Malaysia : supporting smallscale palm oil farmers

SBWA MALAYSIA - SUPPORTING SMALLSCALE PALM OIL FARMERS

In the Beluran district in Malaysia, L’Oréal launched in 2015 the « SPOTS Project » (Sustainable Palm Oil & Traceability with Sabah small producers) targeting to support 500 smallholders by 2020.

L’Oréal has undertaken this project in partnership with its direct supplier Clariant, its intermediary supplier Global Amines, the upstream producer Wilmar and the Malaysian social enterprise Wild Asia. The aim of the project is to:

  • ensure traceability of supplies,
  • promote RSPO certification,
  • support the adoption of sustainable production practices,
  • improve the living conditions of more than 500 small-scale producers.

SPOTS namely allows to connect certified smallholders to the market demand for “Zero Deforestation” palm. As the final off-taker, L’Oréal subscribes a 5-year premium-based commitment to purchase the smallholders’ RSPO certified production.

Through this pilot project, L’Oréal initiates a long-term business relationship with every actor of the value chain, which is inclusive of independent smallholders and disruptive with regard to the rules of a traditional commodity market.

By the end of 2018 :

  • 369 small independent farmers joined the SPOTS project, and among them 179 farmers delivering directly to Wilmar obtained the RSPO certification (73% of the target achieved)
  • 225 training sessions were conducted alongside small palm producers to provide them with knowledge about the RSPO certification system, best management and sustainable agricultural practices, waste management, soil health, etc.
  • Since 2015, 21,357 metric tons of RSPO certified palm oil were generated by the 369 beneficiaries of the project

Following the significant results of SPOTS, L'Oréal launched a second project on the island of Sumatra in Indonesia in 2018, which aims to support 12,500 smallholders over 5 years. In total, 13,000 small producers will benefit from these initiatives.

These projects illustrate L’Oréal’s commitment to achieve the sustainable sourcing all raw materials and zero deforestation by 2020.