Asian Agri and Plasma Smallholders

Asian Agri was recently awarded the “Best Community Program” at the 7th Global CSR Summit in Yogyakarta, Indonesia. It has embarked on the successful partnership with their plasma smallholders since 1987, at the behest of Sukanto Tanoto, one of Indonesia’s renowned self-made entrepreneurs.   

In 1980s, Indonesia faced several social challenges mainly due to over-population in Java Island. Half a million families were moved from the densely populated Java to less densely populated islands of Sumatera, Kalimantan to achieve a more balanced population density, under the Transmigration Program. 

Indonesia’s leaders had a vision that the agriculture sector, including oil palm plantation, would play a major role in the development of its economy.  The idea was to integrate more Established Plantation Operations including processing facilities and infrastructures with smallholders’ plantations called PIR-Trans (Perkebunan Inti Rakyat-Transmigrasi). The PIR-Trans program is a long-term commitment between the plantation company and the transmigrated communities.  Few companies were willing to adopt the program. 

Sukanto Tanoto thought differently from the other companies’ owners. He knows that for a company to be successful, the surrounding community and the country must be successful. So he & Asian Agri became a pioneer to participate in the PIR-Trans program. As the transmigrated communities used to be paddy farmers, and therefore unfamiliar with crop plantations such as oil palm, Asian Agri began by teaching them plantation skills and turning the empty land given by the government into oil palm plantations.

Today, this community partnership program is one of the most successful partnerships that lifted the lives of the transmigrated communities out of poverty. Their income now is significantly higher than regional minimum wages & GDP per capita of Indonesia. Asian Agri has put into practice Sukanto Tanoto’s philosophy of Good for the Community, Good for the Country and Good for the Company and by doing so, transformed the lives of the 29,000 plasma smallholders.

Tanoto Scholarship Benefits Go Beyond the Classroom

The nonprofit Tanoto Foundation has devoted significant efforts to eradicating poverty in Indonesia by improving education in the rapidly developing nation. Created by Sukanto Tanoto, one of the country’s wealthiest self-made entrepreneurs, the foundation believes strongly in the power of education to transform the lives of individuals and society for the better. Through its National Champion Scholarships, awarded in partnership with nine universities, and its Regional Champion Scholarships in collaboration with 17 universities, the Tanoto Foundation has helped thousands of students from low-income families fulfill their dreams.

Aside from the obvious benefit of being able to pursue higher education without the stress of worrying about the cost, there are many bonuses associated with receiving a Tanoto Scholarship.

Tanoto Scholars are automatically enrolled in the Tanoto Scholars Association (TSA). This organization goes beyond the classroom to offer valuable networking opportunities with other students and TSA alumni. TSA members are also able to participate in special seminars with some of Indonesia’s best-known and most successful businesspeople and other leaders.

In addition, Tanoto Scholars can also take advantage of the foundation’s education-to-internship programs within the foundation itself, or in one of the companies that comprise Sukanto Tanoto’s $15 billion RGE Group.

At Tanoto Scholars Gatherings, TSA members come together for skill-building and personal development sessions, gain leadership experience, and hone their ability to work as members of a team. A more intense Leadership Camp gives students the opportunity to challenge themselves even further; a typical Leadership Camp experience involves “soloing,” or spending a night alone in the jungle, equipped with only a few necessary supplies.

Another major advantage of becoming a Tanoto Scholar is the ability to give back to the community. TSA members regularly engage in charitable activities, such as helping out with Tanoto Foundation-supported programs in primary schools.

Collaboration of RAPP and the Local Government in Riau

Infrastructures are major requirement for improving economic activities of the community. Based on this awareness, Sukanto Tanoto always emphasizes the need for helping the communities with underdeveloped infrastructures. He realizes that without adequate infrastructures, such as road and bridges, the community members cannot do anything to improve their standard of living. Building infrastructures is the most important strategy to help the community get out of the isolation and poverty. Therefore, RAPP (PT. Riau Andalan Pulp and Paper) puts special emphasis on the basic infrastructures.

