) Deputies FELDA, MPOB, NASH Committee members SALCRA, WWF, EMPA, RISDA, POMA, Tenaganita, KPPK, FELCRA, NARSCO Representatives Government agency: Private associations NGOs Agriculture Environment Pesticides Board Dept. Land survey DOSH KPPK SLDB MCPA Dealers Assoc. NBPOL Sime Darby Sawit Kinabalu NAFAS Individual SH WWF, GEC Wetlands BRIMAS SAM, MNS Tenaganita SADIA, SDI PACOS 6 8 5 123
MSWG PROGRAMS 1. TRAIN THE TRAINERS First round July - August 2008 Second round August - September 2008 2. SMALLHOLDER AWARENESS First round July - August 2008 Second round August - September 2008 3. SMALLHOLDER OUTREACH Four strategic locations - Starts November 2008 OUTCOME (First round) 1. Awareness about RSPO 60% heard of RSPO and its intentions before 2. Participants view on RSPO P&C P&C is good for smallholders and should be promoted. About 50% of current practices already in line with RSPO P&C 11 1. TRAIN THE TRAINERS PROGRAM Objectives: First round: Familiarize extension officers with RSPO P&C Second round: 1.Get feedback on NI 2.Get feedback on the ability of the trainers to train SH Contents: Lectures: GAP, Social Environmental - Safety and Legal aspects Breakout group discussions Location: K Lumpur, Miri, Sandakan Participants: MPOB, FELDA, FELCRA, RISDA, SALCRA, NASH, etc. 10 Presenters: FELDA, MPOB, Sime Darby, PPB, WWF, MCPA 3. Relevant P&Cs to SH 12 9 124
Objective: To get feedback on: 1. RSPO NI OUTCOME (Second round) 2. Ability of the trainers to train SH towards RSPO compliance Outcome :- 1. 70-80 % of participants are new and many not aware of RSPO 2. Many realize RSPO benefits SH but implementing P&C may be tedious 3. SH Compliance to RSPO P&C estimated to 60-65% SUMMARY (Train the trainers program) The trainers are supportive of RSPO initiative but have incomplete understanding of RSPO P&C Trainers agree GAP is most important to SH, especially on technical and legal aspects 14 2. SMALLHOLDER AWARENESS PROGRAMME Objective: First round: Create awareness of RSPO P&C Second round: Get feedback on ability of SH to comply with NI Contents: Lectures: GAP, Social - Environmental - Safety aspects in farm & MYNI Survey questionnaire: Current status of P&C implementation Locations: K Lumpur, Sandakan, Miri Participants : MPOB, FELDA, FELCRA, RISDA, SALCRA, OUTCOME (Round one) Participation is good but some represented family members, especially in East Malaysia Some communication difficulties noticed due to: 1. Illiteracy/understanding 2. Visual difficulties Participants from Sarawak very concerned over Native Customary Rights NASH, etc. 15 16 13 125
OUTCOME (Round two) SH more aware of RSPO now (after 2 nd session) Issue of Customary Rights prevailed in Sarawak 70-80% of participants in the second round were first timers. Many realize the benefits of RSPO but implementing P&C may be tedious Survey summary Principle Most Easy Indicators (Score < 2.0) 3 1 1.2.1 2 2.3.1 4 4.7.1 4.8.1 Most Difficult indicators (Score >3.15) 4.3.5 4.4.3, 4.4.4 4.6.9, 4.6.10 4.7.3 5 5.5.1, 5.5.3 5.2.3 6 7 7.6.3 8 8.1.1, 8.1.4 19 Survey Results Ability to comply :- 1 = Very easy 2 = Easy 3 = Moderate 4 = Difficult 5 = Very difficult SUMMARY (Smallholder awareness program) Most SHs fairly understood RSPO intentions Views on implementing P&C widely differed, probably due to: Not fully understood P&C requirements Different levels of capacity, operation Cost involvement in implementing GAP Inadequate knowledge on legal requirements Inadequate facilities for storage/documentation Land ownership status (mainly for Sarawak SHs) SHs expected assistance from institutions/mills to enable compliance Wanted to know the direct benefits (quantitatively) so as to offset the extra cost incurred in complying 18 20 17 126
CONCLUSION 1. Knowledge on RSPO P&C still inadequate for Trainers and SH 2. Because of varied views, more workshops/ dialogues needed to improve understanding of SH issues for follow up action 3. Each program has to be at least a full day for detailed understanding of P&C requirements 4. Most SHs hesitant to commit to P&C due to expected higher cost which will reduce their already falling income from: Drop in palm oil price Increase in production cost Uncertain market demand Thank You for your attention. 22 21 127
