F elda GlOBAL Ventures Holdings Berhad (800165-P) Level 42, Menara Felda No. 11, Persiaran KLCC 50088 Kuala Lumpur Tel: 603-2859 0000 Fax: 603-2859 0016 www.feldaglobal.com FELDA GLOBAL VENTURES HOLDINGS BERHAD
S ust ainability ainability Re por t 2013
FELDA GLOBAL VENTURES HOLDINGS BERHAD Enriching Values A Continuous Journey SUSTAINABILITY REPORT 2013 PAGE 01
Enriching Values A Continuous Journey SUSTAINABILTY REPORT 2013
CONTENTS
03 Message from CEO 30 enriching our communities 50 Protecting our natural environment 04 Highlights 31 FGV and FELDA settler’s ecosystem 50 soil management 05 Targets 32 Delivering social development 50 integrated pest management 06 Who we are 32 the Felda Investment Co-operative 50 Waste and effluent 08 part of the FELDA family – our history 34 independent smallholders 52 protecting areas of high conservation value 36 Voices from our stakeholders: 56 preserving and protecting waterways 10 our plantations and mills the second generation 58 climate change 13 our supply chain at a glance 38 yayasan FELDA 14 the world of FGV 60 research and development 40 enhancing accountability in our workplace 60 higher yielding oil seeds 16 Corporate governance 40 structure 60 improving disease resistance 40 human Capital Development 18 Protecting integrity 43 Engaging employees 62 Annexes 43 Diversity & equal opportunity 62 gri index 20 Prospering sustainably 44 Voices from our stakeholders: Generation Y 65 base data and notes 20 Driving sustainability standards 46 Employee turnover 71 glossary 20 our commitment 46 basic working conditions 72 about this report 20 supporting Group Smallholders Certification 47 occupational health and safety contact and feedback 22 sustainability management 24 responsible land development and acquisition 26 Engaging our stakeholders 28 Voices from our stakeholders: The early settlers Message from CEO
Welcome to FGV’s inaugural multi-stakeholder and international in these efforts, we intend to work Sustainability Report, which approach in these standards gives closely with leading international represents a new chapter in our us a better understanding of our and local environmental W e continue to journey and builds on our legacy customers’ expectations, as well as organisations, who can provide and commitment to sustainable those of other stakeholders in the us with support and additional be active in the business practices. The report is palm oil landscape. knowledge. RSPO through a critical building block towards our strategic blueprint to be one We continue to be active in the One of our big environmental working groups of the top ten agri-based business RSPO through working groups on commitments this year is a ‘No new on biodiversity, in the world. In order to reach that biodiversity, greenhouse gases acquisition in peat’ policy. We want greenhouse gases objective, we need to ensure that and smallholder issues. As one of to be responsive to our stakeholders we are fully accountable, not only in the largest plantation companies and believe that this is the right and smallholder relation to financial aspects of our in the organisation, we believe it thing to do in the context of our issues. business, but also in terms of how is our duty to contribute to the own landholdings. However, we will we manage our relationships and continued development of the not extend this policy to settlers the land on which our growth relies. standard. We also know that our and smallholders supplying to us. work with the RSPO is recognised Unlike us, they do not have a choice. Sustainability is at the core by our customers and consumers, We believe we may do more good of what we do, particularly in which is evidenced by sales of by assisting them in managing peat our plantations. I believe that more than USD 3 million since our areas responsibly than to sever sustainability is about ensuring that first certification. I am pleased to long-standing relations. we can grow our productivity whilst note that we have made significant PAGE 02 taking into account the need to headway, with more than a quarter A critical part of sustainability for PAGE 03 safeguard the natural environment of our production now RSPO agriculture is the need to fully FELDA as well as our assets, the land and certified, and making significant utilise available land and grow more Enriching GLOBAL Values VENTURES our people. headway in audits for our Sabah food on less land. We are therefore A Continuous HOLDINGS operations. We are also on track making considerable efforts to Journey BERHAD identify the best mechanisms to SUSTAINABILTY We cannot achieve our objectives to achieve our target to certify all REPORT without the support of our people. of our operations by 2017, and manage crops from fertilising to 2013 As part of our strategic blueprint may indeed complete ahead of harvesting. Whilst I am pleased and ambitious objectives, we time. In some areas, we expect to note that we continue to be focus strongly on developing and to go beyond the requirements among the leaders in our industry changing the mindset of everyone of certification standards, with as far as yield and extraction goes, working at FGV. I want to encourage significant mapping of biodiversity, we are also investing heavily in a culture where every employee water and carbon footprints the development of new planting is asked to be accountable and underway or completed. materials. In the next couple to work with a concrete goal in of years, we will be able to use mind. The same thing is true for We also strongly support the our own clones extensively, and sustainability, and we ensure that Malaysian Sustainable Palm Oil improve seeds which we believe every single person in FGV has standard to be introduced this year, can provide yields above six tonnes a responsibility to enhance our as we believe this is valuable in of crude palm oil (CPO) per hectare performance. the local context and will extend and help decrease land use sustainable business practices to significantly. In the past, most of the elements a much wider group of palm oil of sustainability were enshrined growers in Malaysia. I would like to thank all of FGV’s in our good agricultural and stakeholders helping us on our management practices. Today, We also need to work with external growth journey. We can only international sustainability stakeholders and I believe that achieve our goals as a business standards such as the Roundtable partnerships are critical to long-term and in the sustainability context by on Sustainable Palm Oil (RSPO) and growth and sustainability. We are working together in partnership. I Mohd Emir Mavani Abdullah the International Sustainability and committed to introducing modern am sure that the coming years will Group President/Chief Executive Officer Carbon Certification (ISCC) have techniques to settlers and farmers be exciting and look forward to Non-Independent Executive Director provided us with frameworks and a to increase productivity while building on our legacy together. Felda Global Ventures Holdings Berhad vision which enable our established enhancing biodiversity. The FELDA procedures and policies to be settlers have taken up this challenge strengthened and more clearly and we know that they, too, are Mohd Emir Mavani Abdullah communicated to employees. The enjoying the journey. To assist us FGV Group President and CEO highlights targets
581,666 TONNES Certified Ttarge Year Sustainable Palm Oil 2 percent net profit contribution to Yayasan Felda Annual production capacity Biological oxygen demand (BOD) levels below 100 ppm in all mills 2014 BOD levels below 20 ppm in new mills 2014 136,728 MT CO2e reduction High conservation value (HCV) landscape assessment of existing 2014 of greenhouse gas emissions plantations in Malaysian operation from biogas plants No expansion on HCV forest areas in new plantings 2014 PAGE 04 No land expansion without free and prior informed consent 2014 PAGE 05 FELDA Enriching GLOBAL Values VENTURES A Continuous 4,200 TONNES of ISCC Certified Journey HOLDINGS No new acquisition in peat 2014 BERHAD SUSTAINABILTY REPORT Palm Methyl Ester Water quality assessment of major river systems within plantations in 2013 Peninsular Malaysia 2014 Water usage ratio of 1 tonne of water per tonne of fresh fruit bunch 2014 101 Green Talent AND (FFB) at our mills Global leaders Publish carbon report for certified Malaysia operations 2016 3 regions water quality RSPO certification of all mills in Malaysia 2017 assessment completed Zero fatalities 2017 Achieve average oil extraction rate (OER) of 22.5 percent 2018
2 PERCENT net profit Methane capture installed in 59 mills 2018 allocated to Yayasan Felda Process 17,000,000 tonnes of FFB 2018
RSPO certification of FFB from associated smallholders 0 ‘new acquisition in peat’ in Malaysia 2020 • Malaysia who we are – 390,234 hectares of plantation Plantations – primarily oil palms Third largest – small proportion of rubber plantation plantations manager in Felda Global Ventures Bhd (FGV) is a major palm oil force in the world with operations in more than ten countries. the world • Indonesia We are part of Felda Group, the world’s largest palm oil producer and oil palm plantation operator, based on planted – 19,521 hectares of wholly owned oil mature hectarage. Our associate Felda Holdings Bhd (FHB) is the world’s largest CPO producer and the second largest palm plantations Malaysian palm oil refiner. Together we have 355,864 hectares of palm oil plantations under its own management – 42,000 hectares through a JV and provides services to a further 367,530 hectares owned by FELDA settlers. FGV is also the largest producer of oil palm seed in Malaysia, with sales of around 25 million seeds per year. In addition we are involved in sugar production through our 51 percent-owned subsidiary, MSM Malaysia Holdings Berhad, as well as soybean and canola through our crushing and refining operations in Canada and the production of oleo-chemicals at our facility in the United States. • United States – 1 oleochemical facility Our palm oil activities are guided by sustainable practices. We have been involved in the Roundtable on Sustainable Palm Oil (RSPO), retaining a seat on the organisation’s Board since 2004. Currently, we have certified 187,667 hectares • Canada and 17 mills, with an objective to certify all our mills and deliver over three million tonnes of certified palm oil by – 1 soybean and canola crushing and refining facility in Canada year-end 2017. We have also achieved certification for 15 mills against the International Sustainability and Carbon downstream Certification (ISCC) scheme. • Joint ventures – 2 refineries in Malaysia – 3 refineries in Indonesia, China and Turkey Revenue and Profits – 1 downstream processing facilities 12.89 in China (RM Billions) 12.57 – 1 biodiesel and oils & fats facility in the United States of America R evenue PAGE 06 Profit after tax PAGE 07 7.45 FELDA Enriching GLOBAL Values A Continuous VENTURES sugar Journey HOLDINGS Largest producer – 57% market share BERHAD SUSTAINABILTY 1.4 of refined sugar – 2 sugar refineries REPORT 0.9 1.1 in Malaysia 2013
2011 2012 2013
SUBSTANTIAL SHAREHOLDERS (5% AND ABOVE) as at 31 December 2013
No Names of substantial shareholders No. of shares % palm oil – 3.2 mil MT produced in 2013 mills – Mills: 71 palm oil mills 1 Lembaga Kemajuan Tanah Persekutuan (FELDA) 729,629,800 20.00 2 Felda Asset Holdings Company Sdn Bhd 680,722,800 18.66 3 Lembaga Tabung Haji 283,915,100 7.79 – own account 283,710,100 – cartaban Nominees (Tempatan) Sdn Bhd 205,000 Felda 4 Employees Provident Fund Board 264,432,700 7.25 Holdings – refineries: 5 palm oil refineries and 2 refineries in Pakistan and China – own account 1,500,000 Berhad palm oil (FHB) through an associate and – citigroup Nominees (Tempatan) Sdn Bhd 254,405,700 processing a joint venture – citigroup Nominees (Tempatan) Sdn Bhd (Nomura) 3,127,000 – 5 kernel crushing plants – citigroup Nominees (Tempatan) Sdn Bhd (Amundi) 4,200,000 – citigroup Nominees (Tempatan) Sdn Bhd (Kaf FM) 1,200,000 5 Kumpulan Wang Persaraan (Diperbadankan) 258,845,100 7.10 – own account 258,017,400 Other – Manufacturing and logistics – support services – citigroup Nominees (Tempatan) Sdn Bhd (I-VCAP) 549,700 Businesses – research and development – citigroup Nominees (Tempatan) Sdn Bhd (CIMB PRNP ISLM) 231,400 – hsbc Nominees (Tempatan) Sdn Bhd 46,600 6 Kerajaan Negeri Pahang 182,407,575 5.00 who we are
Ptar of the FELDA family – Our history felda group structure T he foundation of our business goes back more than 50 years to the formation of Federal Land Development Authority (FELDA), established as part of the Land Development Ordinance in 1956. The aim of FELDA was to provide land for the landless and qualified rural poor and to resettle into areas that were to be developed and productively cultivated to provide income for families. The settlers were resettled in structurally managed schemes to enable progressive and productive community with stable income to uplift their socio-economic standing. FGV was incorporated as a wholly owned subsidiary of FELDA in 2007. As the commercial arm of FELDA, it focused on acquiring international downstream business and diversification of FELDA’s portfolio. In June 2012, FGV was listed on the Main Board of Bursa Malaysia, raising RM10.4 billion. As at 31 December 2013, our market capitalisation is O versees the socio-economic RM16.6 billion. development of the settlers FELDA Today, we remain an integral part of the FELDA family. We support FELDA settlers through management and extension services, ensuring that land owners have access to the best management practice, high quality planting SETTLERS materials and support for RSPO certification. Crucially, we also buy on average over 5 million tonnes of fruit from FELDA settlers annually, through our 72 crude palm oil mills. Fund contributions to Yayasan Felda for CSR purposes
PAGE 08 PAGE 09
FELDA Enriching GLOBAL Values VENTURES felda timeline A Continuous HOLDINGS Journey BERHAD SUSTAINABILTY 1956 Federal Land Development Authority established under the Land Development Ordinance REPORT 2013 1957 First FELDA settlement in Lurah Bilut in Pahang 1961 First oil palm plantation in a Felda settlement 1980 Felda Investment Co-operative (Koperasi Permodalan Felda Malaysia Berhad) was established YAYASAN 1990 More than 850,000 ha of land brought under FELDA FELDA 1995 Felda Holdings Bhd (FHB) incorporated 2003 Felda signs letter of intent to join the RSPO 2007 Felda Global Ventures Holdings Bhd (FGV) incorporated 2008 FGV ventures in to North America 2009 FGV acquires a 49 percent share in Felda Holdings Berhad (FHB) FGV ventures into fats and oleochemicals 39% FGV acquires first plantation in Indonesia Fund contributions 2010 FGV ventures into sugar to Yayasan Felda First RSPO certification 2011 FGV acquires a stake in processing soybeans and canola seeds for CSR purposes First ISCC mill certification 2012 Begins 99 year land lease agreement of 355,864 hectares from FELDA 2012 Launch the Global Strategic Blueprint Raised RM10.4 billion at its initial public offering 2013 FGV acquires the remaining 51 percent share of FHB from Felda Investment Co-operative who we are
Our plantations and mills We operate across almost all states in Malaysia, with a combined land bank of more than 360,000 hectares. Of this, Exceeding the yield benchmark 96% is oil palm, two-thirds of which is located in Pahang, Peninsular Malaysia and Sabah on the island of Borneo. (Fresh fruit bunches per mature hectare)
We produce over 5 million tonnes of fresh fruit bunch (FFB) annually. These are processed in our 72 palm oil mills, FGV yield Malaysia average which also process over 10 million additional tonnes of FFB from FELDA settlers and independent outgrowers. We (Source: MPOB) 19.8 19.9 19.7 19.2 18.8 19.2 18.9 19.6 19.0 produce more than 3 million tonnes of CPO annually. 18.0
As part of our upstream business, we also operate five palm kernel crushing plants, with an average annual production of 380,000 tonnes of palm kernel oil (PKO).
