Aceh Green Sustainable Palm Oil


Client: International Finance Corporation, World Bank Group.
Location: Banda Aceh and Jakarta, Indonesia.
From 2008-2009, STC conducted a strategic assessment of Aceh’s palm oil sector, under the framework of the Aceh Green Vision devised by the province’s first democratically-elected Governor, Irwandi Yusuf.  Aceh Green promotes a sustainable economic recovery of the province in the aftermath of the devastating Tsunami and the long-standing conflict that ended with a peace accord in 2005.   This eight-month effort funded by the IFC/World Bank culminated in a final report,which contains a review of the constraints and opportunities in the sector and an action plan with follow-on recommendations for policy initiatives, pilot projects, and investment opportunities.  One of the key results of this initiative was the creation of the multi-sectoral Aceh Sustainable Palm Oil Working Group.

This strategic assessment included extensive data collection, field surveys and stakeholder consultations throughout Aceh Province.  Palm oil constitutes the largest plantation crop in the province in volume and economic value, and the palm oil sector has significant growth potential as a major source of revenue for food and fuel products.  The team identified 6 among 15 major technical, policy, and organizational issues requiring priority attention by the provincial and local governments, the private sector, and civil society.  In order to realize the sector’s potential, the report presented several action recommendations, including:

1. Create operational and policy support for sustainable palm oil among government, private sector, NGOs, and smallholders.

2. Support palm oil public-private investment partnerships.

3. Reduce threats to high conservation value forests and peat swamp ecosystems.

4. Create a provincial seed certification and distribution program.

5. improve supply chains and pricing transparency for palm oil production and processing.