Responsible Operating Principles. August 2014

Transcription

1 Responsible Operating Principles August 2014

2 Responsible Operating Principles Presentation outline 1. Code of Conduct 2. Sustainable Sourcing Practices 3. Responsible Use of Resources 4. Social Responsibility 5. Governance 2

3 1. Code of Business Conduct & Ethics o The IOI Loders Croklaan Global Code of Conduct can be found at: o The IOI Loders Croklaan Global Code of Conduct is based on the IOI Group Code of Business Conduct & Ethics. o The IOI Loders Croklaan Global Code of Conduct was first communicated and published in April

4 2.a Sustainable Palm Oil Sourcing Practices o The IOI Loders Croklaan Sustainable Palm Oil Sourcing Practices can be found at o The Practices were first published in November 2013 and revised in March o The IOI Group Sustainability Policy Statement can be found at o Both IOI Group and IOI Loders Croklaan have signed on to The Sustainable Palm Oil Manifesto. This is a B2B industry initiative with the objective to: Build traceable and transparent supply chains. Accelerate the journey to no deforestation through the conservation of high carbon stock (HCS) forest and the protection of peat areas regardless of depth. Increase the focus on driving beneficial economic change and to ensure a positive social impact on people and communities. 4

5 2.b Sustainable Shea Sourcing Practices o The Sustainable Shea Sourcing Practices can be found at o The Sustainable Shea Sourcing Practices were first published in April

6 Our 3. Our guiding Guiding principles: Principles: Reduce, Reuse, Recycle In all that we do, we strive to minimize the use of natural resources and limit the amount of waste produced. Whatever waste is produced often has a value and can be reused or recycled in other processes. Our ambition is zero waste to landfill. At the regional level, projects are in place or will be initiated to achieve the goals we have set for the resources we use. 6

7 4. Social Responsibility 1. Human Rights, Child and Forced Labor o We support and respect the protection of internationally proclaimed human rights and we make sure that we are not complicit in human rights abuses. We uphold the freedom of association and the effective recognition of the right to collective bargaining. We eliminate all forms of forced and compulsory labor, we refrain from child labor and we eliminate discrimination in respect of employment and occupation (UN global compact principles 1 to 6). o We expect our business partners to do the same or, when involved in the production of Palm Oil, to comply with the RSPO P&C or the RSPO guidance for independent smallholders in relation to child labor and our Sustainable Palm Oil Sourcing Criteria. 7

8 Social responsibility 2. Talent Management We are committed to the success and development of our employees and believe that our employees can and will make a difference. We provide an environment which fosters the collaborative development of responsible leaders. Activities to support employee development: o Selection and promotion processes supported by assessments o Organizational and succession planning regional and global Including a percentage goal of key positions filled internally o Personal development plan for all employees Open two-way dialogue between managers and employees o Individual development planning Mentoring Special projects regional and global Longer term global assignments Job shadowing and rotation Outside training courses University tuition reimbursement 8

9 4. Social responsibility 3. Safety Safety First. At IOI Loders Croklaan we are committed to creating a safe and healthy work environment for all of our employees. Actions: o At the global level, safety parameters are aligned and measured. Targets have been set for: LTA (loss time accident) TIR (total incident rate) o Best practices related to Safety management are shared and learnings implemented. 9

10 5. Governance o The IOI Loders Croklaan Responsible Operating Principles are set by senior management including our Group CEO and confirmed by the IOI Loders Croklaan Executive Committee. The Principles reflect the way we operate our business on a day to day basis. o To stay focused, we are committed to reporting progress on our Responsible Operating Principles. We have joined various certification programs and participate in the Carbon Disclosure Project. We submit ourselves to both internal and external audits to review if we adhere to the set of criteria linked to the various certification programs. o IOI Loders Croklaan will continue to consult external stakeholders to review our Responsible Operating Principles and to conduct an analysis of potential risks associated with the regions and mills from which we source palm oil. 10

