Marrying tech and sustainability, SOBI offers an inclusive business model for Indonesia’s community forest farmers
SOBI is focusing community empowerment through technology and sustainability
Indonesia is a country with an extensive tropical rain forest that become the home for various species of flora and fauna. The Indonesian forest has key commodities for the global needs. One of the commodities is timber, which has become the key source for the forest industry, contributing significantly to the Indonesian economy. Data shown that Indonesia is one of the biggest timber exporters in the world with its industry value reach up to US$10 billion annually (WRI Indonesia, 2018).
However, despite generating considerable profits, the Indonesian wood industry is often regarded as the cause for forest destruction, such as illegal logging and its bad practices that against the principles of environmental sustainability. As a result, Indonesia is listed as one of the countries with the massive forest destruction.
According to the research conducted by Anti-Mafia Coalition for Forestry and Forest Trends, Indonesia supplies 219 million cubic metres of illegal wood, which is unreported from 1991 to 2014. It has caused the state considerable loss in the form of non-taxable income up to US$9 million (KPK, 2015). Such condition is worsened due to the lack of knowledge and awareness of environmental sustainability standards in the forest business communities that cause the degraded Indonesian forest condition from year to year.
In responding to such problem, Indonesian Ministry of Environment and Forestry has developed a system called Timber Legality Verification System (SVLK), an approach to ensure all timber in Indonesian market, either from domestic production or imported from abroad, must comply with Indonesian regulations. Such government initiative aligns with the emerging international standard for timber certification called Forest Stewardship Council (FSC), which become the reference for certification of wood processed products for many countries. FSC certification system become the international standard for environmentally sustainable-logging businesses.
The government initiative to stop illegal logging practices in Indonesia, and the business trend to incorporate the aspects of environmental sustainability, have become the prospect for the development of sustainable natural resource-based business model. Such initiative and the trend resulted positive impact particularly on the increasing demand for certified timber in Indonesia that exceed its supply capacity.
The implication is that the wood supply should not only be based on state-owned and private companies but also from the community forest farmers. In Indonesia, community forest farmers have the potential to supply more than 50% of certified timber. However, the communities are hampered with several problems such as high certification cost, as well as lack of professional management that enable them to connect with the business industry.
Looking at such huge potential and its challenges, Sosial Bisnis Indonesia (SOBI) was established in 2016 as Indonesia’s first market hub for sustainably-managed community-based natural resource commodities with the mission of shared ownership and sustainable management. In its initial stage, SOBI is now focusing on aggregating the community forest farmers in Indonesia with the certified timber industries through the approach of community empowerment and integrated information technology (IT) systems that adopt the principles of sustainability.
SOBI implements an inclusive business model in the forestry sector focusing on facilitating community forest farmers to be able to obtain the FSC and SVLK certification and connecting them with the sustainable market. Through the cooperative model developed by SOBI, community forest farmers have benefited from the multiplier effects from SOBI such as obtaining sustainability certification which costs are fully borne by SOBI, receiving intensive capacity development programs to scale up their competences in connecting with sustainable business market, and getting new job opportunities for local people in the area where SOBI operates.
As a result of such initiative, SOBI has successfully empowering more than 1,000 forest farmers in Indonesia in the form of community cooperatives for forest management unit located in Kulonprogo and Gunung Kidul, Yogyakarta. Both communities have received FSC and SVLK certificate that allow them to supply their certified timber for various industries in Indonesia.
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Currently, SOBI is building partnership with Ministry of Environment and Forestry and several Indonesian prominent Non-Governmental Organizations (NGOs) to collaborate in empowering more of Indonesian community forest farmers. The initiative offered by SOBI was lauded by the government and other institutions as a breakthrough that merges the concepts of community empowerment and inclusive business model in adopting the sustainability principles and practices.
In the next five years, SOBI is targeting to empower 200 thousand forest farmers in Java island and expanding to 20 thousand farmers in other islands across archipelago. Beyond that, for the future plan SOBI envisions to expand its business not only focusing on forest-based sustainable products but also agriculture and fishery-based industry.
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For further information about SOBI and its social business initiatives, can be found in the website www.sobi.co.id
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