RSPO Smallholder Group Certification: An Organic Agriculture Experience in Indonesia Made and presented by Agung Prawoto [agung@biocert.or.id] BIOCert (www.biocert.or.id) At RT 6 RSPO, Bali 18-20 November 2008 08/14/08 1 Characteristics of Oil Palm Farmers in Indonesia Associated/Partnership Farmers Farmers work in partnership with a oil palm company. The farmers first tranfer their land to the company to plant oil palm, the cost considered a loan to the farmers Farmers sell their FFB to the company through their cooperative. The cooperative, as middleman, manages the loan repayment within a defined period Company trains farmers in plantation management during loan period Farmer groups established by the company to organize production. Company provides agrochemicals before signing the partnership contract. Associated farmers don't document systematically. Another partnership model [KKPA]: Company rents the lands for a defined period. 3 08/14/08 3 Overview - Indonesia is the largest producer of palm oil in the world, with 6.78 million hectares producing 17.37 million tonnes a year. - CPO has an important role in the national economy. In 2007, the export of CPO and CPO-related products was 11.8 million tonnes valued at US$7.8 billion; direct employment given to 3.3 million people. 2 08/14/08 2 Characteristics of Oil Palm Farmers in Indonesia Independant farmers Operate their farms independently Provide their own planting materials, fertilizers and maintenance Sell FFB anywhere for the best price Not well organized Have limited access to funds Training on production and quality of FFB by local plantation agency, or none 4 08/14/08 4 1 128
Facts: The CPO factories can be used at 100% capacity. However, the company production usually only suffices for 20% capacity. Thus, outside FFB are bought from middlemen who get it from farmers. What is Group Certification for Smallholders? Based on organic agriculture development for smallholder group certification Well organized smallholder groups --> develop a uniform system for members. Certifier body then evaluates whether the system is running well and efficiently. Internal Control System [ICS]: a documented quality assurance system that allows an external certification body to delegate the annual inspection of individual group members to an identified body/unit within the certified operator. New planting and replanting: Land clearing and applying agrochemicals intensively have the potential to cause erosion, and monoculture is a threat to bio-diversity. Partnership problems: transparency, land ownership, forced labour, profit sharing, access to funds, training, cooperatives, farmer 08/14/08 organizations. 5 08/14/08 6 Smallholder Groups (Cooperatives, Associations) Monitoring/control Production Process Records P&C RSPO Certifier Body 7 08/14/08 7 5 Supply Chain Evaluation Compliances ICS mechanism Smallholder Groups (Cooperatives, Associations) Middlemen CPO Factory P&C RSPO for smallholders P&C RSPO Checking the ICS documentation system and staff qualifications and reinspecting some farmers. Operating well & efficiently ICS Organization Maintaining records of all group members, including approved farmers Internal inspection at least once a year Review and approval on conformity to RSPO P&C for all members. Regular training for members and ICS personnel. Appeals and sanctions ICS is run by groups or sub-contracted. 1. Entire entities within the supply chain are registered 2. Each member of an organization signs a membership agreement, committing to fulfilling the RSPO P&C and allowing inspection. 8 08/14/08 8 129
