Ensuring the Relevance of Independent Smallholder Farmers (ISHFs) Through Sustainable Sourcing Practices

Abstract

Malaysia and Indonesia have been the main sources of supply for palm oil (PO), palm kernel oil (PKO), and other palm-related derivatives for most multi-national companies (MNCs). However, deforestation, new legislation in Europe, and stakeholder expectations have posed significant challenges to this industry. In response to these challenges, companies are looking at driving key sustainability initiatives in palm oil supply chains while remaining beneficial to the farmers. This chapter discusses the findings of a collaborative research project conducted through active academic-industry collaboration in South East Asia and shares an approach to identify and incorporate traceability within the supply chain. Critically, it also aims to provide a framework for both academicians and practitioners towards developing a collaborative approach of driving sustainability goals in difficult to measure parts of the supply chain. Importantly, this work also highlights the key aspects of implementing sustainability practices in the upstream palm oil supply chains, which are often ignored.