Our palm oil mills are among the most efficient in Malaysia. Out of the ten top ranked oil mills in the country by the Malaysia Palm Oil Board (MPOB), four are owned by FHB. The Felda Jengka 21 mill has the distinction of being the best mill in Malaysia with an Oil Extraction Rate (OER) of 24 percent.
2009 2010 2011 2012 2013
PAGE 10 PAGE 11 CPO EXTRACTION RATE ABOVE AVERAGE FELDA T oTAL LAND Bank in Malaysia FGV planted area in Malaysia by crop Enriching GLOBAL (Ha) (%) (%) Values VENTURES A Continuous HOLDINGS Journey 390,234 FGV CPO extraction rate 20.48 20.51 20.35 BERHAD Palm oil: 96.2 20.12 20.44 20.25 SUSTAINABILTY 359,649 359,666 :Timber 0.47 Malaysia average REPORT 2013 Rubber: 3.34 (Source: MPOB)
2011 2012 2013 2011 2012 2013
palm age group C RUDE PALM OIL PRODUCED FFB PROCESSED BY SOURCE as at 31 december 2013 (%) (MIL MT) (MT)
0-3 : 19 3.293 3.285 3.214 O utgrowers 4-9 : 16 FELDA settlers 10-14 : 7 FGV estate 5,152,384 15-20 : 7 5,178,356 21-25 : 30 4,382,933 >25 : 21 5,664,345 5,408,167 6,022,447
5,354,820 5,201,418 5,279,385
2011 2012 2013 2011 2012 2013 AM RE who we are ST P Plantation Estates U • 335,336 ha of oil palm plantations in Malaysia Our supply chain at a glance • 38,775 ha of oil palm plantations in Indonesia We have a uniquely integrated supply chain, starting with • Produced 5.05 mil MT FFB in 2013 the production of seeds, milling, refining, transport, and through to fractionation and final products. mills • 5 kernel crushing plants At mill-level, approximately 70 percent of our fruits come • 72 palm oil mills • 21.24 mil MT of annual from our own plantations and from FELDA settlers. milling capacity • 3.2 mil MT of CPO produced
PAGE 12 PAGE 13 FELDA M Enriching GLOBAL EA Values VENTURES R A Continuous HOLDINGS T Journey BERHAD S SUSTAINABILTY REPORT id refineries 2013 m • 5 palm oil refineries AM through JV RE • 7 palm oil refineries T • 5.2 mil MT capacity S PACKED GOODS (including JVs) n • Production of 99,000 • Production of 1.5 mil MT of packed FMCG MT of RBD products w (food and non-food) o for consumers and logistics services industry • 10 bulking installations d • 486 storage tanks with 752,250 MT capacity • 2 warehouses - 88,000 MT storage oleochemicals & capacity biodiesel • 7 distribution depots • 1 oleochemical plant through • Transportation services - JV in Malaysia and 1 in 251 palm oil tankers Quincy, Massachussetts, USA and 186 lorries • 1 bio-diesel plant in Malaysia • Product: Methyl esters, fatty acid, fatty alcohols and refined glycerin who we are
T he wORLD of FGV
In addition to oil palm, FGV is growing globally across a wide range Our downstream business is also expanding, with our own of agribusiness activities. Domestically, we are the largest refiner processing facilities and refineries in the US and Canada, as well as of sugar in Malaysia with a 57% market share and two refineries. joint ventures and associates in China, Turkey, Indonesia, Pakistan We lease and manage 10,784 hectares of rubber plantations and the US. Through these facilities we process canola and soy bean, in Malaysia. In 2013, we produced 28,218 tonnes of dry rubber and in addition to palm oil. We have a market presence in Europe through processed 84,304 tonnes of rubber in our 7 factories. two trading offices, which ensures we have a global market reach.
Caanad PAGE 14 Canola and PAGE 15 Soybean plant FELDA Enriching GLOBAL Values VENTURES A Continuous HOLDINGS Journey BERHAD SUSTAINABILTY REPORT europe 2013 Trading office in France and Spain
USA turkey 1 oleochemical 1 refinery plant 1 biodiesel and oils & fats plant pakistan 1 refinery china 2 refineries
MYANMAR indonesia Cooking oil 38,775 ha of distribution oil palm plantation Thailand 1 rubber processing 2 rubber factory processing factories 1 refinery
Malaysia 335,336 ha of oil palm plantation 72 mills 5 kernel crushing plants 7 rubber processing factories australia 7 refineries Cattle project 1 oleochemical plant 2 sugar refineries Corporate Simplified overview of FGV Board Governance and management structure
O ur Board of Directors (the Board) is the highest governing body at FGV. The Board has the overall responsibility in leading and determining the Group’s strategic direction. It provides effective oversight of the conduct of the Shareholders Group’s businesses, ensuring that appropriate control systems are in place, as well as regularly reviewing such systems to ensure their adequacy and integrity.
As a public listed company on the Main Board of Bursa Malaysia, we are obliged to comply with all listing requirements. In addition, we wish to uphold the highest standards of corporate governance. We have therefore fgv Board adopted the Malaysian Code On Corporate Governance 2012 which outlines such principles and best practices. We follow Bursa Malaysia’s 2012 Corporate Governance Guide, which ensures that directors are familiar with their duties and roles to the company and its stakeholders.
Board composition Nomination & The eight member Board is responsible for the mission, vision and driving the Global Strategic Blueprint. The Board Audit Board Governance & Investment Remuneration Committee comprises of four independent non-executives, three non-independent non-executives, and one non-independent Committee Risk Committee Committee PAGE 16 executive director. Mohd Emir Mavani Abdullah, Chief Executive Officer, is the only Non-Independent Executive PAGE 17 board member. FELDA Enriching Values GLOBAL Internal Audit Governance & Ethics & Risk Compliance Integrity Management A Continuous VENTURES All board members are Malaysian citizens with an average age of 55 years. There is one female on the Board. Reporting Journey HOLDINGS Reporting Reporting Reporting BERHAD All Directors have extensive board experience, combining an impressive array of commercial, economics, legal, SUSTAINABILTY financial, public administration and specific relevant industry skills and knowledge. REPORT 2013
Board members are subject to retirement by rotation at the Annual General Meeting (AGM) but are eligible for Cluster re-election. Board members are to retire at least once every three years, with priority given to those who have been Boards Plantation Downstream Sugar MLO R&D longest in office since their last re-election or appointment.
Appointment to the Board Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary Subsidiary All nominees are vetted and assessed by the Nomination and Remuneration Committee based on their Level companies companies companies companies companies credentials and suitability before recommending their appointment to the Board for approval. The Nomination and Remuneration Committee must always comprise a majority of independent directors of which one must be selected Chair. The Nomination committee assists the Board with recommendations, review and assessment of President/ the Board composition in terms of mix of skills, independence and diversity required to meet the needs of the CEO FGV company. It considers any potential existence of conflicts of interest of any present Directors or any new directors who may be nominated. The Nomination and Remuneration Committee also ensures a continuous education programme for directors. Management Executive Management Board Committees, cluster boards and subsidiary boards Committee Framework The Audit Committee, Board Governance & Risk Management Committee, Nomination and Remuneration Committee assist the Board in carrying out its duty. All committees have clear and publicly available Terms of Reference and must comprise of a majority of independent directors.
For each of our main business aspects, we have established cluster boards who support the main Board of Vision Directors in decision making. All decision made at the subsidiary companies are escalated to cluster boards and Mission Value subsequently brought to the attention of the main board for approval. Policies, QMS, DAL, ASP Guidelines Code of business practice Management Standards Our Code of Business Practice guides our dealings in order to build and maintain public trust, as well as promote greater transparency. FGV’s Code of Business Practice embodies the six universal principles from the Malaysian Operating Standards Code of Business Ethics, and is integral to ensuring compliance with the rules, regulations and laws of being a (SOP and Work Instructions) public listed company. code provides ethical guidance to Survey with our vendors to ensure employees. Cases of misconduct vendors. We conducted a series that we keep our promises in our can be reported by using our Protecting of roadshows to bring awareness business dealings with them. hotline, email or in person to the of these changes to our vendors. Chief Integrity Officer. Employees A total of 514 registered vendors Whistle blowing policy are accorded protection under integrity signed the Integrity Pact as at 31 We provide a range of channels the Policy for whistleblowing in December 2012. We conduct an for anyone to report acts of good faith. annual Procurement and Integrity wrongdoing by any of our
FGV supports the Malaysian C orporate Integrity Development Gifts are a common cultural government’s initiative to combat Centre of the Malaysian Anti- aspect of business life in Malaysia, unethical practices. We signed Corruption Academy. The training especially during festive seasons. 2 pREVENTION both the Corporate Integrity ensures that we have certified We provide appropriate guidance 1 Education Detect and identify Pledge and the Integrity Pact with integrity officers to plan, implement and guidelines to our employees on weakness in practice, develop, plan and the Malaysian Anti-Corruption and monitor robust integrity gifts. We require all gifts received system and work implement integrated Commission in April 2012. programmes. by general managers and above to procedures and programs to increse be collected and distributed to the continue to increase knowledge, awareness The Corporate Integrity Pledge Integrity training and needy and to orphanages. Our gift level of efficiency and skills of FGV commits us to uphold the Anti- awareness policy is regularly reviewed to make by eliminating Group’s employees in Corruption Principles. By signing In 2013, we launched the Integrity sure it is effective and practical. opportunities for integrity management. this pledge, FGV has made a Awareness Road Show Tour corruption, fraud and unilateral declaration that it will Programme to reach out to our Avoiding conflicts abuse of power. not be involved with corruption, employees on our values and the of interest PAGE 18 commit any act of corruption, FGV-IP. All employees were briefed All FGV management and senior PAGE 19 work towards creating a business on the importance of integrity executive and above are required to FELDA Enriching GLOBAL environment that is free from and what it means to them, before declare their assets and interests to 5 reward/ Values VENTURES corruption and will uphold the signing the integrity pledge as the Chief Human Resource Officer. recognition A Continuous HOLDINGS Journey BERHAD Anti-Corruption Principles for part of their term of employment. The declaration must include family reward to Whistle SUSTAINABILTY Corporations in Malaysia. Employees were also provided businesses, acquisition or disposal REPORT Blower and employees 2013 guidance on how they should act of new or existing assets valued at who report corruption Felda Global Group’s and report any incidents. more than three months of their to the management Integrity Plan (FGV-IP) salary. and authority. The FGV-IP is a five year roadmap We are working with respective Reward to employees to promote and increase integrity subsidiaries to map out and identify Integrity pact for vendors who demonstrate values in FGV. We will educate all integrity systems at the operational As a large company, FGV has a exemplary behaviour. employees and partners on our level that could be improved. We vast network of vendors, and integrity values through training aim to conduct awareness training procurement has been identified 4 enhancement and in our engagement. We will on integrity and anti-corruption to as a potential risk area for corrupt emphasises on efforts assess and enhance existing 10% of our employees and vendors practices. We have therefore to ensure compliance policies and systems to prevent and annually. We will reward employees implemented an Integrity Pact with on work process, code appropriately reprimand anyone who exemplify integrity by organising vendors to abstain from bribery, of ethics, systems, 3 punitive involved in activities that diminishes the FGV Group’s Annual Integrity collusion or any other corrupt code of conduct and Develop a mechanism our integrity. Award in 2014. practices. clients charter, to that will increase the improve the individual ability to detect and In September 2013, we established Employee Code of Business The pact outlines the rights and or organisation that is punish those involved the Governance and Risk Practice obligations of FGV and its vendors. exposed and involved in activities that will Management Division to ensure Our expectation is for employees to Bidders on contracts will need to with activities that can taint FGV Group’s a holistic and robust approach adhere to the highest standards of execute a declaration to pledge not integrity. to protecting integrity. The three ethics. We do this through promoting to be involved in any activity related affect the integrity of respective departments, corporate ethical behaviour and avoiding any to direct or indirect payment, FGV Group. governance, compliance, ethics possible conflicts of interest. We offering, pressuring or bribing and integrity, and enterprise risk have an Employee Code of Business which may affect the final tender management, overlook different Practice which set out principles to decision. aspects of governance and risk. guide all employees in carrying out their duties and responsibilities to In preparation for the signing of We have sent four officers to the highest standards of personal the integrity pact, we revised our receive Certified Integrity Officer and corporate integrity regardless of Procurement Code of Ethics. This accreditation conducted by the where they operate. Prospering sustainably
We are committed to developing prior to the formal establishment In 2010, FELDA was the first productive agricultural areas, of the RSPO in 2004. From 2004 smallholder organisation in the status of rspo certification to 2017 improving living standards and to 2013, FELDA was a member of world to attain RSPO certification. (MT) promoting effective agricultural the 16 member Executive Board FGV’s first mills to be RSPO certified management. In our evolving representing smallholders’ interests. were in Kota Gelanggi 1 and Lepar CPO journey towards this mission, we Following a change in the RSPO Utara 6, Pahang. We have now PK 1,592,029 have adopted and adapted current governance structure, FELDA is certified a total of 17 mills, covering best practices in the arena of social now a member of the Board of 187,667 hectares of our estates. An and agricultural development. Governors representing oil palm additional 10 mills have undergone growers. RSPO audits and awaiting The development and emergence certification. We are also on track to 581,666 412,747 of the Roundtable on Sustainable We are members of the RSPO achieve our target to certify all of our 301,711 Palm Oil (RSPO) marked another Smallholders Working Group operations by 2017. 141,558 81,948 stage in our sustainability journey. developing the RSPO certification PAGE 20 The RSPO is the global standard standard that is inclusive for Supporting Group C ertified Audited 2014 - 2017 PAGE 21 promoting growth and the use of smallholders and upholds the P&C. Smallholder Certification FELDA Enriching GLOBAL sustainable palm oil throughout the We were part of the Verification We have supported 14 FELDA Values VENTURES supply chain. We believe that the Working Group and recently sat on settlements in obtaining RSPO A Continuous HOLDINGS Journey BERHAD RSPO Principles and Criteria (P&C) the P&C Review Taskforce assigned Group Smallholder Certification. SUSTAINABILTY are consistent with FGV’s overall to review the standard in 2013. The RSPO Group Smallholder REPORT 2013 mission and is our benchmark We also participate in the RSPO Certification applies to FELDA to guide us in our next phase of work on identifying and reducing settlements which are not situated growth. greenhouse gases. close enough to our mills to participate in our mill certification Driving sustainability Our commitment scheme. standards Our commitment is to certify all our FGV is an active member of the plantation and smallholders’ crops RSPO on behalf of the Felda Group. by 2017. This covers certification FELDA was one of the first palm of our 72 mills and FELDA scheme oil producer to support the RSPO smallholders in Malaysia. by signing the Statement of Intent
eight Principles of the RSPO 1. Commitment to transparency 2. Compliance with applicable laws and regulations 3. Commitment to long-term economic and financial viability 4. Use of appropriate best practices by growers and millers 5. Environmental responsibility and conservation of natural resources and biodiversity 6. Responsible consideration of employees, and of individuals and community affected by growers and mills 7. Responsible development of new plantings 8. Commitment to continuous improvement in key areas of activity Prospering sustainably
The FELDA Sustainability Steering Sustainability management Committee is responsible for the monitoring of sustainability performance at FGV. The Sustainability Steering Committee is chaired by the Director General of FELDA and consist of the respective CEOs of the four palm oil related business units. The Sustainability Steering Committee reports to the Boards of FGV and FELDA.
