STP and CSR Initiatives at Universal Leaf Indonesia
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PT. Tempu Rejo is a fully-owned affiliate of Universal Leaf Tobacco and headquartered in Indonesia鈥檚 prime tobacco region surrounding the municipality of Jember on the eastern tip of Java. The firm has engaged in various sustainable growth initiatives at least since 2011. Evolving as time passed, 鈥渕any of the sustainable farming activities have in fact been put in place even long before the first community and social responsibility programs were eventually formalized,鈥� said Tempu Rejo鈥檚 managing director, Richard Wood. Randy Nijkamp, the company鈥檚 vice president for growing operations, added that the approach and scope both had consistently improved, particularly since 2016. 鈥淥ne could say that our engagement, for example in the area of contract farming, has matured to a true integration, where not just the crop but also the farming community and environment are included,鈥� he told Tobacco Asia.
According to Wood, sustainability measures initially focused on reducing the usage of agro-chemicals in order to create a supply of tobaccos with acceptable residues. 鈥淭his also was done to ensure that the crop protection agents being used would align with industry trends and customer expectations, as well as lower the potential environmental impact,鈥� he said. Another focus of attention at that time were second-tier risks, which included minimizing the presence of NTRMs, performing regular soil chemical analysis, as well as conducting irrigation and drinking water quality checks. Contract farming was introduced as 鈥渁 means to build a reliable relationship with our farmers and to ensure they implement and maintain good agricultural practices,鈥� according to Wood
Laying out policy and goals
Universal Leaf鈥檚 corporate headquarters plays a very important role in the larger scope of things, laying out policy and sustainability goals for all subsidiary companies, wherever they may be located. 鈥淭here is no compromise in ensuring that we make every effort to achieve continual improvement,鈥� asserted Wood. But Universal鈥檚 customers likewise are involved in that bigger picture. 鈥淭heir respective needs and priorities have a significant impact on how we operate,鈥� said Wood. 鈥淚t is our local knowledge that ultimately enables us at Tempu Rejo to prioritize our actions and customize our programs to meet those needs.鈥�
鈥淭rue and mature integration,鈥� in the words of Randy Nijkamp, of course also includes the supervision of farmers by dedicated sustainability programs and agronomy teams, whereas the overall approach is based on the four pillars of governance, crop, environment, and people. 鈥淓ach of these pillars is guided by risk assessments that allow for prioritization of certain measures, such as training, provision, initiation of pilot programs, and many more,鈥� Nijkamp explained.
鈥淎s a corporation, our actions indeed can have a huge effect on the livelihoods of all stakeholders, be they farmers, employees, local communities, or our customers,鈥� said Richard Wood. In his opinion, a company that does not look out for its stakeholders will in the long term fail to make positive steps forward, which in the end may lead to a lack of sustainability. 鈥淲e need to respect this and move towards the common good. Hence, Universal Leaf espouses a culture where our actions benefit everyone in the supply chain,鈥� he elaborated. 鈥淪ustainability and good corporate citizenship are very closely related.鈥�
CSR: Substantially more than simple welfare
Meanwhile, Randy Nijkamp interpreted CSR as the 鈥渟upport for anything that is not necessarily directly related to tobacco farming communities alone.鈥� CSR programs, he said, 鈥減rovide goods, materials, and financial support for those in need, and [such programs] mostly come ad-hoc.鈥� This could, for instance, encompass the response to a flood emergency, such as the urgent installment of freshwater towers for affected communities or providing assistance in rebuilding damaged infrastructure.
There are other initiatives that 鈥� at least at first glance 鈥� appear to be not much more than simply a nod towards goodwill and family welfare. Yet they are indirectly helping achieve certain sustainability-related CSR goals. 鈥淭ake the children鈥檚 playgrounds that we set up in farming communities, for example,鈥� pointed out Randy Nijkamp. 鈥淭empu Rejo has strict policies against the use of child labor and exposing children to agricultural hazards.听 It has always been our concern that mothers working in the fields or curing barns may bring along their young children. Playgrounds are a great way for keeping children out of the fields.鈥� Nijkamp added that this risk is highest during harvest seasons because labor needs are at their peak and mothers may feel compelled to bring their young children to work instead of staying home to care for them. Additionally, the centrally-located playgrounds are ideal venues for staging education or community events for adult villagers.
