NATURAL
HABITATS
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Natural Habitats
CONTENTS Impact Report 2021/2022
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Natural Habitats
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MESSAGE FROM THE BOARD
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SECTION 1 CONTENTS
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SECTION 2 MESSAGE FROM THE BOARD
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SECTION 3 INTRODUCTION
SECTION 4 100% ORGANIC IS POSSIBLE FULLY TRACEABLE IS POSSIBLE DEFORESTATION-FREE IS POSSIBLE WILDLIFE FRIENDLY IS POSSIBLE FAIR AND SOCIAL IS POSSIBLE
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completely differently to conventional palm oil. Today, our organic palm journey has taken us beyond sustainable best practices, without changing the oil’s taste or performance. As manufacturers, retailers, and consumers, our actions have the power to create meaningful change. Palm oil is an ingredient that is used in 50% of all the products that most people buy and use daily. By knowing the difference between right and wrong, and choosing our products based on where their ingredients have been sourced and processed, we can transform the oil palm industry for the better. Our strategy is simple. By changing how palm oil is grown, processed, used, and perceived in the market, Palm Done Right gives people confidence that they are making the right choice.
Humankind’s relationship with oil palms has a rich history, dating back thousands of years. Yet our recent period of fast and large-scale palm development has not been good for our planet, or the people who share it. Many of us were not aware of how destructive palm development could be when NGOs started to advocate for change. However, we now know that we are part of one system, and have a key role to play in keeping our planet healthy. Bringing organic palm oil to markets around the world is what Natural Habitats is all about. For years now, our Palm Done Right movement has offered a clear solution where palm oil is grown and produced “I founded Natural Habitats to have a positive, scalable impact along the integrated supply chain. My vision was, and is to connect consumers with farmers through Palm Done Right.”
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SECTION 5 CERTIFICATIONS
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SECTION 6 MARKET EDUCATION & AWARENESS
The question is, what will you choose?
Join our mission, and together we can make palm oil a force for good.
Mark Retzloff Natural Habitats Board Member
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SECTION 7 CONCLUSION
Alfons van der Aa Founder and CEO of Natural Habitats
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INTRODUCTION
WELCOME TO OUR WORLD Palm oil is used in half of the food and personal care products found in supermarkets. As a product it’s in high demand. Currently accounting for more than 40% of vegetable oil production, with global demand expected to grow rapidly between now and 2050. In developing countries, it can offer numerous economic opportunities. However, palm oil supply chains face enormous problems and challenges. Palm oil production has been characterized by deforestation, habitat destruction, soil degradation, exploitation, negative impacts on communities, and below living incomes for farmers and workers. To counteract these negative impacts, the Roundtable on Sustainable Palm Oil (RSPO), as well as other initiatives, were created to promote and certify good production practices. Now, many industry players have made commitments to eradicate deforestation and exploitation from their supply chains. However, much more still needs to be done. While the demand for responsible and ethically produced palm oil increases, most of the sustainable certified palm oil supply on the market still isn’t complying with the high standards that a growing number of consumers, retailers and manufacturers are setting. In 2009, we founded Natural Habitats to raise the bar. Then in 2016, we launched Palm Done Right to change the conversation around palm oil.
MAKING OUR PROMISE POSSIBLE Natural Habitats was founded on the belief that palm oil can be done right. Over time, we have steadily built our business from a small palm plantation in Esmeraldas, Ecuador, to a multinational business which supplies the organic markets in North America and Europe. Even though we have faced challenges along the way, our customers inspire and support us to continue on our path of progress. Though we are a small player in a very large, commoditized industry, we believe we can lead this change. By delivering on our promises every day, we will show that palm oil can be a force for good.
DELIVERING ON OUR MISSION Palm Done Right is based on our belief that producing palm in a better, more sustainable way is possible. We envision a future in which farmers, workers, and their communities are empowered. Where value chain partners connect and collaborate. And where organic agriculture becomes the answer to sustainable livelihoods and healthy, resilient ecosystems. That’s why we aim to bring long term solutions that create value for our employees, farmers, communities, business partners, and society as a whole. Right now, 19% of global palm oil is RSPO certified. While this is a good starting point, certification is not enough to change an industry. We believe higher sustainability norms can be achieved by using organic practices, working in partnership with farmers and communities, and collaborating extensively with partners throughout the value chain.
Our social and inclusive business model revolves around creating direct relationships with oil palm farmers in our network. Once these are established, we can provide farmers with training in organic agricultural practices, and added benefits such as agronomic advice, environmental education, biodiversity programs, benefits sharing, and community support. Through this, we can have a measurable impact on the environment, and the social and economic wellbeing of the farmers, workers and communities in our network. Our approach means we can rest assured that the palm oil we process and sell is fully traceable and adheres to multiple sustainability and ethical standards. Because of this, our manufacturers, retailers and consumers can trust that the products they love have been done right.
100% Organic is possible Fully traceable is possible Deforestation-free is possible Wildlife friendly is possible Fair and social is possible
We truly believe that sustainable palm oil is possible, and have created this report to show you how.
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OUR APPROACH There are 8 pillars to the Natural Habitats’ Palm Done Right approach. All of these components are essential and must be provided together for sustainable palm oil production to be possible.
Diversity
Sustainable production ▶ Palm cultivation is based on organic, sustainable, ethical farming practices and diversity.