Model of Group Certification [1] Smallholder Group: - The group holds the certificate - Manages ICS ICS mechanism Middleman CPO Factory RSPO P&C for smallholders Smallholder Groups (Cooperatives, Associations) 08/14/08 9 Production Contract [2]: Middlemen or CPO factory has contract with smallholder groups CPO factory holds RSPO Certificate Factory manages ICS Contract Smallholder Group (Cooperative, Association) Middleman CPO Factory RSPO P&C for smallholders RSPO P&C Independent and partnership farmers ICS mechanism 1. ICS organization responsible for managing ICS by carrying out annual internal inspection and evaluation by 3 rd party [certifier body]. 2. Certifier body carries out annual inspection of ICS organization, some farmers as samples and entities within the supply chain. 11 Strengths: Developing ICS based on local conditions [geographic, knowledge, culture). Certificate on behalf of smallholder groups [community] --> pride Smallholder groups can sell FFB to any buyer with the best price Weaknesses and challenges: Has limited resources (incl. knowledge) to run ICS, documentation and records capacity building for smallholder group to develop and implement ICS. Sustainability of program depends on funds from donor. A percentage of FFB sales is deducted for ICS operation and certification costs. Market access for RSPO certified FFB 10 08/14/08 10 Combined model [3] Smallholder Group (Cooperative, Association) CPO Factory Smallholder Group (Cooperative, Association) RSPO P&C for smallholders ICS mechanism RSPO P&C 12 08/14/08 12 9 130
Group Certification Requirements Well organized smallholder group There is homogeneity of members in terms of geographical location, production system, size of holdings, common marketing system. In principle, only small farmers can be members of a group for group certification. Larger farms can also be included but must be inspected annually by the external inspection body. Processors and exporters can be part of the structure of the group but also have to be inspected annually by the external inspection body. 08/14/08 13 Institutional framework Cooperation: RSPO secretariat, smallholder groups, governments, CPO factories and traders, capacity building institutions, certifiers, NGOs Capacity building for smallholder groups and CPO factory and/or NGO Support to develop ICS managed by smallholder group, refering to RSPO P&C for smallholders 15 08/14/08 15 Protocol for Group Certification 1. Criteria for small farmer [Example: <12 ha, family labour, economic size] 2. Smallholder group has production contract with RSPO certified factory. 3. Certification scheme: Scope of certification Frequency of certification Size of sample Timing of certification Activities to be verified Standards and legal norms Reporting Evaluating/scoring Use of self-evaluation 14 08/14/08 14 Recommendation for the next steps 1. Setting up smallholder group certification system: Guidance manual for group certification, guidance for certifer body, self assessment of conformity to RSPO P&C and ICS 2. Pilot projects for smallholder group certification 3. ICS training for smallholder groups and facilitators [company, NGOs, government] 4. ICS inspection training for certifier bodies. 16 08/14/08 16 131
Terima kasih [Thank you] agung@biocert.or.id www.biocert.or.id 08/14/08 17 132
What we know about smallholders... At least 1.4 million smallholders in top six palm oil producing countries Own 40% harvested area and produce 25% CPO in Indonesia and Malaysia; lower yields than estates Millions of plantation workers in top 5 palm oil producing countries Palm Oil Producer Support Initiative (POPSI) for smallholder inclusion in certified supply chains and certification Without accessible standards, group certification, training and investment many smallholders will be excluded. 133
What can we do about it? Through the effort of the Task Force on Smallholders (TFS), a smallholder version of the RSPO Principles & Criteria has been developed TFS is working on awareness raising and expansion of multi-stakeholder involvement How? Training (BMPs, administration, compliance with RSPO P&C) Group certification Investment, business and financing tools for producers Awareness raising What more needs be done? Address the very large technical, financial, capacity and organizational challenges that exist to ensure that smallholders manage and produce CPO in line with the RSPO Principles & Criteria - Task Force on smallholders Palm Oil Producer Support Initiative (POPSI) Goal: Prepare oil palm smallholders and farm workers worldwide for RSPO Certification Pilot projects with 35,000 smallholders and 100,000 plantation workers in 2009-2012 Global reach: South East Asia, West Africa and South America Part of a broader programme that also addresses soy (SOYPSI, with RTRS) and sugar cane (SUPSI, with BSI) 134
