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A personal view: GAR’s approach to transform the industry through suppliers

By: Posted: December 2, 2016 180 views

In the past few months, due to the nature of my work, I’ve gotten to know a lot about one of the flagship programmes that my company is currently carrying out – the Traceability to Plantation project or TTP as it is more popularly known within the company.

Put simply, this refers to the ability to map our supply chain and by doing so know where our raw materials come from. Over the last few years, we’ve carried this out in two phases: firstly achieving traceability to the mill and then using that now as a stepping stone to achieve traceability all the way to the source or the plantation.

Compared to traceability to the plantation, traceability to the mill is relatively easier to achieve. What we did was to collect data on all the mills which supplied the raw materials to our refineries in Indonesia. This was time-consuming and not without challenges, but we met this goal by the end of 2015.

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Getting to know the people who grow the palm oil

TTP on the other hand, means knowing exactly where the palm oil Fresh Fruit Bunches that come to our mill are from. This means knowing who the farmer is, the location of the plantation and information such as the size of the plantation, how many tonnes are produced and what kind of legal papers they have. This makes it way more complex and on a bigger scale – after all more than 40 percent of the palm oil area in Indonesia is owned by small farmers.

This initiative is fairly new so there are no fixed methods or steps that can be applied. And since the characteristics of the farmers from one area to another are also different, the approach needs to be flexible and customised.

Why traceability?

What interests me the most is why traceability is important to our industry and why a company like GAR/SMART is willing to invest so much in this. From what I have learnt so far, traceability is one of the steps to sustainability.

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I believe it also helps us to achieve the UN’s Sustainable Development Goal 12 suppliers better. Better in the sense that we know who they are and what they are doing. This information lets us know and understand the problems that they are facing and enables us to work together with the farmers and the rest of our supply chain to find the best solutions for them to adopt sustainable practices.

One of the recurring concerns when I’ve talked to farmers is what will happen to them if they are not carrying out sustainable agriculture. Many farmers are concerned that the company will stop buying from them and this makes some of them reluctant to take part and give information required for our mapping process.

The reality is that many farmers do not understand what sustainability means and why it is important to adopt sustainable practices. And we cannot simply look at the issue as black and white – right and wrong.

Engagement is key to making a difference

I was quite surprised when I first learnt that we as a company will not simply disengage with suppliers who are found conducting non-sustainable practices, even though we have that option. My first reaction was why, as they will just create problems for us and we should just stay away from them. With my PR hat on, I could also imagine different potential risks to our company’s reputation.

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GAR brings together suppliers to work on improving practices

But then I learnt a different perspective which to me really shows the commitment of this company in transforming the industry. When we walk away or stop buying from these suppliers, what will they do? They will also disengage with us and they will still sell their fruit bunches to other companies. Does it solve the issue? Does it make any change? No. That is why, in GAR/PT SMART we choose to continue to engage them. Yes, it will cost us more – but it will create a difference. Together with the farmer we create a plan for their transformation where we monitor and assist and give the necessary support when needed. Yes, it will take more time, more cost, more risk. But it will surely make a difference.