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▶ Diversity in our supply chain is key to ensuring a steady delivery of good quality fresh fruit bunches. We do this by making sure that:
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▶ We integrate and continue to work with smallholder farmers.
Organic, ethical farming practices ▶ Our ingredients are 100% organic, fully traceable, deforestation-free, wildlife friendly, and fair and social. ▶ To ensure this, the farmers in our network work to the standards of National Organic Program (NOP), Organic Europe (EU Organic), Roundtable on Sustainable Palm Oil (RSPO), Fair for Life (FFL) and Non-GMO Project Verified (Non-GMO). Technical and agronomist support ▶ We help independent farmers convert to organic, sustainable, and ethical farming practices. ▶ We visit farmers every 4-6 weeks to provide technical and agronomical support including training for organic cultivation practices, natural pest control, composting, conservation, management, administration, certification, legislation, and workers’ rights.
▷ 43% of the certified hectares of palm in our network are managed by smallholder farmers.
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▶ Farmers in our network are located in different production areas in Ecuador.
▶ We encourage farmers in our network to grow multiple crops like cocoa, plantain, and passion fruit to ensure income security, soil health, and farm resilience.
Full traceability through integrated supply chain We provide farmers with access to markets, and market players with access to farmers. As all farms in our network are certified, we can ensure full traceability.
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Market education and awareness We raise awareness of the many benefits that palm oil has to offer, and show that when done right, palm oil can have a significant positive impact on the world.
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Shared mission A growing number of brands are using Palm Done Right as the alternative to conventional palm oil for their products. And more and more retailers are joining Palm Done Right to help change the conversation and accelerate the uptake of organic and sustainable palm oil.
Long term commitment We build long term, mutually beneficial relationships with our farmers by providing them with extensive support and a premium price for their fresh fruit bunches. As well as initiating and facilitating community projects and programs.
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In 1987, the United Nations Brundtland Commission defined sustainability as “meeting the needs of the present without compromising the ability of future generations to meet their own needs”. Sustainability is a holistic approach that considers ecological, social and economic dimensions, and recognises that all must be considered together to find lasting prosperity. WHAT SUSTAINABILITY MEANS
At Natural Habitats, we use the RSPO definition of a smallholder: “Smallholders are farmers who grow oil palm alongside subsistence crops. The family provides the majority of labour and the farm provides the principal source of income. In a smallholder farm, the planted oil palm area is less than 50 hectares.” In the context of Ecuador, the local RSPO interpretation of a smallholder farmer defined the planted oil palm area to be less than 75 hectares. WHAT IS A SMALLHOLDER FARMER?
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WHERE OUR FARMERS ARE LOCATED Over time we expanded our supply network to include other oil palm producing provinces. Now, palm growers in the Quevedo area are also part of our network.
OUR PRINCIPLES To achieve our mission, we work by the following 8 principles:
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We behave with integrity
- We strive to do good, cause no harm, and be honest. When we encounter economic, social, or environmental misconduct in our operations, we’ll do everything in our power to make it right.
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Major town/city
Esmereldas
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Plantation
We embrace diversity It is our policy to work with people who share our mission and values, while representing cultural, ethnic, and gender diversity.
Mill
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We are committed to transparency We are open, honest, and direct when it comes to our organization, procedures and outcomes.
ECUADOR
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We innovate to excel We innovate by trying new ways of doing things and continually improving to add value for our customers.
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Quito
We empower people - We take time to educate and build up the capabilities and confidence in our employees, farmers, and associates to help them excel in their jobs.
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We encourage collaboration We approach collaboration from an equal partnership point of view, with the aim to create benefits for all stakeholders.
Latacunga
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Portoviejo
We share our passion for organic
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We believe organic agriculture is essential to sustainable livelihoods and healthy, resilient ecosystems. We communicate the opportunities it has to offer and encourage manufacturers, retailers, and consumers to search for and reward organic practices.
Ambato
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Guaranda
We enjoy what we do and have fun in the process Creating a safe, positive, and stimulating work environment is everyone’s responsibility. When we enjoy what we do, we can flourish and reach our maximum potential.
Riobamba
Babahoyo
Guayaquil
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4.1
WHAT? What does 100% organic actually mean?
100% ORGANIC
According to the US Department of Agriculture ( USDA ), organic agriculture uses practices that support the recycling of on-farm resources, promote ecological balance, and conserve biodiversity. Organic farming systems use natural processes and materials to maintain soil and water quality, improve crop and livestock nutrition, manage pests and weeds, and conserve biological diversity. Organic farm systems also avoid the use of synthetic fertilizers, sewage sludge, irradiation, and genetic engineering commonly used in conventional farms. Processing palm oil in a way that adheres to the organic standard means not using any chemicals to extract the oil, and only using carefully reviewed and approved processing aids. WHY? Why do we care so much about organic? Organic agriculture is essential to securing healthy and resilient ecosystems, which help clean our water, purify our air, maintain our soil, regulate the climate, recycle nutrients, and provide us with toxin-free food. Organic agriculture contributes to better health in multiple ways:
HOW? How do we meet this promise?
