The Palm Scribe

George S. Tahija, Mechanization will play an extraordinary role in palm oil industry

The figure of businessman George Santosa Tahija stands tall in an industry plagued by environmental issues. Unlike many other entrepreneurs in the palm oil industry, George stands out as a businessman who has the environment and conservation high on his mind.

George Tahija
RUNNING. At 59, George S. Tahija still looks healthy and fit. “I am still running.” (Photo: Wicaksono/The Palm Scribe)

Besides wearing his business cap, George is also a member of the Nature Conservancy’s Indonesia Foundation and of its Asia Pacific Council, and also serves as chair of the Coral Triangle Center that is dedicated to the preservation of marine-protected areas.

His passion for the nature and the environment is also reflected in his hobbies: mountain climbing, running and photography. His mountain climbing skills have already helped him conquer three of the Seven Summits of the world — the Kilimanjaro in Tanzania, Elbrus in Russia and Papua’s Puncak Jaya. Being an ardent reader of the National Geographic in his younger time, may have also encouraged George to turn his personal experience and travels  into two books:  A Walk in The Clouds (2005) and Land of Water, Vol. 1, From Bali to Komodo (2006).

Born in Jakarta in 1958, George is the youngest of two. His father, Julius Tahija is a former soldier turned business captain, who became the first Indonesia to hold the top position of Chairman of the Board of Director of PT Caltex Pacific Indonesia and helped found the country’s largest copper and gold mining operation in Papua. Julius was also a member WWF.

With an undergraduate degree in mechanical engineering from Universitas Trisakti, the young George furthered his studies at the Darden School of the University of Virginia and obtained an MBA in 1986.

On his return from the United States, George was assigned to continue the family’s diversified businesses, in sectors such as natural resources, medical services and finance. He is now one of the commissioners and the chair of the Risk Management Committee of PT Austindo Nusantara Jaya Tbk (ANJ), a group of companies operating in the palm oil industry.

At 59, George still looks healthy and fit. “I am still running. Next month, I will take part in a run in Bogor,” George told The Palm Scribe who met him at the Tahija family library, for an interview, Monday (23/10/2017).


Following are excerpts of the interview with George about his company, the palm oil industry, environmental issues and conservation:

How did the Tahija family began to dabble in the palm oil business?

We first took part in owning a palm oil plantation by joining others. We were a minority shareholder in a partnership. Our partner was Belgian firm PT Sipef.

PT Sipef had already possessed a palm oil plantation in Sumatra for years. At the end of the 1980s, between 1988  and 1989,  Sipef developed a palm oil plantation in Bengkulu and was looking for a local partner. Sipef then contacted my father to become the local partners. That was the first time we went into the palm oil industry.

Why accept to work with Sipef, leading to the Tahija family entering the palm oil business?

In the 1980s, it was already apparent that the world’s populations was fast on the rise. The need for food exceeded supplies. One of the essentials that was not met adequately was vegetable oil.

We saw that globally, the need for oils such as palm oil will continue to grow. On the other side, we also saw that Indonesia had the necessary capability and the competitiveness  in agronomy, especially in palm oil. The land that is  suitable for palm oil, that is fertile, the high level of rainfall at 2,000-3,000 mm per year, the number of population needing employment and the adequate human resources available. If seen from all of that, palm oil appeared suitable. That was the reason. We saw that from the domestic demand side it was suitable, seen from the demand overseas, it was also appropriate.

Was there at the time, already an inkling that the palm oil business will face various environmental issues?

It was already apparent, because one of our partners in the palm oil plantation in Agro Muko (Bengkulu) was IFC (international Finance Corporation). In the 1980s, IFC was already urging for maintaining an a 50 meter wide area  along both banks of a river  as forests.

At the time, many individuals in the palm oil plantation business deemed this as an excessive demand from IFC. Now we all see this as something that should be that way, that there should be a green belt along rivers.

Since then, we thought that that was just the beginning. The coming years must come up with even tighter demands for the preservation of the environment.

How could the Tahija family at the time have the  confidence in running a business in palm oil plantation despite of the environmental issues?

Actually it was not too difficult, because at the time, our father (Julius Tahija-eds.) was a member of the World Wildlife Fund (WWF.)  Father appeared to have already realized that environmental issues would become important. And companies have to be able to follow the new direction. For us, it was by improving productivity at our plantation.

How did you raise productivity when land is becoming limited?

There  many ways.  When replanting, we have to look for superior seedlings which have a better yield than the previous ones.

We also have to use better fertilizers that previously. We began to look at the alternative, organic fertilizers, compost that came from factory waste. With compost, we were able to reduce the amount of organic fertilizers and result in a saving of between 25 and 30 percent.

And then, mechanization. In the future, mechanization will play an extraordinary role. For example, the use of machines to harvest palm oil fruit bunches.

Why is ANJ interested in developing Papua?

About seven years ago, we wanted to develop new land, where we could start from scratch. But there were no longer any. The last land we developed is in Ketapang, West Kalimantan. After that it had become harder to find land. The remaining open land was in Papua.

We are aware that the location is far, and that it is difficult to develop and will take a long time to do so. But because our company, when taking decision always look at the long term, we  summoned the courage to try  clear land in Papua.

What is important about the land in Papua?

We are able to open land, not in small parcels but in sprawling surfaces, so that we can plant in line with the best agricultural practices. The soil is quite good and there is enough rainfalls.

However, the challenges are also many. The people there are not yet accustomed to agrarian life and so far, they have had less than positive experience from many investors so that their level of distrust of investors is quite high.

What was then done, in the face of such challenges?

First of all, we must be patient, diligent, and remember that the host is the people, not us. There is a need for understanding from both sides. We must be able to catch the aspiration of the people. We should not hastily take conclusions using mindsets obtained from other places.

The agriculture industry, especially palm oil, is sandwiched between two poles – environment and economy. What is the compromise?

I think, if we follow the guidelines from the RSPO, that is already good enough. Of course, this would mean that we cannot hundred percent plant like we want to.

How do you bring form to this compromise?

Continuous communication. Not only internally but also externally. Secondly, there must be transparency, because in general, conflicts take place because of suspicion. All sides, all stakeholders must be transparent.

What can make a palm oil company such as ANJ have the ability to survive?

The human resources need to be given full attention. There must always be a continuous development of the human resources. In decades of us doing business, there has been a lot of changes. To survive, we must be capable of adapting  to change. If we want to be more than just surviving, if we want to be successful, we must anticipate. Think about the changes that may take place and thus prepare ourselves. I think that is a very important key to survival.

What is the recipe to be able to embrace the people around the plantation?

The recipe is simple, it is the implementation which is much harder. The people must be able to feel that the presence of the company provides added value for them. If they see us as a liability, and not an asset, then it would be difficult for us to move forward. If the people sees us as an asset, that our presence improves their life,  they will be the ones safeguarding us. (*)


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