鈥淪elf-sustaining鈥� programs
While initiatives such as providing playgrounds mainly serve altruistic reasons, Tempu Rejo (like any other tobacco producer) is of course foremost a commercial operation whose continued existence relies on providing returns to its investors. Many of the initiatives therefore include elements intended to make them self-sustaining. A good example for this is the company鈥檚 introduction of micro businesses like 鈥淪ewing & Needlework鈥�, which foster a modest cottage industry, foster female empowerment, and generate family income during the tobacco off-season.听 Once established, these programs are designed to be run by the communities themselves.
Then there is the 鈥淲aste Bank鈥� program. According to Nijkamp, 鈥淚t is based on the circular economy concept that looks beyond the 鈥榯ake, use, and discard鈥� approach and redefines 鈥榳aste鈥� as a valuable resource,鈥� for example, by turning organic material into compost or wood scraps into charcoal that can either be sold or used by the farmer families. 鈥淲e are not a charity but a sustainable organization that strives to devise CSR projects that carry them-selves, leaving a lasting positive impact in the communities,鈥� he said.
Whenever the company devises new initiatives, thought is always given to an eventual 鈥榟andover timeline鈥�,鈥� as Richard Wood called it. 鈥淔or example, once our recent sewing machine initiative has taken off and is up and running, it will be handed over to the community so they can continue with it under their own responsibility,鈥� he said.
Going beyond the mandatory
Voluntary initiatives are one thing, but Tempu Rejo鈥檚 programs include mandatory elements that are in line with or exceed Indonesian law, including compliance with requirements prohibiting child labor and other labor violations and certain aspects concerning environmental protection, among others. 鈥淪imply restricting ourselves to complying with minimum legal standards would not solve all the underlying issues,鈥� pointed out Nijkamp. 鈥淲e are going far beyond that with training, educating, and empowering our contracted farmers and their families.鈥�
Apart from launching income-generating cottage industry projects, Tempu Rejo also organizes and conducts training courses about farm and environmental safety, good agricultural practices, water conservation, and labor and financial management, just to name a few. 鈥淲e are sharing these skills because a financially secure, well-trained farmer is a lot more likely to continue a successful, sustainable business than an untrained, uninformed one,鈥� assured Nijkamp.
STP and CSR naturally are ongoing efforts, where there are always opportunities for improvement. 鈥淥ur focus for the next three years is to bring our current programs to an increasingly larger farmer base,鈥� Nijkamp explained. The company鈥檚 proactive commercial relationship with its contracted farmers will also help the latter improve their livelihoods and income.听 Contracted farmers sell their tobacco directly to Tempu Rejo, which reduces the farmers鈥� costs by eliminating their reliance on selling produce through commission-driven middlemen. 鈥淭hat is reason enough for us that we need our programs to succeed,鈥� Nijkamp asserted.
Monitoring project success
Even with the best intentions and plans, projects still must be monitored for success.听 Nijkamp recounted the case of a tobacco irrigation project as part of Tempu Rejo鈥檚 farm mechanization drive. 鈥淭he drip irrigation that we had set up proved very inefficient due to the farm landscape, which is inherently rice paddy-oriented,鈥� he said. 鈥淭obacco is only planted during one of the three annual crop seasons, while the other two are dedicated to rice.鈥�
That particular situation necessitated the removal of the drip lines after each and every tobacco harvest. 鈥淪uch frequent dismantling and reinstalling caused unsustainably high repair and maintenance costs,鈥� Wood divulged. The company identified the challenges and adopted an action plan to address them. A semi-permanent overhead irrigation system may potentially provide a solution and is currently undergoing testing.
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