Palm oil traceability platform offered to Europe
This article has been translated by PwC Indonesia as part of our Plantation News Highlights service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Platform jejak rekam sawit ditawarkan ke Eropa
25 August 2023
By: Tri Listiyarini & Zsazya Senorita
Jakarta - The Indonesian government will offer a special platform for the traceability of national palm oil commodities to the European Union (EU). This way, Indonesian palm oil that will enter the European market does not need to use the EU’s platform in fulfilling the traceability aspect in the European Union Deforestation-Free Regulation (EUDR) framework.
According to the Director of Processing and Marketing of Plantation Products at the Agriculture Ministry’s Directorate General of Plantation, Prayudi Syamsuri, one of the problems that may arise from EUDR implementation is the fulfilment of the traceability aspect, precisely the geolocation requirements in the deforestation due diligence statement. Therefore, with encouragement from the Coordinating Ministry for Economic Affairs, the Agriculture Ministry is strengthening traceability on the palm oil supply chain from upstream to downstream by designing and building the Indonesian Plantation Database Block Chain platform. “This platform can trace the origin of our palm oil commodities and their derivatives,” said Prayudi.
Prayudi said this during the International Dialogue Palm Oil VS EUDR Let’s Talk with the subject “EUDR with Special Attention to Palm Oil”, in which Investor Daily participated online on Thursday (24/08/2023). By offering this platform, the EU is expected to no longer push for Indonesia to use their application when fulfilling the traceability aspect in the EUDR framework. “Through the platform that we built, Indonesia is striving to provide guarantees through a barcode system. The confidentiality level of company A, for example, is guaranteed by the Indonesian government, so that the company does not need to release any more data. With this platform, the Indonesian government also guarantees that company A already has a certificate according to the EU’s request, for example Indonesia Sustainable Palm Oil (ISPO),” explained Prayudi.
To develop this platform, the Agriculture Ministry has prepared the e-STDB (Electronic Cultivation Registration Certificate) application, in which smallholders are required to register. The total oil palm land of Indonesian farmers reaches 6 million hectares (ha). For companies/owners of land over 25 ha, they must be registered in the Plantation Licencing Information System (Siperibun) which was built in collaboration with the Task Force for Improving Palm Oil Industry Governance and Optimising State Revenue (Palm Oil Task Force). “Currently, 1,870 out of around 2,000 palm oil companies have been registered in Siperibun. What are the benefits for farmers and companies from registering? With a database, we can create a clear closed supply chain with barcodes so that we no longer need many records and documents in tracing palm oil to the end consumer,” explained Prayudi. The platform will also be connected to the Indonesia National Single Window (INSW).
Prayudi believes that EUDR must be addressed with a negotiation process instead of opposition. Because even though Indonesia’s palm oil exports to the EU only reached 8.8% of the total national exports in 2022, the EU is a global trade trendsetter in the marketing world. “What the EU says can be a reference for other countries. In 2022, the big five importers of Indonesian palm oil were India (19%), China (14%), Pakistan (10%), the EU (8.8%), and the USA (6.8%). It could happen that the USA, the UK which has left the EU, China which has developed Green China [will follow the EU]. Maybe India too. If all four of them follow the EU, it will be very important for us to discuss what the consequences will be for Indonesia. So, EUDR could become a global trendsetter,” he said.
Filling Siperibun
On another occasion, during the 2023 national journalist workshop with the subject “HGU (Cultivation Rights) for Palm Oil Plantations and Forest Areas” which was held in Bandung, West Java on Wednesday (23/08/2023), Head of the Indonesian Palm Oil Association (IPOA) Eddy Martono stated that all IPOA member companies have filled Siperibun as mandated by the state through the Palm Oil Task Force. Currently, there are around 2,000 registered palm oil companies in Indonesia, of which 1,870 have filled out Siperibun, including around 700 companies that are members of IPOA. “Our members have 100% filled out Siperibun, including the maps. So, there are no problems. It must be noted to that the companies do not have the soft files. The soft files are at the ATR [Agrarian Affairs and Spatial Planning Ministry], such as the HGU [Cultivation Rights],” said Eddy.
The Palm Oil Task Force announced that there are still around 700 companies that have not reported data through Siperibun. In the evaluation, several companies have not uploaded digital maps related to HGU, location permits (ILOK), plantation business permits (IUP), and current plantation realisation. Companies are also required to upload scanned permits and attach PDF format maps of the HGU, ILOK, and IUP. This can be seen from only 669 ILOK digital maps and 835 IUP digital maps that were successfully uploaded via Siperibun from all participating companies. The Task Force allows these companies to improve the quality of their data from 23 August–8 September 2023.
Coordinating Minister for Maritime Affairs and Investment Luhut B. Pandjaitan, who is also Head of the Palm Oil Task Force, emphasised that companies that have been included in the Data and Information Decree and are currently in the process with the Environment and Forestry Ministry are required to report data in Siperibun without exception. Overlapping forest areas and oil palm plantations is a complex issue that has not been resolved in Indonesia. The land issue is often used as a weapon for other vegetable oil producing countries to weaken Indonesia by accusing palm oil of being produced from forest encroachment.