The Sustainability Steering PAGE 22 Committee meets on a quarterly PAGE 23 basis to monitor implementation FELDA Enriching GLOBAL of RSPO certification against our Values VENTURES time bound plan, develop and A Continuous HOLDINGS Journey BERHAD review FELDA Group sustainability SUSTAINABILTY policies, and set direction for REPORT 2013 research on sustainability.
The Sustainability Steering Committee is supported by two departments. The Plantation Sustainability and Quality Management (PSQM) is responsible for rolling out RSPO certification across all our estates globally. The team develops the time bound plan, monitors implementation, supports FELDA settlers in preparing for certification audits, and conducts roadshows to promote benefits of RSPO among independent smallholders.
The Sustainability Research Department focuses on improving performance in relation to aspects of sustainability. The department has initiated research on water quality, soil subsidence and soil erosion. Our future focus will be on footprint (water, carbon and energy) assessments and setting targets to pursue. Prospering sustainably
Responsible land development We are committed to ensuring that prior to any expansion, and acquisition all our land proposed for new plantings will undergo As we move to implement our Global Strategic Blueprint, a robust and participatory independent social and we are committed to expanding our land bank in a environmental impact assessment. responsible way. Our acquisition of new land will be
guided by the RSPO P&C on New Plantings Procedures Social and environmental stakeholders and land use change engagements will be documented impact assessments analysis will be conducted prior and carried out in a transparent (NPP). We are committed to ensuring that to any new planting. In cases manner. PAGE 24 prior to any expansion, all our land where there is a risk that HCVs PAGE 25 proposed for new plantings will might be affected, our dedicated Affected communities who have FELDA Enriching GLOBAL undergo a robust and participatory sustainability team will develop demonstrated legal and customary Values VENTURES Released in 2010 following a multi-stakeholder process, independent social and management plans to ensure they rights will be compensated fairly A Continuous HOLDINGS Journey BERHAD environmental impact assessment. will be maintained or enhanced. after a negotiated settlement has SUSTAINABILTY the NPP outlines a comprehensive and verifiable process In demonstrating transparency, been reached through free, prior REPORT 2013 findings of our assessments In consultation with affected informed consent. We will ensure for growers to develop new plantations. By using this will be made public and results communities, we will map out that communities and individuals incorporated into planning, potential positive and negative with rights to the land have access approach, we can ensure that our expansion will be management and operations of the changes to their livelihoods that to information and advice that new area. could result from our new plantings. is independent to reach a fair carried out without compromising the local environment, Focus will be given to identify and compensation value. Soil suitability protect areas required by affected and bring positive social and economic change to under- We have a policy not to acquire any communities that meets their No burning new area containing significant basic needs. We will aim not to burn land to developed communities. amounts of peat. We will avoid prepare for new plantings. When extensive planting on steep terrains, Free prior and informed there is an exceptional circumstance marginal and fragile soils, including consent and fair which requires us to carry out peat where possible. Soil surveys compensation burning, we will seek prior proper and topographic information will No new plantings will be approval from authorities. be used for site planning in the initiated until we demonstrate establishment of new plantings, to stakeholders that legal and Minimise net GHG emissions construction of drainage and customary rights have been We will attempt at all times to irrigation systems, roads and other obtained with their free, prior and ensure we minimise net GHG infrastructure. informed consent. Affected local emissions in our new plantings. communities will have a right to say All potential sources of emissions Maintain and enhance ‘no’ to our development. that may result directly from the biodiversity development will be identified. New plantations will not replace All materials relating to our new We will try to avoid areas of high primary forest or areas of high development will be made available carbon stock in favour of degraded conservation values (HCV). to affected communities in a format forest and grasslands. The net GHG A comprehensive HCV assessment that can be understood by them emission from our new plantings that includes consultation with and their representatives. All our will be estimated and mitigation efforts put in place. T ype of Form of engagement When to Issues of concern Prospering stakeholder engage Employees • Roadshows • Regular • Compensation benchmark • Management meetings meetings • Personal career development sustainably • Circulation of policies • Retirement planning • In-house business human resource
Regulatory and • Inspections by local authority • Annual • Environmental emissions and statutory bodies discharges • Taxes
NGOs • RSPO working committees • Regular • Environmental and social Engaging our stakeholders engagement, we are better equipped ensure that our business relationships committee issues in relation to We understand that the commitment to respond to their concerns and are mutually beneficial. As part of meetings sustainability of oil palm and contribution of all our build a business that brings benefit RSPO certification of our mills and stakeholders is invaluable to achieve to all. supply base, we conduct a series our goals and aspirations. of structured engagement and FELDA settlers • Meetings with FELDA scheme • Ad-hoc • Grading and prices of FFB We use a range of mechanisms meetings with internal and external managers • Tackling diseases in oil palm We identify our stakeholders to engage with our different stakeholders. • Delivery of FFB to mills • Presence of foreign workers in by measuring the extent of our stakeholders. Internally we have • RSPO pre-certification assessment the estates business impacts upon them and an annual employee engagement By having honest and open • RSPO certification how they influence our operational survey to understand their views of communications, internally and • Understanding smoke and performance. Each stakeholder group our performance and concerns they externally, we can work together to effluent discharges from mills adds a different dimension of issues may have. We conduct an annual achieve the best outcomes for our and concerns. Through ongoing Procurement Integrity Assessment to business and for our stakeholders. Investors • Quarterly investor briefing • Quarterly • Group financial performance • Circular/Notice analyst • Global business strategy briefings PAGE 26 • Annual PAGE 27 FELDA general Enriching GLOBAL meetings Values VENTURES A Continuous HOLDINGS Journey BERHAD Customer • Field day/Open day visit • Quarterly • Pricing SUSTAINABILTY REPORT • Coordination meetings • Quality 2013 • After sales service and • Support services follow-up
Suppliers/ • Contract negotiation • Ad hoc • Service delivery contractors • Annual registration • Project scope • Progress payment • Timeliness of payment • Site visits/meetings • Annual Procurement Integrity Assessment
Politicians • FGV Group functions • Ad hoc • Improving FELDA communities in their constituency
Fair compensation of land disputes At the time when FELDA was established, it was the duty of the Federal government to ensure that designated land was free of any encumbrances. Clearance from relevant federal and state agencies were obtained before land was transferred to FELDA. Despite this due diligence, there was only one case involving claim of customary land rights by a Murut community in Kalabakan, Sabah, brought to light in 1997. Prior to any development of the area and following discussions with the community, an agreement was reached with the community to establish a cooperative. This allows the affected individuals to continue receiving dividends from oil palm planted on their land. In the past, there have been claims of over planting by FELDA, which has been investigated and compensation paid to affected parties. There are also some on-going claims by local communities of over planting in the Lahad Datu region, Sabah. FELDA is currently investigating these claims to resolve the issue through consultation with the community and local authorities. Prospering sustainably Voices from our stakeholders: The early settlers
We are originally from Parit Buntar, About a year and a half ago, we because we wouldn’t have our own Perak. We got married in 1971 changed to growing oil palm. We land and a steady income. and we lived with my parents. We are getting old and it is difficult to were rice farmers. We had heard find experienced labour to manage There have been a lot of changes about FELDA and that there was the rubber plantation. The weather over the years in our lifestyles and a new intake. In 1974 we went is also changing and it is really quite opportunities. All my children have for an interview to apply to be a wet in these parts. With rubber, been through school, supported by settler. It was only in 1981 that we if it rains and you don’t tap in the FELDA, and have never had to rely were finally granted a place here morning, you lose a whole day’s completely on us. in Sungai Behrang. All my five productivity. Oil palm you can siblings eventually moved to FELDA harvest anytime. As parents, we worry about the settlements in different parts of second generation and their Malaysia. The majority of settlers in this area connection to FELDA. During the are changing to oil palm. When we time of the listing of FGV, there were PAGE 28 Though we are from Perak, we had grow oil palm, it will be managed a lot of rumours and arguments PAGE 29 never heard of Sungai Behrang. by FELDA so we don’t have to deal for not agreeing to it but I told my FELDA Enriching GLOBAL When we moved here, we were with problem of looking for labour. children that we need to remember Values VENTURES assigned a FELDA house, a wooden Even though my land is managed by where we came from and what the A Continuous HOLDINGS Journey BERHAD house on stilts. The area was very FELDA, we as a settler still have the organisation that has provided to us. SUSTAINABILTY REPORT much undeveloped and we spent right to oversee the plantation. If we 2013 a week clearing up the area around are not satisfied with conditions in Children who have left the estate our house. At that time we had new the field, we can ask the manager to are doing quite well in the city settlers arriving weekly so there take action. as they have jobs and houses of were induction sessions each week their own. Those that have stayed for us to meet. FELDA management Being part of the FELDA scheme has do not have land to build their came to visit us regularly to see changed our lives. I still go back to own home or their own fields to how we were adapting to the new Parit Buntar to see my friends. They tend. Creating new opportunities environment. are still working on paddy fields and such as vegetable farm and fish I can see that my life is now better farming would help provide new We were allocated an 8 acre plot than theirs. If I were still at Parit opportunities for them. of land to clear the land, and later Buntar, I don’t think I could have we were given another 2 acres. At this kind of lifestyle. As a Muslim, I Zakaria Bin Ahmad & Azizah Bt that time rubber trees was the crop wouldn’t have been able to afford to Mokhtar, FELDA Sungai Behrang to plant. As a farmer I had never perform the Haj [Islamic pilgrimage] tapped rubber, so I had to learn. It wasn’t easy at the beginning and it took me some time to get used to it. I had a few friends who gave up and went back to their hometown. All my children have At the beginning, FELDA gave us been through school an allowance of about RM100 in supported by FELDA vouchers for us to use in the FELDA grocery shop. We weren’t paid cash and have never had at that time because our rubber to rely completely trees were still not producing latex. on us. So in addition to tending to our rubber trees, we had to find other work to earn money for the family. Enriching FGV and FELDA settlers’ ecosystem our communities
We remain strongly committed to the core values of FELDA, which is to help Felda settlers obtain a decent income from their estates. Through our related subsidiaries, we support FELDA scheme managers with information and data for good agricultural practices, and provide services to settlers to deliver higher yielding fruit bunches.
