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Federal Land Development Agency (FELDA)/Felda Global Ventures (FGV)

SUBJECT

On 26 July 2015, the Wall Street Journal (WSJ) published an article alleging that Felda Global Ventures (FGV) had breached labour conditions at its plantations. The allegations alluded to forced labour and that the workers were not paid the minimum wage. The article also alleged that the health and working conditions of workers were neglected, and their passports withheld.

In April 2016, Aidenvironment published an analysis that indicated FGV had cleared 880ha of identified High Conservation Value (HCV) peatlands in two concessions in West Kalimantan – PT Citra Niaga Perkasa (PT CNP) and PT Temila Agro Abadi (PT TAA).

In July 2017, Greenpeace published a Palm Oil Alert against Federal Land Development Agency (FELDA)/ FGV on:

  • Illegality – Violation of Malaysian labour laws and development of peat in Indonesia post-moratorium
  • Deforestation – Clearance of natural forest
  • Peatland development – Development of areas mapped as peat
  • Exploitation – Exploitation of plantation workers, including modern day slavery

On 19 September 2018, Greenpeace published Final Countdown, Now or Never To Reform Palm Oil Industry report alleging FGV on the extensive labour rights abuses documented in its operations including workers to pay recruitment fees and passport retained by the company.

PROGRESS

26 July 2015 – Publication of WSJ against FGV alleging labour exploitation

4-6, 24-28 August 2015 – Conducted internal and external investigation on the claims

14-16 September 2015 – Conducted ASI verification

18-21 January 2016 – Conducted Wild Asia verification

1 October 2016-31 March 2017 – Appointed The Forest Trust (TFT) to carry out Support for Transformation (Social Issues) Initiatives, focusing on Forced & Bonded Labour, Minimum Wage, and Health & Safety

29 March 2017 – FGV adopted TFT’s report “Business Engagement-Support for Transformation-Social Issues 2016/2017”

30 March 2017 – FGV signed an MoU with SUHAKAM, a national human rights institution, to collaborate in addressing human rights issues and developing a human rights action plan

24 August 2017 – FGV adopted the Social Compliance & Human Rights (SCHR) Action Plan to address the gaps identified in the WSJ report, Wild Asia report, and TFT report including remedial action to resolve foreign workers and human rights issues

28 August 2017 – FELDA pledged to no deforestation, no conversion of HCV areas, no new planting on peat, irrespective of when the land was acquired by the Group; adopt Best Management Practices (BMPs) for existing peatland estates, and to rehabilitate peatland that have been planted after 25 August 2016; commit to stop planting on peatland irrespective of when the land was acquired. Land development work at PT TAA and PT CNP have been permanently discontinued. FGV will adopt the RSPO’s land rehabilitation guideline and consult with Badan Restorasi Gambut Indonesia on the rehabilitation programme.

Apical had engaged with FELDA/FGV on the allegations of non-conformities, and have received letters from FGV on updates and its progress on actions taken. We have consulted TFT and based on its Support for Transformation Report, Apical recognises the recent progress made by FGV, including the commitment to stop deforestation in the reported areas, and upgraded FGV’s sustainability policy to address HCV and peat issues more effectively.

Apical will continue engaging with FELDA/FGV and monitor the development of the case.

In 2018, there was no CPO delivered by FGV to Apical’s refineries in Indonesia due to commercial and other reasons. However, Apical is maintaining business relations with FGV so as to engage with FGV on its sustainability progress and updates.

Apical have been receiving regular updates from FGV, especially on its progress implementation SCHR action plan and related policies.

On the deforestation of natural forest issue raised in May 2018, FGV has committed to cease land development works at PT CNP and PT TAA.

FGV adopts the RSPO’s land rehabilitation guideline and consult with Badan Restorasi Gambut Indonesia on the rehabilitation program.

7 December 2018 – FGV informed that the company is working together with RSPO to address all the issues. FGV has frozen all recruitment of foreign workers using third party contractors and is reviewing internal processes and the personnel responsible in this area.

At Apical Group, our commitment to sustainability stems right from the top. Apical’s President is supported by the Director of Sustainability and various business heads, to ensure sustainability is integrated within business and functional units, and embedded in the company’s core values and initiatives.

Sustainability topics are discussed at Board meetings held quarterly. We also have dedicated Sustainability teams based in Kuala Lumpur, Malaysia, and Pekanbaru, Dumai, Medan, Jakarta and Balikpapan in Indonesia. The Sustainability teams are tasked with implementing and monitoring our commitments through constructive stakeholder engagement and collaboration.

In addition, there is also a dedicated Social, Security and Licensing (SSL) department in each refinery we own, to handle social and licensing matters in compliance with national regulations as well as Apical Sustainability Policy. The team also oversees Corporate Social Responsibility (CSR) programmes to support better livelihoods in local communities.

Achieving sustainability goals requires more than just collaboration with our key stakeholders. Collaboration across industries and peer companies is also crucial and hence, we constantly look for and participate in new partnerships, relevant industry membership and certification schemes.

We participate in industry membership and certification schemes such as the Tropical Forest Alliance 2020, Roundtable on Sustainable Palm Oil (RSPO), including the RSPO P&C Review Taskforce and the RSPO Indonesia National Interpretation Working Group, the International Sustainability and Carbon Certification (ISCC), and the Indonesian Sustainable Palm Oil (ISPO)

Dato' Yeo How

APICAL GROUP PRESIDENT

Di Apical Group, komitmen kami terhadap keberlanjutan didukung penuh dimulai dari jajaran managemen teratas. Presiden Apical didukung oleh Direktur Keberlanjutan bersama seluruh kepala bisnis, memastikan keberlanjutan terintegrasi dalam unit bisnis dan fungsional, dan tertanam dalam nilai dan inisiatif inti perusahaan.

Topik keberlanjutan dibahas pada rapat dewan yang diadakan setiap tiga bulan. Kami juga memiliki tim keberlanjutan yang berdedikasi berbasis di Kuala Lumpur; Malaysia, dan Indonesia; Pekanbaru, Dumai, Medan, Jakarta dan Balikpapan. Tim Keberlanjutan ditugaskan untuk menerapkan dan memantau komitmen kami melalui keterlibatan dan kolaborasi pemangku kepentingan yang konstruktif.

Selain itu, kami didukung penuh oleh departemen Sosial, Keamanan, dan Perizinan (SSL) khusus di setiap unit bisnis yang kami miliki, untuk menangani masalah sosial dan perizinan sesuai dengan peraturan nasional serta kebijakan keberlanjutan Apical. Tim juga mengawasi program Tanggung Jawab Sosial Perusahaan (CSR) untuk mendukung penghidupan yang lebih baik di masyarakat setempat.

Mencapai tujuan keberlanjutan membutuhkan lebih dari sekadar kolaborasi dengan pemangku kepentingan utama kami. Kolaborasi lintas industri dan perusahaan sejenis juga penting dan karenanya, kami terus mencari dan berpartisipasi dalam kemitraan baru, keanggotaan industri yang relevan, dan skema sertifikasi.

Kami berpartisipasi dalam skema keanggotaan dan sertifikasi industri seperti Tropical Forest Alliance 2020, Roundtable on Sustainable Palm Oil (RSPO), termasuk P&C Review Taskforce RSPO dan National Interpretation Working Group RSPO Indonesia, International Sustainability and Carbon Certification (ISCC), dan Indonesian Sustainable Palm Oil (ISPO).

Dato' Yeo How

PRESIDEN APICAL GROUP