Sustainability performance assessment for palm oil producers

Institute for Sustainable Futures Prepared for Stewart Investors SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS B

ABOUT THE AUTHORS CITATION The Institute for Sustainable Futures (ISF) is an Please cite as: Nagrath, K., Alexander, D., Dominish, E. and interdisciplinary research and consulting organisation Mey, F., 2019. Sustainability performance assessment of at the University of Technology Sydney (UTS). ISF has palm oil producers. Report prepared by the Institute for been setting global benchmarks since 1997 in helping Sustainable Futures, University of Technology Sydney for governments, organisations, businesses and communities Stewart Investors. achieve change towards sustainable futures. We utilise a unique combination of skills and perspectives to offer long ACKNOWLEDGEMENTS term sustainable solutions that protect and enhance the The authors would like to acknowledge the valuable environment, human wellbeing and social equity. inputs shared by the World Wide Fund for Nature (WWF), ISF acknowledges and respects the Aboriginal and Torres Sustainability Policy Transparency Toolkit (SPOTT) Strait Islander custodians of Australia and the Gadigal and the Roundtable on Sustainable Palm Oil (RSPO) peoples upon which the UTS City Campus now stands. We teams as well as the companies who engaged with the continue to value the generations of knowledge Aboriginal assessment. This report was commissioned and funded and Torres Strait Islander Peoples embed within our by Stewart Investors. University and we pay our respect to their Elders past, present and emerging. DISCLAIMER This report was commissioned from ISF by Stewart For further information visit: www.isf.uts.edu.au Investors, a trading name of First State Investment Management (UK) Limited. The content of the report, RESEARCH TEAM including any opinions contained within it, is the Kriti Nagrath responsibility of ISF and it has not been endorsed or Dani Alexander approved by Stewart Investors. The contents of the report Elsa Dominish do not constitute investment advice and the use of the Franziska Mey report is at the user’s own risk. Both ISF and Stewart Investors disclaim any responsibility to anyone relying upon the report.

INSTITUTE FOR SUSTAINABLE FUTURES

University of Technology Sydney PO Box 123 Broadway, NSW, 2007 www.isf.edu.au

© UTS December 2019 B SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 1 Executive Summary

Palm oil is one of the most versatile vegetable oils used in the world today, with applications ranging from food and pharmaceuticals to cosmetics, cleaning products and biofuels. However, palm oil production is a major driver of deforestation and habitat loss in some of the most biodiverse areas in Asia and Africa. There are also concerns regarding the exploitation of workers and the land rights of local communities.

Investors can play a key role in influencing the behaviours of the companies they invest in and their supply chains. For this reason, Stewart Investors commissioned the Institute for Sustainable Futures (ISF) to assess the sustainability performance of nine key palm oil producers and their change over the past ten years:

Figure 1: Relative ranking of companies for environmental, social & governance sustainability

United Plantations Berhad (UP) 51 56 31

IOI Corporation (IOI) 50 57 31 Sime Darby Plantation (SDP) 51 62 24

Wilmar International Limited 47 57 27

Kuala Lumpur Kepong Berhad (KLK) 46 45 29

London Sumatra (Lonsum) 49 49 13

FGV Holdings Berhad (FGV) 46 45 20 Environment Astra Agro Lestari (AAL) 43 46 17 Social Genting Plantations (GP) 41 43 21 Governance

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United Plantations, IOI Coporation and Sime Darby Plantations (SDP) are the leading companies in terms of overall as well as sectoral performance. Wilmar and Kuala Lampur Kepong (KLK) follow the industry leaders. London Sumatra (Lonsum) , FGV Holdings Berhad, Astra Agri Lestari (AAL), and Genting Plantations (GENP) are the lowest scoring companies. Although these companies have moved beyond compliance-led action, they still need far greater action in all categories to reach the industry’s sustainability leaders.

COMMON AREAS OF STRENGTH INCLUDE: COMMON AREAS OF WEAKNESS INCLUDE: • Well defined polices on environmental, social and • Lack of mechanisms to track progress on public governance aspects of sustainability; commitments and sustainability polices; • Low incidence of documented grievances and good • Absence of reporting on the efficiency of operations management processes in place to resolve grievances; management i.e. waste, water, chemical, pest, GHG • Well documented plans and procedures for managing, management; tracking and reporting on sustainability commitments, • Fair/decent work policies not linked to standard especially operations management; procedures and protocols to uphold objectives; • Active industry engagement and leadership through • Some long-term unresolved grievances or lawsuits different alliances and working groups; and against the companies and their subsidiaries; and • High levels of support and traceability in their • Limited support provided to smallholders and supply chains. independent suppliers. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 2

Executive Summary continued

Reports from activists and independent researchers have recognised sustainability progress over time, particularly with regard to deforestation in companies’ owned operations. Figure 2 below outlines the key sustainability milestones for the assessed companies. Figure 2: Key events for the assessed companies and the sector in the last ten years

2008-9 2008/9 2010 ●●Five companies awarded RSPO certification: United ●●SDP awarded RSPO certification Plantations, Wilmar (2008); IOI, Lonsum & KLK (2009) ●●RSPO launched New Planting Procedure (NPP) ●●RSPO published Supply Chain Certification Standard ●●Forest People Programme (FPP) reported on human right (SCCS) (2009) 2010 violations and land acquisition (IOI, Wilmar) ●●Milleudefensie & WALHI reported on RSPO members ●●World Bank (WB) froze palm oil funding after FPP and subsidiaries breaching standards in Ketapang complaints, developed framework to engage with producers (SDP, IOI, GENP) 2013 ●● 2011-12 2011/12 ASI is the first organisation to undertake RSPO certification ●●FGV awarded RSPO certification accreditation ●●1m ha of RSPO certified plantations, 5m tonnes of ●●Wilmar launched 1st No Deforestation No Peat No certified sustainable palm oil (10% global production) Exploitation policy (NDPE) ●● ●●High Carbon Stock Approach (HCSA) developed to Norwegian Government Pension Fund divested from 2013 23 producers following public pressure: AAL, IOI (2011); implement NDPE commitments GENP, Indofood Agri, KLK, Wilmar & United Plantations ●●FPP reported on destructive impact on local communities (2012) (United Plantations, Wilmar, GENP, SDP, IOI) ●●International coalition of NGOs disappointed with ●●Greenpeace report on palm oil driven deforestation & tiger RSPO extension to IOI to resolve breach of code 2014 extinction (Wilmar) 2015 2014 ●●GENP awarded RSPO certification ●●RSPO suspended GENP for not submitting NPP; stock ●●Wall Street Journal exposed labour violations and human price fell by 2% trafficking in FGV operations ●●GENP membership reinstated after NPP submission 2015 ●●Ten international banks adopted “Soft Commodities 2016 Compact” for zero net deforestation in supply chains by ●●RSPO suspended IOI’s certification after 2020; none have currently divested from palm oil businesses Aidenvironment complaint. Stock price fell by 9%. Major companies (Unilever, Cargill) suspended 2016 2017 contracts ●●United Plantations is the 1st Asian company to be RSPO Next certified ●●IOI’s certification reinstated after corrective actions, including new sustainability policy ●●Rainforest Action Network (RAN) reported on sustainability risk for investors and banks (FGV, IOI, Indofood & Wilmar) ●●FGV & FELDA (parent) withdrew RSPO certifications in 2017 Malaysia after labour risks revealed in audit ●●Chain Reaction Research (CRR) reported 74% refining capacity in Indonesia & Malaysia covered by NDPE policies; ●●Amnesty International reported on human rights all assessed companies have NDPE policies abuses in palm oil production, (Wilmar)

2018 2019 2018 ●●RSPO-certified growers account for 19% of global palm oil ●●Over 90 institutional investors urged RSPO to production strengthen certification standards ●●Seven assessed companies still hold active RSPO SCCS ●●RSPO Principles & Criteria revised with stringent certifications 2019 guidelines to improve sustainability ●●RSPO suspended Lonsum’s certifications after RAN ●●Greenpeace reported on sustainability violations complaint. SIMP and Lonsum resigned from RSPO by 25 palm oil producers (Wilmar, FGV, GENP, IOI & membership Lonsum) ahead of 2020 commitment by large brands ●●Norwegian Government Pension Fund divestsed from SDP to clean up supply chains. ●●CRR attributed year-on-year decline in palm oil related ●●Eyes on the Forest reported on Wilmar, IOI and SDP deforestation to NPDE policies, however defaulting mills purchasing illegally harvested FFBs appear in supply chains of companies with NDPE policies (SDP, IOI, and Wilmar)

1 (Wilmar (IP, MB,SG), IOI (MB, SG), FGV (MB, SG), UP (IP,MB,SG), KLK (IP, MB,SG), SDP (MB,SG), GP (IP, MB,SG)) SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 3 Contents

EXECUTIVE SUMMARY 1

CONTENTS 3

ACRONYMS & ABBREVIATIONS 4

INTRODUCTION 6 Context 6 Objectives 6 Companies Assessed 6

RESEARCH APPROACH 8

RESULTS 10

COMPANY PROFILES 15 United Plantations Berhad 16 IOI Corporation Berhad (IOI) 18 Sime Darby Plantation (SDP) 20 Wilmar International Limited (Wilmar) 22 Kuala Lumpur Kepong Berhad (KLK) 24 London Sumatra (Lonsum) 26 FGV Holdings Berhad 28 Astra Agro Lestari (AAL) 30 Genting Plantations (GENP) 32

APPENDICES 34 Appendix 1 34 Research Method 34

Appendix 2 37 Assessment framework: Performance spectrum 37

Appendix 3 38 Assessment framework: Criteria & indicators 38

REFERENCES 41 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 4 Acronyms & abbreviations

Acronyms Full Form

AAL Astra Agro Lestari

ASEAN Association of Southeast Asian Nations

ASI Accreditation Services International

BORA Borneo Rhino Alliance

BWPT PT BW Plantation Tbk

CPKO Crude Palm Kernel Oil

CPO Crude Palm Oil

CRR Chain Reaction Research

CSR Corporate Social Responsiblity

FELDA Federal Land Development Authority, Malaysia

FFB Fresh Fruit Bunches

FGV FGV Holdings Berhad

FoB Friends of Borneo

FoE Friends of the Earth

FPIC Free, Prior and Informed Consent

FPP Forest Peoples Programme

GHG Greenhouse gases

GENP Genting Plantations

GRI Global Reporting Initiative

HCS High Carbon Stock

HCV High Carbon Value

ILRF International Labor Rights Forum

IMU Investigation & Monitoring Unit

IPM Integrated Pest Management

IPOP Indonesia Palm Oil Pledge

ISCC International Sustainability and Carbon Certification Scheme

ISPO Indonesian Sustainable Palm Oil

KL Kuala Lumpur SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 5

Acronyms Full Form

KLK Kuala Lumpur Kepong

Lonsum London Sumatra

MSPO Malaysian Sustainable Palm Oil Standard

NBPOL New Britain Palm Oil Limited

NDPE No Deforestation, No Peat, No Exploitation

NGO Non-Government Organisation

NPP New Planting Procedure

OCEAN Oro Community Environmental Action Network

OHS Occupational Health and Safety

OPPUK Organisasi Penguatan dan Pengembangan Usaha-usaha Kerakyatan

PNG Papua New Guinea

PONGO Alliance Palm Oil & NGO Alliance

PROPER Programme for Environmental Performance Rating

RAN Rainforest Action Network

RRDC Rainforest Resource & Development Centre

RSPO Roundtable on Sustainable Palm Oil

SSCS Supply Chain Certification Systems

SDGs Sustainable Development Goals

SDI Sustainable Development Institute

SDP Sime Darby Plantations

SEIA Social and Environmental Impact Assessment

SOMO Centre for Research on Multinational Corporations

SPOTT Sustainability Policy Transparency Toolkit

UNGC FABPs United Nations Global Compact Food & Agriculture Business Principles

UP United Plantations

WALHI Friends of the Earth Indonesia/Wahana Lingkungan Hidup Indonesia

WSJ Wall Street Journal

WWF World Wide Fund for Nature

ZSL Zoological Society of London SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 6 Introduction

Context Objectives Palm oil, derived from the fruit of oil palms, is one of the Stewart Investors commissioned ISF to assess the most widely consumed vegetable oils in the world, as it is sustainability performance of nine key palm oil producers inexpensive and has a wide range of applicationsi. Palm and their improvement/change over the past ten years. oil is an ingredient of over half of all packaged products including pre-packaged food, cosmetics & personal care Thus, this research: items, cleaning products, pharmaceuticals and biofuelsii. • Developed a comprehensive framework to assess Cultivation and processing forms a crucial part of the sustainability performance of palm oil production; economy and workforce around plantations, particularly • Assessed the sustainability performance of selected in Indonesia and Malaysia who produce 86% of the palm oil companies; world’s supplyiii. • Evaluated and ranked the selected companies based on However, unsustainable large-scale palm oil production has their current sustainability performance; and serious adverse impacts, such as: deforestation leading • Assessed the sustainability progress made by each to habitat loss and fragmentation for endangered species; company over the past 10 years (2009-2019). infringements of the land rights of local populations; air, soil and water pollution; and contribution to climate change.

Companies Assessed Stewart Investors selected the following nine palm oil producers for assessment, which does not include all major global producers. Figure 3 below presents a comparison of the production capacity of the selected producers.

