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Policies

Sustainability Policy

Apical Group Ltd places sustainability strategically at the core of our business. We launched our Sustainability Policy with the aim to build a transparent and traceable palm oil supply chain and it outlines our commitment to ensuring sustainable practices are adopted across the entire value chain of our palm oil production from cultivation to processing and delivery to end-users.

We recognise that our business is reliant on land availability for palm oil plantations and that there are serious risks of deforestation and biodiversity loss if proper monitoring and control mechanisms are not in place. For that reason, we are working closely with our suppliers to ensure adherence to local, international and our own sustainability standards for the protection of High Conservation Value (HCV) areas, High Carbon Stock (HCS) forests and peatland (defined as organic soils with 65% or more organic matter).

The palm oil industry brings about significant socio-economic benefits to the communities in Indonesia by presenting new sources of income through jobs and trading opportunities, thus helping to alleviate poverty and empower people to secure better livelihoods. However, we also understand that the development of our industry could adversely impact local communities, in particular indigenous people. We jointly work with industry stakeholders to protect all human rights, as well as the rights of local communities and indigenous people, and to advance transformation of industry practices.

We first published our Sustainability Policy in September 2014 and it has served as a roadmap to guide our group’s efforts towards becoming a sustainable global processor and trader of palm oil. We started working with sustainability consultancy organisations such as The Forest Trust (TFT) in 2015 and Consortium of Resource Experts (CORE – an association of Proforest & Daemeter) in 2017 to support us in our continuous efforts to develop the transparency of our raw material supply chains, assess and mitigate environmental risks of our supply chain and strengthen the implementation of our policy throughout our supply chain.

Our Commitments

Apical is on track to building a traceable and transparent palm oil supply chain committed to:

  1. The protection of high conservation value (HCV) areas and high carbon stock (HCS) areas
  2. The protection of peat regardless of depth
  3. Driving positive socio-economy impact for people and communities

This commitment extends to all of Apical’s subsidiaries and to the refineries that we own and manage. We will work to ensure that our suppliers, business partners and employees comply with the above commitments, local laws and regulations. We ensure to source only through networks that are transparent and traceable and ensure that the palm oil we purchase, process and sell are in accordance with the policy. We will use our best endeavours, including our resources, to assist smallholders adopt sustainable practices and to facilitate their inclusion in the supply chain.

HCV forests have an especially high ecological and/or social value. HCS forests hold or have the potential to hold a high amount of carbon and should thus, be protected or restored. We have communicated the importance of HCV and HCS areas to our stakeholders and will continue to do so. We are committed to preventing deforestation in our supply chains and require the same from all our raw material suppliers.

We provide training and recommendations to mills that source from estates located close to HCV and primary forests and peatlands. Our team also assists priority suppliers identify, manage and monitor significant biological, ecological and social or cultural values through the High Carbon Stock Approach and geospatial analysis.

Through regular supplier engagement activities, we offer training to our suppliers on adopting agricultural best management practices, such as effective water management to maximise palm oil yield and minimise GHG emissions in existing peat estates.

If suppliers are found in breach of this policy, Apical will work with them to determine a corrective action plan that states detailed measures with timelines to facilitate improved practices. If suppliers refuse to comply or do not demonstrate efforts to implement corrective action, we will take additional measures and in some cases, suspend our business relationship with them until we are able to see significant positive improvements.

We will cease to contract any suppliers who breach our policy and do not take immediate action to correct their non-conformance or violations. In addition, Apical Group shall not conduct business with serious repeat violators of this policy, regardless of remedial action.

Where applicable, we will work to ensure our suppliers adopt the following criteria:

