Improving the livelihoods of smallholder farmers of palm oil and palm kernel oil 

More than decade ago, Solidaridad and Henkel came together with a common belief: that the power of cooperation between a civil society organization (CSO) and a multinational company could bring positive change and build a more sustainable future. Aware of the complex challenges tied to palm oil and palm kernel oil, including deforestation, labor rights issues, and threats to biodiversity, Henkel sought a partner who knows how to navigate this complex terrain. Solidaridad stands as a renowned organization dedicated to creating sustainable supply chains from the producer to the consumer. The partnership has been celebrating an important milestone: over a decade of fruitful collaboration that aims to both improve smallholder farmers’ livelihoods while protecting nature. 

A long-lasting partnership with Solidaridad: working on inclusion of smallholder farmers in global supply chains

Smallholders are a crucial part of the palm ‏(kernel) oil global value chain. “Millions of smallholders make their living from oil palm cultivation and are part of our global challenge to preserve natural forests,” says Ulrike Sapiro, Chief Sustainability Officer at Henkel. Around 40 percent of the palm ‏(kernel) oil produced worldwide comes from small plantations in Indonesia and Malaysia. “We want to improve the working conditions and earning opportunities of smallholders as well as provide them with the necessary know-how so they can protect the forests and can offer certified sustainable products on the world market,” says Ulrike. For this reason, Henkel began partnering with Solidaridad in 2013, supporting projects in Colombia, Honduras, Nigeria, and Indonesia. The partnership envisions a future in which palm ‏(kernel) oil production is in alignment with nature, provides fair incomes, and protects land rights.

“On average, the oil palm plantations of smallholders in Malaysia or Indonesia are only two hectares in size,” explains Marieke Leegwater, Palm Oil Expert and responsible for Sustainable Policy Development at Solidaridad. That's equivalent to two soccer fields and allows for the cultivation of up to 300 oil palms, she explains. “Most of our farmers have far less due to cultivation issues,” adds Marieke, who regularly does grassroots work at the community level in various projects. And yet, oil palms – compared to other types of cultivation – are more resource-efficient than other vegetable oils, requiring less land to yield a comparable amount, which in turn has a direct advantage for the lives of smallholders: “The trees bear fruit all year round, which ensures regular income for the families,” Marieke explains.

Palm ‏(kernel) oil sustainability standards: Overcoming challenges on the ground

For many smallholders, palm ‏(kernel) oil is their lifeline. In collaboration with them, Henkel and Solidaridad help to enhance their crop quality which optimizes their palm ‏(kernel) oil yield. This supports their journey to a more sustainable livelihood. But supporting smallholders goes beyond cultivation issues. “The European markets in particular are demanding more and more from the smallholders: dozens of processes have to be documented and kept, lands have to be mapped. All these bureaucratic hurdles, which industrial producers are used to and overcome almost effortlessly, have regularly overwhelmed smaller suppliers in the past – and sometimes still do,” explains Marieke. 

Driving sustainable initiatives forward: Building long-term trust is key

As the environment is at the heart of the partnership’s shared vision, the collaboration’s initiatives span a broad spectrum. Programs like ‘National Initiatives for Sustainable & Climate Smart Oil Palm Smallholders ‏(NISCOPS)’ in Nigeria and Indonesia focus on innovative replanting, waste reduction, mitigating greenhouse emissions, and ensuring sustainable practices. The NISCOPS program engages specific countries and regions around the world at the landscape level and is also linked to policies and decision-making processes at the national level.

“Henkel's support has been key to equip Nigerian smallholder farmers with skills fostering entrepreneurship in palm (kernel) oil production, and Good Agricultural Practices. Through this, more women and youths are now able to boost yields and household income through palm kernel oil agribusiness,” explains Kenechukwu Onukwube, Palm Oil Program Manager in West Africa/Nigeria. The engagement in Indonesia is primarily with smallholder farmers in the province of West Kalimantan, with whom the partnership works to increase the production of sustainable, deforestation-free palm (kernel) oil and supports them in transitioning to agroforestry models. “As smallholder farmers, we were glad when Henkel and Solidaridad started the project in our areas as, through that project, we gained a vast knowledge which is beneficial for us. Especially since we are aiming to be certified,” says smallholder palm oil farmer Rafael in Indonesia.
 

To bring value to the smallholders and empower them in their livelihoods, the combination of financial, hands-on, and on-site support that the partnership brings together is crucial. “The situation of the smallholders we look after is developing so well as a result of the cooperation with Henkel, mainly because smallholders receive a lot of support and important know-how,” says Marieke from Solidaridad. For the projects to work as successfully as they do, the work of the CSO employees on the ground is based on constant contact and long-term trust-building: “We are very close with our teams, have built stable relationships with the producers and helped them modernize their farms with financial support from Henkel,” says the CSO manager. “The foundation of trust is strong.”

From the field to the bathroom: the new Dial soap 

In 2022, Henkel launched its Farm2Bar project with Henkel’s US soap brand Dial to ensure traceability from the shelf to the farm. The ingredients used for the Dial soap are sourced segregated from suppliers in the Bolivar region in Colombia. Technology comes into play to monitor compliance with their no-deforestation commitment with satellite images.

“We want to use our existing foundations of trust and build on it,” adds Martina Spinatsch, responsible for R&D for Henkel Consumer Brands in North America. “The Farm2Bar project combines knowledge, experience and resources across players in the supply chain in pursuit of a common purpose, with the support of digital tools.” But the partnership has wider impacts, too. “We also facilitate the monitoring of progress with zero-deforestation commitments and other responsible sourcing practices. We are proud to have such projects with Solidaridad and push sustainable farming methods.”

As of today, the Farm2Bar project …

Thinking ahead: Tackling future challenges together  

Henkel and Solidaridad aim to amplify sustainable palm ‏(kernel) oil practices while protecting nature with ongoing projects in Colombia, Indonesia, and Nigeria. Furthermore, a new project in Honduras was launched that builds on the partnership’s earlier initiative that supported their adoption of principles and criteria from the Roundtable on Sustainable Palm Oil ‏(RSPO). “Together, again, Henkel and Solidaridad will address the challenges smallholder farmers face in the area to advance sustainable and inclusive value chains. Particular focus will be on female equality and deforestation – facilitating further contributions of female farmers to the palm ‏(kernel) oil sector and strengthening the smallholders’ commitment to the Honduras national zero deforestation agreement, in adaption to the current evolving regulatory context,” explains further Marjon Stamsnijder, who is responsible for Sustainability in Henkel’s Consumer Brands unit. “As the cooperation between Solidaridad and Henkel continues, their common belief and shared vision stays strong: Bringing lasting change to the palm ‏(kernel) oil industry, fostering a more sustainable future, and improving the livelihoods of smallholder palm ‏(kernel) oil farmers around the world.”