11 5. Governance Actions o Progress report Responsible operating principles -annual. o Traceability report -annual and quarterly internal review. o Sustainable palm Oil Sourcing Committee (governance of sustainable sourcing practices) -quarterly meetings o Carbon disclosure report (scope 1 & 2) -annual o Translate sustainability principles into departmental targets -annual. o Talent management Review (Committee: CEO IOI and CEO IOI-LC, COOs & global HR) -annual. o Intercompany benchmarking of our plants and set targets for best practice -annual. o Employee engagement survey (HR) -annual. Relevant memberships, participations and certification bodies: RSPO ISCC SEDEX ISO FSCC 11

12 Sustainable Palm Oil Sourcing Practices July

13 The setting Palm oil* is an extremely important commodity and is the most widely used vegetable oil in the world. Since palm oil plantations are highly labor intensive, the crop production also provides a livelihood to millions of people in small, tropical agricultural communities around the world. Palm oil will remain a crucial part of food production in the future with the global population expected to increase by 22% to 9 billion. Of all vegetable oils palm oil has, by far, the highest oil yield per hectare. *Palm oil includes palm kernel oil unless stated differently 2

14 Our Commitment IOI Loders Croklaan believes that we have an obligation to source, process and promote the use of palm oil in a sustainable manner respecting the environment, human rights and labor conditions. We also consider the economic benefits and added value palm oil will bring to the country of origin, its people and companies that operate in this industry. 3

15 Sustainable Sourcing Practices Our Commitment We are committed to source and process traceable and certified sustainable palm oil. Sustainable is defined as certified by RSPO or equivalent system and protects peat lands and does not contribute to deforestation. Traceability will guarantee that we know the source of the palm oil (defined list of mills). What We Do Our route to traceable and certified sustainable palm oil starts with the physical delivery of certified sustainable palm oil volumes into our factories. This is executed via the RSPO Segregated (SG) system. In our factories, we can continue with the SG route or mix SG material with traceable conventional palm oil following the RSPO Mass Balance (MB) route. Our Concern We are concerned about deforestation, loss of biodiversity and the use of peat lands. We are working with the RSPO, our suppliers, our customers, governments and NGOs to improve the existing RSPO principles and criteria by addressing these and other emerging issues. 4

16 Our Commitment We are committed to source and process traceable and certified sustainable palm oil. Targets 1. 90% of traced palm oil (mill level) purchased by June Ambition to reach 100% by June Actively promote the use of sustainable palm oil 3. Progress reported on quarterly basis for traceability as well as sustainable volumes sold Actions 1. Map our supply chain back to mill level for palm oil and to crusher level for palm kernel (2014) 2. Risk analysis of our supply base against our sustainable sourcing criteria (2014) 3. Ask our suppliers to commit to our sustainable sourcing criteria ( ) 4. Verification of commitment via audits and site assessments based on outcome of our risk analysis These actions will form the basis of our time-bound plan Sustainable Sourcing Criteria o Adhere to RSPO P&C or equivalent o Comply with all applicable and relevant laws & legislation o Commitment to transparent and traceable supply chains o No deforestation (HCV & HCS) o No new developments on peat lands regardless of depth o Respect the rights of people and local communities and apply FPIC 5

17 What we do Our route to traceable and certified sustainable palm oil starts with the physical delivery of certified sustainable palm oil volumes in our factories Watch the video Supply Chain Models for Palm Oil Explained Actions o Encourage customers to take more certified sustainable palm oil. o Proactively endorse Mass Balance as this will immediately result in increased volumes of SG certified sustainable palm oil delivered via the RSPO SG system into our factories. Further, processing via the Mass Balance route will not compromise the production efficiency in our factories. o If requested, work with customers to organize the supply of SG certified sustainable palm oil products to their factories (traced to mill level). o IOI Loders Croklaan will initiate and support industry efforts to build a traceable and sustainable palm oil supply chain. *Palm oil includes palm kernel oil unless stated differently 6

18 We Are Concerned We are concerned about deforestation, loss of biodiversity and use of peat lands. Actions o We support the strengthening of recognized sustainability criteria with regards to deforestation, biodiversity and the use of peat lands and we strongly believe that a multi-stakeholder approach is the right way forward. o IOI Loders Croklaan will continue to be an active member of the RSPO and we will participate in working groups that recognize these and other relevant industry issues. We currently hold a seat on the RSPO Board of Governors. o We will develop a time-bound plan that will lead to a traceable supply chain that protects peat lands and does not contribute to deforestation (HCV & HCS). o IOI Loders Croklaan works with WRI and Proforest to evaluate our supply chain. 7