Figure 3: Production capacity of selected producers in 2018

United Plantations Berhad (UP) Fresh Fruit Bunches (FFB) produced in 2018 Crude Palm Oil (CPO) produced in 2018 London Sumatra (Lonsum)

FGV Holdings Berhad (FGV)

Genting Plantations (GENP)

IOI Corporation Berhad (IOI)

Kuala Lumpur Kepong Berhad (KLK)

Wilmar International Limited

Astra Agro Lestari (AAL)

Sime Darby Plantation (SDP)

0 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 7

UNITED PLANTATIONS (UP) IOI CORPORATION BERHAD (IOI) Plantations: 50,000 ha Plantations: 178,047 ha Location: Malaysia (80%) and Indonesia (20%) Location: Malaysia (95%) and Indonesia (5%) Employees: 6,508 Employees: 28,000

SIME DARBY PLANTATION (SDP) KUALA LUMPUR KEPONG BERHAD (KLK) Plantations: 630,000 ha Plantations: 210,000 ha Location: Malaysia (35%), Indonesia (28%), PNG Location: Indonesia (51%), Malaysia (41%) and and Solomon Islands (15%) and Liberia (22%) Liberia (8%) Employees: 97,000 Employees: 40,000

Malaysia East Malaysia

PNG

Indonesia Solomon Islands

Liberia

Uganda

WILMAR INTERNATIONAL FGV HOLDINGS BERHAD LIMITED Plantations: 439,725 ha Plantations: 230,409 ha Location: Malaysia (95%) and Location: Indonesia (67%), Indonesia (5%) East Malaysia (25%) and Employees: 19,101 Africa (8%). Employees: 90,000 GENTING PLANTATIONS (GENP) Plantations: 247,400 ha ASTRA AGRO LESTARI (AAL) LONDON SUMATRA (LONSUM) Location: Indonesia (74%) and Plantations: 297,011 ha Plantations: 96,000 ha Malaysia (26%) Location: Indonesia Location: Indonesia Employees: 8,464 Employees: 47,218 Employees: 15,303 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 8 Research approach

Approach 10-YEAR PROGRESS REVIEW A hybrid quantitative and qualitative approach The research methodology combined a desktop review was used to compare the performance of and qualitative interviews to evaluate the sustainability companies over time, since it was not possible to performance of the companies. The assessment framework objectively rank each company for each year since was developed across the three themes of environmental, 2009. Instead the ten-year review considered: a social and governance responsibilities. The detailed constructed timeline for each company using media research approach is explained in Appendix 1. reports and other published information; interview data, particularly from industry experts; and historic CURRENT STATE ASSESSMENT AND RANKING SPOTT assessments. ISF developed an assessment framework with 3-4 criteria within each of the themes of environmental, social and ABOUT THE RESULTS governance sustainability for current performance as This research and report provide a baseline for shown in Figure 4. A total of 37 indicators sit under the Stewart Investors on the sustainability performance criteria that were derived from RSPO, POIG, SPOTT and other of palm oil producers included in the assessment. certification bodies in the palm oil sector. The complete Stewart Investors can use these findings to engage assessment framework is provided in Appendix 3. with these companies to improve their sustainability performance.

• The summary results illustrate how individual companies are performing against peers and their progress over time (pages 10 to 14). • The detailed company assessments show specific areas of weakness and opportunities to improve with individual companies (pages 15 to 33).

Figure 4: Assessment framework: criteria

ENVIRONMENTAL SOCIAL GOVERNANCE RESPONSIBLITY RESPONSIBLITY RESPONSIBILITY • Deforestation & biodiversity • Decent work & conditions • Leadership • Plantation management • Community & land rights • Responsible sourcing • Waste, water & pest • Smallholders & suppliers • Reporting & transparency management • Conflict resolution & • GHG emissions grievance SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 9

SUSTAINABILITY PERFORMANCE SPECTRUM The scores were calculated using a sustainability performance spectrum that assessed the company’s level of action against each indicator from 0 (no action) to 5 (systemic action) as seen in Figure 5. The scores of each company against each indicator are represented using a coloured “heat map” approach (e.g. red for no action, to green for systemic action) to highlight specific areas of strength and weakness (Figure 7).

This led to a composite score out of 185, which was aggregated for their environmental, social & governance performance The total scores were used to deliver a relative ranking of the companies’ current sustainability performance (Figure 6).

Figure 5: Sustainability performance spectrum

NO ACTION 0 Company takes no action to improve sustainability performance

COMPLIANCE DRIVEN ACTION 1 Company action is compliant with local laws

INCREMENTAL ACTION 2 Company action moves beyond compliance to eco-efficiency

STRATEGIC ACTION 3 Sustainablity actions are included in corporate strategy

INTEGRATED ACTION 4 Sustainability is embedded in company governance and mangement

SYSTEMIC ACTION 5 Sustainability is championed by company internally SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 10 Results

Figure 6: Overall ranking of the assessed companies in the three categories of environment, social and governance sustainability

United Plantations Berhad (UP) 51 56 31

IOI Corporation (IOI) 50 57 31 Sime Darby Plantation (SDP) 51 62 24

Wilmar International Limited 47 57 27

Kuala Lumpur Kepong Berhad (KLK) 46 45 29

London Sumatra (Lonsum) 49 49 13

FGV Holdings Berhad (FGV) 46 45 20 Environment Astra Agro Lestari (AAL) 43 46 17 Social Genting Plantations (GP) 41 43 21 Governance

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Company rankings COMMON AREAS OF STRENGTH INCLUDE: • Well defined polices on environmental, social and The results vary significantly between the highest and governance aspects of sustainability; lowest performing companies, showing that there is still a wide range of action being taken on sustainability by palm • Low incidence of documented grievances and good oil producers. management processes in place to resolve grievances; • Well documented plans and procedures for managing, The key points to note are: tracking and reporting on sustainability commitments, • The top three performing companies are United especially operations management; Plantations, IOI and SDP. However, even these best • Active industry engagement and leadership through performing companies have not attained best practice different alliances and working groups; and sustainability. • High levels of support and traceability in their supply chains. • SDP and United Plantations lead in environmental performance, SDP leads in social performance and United COMMON AREAS OF WEAKNESS INCLUDE: Plantations and SPD lead in governance performance. • Lack of monitoring and tracking mechanisms to • Wilmar and KLK closely follow the industry leaders. understand progress on public commitments and • Lonsum , FGV Holdings, Astra Agri Lestari (AAL), and sustainability polices; Genting Plantations (GENP) are the lowest scoring • Absence of reporting on the efficiency of operations companies that, although they have moved beyond management i.e. waste, water, chemical, pest, GHG compliance-led action, still need far greater action in all management; categories to reach the industry’s sustainability leaders. • Fair/decent work policies not linked to standard • The results are broadly consistent with the most recent procedures and protocols to uphold objectives; SPOTT assessment rankings from November 2018. • Some long-term unresolved grievances or lawsuits against the companies and their subsidiaries; and • Limited support provided to smallholders and independent suppliers. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 11

Figure 7: Performance of the different companies against the specific evaluation criteria. Deforestation policy Deforestation policy/ Deforestation commitment implementation policy conservation Biodiversity policy/commitment Biodiversity implementation New peatlands Existing peatlands management Soil Burning management Pest management Chemical management Waste management Water GHG management employment of Terms Facilities labour forced No association of Freedom welfare Child Gender equality & support Training & safety Health Labour rights violations impact Social FPIC processes Land conflict security Food pricing Fair & support Training Participation & systems Sustainability policy Memberships supply Certified Traceability Sustainability reporting action/lawsuits Legal & Anti corruption policy mechanisms mechanisms Grievance Environment Social Governance UP IOI SDP Wilmar KLK Lonsum FGV AAL GENP

Companies generally perform well on indicators related to 10 YEAR REVIEW: COMPANY COMPARISON policies for deforestation, biodiversity, fair work & labour The key sustainability milestones for the assessed rights, anti-corruption, grievance and sustainability reporting. companies, in the context of the broader palm oil production All of the companies assessed had recent updates to their industry, from 2009-2019 are described in Figure 8. policies to align them with RSPO and other international standards, which may be attributed to public pressure. It shows the industry wide institutional initiative taken up by investors and civil society as well as individual companies, Sustainability performance is still a concern as there is but implementation remains a concern and is increasingly a lack of public documentation on the implementation highlighted in the recent years. of policies. The dark grey indicators in Figure 7 strive to rate the level of implementation of actions on the ground, Key trends to note include: based on RSPO, NGO and media reports of grievances and • United Plantations has been consistently at the forefront violations of standards or laws. There have been many of sustainability performance in the cohort of assessed allegations and proven cases raised against several larger companies, being the first to be awarded both RSPO and producers, including formal RSPO complaints, despite RSPO NEXT certification; having policies in place. • RSPO suspensions are correlated to falling stock prices and divestment by both investors and customers; Most companies have a similar approach to sustainability reporting due to their RSPO requirements. Only two • Several companies, including Wilmar, IOI, GENP, Lonsum companies are not members of RSPO. Lonsum resigned and FGV Holdings, have been consistently referenced in from RSPO membership earlier this year and AAL has allegations for sustainability contraventions, even with never been a member. While both companies are pursuing NDPE policies in place; and national certification schemes like ISPO and MSPO, industry • Reports from activists and independent researchers experts who were interviewed for this study stated that they have recognised sustainability progress, particularly with believe the national schemes’ criteria to be far less rigorous regard to deforestation in companies’ owned operations, than RSPO. Therefore, these companies score lower on but are now calling for more action to ensure compliance these criteria. with NDPE policies throughout the supply chain. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 12

Results continued

Figure 8: Key events for the assessed companies and the sector in the last ten years

2008-9 2008/9 2010 ●●Five companies awarded RSPO certification: United ●●SDP awarded RSPO certification Plantations, Wilmar (2008); IOI, Lonsum & KLK (2009) ●●RSPO launched New Planting Procedure (NPP) ●●RSPO published Supply Chain Certification Standard ●●Forest People Programme (FPP) reported on human right (SCCS) (2009) violations and land acquisition (IOI, Wilmar) 2010 ●●Milleudefensie & WALHI reported on RSPO members ●●World Bank (WB) froze palm oil funding after FPP and subsidiaries breaching standards in Ketapang complaints, developed framework to engage with producers (SDP, IOI, GENP) 2013 2011/12 ●●ASI is the first organisation to undertake RSPO certification 2011-12 accreditation ●●FGV awarded RSPO certification ●●Wilmar launched 1st No Deforestation No Peat No ●●1m ha of RSPO certified plantations, 5m tonnes of Exploitation policy (NDPE) certified sustainable palm oil (10% global production) ●●High Carbon Stock Approach (HCSA) developed to ●●Norwegian Government Pension Fund divested from 2013 implement NDPE commitments 23 producers following public pressure: AAL, IOI (2011); ●●FPP reported on destructive impact on local communities GENP, Indofood Agri, KLK, Wilmar & United Plantations (United Plantations, Wilmar, GENP, SDP, IOI) (2012) ●●Greenpeace report on palm oil driven deforestation & tiger ●●International coalition of NGOs disappointed with extinction (Wilmar) RSPO extension to IOI to resolve breach of code 2014 2015 2014 ●●GENP awarded RSPO certification ●●RSPO suspended GENP for not submitting NPP; stock ●●Wall Street Journal exposed labour violations and human price fell by 2% trafficking in FGV operations ●●GENP membership reinstated after NPP submission 2015 ●●Ten international banks adopted “Soft Commodities 2016 Compact” for zero net deforestation in supply chains by ●●RSPO suspended IOI’s certification after 2020; none have currently divested from palm oil businesses Aidenvironment complaint. Stock price fell by 9%. Major companies (Unilever, Cargill) suspended 2016 2017 contracts ●●United Plantations is the 1st Asian company to be RSPO Next certified ●●IOI’s certification reinstated after corrective actions, including new sustainability policy ●●Rainforest Action Network (RAN) reported on sustainability risk for investors and banks (FGV, IOI, Indofood & Wilmar) ●●FGV & FELDA (parent) withdrew RSPO certifications in 2017 Malaysia after labour risks revealed in audit ●●Chain Reaction Research (CRR) reported 74% refining capacity in Indonesia & Malaysia covered by NDPE policies; ●●Amnesty International reported on human rights all assessed companies have NDPE policies abuses in palm oil production, (Wilmar)

2018 2019 2018 ●●RSPO-certified growers account for 19% of global palm oil production ●●Over 90 institutional investors urged RSPO to strengthen certification standards ●●Seven assessed companies still hold active RSPO SCCS certifications ●●RSPO Principles & Criteria revised with stringent guidelines to improve sustainability 2019 ●●RSPO suspended Lonsum’s certifications after RAN complaint. SIMP and Lonsum resigned from RSPO ●●Greenpeace reported on sustainability violations membership. by 25 palm oil producers (Wilmar, FGV, GENP, IOI & Lonsum) ahead of 2020 commitment by large brands ●●Norwegian Government Pension Fund divestsed from SDP to clean up supply chains. ●●CRR attributed year-on-year decline in palm oil related ●●Eyes on the Forest reported on Wilmar, IOI and SDP deforestation to NPDE policies, however defaulting mills purchasing illegally harvested FFBs appear in supply chains of companies with NDPE policies (SDP, IOI, and Wilmar)

1 (Wilmar (IP, MB,SG), IOI (MB, SG), FGV (MB, SG), UP (IP,MB,SG), KLK (IP, MB,SG), SDP (MB,SG), GP (IP, MB,SG)) SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 13

Figure 9: SPOTT assessments over time • Over the last 4 years of assessments, the overall trend 100 of companies has been to improve their transparency scores. Wilmar however reported a 1.5% decline in its 90 transparency score since its last assessment in 2017. IOI 80 also reported a dip in their SPOTT scores in 2016. One of 70 the reasons for IOI could be the temporary suspension of 60 their RSPO certificates, as their scores improved towards 50 the end of the year.

