Introduction to Minimal Independent Smallholder-driven Deforestation

Malaysia and Indonesia have approximately 3 million independent palm smallholders (ISH) and there are significant challenges in mapping, registering and tracing to individual smallholder farms or plots (public summary). It will take years to do this, so it is vital that smallholders are not excluded from supply chains unfairly in the interim.​

The Palm Oil Collaboration Group (POCG) recognises the importance of a just transition to Deforestation-Free for palm smallholders, therefore the group analysed palm ISH-driven deforestation and peat conversion in Malaysia and Indonesia to identify administrative areas with minimal independent smallholder-driven deforestation (MSD) since the industry cut-off date of 2015. The analysis is available from 2016 to 2024, with 2025 deforestation under discussion for analysis.

From 2025 onwards, the results of this analysis will be used by POCG companies for their reporting on No Deforestation & No peat conversion, via the Implementation Reporting Framework (IRF):​

• ISH volumes coming from administrative areas with MSD will be considered as IRF “Delivering” for Deforestation & Peat. Volumes coming from other “significant” areas will not be considered “Delivering” and will need other risk mitigation measures, e.g. traceability to plot & evidence of no deforestation since the cut-off date, certification by relevant schemes, or coverage of a landscape or jurisdictional initiative implementing risk mitigation activities (see forthcoming IRF guidance for more details).​

• The threshold for “minimal” smallholder deforestation was decided by POCG companies, taking into account inputs from an extensive consultative process with technical service providers and external NGOs. The threshold agreed by the companies was that administrative areas accounting for 95% of all ISH deforestation in Malaysia and Indonesia should be classed as “significant”, and additional risk mitigation measures will be required. Therefore, only administrative areas accounting for 5% of all ISH deforestation in Malaysia and Indonesia are classified as “minimal” smallholder deforestation areas.

  Please review the methodology and detailed excel for the MSD analysis. The GIS shapefiles are available upon request, please contact the Proforest or PwC teams to access those.

External Validation (CLOSED)

To ensure credibility and integrate the most updated and accurate information available on ISH deforestation before the MSD classification and maps can be used for 2025 IRF reporting, the POCG conducted a short validation period of the layer/classification from October - December 2024, where companies, service providers or CSOs with monitoring data submitted evidence they have that shows administrative areas have been wrongly classified as either minimal or significant ISH deforestation. The results of the external validation were incorporated into the final MSD layer, with the status of the wrongly classified villages being updated.