Overview & Background

Purpose and the Context

Recommendations

1. Using empty fruit bunch as an organic fertilizer and Mechanical weeding over the chemical Herbicides for reducing the environmental impact

The oil palm fruits are known for generating two components of product namely the CPO that is crude palm oil and CPK oh which is crude palm kernel oil. CPO is obtained from the mesocarp whereas CPKO is extracted from the endosperm, however, during the extract process, it tends to generate waste known as empty fruit bunch. approximately 90 million tons of renewable biomass are in the form of a shell, palm press fiber, and EFB (empty fruit bunch), it has been revealed that EFB generates 9%. EFB is considered a lignocellulosic material that contains around 2.5% lignin, 25% hemicellulose, and 50% cellulose. In the past decade, EFB is used as a fuel generation stem especially in the palm oil industries, however, the burning of this material was causing some severe hazardous environmental concerns, Thus the authority was pushed to impose some of the strict rules for curbing the air pollution caused due to these activities. However nowadays EFB is also used as a mulch in agricultural lands for controlling the weeds, also helps in maintain the moisture and prevent soil erosion (MURALIDHARAN and POKHAREL, 2012).

3. Free-Prior Consent

The expansion of oil palm plantations tends to create social conflicts it is usually due to the unclear land rights and uncertain customary land rights. An indigenous community who are nearby located concessions area in the poor bargaining position to prevent their lands from the company acquisition. Moreover, due to the corruption and clientelistic behavior, the communication between the company and the local government becomes illegal, apart that social conflict usually rises between the communities around the palm oil plantation as the conflict revolves around migrants and local community as the companies prefer migrant labor over the local community. Therefore, in order to overcome this RSPO can contribute towards solving the social conflict by emphasizing their obligation towards developing smallholder plantation for the surrounding community at least by 20% from their total concession area so that they could positively contribute towards productive economic activities that surround the community (Oosterveer, 2015).

Issues

The multiplicity of the Actor

REA HOLDINGS East Kalimantan

This case study can be considered be important and help RESPO in term of planning and designing the strategies which could help the company in addressing the issues and will help them in achieving the positive result that is optimum use of the fertilizers especially in context to quantity and quality (Omont, 2005).

Financial Implications

International financial service provider, as well as domestic, tends to play a crucial role when it comes to the development of the family industry. This financial service provider includes institutional investors, commercial banks, asset managers, and investment banks (Pramudya, Hospes & Termeer, 2017). these financial service provider plays a crucial role in providing funds for the operation of the organization and also when it comes to expansion (Pacheco, Schoneveld, Dermawan, Komarudin & Djama, 2018).

• role of government and the NGOs when it comes to financing.

The local and international government in Malaysia needs to step up so that they could influence the exert when it comes to the decision-making process of FSPs Through the various regulatory development policies which could include greater smallholder participation as well as will also promote sustainability. besides that, it is also important to follow various governmental guidelines when it comes to governing the inclusion of sustainability issues especially in financing the palm oil industry segment. it should be properly understood to perform the concrete policy and articulation and how they should be implemented so that the actual progress could be achieved.

Risk analysis

Legal and Compliance

• Free Prior and Informed Consent

According to article 32, which clearly states that indigenous people have the right to determine as well as develop priorities and strategy when it comes to development or the use of their lands as well as the resources, Moreover, the state should consult and cooperate with them in good faith through their own representative institution so that they could gain free and informed consent priory before the approval of any project which could affect their land, resources or territories specifically when it comes to the development and the exploitation of the resources. Moreover, the state shall provide an effective mechanism to reduce the adverse impact on the environment caused due to the development. Therefore, RSPO needs to consider the indigenous people when expanding palm oil production (Rist, Feintrenie & Levang, 2010).

Quantitative KPI

• Better Economic Performance

• Increased in Smallholder Participation

References

Hidayat, N., Offermans, A., & Glasbergen, P. (2017). Sustainable palm oil as a public responsibility? On the governance capacity of Indonesian Standard for Sustainable Palm Oil (ISPO). Agriculture And Human Values, 35(1), 223-242. doi: 10.1007/s10460-017-9816-6

MOHD-AZLAN, A. (2020). IS THERE A SUSTAINABLE FUTURE FOR WILDLIFE IN OIL PALM PLANTATIONS IN MALAYSIA?. Journal Of Oil Palm Research. doi: 10.21894/jopr.2020.0104

Rist, L., Feintrenie, L., & Levang, P. (2010). The livelihood impacts of oil palm: smallholders in Indonesia. Biodiversity And Conservation, 19(4), 1009-1024. doi: 10.1007/s10531-010-9815-z