TT Score (%) 40 • Lonsum was only assessed as a separate company 30 SPO until 2016, and since then the assessment is for the 20 parent company Indofood Agri Resources. Lonsum’s last 10 SPOTT assessment dates to November 2018 and does 0 not account for the suspension of its RSPO certification in 2019. Jun 17 Jun 15 Jun 18 Jun 16 Jun 14 Sep 17 Sep 18 Sep 16 Sep 14 Most companies show progress in the SPOTT assessments GP Lonsum SDP over time as sustainability policies and practices are AAL KLK Wilmar established. However, a high level of transparency does not FGV IOI UP necessarily mean that a company is sustainable in terms Disclaimer: This graph has been compiled from data provided by SPOTT of implementation. While SPOTT includes some indicators (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl. focused on companies self-reporting progress against org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available. targets (e.g. water intensity of operations), it is primarily focused on the existence and availability of public policies 10 YEAR REVIEW: SPOTT SCORES and commitments. For the past five years, historic SPOTT assessments offer a more detailed and transparent comparison of the assessed companies (Figure 9). About SPOTT Key points to note include: SPOTT – Sustainability Policy Transparency Toolkit • As of November 2018, United Plantations, Wilmar and SDP – is a free, online platform supporting sustainable scored highest within the group of assessed companies. commodity production and trade, developed Across all 70 palm oil producers SPOTT assesses, United by ZSL (Zoological Society of London). SPOTT Plantations ranks at 5th worldwide and 2nd in Asia. assesses 70 palm oil producers and traders on • The two lowest scoring companies from the assessed the public disclosure of their policies, operations group, AAL and GENP, rank at 36 and 37 respectively in and commitments to environmental, social and the overall SPOTT ranking. AAL scores poorly primarily governance (ESG) best practice. Each company because they are not an RSPO member and therefore receives a percentage score as a measure of its cannot be certified under the RSPO scheme. transparency in relation to 119 ESG risk indicators across 10 categories, aligned with corporate reporting • When the SPOTT assessments were initiated in 2014, initiatives (including the UNGC, RSPO ACOP, CDP and SDP was ranked highest among this cohort, even with a GRI, etc.). medium transparency score range, followed by United Plantations, Wilmar and KLK. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 14

Results continued

Key things to note for investors While there have been steady sustainability improvements in the sector over the last decade, there are a few key caveats for investors to note now and into the future. In order to accurately understand the current situation it is necessary to engage with key stakeholders in the palm oil production chain – workers, smallholders & independent suppliers, and indigenous communities on whose land the plantations are. We also recommend that audits to track progress in the future consult with these stakeholders.

It is still very difficult to determine whether Land acquisition and FPIC processes must be sustainability policies are being implemented, strengthened to protect the rights of indigenous particularly by smallholders and suppliers. Most land owners. RSPO currently seeks to protect companies, including those assessed in this research, indigenous land rights itself by responding to public have adopted NDPE sourcing policies. This has led reports, and by facilitating formal grievances raised directly to a reduction of deforestation linked to palm from other organisations and communities. However, oil production. However, many smaller companies in these conflicts often last years without adequate their supply chain are not complying with the NDPE resolution and some cases are closed due to the policies. In addition, public monitoring and reporting death or absence of the complainants. It is not on compliance is rare with only a few companies clear whether communities have enough agency launching real-time tracking systems. Regular, and resources to engage in the resolution process, transparent and comprehensive reporting against especially when compared to a large company and all major elements of sustainability policies must be the drivers for this require further investigation. made standard practice for all palm-oil producers.

Beyond implementation of existing policies, the Risk assessment and management processes perspective of indigenous communities needs must be strengthened to protect the worker to be included while defining commitments. rights. Modern slavery is unfortunately a reality Besides fulfilling basic food and resource needs of global palm oil production as highlighted by and environmental conservation priorities, many various civil society reports. While companies have indigenous people have a deep emotional and commitments and policies to uphold human rights, spiritual connection with forests which is often there are few mechanisms to understand and assess not acknowledged in assessment methodologies, the risk at different facilities. This lack of definition alienating people from their land. and monitoring puts workers especially casual or migrant workers at risk. Children and women are other vulnerable groups that should be monitored. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 15 Company Profiles SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 16 United Plantations Berhad

Current state assessment Environment Deforestation policy United Plantations Berhad is a medium sized plantation group in Malaysia (80%) with a Deforestation small but growing interest in Indonesia (20%). With a little over 200,000 MT CPO production policy/commitment implementation in 2018, it is the smallest company in this assessment. The plantation group structure is Biodiversity divided by United Plantations Berhad in Malaysia as well as 95% ownership of PT Suriya conservation policy Sawit Sejati (PT SSS) in Indonesia. Its total cultivated landbank covers approximately 50,000 Biodiversity policy/ ha (90% palm oil) supported by 6,508 employees. The Malaysian operation has been fully commitment certified under RSPO since 2008 and MSPO in 2018. Indonesian plantations are still in the implementation process of getting RSPO certified. The first certified palm oil consignment to Europe in New peatlands 2008 was sourced from United Plantations. United Plantations subsidiaries are engaged in Existing peatlands downstream activities such as refining, producing, and packaging oils and fats based on Soil management certified palm oil. Burning Pest management Chemical management Waste management Water management 78% 70% 77% GHG management Social Terms of employment Facilities ENVIRONMENTAL SOCIAL GOVERNANCE No forced labour PERFORMANCE PERFORMANCE PERFORMANCE Freedom of association Child welfare United Plantations has United Plantations’ United Plantations shows Gender equality had a strong NDPE policy social policies are strong. sustainability leadership, Training & support in place since 2014, with However, the supporting particularly in Malaysia Health & safety new planting procedures plans and specific reports where their plantations Labour rights violations in line with HCV and HCS are generally not provided, were certified by RSPO and strong conservation which has held back NEXT in 2017. All of its own Social impact measures. Management their overall score. Again, production is traceable. FPIC processes plans are in place with smallholders are not yet However, their Indonesian Land conflict a GIS database and fully compliant with policies operations are still Food security public targets. These and certifications, which is lagging, with no national or Fair pricing policies are applied to targeted for 2021. Currently international certification. Training & support suppliers through their self none of their smallholders This is expected by 2020. Participation assessment. The company are RSPO certified. The Some information is not Governance is committed to strong company states that fully available, including Sustainability policy plantation management it is fully committed to anti-corruption measures, & systems and pest management FPIC, through an external reports of legal compliance Memberships practices, however has not consultant LINKS, however and grievances, and Certified supply published its waste or water there are still some smallholder land use maps. Traceability management plans. On unresolved land disputes The business appears to Sustainability reporting average, it demonstrates in Indonesia. While there be moving from strategic Legal action/lawsuits integrated environmental is a spread across all towards integrated Anti corruption policy action. criteria, most activities action. & mechanisms fall between strategic Grievance mechanisms and integrated action. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 17

United Plantations Berhad: 10 year assessment

PROGRESS SPOTT assessment results over time

In Malaysia, United Plantations has a strong history of 100 sustainability leadership. On 26 August 2008, it became the 90 world’s first company to have all Malaysian plantations RSPO 80 certified and deliver the first certified palm oil shipment to 70 Europe. These plantations were recertified in both 2013 and 60 2017. However, they have faced criticism for continuing with 50 “business as usual” in Indonesia1. Certification in Indonesia

TT Score (%) 40 is still in progress. The company had a zero burning policy 30 SPO and Good Agricultural Practice in place since 1989 and no 20 new development on peat since 2010. There are examples 10 of strong social sustainability over time, with the company 0 being awarded for its OHS standards, corporate social 2014 2015 2016 2017 2018 responsibility practice and estate management. The company sees its green credentials as a major competitive This graph has been compiled from data provided by SPOTT (www.spott.org), advantage. In general, the sustainability performance of as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that United Plantations appears to be on a steady upwards SPOTT may have more up-to-date data available. trajectory with near-term targets for further improvements over the coming years.

2012 2018 ●●Featured in German ●●RSPO certification for ZDF documentary, Indonesia “How everyday ●●Issued MSPO products destroy the certification rainforest”, which was ●●Commendation 5 rebutted by United for sustainability 2009 ●●Runtu community reporting from ACCA ●●Awarded “Best complaint over land 2016 MaSRA7 Managed Estate” clearing without ●●Published first annual ●●Indonesian land by the Minister of consent and Sustainability Report dispute from 2014 2 Plantations Industries compensation ●●Conservation efforts in completion stage, 3 and Commodities ●●Norwegian Pension 2014 and partnership with claimant to join fund divested10 ●●NDPE Policy in place Copenhagen Zoo6 Plasma scheme9

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2011 2013 2017 2019 ●●Awarded Malaysian ●●Engaged with Runtu ●●1st company in Asia to ●●Sustainable Business prize for Best community over achieve RSPO NEXT award for climate CSR Practice and compensation plans certification change and special National Excellent mediated by Camat ●●Revised Sustainability recognition on land 8 Occupational Safety authorities and case Policies use and biodiversity and Health4 closed2 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 18 IOI Corporation Berhad (IOI)

Current state assessment Environment Deforestation policy IOI’s core business is plantations in Malaysia and Indonesia spread across 178,047 ha in Deforestation 90 estates. Upstream activities include seed breeding, cultivation and crop oil extraction; policy/commitment implementation and downstream resource-based manufacturing activities include palm oil refining, Biodiversity palm kernel extraction, oleochemicals and specialty fats and oils across 15 mills with conservation policy products exported to more than 60 countries worldwide. Annual production of CPO is in Biodiversity policy/ excess of 800,000 tonnes. IOI employs more than 28,000 employees, with 71% male and commitment 29% female employees. implementation New peatlands Existing peatlands Soil management Burning 77% 71% 77% Pest management Chemical management Waste management Water management GHG management ENVIRONMENTAL SOCIAL GOVERNANCE Social PERFORMANCE PERFORMANCE PERFORMANCE Terms of employment IOI adheres to a NPDE IOI has a strong set of IOI has a dedicated Facilities policy and has adopted policies to support decent Sustainable Palm Oil Policy No forced labour a HCS/landscape work for employees, both that is supported by a Freedom of association approach to its plantation local and migrant. They are series of other environment Child welfare planning. There are strong developing internal audit and social polices. It has Gender equality measures in place for processes to address labour an efficient multi-channel Training & support peatland conservation rights concerns. Social grievance mechanism Health & safety and restoration in line with development programs that allows for anonymity. Labour rights violations RSPO guidelines. Chemical for children have been There is currently one Social impact management is quite especially successful. IOI outstanding grievance FPIC processes advanced but waste and has strong processes for its that IOI is dealing with Land conflict water management plans social impact assessment through FPIC processes. Food security are not very well defined and FPIC processes. There They regularly report based Fair pricing publicly. GHG reporting and is a program in place for on the GRI guidelines in Training & support monitoring is quite high. training and supporting line with the SDGs. IOI’s Participation Overall its performance smallholders, though governance performance for environmental they do not have many is integrated, that sets Governance sustainability is smallholders. Thus there is the stage for a strong Sustainability policy & systems integrated moving also limited action on food sustainability practice. Memberships towards systemic action. security and fair pricing initiatives with small holders Certified supply and local communities. Traceability They demonstrate Sustainability reporting strategic action with Legal action/lawsuits respect to social Anti corruption policy sustainability. & mechanisms Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 19

IOI Corporation Berhad (IOI): 10 year assessment

PROGRESS SPOTT assessment results over time

Over the last few years, IOI has shown a lot of growth, 100 especially on plantation and conservation related aspects. 90 Following IOI’s RSPO certification suspension in 2016, 80 the company refocused its approach to stakeholder 70 engagement and communication. While they did have 60 sustainability policies in place earlier (2014), they have 50 been recently updated (2017-18). Over time there is more

TT Score (%) 40 visibility of their plans and achievements. From 2017, IOI 30 SPO has been improving its labour practices with its initiation of 20 standalone sustainability reporting. IOI has been working 10 with the community, to resolve a land conflict first reported 0 in 2010, in line with RSPO guidelines employing FPIC 2014 2015 2016 2017 2018 processes. RSPO traceability certification started in 2009 with a plan to 100% by 2013 (deferred to 2020). In 2019, This graph has been compiled from data provided by SPOTT (www.spott.org), 98.5% of the estates were RSPO certified, highlighting their as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that commitment to the cause. SPOTT may have more up-to-date data available.