Moving towards 100% organic won’t happen overnight, but it is possible. We are already seeing a growing interest in organic farming in our operational landscapes. Here’s what we’re doing to help speed up the process. Help farmers convert to organic, sustainable, and ethical practices We only work with farmers that have converted to organic, sustainable, and ethical practices. To continue growing our network, we actively reach out to conventional oil palm farmers to explain that organic agriculture is not only better for the planet, but for people too, as it brings them a premium for their harvested crop. Initially, we concentrated on converting smallholder farms up to 75 hectares. However, in 2018 we started converting larger farms, as we have seen the positive impact this can have. Moving forward, we plan to convert larger farms to help us meet supply demands based on the growing interest we are seeing in the market.
▶ Soil health
▷ Organic farming builds soil quality by adding compost, animal manure, organic waste from the milling process, and organic matter from the plantations which comes from pruning & weeding. ▷ The use of cover crops helps to retain water and protect the soil from wind and water erosion.
OUR EVOLVING SUPPLY NETWORK
Our supply network has been evolving over time, with new farmers coming on board our organic palm oil journey, and farmers leaving our network due to non-compliance, crop disease or resignation. At this point in time (April 2022) we have 5,304 hectares of palm under certification. Since 2009, we have converted 12,679 hectares of palm cultivation from conventional to organic practices. Those 12,679 hectares correspond to approximately 9,130MT of chemical fertilizer eradicated from use annually. Due to the Covid pandemic and the global market price dynamics in 2021, we saw a slowdown in onboarding new farmers. Our average annual prognosis for onboarding new farmers in our supply network is 2,000-3,000 for the coming 3 to 5 years.
▶ Farmer, worker & community health
▷ The eradication of pesticides, herbicides, and chemical fertilizer means that people working at, or living close to the farm will not come into contact with harmful toxins. ▷ By converting from conventional to organic practices, the use of at least 3,600MT of chemical fertilizer is eradicated annually by the farmers in our supply network.
IS POSSIBLE
▶ Environmental health
▷ The eradication of pesticides, herbicides, and chemical fertilizer will mean no harmful toxins will be released into the air, soil, and water bodies.
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Carbon Organic palm cultivation can help to cut the amount of carbon released into the atmosphere in multiple ways. ▶ The farmers in our supply network have almost 1,000 hectares of conservation area under management as part of their land, most of which is categorized as “tropical forest”. ▷ This area covers 16.7% of total plantations’ land. ▷ These conservation areas are an important source for carbon sequestration – which means removing and storing carbon from the atmosphere. ▶ Reusing organic farm waste, instead of burning it, prevents carbon dioxide being released back into the atmosphere. ▶ The use of farm waste, compost, or organic fertilizer prevents fertilizer derived CO2 emissions. In 2017, we published our first Carbon Footprint Report By the end of 2022, we will publish a report update to monitor our progress. Biodiversity Organic oil palm growers are responsible for preventing pesticide drift and any cross-contamination between conventionally-grown and their organic-grown crops. Buffer zones are put in place on organic farms that neighbor conventional farms to prevent any contamination from prohibited pesticides, herbicides, and fertilizers. Processing practices The processing of our crude palm oil is kept completely separate from any conventional processing. Before any processing takes place, all equipment is completely cleaned and sanitized. Each step after processing takes place in separated supply chains to safeguard the organic integrity of our ingredients and products. All of the ingredients and products made with our palm oil are routinely and randomly tested in an independent lab to ensure there has been no chemical contamination prior to shipment. We take these steps so that our manufacturers and consumers can trust that the Natural Habitats ingredients used in their products are free from chemicals.
Regenerative Organic Certification At Natural Habitats, we will continue to research and support development around intercropping and regenerative organic agriculture, as we believe it holds many environmental, social, and economical benefits.
▶ Since 2009, we have converted 347 plantations with 12,679 hectares of productive oil palms from conventional to organic practices.
Typically used fertilizer input in oil palm cultivation comprise of nitrogen fertilizers (either ammonium nitrate, ammonium sulphate, urea and/or ammonium chloride), phosphate rock, potassium chloride and kieserite. It is estimated that overall CO2 emissions related to the use of the fertilizer mix equals 17.3kg CO2-eq per ton of fresh fruit bunches. As the farmers in our collection network only apply natural compost to fertilize the soil, like emply fruit bunches and palm fronds, based on estimated 2022 total FFB collection numbers, the emission of 1,193,700kg fertilizer derived CO2 emission is prevented. FERTILIZER DERIVED CO2 EMISSIONS
▶ In 2022, we aim to start converting an additional 4,000 hectares.
▶ In 2022, we will start the process of Regenerative Organic Certification (ROC).
▶ By 2025, we aim to have 10,000 hectares of productive oil palm under certification.
▶ We will: ▷ Prepare for our first audit.
Technical and agronomist support Our team provides support and training to farmers that are committed to converting to organic practices. Since 2009, 300 farmers and their 347 plantations have been converted. Every 4-6 weeks, our team of 6 technicians and agronomical advisors visit our farmers to offer training and support. Our current supply network consists of 87 plantations which cover 5,304 hectares of certified oil palms.
▷ Our internal assessment showed that half of the farmers in our collection network already qualify for ROC certification. ▷ Aim to certify 50% of the plantations from our supply network, and start transitioning the other plantations from 2023.