In 1957, FELDA established its Each family is allocated 1,000 square The land title under the GSA first rubber FELDA settlement in metres of land on which to build requires the land to be under the PAGE 30 Lurah Bilut, Pahang. In 1990, it a home and four hectares of land name of one household member PAGE 31 established its 317th and last FELDA for agriculture. The development and the land cannot be sold FELDA Enriching GLOBAL scheme in Sahabat 2, in Lahad Datu, cost of the area, including other individually. The land can only be Values VENTURES FELDA A Continuous HOLDINGS Sabah. Today there are 112,635 infrastructure such as building redesignated and sold with the Journey BERHAD Felda settlers, with an estimated roads and drainage, are paid for consent of the state government SUSTAINABILTY REPORT population of 1.6 million. Over 98% by settlers over a period of 15 if there is a need for the land to 2013 of Felda settlers are Malays, with years. Once the development cost be developed. Proceeds from the the remaining Chinese and Indians. is repaid, the state government is sale of land is paid to settlers upon The average household income of a notified and the land title is issued completion of sale. settler is RM3,787 gross per month to the settler under the Group before deduction for expenses Settlement Area (GSA) Act (1960). The FELDA Settlers Association and loans. provides a platform for settlers to raise issues and concerns at scheme, regional and national level. Enriching our communities
Plantation and mills Yield losses in areas affected by management for three years. In Oil palm accounts for 83% of total pest and diseases have an impact 2013, we replanted 12,722 hectares structure of felda settlers association area under cultivation at FELDA on the income of FELDA settlers. belonging to settlers. During this schemes. Under a signed agreement We provide recommendations on replanting period, settlers qualify National Level between FGV Plantations and Felda the type of chemicals used and for a FELDA subsistence allowance • Decide on policy matters National Level Palm Industries, all FFB harvested timing of their application in their for eight years. This allowance is • Decide yearly programmes in FELDA schemes are sold to our farms. Even though the settlers repaid after the oil palm matures • Quarterly meetings mills. In 2013, we received more are responsible for purchase and and provides an income for • Region representatives Regional Level than six million tonnes of FFB from application of the chemicals, Felda the settlers. Felda settlers, with an average yield coordinates the purchase of these National Level of 21.5 tonnes per hectare. chemicals. After three years, Felda settlers have the option to contract Felda • Scheme representatives Scheme Level • Decide on programmes We have a fair and transparent RSPO Certification Technoplant to manage its estate at pricing mechanism in grading The Plantation Sustainability a rate of RM10 per acre per month, PAGE 32 Scheme Level FFB delivered to our mills. This and Quality Management excluding the cost of fertiliser. In PAGE 33 is particularly important for Department (PSQM) is responsible 2013, Felda Technoplant managed FELDA • Monthly meeting Block Block Enriching GLOBAL • Execute programmes outgrowers who are contractually for supporting settlers for RSPO 216,682 hectares of land for settlers. Values VENTURES obliged to sell all FFB to our mills. certification. As part of their A Continuous HOLDINGS Journey BERHAD Prices of the FFB are clearly posted. certification, the PSQM conducts SUSTAINABILTY When FFB is brought to our mills, documented stakeholder REPORT 2013 Delivering social employees and their dependants in that those who had disposed of it is graded based on the quality of engagement, briefings and training development the FELDA Group. Each individual is their shares continue to receive the FFB. Maturity of the fruit and to improve agriculture practices. Each Felda community has a Felda allowed to invest up to RM250,000 future dividends. The trust fund signs of damages are characteristics store where daily goods are sold. in the Co-operative. Over the last has a policy to distribute 50% we look out for when grading. Chemical management is an There are also social amenities such five years, the Co-operative has of dividends to settlers. FELDA area of focus for PSQM. Training as a mosque, schools, community paid out on average 15% dividends also gave RM15,000 to settlers to Despite these efforts, we continue to on correct chemical use, triple hall, kindergarten, clinic, internet to members. purchase additional share units. receive complaints on the pricing of rinsing of containers and chemical centre, and youth centre in a FFB. We will intensify our awareness application are organised. The typical scheme. Each scheme is With 51% shares in Felda Holdings Scheme oil palm management and communication about how department conducts a census of responsible for organising a range Bhd, the Co-operative held shares Each Felda community is managed grading is carried out with our each household to ensure there of community, cultural, recreation, in a range of FELDA related by a Felda scheme manager. settlers and smallholders. is a locked chemical store and sports and religious activities. subsidiaries. In 2013, FGV acquired Most of the schemes will have two discourage the use of pesticide the remaining 51% share in assistant managers. One assistant Agricultural extension containers for household activities FELDA provides interest free loans, Felda Holdings Bhd from the manager provides administrative services use such as planting pots. for education, buying computers Co-operative for RM2.2 billion. support, such as processing Our subsidiary, Felda Agricultural and home renovation to improve monthly payments to settlers, Services Sdn Bhd (FASSB), provides Replanting and management their quality of life. It also provides Participating in FGV’s initial monitoring of loan repayments, soil and foliar analysis services to services low-interest loans for entrepreneurial public offering and issuing monthly statement of all FELDA schemes. In coordination A replanting fund is established at initiatives. One of the most popular Through 20% shares held in trust accounts. and cooperation with the the start of each oil palm scheme is the development of homestays by FELDA, settlers are the largest scheme manager, FASSB provides for each settler. Each month, for tourists. shareholders in FGV. At the time The second assistant manager is in recommendations about the type RM10 per acre is deducted, and of initial public offering (IPO), each charge of plantations. The assistant of fertiliser and application levels. the estimated fund at the time The Felda Investment settler was given 1,000 units of manager disseminates information Fertiliser for use in settler area is of replanting is RM17,000. Our Co-operative FGV shares. A settler could opt to through block leaders. One block done through a process of tender subsidiary, Felda Technoplant Established in 1980, the keep the shares and pay a monthly leader supports up to 20 Felda and negotiation. The settlers pay for Sdn Bhd, provides replanting membership of the Co-operative instalment of RM200 or sell back settler. Each settler is responsible for the fertilisers. services and post replanting today comprises 202,870 settlers 800 units to FGV. The remaining the management and productivity and dependants as well as 29,032 200 units are held in trust to ensure of their land. Enriching our communities
Independent smallholders Independent smallholders RSPO Certification Outreach In addition to Felda settlers, a large represent an important stakeholder In 2013, we conducted a series of number of independent outgrowers in establishing a traceable engagements with independent supply us with approximately 33% supply chain. The RSPO requires smallholders across our operations. of the FFB processed in our mills. us to certify our independent In partnership with the National In 2013, this amounted to smallholders three years after we Association of Smallholders (NASH), 4.38 million tonnes of FFB. have achieved full certification we presented to them on the of our mills and supply base. benefits of RSPO and the process Our target is to certify all of our of certification for independent independent smallholders by 2020. smallholders. Most of them were aware of the RSPO but did not have detailed knowledge of RSPO requirements. We also took note PAGE 34 external ffb sourced by state in 2013 of their concerns about RSPO PAGE 35 FELDA certification, which centred on the Enriching GLOBAL cost of certification and the lack of Values VENTURES A Continuous HOLDINGS Pahang: 1,549,307 premium. Journey BERHAD Sarawak: 59,099 SUSTAINABILTY REPORT :Selangor 105,042 We will begin testing the readiness 2013 Negeri Sembilan: 120,146 of certification of independent Perak: 134,850 smallholders in 2014 by developing Terengganu: 315,555 a pilot project after consultation Sabah: 527,600 with representative bodies such as Kelantan: 531,597 the NASH. We will provide training Johor: 920,442 services on best management practices such as seed selection, fertiliser application and proper health, safety and environment practices.
ffb supplied by external suppliers (tonnes)
5,178,356 5,201,418
4,382,933
2011 2012 2013 Enriching our communities Voices from our stakeholders: The SECOND GENERATION
I moved from Chenderiang, Perak Since then we have seen many daughters and two sons, and they with my family to Sungai Behrang improvements in the community. have received educational support when I was seven. There were seven The roads are now fixed, the village from FELDA, which is a great burden of us in the family. When I was ten, hall is repaired, the grounds are lifted off us. We also received a I stopped going to school because well maintained, and our crops windfall of RM15,000 per family and I was afraid of the teacher. I then are better managed. As in any shares from the listing of FGV for began working with my father on community, you are going to have our loyalty and contribution to the our rubber estate. differences of opinions. We need FELDA scheme. to continue to cooperate and At that time, the area was still improve our communication with As a second generation of FELDA, undeveloped and overgrown each other. I am considered quite lucky because with vegetation. We had a FELDA my father’s land has been signed wooden house and eight acres There is no doubt that FELDA over to me. For some families, the of land. It wasn’t until much later has improved our livelihoods. second generation are in a limbo, PAGE 36 that we were allocated another Compared to our smallholder but FELDA has come up with the PAGE 37 two acres. Life wasn’t easy then. peers in Indonesia and Thailand, new model called ‘Sentuhan Kasih’, FELDA Enriching GLOBAL I can remember during early days we are better off because we have an integrated modern farming Values VENTURES my father received a cost of living the opportunity to own land. At which includes a single storey A Continuous HOLDINGS Journey BERHAD allowance of RM68 per month this moment, I have an eight acre bungalow house and for those SUSTAINABILTY which he used to get food from the rubber plantation of which I will working nearby, FELDA also offers REPORT 2013 FELDA shop (now D’Mart). change to palm oil next year. As of a single storey terrace house for now, my average monthly income FELDA new generation. In my early twenties, I left the estate is around RM2,500. By changing to and went to Kuala Lumpur and palm oil in the future, insya Allah Abdullah Sani Bin Md Daud & Latipah worked in different areas. In 1992, my income would be better. Bt Hashim, FELDA SUNGAI BEHRANG my father asked me to quit my job and come back to FELDA. We have also benefited in other As my other siblings had their ways. I have five children, three steady careers, my father offered to change the land title to my name. I discussed this with my siblings and they all agreed. My father passed away in 1995, and in 1997 the land title was officially under my name.
We went through many challenges. Once, there was news that an investor wanted to buy our land. Everyone was dreaming about becoming a millionaire but after a while there was no news from the so called investor. At that time, I was so frustrated but remembered thinking that it was a bad idea to Compared to our part from the land as it is my source smallholder peers in of income. Indonesia and Thailand, we are better off because we have the opportunity to own land. Board of Trustees young graduates in their pursuit of Prihatin”, which offers health The Board of the FELDA Foundation employment opportunities. screening and free spectacles. In comprises of six Trustees. The collaboration with the National Board of Trustees ensures that The Foundation’s English Language Cancer Council Malaysia (MAKNA), funds are properly administered Centre in Kelana Jaya offers the programme also offers mobile and disbursed according to the three months intensive English breast cancer screening. In addition Foundation’s vision, objectives language training for children to these programmes, it also runs; and areas of focus. The trustees of settlers who have completed meet quarterly to vet new project secondary education. Accredited • Nur Ilmu - Supplies religious proposals, review on-going projects by City and Guilds of London, the manuscripts to mosques, suraus, and ensure accountability of intensive course offers students and religious schools in FELDA funding. The FELDA Foundation is an opportunity to enhance their settlements. supported by a team of staff who fluency before they enter an • Multivitamins - Provide implement and monitor progress of institute of higher learning. In 2013, multivitamins to Haj pilgrims in projects funded. 919 students graduated from the preparation for their pilgrimage. programme. For students in lower • Gema Bakti - Provides NGOs and Foundation funding focus secondary school, between the suraus with mobile PA systems. FELDA Foundation has four focus ages of 13 and 14, the centre runs areas. It seeks to provide access to an “English for Young Learners” Pursuit of new knowledge education, access to kidney dialysis programme at SMK Trolak Selatan. The investment in research into treatment, pursuit of research There are 120 students involved in new discoveries and innovation PAGE 38 and development and provision this programme. that have commercial value will PAGE 39 FELDA of welfare. Since its inception, the contribute to the pursuit of the Enriching GLOBAL Foundation has dispersed over The centre also teaches English nation’s developed status. It Values VENTURES A Continuous HOLDINGS RM291 million towards these to FELDA settlers operating will also place Malaysia on the Journey BERHAD focus areas. homestays. With tourists arriving international stage in the scientific SUSTAINABILTY REPORT from all over the world, English and technological arena. 2013 Access to higher learning is the common tongue that Development of the nation’s connect families and provides an Since 1999, the Foundation has human resource is critical to the opportunity to enrich their cultural disbursed 80 grants worth RM14.75 growth of the nation. With 46% experience. million, ranging between RM50,000 of the population under the age and RM350,000 per project. In of 25, access to affordable and Access to welfare and 2013, the Foundation approved high quality education for all is medical assistance one project worth RM156,000. important for the development of In 1999, Felda Foundation began A total of 32 research projects the nation. operating a haemodialysis centre have the potential to be applied for lower income individuals. commercially. FELDA Foundation funds and Haemodialysis is a critical aspect of operates four colleges for the chronic kidney disease treatment Scheme Kasih Felda educational enhancement of and can help prevent permanent In June 2012, the Foundation children of settlers. Students can kidney failure. The centre has 23 launched “Programme Skim Kasih earn a certificate and/or diploma dialysis machines and subsidises Felda”. The programme aims to help in areas ranging from hospitality, care for 117 patients. It is staffed local communities surrounding Y aYASAN FELDA health professions, information with nurses, support staff, a doctor FELDA projects to refurbish their technology and animation, as well and a nephrologist. The Foundation homes with a grant of between as vocational skills ranging from has donated 50 dialysis machines RM5,000 and RM7,000 per house. tailoring to hair dressing. to government hospitals, clinics A budget of RM60 million has been and NGOs to enhance access to allocated to fund this project until In 1998, the FELDA Foundation (Yayasan FELDA) was English education treatments. June 2016. In the first phase, up to In our increasingly globalised the end of 2013, RM34.6 million has established to promote and provide support to charitable and world, being fluent and proficient FELDA Foundation has a been disbursed to 6,312 families. welfare activities to benefit Malaysians. Being part of the FELDA in English is essential for Malaysia’s programme known as “Kami family, FGV is committed to contributing 2% net profit every year to the Foundation. Enhancing accountability in our workplace
Our 18,785 staff are the building Structure planters. We need leaders with a blocks of our company. The Our Group Human Resource global mindset to lead our new majority of our staff are based in manages the overall capacity businesses teams as we continue Malaysia. The staff of our upstream and capability building of our with our global expansion. operations account for about 25% employees to support our business or 4,605 of our total staff force. The goals. A resource committee Our human capital development upstream operations employed at each business unit identifies is designed to equip our future an additional 30,172 workers to human resource needs and selects leaders with technical, leadership support their activities. potential high performance and management capabilities. individuals. Recommendations from We are creating a culture of We empower every single person to resource committees are challenged differentiation. Our training and be as productive as possible, while and scrutinised to ensure that development programme aims to developing their skills, character objectives and needs are clearly create a behavioural change for and experience. By encouraging identified. We add an element positive business impact. We want PAGE 40 our staff to achieve their maximum of external and independent to develop individuals who think PAGE 41 potential we ensure ownership, assessment to ensure non-bias in out of the box, innovate, drive FELDA Enriching GLOBAL innovation and entrepreneurial our processes. performance and are accountable. Values VENTURES endeavour. A Continuous HOLDINGS Journey BERHAD We have installed an Online Technical capability SUSTAINABILTY One of our core value is for our Performance Management System development REPORT 2013 employees to “Walk the Talk”. We to ensure that all processes involved Developing a healthy bloodline want to develop employees who in the performance management of plantation and mill managers are results focused and invested can be completed successfully and is crucial for the long term growth in continuous improvement. We effectively. of our plantations. Our talent want our employees to be people pool however is limited. Gen Y’s friendly, to instil them with respect Human capital development at university do not gravitate to for our stakeholders and uphold Developing human capital is a agricultural science as a first choice, integrity and strong work ethics. significant piece of our strategy and there are few universities that to achieve our growth trajectory. offer plantation management as a Our pioneering group of growers discipline. Therefore, we are looking are retiring and we are in a race for talented individuals with a to develop a new generation of passion to make a difference.
