USAID SEGAR and RSPO signed a Memorandum of Understanding (MoU) to build a more sustainable palm oil sector in Indonesia on August 15, 2022. Photo: USAID SEGAR
Jakarta, Indonesia – On August 15, 2022, the United States Agency for International Development (USAID), through its Sustainable Environmental Governance Across Regions (USAID SEGAR) activity, signed a Memorandum of Understanding (MoU) with the Roundtable on Sustainable Palm Oil (RSPO) to support more responsible and sustainable palm oil production in Indonesia. Activities under the agreement include increasing the number of RSPO certified smallholders, working with local governments and member companies to improve the quality of land-use planning and management of areas with high conservation value, and improving the implementation of Remediation and Compensation Procedures (RaCP).
“Through this cooperation, USAID is pleased to support a more sustainable Indonesian palm oil supply chain,” said Brian Dusza, director of the USAID Indonesia Environment Office. “We believe that a greener and more sustainable palm oil sector will generate inclusive development that respects environmental and social values."
The growth of the palm oil industry in Indonesia has contributed significantly to the development of local and national economies. However, this growth has also raised legitimate concerns about environmental impact and sustainability. There is an increasing number of palm oil companies that are making space for sustainability across the supply chain, but this trend needs to be amplified to more companies and smallholder palm oil producers. Cooperation between key stakeholders—including the private sector, the government, and international development agencies—can support greater sustainability within the palm oil value chain.
USAID SEGAR is working to support the Government of Indonesia and a range of Indonesian stakeholders to improve environmental governance, especially in the land-based sector. One important aspect of USAID SEGAR’s work is to engage with Indonesian companies, and the organizations that represent them, to improve their compliance with environmental, social, and governance standards, promote sustainable production practices, enhance land management, and ensure that local communities benefit economically from sustainable business practices.
RSPO’s Chief Executive Officer, Joseph D’Cruz, said that the key to turning certification commitments into real, systemic change is supporting the players across the palm oil supply chain who are making that change. "We must strongly support smallholders to enable them to apply more sustainable farming practices, leading to higher yields, increased income and improved livelihoods. This collaboration is an opportunity to establish closer links to empower every actor to participate in sustainable production, no matter where they are in the supply chain,” he said. "The increased prosperity and wellbeing of smallholder producers goes hand in hand with climate resilience." *