Neste Oil has more than 9,000 smallholders in its supply chain in Sumatra, the Riau province. Smallholdings there are 2 hectares in size and the families who farm them originally received their land as part of a government settlement program aimed at improving the living conditions of low-income families.
“Families that manage their farms well can send their children to university today,” says Adrian Suharto, Sustainability Manager at Neste Oil’s Singapore City office.
Adrian joined Neste Oil in July 2009 and says that he has been passionate about developing the smallholder community from the very start.
“40% of Indonesia’s palm oil comes from smallholdings and the majority of smallholders still live in poverty. Every company that buys palm oil should play their part in helping alleviate this poverty by including smallholders in their supply chain, I believe, and I’m very glad that Neste Oil is committed to doing just this.”
Neste Oil requires its suppliers to be certified, as this not only shows where their palm oil comes from, but also that it has been produced sustainably.
Smallholders benefit directly from certification, as certified oil commands a higher price.
Neste Oil’s experts help farmers certify their smallholdings in accordance with the International Sustainability and Carbon Certificate (ISCC-EU) system.
“I’m very satisfied that we’ve succeeded in introducing a reliable and stringent supplier selection process, while still maintaining good relations with our suppliers.”