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BOSCO RODRIGUEZ
FARMER WITH A VISION
SHORT INTRODUCTION TO THE FARMER It took a severe medical condition to prompt farmer, Bosco Rodriguez (Juan Bosco Rodriguez Intriago), to change the way he managed his farm. He diversified his crops and transitioned to organic practices, and achieved organic certification in 2019. Bosco manages his farm La Gaviota with his wife Luisina. His son Juan Diego recently joined the family business. The farm spans 43 hectares, of which 24 hectares are dedicated to oil palms. The family also grows cocoa, plantain, sugar apple, and coffee - creating and marketing their own coffee bean brand. Bosco is proud of what they have achieved together, and wants people to understand that his organic products are made by a happy farmer. BRIEF OVERVIEW OF HOW THEY WORK Though Bosco loves coffee for the beauty of the crop, he loves oil palm for its economics. The fresh fruit bunches that can be harvested continuously provide a steady source of income for him and his family. Bosco uses many organic techniques as natural fertilizer for the oil palms. This includes using the waste product from his diverse crops, such as pruned and fallen leaves, and the dropping of livestock who graze in the palm plantation on set days. The rich under-cropping also provides important nutrients for the soil. About 2 hectares of the land by the river has been left aside as a conservation area. An indigenous species of bamboo regenerated naturally on their land, which they extended. This bamboo patch is an important tool for water retention during the dry season. Managing a diversified farm, like Bosco’s, supports wildlife so it can thrive. The wildlife Bosco and his family regularly spot are possums, armadillo, sloths, anteaters, monkeys, and otters.
WHAT HAS CHANGED SINCE COLLABORATING WITH NATURAL HABITATS?
Bosco learned about Natural Habitats’ mission during a local conference. Soon after, he started to work with the Natural Habitat team, and began the process to become organic certified. The team also helped Bosco get RSPO certification by adding his farm to the broader Land Use Change Analysis that needs to be performed to qualify for RSPO. Having solid certification standards in place strengthens Bosco’s position as a fruit supplier, and provides him with access to international markets.
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4.2
WHAT? What does fully traceable actually mean?
Traceability is the ability to identify and follow the movement of a product’s ingredients through all stages of production, processing, and distribution. It means knowing the sources of your ingredients, and where and how a product was produced. WHY? Why do we care so much about traceability? Knowing where ingredients are sourced is the only way to ensure clean products. Traceability is vital to ensuring products are deforestation and exploitation- free. By knowing the source of our ingredients, we can understand the impact of our actions on people and the environment throughout our supply chain. This knowledge means we can offer manufacturers, retailers, and consumers full transparency around where and how their ingredients and products are produced. “Providing full traceability means governing and registering every step in our supply chain, from the farms that produce the palm fruit, to the markets where we supply our ingredients and products. ”
HOW? How do we meet this promise?
Providing full traceability means governing and registering every step in our supply chain, from the farms that produce the palm fruit, to the markets where we supply our ingredients and products. Operate an integrated supply chain We have built an integrated supply chain from farm to fork. We know all of the farmers in our supply network, and understand their practices and businesses. We operate our own mill and are strategically aligned with the processor, which means that they work according to our strict specifications. As well as this, we actively collaborate with the manufacturers and retailers that service their consumers. Knowing exactly what is going on at every step of our supply chain allows us to intervene immediately when necessary. Certification standards Certification standards support the full traceability of our ingredients. By following the Identity Preserved system of the RSPO standard, we make sure that a single identifiable certified source is kept separate from conventional palm oil throughout the supply chain.
FULLY TRACEABLE
IS POSSIBLE
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WILFRIDO MACIAS
FARMER WITH A VISION
SHORT INTRODUCTION TO THE FARMER Wilfrido Macias has been a farmer his entire life. His parents were farmers too, and now his 26 year old daughter, Camilla, is preparing to take over the farm one day. Wilfrido owns 2 plantations that grow oil palms, which together span 150 hectares. Not all of the land is planted with crops, as about 36 hectares are set aside as a conservation area. Wilfrido previously farmed bananas, which is a very demanding crop, and became a very skilled and technical farmer. He aims to increase his oil palm yield and is actively looking to fertilize his soil using organic inputs. As the President of the Quevedo Farmers Association, Wilfrido has an eye for engaging farm workers, their families and their communities. He sets a good example, ensuring contracts and social security are in place, and providing good housing, water, electricity and nutritious food for his workers. BRIEF OVERVIEW OF HOW THEY WORK When Wilfrido bought plantation Isabela, it had been abandoned for 10 – 15 years and used for cattle grazing. A lot of work had to be done to prepare the plantation for oil palm cultivation. Now, Wilfrido employs 7 workers to help manage this plantation. Transitioning an oil palm plantation to using organic practices involves many adaptations and a lot of care. Eradicating pests can only be done using natural pest control, such as setting traps using pineapple & melasse to draw beetles away from the oil palms. To naturally fertilize the land and retain water, a rich layer of under cropping, with a huge diversity of plants needs to be in place. To maintain these crops and to control weeds, several cows graze in the plantation. At the same time, their dung adds nitrogen to the soil which is important for palm productivity.
The steep slopes on the farm pose a challenge for harvesting, which is why mules are used. Good animal care is part organic and sustainable practices. WIlfrido ensures the animals are well cared for, training with patience and letting them rest after working. Every 3 months a vet comes to check them. Part of the steep slopes serve as a conservation area, where reforestation took place with fruit trees. Not only does this attract and provide refuge for wildlife, but the fruit trees also provide food. Wilfrido has spotted special wildlife in the plantation, such as tiny jaguars, called tigrillo. And otters can be found in the nearby river.
