GIZ, Proforest, Barry Callebaut, McDonald’s, Nestlé, and PepsiCo sign agreement to promote sustainable landscape in East Kutai
Kutai Timur (East Kutai) is a commodity-dependent district, among the top palm oil producing regions in Indonesia, where there are still ample opportunities to preserve diverse and precious natural ecosystems. More than 90% of the region’s economic contribution originates from coal mining and palm oil production. The latter's contribution increased from 3% (2010) to 10% (2019) and employed more than half of the district’s active workforce in 2023.
Due to the supply of the district’s palm oil mills to the refineries from the world's largest palm oil companies and because the majority of the two commodities are consumed outside of the country, the district is well integrated into the global supply chain.
Efforts to transform East Kutai into a sustainable agriculture region is enhanced by the signing of a Cooperation Agreement between the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH, Proforest, Barry Callebaut, McDonald’s, Nestlé, and PepsiCo.
The joint signing, formalised in October 2024, further solidifies the public and private commitments in strengthening outreach towards the Sustainable Landscape Initiative in Kutai Timur (SUSTAIN KUTIM).
“The existence of the joint cooperation between the East Kutai District Government and SUSTAIN KUTIM has brought achievement development goals which were planned in the East Kutai regency development masterplan. This cooperation includes multi-stakeholder engagement, hence, fostering the establishment of sustainability in an optimal palm oil farming system through the Sustainable Landscape Initiative. The East Kutai District Government hopes it can be a role model for other places and this joint cooperation will be continued in East Kutai in the next years to come,” said Ripto Widargo, Head of Economy and Natural Resources at Bappeda Kutim.
Introduced in 2023, SUSTAIN KUTIM is a three-year collaboration between the public and private sectors in East Kutai, coordinated by GIZ, Proforest and Tanah Air Lestari (TAL), under the remit of the East Kutai District Government’s ongoing sustainability strategy. The initiative aims to strengthen the capacity of the East Kutai District Government, local communities, smallholders, workers, and plantation companies to cooperate in transforming East Kutai to be a sustainable region in agricultural production with a focus on palm oil and rubber production.
The four key aims of the initiative are (1) the development of foundational elements to facilitate the multistakeholder cooperation process, (2) the protection of high conservation value (HCV) areas, (3) strengthening tenurial and operational legalities of local communities and smallholders, and (4) sustainable production by smallholders and companies.
The commitments by East Kutai District Government towards the project is guided by Sustainable Plantation Declaration which aims to strengthen the commitment of public and private sector and increasing HCV protection of East Kutai.
Beyond that, continued private sector engagements will be conducted to ensure alignment and connectivity between HCV areas and village land use plans. This will also lead to the establishment of company-community agreements for collaboration and to jointly managed HCV areas in a sustainable manner.
Barry Callebaut shared the signing of this cooperation agreement is a pivotal moment in efforts to advance sustainable agriculture in East Kutai.
“As one of Indonesia's key palm oil-producing regions, East Kutai faces both significant opportunities and challenges in preserving its diverse ecosystems while driving economic growth. The Sustainable Landscape Initiative in Kutai Timur (SUSTAIN KUTIM) aims to transform the region into a model for sustainable palm oil and rubber production. With a focus on multi-stakeholder engagement, protection of HCV areas, and strengthening the legal rights of local communities and smallholders, this initiative will pave the way for a sustainable and resilient future. We are proud to be part of this important collaboration and look forward to continuing our joint efforts to promote sustainability, not only in East Kutai but as a model for other regions to follow in the years ahead."
Meanwhile, McDonald's is proud to partner with the Sustain Kutim Landscape initiative, working with local government, communities, and NGOs in the East Kutai district to take a holistic and practical approach toward long-term improvements in social and environmental outcomes for the region's palm and rubber sector.
“Working alongside like-minded organisations and corporate partners enables McDonald's to continue to support our Commitment to Forests & Natural Ecosystems by protecting natural ecosystems and areas of high conservation value (HCV), alongside helping safeguard the people and communities who depend on these natural spaces,” said Aisling Andrews, Sustainable Sourcing of McDonald's.
"We are proud to support this initiative, which will contribute to our efforts in achieving a sustainable, deforestation-free palm oil supply chain,” said Emily Kunen, Senior Director of Sustainable Agriculture at PepsiCo.
GIZ is a federal enterprise with worldwide operations that supports the German Government in the field of international cooperation for sustainable development. Proforest is a dynamic not-for-profit organisation with global presence that has established itself as a leader in the development and implementation of sustainable production and sourcing of agricultural and forestry commodities, including soy, sugar, palm oil, cocoa, beef and timber.
Sustain Kutim has also received funding from the State Secretariat for Economic Affairs (SECO), the German Federal Ministry for Economic Cooperation to and Development (BMZ).