Developing human capital is a significant part of our CHRO strategy to achieve our growth trajectory. Our pioneering group of growers are retiring and we are in a race to develop a new generation of planters. We need leaders with a global mindset to lead our new business teams as Performance, Human Capital Staffing and International we continue with our global expansion. Group HRBP Rewards and Development University Relation HR System Support Enhancing accountability in our workplace
Ctade planters and mill Our accounting professional in collaboration with Asia Individual education on improvements. Engagement of Empowering women programme certification programme supports e-University. Designed specifically enhancement our mills and plantations is part of Women make up 10% of the Group Our cadet programme trains future 50 young accountants in attaining with our input, the programme As employers, our role is to enable our social impact assessment as we management. We are supportive of plantation and mill managers. their ACCA, CIMA and ICAEW adopts the Ram Charan six fold each employee to develop their certify our mills to RSPO. the recommendations adopted by Cadets are placed in plantations qualifications. Over three years, leadership guidelines. In 2013, career path. For each employee, the Government and Bursa Malaysia and mills at the very start of the we monitor their progress in assignments abroad were included this path is unique. Since 2011, We have standardised all that 30% of decision-makers in programme to test their suitability the professional exams and as part of their assessment to reflect we have supported 16 employees compensation packages for public listed companies should be and passion for the job. Candidates performance at the workplace. the leaders we seek to develop. in gaining their professional management trainees, and female. that make it through the first three A group were sent to Chiang Mai, certification in Chartered Internal increased compensation packages months then begin a one year Leadership and management Thailand and another to our new Auditor, Association of Chartered for some categories of employees to All female employees are entitled training on plantation and mill capacity development operation in Pontianak, Indonesia Certified Accountants, Enterprise be more competitive in the market to 60 consecutive days of paid management. All cadets are trained The Green Talent & Global Leaders to undertake project that tests and Risk Management, and Science to attract and retain key talent. We maternity leave, in accordance on the basics of plantation and mill programme assures us of our next develops leadership skills. Actuaries. We also supported the will continue to review job grading to the Malaysian government management to ensure we develop generation of leaders and ensure academic pursuits of 20 employees and salary structure that supports a regulations. PAGE 42 managers inculcated with the same healthy succession planning. The interaction exposes our in getting their masters and PhD. performance oriented culture. PAGE 43 mindset. The programme identifies high emerging leaders to new ideas With young women making up over FELDA Enriching GLOBAL potential employees between the and contacts across our business FGV scholars Diversity and equal 60% of university graduates, we Values VENTURES Each plantation and mill cadet is ages of 30 and 45, who undergo units. We invite corporate leaders Each year, the FGV Scholarship opportunity recognise they are valuable talent A Continuous HOLDINGS Journey BERHAD required to write and present a mini a 15 month intensive leadership and arrange visits to other leading provides the country’s brightest We believe that all our employees pool that can support our business SUSTAINABILTY thesis before they graduate from development programme. companies to learn and be inspired students an opportunity to study should be treated equally. We growth. We encourage women to REPORT 2013 the programme. The thesis should by different leadership values in the world’s best universities. believe that merit and performance enrol in our cadet plantation and demonstrate understanding of High potential employees are and styles. Since 2006, we have awarded should determine reward and mill programmes. Although they an aspect of their operations and first identified by a respective 40 scholarships to students promotions. We have designed may only remain in the estates identify areas where improvements resource committee and then In 2013, we graduated our first with an opportunity to study challenging assignments that for a few years, we believe that to processes can be made. assessed by independent external batch of 47 Green Talent & Global biotechnology, chemical and candidates have to pass, and time spent gives them a better consultants to eliminate any form Leaders. Eight graduates were mechanical engineering, finance, established external independent understanding of the business Management and Account of bias. Selected individuals enrol subsequently promoted. Our accounting, information technology boards to ensure non-bias in our when they move out of the estate trainee in a Diploma in Management in current batch of 54 Green Talent & and international marketing. We selection programmes. into a position overseeing a region. We recruit management trainees collaboration with the Australia Global Leaders will graduate already have 12 scholars returning to give young graduates first Institute of Management and an in July 2014. and contributing their knowledge exposure to their potential careers. Executive Masters in Management to FGV.
Engaging employees With employees based across EMPLOYEES AT FGV the country, we have an active women in fgv management as at 31 december 2013 (%) engagement calendar to ensure (%) that our employees remain Employee: 86 connected with us. We conduct Management: 3 roadshows in different regions, Male management: 90 Executive: 11 publish in-house monthly Female management: 10 newsletters, suggestion boxes and an intranet to gather suggestions Enhancing accountability in our workplace Voices from our stakeholders: GENERATION y
I joined FGV two years ago, shortly my strengths but also recognise Global Leaders Programme, more after I graduated with my Masters in that I can develop areas beyond my than the previous batch. About 17% Human Resources. I was older than key competencies. of our 244 cadets and trainees are most when I applied for a position women. We have a former female as a management trainee. My boss Being a part of the Green Talent cadet - an expert in rubber - who must have seen something in me and Global Leaders Programme is now teaching young cadets on as I was subsequently bypassed as for high performing candidates planting and currently we have a management trainee and offered has been very rewarding. The five female cadets planters in the PAGE 44 PAGE 45 an Executive position in the Human coursework has been intensive programme. I do admire the young FELDA Capital Development division but the exposure has been even women out in the estate. While Enriching GLOBAL Values instead. greater. We are completing our their leadership may not be taken A Continuous VENTURES Journey HOLDINGS research and business proposal on as seriously by subordinates, they BERHAD SUSTAINABILTY When I started working at FGV, cloning of palms. Our exhibition are no less committed to their work REPORT I knew little about the company. and presentation to the senior and show remarkable resilience in 2013 I only knew that it was connected management is in the next few facing the challenges of harsher to FELDA and that it was involved in weeks, which is rather exciting. working conditions. oil palm plantations. Many people Not many executives get the thought I worked in the estate. It opportunity to present their visions I have an interesting and privileged was only when I started working for to senior management. We want role as the coordinator of the young the company that I got to know that to demonstrate their investment cadet programme, as I connect the it is a company that is much more in us has been worth it, and that as Gen Ys with the senior employees diversified, more than just about managers, we can contribute to the and managers. We act as liaisons oil palm. FGV needs to get that success of the future growth of the to support and guide them. Gen message out. business. We hope that our business Ys have high expectations of case will grab their attention themselves. For them, a university I now feel very connected to FGV. and that it can be adopted in the degree is proof that they can do It looks after the welfare of its business plan. the job, but to most managers, it is employees well. I want to be a the experience gained over years part of an organisation that helps Although the plantation sector is of being in the field that creates to develop individuals who are largely male dominated, we can adeptness. I think the Gen Ys feel critical thinkers, problem solvers see that women can thrive here like they are being treated like and future decision makers. FGV too. Women are recognised for children sometimes, while all that gives me great opportunities to try the strengths that we bring to they want is to be recognised peers. new things and to discover skills the table. I do not feel that we are Engagement is so important to Gen I did not even know I had. When I judged by our gender but by our Ys, so I hope that FGV will continue was assessed for the Green Talent capabilities. I think we are just as to do that. and Global Leaders Programme, able to contribute ideas to get the I want to be a part of an we were asked to step out of our job done. Alissa Oon Ridzuan Oon organisation that helps comfort zones to do things that we Executive – Human Capital would not normally do. I was happy There are currently four women in Development to develop individuals that I not only succeeded in utilising my batch of the Green Talent and who are critical thinkers, problem solvers and future decision makers. Enhancing accountability in our workplace
Engaging Generation Y of 4.5% over two years. We have had including the right to collective and we have had no on-going Foreign workers system. Workers are accommodated We want our managers to be slight decrease in overall turnover bargaining, elimination of forced disputes. Our collective bargaining We employ 25,144 foreign workers in a two or three bedroom educators of our emerging talents, over the past two years. or compulsory labour, no child agreement covers all our foreign on our estates. The majority of house. All workers are covered by our Generation Ys. Our experience labour and the elimination of workers. our workers are from Indonesia, insurance which covers accidents has shown that engaging managers We have seen a slight increase discrimination in the workplace. Bangladesh and Nepal. All workers and disability. to understand the values and in the number of executives Non discrimination are recruited by an agency in their mentality of the new generation is leaving us in the past two years. Fair wage We recognise and value diversity home country. Workers do not In addition, we have 3,974 foreign crucial to the retention of younger We attribute this to a change in Our pay and conditions for in the work place. We do not have to pay a bond. We do not workers working on our estates employees. We hold meetings with our cadet selection programme workers meet at least the legal or discriminate against age, race, allow changes to their working employed by our contractors. managers to share experiences and which recognises individuals with a industry minimum standards and gender, nationality, and politics. conditions, unless it involves These workers are accorded the ideas on how to engage Generation passion in plantation management are sufficient to provide decent Our workers are paid the same rate. changes required under national same basic work conditions, Ys to ensure optimum performance. earlier in the programme rather living wages. Our workers are paid Our recruitment and promotion guidelines and legislation. protection of human and social than later. not less than the recommended procedures are based on merit. rights, and adherence to safe Generation Ys wants to be engaged wages of the Malaysian Agricultural We respect the rights of foreign working conditions as foreign PAGE 46 and like to be challenged. In all our Basic working conditions Producers Association and the We have a zero tolerance policy on workers to their travel documents. workers under our employment. PAGE 47 training, we have built in periodic We are guided by the principle National Union of Plantation harassment or abuse in the work We do retain their passport for safe FELDA Enriching GLOBAL structured engagement to ensure that all employees, including Workers. The current starting wage place. We have instituted a series keeping. However, workers have Occupational health Values VENTURES that our trainees are motivated foreign workers, must be treated of a foreign worker is RM900, in of hotlines for anyone to raise access to them upon request. New and safety A Continuous HOLDINGS Journey BERHAD and receive useful feedback. We set fairly, and with respect. Our labour addition to provision of housing complaints. foreign workers arriving at the We are committed to providing a SUSTAINABILTY REPORT stretch targets to help them realise policies are grounded in Malaysia’s and utilities. estate are given an orientation. An safe and healthy work environment 2013 their potential. labour legislation, as well as in Bonded labour orientation programme includes to our employees and contractors. International Labour Organisation All our contracts of employment We do not subject any of our worker safety, labour laws and local We provide all necessary training Employee turnover (ILO) Declaration on Fundamental provide details on payments workers to bonds. Workers enter cultural sensitivities. and support to all on information, Our employee turnover is relatively Principles and Rights at Work. and conditions of employment. into employment voluntarily and instruction, training and supervision low and has maintained an average This covers core labour standards Information on working hours, freely, without duress. Local workers Our foreign workers are paid on a to work safely and without risk to deductions, overtime, sickness, have the freedom to terminate monthly productivity-based pay health. holiday entitlement, maternity employment without penalty if leave, reasons for dismissal, period given reasonable notice. Foreign of notice is provided in their native workers are under a three year language or explained to them by a contract. management official. Child labour Freedom of association We do not employ children under employee turnover We respect the rights of our the age of 17. We recognise that nationalities of workers employed at plantation (%) employees to form and join there are children living in the areas and mills (%) unions. In our oil palm upstream around the estates and that children operations, we recognise five in settler and smallholder families Indonesian: 59 5.06 unions representing 33.6% of our will often help out on smaller tasks Others: 2 employees. such as loose fruit collection. As Nepal: 3 4.74 long as it does not affect their Malaysian: 17 Bangladesh: 19 There is a local committee attendance and participation in consisting of union representatives schools, and as long as there are elected by members at each mill no hazardous tasks, we accept that and estate. All of our collective as part of their contribution to the bargaining agreements are signed household.
2012 2013 lost time accident rate Enhancing (Accidents per 200,000 working hours)
accountability 0.57
0.42 in our workplace 0.40
M anaGEMENT of health and standard was carried out at Besout thorn pricks. In the mills accidents safety 6 FGVPM Estate. are related to mechanical hazards. The Head of Environment Safety Benchmarked against our industry and Health is responsible for overall We collaborated with FGVH peers, our accident rates are lower 2011 2012 2013 health and safety. Our health and Occupational Safety Department but our severity is higher. This safety systems at the mills are to develop a Plantation Safety may indicate a difference in the OHSAS 18001 certified. At each of Supervisor (PSS) module to way accidents are recorded and our plantations, a safety manual Support our target of having a reported. We will consult with our guides the health and safety competent PSS in all our estates peers to ensure that we develop committee to implement a range by 2017. A PSS’s role is to assist in comparable indicators that can be of health and safety programmes overseeing occupational safety benchmarked. and monitors performance and health, as well as the welfare severity rate improvement plans. Daily briefings of workers. We initiated an online Fatalities (Average days lost per accident) and a weekly toolbox is conducted Notification of Accident, Dangerous Any fatality at our workplace is PAGE 48 to identify hazards and areas for Occurrence Occupational Poisoning a cause of concern. A review of 14 PAGE 49 improvements. and Occupational Disease with operations is conducted after FELDA 11 11 Enriching GLOBAL PRODATA, which will be completed each fatality and we implement Values VENTURES Each worker undergoes four health in June 2014. We conducted improvements and raise awareness A Continuous HOLDINGS Journey BERHAD and safety training modules before training on “Chemical Safety” and among our workers. We aim to have SUSTAINABILTY being deployed to the field. Workers developed a module on “Confined zero fatalities in our operations REPORT 2013 are trained on general health and Space Training” to comply with by 2017. safety, hazards at the workplace, the OSHA 94 and FMA 97. We also personal protective equipment focused on improving enforcement We recorded five fatalities in our (PPE) and training specific to of PPE use among lower risk workers. plantation and mill operations in their role. 2013. Three accidents were related Accidents to road accidents, one an accidental 2011 2012 2013 In 2013, we reviewed our Plantation In 2013 we recorded 229 accidents, drowning. In our mill operation, a Safety Manual to ensure it complies resulting in 2,508 lost working fire in a PKE warehouse resulted in with the Malaysian Occupational days. Most of the accidents in our the death of one worker. We also Safety Standard-MS1722. A pilot plantations are from falling palm recorded two deaths of workers project to test compliance with the fronds, motorcycle accidents and employed by our contractors.
fatalities
FGVPM FPI FASSB FKP 2 Contractors
5 1 4 2
1
2011 2012 2013 Protecting our natural environment
As the manager of one of the Malaysia’s largest land banks, we have an immense responsibility to ensure that we have minimal impact on the environment and enhance areas surrounding our estate.