2016 2011 ●●RSPO certification 2018 ●●International coalition suspended post ●●Sustainability Policy of NGOs disappointed Aidenvironment updated 2 with RSPO extension complaint ●●98.5% estates RSPO to IOI for resolving ●●Major buyers cut ties certified breach of code of 7 after suspension ●●Aidenvironment conduct11 2014 ●●RSPO certification complaint transferred ●●Launched ●●Norwegian pension reinstated after new to IMU for monitoring2 fund divests14 Sustainability Policy sustainability policy ●●Finnwatch reports ●●ISCC certification for & plans improvement in 2009 2012 Malaysian operations ●●Milleudefensie ●●IOI withdrew from ●●Greenpeace working conditions ●●Uploaded its millionth & WALHI report Long Teran Kanan report links IOI and but concerns with ton of segregated that Ketapang mediation process other traders to informal work, and RSPO certified palm 3 8 subsidiaries and revived court deforestation & fires temporary workers oil don’t meet RSPO injunction against ●●Finnwatch reports ●●CRR reports that 15 standards seven villagers for ●●Finnwatch report on improvement companies in 9 ●●Initial RSPO illegal harvesting oil labour violations but problems in supply chain still certification awarded palm plantations13 recruitment process10 deforesting16

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2013 2015 2017 2019 ●●Land conflict ●●RSPO certification for ●●Aidenvironment ●●First standalone ●●IOI’s resolution plan complaint by all mills and estates in complaint on illegal sustainability report for Long Teram Kanan Long Teran Kanan Malaysia deforestation released case accepted by 1 community ●●FoE report on IOI’s and plantations ●●Announced 3 community and under 1 ●●Milleudefensie report financial stake in on peatlands in labour policies; RSPO review on plantations companies involved West Kalimantan, no recruitment 2 without environmental in deforestation and Indonesia fees, freedom of approvals, land grab12 association and unauthorised paying living wage6 deforestation, ●●Greenpeace alleged peatland IOI sourcing palm oil encroachment, fires from companies till 5 and land conflicts clearing rainforests4 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 20 Sime Darby Plantation (SDP)

Current state assessment Environment Deforestation policy Formerly under multinational conglomerate Sime Darby Berhad (SDB), Sime Darby Deforestation Plantation (SDP) was listed on Bursa Malaysia on 30 November 2017, following a strategic policy/commitment implementation demerger to create a “pure play” entity. As a globally integrated plantation company, SDP is Biodiversity involved in the full spectrum of the palm oil value chain, from upstream to downstream palm conservation policy oil activities, R&D, renewables and agribusiness. SDP has 630,000 ha oil palm plantations. Biodiversity policy/ Upstream operations encompass 250 estates and 73 mills located in Malaysia, Indonesia, commitment PNG, Solomon Islands, and Liberia. Global operations across 17 countries are supported by implementation 97,000 employees. SDP is the world’s largest oil palm plantation company by planted area, New peatlands accounting for about 4% of total global production of CPO with an annual production of over Existing peatlands 2.6m MT(2018) and 20% of the world market share for Certified Sustainable Palm oil (CSPO)1. Soil management Burning Pest management Chemical management Waste management 78% 77% 60% Water management GHG management Social Terms of employment Facilities ENVIRONMENTAL SOCIAL GOVERNANCE No forced labour PERFORMANCE PERFORMANCE PERFORMANCE Freedom of association SDP has strong SDP has a suite of policies SDP started their biannual Child welfare deforestation and to support their employees standalone sustainability Gender equality biodiversity conservation – migrant and permanent. reporting in 2011. Their Training & support commitments. They SDP directly recruits sustainability policy Health & safety launched an open access migrant workers, avoiding was established in Labour rights violations online tool to trace palm oil agencies and agents. They 2008. The Main Board is Social impact supply to the mill level to issue annual disclosures on accountable for the group’s FPIC processes create a deforestation free efforts to address human sustainability commitments Land conflict supply chain. Sustainable trafficking in their supply and performance through Food security agricultural, IPM and no chains. Currently they have the establishment of a Fair pricing burning practices were two open conflict cases Sustainability Committee. Training & support introduced in 1970-1990. that are under RSPO review. SDP is 97% RSPO certified Participation The no peat plantation All their smallholders in and 100% MSPO certified. Governance policy has been in place PNG and Solomon islands Their grievance register since 2012. They have a are RSPO certified and the is online with a summary Sustainability policy & systems strong waste management company is working with of actions and findings. Memberships program, however there other regions to achieve SDP is also working with Certified supply is no publically available similar targets. Overall the other stakeholders. The waste management social performance also governance performance Traceability plan or targets. Overall demonstrates integrated is aligned with integrated Sustainability reporting its environmental action. action. Legal action/lawsuits sustainability Anti corruption policy & mechanisms performance displays integrated action. Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 21

Sime Darby Plantation (SDP): 10 year assessment

PROGRESS SPOTT assessment results over time

SDP initiated their sustainability practices in the 1970s, 100 and have been leaders in the industry’s sustainability 90 movement. Starting from 2008, they have achieved almost 80 complete RSPO traceability certification to mill. They have 70 also launched various policies and monitoring mechanisms 60 to track environmental and social concerns. Over the years 50 they have dealt with complaints from communities and TT Score (%) 40 NGOs on their handling of labour and forest issues, with one 30 SPO legal review active under RSPO. They are currently engaged 20 with the communities in Liberia to resolve land rights 10 issues through dialogue. In general they seem to have been 0 improving their processes and are a front runner in terms of 2014 2015 2016 2017 2018 sustainability performance in the sector. Note: There have been allegations against SDP on their This graph has been compiled from data provided by SPOTT (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was rubber plantations. obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2018 ●●Launched Innovation & Productivity Charter ●●99.9% CPO, 100% palm kernel and 87.9% refined palm 2012 traceable to mill 2009 ●●Largest producer of ●●RSPO legal review ●●Milleudefensie & CSPO for PT MAS case WALHI report that ●●Columbian university initiated3 subsidiaries’ started report on no FPIC for work without required ●●CRR report on Liberia land7 approvals8 2016 companies in ●●Liberian communities ●●Launched supply chain still 2010 withdrew RSPO 2014 Responsible deforesting11 2 14 ●●100% Malaysian units complaint ●●Signed Sustainable Agriculture Charter ●●Liberia finds SDP RSPO certified ●●Complaints over Palm Oil Manifesto ●●CRR report highlights liable for breaching ●●2 million MT CSPO rights to customary ●●Commenced HCS deforestation concession produced land in PT MAS3 study concerns in Liberia15 agreement12

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2011 2013 2015 2017 2019 ●●First RSPO SCCS & ●●First fully segregated, ●●PNG smallholders ●●Launched Human ●●Online platform ISCC certifications traceable, RSPO complaint on Rights Charter Crosscheck to track ●●FPP complaint on certified refinery environmental, ●●Won Edison Award deforestation in 9 land acquisition and ●●Steering Committee humanitarian welfare for Energy & supply chain 1 clearing in Liberia2 on UNGC FABPs and pricing concerns Sustainability ●●First in Asean ●●RSPO closes PNG ●●Won award for Best Business and Human 1 complaint Overall Reporting, Rights Disclosure 10 ACCA MaSRA13 Study ●●SOMO & CNV ●●Norway’s Government 6 International report Pension Fund divests on labour rights violations4 ●●Complaint against PT MG for non payment of salary5 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 22 Wilmar International Limited (Wilmar)

Current state assessment Environment Deforestation policy Wilmar International Limited one of the world’s largest palm oil plantation owners, with Deforestation 230,409 ha of plantations in Indonesia (67%), East Malaysia (25%) and Africa (8%). Wilmar policy/commitment implementation owns an additional 46,000ha in Africa through joint ventures, and manages a further Biodiversity 184,000 ha through smallholder schemes. The company as a whole spans 50 countries conservation policy and regions with a workforce of over 90,000 people across the palm oil supply chain and in Biodiversity policy/ other agribusiness sectors. Wilmar centres its sustainability strategy around its NDPE Policy, commitment which has been in place since 2013. implementation New peatlands Existing peatlands Soil management Burning 72% 71% 67% Pest management Chemical management Waste management Water management GHG management ENVIRONMENTAL SOCIAL GOVERNANCE Social PERFORMANCE PERFORMANCE PERFORMANCE Terms of employment Wilmar’s NDPE policy has Wilmar scores low on Wilmar has been a member Facilities been in place since 2013 its social sustainability of RSPO since 2004 and No forced labour and HCV assessment metrics, generally in relation currently has 76% of Freedom of association since 2008, however to its smallholders and its plantations certified Child welfare the key issue has been suppliers and how these (681,000MT). The company Gender equality compliance by suppliers impact FPIC concerns. We has a strong grievance Training & support and smallholders. There could not see evidence for procedure in place, with Health & safety have been 38 deforestation fair pricing for smallholders transparent reporting of Labour rights violations grievances filed against the or a strong and consistent those filed against the Social impact company since 2018. The SEIA. Wilmar’s policies are company. There are still FPIC processes company has a target of generally strong however regular allegations raised Land conflict zero deforestation across the evidence of actions against Wilmar’s suppliers Food security supply chain 2020 onwards, (e.g. specific reports, plans and smallholders, largely Fair pricing halting supply from non- and targets) that support related to deforestation Training & support compliant suppliers from these are not made public, and FPIC violations, and Participation 2019. Wilmar has a wide therefore are not possible there are currently two range of scores across to assess across many RSPO grievances under Governance the indicators, with the metrics. In general, the investigation. Wilmar Sustainability policy & systems average sitting between company is performing at is close to integrated Memberships strategic and integrated a strategic level for social action on sustainability action. action. governance, which Certified supply can be achieved if Traceability traceability is improved. Sustainability reporting Legal action/lawsuits Anti corruption policy & mechanisms Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 23

Wilmar International Limited (Wilmar): 10 year assessment PROGRESS SPOTT assessment results over time

As a larger company, there are substantially more 100 sustainability issues raised in the media, both positive 90 and negative. However, over the past 10 years Wilmar has 80 been a sustainability leader in many ways. The critical gap 70 is still whether its suppliers are responsible for ongoing 60 deforestation or abusing human rights with multiple 50 RSPO complaints filed almost annually. In the past five TT Score (%) 40 years, Wilmar has been working to improve supplier and 30 SPO smallholder compliance with its policies, and has a target 20 for zero deforestation across the supply chain 2020 10 onwards. If this is achieved, it will dramatically improve its 0 performance against our framework. 2014 2015 2016 2017 2018

This graph has been compiled from data provided by SPOTT (www.spott. org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2016 ●●2,700 smallholders RSPO certified ●●Cofounds Global Agribusiness Alliance 2018 2014 ●●Published ●●Recognised by CDP ●●Released 1st annual whisteblowing & equal as most improved on Sustainability Report opportunity policy 16 deforestation action ●●IPOP disbands ●●Kapa case 2012 ●●Announced HCS ●●RAN report on transferred to IMU for ●●FPP complaint on Approach and IPOP suppliers clearing monitoring6 11 NPP impact on ●●RAN report on threats forests ●●Decent Rural Living communities3 to Leuser12 ●●Land dispute in Initiative 7 ●●RRDC complaint on ●●Nagari Kapa, FPP & Indonesia ●●Supplier deforestation legality of Nigerian HUMA complaint on ●●Compensation & FPIC allegations15 concessions4 6 land conflict complaint in ●●Greenpeace report 8 2009 ●●Norwegian sovereign ●●Greenomics report Indonesia ignites protests, wealth fund divests1 ●●Released 1st biennial on noncompliance ●●Compensation executive resignation Sustainability Report ●●Launched of supply chain with complaint from Desa & cessation of supply environmental policy NDPE13 kapuk community9 from Gama

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2011 2013 2015 2017 2019 ●●FPP complaint on ●●Announced NDPE ●●1st company to ●●Partnership with Verite to ●●Updated OHS & land conflict2 policy disclose suppliers combat systemic labour traceability policy ●●FPP land conflict case names & locations issues in supply chain ●●Published Women Charter closed2 ●●Updated ●●Cofounded PONGO and Human Rights ●●FPP NPP case closed environmental policy Alliance Framework post action on HCV and OHS policy ●●Updated child protection ●●Ranked top Singapore- FPIC & compensation ●●Published grievence policy listed company for human 3 19 issues procedure ●●Indonesian cases rights disclosure ●●RRDC case closed4 ●●Ugandan farmers dismissed due to lack of ●●Ranked highest in 7,8 ●●FoB complaint on sue over palm oil land response Greenpeace deforestation 14 19 breaching code of grab ●●Developed supplier action report conduct5 ●●FoB case closed reporting tool ●●Launched child rights with compensation ●●RSPO verdict: Kapa lands program transferred to other taken without FPIC6 ●●Further supplier cases & location deforestation and FPIC 5 ●●Greenpeace climate permit revoked 20 report scores Wilmar mid allegations to low17 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 24 Kuala Lumpur Kepong Berhad (KLK)

Current state assessment Environment Deforestation policy KLK is the 3rd largest Malaysian palm oil producer with approximately 210,000 ha plantations Deforestation in Malaysia and Indonesia. KLK produces and processes palm products, natural rubber, and policy/commitment implementation cocoa on its plantations. The Company ,through its subsidiaries, mills and refines oil palm Biodiversity products, cultivates ramie, and manufactures oleochemicals, soap, esters, latex gloves, conservation policy toiletries, and parquet flooring products. KLK employs approximately 40,000 staff. Biodiversity policy/ commitment implementation New peatlands Existing peatlands Soil management 71% 56% 72% Burning Pest management Chemical management Waste management Water management ENVIRONMENTAL SOCIAL GOVERNANCE GHG management PERFORMANCE PERFORMANCE PERFORMANCE Social Terms of employment KLK has a public NDPE KLK has a strong set of Since 2016, KLK has and no burning policy, policies to support decent published annual Facilities with a commitment to work for employees. sustainability reports in No forced labour support smallholders to However, there is not a clear line with GRI standards. Freedom of association zero deforestation. There breakdown of the workforce In 2019 RAM Consultancy Child welfare is reference to a number including temporary workers assigned KLK a gold Gender equality environmental management and union representation. sustainability rating. KLK Training & support plans (waste and water The SEIA and the number has been a member of Health & safety management, conservation of grievances related to RSPO since 2004 and has Labour rights violations approach), which are not discrimination are also approximately 40% of Social impact made public to evaluate not published. While the its supply certified. While FPIC processes targets and performance. OHS plan is strong, there the business espouses Land conflict The SPOTT assessment of are questions raised traceability, there are still Food security KLK also notes that there is around recent fatalities. significant gaps that will Fair pricing no public landbank and that FPIC policies are in place, be addressed by Dec 2020. Training & support there is a ‘moving target’ however there seem to be Performance against this Participation for emissions reduction. regular conflicts. There is target should be reviewed. Agricultural practices are no reporting of smallholder All published grievances Governance strong. Most commonly, compliance with company appear to be resolved. The Sustainability policy & systems KLK demonstrates policy. In general, KLK is company demonstrates Memberships strategic action towards moving from incremental strategic action Certified supply the environment. to strategic action. towards sustainability governance. Traceability Sustainability reporting Legal action/lawsuits Anti corruption policy & mechanisms Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 25

