Delivering Sustainable Development

Supporting Smallholder Farmers

Partnership and engagement with the local communities in the areas that we operate is fundamental to the success of our businesses. Local communities benefit from a relationship with our business through the payment of fair wages to local employees, opportunities for smallholder development, employee and smallholder training and community investment projects.
Sime Darby Plantation took over management control of our Indonesian Estates in 2007, a decade after the plantation was established, assuming responsibility for the 2,054 plasma farmers in the area who run 30% of the total land bank, or 3,320 hectares.

Today, we have more than 20,000 smallholders in Indonesia, operating approximately 40,000 hectares of palm oil plantation.

To ensure that their rights and growth are protected and supported, we take all grievances issued by our smallholders seriously. In August 2007, 14 legacy claims had been submitted from affected communities in the plasma areas related to land rights, distribution of smallholder plots, and community infrastructure. The claims were lodged through the Sarikat Petani Kelapa Sawit, a union for the farmers.

Meetings were held with the smallholder representatives at each RSPO Roundtable as well as onsite, to address the legacy claims. At the request of the communities, we agreed to limit engaging third party consultants to conduct studies and provide recommendations for social management and community engagement plans. We have also conducted direct engagement with the other two communities and we believe that we can arrive at a consensus with the affected communities through this approach.

We have made significant progress in resolving the complex range of issues raised, and we hope to attain more in the coming year.
Plasma farmers are smallholders who receive technical assistance, advice and access to market from palm oil companies operating in Indonesia. Sime Darby Plantation purchases the fresh fruit bunch (FFB) produced from our smallholders and process them at our mills, providing them with a steady income stream.

Grievances about land rights, distribution of smallholder plots, and community infrastructure are some of the main concerns of our smallholders.

Towards this end, Sime Darby Plantation conducts direct engagements with community leaders on a bi-monthly basis to formulate an effective standardised grievance resolution mechanism.

Sime Darby is also working towards RSPO Certification for our smallholders.

We currently operate an area of 12,661 hectares of which 10,035 hectares have been planted with oil palm and 107 hectares with rubber. This has resulted in over 3,000 jobs for the local community. Under the Community Farming programme, more than 400 farmers in all 17 townships are given 12-months’ worth of technical assistance and seeds to set up rice, corn and vegetable plots on 50 hectares of land adjacent to their village.

In 2013, 291 farmers participating in Phase 1 of the programme from the towns of Sangamah, Johnson, Lein, Seeni, Dama, Timbo, Denewea and Kon have harvested 172 bags of corn and 227 bags of rice.
Sime Darby Plantation Liberia (SDPL) employs at least one member from every Project Affected Community (PAC) household.

SDPL’s employees receive the highest daily wage in the industry. The compensation is based on the Collective Bargaining Agreement (CBA) that was signed with the General Agriculture and Allied Workers Union of Liberia (GAAWUL). The company invested USD480,639 in training and skills development to date, providing employees the opportunity to learn the best agricultural practices from an industry leader.

For the Community Farming Programme, Sime Darby provides both technical and financial support for agricultural farming to the Project Affected Communities.
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