G ood Agriculture Practice have Oil palm planted on slopes of plantations. Spraying is confined compost as an organic fertiliser, emission credits annually. The use been core foundation in our role as greater than eight degrees, are to the immediate area around we reduce our dependency on of biomass has displaced the use plantation manager and extension terraced with fronds laid along the the palm tree. We currently chemical fertilisers and greenhouse of fossil fuel since January 2006, service provider. Practices such as contours. We have phased out oil use Paraquat for specific weed gases associated with its production resulting in emission reduction of PAGE 50 reducing soil erosion, correct and palm on slopes greater than 25 conditions, as we find this the most and transportation. 144,522 mt CO2 eq. PAGE 51 timely application of fertiliser, waste degrees at landscape level during effective chemical for this use at the FELDA Biomass power plant Our second EFB power plant at Enriching GLOBAL management and protection of replanting. moment. However, we understand Values In 2005, our Sahabat power plant in Jengka is under construction. A A Continuous VENTURES water bodies have long been part that some stakeholders are Journey HOLDINGS of our practice. Our environmental Integrated pest management concerned about this herbicide due Lahad Datu, Sabah, was the world’s joint venture with Tenaga Nasional BERHAD SUSTAINABILTY management systems are based on Our integrated pest management to cases of poor stewardship and first to use oil palm waste material Bhd, when completed, the plant REPORT 2013 the ISO14001 framework. uses a suite of bio-controls aimed we are seeking viable alternatives to under a Clean Development will use 320,000 tonnes of biomass at controlling pests which attack Paraquat. For now, we are gradually Mechanism project. The power to generate 10.0 megawatts of Estate managers are responsible for oil palms. The integrated approach reducing our use of Paraquat, and plant has the capacity to produce electricity, which will feed into the the implementation and monitoring employs a combination of natural plan to phase out all use in up to 55,000 tonnes of carbon national grid. of environmental management or benign pest control methods, to the future. plans. Each manager reports to reduce damages caused to the crop a complex head who oversees by pests, resulting in minimal use of Waste and effluent environmental performance at a pesticides. In 2013, we produced over landscape level. 5 million tonnes of empty fruit Our crop protection team uses bunches (EFB), mesocarp, palm Soil management barn owls to control the population shell, old palm fronds and oil palm Ensuring the quality of our soil of rats that eat the palm fruits. trunks from replanting. These by- is paramount in our operations. Hymenoptera wasps are natural product for our mills and estate are by-products from mills We ensure that we minimise and predators of bagworms, which used to add value to other parts of (MT) control erosion and degradation attacks fronds of palms. We deploy our operations. Empty Fruit Bunch 3,537,998 3,524,508 of soils. We plant leguminous pheromone traps to capture beetles 3,460,067 cover crops when we prepare and implement innovative methods Composting Fibre Palm kernel expeller the land for replanting to assist incorporating bio-pesticides We operate six compost plants in soil conservation and moisture (metarhizium spp) in our wood which takes organic waste and palm retention. Planting of leguminous chips to control oryctes beetle oil mill extract to create organic 1,929,817 1,922,459 1,887,309 cover crops also fixes nitrogen from population. fertiliser. Composting is a process of 840,745 850,520 841,197 the air into the soil, thus reducing decomposing organic waste using the need for nitrogenous inorganic Blanket spraying of weed killer aerobic decomposition. By using fertiliser. is not widely practiced on our
2011 2012 2013 Protecting our natural environment
Protecting areas of high biodiversity and ecosystems The Six High conservation value surrounding our plantations in Conservation Values FGV is committed to protecting Peninsular Malaysia. More data The six steps of the HCV process the natural environment and we needs to be collected at the estate • HCV1 Areas containing globally, have adopted the internationally level to identify site specific HCV regionally or nationally accepted High Conservation Value areas. Field survey and consultation significant concentrations (HCV) assessment tool as our process needs to be conducted of biodiversity values (e.g. basis for identifying biodiversity together with local stakeholders, endemism, endangered species, PAGE 52 PAGE 53 conservation and protection especially to confirm the presence refugia). FELDA priorities. Through this approach, of HCV 5 and 6. Enriching GLOBAL t Values we can help preserve populations • HCV2 Globally, regionally or A Continuous VENTURES Journey HOLDINGS of endangered wildlife and ensure The engagement and investigation nationally significant large BERHAD SUSTAINABILTY their survival for future generations. following our assessment will landscape-level areas where REPORT allow us to develop appropriate viable populations of most if not 2013 Mapping surrounding high monitoring and management all naturally occurring species conservation value plans for our estates, beginning exist in natural patterns of oring In 2013, we conducted a desktop with estates closest to HCV areas. distribution and abundance.
HCV assessment at a landscape We will also conduct landscape tification level of our estates in Peninsular assessments of our estates in Sabah, • HCV3 Areas that are in or contain
eporting Malaysia. The objective of the Sarawak and Indonesia in 2014. rare, threatened or endangered assessment was to provide as much ecosystems. V r information as possible about the High Conservation Values lanning V monit
potential types of HCVs present In 1999, the Forest Stewardship • HCV4 Areas that provide basic P r V iden within and around our estates. We Council developed the concept ecosystem services in critical V managemen P eparation used the National (Malaysia) HCV of High Conservation Value (HCV) situations (e.g. watershed HC Forest Toolkit developed by WWF for the use in forest management protection, erosion control). HC HC to guide our assessment. Reference certification. There are 6 types HC documents, maps of forest cover, of HCV areas defined by this • HCV5 Areas fundamental to protected areas and species concept. HCVs are critical areas meeting basic needs of local distribution were overlaid with our in a landscape which need to be communities (e.g. subsistence, estate maps. appropriately managed in order to health) maintain or enhance its services. The findings of our desktop HCV The HCV concept is globally • HCV6 Areas critical to local assessment provided us with a recognised and toolkits have been communities’ traditional landscape overview of the diverse adapted to national landscapes. cultural identity (areas of cultural ecological economic or religious significance identified in cooperation with such local communities). Protecting IUCN red list species identified found around our plantations IUCN STATUS SCIENTIFIC NAME COMMON NAME CRITICAL Dicerorhinus sumatrensis Sumatran rhinoceros (Badak sumatera) our natural ENDANGERED Megaerops wetmorei Wetmore’s tailess fruit bat (Cencadu) Rousettus leschenaulti Cencadu Rhinolophus convexus Convex horseshoe bat (Kelawar) environment Rhinolophus marshalli Marshall’s horseshoe bat Rhinolophus shameli Shamel’s horseshoe bat Aselliscus stoliczkanus Trident horseshoe bat (Kelawar serampang) Coelops frithii East asian tailess bat (Kelawar ladam tiada berekor) Hipposideros dyacorum Dayak roundleaf horseshoe bat (Kelawar ladam)
Hipposideros lekaguli Lekagul’s roundleaf horseshoe bat (Kelawar llekagul) Hipposideros nequam Malayan roundleaf horseshoe bat Hipposideros orbiculus Roundleaf horseshoe bat Hipposideros pomona Roundleaf horseshoe bat Arielulus circumdatus Black-gilded pipistrelle (Kelawar hitam kuning) Hesperoptenus doriae Doria’s false serotine (Kelawar petang palsu sederhana) Macaca arctoides Stump-tailed macaque (Beruk kentoi) Viverra megaspila Large spotted civet (Musang titek besar) Herpestes urva Crab-eating mongoose (Bambun) Panthera pardus Leopard Panthera tigris Malayan tiger (Harimau belang) Petinomys genibarbis Whiskered flying squirrel (Tupai terbang berjambang) Berlymys bowersii Bower’s rat (Tikus buku kasar) PAGE 54 Leopoldamys edwardsi Mountain giant rat (Tikus bukit besar) PAGE 55 VULNERABLE Manis javanica Scaly anteater FELDA Echinosorex gymnurus Moonrat, gymnure Enriching GLOBAL Values A Continuous VENTURES Euroscaptor malayana Malayan mole (Cencurut hutan) Journey HOLDINGS Chimarrogale hantu Malayan water shrew (Cencurut air) BERHAD SUSTAINABILTY Ptilocercus lowii Pen-tailed treeshrew (Tupai akar malam) REPORT 2013 Tupaia minor Lesser treeshrew Aethalops alecto Grey fruit bat Rhinolophus chiewkweeae Chiewkwee’s horseshoe bat (Kelawar) Hipposideros doriae Lawa’s roundleaf horseshoe bat( Kelawar ladam bulat lawas) Arielulus societatis Benom pipistrelle (Kelawar benom) Hesperoptenus blandfordi Lesser false serotine (Kelawar petang pasu kecil) Kerivoula intermedia Small woolly bat (Kelawar hutan kecil) Kerivoula picta Painted bat (Kelawar kupur kapur) Myotis hermani Herman’s bat (Kelawar badan merah) Phoniscus atrox Groove-toothed bat (Kelawar putih telinga) Phoniscus jagorii Frosted groovetoothed bat Presbytis siamensis Black-thighed leaf monkey (Lontong ceneka saiam) Helarctos malayanus Malayan sun bear (Beruang matahari) Prionailurus viverrinus Fishing cat (Kucing ikan) Elephas maximus Asian elephant (Gajah) Rusa unicolor Sambar deer (Rusa) Bos gaurus Gaur (Seladang) NEAR Symphalangus syndactylus Siamang THREATENED Cuon alpinus Red dog, Dhole (Serigala) Martes flavigula Yellow-throated marten (Mengkira) Mustela nudipes Malayan weasel (Pulasan) Prionodon linsang Banded linsang (Linsang) Viverra zibetha Large indian civet (Musang jebat) Viverricula malaccensis, indica Little civet (Musang bulan) Neofelis nebulosa Clouded leopard Prionailurus planiceps Flat-headed cat (Kucing hutan) Tapirus indicus Malayan tapir (Badak cipan) Sus barbatus Bearded pig Muntiacus muntjac Barking deer (Kijang) Capricornis sumatraensis Serow (Kambing gurun) each individual estates in the two Reducing effluent between states and proximity to complexes will be collected as Palm oil mill effluent (POME) is a settlements. Protecting part of the RSPO mill supply base by-product of processing our FFB. certification. POME is first captured in a holding In 2013, the average BOD levels pond and treated by oxidation. We from our mills was 58 ppm. our natural Identifying water hotspots measure the Biological Oxygen Although it is well below the In 2014, the sustainability research Demand (BOD) before treated regulatory requirement there are department will begin a study POME is released into the natural few instances, where the levels were on water hotspots. The study will environment, either through high. We are committed to BOD environment involve identifying companies application as fertiliser of through levels below 100 ppm in all mills who use water from the same river river discharge. In Malaysia, BOD and below 20 ppm in new mills. basin and estimate our combined levels are for river discharge is estimated intake. If the result regulated and monitored by the is a potential shortfall from our Department of Environment. Preserving and protecting Reducing our water In 2013, our sustainability research combined use, we will need to The level of allowed BOD varies waterways footprint department completed water develop mitigation action plans. Water is one of the most critical We harvest rain water in silt pits or quality assessments of three of resources for health, wellbeing and close-ended trenches to conserve our 11 regions. The objective was growth. Through the preservation use of surface water sources. We to identify if there were significant of rivers and waterways, we ensure pump water from nearby rivers to pollutants contributing to the Case Study: FELDA Wilayah Kuantan that people and wildlife can thrive. irrigate our nurseries and young deterioration of stream water Seventeen river systems were tested in the assessment of eight complexes in FELDA Kuantan and all samples are palms when needed. quality. The results will be discussed within the permissible levels for agricultural activity. We found there were improvements in three river systems We have mapped the different in future reports once we complete and no deterioration in nine river systems. In the remaining five river systems, there was higher levels of dissolved areas in our operations that have Our main use of water is in our all the 11 regions. oxygen and ammoniacal nitrogen in the water quality. We are in the process of ascertaining the causes of an impact on the quantity and milling operations where it is used deterioration in these river systems before we develop mitigation plans. quality of water. We have developed to power our steam boilers and The team identified all major rivers management plans to monitor and processing our FFB. In 2013, we and tributaries gazetted by the decrease soil run-off, improve water used 1.51 tonnes of water per tonne Department of Environment that PAGE 56 efficiency in our mills and improve of FFB processed. We are committed flowed through each complex. PAGE 57 water quality discharged from to achieving a water usage ratio Water samples at the entry point FELDA Enriching GLOBAL our mills. target of 1 tonne of water per tonne to our complex were taken and Values A Continuous VENTURES of FFB in 2014. compared with water samples Journey HOLDINGS BERHAD Enhance riparian exiting the complex, using test SUSTAINABILTY REPORT buffer zones Assessing water quality based on parameters under the 2013 Maintaining a healthy riparian Approximately 40% of the 464 rivers Department of Environment Water and buffer zone is our first line of monitored by the Department of Quality Index guidance. protecting our water courses and Environment in Malaysia is classified wetlands in our estates. A riparian as slightly polluted or polluted. We aim to complete water buffer zone helps to slow down We want to ensure that the use quality assessment of nine of our soil run-off and soil particles. and management of water by our complexes by 2014. It is unlikely Depending on the width of water operation does not result in adverse that we will conduct a water quality courses, our riparian and buffers impacts on other users within the assessment of our Malacca and zones range from between 1 metre catchment area. Perak complex due to the dispersed and 100 metres on both sides of locations of our plantations in those the river. areas. However, water quality of
W aTER used per tonne of FFB processed (Tonnes)
1.51
1.22 1.18
2011 2012 2013 Protecting our natural environment