Kuala Lumpur Kepong Berhad (KLK): 10 year assessment

PROGRESS SPOTT assessment results over time

KLK has been one of the most highly criticised companies 100 for conflicts with communities in Liberia; threatened social 90 conflict and deforestation in Papua New Guinea; and 80 unresolved labour and deforestation risks in Indonesian 70 and global operations. After facing years of public criticism 60 and campaigning from civil society, KLK has moved to 50 new sustainability standards, pledging its commitment TT Score (%) 40 to responsibly produce and source palm oil. But the 30 SPO real test will be in implementation. As mentioned in the 20 current state assessment, the key elements that should 10 be reviewed going forward include: the establishment of a 0 public landbank; shifting GHG emission reduction targets; 2014 2015 2016 2017 2018 publishing and performance against social sustainability measures; and the % of certified output. This graph has been compiled from data provided by SPOTT (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2014 ●●All plantations certified by RSPO 2012 ●●Sawit Watch ●●Launched reports on child sustainability policy 2016 labour2,recruitment ●●OCEAN complaint to ●●Published first by blacklisted RSPO closed4 Sustainability and Corporate contractor, forced ●●Planned expansion 6,7 Responsibility Report labour in Collingwood taken ●●Majority interest to National Court of ●●Withdraws operations 2018 in PNG company PNG, KLK lost two of from Collingwood ●●Releases new 10 Collingwood three leases5 Bay Sustainability Plantation claiming ●●RAN reports ●●SDI complaint on FPIC Standards, supported 3 user rights over on Rainforest in Liberia closed by RAN 2 2009 40,000 ha Destruction, Land ●●Responds to RAN ●●Accused of bribing ●●Initial RSPO ●●Norwegian sovereign Grabbing and Child report, which is again River Cess Community certification awarded wealth fund divests1 Labor2 rebutted Chiefs in Liberia8

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2013 2015 2017 ●●Reports of forced ●●SDI complaint on land ●●Releases ●●All palm oil mills in labour and abuse by clearing in Liberia sustainability Malaysia fully certified labour contractor CV without FPIC3 progress report under MSPO Sinar Kalimantan in ●●OCEAN complaint on ●●RAN update yet to ●●Ranked lowest in 6 PT 198 customary ownership resolve conflicts the Greenpeace ●●Contractor of lands4 in supply chain – deforestation report9 6 blacklisted ●●Further evidence of deforestation, human child labor in East and labour rights, and 6 Kalimantan2 social conflict ●●Forest clearing in PT ●●Negotiations between KMA II) and PT JEK2 EPO and SDI on Liberia complaint3 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 26 London Sumatra (Lonsum)

Current state assessment Environment Deforestation policy Lonsum is a subsidiary of PT Salim Ivomas Pratama Tbk (SIMP), which is a subsidiary of Deforestation Indofood Agri Resources Ltd, a plantation arm of Indofood Sukses Makmur Tbk which is policy/commitment implementation itself controlled by Anthoni Salim, owner of the Salim group. Lonsum manages 150,000 Biodiversity ha through 38 company-owned and 14 smallholder farmer estates of planted oil palm, conservation policy rubber, tea and cocoa plantations spread across Indonesia’s four largest islands (Sumatra, Biodiversity policy/ Java, Kalimantan and Sulawesi), with palm oil being the company’s primary commodity commitment over 96,000 ha. Lonsum operates 12 palm oil mills in Sumatra and Kalimantan, with a total implementation annual FFB processing capacity of up to 2.6 million tonnes. The group has a total of 15,303 New peatlands permanent employees. Existing peatlands Soil management Burning Pest management 75% 61% 32% Chemical management Waste management Water management GHG management Social ENVIRONMENTAL SOCIAL GOVERNANCE Terms of employment PERFORMANCE PERFORMANCE PERFORMANCE Facilities No forced labour Lonsum has been achieving Lonsum has a set of policies While Indofood Agri (the zero deforestation since to support decent work parent company) has had a Freedom of association the last 2 years and no new for employees. However, sustainability policy in place Child welfare peat plantations since 2013. there have been various since 2013, sustainability Gender equality 100% plantations have HCV allegations on labour does not seem well Training & support assessments. There is an violations and its RSPO embedded in governance, Health & safety opportunity now to plan and certification was suspended which has received Labour rights violations implement restoration and due to non-compliance with negative publicity. Lonsum Social impact conservation strategies. labour laws. The company was a member of RSPO FPIC processes Lonsum also has reported reports that processes are since 2004 but resigned Land conflict on waste, waste and in place for SEIA and FPIC from RSPO membership Food security GHG emissions and the however there is limited earlier this year following Fair pricing reductions over time. They published information. While disagreements with the Training & support have adopted integrated the OHS plan is strong, Complaints Panel on how Participation pest management there are questions raised the labour violations case Governance practices. However around recent fatalities. was handled. Lonsum is in Sustainability policy there is no evidence of There is a programme the process of getting 100% & systems appropriate management to help smallholders get ISPO certified by 2019 with Memberships and handling training. Their ISPO certified (now having 77% already certified. There Certified supply sustainability actions are left RSPO). They display is no published information Traceability strategic. incremental actions in on open grievances other Sustainability reporting this space. than the matter with RSPO. Thus, their governance Legal action/lawsuits actions are also Anti corruption policy & mechanisms incremental. Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 27

London Sumatra (Lonsum): 10 year assessment PROGRESS SPOTT assessment results over time

Over the last 5 years, Lonsum appears to have made some 100 progress on no deforestation and no peat plantations. The 90 first partial certification from RSPO was received in 2009. 80 There seems to be an upward movement since then with a 70 100% target for 2016 that moved to 2019. Currently they are 60 pursuing ISPO certification. 50

However, in 2016, complaints of over 20 violations of the TT Score (%) 40 RSPO’s standard and 10 violations of Indonesian labour laws 30 SPO were raised. In early 2019, following an audit, RSPO ordered 20 the suspension of their sustainability certificates. Unhappy 10 with how the audit was handled, SIMP and Lonsum resigned 0 from RSPO membership. Shortly after RSPO issued a notice 2014 2015 2016 2017 2018 to terminate their membership. This graph has been compiled from data provided by SPOTT (www.spott.org), There is limited historic reporting on social performance. as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that Lonsum currently has community programmes across 100% SPOTT may have more up-to-date data available. of its estates. While the annual reports (available since 2009) have some sustainability reporting, the sustainability policy and standalone reporting only began in 2017. Compared to other companies, Lonsum does not have a strong sustainability track record.

2016 2018 ●● Complaint filed by ●● 77% CPO is ISPO RAN, OPPUK and certified ILRF against Lonsum ●●Greenpeace report for labour violations, alleges forest clearing lack of adequate 2009 on peatlands6 ●●Desa Pergulaan 2012 health & safety community complaint ●●Norwegian sovereign equipment, and ●● Nestle severed ties 8 against illegal land fund divested from undermining freedom with Indoagri acquisition2 Indofood (parent)1 of association3, 4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2011 2013 2015 2017 2019 ●●Norwegian sovereign ●● Engaged in bilateral ●●RAN sustainability ●●Updated ●●SIMP and Lonsum fund divested from negotiations with assessment noted Sustainability Policy resign from RSPO 7 Lonsum Desa Pergulaan presence of policies ●●Published first membership 2 community but fell short on standalone disappointed with ●●Launched stakeholder/investor Sustainability report Complaints Board demands7 handling of case Sustainability Policy ●●PepsiCo suspended ●●Norwegian pension palm oil procurement ●●RSPO terminates SIMP fund divested from form Indoagri8 & Lonsum membership Frist Pacific (Indofood for non compliance with is a subsidiary)9 labour case3 ●● Desa Pergulaan case closed on termination2 ●●Independent legal review noted Lonsum was in compliance with Indonesian laws and violations not substantiated. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 28 FGV Holdings Berhad

Current state assessment Environment Deforestation policy Incorporated in 2007 as a private limited company, FGV initially operated as the commercial Deforestation arm of Federal Land Development Authority (FELDA) prior to its listing on Bursa Malaysia policy/commitment implementation in 2012 as Felda Global Ventures Holdings Berhad. FELDA was set up to provide land for Biodiversity the landless and qualified rural poor and to resettle into areas that were to be developed conservation policy and productively cultivated to provide income for families. The settlers were resettled Biodiversity policy/ in structurally managed schemes. FGV’s palm upstream is their largest revenue earner commitment and forms the core of the company, with a total landbank of 439,725 Ha in Malaysia and implementation Indonesia, producing around 3 million tonnes of CPO annually. Downstream activities include New peatlands refining, processing and marketing activities related to the conversion into value-added Existing peatlands products. 30% of the 13 million tonnes FFB comes from FGV plantations and the balance Soil management from FELDA settlers and third parties. Burning Pest management Chemical management Waste management Water management GHG management 71% 56% 50% Social Terms of employment Facilities No forced labour Freedom of association ENVIRONMENTAL SOCIAL GOVERNANCE Child welfare PERFORMANCE PERFORMANCE PERFORMANCE Gender equality FGV introduced a group FGV has employee policies FGV has taken steps in the Training & support sustainability policy in in place, but has been last two years to strengthen Health & safety 2017, though it had NDPE accusations of labour and their sustainability Labour rights violations commitments in 2015. In human rights violations policies. This is following Social impact spite of these policies, confirmed through RSPO and the voluntary withdrawal FPIC processes there have been complaints internal audits. The updated of RSPO certification and about deforestation. A policy reinforces comittment the sanctions imposed Land conflict significant achievement is to labour standards, on certain mills for RSPO Food security the 70% reduction in GHG community rights, non- standard violations. Fair pricing emissions. There is activity discrimination, gender They have a biannual Training & support in improving operations equality and livelihood. sustainability reporting Participation efficiencies in terms of Social assessment and system. However, their Governance chemical use, waste and FPIC processes are RSPO traceability Sustainability policy water management. Public followed. Outstanding certification is still low. & systems management plans were land conflicts are under The grievance mechanism Memberships not available. Overall FELDA not FGV. They have is embedded in FGV’s Certified supply their environmental a smallholder programme whistleblowing channel. Traceability performance is aligned in place, but there are FGV’s governance Sustainability reporting with strategic action, reports of unsettlement sustainability is still Legal action/lawsuits with an aim to move regarding pricing and only incremental, with Anti corruption policy towards integrated. support. FGV’s social its responsible sourcing & mechanisms sustainability performance compliance driven. Grievance mechanisms is approaching strategic action. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 29

FGV Holdings Berhad Holdings: 10 year assessment PROGRESS SPOTT assessment results over time

Since 2004, FGV’s RSPO membership RSPO was together 100 with FELDA. Following the public listing of the FGV Group, 90 FGV joined as a separate RSPO member in December 2016. 80 Over the last few years, there have been multiple allegations 70 of environmental and labour violations in spite of their 60 polices. FGV has been under pressure from NGOs, RSPO and 50 communities to resolve these concerns. Some of these are TT Score (%) 40 still under investigation. There have also been concerns with 30 SPO FGV’s acquisitions and their non conformity to sustainability 20 policies and RSPO standards. While FGV has made slow 10 progress in improving sustainability over the past few years, 0 currently they are under financial stress and it is anticipated 2014 2015 2016 2017 2018 that their sustainability performance might suffer.14 This graph has been compiled from data provided by SPOTT (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2016 ●●FGV joined RSPO as a separate member public listing13 ●●Settlers lose suit 2012 against FELDA12 ●●Transfer of FELDA ●●CRR reports on breach plantations to 2014 of RSPO deforestation FGV criticized for ●●Published 1st standards5 2018 ●●Settlers unhappy with undermining hope standalone ●●FGV commissioned 13 palm oil prices and 2009 of settlers to obtain sustainability report Wild Asia audit revealed additional costs7 ●●766 settlers their own land and ●●Subsidiaries PT CNP continued labour risk6 sued FELDA over transferring native ●●Sanctioned by RSPO & PT TAA accused ●●FGV withdrew RSPO mismanagement & customary land to over forced labour, of clearing HCV certification from 58 breach of trust12 private company15 6 human trafficking1 peatlands complexes in Malaysia6

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2013 2015 2017 2019 ●●Obtained first mill ●●1st RSPO ●●Announced NDPE ●●Launched FGV-ToP ●●For WSJ case, FGV certification in 201013 certification for 2100 policy13 traceability system13 submitted action plan 13 1 ●●Subsidiary awarded smallholders ●●Started Sunbear ●●Launched Group for review to IMU Malaysian Palm Oil ●●1st integrated ISO and Rafflesia sustainability policy13 ●●RSPO lift the 13 Industry Award for certification Conservation ●●Joint venture suspension on FGV’s 16 Best Palm Kernel Program with UTM for Mill Serting complex and 10 crushing plant ●●Greenpeace alleged sustainability index13 reinstated its RSPO certification20 fire hotspots in FELDA ●●FGV to restore 1000 2011 19 plantations 18 ●●FGV, Sime Darby ●●1st ISCC certification13 ha in response Energy Solutions & ●●WSJ article on human ●●RSPO investigating Biotek Dinamik enter trafficking, forced CRR deforestation 4 tripartite MoU on labour complaint2 BioCNG21 ●●RSPO commissioned ●●Corruption ●●Freeze on ASI audit confirmed investigation 1 remuneration payout violations underway17 of FGV Holdings Bhd ●●Desa Begahak ●●FELDA acquired (FGV) directors8 Community complaint BWPT linked to 3 on land issue deforestation and no RSPO certifications9, 6 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 30 Astra Agro Lestari (AAL)