  • Adopt the High Carbon Stock Approach that is based on field trials and expert and scientific recommendations, taking into account social considerations.
  • Engage constructively with members of the High Carbon Stock Approach Steering Group, which was established to implement best practices and oversee the HCS approach.
  • Utilise the HCS Approach methodology to identify protected areas prior to the establishment of any new plantations, while further robust scientific studies are being conducted.
  • Conserve the existing biodiversity, riparian zones (areas bordering rivers and other bodies of surface water) and high conservation value (HCV) areas that are important to the social and cultural construct of communities within plantations
    (this aligns with RSPO Principles & Criteria 5.2 and 7.3). Independent HCV assessments will be peer reviewed by technical members of the HCV Resource Network.
  • Develop a landscape planning approach to conservation and existing conservation initiatives.
  • Ensure the long-term protection of forests and other important areas by building an integrated forest management plan that integrates the recommendations of HCS, HCV, Special Environmental Impact Assessment (SEIA) and peatland assessments within larger landscape planning.
  • Identify the sources of greenhouse gas (GHG) emissions and conduct GHG calculations for all operations linked to us (based on RSPO Principles & Criteria 5.6 and 7.8).
  • Monitor GHG emissions and strive for progressive reductions in areas where it is environmentally and economically feasible.
  • Commit firmly to the Zero-Burning Policy adopted by ASEAN countries in all operations and actively engage in initiatives of fire and haze mitigation.
  • No new development on areas of peatland regardless of the depth of peat.
  • Work with expert stakeholders to ensure Best Management Practices (BMPs) on peat in pre-existing plantations as defined by RSPO and peat experts.
  • Collaborate with stakeholders and community experts to explore options for long-term restoration or alternative use, in areas where existing peat is unsuitable for replanting.
  • The HCS approach is also designed to ensure that land use rights and the livelihoods of local communities are respected.
  • Recognise the Universal Declaration of Human Rights and promote equal rights in employment regardless of age, race, colour, sex, creed, religion and disability. Child labour is strictly prohibited in any of our operations and we condemn any form of sexual harassment, discrimination and abuse against women.
  • Respect the rights of all workers to form or become members of a labour union on their free will and the right to collective bargaining.
  • Provide a safe and healthy working environment and practise the Fair Treatment Policy that ensures the rights of all people to be treated with fairness, equality and dignity and provide an environment free of discrimination and harassment including for contract, temporary and migrant workers. Empower gender mainstreaming and not condone any form of human rights violation or discrimination within our supply chain
  • Facilitate the inclusion of smallholders, outgrowers and small fresh fruit bunch (FFB) suppliers and fully support them into our sourcing supply chain in a fair, transparent and accountable partnership.
  • Respect and recognise the rights of indigenous and local communities to give or withhold their Free, Prior and Informed Consent (FPIC) to the utilisation of lands to which they hold legal, communal or customary rights to. Ensure a transparent and legal land allocation process.
  • Consider and maintain strong food security of local communities in order to maintain their land use choice and future food security options.
  • Work in a fair and transparent manner to resolve verifiable complaints and conflicts with all parties. Develop a transparent grievance mechanism system to ensure that all grievances and conflicts are addressed in an accountable manner

 

  • Effective immediately, Apical and our subsidiaries (including companies we control, manage and/or have an investment regardless of stake) shall comply with this policy.
  • We work with our suppliers to socialise and encourage the adoption of this policy. We shall not knowingly source from suppliers who are not in compliance with this policy.
  • We have set up a transparent grievance system for stakeholders to inform us of issues within our supply chain. We shall respond to these grievances in a transparent manner and communicate a time-bound plan for handling of the grievance.
  • We have progressively achieved 100% mill traceability in our supply chain in 2015 and have maintained this to date. We have an appointed sustainability consultant that conducts independent verification of our mill traceability every quarter. All new suppliers to our supply chain are also verified by our sustainability consultant.
  • We actively report to the Roundtable on Sustainable Palm Oil (RSPO) through the Annual Communication of Progress (ACOP) since 2013 and will continue reporting annually. The ACOP is used by RSPO to assess our yearly progress towards 100% certified RSPO sustainable palm oil.

Apical Group continues our commitment to promote the production of sustainable palm oil in accordance to the principles and criteria presented by the Roundtable on Sustainable Palm Oil (RSPO), International Sustainability & Carbon Certification (ISCC) and the Indonesian Sustainable Palm Oil (ISPO). We are open to explore new initiatives to promote the production of sustainable palm oil through collaboration with stakeholders, experts and communities. We will monitor and assess the implementation of our policy for ways to improve its effectiveness and; as new information and knowledge come to light, Apical will adjust and improve policies to further align with our sustainability commitments.

Download the Apical Sustainability Policy (English)
Unduh Kebijakan Keberlanjutan Apical (Bahasa Indonesia)

Sourcing Policy

Introduction

Apical Group Ltd is one of the largest processors of palm oil/ palm kernel oil and exporters of palm oil products in Indonesia. We have an extensive palm oil business value chain from sourcing to distribution as we are engaged in the refining, processing and trading of palm oil and its products for both domestic use and international export. Our operations in Indonesia consist of four refineries, two biodiesel plants, an oleochemical plant and a kernel crushing plant. We also own a small refinery in China and a biodiesel plant in Spain.

It is highly important to us that our customers and end consumers have confidence that our products are made from palm oil that has been responsibly sourced from traceable and transparent supply chains that respect the environment and local communities. Therefore, it is imperative that we work together with our valued suppliers to ensure that their raw materials and produce receive wide acceptance and have unrestricted global market access.