WHAT HAS CHANGED SINCE COLLABORATING WITH NATURAL HABITATS
Eradicating the use of toxic chemicals is important to Wilfrido. Organic and sustainable farming brings an equilibrium between productivity and taking care of the environment. This is a very different approach to the green revolution, during which machines and chemicals took over to boost yields. Unfortunately this resulted in many of the issues we face today. Wilfrido and Camilla appreciate the social and environmental components of the relationship with Natural Habitats. They like to use their approach as a model for other farmers. As the President of the Quevedo Farmers Association, Wilfrido aims to focus on training and raising awareness. For instance, in financial management, and in health and nutrition. He wants to support people to live healthier and better lives, and wants to make the farming communities stronger.
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4.3
DEFORESTATION- FREE
WHAT? What does deforestation-free actually mean? For centuries, cutting and burning down forests was a way to prepare forested land for agricultural activity. However, we now know that land use change is a main cause of biodiversity loss. Growing consumer awareness about the conversion of tropical rainforests to palm plantations has prompted many companies to make ‘no-deforestation’ pledges. Yet what does ‘no deforestation’ or ‘deforestation-free’ actually mean in the context of these palm oil pledges? There is no single accepted term or definition to describe the act of refraining from deforestation. Terms like ‘deforestation-free’, ‘zero deforestation’ and ‘no-deforestation’ are considered ambiguous. At Natural Habitats, we follow the UNs’ Food and Agriculture Organisation’s (FAO) concept of‘ zero net deforestation ’. Zero net deforestation means there will be no change to the total forested area, and new forests compensate for converted forests. WHY? Why do we care so much about our forests? Protecting forests in our production landscapes is essential to securing the healthy resilient ecosystems we all depend upon. To date, deforestation has resulted in 2 billion hectares of degraded land worldwide. Land degradation threatens species diversity and our global food systems, and has reduced the productivity of 23% of the global land service. Because of this, up to US$577 billion in annual global crops are at risk from pollinator decline. Pollinator decline is the significant reduction of insect and other animal pollinators in ecosystems worldwide. This began being recorded at the end of the 20th century. WHAT IS POLLINATOR DECLINE?
HOW? How do we meet this promise?
Farms and plantations that are part of the Natural Habitats supply network can, under no circumstances, clear any land that causes deforestation, or damage areas rich in carbon such as peatlands and High Carbon Stock (HCS) forests . Policies We operate a strict Forest Conservation policy . This means that the conversion of primary and secondary forests into agricultural production areas, tree plantations, or other degenerating land uses are strictly prohibited. Our policy also stipulates that we must take precautionary actions for forest preservation and have zero burning practices. Alongside this, we operate a Land Use Policy that prevents any conflict in relation to land use, as well as the associated rights of the local inhabitants. Rigorous assessments Before starting our collaboration with new farmers and plantation owners, we perform rigorous assessments to ensure the farms and plantations comply with our zero net deforestation promise. We only start buying their palm fruit for processing after they pass our internal and external audits, and meet all of our certification standards. Part of the conversion process from conventional oil palm cultivation to Palm Done Right is performing a Land Use Change Analysis (LUCA) , which is reviewed by the RSPO. A LUCA is performed by an external consultant. It provides a complete insight into previous land functions and how land use has changed over time using satellite imagery. By performing a LUCA, we can make sure we comply with internal and industry standards, and verify our zero net deforestation promise.
IS POSSIBLE
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REMEDIATION ACTION PLAN
IN 2022
WE PROVIDED INFORMATION ABOUT THE PROJECT, TRAINED FARMERS, AND IDENTIFIED THE RESTORATION AREAS. IS OUR COLLABORATION WITH THE LOCAL GOVERNMENT TO SECURE INDIGENOUS PLANTS AND TREES FOR REPLANTING.
UP NEXT
Natural Habitats will invest in acquiring the plants and trees, and the farmers will provide the labor.
Increase productivity through better practices and organic fertilization The global demand for palm oil will continue to increase, as will the demand for our organic palm oil. One measure we can take to help prevent deforestation is to increase productivity on existing land. We do this by supporting smallholder farmers who supply 40% of palm oil volume worldwide, yet deal with far lower productivity than large estates. This is mostly due to a lack of good agronomic practices and the resources to invest in effective fertilization and replanting. To increase farm and plantation productivity in our supply network, our team of agronomists actively work with farmers to improve their agricultural practices. They train farmers in proper pruning, the use of under cropping for soil health, better and timely harvesting techniques, and fertilization plans. To support our farmers to increase their yield, and keep the right nutritional balance in the soil without having a negative impact on the environment, we will provide them with good quality organic fertilizer, which can be difficult to get in Ecuador. In 2022, we have available 2,800 MT of high-quality organic fertilizer to enrich over 4,000 palm productive hectares in our supply network.
Take compliance seriously Despite our awareness raising and training, our annual internal audits have occasionally revealed that farmers have cleared forest land after joining our network. When farmers don’t comply with our policy and standards they are cut from our supply chain.
BY 2023
NEW AREAS FOR REHABILITATION AND RESTORATION WILL BE IDENTIFIED.