Current state assessment Environment Deforestation policy Astra Agro Lestari (AAL) is one of the largest palm oil producers in Indonesia. They started Deforestation the cultivation of oil palm plants in 1984 and have a total management area of 297,011​​ ha policy/commitment implementation spread across Sumatra, Kalimantan and Sulawesi. As of 2018, AAL has cooperated with Biodiversity 74,860 oil palm farmers who joined in 2,736 farmer groups. To maintain business continuity, conservation policy in addition to managing oil palm plantation land, the Company also develops related Biodiversity policy/ downstream industries. AAL employs 47,218 people. commitment implementation New peatlands Existing peatlands Soil management 66% 58% 42% Burning Pest management Chemical management Waste management Water management ENVIRONMENTAL SOCIAL GOVERNANCE GHG management PERFORMANCE PERFORMANCE PERFORMANCE Social Terms of employment AAL has made a strong AAL has strong reporting AAL has consciously opted environmental commitment on its support programs not to be part of the RSPO, Facilities through its sustainability for smallholders and instead develop its own No forced labour policy and sustainability independent suppliers. They sustainability framework Freedom of association framework. The policies regularly run socialization based on the aspects Child welfare and monitoring for workshops and partnership identified as material Gender equality the deforestation and programmes to help them. to internal and external Training & support planation management While the need has been stakeholders. The policy Health & safety aspects showcase an identified, this support does seems well integrated Labour rights violations integrated approach to not extend to economic within the company with Social impact sustainability. While there aspects. While labour accountability established FPIC processes appears to be activity and policies are well articulated, at different levels of Land conflict progress on operational the implementation/ management. AAL is part Food security efficiencies like waste, monitoring of these policies of the ISPO and PROPER Fair pricing water and emissions, is not apparent. Similarly certifications, with Training & support it is not obvious if it is with FPIC process, the 100% traceability to mill Participation backed by a time bound policy demonstrates its established for a majority of plan with targets and commitment, reporting its suppliers. They appear Governance indicators. These aspects on progress is not as to be moving from a Sustainability policy & systems are more in line with a clear. Overall, it places strategic to an integrated Memberships strategic approach to AAL on an incremental level of sustainability Certified supply sustainability. sustainability level. governance. Traceability Sustainability reporting Legal action/lawsuits Anti corruption policy & mechanisms Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 31

Astra Agro Lestari (AAL): 10 year assessment PROGRESS SPOTT assessment results over time

AAL has been criticised for not joining the RSPO and for 100 accusations of habitat destruction and deforestation. It is 90 one of the few large producers that are not a RSPO member. 80 Following a public campaign in 2015, they have made great 70 strides, in owning their sustainability policy and initiatives. 60 AAL has been charting its own sustainability course by 50 developing a proprietary framework based on the SDGs

TT Score (%) 40 and GRI principles. While still not joining the RSPO, they 30 SPO are seeking ISPO certification and working with NGOs and 20 research organisations to establish better management 10 practices. They have started the process to manage the 0 land conflict in Organ Rimba, that has been contested for 2014 2015 2016 2017 2018 over 30 years. This graph has been compiled from data provided by SPOTT (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15th June 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2016 ●●Started collaboration with CORE ●●Developed sustainability 2018 framework ●●Strengthened 2012 2014 ●●Signed Indonesian sustainability ●●License revoked in ●●Forest Heroes Palm Oil Pledge organization Tripa case1 accused AAL of (disbanded)8 ●●Involved suppliers in ●●WALHI & Aceh deforestation and ●●Aidenvironment sustainability policy government habitat destruction reports on supply through workshop challenged PT KA’s in Indonesian chain not meeting ●●Initiated collaborative 7 appeal in court rainforests sustainability policy management in and won2 commitments9 Orang Rimba

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2011 2015 2017 ●●Indonesian ●●Released ●●Organised environment ministry Sustainability/NDPE sustainability investigated permit Policy workshop for top to PT KA (subsidiary) ●●Forest Heroes management in Tripa peat swamp launches public ●●Prepared responsible after pressure from campaign against sourcing system 1 NGOs AAL and parent and grievance ●●WALHI filed a lawsuit company Jardone management 2 7 to revoke permit Matheson ●●Rejuvenated ●●Norwegian ●●Aidenvironment sustainability government pension reports 90,000 ha dashboard 6 fund divested forests clearing ●●Quarterly progress (2009-14) and land reports launched Conflicts in Orang ●●Farmer accusations Rimba3 of illegal land grab5 ●●Complains from NGOs for not reporting quarterly on progress4 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 32 Genting Plantations (GENP)

Current state assessment Environment Deforestation policy From a modest 13,700 ha in 1980, Genting Plantations’ (GENP) landbank has grown to Deforestation 247,400 ha currently, spread over Peninsular Malaysia, Sabah and Indonesia. As part of policy/commitment implementation its upstream plantation operations, GENP has also invested in 11 oil mills in Malaysia & Biodiversity Indonesia with a combined capacity of 550 metric tonnes per hour. In 2014, GENP embarked conservation policy on a journey that will see the Company transform into a fully integrated palm oil producer Biodiversity policy/ with downstream refineries. commitment implementation New peatlands Existing peatlands Soil management 63% 54% 52% Burning Pest management Chemical management Waste management Water management ENVIRONMENTAL SOCIAL GOVERNANCE GHG management PERFORMANCE PERFORMANCE PERFORMANCE Social Terms of employment GENP committed to GENP has a range of GENP started their annual adopting the HCV approach social policies to cover standalone sustainability Facilities in 2018 and has zero aspects of forced labour, reporting in 2010. However No forced labour burning commitments since child labour, decent work, policies on environmental Freedom of association the 1990s. However its no human rights, etc. There is and social sustainability Child welfare deforestation and peat evidence of some support have been added in the Gender equality polices are less defined. for smallholders, however last few years. They are Training & support GENP has strong waste only a small number seem included in the 2017 and Health & safety and water management to have progressed on to 2018 report but not as Labour rights violations practices and reporting. certification. GENP has standalone policies. GENP Social impact There was no evidence made a commitment to is currently pursuing FPIC processes of well defined plans for following FPIC processes traceability certification Land conflict any operational efficiency. for land acquisition. While from RSPO, ISPO and MSPO, Food security Overall the environmental there is evidence of policies, but have not made huge Fair pricing sustainability reporting on implementation strides, except for 100% Training & support performance displays is lacking. Overall the ISCC certification. The Participation a transition into the social performance is in governance performance strategic level. line with compliance led also is transitioning into Governance action. strategic action. Sustainability policy & systems Memberships Certified supply Traceability Sustainability reporting Legal action/lawsuits Anti corruption policy & mechanisms Grievance mechanisms SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 33

Genting Plantations (GENP): 10 year assessment PROGRESS SPOTT assessment results over time

GENP is one of the low scorers on this assessment. While 100 they have been publishing standalone sustainability reports 90 over the last 10 years, there continue to be allegations 80 of environmental violations against them. Some of these 70 matter are still under RSPO review. As suppliers to other 60 palm oil companies who conform to NDPE policies, there 50 is pressure exerted from their supply chain as well as

TT Score (%) 40 environmental groups. While they are formalizing more of 30 SPO their sustainability policies, they appear to have a long way 20 to go. 10 0 2014 2015 2016 2017 2018

This graph has been compiled from data provided by SPOTT (www.spott.org), as part of the Zoological Society of London (ZSL) (www.zsl.org). This data was obtained from the SPOTT website on 15thJune 2019 and we acknowledge that SPOTT may have more up-to-date data available.

2018 ●●Sets aside 44.5 ha to protect pygmy elephants ●●Orangutan killing 2016 case dismissed after 6 ●●BORA satisfied with corrective action 2014 progress reporting an ●●Complaint on lack 4 ●●Greenomics report case closed of transparency on 7 alleges deforestation ●●Complaint against plasma scheme despite Wilmar’s 3 subsidiaries for ●● Complaint on (buyer) pledge10 illegally operating5 destruction of ●●RSPO suspended ●●Complaint to RSPO for community farms in Indonesia8 2009 membership for not obtaining forest ●●Milleudefensie not submitting NPP release/swap area ●●Greenpeace reports 2 & WALHI report 2012 proceedings ●●Tongod community rainforest destruction that subsidiaries’ ●●Norwegian sovereign ●●Stock price fell opeted for court ●●One of the few concession overlaps wealth fund divested by 2% after RSPO negotiated mediation companies with an with national forest15 from GP (1) divested1 suspension12 and won3 all-male board9

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

2010 2013 2015 2017 2019 ●●Published first ●●Tongod community ●●Greenomics update ●●Introduced ●●Subsidiary case standalone complaint for failing report alleges forest sustainability policy closed, proceed with 13 sustainability report to address concerns clearing after supplier ●●Orangutan killed on development only after 11 5 on land, pollution, closed for monitoring plantation6 requirements met conservation, ●●Awarded initial RSPO ●●Transparency case 3 communication certification dismissed as RSPO ●●BORA complaint does not have for not progressing jurisdiction7 certification in ●●Indonesia community 4 Malaysia farm case moved ●●Collaboration with to state mediated Dupont to improve process, closed yield and address on demise of lead food security14 complainant8 ●●Investors launch effort to force corporate climate disclosure16 SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 34 Appendices

ISF developed a framework for assessing the Appendix 1 1 environmental, social and governance sustainability performance of palm oil producers, including a RESEARCH METHOD set of 11 criteria and 37 indicators across 5 levels This section describes the research method and process of performance. The framework was based on a including the Assessment Framework. The research literature review of existing sustainability standards methodology combined a desktop review and qualitative and charters. The framework was initially reviewed interviews to evaluate the sustainability performance of the by sustainability experts at SPOTT. The complete companies. Assessment Framework is provided in Appendix 3.

DESKTOP REVIEW From the assessment framework, ISF developed 2 a series of questions to be answered from either The selected companies were assessed and ranked against publicly available data or information provided by the framework, based on: companies via interview and/or written responses • public information made available by the companies, and documentation. including websites, dashboards, annual reports and Stewart Investors selected 10 companies to be sustainability reports; 3 included in the study. Two of the companies – • media articles and reports by other NGOs and London Sumatra (Lonsum) and Salim Ivomas – certification bodies to understand the current were subsidiaries of Indofood Agri, therefore only implementation status of company policies and to trace 9 companies were formally assessed. progress over the last 10 years; • SPOTT assessments, initiated in 2014, to compare 4 ISF undertook desktop research using public data company progress and performance over time; and and reports on the companies’ current sustainability performance and progress over the last 10 years • additional documents, that were not in the public domain, (2009 – 2019). The current performance was were provided by five companies to provide evidence for quantitatively scored through the framework, which achieving levels of action in the framework. allowed the companies to be ranked. The past performance was quantitatively mapped using QUALITATIVE INTERVIEWS historic SPOTT assessments and qualitatively Interviews were undertaken with experts and company analysed by constructing a timeline for each representatives at three stages of the research: company using: media reports; other published information; and interview data from both industry • Experts at WWF and SPOTT provided feedback on the experts and the companies themselves. draft assessment framework; • Three companies – Sime Darby Plantations (SDP), IOI and Wilmar – participated in an interview to provide feedback and additional evidence on their draft assessment (GENP and London Sumatra (Lonsum) provided written feedback); and • Experts at WWF, SPOTT and RSPO provided feedback on the draft findings of the assessment, which was synthesised into this final report. • Five companies - IOI, Wilmar, FGV, AAL and Lonsum provided feedback on the final report. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 35

5 All companies were contacted and given the RESEARCH LIMITATIONS opportunity to be interviewed to provide additional Most companies started publishing standalone evidence to support their sustainability assessment. sustainability reports in 2016/2017. While there is some SDP was the only company to respond to this initial reporting on sustainability criteria in previous annual interview request. reports, it is hard to trace an evidence-based historic path. 6 The draft assessments were reviewed by the The SPOTT assessments used to trace progress on research team, Stewart Investors and industry sustainability only date back to 2014. experts – SPOTT, WWF and RSPO. Due to confidentiality constraints, industry experts could Media reports are comprehensively reported by SPOTT not comment on the specific company rankings from 2014, but were more difficult to source prior to this and scores but instead provided feedback on the year. Regional media becomes harder to trace as previous application of the framework and directed the articles become available as websites change. Also issues researchers to additional public resources to deliver of sustainability have become more prevalent in the media a more comprehensive assessment. The feedback in recent years. was incorporated to deliver a final draft of the company assessments Not all companies responded to ISF’s request for interviews and additional evidence. One company – KLK – actively 7 All companies were provided a second opportunity to chose not to participate. Those that did participate all review and comment on the final draft assessments, scored higher than their original assessment. Therefore, the provide further information, respond to any follow overall company rankings may not be fully reflective of the up questions and correct any inaccuracies. Two current state. companies – IOI and Wilmar – participated in an interview to provide feedback and additional The companies that did respond provided additional evidence on their draft assessment. Three evidence that is not publicly available, including specific companies – SDP, GENP and Lonsum – provided implementation plans e.g. water management plans. It written feedback on their draft assessments. Where will be difficult to track progress against these plans in appropriate, assessments and scores were adjusted the future, since these metrics are also not published in to take into account any additional information. sustainability reporting. Experts recommend that this level of detail be made publicly available to better demonstrate 8 ISF undertook a final team review, including on-the-ground implementation. an independent internal expert review of all assessments to ensure consistency across the different companies. Companies were provided a final opportunity to comment on the assessment. Five companies - IOI, Wilmar, FGV, AAL and Lonsum provided feedback on the final report. The final report was provided to Stewart Investors in October 2019. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 36

