Trade & Environment Dimensions from Oil Palm Seed to Palm Oil Tony Liwang Sinar Mas Agro Resources...

Trade & Environment Dimensionsfrom Oil Palm Seed to Palm Oil

Tony Liwang

Sinar Mas Agro Resources and Technology (SMART) Research Institute

Sinar Mas Agribusiness & Food Indonesia

Sub Regional Workshop on the Trade and EnvironmentJakarta, July 26-27, 2006

Outline

1. Palm Oil for Food & Non Food Uses

2. World Edible Oil Production & Consumption

3. Indonesian Palm Oil & Food Safety Regulations

4. Palm Oil Process Chain Management4.1. Oil Palm Seed Production4.2. Oil Palm Plantation4.3. Palm Oil Mill4.4. Palm Oil Refinery

5. Today’s Challenge

Sub Regional Workshop on the Trade and Environment, Jakarta, July 26-27, 2006

Food Uses of Palm Oil and

Kernel Palm Oil

• Cooking Oil• Deep Frying Oils• Margarine & Spreads• Bakery Fats (Shortenings)• Cocoa Butter Fats• Confectionary Fats• Ice Cream Fats• Infant Nutrition Fats• . . .


Surfactants & Lubricants – Grease

Soap

Tupperware

Bio Fuel

Cosmetic

Candle / Wax


Outline







Development of World Palm Oil Production

( 000 tons) % ( 000 tons) % ( 000 tons) %

Malaysia 370 32.74 11 660 48.26 13 974 46.00 Indonesia 190 16.82 8 300 34.36 12 080 39.00 Nigeria 50 4.42 750 3.11 790 3.00 Colombia 30 2.66 560 2.32 632 2.00 Thailand N A - 530 2.19 668 2.00 Congo 230 20.35 96 0.40 N AOthers 260 23.01 2 263 9.36 N A

Total 1 130 100.00 24 159 100.00 > 30 000 100.00

20041969 2001Country

World Edible Oils & Fats Production & Consumption


2002 2004 Population Caput O&F use

Palm oil / total O&F

10 6 tons 10 6 tons 106 kg/person %

EU 25 2.5 3.8 455 48.2 17China 1.6 3.7 1 299 18.9 15India 3.6 3.4 1 096 11.5 27Indonesia 2.9 3.3 225 17.7 83Pakistan 1.1 1.4 161 19.5 45Malaysia 1.5 1.8 25 - -

Year Data in 2004

Country



Development of World Palm Oil Consumption

Productivity of Edible Oils( total oil in ton Ha-1)

Palm Oil Coconut oil Represeedoil

soybeanoil

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

Palm Oil

Coconut oil

Represeed oil

soybean oil



Some facts :

1. The world production of Oils and Fats in 2004 was around 130 million tons, of which 80% was used for Food and 20% for Non- Food purposes

2. Two oils & fats sources determine the market, i.e.Palm Oil and Soybean Oil,

each of which is about 30 million tons per annum

3. Palm Oil supplies at least 22% of the global demand for Oils & Fats

4. About 50% of the global export trade in Oil & Fats depends on Palm Oil



Some facts (cont’d) :

5. About 50% of the Palm Oil produced in the world is used by four equally big users:

EU 25 countries, ChinaIndia, and last but not least the Indonesian domestic market

6. Total European Palm Oil consumption is 13% of world consumption 7. The import of Palm Oil (including Palm Kernel Oil) in the EU 25 has increased enormously from 2.7 million MT in 1997 to 4.6 million MT in 2004 (Oil World Annual 2005)

8. The Palm Oil imported by the EU 25 is mainly from Indonesia and Malaysia




9. The EU 25 importation of Palm Oil is mainly coming through the Netherlands as the centre for palm oil distribution to other countries in Europe.