THE IMPORTANCE OF USING ORGANIC FERTILIZER
Rehabilitation of fragile areas With our commitment to protecting fragile areas, and our compliance to the RSPO standard, we support farmers in our supply network to rehabilitate sensitive areas through reforestation. Through our Remediation Action Plan, the farmers in our supply network are informed, trained, and supported by the Natural Habitats team on how to restore and rehabilitate fragile areas, including riparian zones and steep slopes. This means the areas will need to be converted to natural vegetation cover through remediation and modification actions, such as planting native tree species.
Protect biodiversity Biodiversity is an inherent, high priority part of our environmental assessments. Every 3 years we perform an Environmental and Social Impact Assessment (ESIA) that reviews protected areas and species that are considered a valued ecosystem. Through the ESIA, we customize training for our farmers and their workers to recognize protected areas and species, and understand their existence and importance in terms of biodiversity and environmental balance.
Chemical fertilizers have a negative impact on the environment by increasing soil acidity and creating soil infertility, as well as contaminating surface and underground water sources. Organic fertilizers keep soil and ecosystems safe. Organic fertilizers are normally made from animal manure, vegetable or mixed waste. They help to recover the organic matter in the soil, recycle organic waste, fix carbon and nitrogen in the soil, improve soil strength, and ensure the soil will remain fertile over a longer period of time, which leads to increased oil palm productivity.
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GERARDO VILLAMARIN
FARMER WITH A VISION
SHORT INTRODUCTION TO THE FARMER Organic farming is a family affair for Gerardo Villamarin. He and his son, Juan Pablo, manage 60 hectares of oil palms, and are dedicated to sustainable, organic growing methods. Together, they use innovative strategies to protect their farm’s ecosystem. While Gerardo and his son nurture their palms, Gerardo’s daughter, Maria Belen, is proud to run her own business. Maria manages 30 hectares of cacao and runs the family’s very own chocolate brand – Valdivia – named in honour of the Indigenous people that lived on their farmland thousands of years ago. This additional income contributes to the family’s financial stability. The entire family takes great pride in their 50 hectares of conserved land. By protecting areas of land from commercial use, the Villamarin family supports the natural regeneration of native forests. This in turn, attracts native wildlife such as large iguanas and boa constrictors, which had not been seen in the forest for a long time. BRIEF OVERVIEW OF HOW THEY WORK Gerado and Juan use a specific combination of under cropping to support the soil health, and in turn, the productivity of their oil palms. For example; the large- leaved Camacho plant provides soil with shade, which helps to retain water through the dryer months. While the Kudzu vine adds vital nitrogen to the soil, which supports plant growth and food production. With a conventional banana farm using chemical pesticides and herbicides right next door, Gerardo and Juan have had to take extra steps to maintain their organic certification. To avoid contamination with chemicals, they planted a buffer zone between the two properties. They have also taken steps to reforest the riparian zones of the beautiful river that runs through their plantation, which is a requirement of RSPO certification. And now a thriving community of indigenous plants protect the river and help native wildlife thrive.
WHAT HAS CHANGED SINCE COLLABORATING WITH NATURAL HABITATS?
Collaborating with Natural Habitats gives the Villamarin family a platform to showcase their model organic farm. Their story has and continues to inspire other farmers by demonstrating how palm can be done right.
“To maintain healthy, nutrient-rich soil, Gerardo uses specific plant species. The large-leaved Camacho shades soils and retains water, while the Kudzu vine adds vital nitrogen to the soil.”
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4.4
WILDLIFE FRIENDLY
HOW? How do we meet this promise?
The significance of species diversity, as well as the impact of certain agricultural practices on wildlife, is not always considered or understood by farmers and workers. To combat this, we are continuously raising awareness of the importance of species protection at the farmer, worker, and community level. Awareness raising and training An integral part of the RSPO and Fair For Life (FFL) certifications is training farmers, workers, and communities about the importance of protecting wildlife and biodiversity. Wildlife protection is an integral part of the training programs our team uses. Here are a few examples: ▶ Our FFL certified farmers commit to ‘not being involved in hunting, collecting, processing, commercialization, trafficking of all or part of endangered or threatened wild animals/plants’. ▶ Under the RSPO certification, ‘all rare, threatened, or endangered species are protected’, and ‘disciplinary measures are taken and documented if any individual working for the company is found to capture, harm, collect, trade, possess, or kill these species.’ We run internal and external audits to ensure our farmers are compliant with these standards. Using natural solutions Replacing chemicals with natural fertilizers and pest controls means harmful toxins won’t be released into the air, soil, and water bodies, or go on to have a negative effect on wildlife. The use of natural solutions prevents the risk of toxic chemicals and salts building up in species that, in turn, serve as a food source for other species. Leaving pruned leaves and empty fruit bunches (a waste product from the milling process) as a natural fertilizer supports healthy soils, creates shelter for animals, and provides nesting and foraging habitat for key crop pollinators. Planting buffer zones and reforestation of fragile areas with indigenous trees creates a similar positive side-effect. The diversity and abundance of native bird species is greater with even small linear, natural hedgerows along farm field edges.
WHAT? What does wildlife friendly actually mean?
