Strengthening Indonesian Sustainable Commodities Supply Chain
Collaborative effort to effectively eliminate deforestation from key land-based commodities production and provide robust stewardship for the remaining forest and peatland by mainstreaming ethical supply chain principles and sustainable business practices
Aim
The project aims to mainstream and to accelerate uptake of sustainability principles in land-based commodities supply chain by reinforcing sustainable commitments of all supply chain actors, inclusion of stakeholders from various level of government to civil society, research collaboration, policy advocacy, and capacity building strategies.
Where
Aceh, West Kalimantan, South Sumatra
Why
As a developing country, Indonesia's economy is still bolstered significantly by its land-use sector, including palm oil, forestry and pulp & paper industry. These sector have contributed significantly to the nations’ GDP and employ tens of millions Indonesian throughout its supply-chain. Indonesia is the largest palm oil producing country globally with production rate of over 40 million tons in 2020, churning in export revenue of nearly 20 billion dollars per year. Meanwhile, the revenue from pulp and paper sector is estimated to reach nearly five billion dollars annually. The country have also successfully shipped its timber under the Forest Law Enforcement, Governance and Trade (FLEGT), making it the first exporting country to ship to the European Union under its nationally determined legal requirements.
In contrast, land-use sector in Indonesia have been linked to multifaceted issues representing environmental and social concerns including fire, deforestation, loss of biodiversity and social conflict. From business perspective, failure to mitigate and adapt to climate change was defined as a major global risk at the 2017 World Economic Forum. In the last decade, the industry has seen tremendous pressure from its international buyers to decouple commodity production with deforestation and peat degradation but leakages market where procurement rules are more relaxed is still quite significant. Consumers in various sector are also shifting towards sustainable products. Sustainable practice is inevitable for longevity and competitiveness of business.
How
With the pressing need to find innovative solutions to address these concerns, WRI Indonesia aims to construct a new approach to accelerate sustainability principles in the commodities’ supply chain and business practice. The Sustainable Commodities Supply Chain intends to achieve its goal through continuous updates of dataset containing key commodities supply chain monitoring nodes, promote adoption of robust monitoring tools by supply chain actors and key stakeholders, capacity building to supply chain actors through collective engagement strategy, and develop narratives of sustainable palm oil supply chain to promote the adoption of green supply chain principles to identified leakage markets.
Additionally, as the Southeast Asia Secretariat of the Accountability Framework initiative, WRI Indonesia aims to further increase uptake of sustainable frameworks and tools to reinforce sustainable commitments of supply chain actors based on the global standard of best practices for ethical supply chain.
Partners
Our key partners are upstream to downstream supply chain actors of land-based commodities, NGOs, commodities buyers in potential leakages market (e.g. China), associations of key land-based commodities, Ministry of Agriculture, and district governments.