10. The highest rate of the consumption of the Palm Oil in Europe is UK, followed by the Netherlands and Germany. These three countries contribute about 60% of the Palm Oil demand in EU

11. Palm Oil as Food and Feed needs to fulfill the EC Regulation 178 / 2002 as basis for the approaches to the Food Safety

12. Palm Oil Business Initiative has formed the Roundtable on Sustainable Palm Oil (RSPO) to promote the sustainable supply chain of palm oil, in relation to Planet – People – Profit (3 P’s)




12. The Roundtable on Sustainable Palm Oil (RSPO) was initiated in April 2004 by different stakeholders in palm oil business (producers, consumers, retailers, traders, bankers, NGO’s, etc.). RSPO has grown rapidly in size, complexity, and accomplishments. Now (2 years after, 2006), the number of members of RSPO is more than 140 members.RSPO Priciples & Criteria’s has been developed and carried out by the members :

1. Commitment to transparency2. Compliance with applicable law and regulations3. Commitment to long-term economic and financial viability4. Use of appropriate best practices by growers and millers5. Environmental responsibility and conservation of natural resources

and biodiversity6. Responsible consideration of employees and of individuals and

communities affected by growers and mills7. Responsible development of new plantings8. Commitment to continuous improvement in key areas of activity



Outline







Important EU Regulations on Food and Feed Safety White Paper on Food Safetyhttp://europa.eu.int/comm/dgs/health_consumer/library/pub/pub06_en.pdf COMMISSION REGULATION (EC) No 466/2001 of 8 March 2001 setting maximum levels for certain contaminants in foodstuffshttp://europa.eu.int/eur-lex/pri/en/oj/dat/2001/l_077/l_07720010316en00010013.pdf REGULATION (EC) No 178/2002 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 28 January2002 laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safetyhttp://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf REGULATION (EC) No 852/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 on the hygiene of foodstuffshttp://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/l_226/l_22620040625en00030021.pdf


http://europa.eu.int/comm/dgs/health_consumer/library/pub/pub06_en.pdf

http://europa.eu.int/eur-lex/pri/en/oj/dat/2001/l_077/l_07720010316en00010013.pdf

http://europa.eu.int/eur-lex/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf

http://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/l_226/l_22620040625en00030021.pdf

Important EU Regulations on Food and Feed Safety (cont‘d)

REGULATION (EC) No 853/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 laying down specific hygiene rules for food of animal originhttp://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/l_226/l_22620040625en00220082.pdf REGULATION (EC) No 854/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 laying down specific rules for the organisation of official controls on products of animal origin intended for human consumptionhttp://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/l_226/l_22620040625en00830127.pdf REGULATION (EC) No 882/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 29 April 2004 on official controls performed to ensure the verification of compliance with feed and food law, animal health and animal welfare ruleshttp://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2004/l_191/l_19120040528en00010052.pdf REGULATION (EC) No 183/2005 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 12 January 2005 laying down requirements for feed hygienehttp://europa.eu.int/eur-lex/lex/LexUriServ/site/en/oj/2005/l_035/l_03520050208en00010022.pdf






Indonesian Laws & Regulations “from Farm to Table”

Law UU No. 7/96 for Food

Law UU No. 8/99 for Customer Protection

Govt. Regulation PP 28/2004for Food Safety, Quality, and Nutrition

Health Ministry Regulation Permenkes RI No. 722/Menkes/Per/IX/88 for Food Additive Materials

Indonesian Palm Oil & Food Safety


Area of Oil Palm Plantations in Indonesiabased on the land ownership (in Ha)

Year Smallholders Government Private Plantation

Total

1998 890 506 556 640 2 113 050 3 560 196

1999 1 401 046 576 999 2 283 757 3 901 802

2000 1 166 758 588 125 2 403 194 4 158 076

2001 1 561 031 609 943 2 542 457 4 713 431

2002 1 808 424 631 566 2 627 068 5 067 058

2003 1 854 394 662 803 2 766 360 5 283 557

2004* 1 904 944 675 090 2 820 525 5 400 559•estimated figure

Total Area used for Oil Palm Plantations is equal to approx. 3% of the Total Indonesian Forest land.

