14 July 2014

Feeling empowered of the progress on corporate sustainability

Working in the field of sustainability, we are ‘honoured’ to be invited to many sustainability conferences. Sometimes it’s a challenge to differentiate which is a truly valuable conference, or one which is a ‘talk-fest’. A truly valuable conference would be a conference where we talk about practical implementations, substance of the projects we are involved in; speakers would be true practitioners on the field with valuable experiences to share. While, a ‘talk-fest’ will be a conference where a group of people will only talk about their opinions without proof that they did something, and plans for the future; for example a ‘declaration of commitments’ or ‘discussion on a subject’ would sometimes be a conference where I struggle focus attention on.

The latest conference I went to which was organized by IFC, was a truly different conference. IFC, the International Finance Corporation, is under the World Bank, an organization established to among others, to promote community development, alleviate poverty within developing countries. IFC invited their clients, including high achieving companies to speak about their projects with IFC. There were 235 participants, from different industries and sectors (mining, oil and gas, plantation, banking, IT, NGOs, governments etc.) covering 5 continents. This was a by-invitation only event where Neste Oil was invited as a soon-to-be client of IFC, where we will be signing an agreement soon. It was amazing to discover the achievement and commitment of the companies present, the fact as well that they have done these projects without concern on branding but on the spirit to do what is right for them and the stakeholders whose livelihood they influence. The problems they face during their operations are various and unique per region they are operating, however the basic principles are the same. One message was repeated in each presentation: the importance of, stakeholder mapping, providing value to the supply chain, community development, and engaging with stakeholders -government, NGOs, and others.

Neste Oil will most likely speak in the next conference, since by then we would have some progress to report on our smallholder project. We have been reporting an increased number of smallholder suppliers; 9,000 in 2012 and now 54,000. This number is an achievement and, believe it or not, is unprecedented for a buyer in the palm oil supply chain. And this year, we in Neste Oil have gone a step further, not only on supplying from smallholders – traceable (through mass balance or segregation) and certified oil – but also on exploring how we can supply from the most marginalized and poorest group in the palm oil supply chain: the independent smallholders.

Not a lot of people, when they speak about palm oil, understand the role of smallholders, who own 40% of the lands growing palm but yet most are still living in poverty. IFC's diagnostic analysis of independent smallholder supply in Indonesia found that the lacks of training and good practices are the reason for the low yield and thus low income - and also the reason why they continue to slash and burn and expand irresponsibly. The only way to help these smallholders, are with a good cooperation between a willing buyer like us, an responsible and experienced financier (IFC) and one of our mill processors. This project is aimed to be a model for a successful assistance scheme for independent smallholders who will show that these smallholders can be brought out of poverty, can be responsible growers and can produce sustainable palm oil. For Neste Oil, this is the right thing to do as a responsible buyer, to ensure that we provide a shared benefit for the resources we buy, along our whole supply chain.

The conference and the achievements of the other clients of IFC has given proof that IFC has experience, expertise and are well-aware on the risks as well as opportunities on the field. I am personally glad that we managed to secure a good partner and hope that this project with the support of my colleagues in Neste Oil will go well! I will update you again when finally this project has started and progress reported.

Adrian R. Suharto
Sustainability Manager Neste Oil Singapore Pte Ltd