Indonesian & Indian Palm Oil Industry Join Hands to Promote Sustainable Trade

A new Memorandum of Understanding (MoU) has been signed which, for the first time, recognizes the Indonesian Sustainable Palm Oil (ISPO) and the Indian Palm Oil Sustainability (IPOS) Framework as legitimate sustainability frameworks for palm oil production and trade between Indonesia and India.

This MoU was signed on 16 July 2018 between the Solvent Extractors Association of India, the Indonesian Palm Oil Board and Solidaridad during a high-level meeting with the Coordinating Ministry for Economic Affairs, in Jakarta, Indonesia.

It is expected this cooperation will lead to joint the promotion of IPOS and ISPO aligned sustainable palm oil in Indian, Indonesian and other markets through increased awareness amongst all stakeholders including consumers.

Leading the Way for Long-term Sustainability 

The MoU signing was witnessed by the Indonesian Coordinating Minister for Economic Affairs, Mr. Darmin Nasution. Speaking on this occasion, Mr. Darmin said he hoped this MoU will take forward the discussion on the continued growth of palm oil and its derivatives as discussed between President Jokowi and Prime Minister Modi during the latest visit to Indonesia on May 30th 2018.

Also present was Mr. Atul Chaturvedi, President of SEA and Director of Adani Group who stated that the MoU will lead the way for long-term sustainability of the palm oil sector by reducing barriers and facilitating enhanced production and trade. He said:

“I am confident that synergies between IPOS and ISPO will jointly safeguard the competitiveness of the palm oil industry and will help to prepare for  future consumer demands in a sustainable manner and to fulfill on national commitments towards sustainable production and trade of palm oil”

Preventing Social & Environmental Costs

Dr Shatadru Chattopadhaya, Managing Director of Solidaridad Network Asia Limited, said:

“Solidaridad is happy that with this MoU, a process of recognizing respective national sustainability initiatives on palm oil in Asia has been initiated for the first time. This cooperation will allow for the expansion of palm oil production and trade benefitting producers, extractors and consumers in Asia without compromising on the social and environmental aspects.”

Mr. Iskandar Andi Nuhung, said:

“This cooperation is expected to improve the performance of national palm oil industries especially when faced with many challenges in international markets, particularly from Europe and America. This partnership will be an entry point to encourage more palm oil exports to India.”

Indonesia – The World's Largest Palm Oil Producer

He highlighted that Indonesia is currently the world's largest palm oil producer with an area of about 14.3 million ha and production of around 40 million tons. In addition, palm oil is a source of vegetable oil and has contributed to meet the needs of public consumption in the form of cooking oil and other downstream products or in the form of bioenergy (biofuel).

The event was followed by an open discussion on issues related to India – Indonesia Palm Oil trade matter; exploring synergies between Indian Palm Oil Sustainability (IPOS) Framework and Indonesian Sustainable Palm Oil (ISPO) and develop a roadmap towards supporting each other.

Next Steps

The Indian delegation will also visit Sintang District, West Kalimantan to meet provincial government officials before visiting Solidaridad and Keling Kumang Group (KKG) implemented projects with palm oil smallholders. Ten of the out-performing farmers from the project would be given recognition by the Indian palm oil industry delegation along with cash awards.

Further strengthening of cooperation between West Kalimantan palm oil producers and Indian palm oil buyers will be explored this week.

Learn more about Solidaridad's palm oil programme here.