POPSI and RSPO Initiative of Solidaridad and WWF-US Endorsed by RSPO, as well as Unilever and Cargill PPP of the Dutch Ministry of Foreign Affairs (40%) and co-funding partners (60%) Coordinated with the Task force on smallholders and national stakeholders POPSI criteria Eligible other projects are those that: Develop RSPO training materials; Provide training to smallholder groups and plantations for RSPO certification; Identify and implement Better Management Practices; Develop and provide business and finance mechanisms; Create awareness on RSPO P&C and Guidance. Specific emphasis is given to smallholder farmers and plantation workers. Co-funding grants of 20,000-150,000 a year. POPSI appraisal procedure Solidaridad is the contract recipient, hence responsible for reporting and administration; the program will be supervised by a Supervisory Group (SG); Call for proposals open until 20 December; Proposals will be reviewed by an independent Project Group; the SG gives formal approval. Preconditions Cash and/or in kind co-funding by applicant(s) There is a RSPO member in the supply chain (industry applicants should be members) Commitment to joint implementation of activities See the brochure in your conference bag for more information 135
About Solidaridad Founded in 1976 in Utrecht, Netherlands Worldwide network with 8 regional offices in four continents Mission: Poverty reduction through sustainable supply chain development (Coffee, cocoa, tea, palm oil, sugar cane, soy, cotton/textiles, fruits) Certification Support Network, multi-stakeholder engagement through roundtables, public policy lobby and company engagement Higher yields Affordable credit Safe chemical use Investment in machinery Increased incomes Children to school Better Management Practices popsi@solidaridad.nl www.solidaridad.nl g Sustainable Chains Sustainable economy starts with Solidaridad 136
Q & A SESSION 4 SPKS Rohul: 1) What are the pre-requisites for smallholders to gain RSPO certification? (To General) Answer: Compliance with Smallholder P&C adapted for each country (NI). For smallholders, RSPO is looking into a group certification system. 2) Is RSPO willing to provide guidance to help smallholders? (To General) Answer: Yes, through the TFS (Task Force on Smallholders) and National Smallholders Working Groups. Kanisius (SPKS): 1) What happens when a certified smallholder wants to sell his FFB to an uncertified mill? (To General) Answer: Their FFB will be certified. RSPO is looking into incentives for certified FFB. 2) Why are Indonesian companies so reluctant to join RSPO? (To General) Answer: They are not reluctant just getting themselves ready to join. Marcus Colchester (Forest Peoples Programme): 1) Generic standard is developing guidance for smallholders has different requirements for tied and independent smallholders. It is urgent to complete this. Task Force plans this. 2) Funding of certification by smallholders is a challenge. The meeting on Monday called on RSPO to create a fund to assist smallholders with the costs of audits (and repeat audits). Answer: Comments noted. Rosdiana (IPOB): 1) Please find an experienced body to implement group certification, e.g., FSC, the well-known agent in Indonesia is the Indonesian Ekolabel Institute (LEI). (To General) 2) Smallholder certification should be assisted financially, with the cost subsidized by an RSPO fund. Answer: Comments noted. 137
PEP George (ProForest): Clarity on what is being certified under RSPO is needed from the EB whether this is CPO or FFB. This point needs to be defined now as it will impact on the work being done on the Group Certification Protocol development and moving forward of certification of independent smallholders. Answer: RSPO is working towards FFB certification given the smallholder realities.. Rafmen (Asian Agri): 1) What is your suggestion about successful RSPO certification, especially for independent smallholders. In Indonesia, there is no land ownership, conflict land and social, no AMDAL? (To Ilangovan) Answer: RSPO is looking into the matter in the course of its smallholder work. 2) No middlemen to send FFB from group smallholders to mill. (To Aguni) Answer: This will be considered in the group certification scheme. 138