Responsible Sourcing

Sustainability starts at the source

PT SMART Tbk together with our parent company Golden Agri-Resources (GAR) recognises we must source our raw materials (both palm and non-palm) from responsible suppliers who follow the same high standards of production as we do, if we are to fulfil our sustainability commitments. Guidelines outlined in the GSEP and Responsible Sourcing Policy inform our sourcing practices.

We emphasise the importance of these guidelines with all our suppliers, and make substantial investments in time and resources to help our supply chain transform and change for the better.

Who we buy from

As a palm-based agribusiness, the bulk of our sourcing concerns palm products. At our parent company’s level, our crude palm oil (CPO) and palm kernel (PK) come from 49 GAR-owned mills and almost 353 third-party mills in Indonesia.

In our drive for sustainable palm oil production, we are striving towards 100 percent traceability. Ensuring our third-party palm suppliers and their agents and smallholders adhere to the same strict guidelines we do requires extensive supplier engagement, assessment and training.

Supporting smallholders

Smallholders are a critical part of the palm supply chain in Indonesia. Over two million farmers control about 40 percent of total oil palm plantation area in the country. We believe that improving their livelihoods while driving responsible practices is key to improving the palm oil industry.

Plasma smallholders

For almost three decades, our Plasma Programme has helped over 19,000 smallholders to practice responsible farming. We do not own these plantations but integrate these plasma smallholders into our management system. We provide plasma smallholders with high-yielding seeds, quality fertilisers, and conduct regular training on good agricultural practices. In 2021, our plasma smallholders could achieve a CPO yield of around 3.1 tonnes per hectare, which is classified as the highest achievement in Indonesia.

Independent smallholders

We also support thousands of independent smallholders through technical and financial assistance initiatives as part of our mission to drive transformation across the industry.

Replanting with better quality, higher-yielding seeds is a focus area in our work with independent smallholders. However, the loss of income while waiting for the new plants to mature is often a barrier to many smallholders undertaking the necessary replanting that can help them earn more from their crop.

The Independent Farmers Replanting Programme gives farmers access to financing, helping them sustain their livelihoods during the four years it takes for the new seedlings to mature.

Since 2014, we have helped 2,300 independent farmers secure financing from state-owned banks for replanting, covering an area of around 4,600 hectares.