USAID SEGAR and KSMJ Formalize Their Collaboration to Foster an Environmentally Friendly Oil Palm Sector in West Kotawaringin District (12/04/2023). Photo: USAID SEGAR

Pangkalan Bun – On Wednesday, 12 April 2023, the Karya Sawit Mandiri Jaya Secondary Cooperative (KSMJ) and the United States International Development Agency (USAID) through the Sustainable Environmental Governance Across Regions (SEGAR) project joined forces by signing a memorandum of understanding (MOU). The primary objective of this MOU is to foster the development of environmentally-friendly supply chains and operations for palm oil mills (PKS) in the West Kotawaringin (Kobar) district.

USAID SEGAR and KSMJ will collaborate in developing green production and cooperative-based palm oil mills, including the certification of smallholders and environmental conservation efforts in broader landscapes. Both parties will also focus on implementing good plantation practices to maintain environmental sustainability while strengthening relationships between cooperatives and local communities, particularly the smallholders who are members of KSMJ.

West Kotawaringin's local government Assistant for Governance and People's Welfare, Tengku Ali Syahbana, said, "The government is continuously pushing for the commitment of all stakeholders in implementing sustainable palm oil management." He added that the collaboration between KSMJ and USAID SEGAR will help promote a more eco-friendly palm oil industry in West Kotawaringin.

Under this collaboration, USAID SEGAR is committed to assisting KSMJ in building a PKS with a production capacity of 30 tons per hour, sourced from Fresh Fruit Bunches (TBS) supplied by smallholders from seven primary cooperatives. The assistance will include document preparation such as Environmental Impact Analysis (AMDAL) and business plans, identifying potential additional investments, providing technical assistance for smallholders certification, and enhancing institutional capacity in business management.

Sutiyana, Chairman of KSMJ Secondary Cooperative, said, "We are very grateful for the support from USAID SEGAR. We hope this collaboration can help KSMJ develop greener and more sustainable palm oil business supply chains."

USAID Indonesia's Deputy Director of the Office of Environmental Affairs, Mark Newton, said that integrating environmental, social, and responsible governance is a prerequisite for long-term business success. Through the SEGAR project, USAID supports businesses by strengthening activities that incorporate these three aspects, benefiting competitiveness in the global market.

Nur Hygiawati Rahayu, Bappenas Forestry and Water Resources Conservation Director, who also attended the MOU signing event, said that support from the USAID SEGAR project for businesses like KSMJ is crucial, not only for greening palm oil supply chains in Indonesia but also for balancing economic, environmental, and social aspects through inter-institutional collaborations.