19 Time bound plan committed to sustainable sourcing

20 Palm oil sourcing practices Our commitment We are commited to source and process traceable and certified sustainainable palm oil. Sustainable is defined as certified by RSPO or equivalent system. Traceability will guarantee that we know the source of the palm oil (defined list of mills). Sustainable sourcing criteria Adhere to RSPO P&C or equivalent Comply with all applicable and relevant laws and legislation Commitment to transparent and traceable supply chains No deforestation (HCV and HCS) No new developments on peat lands regardless of depth Respect the rights of people and local communities and apply FPIC 2

21 Key milestones Parameter Status as per 1-May-14 Goal Traceability Palm Oil 82% mill level 90% Jun 14 mill 100% Jun 15 mill 100% Dec 18 plantation Traceability Palm Kernel Oil First update scheduled for 1 st July % Jun 14 crusher 90% Jun 15 mill 95% Dec 15 mill 100% Dec 18 plantation Risk analysis supply base of app. 200 mills Partner selection completed Remote sensing analysis completed December 2014 SG RSPO certified or equivalent sourced by IOI Loders Croklaan (IOI LC) 53% LC Europe 15% LC Americas 3% LC Asia 100% Dec 16 LC Europe 100% Dec 18 LC Americas 100% Dec 20 LC Asia Subject to market demand 3

22 IOI Loders Croklaan time bound plan Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Mapping PO 90% (mill) start mapping to plantation level 100% (mill) Mapping PK 100% (crusher) start mapping to mill level 90% (mill) 95% (mill) Ambition to reach 100% to plantation level by 2018 Risk analysis: Proforest & WRI input Site assessment: pilot Site assessment program (Proforest & in-house) in combination with in-house continuous risk assessment Questionnaires to mills + asking for commitment to SSC input input Customer initiated assessment (e.g. in coordination with TFT) SSC: Sustainable Sourcing Criteria PO: Palm oil PK: Palm kernel HCS definition available and start implementation 4

23 Time bound plan explained Mapping PO GPS coordinates of the supplying mills registered. Quarterly updates resulting in List of supplying mills. Volumes per supplying mill registered. Traceability protocol in place and audited by Lloyd's. Ambition 100% to plantation level by Mapping PK Start with crushing plant followed by: GPS coordinates of the supplying mills (to crusher) registered. Quarterly updates resulting in List of supplying mills. Volumes per crusher registered. Traceability protocol in place and audited by Lloyd's. 5

24 Time bound plan explained Risk Analysis Outsourced to Proforest, WRI and others. Remote sensing / GIS data analysis of our supply base. Identify high/medium/low risk areas in our supply base. Look beyond mill level: check area with supplying plantations. Provide input for further investigation: site assessments (focus on high risk areas first). Site assessments Outsourced to Proforest and other third parties / build in-house skills. Pilot scheduled for June 2014 in Latin America. Mill visits / verify adherence to our SSC. Investigate supply base (plantations) of mill. Sites are selected on basis of risk analysis and questionnaires. 6

25 Time bound plan explained Questionnaires Verify adherence to our SSC. Obtain clarity on mill strategies for new developments, supplier selection (plantations) etc. All mills. Customer initiated assessments From time to time we may facilitate customer initiated assessment of our supply base via third parties (e.g. TFT). HCS definition We support the initiative of the Malaysian growers to come to a robust and scientifically supported HCS forest definition. Once the HCS forest definition is accepted we will implement this in our risk analysis, questionnaires and site assessments. 7

26 Closing remarks We support the strengthening of recognized sustainability criteria with regards to deforestation, biodiversity and use of peat lands and we strongly believe that a multi-stakeholder approach is the right way forward. IOI Loders Croklaan will continue to be an active member of the RSPO and we will participate in working groups that recognize these and other relevant industry issues. 8

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