Appendices continued

SUMMARY OF DATA USED TO ASSESS COMPANIES

Company SPOTT Written reports & Assessment & response to Company website media analysis Interview assessment

United Plantations Berhad ✓ ✓ – –

London Sumatra ✓ ✓* – ✓

FGV Holdings ✓ ✓ – ✓

Genting Plantations ✓ ✓ – ✓

IOI Corporation Berhad ✓ ✓ ✓ ✓

Kuala Lumpur Kepong Berhad ✓ ✓ – –

Wilmar International Limited ✓ ✓ ✓ ✓

Astra Agro Lestari ✓ ✓ – ✓

Sime Darby Plantation ✓ ✓ ✓ ✓

*Lonsum was only assessed in SPOTT as a separate company till 2016. After 2016, the assessment is for the parent company Indofood Agri Resources. SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 37

Appendix 2 ASSESSMENT FRAMEWORK: PERFORMANCE SPECTRUM

Levels of Compliance Incremental Strategic Integrated Systemic performance No Action driven action action action action action

Score 0 1 2 3 4 5

Description No action taken Action to Actions Improved Sustainability Sustainability by company improve go beyond sustainability performance performance is to improve sustainability compliance performance aligned with core excellent and sustainability performance into operational leveraged as values of the championed by performance based on local aspects of the competitive company the company laws/regulations company advantage

Nature BAU Reactive Opportunistic Proactive Embedded Transformational

Drivers None Regulatory threat Eco- Business Long term Industry Public pressure/ efficiencies/ Opportunities/ viability & value leadership good will Cost saving & Profitability/Risk creation Contribution revenue growth Management to global PR Crisis/ sustainability Reputation goals

Commitment None Informal Targets & Sustainability Sustainability Commitments commitments metrics commitments commitments are BAU, adopted/ embedded embedded embedded in part of some in corporate in corporate all company certificatio/ strategy strategy, processes, with reporting governance and regular feedback mechanism management structures for structures continuous improvement

Activities BAU In compliance Beyond solely Ambitious Targets achieved Ambitious with local laws compliance targets & Mostly targets achieved Ad hoc activities Targets & metrics adopted undertaking Innovation for metrics adopted Good progress industry best continuous achieved practice improvement Innovation underway

Challenges Lack of Lack of Knowledge gaps Technology gaps Technology gaps awareness/ awareness/ Resourcing/ intent intent reporting No time/budget No time/budget constraints to focus on to focus on sustainability sustainability

Adapted from the Corporate Sustainability Continuum, Sustainability Integration Continuum and the Public Sector Leadership on Sustainable Development Spectrum . SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 38

Appendices continued

Appendix 3 ASSESSMENT FRAMEWORK: CRITERIA & INDICATORS

Criteria Indicator Description

ENVIRONMENT

Deforestation & Deforestation Public commitment/policy on No Deforestation, No Peat, No Exploitation biodiversity policy (NDPE) policies

Deforestation Outstanding/long pending cases on deforestation against the company policy implementation

Biodiversity Public commitment/policy on biodiversity assessment & conservation conservation policy

Biodiversity policy Outstanding/long pending cases on biodiversity conservation against the implementation company

Plantation New peatlands No new planting takes place on peat regardless of the depth management Existing All existing peatlands are inventoried, documented and managed peatlands responsibly including exploring restoration opportunities

Soil management Good agricultural practices to manage/improve soil fertility

Burning No use of open burning/fire policy for all new or ongoing operations for land preparation, land management, or waste management

Operations Pest management Systems in place to practice natural weed & pest control management Chemical Pesticides and fertilisers used in ways that do not endanger health of management workers, families, communities or the environment

Waste Systems in place to manage waste in an environmentally and socially management responsible manner

Water Systems in place to manage the quality and quantity of water management

GHG emissions GHG Public reporting on annual GHG emission reduction plans, measures and management targets SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 39

Criteria Indicator Description

SOCIAL

Decent work Terms of Systems in place to provide all workers fair and decent terms of employment policies employment

Facilities Adequate housing, sanitation facilities, water supplies, medical, educational and welfare amenities to national standards or above

No forced labour Systems in place to ensure no forms of forced or trafficked labour are used

Freedom of Systems in place to support workers’ rights to collective bargaining and association freedom of association

Child welfare Systems in place to safeguard and manage child welfare

Gender equality Non-discrimination and equal opportunity policy implemented to prevent discrimination based on gender

Training & support Programmes in place to support training needs of all staff and workers

Health & safety Systems in place to safeguard worker health & safety

Labour rights Outstanding/long pending cases on labour violations against the company violations

Community & Social impact Systems in place to assess, manage and monitor social impact of operations Land rights on communities

FPIC processes Systems in place to obtain comprehensive FPIC with full respect for legal and customary rights

Land conflict Outstanding/long pending land disputes against the company

Food security Food security concerns of workers, smallholders, and indigenous & local communities affected by existing plantations

Smallholders Fair pricing Systems in place to conduct fair and transparent dealings with all smallholders (Independent and Scheme)

Training & support Training & support to improve livelihoods of smallholders and their inclusion in sustainable value chains is provided

Participation Number of smallholders certified by RSPO SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 40

Appendices continued

Criteria Indicator Description

GOVERNANCE

Leadership Sustainability Published sustainability commitments and targets, and allocation of policy & systems resources and responsibility across the organisation

Memberships Company is a member of RSPO, POIG and other national schemes

Responsible Certified supply Company output is certified by RSPO or other national schemes sourcing Traceability Supply chain is traceable and verifiable e,g, by RSPO SCCS

Reporting & Sustainability Published sustainability reports and landbank maps transparency reporting

Legal action/ Outstanding legal cases against the company lawsuits

Anti-corruption Systems in place to monitor compliance and policy implementation, and policy & overall ethical business practice mechanisms

Conflict Grievance Openness and accessibility of grievance mechanisms to stakeholders, resolution & mechanisms with an option for anonymity. grievance SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 41 References

i WWF, 2018. https://www.wwf.org.au/what-we-do/food/ 9. http://www.unitedplantations.com/Files/PDF/ palm-oil#gs.ro7kfx Announcements/UPAR2018.pdf ii GreenPalm, 2016. https://greenpalm.org/about-palm- 10. https://redd-monitor.org/2013/03/13/norways- oil/what-is-palm-oil sovereign-wealth-fund-divests-from-23-palm-oil- iii WWF, 2018. https://www.wwf.org.au/what-we-do/food/ companies/ palm-oil#gs.ro7kfx Other documents referenced iv Willard, 2005. “Next Sustainability Wave: Building • Sustainability Report 2018 Boardroom Buy-In”. Gabriola Island, BC, Canada: • Annual Report 2018 New Society Publishers. https://books.google.com. • Conservation Management Report 2016 au/books?hl=en&lr=&id=CN_0AgAAQBAJ&oi=fnd&p- g=PR15&dq=%E2%80%A2Corporate+sustainabil- • Environment & Biodiversity Policy 2017 ity+continuum++(Willard,+2005)&ots=5R06Gk1V- • SOPs for New Planting Procedures 2016 Ja&sig=hr1noGze9cPPSRUtUkOFdwQzQT0#v=snip- • Human Rights Policy 2017 pet&q=continuum&f=false • Guest Workers Policy 2017 v Strandberg Consulting, 2015. Sustainability Integration • Gender Policy 2015 Continuum https://corostrandberg.com/wp-content/ • Occupational Safety and Health (OSH) policy 2017 uploads/2015/07/sustainability-integration-continu- • Code of Conduct & Business Rthics 2016 um-2015.pdf • Whistleblowing Policy 2017 vi Forum for the Future, 2010. Public sector leadership on • United Plantation website sustainable development spectrum https://www.criti- caleye.com/inspiring/insights-servfile.cfm?id=2136 IOI Corporation Berhad (IOI) 1. https://askrspo.force.com/Complaint/s/ United Plantations Berhad case/50090000028ErzqAAC/detail 1. http://www.greenpeace.org/archive-belgium/Global/ belgium/report/2008/11/rspo-scandal.pdf ; http:// 2. https://askrspo.force.com/Complaint/s/ unitedplantations.com/Files/PDF/Announcements/ case/50090000028Erz8AAC/detail Unjust%20allegations%20by%20Greenpeace%20 3. https://issuu.com/greenpeaceinternational/docs/ on%20United%20Plantations%20Bhd%20and%20 deadly-trade-off-ioi-report_highres the%20RSPO%20Page%201.pdf 4. https://www.greenpeace.org/archive-international/ 2. https://askrspo.force.com/Complaint/s/ Global/international/publications/forests/2017/Still- case/50090000029w2ZvAAI/detail Cooking-the-Climate.pdf 3. http://www.unitedplantations.com/Files/PDF/Best%20 5. https://www.foeeurope.org/sites/default/files/ managed%20estate%20160809.pdf publications/foee_too_green_to_be_true_0310.pdf 4. http://www.unitedplantations.com/Public/Media_room. 6. https://aliran.com/civil-society-voices/2017-civil- asp society-voices/major-malaysian-palm-oil-company- 5. http://www.unitedplantations.com/news/rebuttal.asp announces-groundbreaking-labour-policies/ 6. https://scandasia.com/copenhagen-zoo-and- 7. http://www.triplepundit.com/story/2016/cargill- malaysia-strengthens-collaboration-further/ suspends-palm-oil-contracts-controversial- producer/24206 7. http://www.unitedplantations.com/Public/doc/ ACCA%20MaSRA.pdf ; http://www.theedgemarkets. 8. https://finnwatch.org/fi/uutiset/555-nesteen- com/article/sime-darby-wins-best-overall- alihankkijan-tyoeolot-kehittyneet-myoes-malesian-sab sustainability-reporting-award ahissa?highlight=WyJpb2kiXQ== 8. http://www.unitedplantations.com/Public/doc/SBB%20 9. https://www.finnwatch.org/en/news/213-ioi-group- Award%20%20%20Special%20Recognition%20Award.pdf suspected-of-serious-labour-rights-violations ; https:// www.finnwatch.org/images/palmoil.pdf SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 42

References continued

10. https://www.finnwatch.org/images/pdf/IOI-2016_ sime-darby-unveils-industry-first-platform-for-palm-oil- EN.pdf transparency/ 11. https://www.malaysiakini.com/letters/165286 10. https://www.theborneopost.com/2019/05/16/sime- 12. https://1bps6437gg8c169i0y1drtgz-wpengine.netdna- darby-plant-ranks-first-in-asean-business-and-human- ssl.com/wp-content/uploads/2017/legacy/FOE_ rights-disclosure-study/ CommodityCrimes_LowRes.pdf 11. https://chainreactionresearch.com/the-chain- 13. https://zembla.bnnvara.nl/pdf/ continued-uptake-of-ndpe-policies-a-key-factor-in- LettertoRSPOonIOIcomplaint19April2012.pdf reducing-deforestation-rates-in-se-asia/ 14. https://redd-monitor.org/2013/03/13/norways- 12. https://frontpageafricaonline.com/news/liberia-house- sovereign-wealth-fund-divests-from-23-palm-oil- finds-sime-darby-plantation-liable-for-breaching- companies/ concession-agreement/ 15. http://www.aidenvironment.org/media/uploads/ 13. https://www.theedgemarkets.com/article/sime-darby- documents/A1757_Biomassa_Failing-governance- wins-best-overall-sustainability-reporting-award avoiding-responsibilities_september2009-2.pdf 14. http://gnnliberia.com/2016/09/21/sime-darby- 16. https://chainreactionresearch.com/the-chain- plantation-launches-responsible-agriculture-charter/ continued-uptake-of-ndpe-policies-a-key-factor-in- 15. https://chainreactionresearch.com/report/sime-darby- reducing-deforestation-rates-in-se-asia/ liberian-crossroads/ Other documents referenced Other documents referenced • Sustainability report 2019 • Annual Report 2018 • Sustainability report 2018 • Supplementary Progress Report on Sustainability 2018 • Sustainability report 2017 • NBPOL Sustainability Report 2016/17 • Sustainability Progress updates 2017-2019 • Responsible Agriculture Charter • Palm Oil Dashboard • Environment & Biodiversity Policy • Sustainable Palm Oil Policy 2018 • Environmental Management Policy • Peatland Protection & Management Policy 2018 • Saving The Orang Utan Policy • Zero Burning Policy 2018 • Slope & River Protection Policy • Agrochemical Management Policy 2018 • Carbon Policy • Minimum Wage & Leave Pay policies in Malaysia 2017 • Social Policy • Foreign Workers Recruitment Guideline & Procedures in • Social & Humanity Management Policy Malaysia 2017 • Child Protection Policy • Equal Opportunity Employment & Freedom of Association • Gender Policy Policy 2017 • Occupational, Safety & Health Policy • Policy on Harassment at Workplace • Corporate Policy Statement • Business Ethics, Compliance, Anti-Corruption, Anti-Money Laundering Policy Sime Darby Plantations website

• Code of Business Conduct and Ethics Wilmar International Limited (Wilmar) • Code of Ethics for Directors 1. https://redd-monitor.org/2013/03/13/norways-sovereign- • Company interview & correspondence wealth-fund-divests-from-23-palm-oil-companies/