In farming, wildlife-friendly means working to conserve biodiversity on and around agricultural land. Conservation and production are integrated in a way that means habitats for wildlife are sustained using methods that also benefit the farm and plantation. WHY? Why do we care so much about wildlife? Species diversity is crucial to preserving our planet for future generations. By conserving fauna and flora, we can work towards ecological balance and stability in the world. However, converting land into agricultural production sites has come at significant cost to natural ecosystems and wildlife. With agriculture becoming increasingly intensive, little room has been left for the natural habitats that sustain biodiversity. This results in the breakdown of important ecosystem services like pollination and nutrient cycling. Even small patches of habitat within farmlands can provide important places for wildlife to breed, move through the landscape, and find shelter from predators. Those patches can also provide valuable benefits for farmers, such as water retention, reducing erosion, supporting pollination, and providing nutrients for the soil.
IS POSSIBLE
Natural Habitats Palm Possible
Impact Report 2022
28
Natural Habitats
Impact Report 2021/2022
29
Crop diversity Crop diversity is important to attract a diverse group of insects and animals, which in turn attract other species. Different species find refuge in different kinds of tree and plant cover. More than half of the plantations in our supply network manage diverse crops on their land. This is either “mixed” crop, which means they planted other crops within their palm plantations, or “mixed production”, which means they planted other crops on adjacent lots or another property.
The HCV concept was originally developed by the Forest Stewardship Council (FSC) to help define forest areas of outstanding and critical importance. A HCV area is simply a forest, a grassland, a watershed, or a landscape-level ecosystem that needs to be appropriately managed to maintain or enhance the identified values. Identifying the areas where these values occur is the essential first step in appropriately managing them. For a definition of the 6 distinguished HCV areas, please visit the RSPO website. WHAT DOES HIGH CONSERVATION VALUE MEAN? PROTECTING HIGH CONSERVATION VALUE AREAS
▶ 51 out of 87 plantations in our network grow other cash and food crops.
Biodiversity conservation By maintaining a patchwork landscape, with a mix of agricultural land, forests, riparian zones and water bodies, we can secure crucial diversity that is needed to sustain our ecosystems. In our supply network, 6.24% of the certified land has High Conservation Value (HCV). HCV areas are protected to conserve forests and biodiversity, and help wildlife to co-exist with farmers and their communities. HCV areas are also protected to support and regulate ecosystem services, and fulfill vital functions to meet some of the basic needs of local communities.
Natural Habitats
Impact Report 2021/2022
30
Natural Habitats
Impact Report 2021/2022
31
DORA ARELLANO
SHORT INTRODUCTION TO THE FARMER At 76 years old, Dora Arellano is a proud mother of 5 children, a grandmother to 7 grandchildren, and a great grandmother to 7 great grandchildren. Alongside her 38 hectares of farm, Dora takes great pleasure in the little garden of Eden she has created around her house, which is filled with fruit trees and beautiful flowers. Dora has been farming organically for many years, but became part of the Natural Habitats network in 2021. Her farm currently spans 38 hectares. 30 of those have been planted with oil palms, which leaves the other 8 for growing cacao and annual crops like corn. BRIEF OVERVIEW OF HOW THEY WORK When Dora acquired the farm, all of the land was planted with cocoa. But the cocoa trees were old and had low productivity. About 16 years ago, after a bad year, a cousin advised Dora to switch to palm. After planting a couple of hectares with oil palms, Dora realised that they involved less risk, less labour and less support than other crops. Now, Dora’s son and one full time worker help to manage the oil palms, and they hire more support during the harvest. Dora is very aware of the damage chemicals can cause. And with her son and their worker out in the field every day, she feels responsible for their wellbeing. That’s why Dora’s farm uses waste material from the harvest as an organic source for fertilisation. This organic matter protects the palm roots, helps to maintain humidity in the plantation, and retains water for the oil palms during the dry season. But, as the weather becomes even more unpredictable, Dora has been thinking about installing irrigation as an additional measure to protect her crops. Sadly, the farm bordering Dora’s oil palms is a conventional cocoa plantation. Due to the risk of chemical contamination, Dora will need to plant a buffer zone to protect her oil palms. She plans on using Pilgrim bush – a type of hibiscus, which is thick with vegetation and is also known to attract hummingbirds.
Thanks to being an organic, diversified farm, Dora’s plantation now provides a permanent shelter for wildlife. She regularly spots species like purchipine, ferrets, possums, armadillo, sloths, otters, and many snakes. Instead of burning oil leaves like other farmers, Dora’s farm uses them for fertilisation, soil protection, and water retention, which means much more wildlife can survive. WHAT HAS CHANGED SINCE Two years ago, Dora was contacted by Natural Habitats. Since then, she has started the process of joining our supply network. However, this process can take some time, as farmers are required to become organic and RSPO certified. Unfortunately, environmental checks like a Land Use Change Analysis can take long. This means Dora can’t yet benefit from the premium to cover any additional expenses. But once this process is complete, Dora knows that the collaboration will provide her with the support, technical assistance, and advice she needs to better manage and protect her farm in the long run. COLLABORATING WITH NATURAL HABITATS?
FARMER WITH A VISION
Natural Habitats Palm Possible
Impact Report 2022
32
Natural Habitats
Impact Report 2021/2022
33
4.5
FAIR AND SOCIAL
TRAINING AND SUPPORT
WHAT? What does fair and social actually mean?
