A highly rich natural ecosystem, Sumatra encompasses five main eco-zones: Sumatran freshwater swamp forests, lowland rain forests, mountain rain forests, peat swamp forests, and Sunda shelf mangroves. Livelihoods projects cover three of these eco-zones.
Bernard Giraud, President and Co-Founder of Livelihoods Venture, recently returned from visiting the three transformative projects we are implementing on the island. He shares his reflections on the challenges and successes observed during these visits, providing a deeper understanding of the ongoing efforts to address environmental and social issues in the region.
How is Livelihoods acting to couple social justice and environmental preservation in Sumatra island?
Bernard Giraud: “Livelihoods began investing in Sumatra about fifteen years ago. Initially, we supported Yagasu, a local NGO that restored mangroves on the East Coast between Medan and Banda Aceh, which had been severely damaged by intensive aquaculture development and the tsunami that hit the island in 2004. We then partnered with major international and Indonesian companies to help thousands of smallholder palm oil growers to develop sustainable production models.
Recently, we decided to invest in a significant agroforestry project in Aceh Province. Our goal is to help protect the Leuser Park, a vital biodiversity hotspot, by collaborating with coffee growers in the surrounding area. Beginning in September, we will plant several million trees to provide shade for coffee plantations, rejuvenate the soil, and diversify the incomes of 10,000 producers and their families.”
Why does Livelihoods engage with palm oil plantations, a controversial industry in Europe?
B. Giraud: “Palm oil production has dramatically expanded in Indonesia, establishing the country as one of the world’s leading producers. The palm oil tree is productive year-round, with diverse industrial uses and relatively low production costs. However, this economic success has come at the cost of forested areas. The planting boom has resulted in harmful practices, such as planting palms in drained and often burned peatlands, and replacing rich tropical ecosystems with extensive palm monocultures. In parallel, the palm oil economy has created millions of local jobs in production and processing.
While we cannot reverse the past, the Indonesian government and all stakeholders in the palm oil industry share a responsibility: to preserve and restore biodiversity-rich natural areas and to guide palm producers towards sustainable practices. This includes renewing old plantations and avoiding the conversion of new forest areas. Certification systems like the RSPO (Roundtable on Sustainable Palm Oil) have helped limit deforestation, but certification alone is insufficient without investing in genuinely sustainable palm oil production systems. Supporting smallholders, who lack the technical and financial resources for this transition, is crucial. This is the focus of Livelihoods’ project in Sumatra.“
What lessons have you learned from these projects over the past 15 years?
B. Giraud: “I was impressed by the progress made in a relatively short time. Five years ago, when I asked producers, “What do you need the most?” many of them responded: “Chemical fertilizers to increase our yields.” Relying on chemical inputs to compensate for soil exhaustion due to monoculture is neither a sustainable agronomic nor an economic solution.
What I see now is far more encouraging: smallholders adopt practices that restore soil organic matter, such as large-scale compost production, cover cropping, and biological pest and disease control methods. These new, sustainable practices are still in the minority but are increasingly appealing to producers because they offer good yields while reducing costs. Scaling up these practices is feasible when farmers realize the benefits they get in the short but also the longer term.
I also observed a greater convergence between public and private sector leaders on making realistic compromises to address the politically challenging dilemma: should we protect nature or create economic and social wealth for the local populations? Forest protection laws and bans on commercial plantations are not universally enforced but are progressing. International consumer pressure contributes to this evolution. However, significant work remains to be done to restore degraded forest areas and mobilize financial resources commensurate with the challenge.”
What are the key success factors for Livelihoods’ projects?
B. Giraud: “We must remain modest: we face significant challenges and often operate in complex contexts. While there is no magic solution, our experience over the past fifteen years shows that real transformations are possible. It takes a strong commitment and a results-focused approach to drive change. Our approach typically relies on three pillars.
First, we build operational coalitions of stakeholders who are deeply involved in the project. In Livelihoods’ palm project, this coalition includes companies like Danone, Mars, L’Oréal and L’Occitane who have committed to source their raw materials from the project over several years. Musim Mas, a major Indonesian supplier for these brands, sources from the project’s smallholders. SNV, an international NGO, implements the program on the ground, while ICRAF, a research institution specializing in agroforestry, provides technical support. These teams work closely and are integrated under the Project’s Steering Committee, which brings together all project partners.
Second, we stay close to the field realities. Livelihoods’ project managers work hand in hand with our local project partners to develop and implement solutions which are suited to the local contexts. They leverage the expertise of Livelihoods’ team, including agronomists, foresters, agricultural specialists, rural development experts, carbon and biodiversity impact professionals.
Third, we focus on financial innovation. Our partner companies are committed to transforming their operations, aiming for net-zero carbon or regenerative agriculture in their supply chains. We help them scale these efforts affordably through financial arrangements and investment models that involve private companies, public institutions, carbon finance, and payments for environmental services.”
Have a glimpse at Livelihoods’ approach: