Corporate programmes for better quality of life
September, 2021 in Issue 3 - 2021, Sustainability
Palm oil production forms the backbone of economic activity in many Indonesian communities today. The sector holds vast potential to alleviate poverty by providing employment and raising income levels, thereby improving living standards.
With increasing scrutiny of human rights and labour issues in the palm oil industry, it is crucial for producers to assume full responsibility for sustainable practices, including improvements to social infrastructure in smallholder communities. There is also a need to measure and validate the progress made.
Musim Mas, one of the largest palm oil corporations globally, has long worked on improving the social needs of smallholders in Indonesia, including those in remote areas. The community development programmes cover education, healthcare services, infrastructure, disaster relief measures and environmental conservation. This has benefited farmers, children and teachers, as well as the environment.
The company has also been collecting vital data to measure the efficacy of its social development programmes, based on its updated Sustainability Policy launched last year. Its inaugural Social Impact Report (SIR), released in May this year, includes a comprehensive Social Impact Framework (Figure 1). The SIR will serve as a guide in reviewing strategies and efficiently focusing resources on programmes that have the biggest impact on improving quality of life.
The success of the programmes is indicated by these main findings of the SIR:
Supporting smallholders
A key aspect of the SIR was to look at the impact of the programmes on smallholders, who play a pivotal role in the company’s supply chain. Smallholders, defined as individuals with farms smaller than 25 ha, are estimated to cultivate around 40% of Indonesia’s oil palm planted area.
Musim Mas works with more than 1 million independent smallholders; its scheme smallholders were also the first to be RSPO-certified in 2010. The company has implemented two programmes for this group – Koperasi Kredit Primer Anggota (KKPA, or Smallholders’ Oil Palm Development Programme) in 1996; and Kebun Kas Desa (KKD, or Village Oil Palm Development Programme) in 2000.
The KKPA is a primary cooperative credit scheme that provides smallholders with practical support, including bank loan guarantees, agricultural training, and the transfer of quality seeds and fertilisers. The scheme targets individual smallholder family units that manage 2 ha of land or less. To get farmers on board, Musim Mas staff went from house to house to explain the benefits of the scheme. They also helped with administrative requirements to obtain land legally, including applications for identity cards.
The KKD, meanwhile, is tailored for holdings under communal ownership and partnership. This outreach initiative promotes economic independence in villages involved in oil palm cultivation; it also aims to improve social conditions in communities in surrounding areas.
Training is provided to growers – both men and women – as part of the KKPA and KKD programmes. In 2019, Musim Mas conducted 132 training sessions to enhance skills and knowledge. With this, as well as access to higher quality seeds, smallholders have been able to increase the yield of fresh fruit bunches. In 2019, farmers involved in both programmes produced an average of 22.9 tonnes/ha/year – or 22.2% higher than the average RSPO-certified smallholder at 18.8 tonnes/ha/year.
Smallholders under the Musim Mas programmes also enjoy an average wage of 4,343,773 Rupiah (~US$310) per person/month. This is more than 60% higher than the minimum wage in Riau Province of 2,662,026 Rupiah (~US$190). With better income, many farmers have been able to ensure that their children complete higher education.
Rural development measures
Education is fundamental in paving the way to improved livelihoods and social mobility. Since 2002, Musim Mas has been supporting children’s education across Indonesia through the Yayasan Anwar Karim (YAK, or Anwar Karim Foundation); this was set up in memory of the late founder of Musim Mas. The YAK has facilitated his passion for providing quality education to children and youth, among other social welfare activities. In 2019, the operating costs of Anwar Karim schools exceeded 16 million Rupiah.
To date, Musim Mas has built and funded 20 learning units, comprising nine kindergartens, nine primary schools and two secondary schools. Of the 5,983 students enrolled, 47% are girls. In 2013, Musim Mas built the first secondary school at PT Guntung Indamannusa; construction of the second school was completed in 2019 at PT Musim Mas.
Quality teaching jobs are also offered, especially to those from the local community. The schools have received an ‘A’ grade from the Education Ministry. Musim Mas takes pride in providing education for rural children and improving the welfare of teachers, thereby creating a positive learning environment.
Musim Mas is further dedicated to improving infrastructure in remote communities and workers’ compounds. Projects to date include access to utility supplies for more than 13,000 households; construction of roads, mosques and religious centres; provision of free healthcare services at 26 clinics; and upholding of food security.
Fire prevention strategies
Musim Mas takes a serious stance on fire prevention and a deforestation-free supply chain. Forest fires and haze pollution have been a long-standing problem in Indonesia. Musim Mas has therefore rolled out special programmes on sustainable farming policies and fire-free villages. It operates a strict zero-burning policy at all new developments and during replanting, and maintains teams of highly-trained firefighters at each of its plantations. The company’s fire patrol teams and fire monitoring towers enable the early detection of fires.
As part of its Fire-free Village Programme, Musim Mas conducted 148 training sessions at 74 villages covering 458,361 ha in 2019. The topics included alternative land clearing methods and fire prevention, monitoring and suppression. The SIR found that local communities have adopted non-fire farming methods, ever since they began to understand the impact and danger of forest fires. Over the years, there has been an 85% drop in the number of fire incidents within Musim Mas’ concessions – from 89 in 2015 to 16 in 2019.
To combat forest fires beyond its concession areas, the company sees the importance of working with other stakeholders and supporting local communities in adopting alternatives to the slash-and-burn method for land clearing. As a founding member of the Fire-free Alliance – a multi-stakeholder platform set up in 2016 to support the commitment to a haze-free ASEAN by 2020 – Musim Mas has shared information and resources toward a lasting solution.
As a leading sustainable palm oil player, Musim Mas recognises its responsibility and influence in continuing to improve the social and labour conditions of local communities and workers within the industry. The impact can be widened through multi-stakeholder initiatives with government bodies, industry stakeholders and civil society organisations.
Musim Mas
Headquartered in Singapore, Musim Mas is a privately owned, vertically integrated company involved in each point of the palm oil value chain.
