There was good news recently for Samsung C&T Trading & Investment Group’s palm plantation in Indonesia, which received an eco-friendly stamp of approval when it was certified by the international Roundtable on Sustainable Palm Oil (RSPO) in May.
This is the first time that a Korean company operating an Indonesian palm plantation has been awarded an RSPO certification. It is seen as being highly meaningful not only for the plantation itself, but also for the future of the palm oil business.
Nearly half the size of Seoul
Samsung C&T has been in charge of its palm plantation in Sumatra, known locally as GNI, since 2008 – having moved into the business in response to market interest in eco-friendly fuels and concerns about high oil prices and the environment.
Based in Sumatra, a large island in western Indonesia characterized by rough, tropical terrain, the plantation stretches across a vast area – 24,000 hectares – which would take up around 40 percent of South Korea’s sprawling capital of Seoul.
The site is covered with 15-meter-high palm trees and produce up to 100,000 palm fruits per day that can altogether weigh as much as 1,500 tons. It is a highly efficient process because so little goes to waste. Once purified through extraction and sterilization, the flesh of the fruit can be used to make crude palm oil (CPO), which has a number of applications from cooking oil to biodiesel. Samsung C&T’s Indonesian plantation produces more than 100,000 tons of CPO per year. Meanwhile, the fruit’s seeds are converted into palm kernel oil (PKO) and the outer part of the seed, or palm kernel shell (PKS), becomes eco-friendly biomass with great potential as a renewable energy resource.
An important feature of operating a palm plantation is creating a harmonious organizational culture with the local community. Samsung C&T has worked to offer a systematic and meticulous management system, including aiming to limit the risks and environmental challenges that can be expected to arise on any palm plantation.
The company’s Indonesian plantation offers welfare and safety facilities for employees as well as schools for the children of its workers so that employees can work without anxiety.
Why RSPO is so important
RSPO is a nonprofit organization established in Switzerland by the World Wide Fund for Nature (WWF) in 2004. This international NGO did so with the purpose of producing palm oil while protecting the environment and securing a stable supply by developing the industry.
An RSPO certification is only issued after around 54 international NGOs, including WWF, strictly check to see whether the farm is meeting the requirements of observing eight main principles and 39 standards. These include transparency, performance of legal duties, responsible plantation management, protection of natural resources, and local community obligations. Approximately 4,000 institutions and companies throughout the world have joined RSPO and many international banks require RSPO certification to carry out palm oil business transactions.
Since initially becoming an RSPO member in August 2017, Samsung C&T made efforts to excel in areas such as terms of sustainability and environmental protection. As a result, in May, the company finally passed the stringent process for certification.
GNI CEO Lee Woon-bong described the acquisition of the certificate as “very meaningful” because the plantation has been “acknowledged internationally for environment-friendly management of the palm plantation by our company.”
Lee also vowed “to continue to exert efforts for a sustainable palm oil business, maintaining the RSPO certification through environmental protection, quality safety management, and contribution to the local society.”