Collaboration of RAPP and the Local Government

The Local Governments around the areas, where RAPP operates, have established collaboration with the companies that operate there. Previously, social stewardships of these companies focused more on socio-economic infrastructures, community empowerment, and environmental sustainability. The local governments in Riau Province have attempted to broad the collaboration to include road construction.  PT. Riau Andalan Pulp and Paper (RAPP) is one of the first companies that have made an agreement to support the local government.

More importantly, the company collaborates not only with the local government but also with the local people. The company also commits to hire local labors to do the construction jobs. This will give the villagers with an immediate source of extra income. The company also welcomes the surrounding communities to propose what they need and the management team will review and consider them.

Road Construction by RAPP

As a manifestation of the agreement, in 2014 RAPP had finished building a connecting road. In Pulau Padang, Kepulauan Meranti Regency, the company built a connecting road that covers 12 kilometers of length. The road connects two villages, which include six sub-villages in Tarik Putri Puyu Sub-district. They are Dusun Sungai Hiu, Dakal, Sungai Labu, Sungai Mata, and Sukajadi. The road will certainly facilitate the community members and local villagers to transport their crops and commodities. Easier transportation means cheaper costs.  This long-awaited road will also open more chances for the local villagers to improve their prosperity.

In 2015, the company under RGE Group led by SukantoTanoto, continues the same partnership with the Local Government of Kuantan Singingi (Kuansing). This year, RAPP manages a road paving project that includes 5 kilometers of length from Benai to Cerenti. It begun earlier this month and is expected to finish within 120 workdays. The Local Government had made an agreement with 3 companies to pave 9 meters road with a budget of Rp. 30 billions. Of the 9 meters, RAPP alone is responsible for 5 kilometers by allocating 14 millions of fund.

Apical Group and Business Principles for Sustainability

As the mainstay of economic activities in remote areas, agricultural sector becomes the focus of RGE group companies, including Apical Group. Yes, RGE group, which is owned by one of Indonesia’s tycoons, Sukanto Tanoto, focuses in various aspects of palm oil industry, including sourcing, crude palm oil (CPO) trading, refining, and merchandising distribution in Indonesia and China. Apical’s products are made into various end products used by people around the world in their daily life.

Apical Group and Business Principles

SukantoTanoto applies almost similar principles in all of the companies led by RGE Group. The same thing is true for Apical Group. It is one of the largest exporters of palm oil in Indonesia and controls wide spectrum of palm-relate business chain. The large business entity is built mainly upon three models, namely reliable and wide-ranging network of CPO sources, integration of assets in its primary and secondary refinery facilities, and efficient logistic channels. This way, the company ensures that the diversified buyers receive products in uniform quality.

The business model allows Apical Group to take control over the quality, to focus on sustainability and food safety, and to ensure efficiency and synergy in every step it takes within the business chain. This way, it is able to ensure profits for all shareholders. In addition, Sukanto Tanoto never underestimates the need for sustainable operation in his businesses, which mainly focus on natural resource exploration. He realizes that agricultural sector, such as oil palm cultivation, plays a significant role in the social economic development of the rural areas. Therefore, the business must be managed in a sustainable way to contribute to the economic improvements of all stakeholders in a sustainable way.

Apical Group and Sustainable Business Operation

To prove its commitment to the sustainable environment, Apical Group has made many efforts. They include collaboration with suppliers and stakeholders in building a transparent and appreciable supply chain of palm oil. Recently, it backed the New York Declaration of Forests during the United Nations Climate Summit, which was held in September 2014. In addition, it participates in Roundtable on Sustainable Palm Oil (RSPO) as an active member.

Apical Group attempts to improve its sustainable business principle from time to time. In 2014, for example, it signed Sustainable Palm Oil Manifesto, established Sustainable Palm Oil Policy, and published the policy statement in its website. The policy statement maintains its commitment to protect areas with high carbon stock and conservation value, protect peat land of any depth, and to drive socio-economic activities of the surrounding communities.

Unique Approach to Environment by Tanoto Foundation

The fact that Sukanto Tanoto loves education and environment is something unquestionable. This is evident from various efforts, which Tanoto Foundation has made to encourage the communities in the area, where Royal Golden Eagle companies operate, to maintain and love the environment. The Indonesia richest businessman admits that the love for the environment must be developed since the early age.