Paying a premium When farmers transition to organic, sustainable, and ethical practices, and are certified by the standards we operate by, we pay them a premium for their fresh fruit bunches. ▶ Since we have been certified organic (2011), we have paid $11,168,698.71 in premium for the fresh fruit bunches we bought. Long term relationships We are committed to the farmers, workers, and communities in our supply network, and invest in building long term relationships. To support and train the farmers in our supply network, our team of 4 certification compliance experts and 2 agronomists are in the field daily. It takes time and effort to get farmers who have been cultivating oil palm conventionally for years, to transition to organic, sustainable, and ethical practices. By working consistently and diligently with the farmers, our team takes a step by step approach to teaching them new processes and procedures. It takes 3 years for the farmers to become fully certified. This is mainly due to the organic standard which determines that no chemical can be used for 3 years, before becoming certified organic.
To be a fair and social business means working to improve systemic inequalities. At Natural Habitats, we work in a way that ensures everyone in a community or an impacted area has access to the same opportunities and outcomes. WHY? Why do we care so much about fairness? By treating every person with dignity and equality, valuing different perspectives, and giving every person opportunities in life, we can improve personal well-being and make way for mutually supportive relationships. Fairness is not only about making sure that everyone is treated the same, it’s about encouraging respect, responsibility, leadership, and trust, which builds stronger communities that care for each other, and the planet. HOW? How do we meet this promise? To us, fair and social means every person in our supply chain benefits from our approach. We have a responsibility to ensure fairness at all levels of our supply chain, which means people receive meaningful employment, their rights are respected, and they receive fair prices and wages. We also support community projects around education, healthcare, and culture.
IS POSSIBLE
Training & support
▶ We invest $65,000 annually to train and support farmers to transition to and uphold organic, sustainable, and ethical practices. ▶ Our team of 4 certification compliance experts and 2 agronomists are out in the field daily to support and train the farmers in our supply network.
Natural Habitats
Impact Report 2021/2022
34
Natural Habitats
Impact Report 2021/2022
35
Supporting associations When the first independent farmers joined our organic palm journey in 2011, we helped them form Ecuador’s first organic producer association. Since then, we have helped form 4 more associations. The 4 farmers associations were created based on the geographical location of the farms, with associations in Viche, Mompiche, Quinindé and Quevedo. The first Quevedo palm oil producer association will be officially inaugurated in 2022. All certified farmers are members, and with that, all 87 farms are represented in the associations. Additionally, we have promoted the creation of the Natural Habitats Employees Association, with 67 active members. Fair For Life Fund On top of the ingredient prices, several US and EU customers pay an additional Fair for Life premium. The premium paid goes into a special Fair for Life Fund for community projects. The farmers and workers organized in the 5 associations decide how the money will be used, and which social and environmental projects will be funded. We are responsible for managing the fund and proper use of resources, and help the associations to start, manage, and complete the projects. ▶ The sales of Fair for Life certified products began in 2014. Since then, money was transferred to the Fair For Life Fund. From 2014 to the end of 2021, the total accumulated amount of premium collected was $787,647.35.
Social projects As part of our commitment to diversity and inclusion, we’ve supported a number of social projects to help build stronger communities in the places we work. ▶ In 2011, we started a Soccer School Project, in which 200-250 children have been participating annually. Over time we set up 5 Soccer Schools in total. These are located in Chaupara Alto, San Juan, Bocana de Ostiones, Santa Elvira and Barrero. ▷ 212 children currently attend the schools, which provide social and physical activity for the community children. ▷ As going to school is a prerequisite for joining soccer training, this motivates both the children and their parents to attend school, instead of working the land. ▷ We also provide the children and schools with a teacher, team uniforms, shoes, soccer balls, and other equipment they need. ▷ In 2022, we will organize a local championship. The winners will be able to visit their favorite national team in Quito or Guayaquil, and spend a day training with the professionals.
We have also realized a number of other social projects such as Kids Days, Health Squads, and Christmas Celebrations. Adherence to standards Our certification standards ensure that proper procedures are in place to create a supportive and inclusive work environment. This includes making sure that contracts are signed before commencing work, fair prices and wages are paid, work schedules are adhered to, and housing and clean water are provided. As our certification standards require continuous improvement, an external consultant from BioAp performed an environmental & social impact assessment (ESIA) in 2021. One of the objectives of the ESIA is to identify the vulnerable communities in our production landscape, and the social support that they need.
▶ Use of the Fair For Life Development Fund started in 2016.
Medical care We provide medical care for our employees, farmers, and local communities to ensure the health and wellbeing of the people in our network.
Diverse farmer network We believe that bringing a wide variety of perspectives to the challenges we face harvests better solutions. That is why we operate a diverse and inclusive farmer network:
▶ We have 1 medical clinic in the mill for our employees.
▶ 43% of productive hectares are managed by smallholder farmers
▶ 2 medical doctors provide medical services for our employees, farmers and their workers, communities, and the football schools we set up.
FAIR FOR LIFE AND ASSOCIATIONS
▶ 47% of productive hectares are managed by medium sized farmers (between 75-500 hectares)
▶ Our medical services also include nutritional lectures and nutritional advice.
Under Fair For Life certification, farmers and workers are stimulated to organize themselves in associations and bargain collectively. We have actively supported the formation of 5 associations, and help manage the social projects that are financed through the Fair For Life Fund.
▶ 10% of productive hectares are managed by large farmers (>500 hectares)
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