Hoax 3 : Oil Palm Plantation Companies Do Not Engage in Partnerships.
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Do oil palm plantation companies not engage in partnerships ?
Regarding oil palm plantation development programs with local economies, there are several forms of partnership: (1) Nucleus-plasma partnerships, (2) Partnerships of independent palm farmers, (3) Partnerships with SME goods suppliers and (4) Partnerships with SME services suppliers. The four forms of partnership occur in oil palm plantation companies in line with the development phase of the company concerned. The distribution of the value of partnership transactions for the four types of partnership is presented in Figure 1.
Figure 1 : Value of partnership transactions with oil palm plantations (PASPI, 2014)
Value in Percent %
The nucleus-plasma partnership is an obligation as stipulated in the Plantation Law and its implementation stipulates that corporate partnerships with private individual-run palm plantations should be a minimum of 20 percent. In general, the fact those private individual-run palm oil plantations reached 42 percent in 2014 shows that partnerships between corporate and private individual-run palm plantations have increased well above the minimum requirement of 20 percent.
The largest value of partnership transactions is in nucleus-plasma relations, namely the purchase of plasmas’ FFB amounting to 41 percent of the total transaction value of the partnerships. This is followed by the transaction value of independent palm farmers, suppliers of goods and suppliers of services. The value of partnership transactions is generally increasing (Figure 2).
Figure 2 : Index of average transaction value between plantation companies and local partners (PASPI, 2014)
Compared to the transaction value of 2006 (2006 = 100), the real partnership transactions has increased from year to year. In 2013, the value index of partnerships stood at 357, which means the value of partnership transactions in 2013 increased more than 3.5 times the value of 2006.
The data above show that oil palm plantations generally run partnerships, and these increase from year to year. The existing partnerships are still fewer than demanded by many local communities and not all palm oil plantations have developed partnerships as expected. The number of partnerships with private individuals needs to be improved and expanded so that growth and an even distribution of development go hand in hand.