Earlier this month, we achieved another important milestone – our company has received the highest number of Indonesian Sustainable Palm Oil (ISPO) certificates in the country. With two of our business units, PT Sinar Kencana Inti Perkasa and PT Bumi Sawit Permai receiving their ISPO certificates, the company now has a total of 30 certified companies. It is a nice way to end the year.
This got me thinking about why ISPO is important for us and for our stakeholders. It is after all, mandatory to be ISPO-certified if you are a palm oil grower operating in Indonesia and in a way it is just part of doing business. Plus, there are other certifications which are more well-known internationally such as Roundtable on Sustainable Palm Oil (RSPO) and International Sustainability & Carbon Certification (ISCC).
I believe it is precisely because ISPO is mandatory rather than voluntary like RSPO or ISCC, that it is significant. It is the Indonesian government’s attempt to create one single national standard for sustainable practices in the palm oil sector. It creates a level playing field – whether you’re a big company or a small farmer, you have to comply with the same requirements.
These requirements are designed to ensure palm oil growers operate in compliance with existing laws and regulations in Indonesia. ISPO certification gives buyers confidence as it carries an assurance that the products are produced legally; the company has the requisite permits; and the grower has followed certain environmental as well as labour and social standards. ISPO is also tailored to local conditions thus making it more accessible to millions of small farmers. It is a doable first step which may eventually help them achieve other certification such as RSPO.
Improving the Indonesian palm oil industry through ISPO
Much work remains to be done to make ISPO an internationally-accepted standard amongst palm oil customers. There is a lack of understanding and knowledge about ISPO and it needs to be better promoted amongst customers in the international palm oil market. At home, palm oil companies and smallholders need to see ISPO as something more than just a piece of regulatory compliance and instead as a means to lessen risks and improve business longevity.
In the past few months, the palm oil sector, the company included, has initiated moves to help strengthen ISPO as a national sustainability platform. As a company which has invested wholeheartedly in the process of obtaining ISPO certification, we want to see ISPO become a useful tool for everyone in the industry to help upgrade and improve their practices. Not only are we involved in discussions with industry and government, we are also helping our suppliers get ISPO-certified through special workshops. Our dedicated supplier support team is also on hand to help our suppliers understand and comply with the requirements of ISPO. With more companies and smallholders obtaining ISPO we see it becoming a game changer, eventually helping to elevate the Indonesian palm oil sector.