Convening a Sustainable Palm Oil Landscape in Aceh, Indonesia

The Aceh Province in Indonesia is home to the majority of the 2.8 million-hectare Leuser Ecosystem - one of the world’s most ecologically significant biomes. It is the only place on Earth where tigers, orangutans, elephants, and rhinos coexist in the wild, and it supplies fresh water to over 4 million people. However, this vital ecosystem is under threat from deforestation, primarily driven by unsustainable palm oil expansion. More than 260,000 hectares of High Conservation Value (HCV) areas lie within palm oil production zones, making the need for sustainable solutions urgent.

Palm oil is Aceh’s largest contributor to regional GDP, with approximately 471,000 hectares[1] of plantation, 52% of which are managed by around 240,000 smallholders. Without alternative business models rooted in green growth principles, deforestation will continue to escalate.

Common solutions

To address these challenges, IDH convenes public-private partnerships through a landscape approach to support Aceh’s vision for a deforestation- and conversion-free palm oil supply chain that includes smallholder farmers. This vision is being realised through a multi-pronged strategy:

• Landscape Governance: Establishing robust governance frameworks at provincial and district levels.
• Business Transformation: Supporting supply chain actors in adopting sustainable practices.
• Impact Investment: Catalysing investments to improve productivity and diversify livelihoods.
• HCV Protection and Restoration: Promoting deforestation- and conversion-free supply chains and restoring degraded lands.
• Smallholder Inclusion: Enhancing smallholder capacity to adopt deforestation- and conversion-free agricultural practices and access to certification.

IDH has been active across the Leuser Ecosystem, including Aceh Province and parts of North Sumatra, to implement these strategies.

Collaborative Roadmap

In collaboration with government, civil society, and private sector stakeholders, IDH helped facilitate the development of the Aceh Sustainable Palm Oil Roadmap 2023–2045. This roadmap was formalised under the Aceh Governor Decree No. 09/2024, serving as a framework for coordinated action. Key targets include:

• Registration of 156,000 smallholders
• Protection of 247,000 hectares of HCV areas
• Establishment of deforestation monitoring and grievance response mechanisms
• Improved smallholder productivity and inclusivity
• Transformation of the palm oil supply chain to be fully deforestation- and conversion-free

Implementation and Partnerships

To operationalise the roadmap, IDH leveraged a development priority program and established co-financing projects with seven global supply chain companies: Unilever, PepsiCo, Mars, Mondelez, GAR, Musim Mas, and Apical. These partnerships aim to:

• Build the capacity of 16,000 smallholders to adopt a deforestation-and conversion free supply chain and good agricultural practices 
• Pilot deforestation monitoring and grievance response systems in two districts and at the provincial level
• Improve landscape resilience through cocoa agroforestry
• Transform one Crude Palm Oil (CPO) mill’s supply chain to be deforestation- and conversion-free-compliant