• IOI website 2. https://askrspo.force.com/Complaint/s/ case/50090000028ErzyAAC/detail Sime Darby Plantation (SDP) 3. https://askrspo.force.com/Complaint/s/ 1. https://askrspo.force.com/Complaint/s/ case/50090000028ErzRAAS/detail case/50090000028Es0xAAC/detail 4. https://askrspo.force.com/Complaint/s/ 2. https://askrspo.force.com/Complaint/s/ case/50090000028Es0LAAS/detail case/50090000028Es02AAC/detail 5. https://askrspo.force.com/Complaint/s/ 3. https://askrspo.force.com/Complaint/s/ case/50090000028Es0LAAS/detail SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 43

6. https://askrspo.force.com/Complaint/s/ • Child Protection Policy 2018 case/50090000028Erz4AAC/detail • Equal Opportunity Policy 2018 7. https://askrspo.force.com/Complaint/s/ • Health & Safety Policy 2019 case/50090000028Es0VAAS/detail • Sustainability and Traceability Policy for Palm Oil Production 8. https://askrspo.force.com/Complaint/s/ 2019 case/50090000029w2raAAA/detail • Whistleblowing Policy 2016 9. https://askrspo.force.com/Complaint/s/ • Wilmar website case/50090000028Es0SAAS/detail 10. https://d3n8a8pro7vhmx.cloudfront.net/ Kuala Lumpur Kepong Berhad (KLK) rainforestactionnetwork/pages/17068/attachments/ 1. https://redd-monitor.org/2013/03/13/norways-sovereign- original/1478544586/2_RAN_Protecting_The_ wealth-fund-divests-from-23-palm-oil-companies/ Leuser_2016_(2).pdf?1478544586 2. https://www.ran.org/wp-content/uploads/2018/06/ 11. https://www.wilmar-international.com/sustainability/ klk_case_study_2014_low.pdf wp-content/uploads/2018/06/18614_Grievance- 3. https://askrspo.force.com/Complaint/s/ update.pdf case/50090000028Es0OAAS/detail 12. https://d3n8a8pro7vhmx.cloudfront.net/ 4. https://askrspo.force.com/Complaint/s/ rainforestactionnetwork/pages/2729/attachments/ case/50090000028ErzvAAC/detail original/1415727943/Last_Place_On_Earth_Report_ Nov2014.pdf?1415727943 5. https://www.ran.org/press-releases/contested-klk-palm- oil-leases-declared-illegal-papua-new-guinea-court/ 13. http://www.greenomics.org/docs/Findings_Wilmar’s- No-Deforestation-Policy_(LowRes).pdf 6. https://www.ran.org/press-releases/palm_oil_giant_ kuala_lumpur_kepong_berhad_klk_plagued_by_ 14. https://foe.org/2015-02-foe-uganda-files-a-lawsuit- ongoing_conflict_and_exploitation_new_progress_ over-palm-oil-landgrab/ report_finds/ 15. http://www.greenpeace.nl/Global/nederland/ 7. https://www.schusterinstituteinvestigations.org/slavery- report/2016/bossen/Deadly-Trade-off-IOI-Report.pdf; palm-oil-plantations-indonesia http://www.mightyearth.org/BurningParadise/ 8. https://frontpageafricaonline.com/county-news/liberia- 16. https://www.eco-business.com/news/indonesian- river-cess-community-rejecting-oil-palm-plantation/ palm-oil-pledge-disbands/ 9. https://www.greenpeace.org/archive-international/ 17. https://www.greenpeace.org/archive-seasia/Global/ Global/international/publications/forests/2017/Still- international/publications/forests/2017/Still-Cooking- Cooking-the-Climate.pdf the-Climate.pdf 10. https://www.valuewalk.com/2016/11/klk-withdraws/ 18. https://www.businesstimes.com.sg/companies- markets/wilmar-tops-singapore-companies-for- Other documents referenced human-rights-disclosure-second-in-asean-study • Sustainability Report 2018 19. https://storage.googleapis.com/planet4-international- • Sustainability Report 2017 stateless/2019/09/98db6c73-gp_cte_report_lowres. • Sustainability Policy 2018 pdf • Environmental Policy 20. https://www.wilmar-international.com/sustainability/ • Group Employee Grievance Redressal Policy grievance-procedure/ • Group Whistleblowing Policy 2017/19 Other documents referenced • KLK website • Sustainability Report 2018 London Sumatra (Lonsum) • NDPE Policy 2013 1. https://redd-monitor.org/2013/03/13/norways- • Environmental Policy 2015 sovereign-wealth-fund-divests-from-23-palm-oil- • Human Rights Policy 2018 companies/ • Human Rights Framework 2. https://askrspo.force.com/Complaint/s/ case/50090000028Es03AAC/detail • UK Modern Slavery Act Transparency Statement Wilmar International 3. https://askrspo.force.com/Complaint/s/ case/50090000028ErzBAAS/detail SUSTAINABILITY PERFORMANCE ASSESSMENT FOR PALM OIL PRODUCERS 44

References continued

4. https://www.ran.org/wp-content/uploads/ migrant-workers-tell-of-abuses-on-malaysian- rainforestactionnetwork/pages/15889/attachments/ plantations-1437933321 original/1467043668/The_Human_Cost_of_Conflict_ 5. https://chainreactionresearch.com/the-chain-felda- Palm_Oil_RAN.pdf?1467043668 global-ventures-asian-plantations-deforestation- 5. https://askrspo.force.com/Complaint/s/ contrary-to-company-wide-policy-group-takes- case/50090000028ErzkAAC/detail corrective-action/ 6. https://www.greenpeace.org/international/ 6. http://forestsandfinance.org/wp-content/ publication/18455/the-final-countdown-forests- uploads/2017/04/RAN_Every-Investor-Has-a- indonesia-palm-oil/ Responsibility_2017.pdf 7. https://d3n8a8pro7vhmx.cloudfront.net/ 7. https://www.theedgemarkets.com/article/settlers- rainforestactionnetwork/pages/14786/attachments/ bearing-brunt-cashflow-issues-felda original/1442856231/Full_Report_Palm_Oil_ 8. https://www.thestar.com.my/business/business- Sustainability_Assessment_of_Indofood_Agri_ news/2019/06/29/unmasking-the-fgv-remuneration- Resources.pdf?1442856231 saga/ 8. https://www.bakeryandsnacks.com/ 9. https://www.valuewalk.com/2017/01/chain-felda/ Article/2018/10/05/PepsiCo-and-Nestle-sever-ties- with-Indonesia-s-largest-palm-oil-supplier-in-wake-of- 10. https://www.theedgemarkets.com/article/felda- alleged-human-rights-abuses global%E2%80%99s-subsidiary-gets-malaysian-palm- oil-industry-award 9. https://www.regnskog.no/en/news/worlds-largest- sovereign-wealth-fund-continues-to-drop-companies- 11. Khor, Y., “FELDA Settlers & The Felda Global IPO – a over-deforestation socio-political perspective”, Khor Reports, 22 May 2012. 25 Razak, A. “FGV listing: Status of Malay reserve land 10. https://www.banktrack.org/download/ questioned”, Malaysiakini, 6 June 2012 ( http://www. maybank_the_single_largest_palm_oil_financi er/ malaysiakini.com/news/200055), viewed June 2012. maybankreportenglish210218.pdf 12. https://www.theedgemarkets.com/article/fgv-cleared- 11. http://forestsandfinance.org/wp-content/ alleged-fraud-manipulation-oer uploads/2017/04/RAN_Every-Investor-Has-a- Responsibility_2017.pdf 13. http://www.fgvholdings.com/wp-content/ uploads/2018/06/FGV-Sustainability- Other documents referenced Report-2016_2017.pdf • Lonsum Sustainability Report 2018 14. https://chainreactionresearch.com/the-chain- • Indoagri Sustainability Report 2018 financial-troubles-at-felda-may-impede-fgvs- • Lonsum Annual Report 2018 sustainability-efforts/ • Indoagri Sustainable Palm Oil Policy 2017 15. https://www.bothends.org/uploaded_files/ • Indoagri Code of Conduct inlineitem/2Felda_Global_Ventures_Profundo_120613. • Lonsum website pdf • Indofood Agri website 16. http://www.fgvholdings.com/media-release-fgv- champions-conservation-of-the-worlds-largest-flower-

rafflesia-and-worlds-smallest-bears-species-the-sun- Felda Global Ventures Holdings (FGV) bear-with-frim-and-perhilitan/ 1. https://askrspo.force.com/Complaint/s/ case/50090000028Es0aAAC/detail ; https://www. 17. https://www.reuters.com/article/us-fgv-management/ reuters.com/article/us-malaysia-palmoil-fgvholdings/ malaysian-corruption-investigators-search-felda- palm-oil-body-says-it-finds-exploitative-labor- globals-head-office-idUSKBN18Z0FA practices-at-malaysias-fgv-idUSKCN1NZ18J 18. http://www.fgvholdings.com/wp-content/ 2. https://askrspo.force.com/Complaint/s/ uploads/2018/01/FGV-RSPO-Certification-Initiative- case/50090000028ErzMAAS/detail and-FGV-Kalimantan-Peat-Restoration-Master-Plan- 3. https://askrspo.force.com/Complaint/s/ 12-January-2018.pdf case/50090000028Es14AAC/detail 19. https://www.rnz.co.nz/news/regional/289457/nz- 4. https://www.wsj.com/articles/palm-oil- linked-to-destruction-in-se-asia,-greenpeace-says 20. http://www.fgvholdings.com/lifting-of-certification- Genting Plantations (GENP) suspension-for-fgvs-serting-complex/ 1. https://redd-monitor.org/2013/03/13/norways- 21. http://www.fgvholdings.com/fgv-palm-industries-sime- sovereign-wealth-fund-divests-from-23-palm-oil- darby-energy-solutions-and-biotek-dinamik-enter- companies/ tripartite-mou-on-biocng/ 2. https://www.theedgemarkets.com/article/genting- Other documents referenced plantations%E2%80%99-rspo-membership- suspended • Annual Report 2018 3. https://askrspo.force.com/Complaint/s/ • Sustainability Report 2016-17 case/50090000028Es0FAAS/detail • Group Sustainability Policy 2019 4. https://askrspo.force.com/Complaint/s/ • Grievance Policy case/50090000028ErzYAAS/detail • Supplier Code of Conduct (SCOC) 5. https://askrspo.force.com/Complaint/s/ • Code of Ethics & Conduct case/50090000028Es0ZAAS/detail • Code of Business Practice 6. https://askrspo.force.com/Complaint/s/ • FGV Whistleblowing Policy case/50090000028Es0zAAC/detail • FGV website 7. https://askrspo.force.com/Complaint/s/ case/50090000028EoXjAAK/detail Astra Agro Lestari (AAL) 8. https://askrspo.force.com/Complaint/s/ 3. http://www.aidenvironment.org/media/uploads/ case/5009000002CD8lnAAD/detail documents/Astra_Agro_Lestari_report_ENG_Final-2.pdf 9. https://www.malaymail.com/news/ 4. http://www.mightyearth.org/indonesias-second-largest- malaysia/2018/01/21/all-male-board-only-in- palm-oil-producer-fails-to-deliver-on-its-sustainability- seven-top-firms-sc-says-as-women-power-up- policy/ in-2018/1558955 5. https://news.mongabay.com/2018/06/when-palm-oil- 10. http://www.greenomics.org/docs/Wilmar’s-suppliers_ meets-politics-indonesian-farmers-pay-the-price/ deforestation_(LowRes).pdf 6. https://redd-monitor.org/2013/03/13/norways- 11. http://www.greenomics.org/docs/IPOP_ sovereign-wealth-fund-divests-from-23-palm-oil- Implementation_Report-09_Greenomics.pdf companies/ 12. https://news.mongabay.com/2014/05/malaysian- 7. http://www.forestheroes.org/mandarin-oriental-were- palm-oil-company-stock-drops-after-environmental- not-fans-of-your-rainforest-destruction/ ; https:// complaint/ d3n8a8pro7vhmx.cloudfront.net/forestheroes/pages/131/ 13. http://www.gentingplantations.com/wp-content/ attachments/original/1412255345/9546Koptimized. uploads/2017/04/2010.pdf pdf?1412255345 14. http://www.acgt.com/press/pdf/DuPont_Genting_ 8. http://www.forestheroes.org/astra-agro-lestari-joins- Plantations_Joint_Press_Release_3_Dec_2012.pdf ipop/ 15. http://www.aidenvironment.org/media/uploads/ 9. https://d5i6is0eze552.cloudfront.net/documents/ documents/A1757_Biomassa_Failing-governance- Publikasjoner/Andre-rapporter/Update-on-Astra-Agro- avoiding-responsibilities_september2009-2.pdf Lestaris-sustainability-policy-implementation-ID-31605. pdf?mtime=20160927135648 16. https://www.businessgreen.com/bg/news- analysis/3077444/investors-launch-co-ordinated- Other documents referenced effort-to-force-corporate-climate-disclosure • Sustainability Report 2018 Other documents referenced • Sustainability Report 2016 • London Sustainability Report 2018 • Progress report on Sustainability - Q1 2019 • Sustainability Report 2017 • Annual Report 2018 • Annual Report 2018 • Sustainability Policy • Code of Conduct and Ethics • AAL website • Whistleblower Policy • Genting Plantations website INSTITUTE FOR SUSTAINABLE FUTURES University of Technology Sydney PO Box 123 Broadway, NSW, 2007 www.isf.edu.au