The ongoing refinement of Accounting for 7% of our total Producing biodiesel Climate Change the RSPO PalmGHG calculator planted area, we have 2,170 With an estimated global demand provides the industry with the hectares of oil palm planted on for biodiesel of up to 15 million We believe that all business have a responsibility to most robust tool to estimate and peat. We are guided by the RSPO tonnes by 2020, the production address how their operations contribute to climate monitor net greenhouse gas Best Management Practice Manuals of biodiesel will be a key part of emissions. The RSPO PalmGHG on Peat. We maintain water levels our downstream development change. All business have a responsibility to measure, calculator is a framework designed of peat land at between 50cm and strategy. With the national B5 to be compatible with existing 70cm. Subsidence of the area is biodiesel programme implemented monitor and reduce its greenhouse gas emissions. international GHG accounting being measured and monitored on in Malaysia’s East Coast in January methodologies such as the an annual basis. This is to determine 2014 and in Sabah and Sarawak by Intergovernmental Panel on Climate the long term viability of the area mid-2014, we foresee that this will Change and the International after current rotation. contribute to future group revenue. Sustainability and Carbon The B5 biodiesel programmes Certification (ISCC). Utilising biogas energy involves the blending of 5% palm PAGE 58 A natural by-product from the methyl ester with 95% fossil fuel PAGE 59 The RSPO PalmGHG calculator treatment of POME is methane. A diesel. FELDA Enriching GLOBAL system boundary for the greenhouse gas calculation in palmghg presents a system boundary of powerful greenhouse gas, methane Values VENTURES emission sources within a typical can be used to generate electricity We are amongst the first to certify A Continuous HOLDINGS Journey BERHAD palm oil operation. By using the by burning it as a fuel in a gas palm oil to ISCC standards in SUSTAINABILTY calculator, we can identify where turbine or steam boiler. Burning the country and together with a REPORT 2013 Emissions credit within our operations are GHG methane instead of traditional fossil biodiesel partner become the first Emissions due Carbon Emissions from for export of emissions highest and investigate fuel produces less carbon dioxide. integrated ISCC certified facility to loss of stored sequestration contribution of surplus energy carbon in biomass opportunities for reduction. We will in South East Asia in 2011. We have in palm biomass fossil fuel produced at land clearing contribute to this growing body We have installed 15 biogas certified 15 mills and a biodiesel from biomass of knowledge on GHG calculation trapping plants and plan to plant. by committing to using the RSPO complete installation of biogas PalmGHG calculator or equivalent capturing facilities in 59 mills by The ISCC standard is the first bio fuel inputs OUTputs tools and report publicly on our 2020. As an example, our Serting certification standard in the world. emissions by the end of 2016. Hilir biogas plant feeds electricity Products that are ISCC certified can generated into the national grid. be sold in Europe as compliant with tCO2e per ha and Our Research and Development We have reduced 136,728 mt co2 the EU Renewable Energy Directive. per tonne of sustainability department has plans eq. of greenhouse gas emissions In November 2013, we exported our palm products: for a carbon accounting exercise since January 2011. Our biogas first 4,200 tonnes of ISCC Certified CPO, PKO, PKE in all our mills with an intention to plant in Umas supplies electricity Palm Methyl Ester to clients reduce carbon footprint in the mills. as a CSR project under the rural in Switzerland. electrification programme. The A llocation of net Emissions from peat land methane captured in the remaining emissions to palm Peat is commonly accepted as mills are either for grid connection products being a major source of GHG purposes or used as boiler fuel for emissions associated with oil palm, the mills. Only the excess methane agricultural mill stage and it is critical to ensure that these from the facility is flared. stage emissions are minimised through appropriate management practice. Emissions from Emissions due to combustion of Net emissions of cultivation of peat fossil fuel used methane produced in the field from POME Research and development
We operate one of the largest technology to shorten the duration automation to achieve higher oil palm tissue culture research needed for yield improvement. productivity, developing advance facilities located in Enstek, Negeri sensor technology for precise Sembilan. We have over forty years We have been able to improve crop monitoring, and information of research in oil palm breeding and the average mature yield of technology systems for better data selection enabling us to be the top FFB and OER over the years. For management and utilisation. seed producer in the country. Our FELDA settlers, a 1 percent OER aim is to maintain our position as a improvement translates to a 5 to 6 We have already begun to see market leader in oil palm planting percent increase in net income. results of our investment in material, developing seeds and technology. Our Smart Unmanned clones of high oil yield together Improving disease resistance Nursery project has automated the with desirable traits e.g. disease Ganoderma is a basal rot disease operation of our main nursery. The tolerance, compact palm and good that commonly affects oil palm. use of wireless sensors monitors oil composition. We have conducted extensive and administers fertiliser using PAGE 60 research on early prevention the water deficit method, which PAGE 61 We conduct field tests to evaluate methods, control during replanting, is a more efficient way of nutrient FELDA Enriching GLOBAL planting materials and clones on removal and sanitation of infected uptake for seedlings. This has also Values VENTURES 17 sites across Malaysia totalling planting areas. Our extensive resulted in savings in manpower, A Continuous HOLDINGS Journey BERHAD 10,000 hectare. We adopt a laboratory research has also more efficient use of fertiliser, less SUSTAINABILTY proactive approach to counter resulted in obtaining the patent of culling and waste of seedlings. REPORT 2013 numerous challenges that adversely the Ganoderma gene marker. By affects the sustainability of oil palm using the marker, we can produce We are investing in research if left unaddressed. This includes planting materials that are more and development to improve developing clonal material of higher resistant to the disease. efficiencies during harvesting. We yield with disease tolerance and have developed and patented with specific traits, Applied technology screening technology for fruits of The Applied Technology Division virescense palms, which changes Higher yielding oil seeds explore ways to improve efficiency, colour from green to orange when We produce 25 million oil palm quality and productivity of our it ripens. We are also developing seeds and one million ramets operations. Investing in these an automated ripeness scanning annually. The focus of our breeding technologies will reduce manpower machine to improve accuracy of programme is to develop seeds resources needed to operate our when FFB can be harvested to with incremental improvements estates and reduce wastage. The increase productivity. to oil yield. We have begun to division focuses its research on use marker assisted selection mechanisation of operations,
yield and oer improvements
Mean mature yields (t/ha) OER (%) 29.66 29.83 30.12 27.18 26.3 27.1 24.9 23.2
1980s 1990s 2000s 2010s annexes
GRI index G4-29 Date of most recent previous report This is FGV’s GENERAL STANDARD DISCLOSURES first report General Standard Disclosures Page G4-30 Reporting cycle 72 Full Partial G4-31 Contact point 73 STRATEGY AND ANALYSIS G4-32 GRI content index 62-64 G4-1 Statement from the most senior decision-maker of the 2-3 G4-33 External assurance 72 organisation GOVERNANCE ORGANISATIONAL PROFILE G4-34 Organisation’s governance structure 16-17 G4-3 Name of the organisation 6 ETHICS AND INTEGRITY G4-4 Primary brands, products and services 12-13 G4-56 Organisation’s values, principles, standards and norms of 18-19 G4-5 Headquarters location 6 behaviours G4-6 Countries of operation 14-15 G4-7 Nature of ownership and legal form 8 SPECIFIC STANDARD DISCLOSURES G4-8 Markets served 14-15 Material Aspects DMA and Indicators Page G4-9 Scale of the organisation 10, 65-67 Full Partial G4-10 Organisation’s workforce 42-43, 65-67 Disclosures on Management Approach G4-11 Total employees covered by collective bargaining agreements 46-47 G4-DMA Covers environment category and local 20-25 PAGE 62 G4-12 Organisation’s supply chain 12-13, 31, 34 community aspect PAGE 63 G4-13 Significant changes during the reporting period regarding size, This is FGV’s Category: Economic FELDA Enriching GLOBAL structure, ownership or its supply chain first report Economic G4-EC1 Direct economic value generated and distributed 6, 65-67 Values VENTURES performance A Continuous HOLDINGS G4-14 Explanation of whether and how the precautionary approach or 24-25 Journey BERHAD principles is addressed by the organisation Indirect Economic G4-EC8 Significant indirect economic impacts, including 30 SUSTAINABILTY REPORT G4-15 Externally developed economic, environmental and social charters, 20-25 Impacts the extent of impacts 2013 principles or other initiatives G4-EC9 Proportion of spending on local suppliers at 11, 31, 34 G4-16 Memberships of associations and national/ international advocacy 68 significant locations of operations organisations Category: Environmental Materials G4-EN1 Materials used by weight or volume 11, 34 IDENTIFIED MATERIAL ASPECTS AND BOUNDARIES Energy G4-EN3 Energy consumption within the organisation 58-59 G4-17 Entities included in the organisation’s consolidated financial 72 Water G4-EN8 Total water withdrawal by source 68 statements or equivalent documents Biodiversity G4-EN11 Operational sites owned, leased, managed in, or 32 G4-18 Process for defining report content and the Aspect Boundaries 72 adjacent to, protected areas and areas of high G4-19 Material Aspects identified in the process for defining report 72 biodiversity value outside protected areas content G4-EN12 Description of significant impacts of activities, 32 G4-20 Aspect Boundary within the organisation 72 products, and services on biodiversity in protected G4-21 Aspect Boundary outside the organisation 72 areas and areas of high biodiversity value outside protected areas G4-22 Restatements of information provided in previous reports This is FGV’s first report G4-EN14 Total number of IUCN red list species and national 55 conservation list species G4-23 Significant changes from previous reporting in the Scope and This is FGV’s with habitats in areas affected by operations, by Aspect Boundaries first report level of extinction risk Emissions G4-EN19 Reduction of greenhouse gas (GHG) emissions 58 STAKEHOLDER ENGAGEMENT Effluents and G4-EN22 Total water discharge by quality and destination 58-59 G4-24 List of stakeholder groups engaged by the organisation 26-27 waste G4-25 Basis for identification and selection of stakeholders with whom to 26-27 G4-EN23 Total weight of waste by type and disposal 50-51 engage method G4-26 Approach to stakeholder engagement, including frequency of 26-27 G4-EN26 Identity, size, protected status and biodiversity 56-57 engagement by type and by stakeholder group value of water bodies and related habitats G4-27 Key topics and concerns that have been raised through 26-27 significantly affected by the organisation’s stakeholder engagement, and how the organisation has discharges of water and runoff responded to those key topics and concerns, including through it G4-EN33 Significant actual and potential negative 32-34 reporting environmental impacts in the supply chain and REPORT PROFILE actions taken G4-28 Reporting period 72 annexes
C aTEGORY: Social BASE DATA AND NOTES Labour practices and decent work Category/ Indicator Measurement unit/ 2013 2012 2011 Employment G4-DMA-b 40 Breakdown G4-LA1 Total number and rates of new employee hires 42-43, 65-67 Financial and employee turnover by age group, gender and Total revenue Million RM 12,568,008 12,886,499 7,453,077 region Total profits after tax Million RM 1,108,298 905,058 1,400,247 Occupational G4-LA6 Type of injury and rates of injury, occupational 48-49, 65-67 Revenue by segment Health and diseases, lost days, and absenteeism, and total Safety number of work-related fatalities, by region and Plantations Million RM 18,073,010 20,287,441 15,734,130 gender Downstream Million RM 6,779,899 7,873,245 10,822,457 Training and G4-LA9 Average hours of training per year per employee 65-67 Sugar Million RM 2,249,689 2,313,188 2,338,796 education by gender, and by employee category Manufacturing Million RM 3,015,711 3,494,239 4,077,684 G4-LA10 Programmes for skills management and 40-43 and logistics lifelong learning that support the continued Employees employability of employees and assist them in managing career endings Employees by countries Total 18,785 18,466 18,480 Diversity G4-LA12 Composition of governance bodies and 40-43, 65-67 Malaysia 18,753 18,444 18,458 and equal breakdown of employees per employee category Indonesia 17 7 7 PAGE 64 opportunity according to gender, age group, minority group USA 4 4 7 PAGE 65 membership, and other indicators of diversity FELDA Canada 4 5 3 Enriching GLOBAL Human rights Values Others 7 6 5 A Continuous VENTURES Child labour G4-HR5 Operations and suppliers identified as having 47 Journey HOLDINGS Employee (Malaysia operations only) BERHAD significant risk for incidents of child labour, and SUSTAINABILTY REPORT measures taken to contribute to the effective Employees categories Total 18,753 18,444 18,458 2013 abolition of child labour Management 626 623 649 Forced or G4-HR6 Operations and suppliers identified as having 47 Executives 2,096 1,956 1,832 compulsory significant risk for incidents of forced or labour compulsory labour, and measures to contribute Non-executive 16,031 15,865 15,977 to the elimination Female staff Total 2,798 2,662 2,591 of all forms of forced or compulsory labour Management 65 51 47 Indigenous rights G4-HR8 Total number of incidents of violations involving 27 Executives 473 453 405 rights of indigenous people and actions taken Non-executive 2,260 2,158 2,139 Society Male staff Total 15,955 15,782 – Local G4-SO1 Percentage of operations with implemented local 27, 30-34, 39 communities community engagement, impact assessments, Management 561 572 602 and development programmes Executives 1,623 1,503 1,427 G4-SO2 Operations with significant actual and potential 27 Non-executive staff 13,771 13,707 13,838 negative impacts on local communities EthnicITY Anti-corruption G4-DMA-b 18-19 Malay Total 18,525 18,202 18,203 G4-SO3 Total number and percentage of operations 18-19 Management 579 571 593 assessed for risks related to corruption and the significant risks identified Executives 2,033 1,886 1,763 G4-SO4 Communication and training on anti-corruption 18-19 Non-executive 15,913 15,745 15,847 policies and procedures Chinese Total 111 119 120 Management 31 34 36 Executives 39 43 42 Non-executive 41 42 42 annexes