Our sourcing policy has been completed pursuant to the Apical Sustainability Policy (as of September 2014) to build a traceable and transparent palm oil supply chain that is committed to the No Deforestation, No Peat and No Exploitation (NDPE) policy and includes:

  • The protection of high conservation value (HCV) areas and high carbon stock (HCS) areas
  • The protection of peat regardless of depth
  • Driving positive socio-economy impact for people and communities

Scope

Apical Group’s Sourcing Policy covers all internal and external operations within the Group’s supply chain including refineries, palm oil supplying mills, kernel crushing plants, plantations and smallholders.

Sourcing Strategy

Our sourcing strategy focuses on developing long-term relationships and collaboration with all our suppliers. The Sourcing Policy is implemented through:

  • Supplier engagement to ensure compliance with our Sustainability and Sourcing Policies.
  • Quarterly maintenance and updates of supplying mills’ and plantations’ traceability database
  • Sourcing of raw materials and supplies only from legal sources
  • Preventing encroachment on legally protected areas such as natural forests, HCS areas, national parks and others

Apical is conscious of our role in the palm oil supply chain and shall act responsibly and proactively to ensure that the palm oil we process and trade is sustainably sourced. We do not knowingly source from suppliers, traders or mills associated with deforestation of protected areas or supplying products that do not meet legal requirements or are non-compliant to our policies.

All our new suppliers are pre-screened and pre-qualified based on their company profile and possession of proper licenses and/or permits to ensure they meet legal requirements. New suppliers are then required to provide us with information through a comprehensive questionnaire that details their status in terms of sustainability and traceability database.

Existing suppliers that have been contracted for more than six months must provide us details of their latest mill and FFB traceability database. We require our suppliers to comply with our Sustainability and Sourcing Policies as part of the terms and conditions of our trading contract.

In addition, our suppliers are required to comply with the RSPO Principles & Criteria and take immediate remedial action to correct any non-compliance or violation. Suppliers must recognise and respect the rights of indigenous people and local communities to give or withhold their Free, Prior and Informed Consent (FPIC) to the utilisation of lands to which they hold legal, communal or customary rights to. They must also recognise the Universal Declaration of Human Rights and promote equal rights to all workers. Human trafficking and child labour are strictly prohibited in all our operations and those associated with us. Other requirements by the RSPO Principles & Criteria such as progressive reduction of GHG emissions and efficient use of water and energy are also part of our requirements.

Regardless of remedial action and subject to any legal requirements, as a last resort, we reserve the right to cease to do business with serious repeat violators of our Sustainability and Sourcing Policies. We will work in a fair and transparent manner to resolve verifiable complaints and conflicts with all parties. We are continuously working towards the development of a transparent grievance procedure to ensure that all grievances and conflicts are dealt and handled in an accountable manner.

Although facilitating the sustainability transformation across our entire supply chain is a major undertaking, we shall continue to provide technical support to our suppliers to achieve policy compliance via time-bound action plans as quickly as possible and expect to complete implementation by 2020 progressively. There is a growing demand for traceable palm oil to known and certified sources and Apical intends to meet this as a core element of our growth strategy.

Sourcing from smallholders

Most of our direct procurement comprises of crude palm oil (CPO) and palm kernel (PK) for the refineries located in Indonesia. Here we have more than 500 suppliers providing us raw materials for the production of CPO and PK from a number of sources such as third-party estates, smallholders and dealers or brokers who buy from farmers. Smallholders form an essential part of the palm oil value chain as there are about two million small farmers controlling over 44% of all FFB supply in Indonesia. As such, the fragmented nature of our upstream procurement represents our key supply chain risks.

To prevent the inflow of illegal FFB into our supply chains, our suppliers are required to provide legal documentation of all FFB sources from independent smallholders and third-party palm oil suppliers. We conduct due diligence in the selection of suppliers and ensure adequate grievance mechanisms are in place. We also assess suppliers’ performance throughout their contact with Apical and develop remedial action plans for any areas of improvement that are identified.

To facilitate the increase of sustainable certification for smallholders, Apical works with our suppliers who have direct control of FFB sources, to ensure inclusivity of smallholders through engagement.

Apical Group has initiated Anchor Programmes for pro-active engagement using traceability as the starting point and will continue to do so. This comprises initiatives for supplier prioritisation, engagement and capacity building through field visits, face-to-face meetings and best practices training workshops. We have taken steps to build close and healthy long-term relationships with suppliers as we strive to instil a cooperative spirit and positive change towards sustainable practices within our priority suppliers during these contact points.

Download the Apical Palm Oil Sourcing Policy

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