Among the environmental stewardship programs managed by the foundation are training sessions, which involve environmental themes, for elementary school students and teachers. The following are two unique approached recently used by the foundation.

Tanoto Foundation Held Doll Puppetry for Environment

Tanoto Foundation recently managed a unique program to increase the community awareness about the environmental sustainability. It held a doll puppetry entitled Ice Cream from Waste for a group that consisted of students and teachers. The puppetry show was a part of Pelita Sekolah Sehat and Pelita Sekolah Ramah Lingkungan (PSS-PSRI) Training managed by the foundation at Batubara Regency, North Sumatra Province and involving 33 teachers.

The puppetry show made use of doll character to deliver different messages related to environment. The show essentially focused on the importance of sorting the waste and providing waste bank. On the other hand, the students from the surrounding areas were involved in sorting the garbage they collected around the area. Then, the money was used to buy ice cream.

Tanoto Foundation Established an Environment-Oriented School

Another unique program managed by Tanoto Foundation to promote environmental sustainability efforts was establishing an environment-oriented elementary school called Global Andalan Elementary School at Pelalawan, Riau. This is the manifestation of how Sukanto Tanoto cares about education in the poverty alleviation efforts. The alternative elementary school is established within the area managed by Riau Andalan Pulp and Paper (RAPP).

Global Andalan is an alternative elementary school, which focuses on three elements, namely, individual approach, holistic approach by involving individual students, family, and teacher, and talent and experience-oriented approach. It was established as an effort for promoting awareness about the environment among the local villagers by means of education. Since most of the surrounding villagers are agricultural labors with low education and low income.

The surrounding environment brings huge opportunities for the surrounding communities. Therefore, Global Andalan Elementary School under the control of Tanoto Foundation encourages the students to be closer to the environment. Therefore, the curriculum is designed to make use of the nature as the main media. It is designed to develop their hard skill to plant vegetables and soft skills in teamwork and helping each other in doing their jobs.

Sukanto Tanoto on Teachers and Top Students in Riau

Many top students with extraordinary capabilities and skills come from underprivileged areas, and they do not get much chance to learn under the best condition. SukantoTanoto, Indonesian self-made billionaire, has really high view about education and feels that such condition is unfair. While these students are probably able to come on top position in class, they are probably unable to learn under the best condition with best facilities.

On top of those, these students probably cannot get opportunities to learn with teachers that really understand what they need, and able to explore their best. Through Tanoto Foundation, the billionaire wants to make sure that more potential students can learn under good teachers.

Teaching Teachers to Recognize Students’ Potentials

Good teachers can recognize students’ best potentials and teach to give advantages to top students, so they can feel that their capabilities and potentials are recognized. Even in remote or underprivileged areas, good teachers can help top students to explore their skills and become successful in the future. This can be done by making sure that teachers recognize visual, kinesthetic and auditory aspects in intelligence and then teaching by focusing on these aspects in order to recognize students’ potentials.

Basically, each student has certain lean toward intelligence aspects such as auditory, kinesthetic, visual, or some overlapping combinations. By recognizing those aspects, especially among top students, teachers can engage them in more challenging and rewarding lessons. In Indonesia, the training has been done to teachers in Pelalawan District in Riau, mostly for elementary school teachers (although there are middle school teachers involved), and similar plans are made to spread this beneficial project to other areas.

Teaching Methods to Engage Top Students

Ideally, a teacher should engage his or her students in various teaching methods, to make sure that the lessons cover all intelligence aspects. For example, teachers can apply methods like playing videos or teaching with songs for auditory learning, role playing and experiments for kinesthetic learning, and observation or creative writing for visual learning. Unfortunately, even when knowing these methods, there are still many teachers that cannot do these methods because they are lack of facilities.

This is why, besides training teacher, Tanoto Foundation also provides learning facilities for schools, so teachers can use them to provide potential students with more challenging and engaging learning experiences. Sukanto Tanoto aims to provide as many students as possible with high quality teachers and learning atmosphere, especially to facilitate potential students who need extra challenges and attention for their achievements.