22 Sep 2021 — AAK has entered a smallholder partnership with Nestlé and palm oil corporation Musim Mas to address deforestation outside of palm oil concession areas in Aceh, Indonesia.
The five-year program will “positively impact some 1,000 independent smallholders.” Aceh is a priority landscape, as 87% of the Leuser Ecosystem – a protected area important for both biodiversity and carbon storage – lies within the province.
“This partnership is an important part of AAK’s sustainable sourcing approach,” says Anne Mette Olesen, chief strategy and sustainability officer at AAK. “Engaging with partners and other stakeholders in the supply chain is fundamental, and only together can we make the global palm oil industry fully transparent and sustainable.”
Train the trainer approach
AAK and Nestlé will initially provide funding for the first two years of the program.
In a “train the trainer” approach, government extension officers will be trained in good agricultural practices and NDPE (No Deforestation, No Peat, and No Exploitation). The extension officers will, in turn, train oil palm smallholders.
Expected outcomes of the program are increased yields and earnings for the smallholders, reducing the incentive to encroach into protected areas as a way of increasing their income.
Vital for deforestation
As most deforestation in Aceh occurs outside plantation concession areas, these types of programs are vital, the companies highlight.
“Engaging with stakeholders in the most sensitive landscapes and focusing on deforestation outside concession areas is crucial,” says Caroline Westerik-Sikking, global manager for sustainable oils at AAK.
“We believe that this partnership can significantly contribute to the protection and preservation of an important landscape and have a positive impact on the livelihoods of the smallholders involved.”
Path to sustainable palm
The move is AAK’s third significant initiative supporting smallholders within palm.
The other two are Forever Sabah in Malaysia, which seeks to apply Roundtable on Sustainable Palm Oil (RSPO) jurisdictional certification to all smallholders in the state of Sabah, and a program in Mexico run together with Solidaridad supporting the implementation of good agricultural practices as well as smallholders on their journey toward RSPO certification.
AAK recognizes the importance of smallholders to palm oil production and their role in the supply chain. The company says that supporting them to achieve better livelihoods through palm helps AAK realize its societal, environmental and commercial ambitions.
Ingredient sourcing in focus
In light of AAK’s latest news, ethical and sustainable ingredients are demanding attention across industry.
Last month, AAK extended its Kolo Nafaso shea sourcing program to support the growing demand for ethically produced chocolate.
Shea is a widely used plant-based fat ingredient in chocolate products, where it delivers texture and functionality. According to the company, demand for sustainably sourced shea is currently higher than ever.
Over half of consumers say they have changed their purchase choices to make a difference on an economic, environmental, social or political issue in the past year.
This ties in with Innova Market Insights’ Top Trend for 2021: “Transparency Triumphs.” The market researcher emphasizes that increasing transparency to meet evolving ethical, environmental and clean label consumer demands is vital.
Also in line with these themes, Barry Callebaut recently launched a scorecard to define and develop sustainable practices in coconut production and address “untackled challenges” across the sector, together with Nestlé and Proforest.
Edited by Elizabeth Green
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