Category/ Indicator Measurement unit/ 2013 2012 2011 Category/ Indicator Measurement unit/ 2013 2012 2011 Breakdown Breakdown Indian Total 117 122 134 Training Management 16 17 19 Average training hours per Executive male 18.44 28.37 Executives 24 27 27 category Executive female 16.76 24.78 Non-executive staff 77 78 88 Non-executive male 11.3 18.67 Non Malaysian Total 0 1 1 Non-executive female 10.18 16.28 Management 0 1 1 Labour standards Executives 0 0 0 Minimum starting wage RM per month 900 900 850 STAFF TURNOVER Number of employees who are 33% Turnover of staff Total 4.74% 5.06% members of a trade union Management 0.03% 0.06% Incidents of reported 0 0 0 discrimination Executives 0.48% 0.37% Health and safety Non-executive staff 3.02% 3.26% Fatalities 7 5 3 Upstream operations Lost time Incidents per 0.40 0.57 0.42 Permanent Executive male 753 764 PAGE 66 accident rate 200,000 working hours PAGE 67 Executive female 79 75 Severity rate Average number of lost 11 11 14 FELDA Enriching GLOBAL Non-executive male 2,805 3,086 time per incident Values VENTURES A Continuous HOLDINGS Non-executive female 943 834 Land Journey BERHAD SUSTAINABILTY Contract Executive male 61 15 Total land bank Hectares 362,437 359,665 359,649 REPORT 2013 Executive female 7 2 Total planted area by crops in Hectares 323,419 339,410 339,202 Malaysia Turnover (UPSTREAM OPERATION ONLY) Palm oil Hectares 311,120 326,495 326,441 Below 30 New hire male 81 Rubber Hectares 10,783. 10,880 10,726 New hire female 31 Timber Hectares 1,515. 2,034 2,034 Resignation male 57 Total peat on palm oil estates Hectares 2,170 2,170 2,170 Resignation female 30 PALM OIL AGE PROFILE 30-50 New hire male 8 0-3 % 19 17 17 New hire female 8 4-9 % 16 13 15 Resignation male 15 10-14 % 7 7 5 Resignation female 11 15-20 % 7 10 33 Above 50 New hire male 3 21-25 % 30 36 26 New hire female 0 >25 % 21 17 4 Resignation male 1 fresh fruit bunch Resignation female 0 FFB harvested Tonnes 5,278,029 5,148,965 5,399,781 Workers – upstream operations only FFB yield per mature ha Tonnes 19.6 19.2 19.9 Nationalities of workers in Malaysians 5,028 4,690 4,566 FFB from Felda settlers Tonnes 5,408,167 5,664,345 6,022,447 Malaysia plantation and mills Indonesians 17,739 17,531 15,728 FFB supplied by external sources Tonnes 4,382,933 5,152,384 5,178,356 Bangladeshis 5,739 6,107 6,218 Nepalese 1,005 1,248 Others 661 289 578 Male workers 31,967 32,026 Female workers 3,400 2,983 annexes
Category/ Indicator Measurement unit/ 2013 2012 2011 T argeTS and achievements for certification 2010 – 2017 Breakdown Mill processing 17 certified complexes 581,666 tonnes CPO and 141,558 tonnes PK FFB processed Tonnes 15,727,575 16,020,490 16,081,810 1 Kota Gelanggi CPO Million tonnes 3.214 3.285 3.293 2 Lepar Utara 06 CPO OER Million tonnes 20.44 20.51 20.48 3 Padang Piol PK Tonnes 840,521 857,245 857,003 4 Jengka 3 (SG) PKE Tonnes 426,817 442,253 444,699 5 Jengka 8 PKO Tonnes 385,799 394,504 392,079 6 Lepar Utara 04 (SG) PKO OER % 45.90 46.02 51.89 7 Jengka 21 (SG) Fibre Tonnes 1,887,309 1,922,459 1,929,817 8 Jengka 18 EFB Tonnes 3,460,067 3,524,508 3,537,998 9 Waha Environmental 10 Adela Water sources M3 23,173,904 19,237,032 11 Lok Heng Municipal water M3 229,402 243,152 PAGE 68 12 Semenchu PAGE 69 Water used per tonne of FFB Tonnes 1.51 1.22 1.18 FELDA 13 Bukit Mendi Enriching GLOBAL BOD level Average parts per million 58 Values VENTURES 14 Kemasul A Continuous HOLDINGS Methane capturing of POME’s mt CO2 eq 136,728 Journey BERHAD 15 Triang SUSTAINABILTY treatment REPORT 2013 Fossil fuel displacement mt CO2 eq 144,522 16 B. Kepayang Social – Community giving 17 Tementi Total contribution to Yayasan Felda % of net profit 2 2 2 10 audited complexes membership 301,711 tonnes CPO and 81,948 tonnes PK Malaysian Palm Oil Association 18 Bukit Sagu Malaysian Institute of Chemistry 19 Fajar Harapan International Rubber Research and Development Board Malaysian Oil Palm Nursery Association 20 Bukit Besar 21 Kulai Notes to data 22 Pengeli Staff: The data includes Management, Executives and Non Executives of companies under FGV Holdings Berhad. 23 Belitong Workers: This data includes only Malaysian and foreign workers employed by FGV Plantations Sdn Bhd and Felda Palm Industries Sdn Bhd. 24 Kahang Land: Only includes land in Malaysia.
Health and safety: This includes only the staff, workers and workers of contractors in the upstream operations of the Plantation division. Number of fatalities 25 Nitar excludes employees who died at work due to health problems not related to employment. 26 Lepar Hilir Lost time accident rate is calculated using total number of injuries /number of hours worked by all employees x 200,000. 27 BaiduriAyu Severity rate is calculated using the formula of ‘total number of lost days (excluding fatalities)/number of accidents’. Training hours: This covers only training hours provided to staff of Felda Palm Kernel Sdn Bhd and Felda Agriculture Services Sdn Bhd. 2014 – 2017 Certification Water: This covers only the upstream operations of the Plantation division. Quantity: 1,592,029 tonnes CPO and 412,747 tonnes PK
GHG reduction from methane capture from POME: Only covers our mills at Serting Hilir, Besout, Kemahang, Maokil, Pasoh, Pancing, Chalok, Jerangau Barat 28 Palong Timur & Sungai Tengi from January 2011 to December 2013. This is based on the registration date of the projects with United Nation Framework Reduction of GHG emissions. 29 Serting Hilir
GHG reduction from fossil fuel displacement: Only covers our Independent Power Plant at Felda Sahabat, Lahad Datu between January 2006 to 30 Maokil December 2013. 31 Tenggaroh 32 Tenggaroh Timur 33 Keratong 09 34 Kechau A annexes
2014 – 2017 Certification Glossary information and sets minimum focusing on environmental or Quantity: 1,592,029 tonnes CPO and 412,747 tonnes PK Biodiversity - The diversity (number international labour standards social issues. and variety of species) of plant and called “conventions”, offered to 35 Kechau B animal life within a region. member nations for adoption. Palm oil mill effluent (POME) - 36 Kembara Sakti (SG) Bi-product of processed fresh fruit Biological Oxygen Demand (BOD) Independent Director - According bunch (FFB). 37 Mercu Puspita (SG) - The amount of oxygen used to Bursa Malaysia, an independent 38 Nilam Permata (SG) when organic matter undergoes director means a director who is Peat - is an accumulation of partially 39 Hamparan Badai decomposition by micro organisms. independent of management and decayed vegetation matter. Peat Testing for BOD is done to assess free from any business or other forms in wetlands or peatlands, 40 Embara Budi the amount of organic matter relationship which could interfere variously called bogs, moors, 41 L. Kemudi in water. with the exercise of independent muskegs, pocosins, mires, and peat 42 J.Bistari judgement or the ability to act in swamp forests. Extraction rate - The amount of oil the best interests of an applicant or 43 Kalabakan extracted from oil palm fruit at a a listed issuer. Ramets - A group of genetically 44 Umas mill. Oil is extracted from the flesh, identical plant produced asexually 45 Neram crude palm oil (CPO) or from the Integrated Pest Management from a single ancestor. nut, palm kernel oil (PKO). (IPM) - is a pest control strategy that 46 Pancing uses an array of complementary Roundtable on Sustainable Palm 47 Besout Fresh fruit bunch (FFB) - Bunch methods: mechanical devices, Oil (RSPO) - A multi-stakeholder PAGE 70 harvested from the oil palm, with physical devices, genetic, biological, organisation based in Kuala PAGE 71 48 Trolak FELDA each bunch weighing 5kg to 50kg legal, cultural management, and Lumpur, Malaysia. The organisation Enriching GLOBAL Values 49 Keratong 2 and may contain 1,500 or more chemical management. These has developed a certification A Continuous VENTURES Journey HOLDINGS 50 Keratong 3 individual fruits. methods are done in three stages: scheme for sustainable palm oil. BERHAD prevention, observation, and SUSTAINABILTY 51 Sg Tengi REPORT Gen Y - The generation born in the intervention. It is an ecological Social Impact Assessment - 2013 52 Krau 1980s and 1990s, typically regarded approach with a main goal of includes the processes of analysing, 53 Mempaga as increasingly familiar with digital significantly reducing or eliminating monitoring and managing the and electronic technology. the use of pesticides. intended and unintended social 54 Serting consequences, both positive and 55 Pasoh Global Reporting Initiative (GRI) IUCN Red List - The International negative, of planned interventions 56 Kertih - A multi-stakeholder standard for Union for Conservation of Nature (policies, programs, plans, projects) sustainability reporting, providing and Natural Resources (also and any social change processes 57 Selendang guidance on determining report known as The World Conservation invoked by those interventions. 58 Chalok content and indicators. Union) is an organization based in Its primary purpose is to bring Switzerland which is involved in about a more sustainable and 59 J. Barat High Conservation Values - The preservation of natural resources. equitable biophysical and human 60 J. Baru concept of High Conservation Value Publishes the Red Data Book, which environment. 61 Selancar 2A Forests (HCVF) was first developed lists the endangered species of by the Forest Stewardship Council every nation. Stakeholders - Any group or 62 Selancar 2B (FSC) in 1999 as their 9th principle. individual who are affected by 63 Aring A The FSC defined HCVF as forests of Non-executive Director - A Board or can affect the company’s 64 Aring B outstanding and critical importance Director who does not currently operations. due to their environmental, hold other employment with the 65 Ciku socio-economic, cultural, company. Unlike an Independent Sustainability - A term expressing a 66 Kemahang biodiversity and landscape value. Director, a non-executive can have long-term balance between social, 67 Tersang significant financial interests or economic and environmental ILO (International Labour close personal ties to the company. objectives. Often linked to 68 Cini 2 Organization) - Is a tripartite world Sustainable Development which 69 Cini 3 body representative of labour, NGO (Non-governmental is defined as “Development 70 Sampadi management and government organisation) - In this report, that meets the need of current and is an agency of the United used to refer to grass-roots and generations without compromising 71 Air Tawar Nations. It disseminates labour campaigning organisations the needs of future generations”. 72 Pontian Plantation annexes
About this report The team was headed by the Completeness Scope of the report Associate Principle Researcher/ We have attempted to provide This is the inaugural sustainability General Manager (Sustainability) a complete overview of our report for the upstream operations with 18 individuals from each operations within the established of the Plantation Division of of the four companies in the scope. However, since this is our Felda Global Ventures Holdings upstream operation of the oil palm first report, data availability and Berhad for the calendar year 2013. division. Individuals represented consistency across sites have yet to This report covers operations of departments from health, be fully aligned and may be subject FGV Plantations Sdn Bhd, Felda safety and environment, HR and to corrections and restatements in Palm Industries Sdn Bhd, Felda stakeholders, finance, operations, subsequent reports. Agricultural Services Sdn Bhd and products and sales. Felda Kernel Products Sdn Bhd. Data in this report covers 1 Jan - We reviewed our business goals 31 Dec 2013. Where possible, we The report does not cover the and identified potential positive have sought to include historical Group’s downstream operations of and negative social, economic and data as a benchmark. We believe the Plantation Division, upstream environmental impacts from the that the data presented are a fair plantation operations outside of pursuit of such goals. We conducted representation of performance, Malaysia, other business divisions, stakeholder identification and and have included detailed notes or operations in which FGV has prioritisation. Review of past in relevant sections to ensure less than 51% ownership or engagement was undertaken transparency. Explanation of data PAGE 72 management control. We may including those conducted during are provided in “Notes to data”. FELDA include these operations in future the RSPO certification process of GLOBAL reports, prioritised on the basis of mills to guide identification of Report Cycle VENTURES HOLDINGS stakeholder feedback. issues. This report is our first sustainability BERHAD report. Following publication of We have chosen to report on Following this review and this report, we will seek stakeholder the upstream operations as consultation, material issues were feedback to determine whether to our plantations in Malaysia are identified. A review was then report annually or bi-annually. our oldest operations with a taken to assess the availability of stakeholder that is critical. It also performance indicators matching Assurance cConta t and feedback represents a significant part of material issues identified. A As this is our first report, we We welcome any feedback or questions: our business and contributes review of sustainability reports of have decided not to perform an The Senior General Manager, approximately 60% of our Group’s other palm oil growers was also assurance. We will conduct a review Sustainability Department, revenue, 96% of our planted areas conducted to benchmark our issues of our processes and identify gaps Felda Global Ventures Holdings Berhad and 25% our total staff. raised were comparable with other and weakness in the production of (c/o Felda Agricultural Services Sdn Bhd) companies. the first report. We will also use this 7th Floor, Balai Felda, Materiality and Responsiveness report to engage stakeholders and Jalan Gurney 1, 54000 Kuala Lumpur, Malaysia In July 2013, a sustainability We have used GRI G4 Guidelines understand what form of assurance T +603 26987772 reporting committee was as the basis of reporting. We have they would like to see in our next F +603 26930018 established to oversee production chosen to report on the following report. www.feldaglobal.com of our first sustainability report. aspects (see table below).
Design by Meta Fusion Pte Ltd Aspect boundary within the aspect boundary outside organisation the organisation Facilitated and edited by Helikonia Advisory Sdn Bhd Economic performance Local communities Materials Water Energy Biodiversity GHG Emissions Occupational health and safety Effluents and waste Anti-corruption Training and education Diversity and equal opportunity Labour practices Indigenous rights Felda Global Ventures Holdings Berhad (800165-P) Level 42, Menara Felda No. 11, Persiaran KLCC 50088 Kuala Lumpur Tel: 603-2859 0000 Fax: 603-2859 0016 www.feldaglobal.com FELDA GLOBAL VENTURES HOLDINGS BERHAD
S ustainability Re port 2013
FELDA GLOBAL VENTURES HOLDINGS BERHAD Enriching Values A Continuous Journey SUSTAINABILTY REPORT 2013