Palm

We do not own palm plantations, but work with many different operators to supply oil by:

• Refining palm bought from third-party mills at our refineries in Indonesia, and selling the oil to customers; and
• Buying oil from third parties to sell on through our commercial office in Singapore.

Palm oil bought by our Singapore teams often involves several intermediary layers of the supply chain. For us, this is as an opportunity to influence these suppliers to adopt the ‘No Deforestation, No Peat, No Exploitation’ (NDPE) policy we launched in 2016.

We also make sourcing transparency a priority, aiming ultimately to trace palm oil back to mill level and beyond.

In addition to our sustainability reports, we update our website regularly with information regarding our sourcing profile and locations.

Since 1995, the Indonesian Ministry of Environment and Forestry has employed a rating system for company environmental performance, known as PROPER, to rate facilities’ compliance with environmental regulations using a color-coded rating, ranging from gold for excellent, green or blue for compliant, and red to black for poor performance.

In 2020, our Lampung refinery participated in the scheme and received a blue rating.

We will continue to improve the environmental performance of our refineries by integrating the PROPER criteria into our management system.

In 2020, we began working with several stakeholders, including local governments, NGOs and other palm oil companies in East Kalimantan, Indonesia, to draft guidelines for palm oil companies on Fair Employment of Casual and Temporary Workers and Mitigating the Risk of Child Labor in Palm Oil Plantations.

Unfortunately, this initiative is currently on hold due to Covid-19 restrictions.

We are also working with a service provider to develop a human rights assessment for NDPE implementation field verifications. This assessment will complement the NDPE Implementation Reporting Framework, a multi-stakeholder reporting tool we use to systematically report on progress toward implementing NDPE commitments in palm oil.

We hope to implement this assessment in 2021/2022, once Covid-19 restrictions have eased.

In 2019, we started a project with Dutch non-profit organization SNV and the Louis Dreyfus Foundation in South Sumatra, Indonesia, to include smallholder farmers in sustainable supply chains.

With a focus on increasing production and yields sustainably, and without resorting to deforestation, the project develops essential infrastructure, such as washing facilities and safe chemical storage, that is critical to help them comply with sustainability requirements, and so achieve certification.

In 2020, the project managed to train over 1,000 independent smallholders despite the logistics challenges posted by Covid-19 restrictions.

Trainees included a group of 30 smallholders who manage 130 hectares of oil palm as members of KUD Mitra Bersama. They became the world’s first independent smallholder group to be certified under the newly adopted RSPO Independent Smallholder (ISH) Standard.

KUD Mitra Bersama’s Group Manager, Nyoman Sucipta, said the training they received not only taught them about sustainable oil palm cultivation, but increased the group’s production efficiency, and therefore their income.

The additional sales generated by their RSPO certification helped incentivize the members and attract more smallholders to the group, who are now targeting the next level of RSPO certification, with our ongoing support.

A similar smallholder project is now underway in Lampung province, with a target to train 1,000 smallholders in good agricultural practices and achieve ISCC certification by 2022.