Indonesian Palm Oil & Food Safety


Outline







4. Integrated Palm Oil Process Chain ManagementTraceability = Chain of Custody

Oil Palm Seed Production Oil Palm Plantation

Palm Oil Mill Palm Oil Refinery

UP-STREAM MID-STREAM DOWN-STREAM

Integrated Palm Oil Process Chain Management


4.1. Oil Palm Seed Production

GMO Free Planting Materials

Parents materials used are crossed from the registered pedigree (by the Indonesian Government)

Documentation and CertificationISO 9001:2000 Quality Management System

for Seed ProductionISO 9001:2000 Quality Management System

for Research & Development ISO 17025 Accreditation of Laboratory

Management System

Traceability for Oil Palm Seed Production with the Barcode Management System



4.2. Oil Palm PlantationIntegrated Palm Oil Process Chain Management

GMO Free Planting Materials

High Conservation Value Forest (HCVF)

in collaboration with WWF

Better Agricultural Practices (BAP)

Organic & In-organic Fertilizer Mgmnt

Safety Pesticide Use

Integrated Pest Management (IPM)

Integrated Weed Management (IWM)

Waste Management

(Recycling, Reuse, Recover – 3R)

Environment Impact Assessment (EIA)


4.2. Oil Palm PlantationIntegrated Palm Oil Process Chain Management

Documentation & Certification

ISO 9001:2000 Quality Mgmnt System

ISO 14001:2004 Env. Mgmnt System

Traceability for Oil Palm Plantation

Area Unit Identification

(block by block, @ 30 Ha)

GIS Map & Information System

SAP Data & Information System

Harvesting and Transportation


4.3. Palm Oil MillIntegrated Palm Oil Process Chain Management

Good Manufacturing Practices (GMP)

Waste Management






Traceability for Palm Oil Mill


SAP Data & Information System

Harvesting and Transportation


4.4. Oil Palm RefineryIntegrated Palm Oil Process Chain Management

Waste Management






HACCP

Codex Alimentarius

Traceability for Palm Oil Refinery


Transportation & Logistic


Outline



3. Indonesian Palm Oil & Food Safety




Today’s Challenge

Food production, including Palm Oil, is expected to grow at least at the same pace as population growth.

Therefore it will be an increasing demand for edible oils and agricultural products in the future

At the same time, the demand for food safety and security and the awareness towards conservation of the environment and sustainability of the Palm Oil industry get more attention

These issues are highlighted in several international forums and meetings

Exchange views and information within all stakeholders (producers, consumers, retailers, financial institutions, NGO’s, and governments) are needed to improve the current global trade conditions.



Today’s Challenge

Collaboration of stakelholders in the Roundtable of Sustainable Palm Oil can be applied also to other commodities, e.g. Cacao, Coffee, etc.

Smallholders oil palm plantations and their small scale enterprises need more attention and effort to fulfill all requirement needed for food safety and security in each step of palm oil process chain

Unfair trade and tax barriers have to be avoided in order to meet the objective of the Millenium Goal, i.e. Poverty Elaviation. Most commodities are produced by smallholders in the developing countries with limited capability and capacity to meet the high food quality required by the consumers in the developed countries.

Capacity building on the awareness of food quality and safety and environment to all stakeholders, especially to smallholders, is needed.

Intensive Dialogue and Forum of G to G and B to B initiatives for each commodity are needed to bridge the need among the stakeholders.



Great things are not done by an impulsebut by a series of small things brought together

Vincent van Gogh


Thank YouTerima Kasih

for more information :

[email protected]

[email protected]

Trade & Environment Dimensions from Oil Palm Seed to Palm Oil Tony Liwang Sinar Mas Agro Resources...

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