Socio-economic Benefits

Driving positive socio-economic development

The palm oil industry brings major benefits to the communities in Indonesia, primarily through new sources of income with jobs and trading opportunities. This helps alleviate poverty within the communities we operate in and uplifts the local people to secure better livelihoods for themselves.

At the same time, we recognise that the development of our industry may adversely impact local communities, in particular indigenous people, giving rise to land conflicts. As such, we are committed to ensuring the rights of local and indigenous communities are respected as well as empowered for better livelihoods. As a responsible company, it makes good business sense to utilise palm oil’s natural advantage to improve the lives of our communities and effect positive transformation in our supply chain.

The socio-economic development of Apical Group’s smallholders, communities, and relevant stakeholders is a significant part of our business development strategy. Local and surrounding communities play an important role in our supply chain, which is why we facilitate the inclusion of palm oil mills and smallholders into our sustainable sourcing supply chain. Thus, we have also assisted many smallholders in our supply chain to obtain RSPO and ISCC certification. These certifications enhance the economic development of our smallholders, villages and areas surrounding plantations either directly or indirectly.

Apical prioritises the recruitment of local residents for employment as our primary focus to empower the communities where we operate in. In addition, we engage with adjacent villages to fulfill our commitment to drive positive socio-economy impact for people and local communities. An example would be at the Sari Dumai Sejati Refinery in Lubuk Gaung, where we enhanced the quality of living for the local community through the construction of roads and bridges, the refurbishment of a mosque, repair of a burnt down primary school’s facilities and provided scholarships to students, as part of our Corporate Social Responsibility programmes. We have initiated and explored other programs that seek to boost alternative livelihoods such as catfish farming.

Our goal is to support the production of sustainable palm oil, creating long-term demand and mutually beneficial relationships within our supply chain.

Respecting human rights

Apical fully recognises and respects the rights of indigenous and local communities to give or withhold their Free, Prior and Informed Consent (FPIC) to the utilisation of land to which they hold legal, communal or customary rights to. Through FPIC, indigenous communities can negotiate the conditions under which a new project will be designed, implemented, monitored and evaluated. We have produced an FPIC Guideline to assist our suppliers in applying the FPIC process.

View the FPIC Guideline here.

We ensure that a transparent and legal land allocation process is in place to prevent any land-related conflicts. We strictly adhere to national laws and regulations in the locations in which we operate. Prior to any new development and expansion that may affect surrounding local communities and the environment, Apical engages with accredited consultants and government departments to carry out Social and Environment Impact Assessments (SEIA) or AMDAL (Analisis Mengenai Dampak Lingkungan). This is applicable in Indonesia and aims to evaluate the potential impact of any land-based development. At this stage, any adverse feedback from communities and negative feedback to the environment is evaluated and assessed.

We respect the legal and customary (or traditional) rights of local community in land tenure and ownership, where any access or use of land for development must be carried out in compliance with the Free Prior Informed Consent (FPIC) and the RSPO Principles & Criteria, UN Declaration on the Rights of Indigenous Peoples or ILO 169.

We are committed to ensuring no new plantings are established on local peoples’ land where it can be demonstrated that there are legal, customary, land tenure or user rights.

Our refineries operate on designate industrial zones authorised by the local government. In 2017, there were no incidents involving the rights of the indigenous people at our sites. There have been no incidents related to our suppliers and in case of such incidents; Apical will work closely with suppliers to ensure corrective measures are taken immediately.

Apical is committed to respect and recognize the rights of indigenous and local communities to the utilization of lands to which they hold legal, communal or customary, and to ensure a transparent and legal land allocation process. This is in accordance with our commitment to UN Declaration on the Rights of Indigenous Peoples (2007) (UNDRIP), ILO Convention 169 and RSPO P&C 4.4-4.8 and as part of Apical’s Sustainability Policy.

UNDRIP (2007) – Indigenous peoples have the right to self-determination and to freely pursue their economic, social and cultural development. Right to FPIC to any project affecting their lands as expressed through their own representative institutions.

ILO Convention 169 (1989) Indigenous and Tribal Peoples – Respect and safeguard rights to lands and natural resources traditionally occupied and used; respect for customs of inheritance; no forced removals; compensation for loss and injury.

Rights are legal, social, or ethical principles of freedom or entitlement, in accordance with the International Bill of Rights, and other relevant international human rights instruments including the UN Declaration on the Rights of Indigenous Peoples, UN Guiding Principles on Business and Human Rights, The Global Compact for Safe, Orderly and Regular Migration.

Indigenous peoples, local communities and users may have informal or customary rights in land that are not registered or recognised by the government or national laws. Demonstrable rights are distinguished from spurious claims by direct engagement with local communities, so they have adequate opportunities to justify their claims, and are best ascertained through participatory mapping with the involvement of neighbouring communities.

Our approach is to aim to minimise the likelihood of cases arising through proactive and direct engagement with relevant stakeholders. Should a conflict arise, we strive to work in a fair and transparent manner to resolve any verifiable complaint or conflict with all parties involved.

The Apical Grievance Procedure, managed by a grievance verification team, was established to ensure all grievances and conflicts are addressed and resolved in a transparent manner. The team gathers information from all relevant parties before conducting field investigations with the aim to seek a resolution. The description of the grievance case and follow-up action taken is logged and publicly shared.

View the Apical Grievance Procedure here.

In accordance with RSPO P&C 6.2, pay and conditions for staff and workers (including contract workers) of Apical’s operations always meet at least legal or industry minimum standards and are sufficient to provide decent living wages (DLW). All employees of Apical receive wages that are equivalent to or above the minimum requirements set by the local and provincial authorities in the locations in which we operate.

From Riau to Jakarta and North Sumatra, Apical’s employee wages are typically higher than the minimum wage set by the provincial government. Details of our employee wages in Indonesia are available in our latest Sustainability Report.

In China, the current minimum wage in Jiangsu province, Nanjing is 2020CNY. According to local regulations, this amount excludes the minimum housing allowance paid by employers, thus the actual minimum wage 2250CNY. The entry level wage of Excelic, which is owned by Apical, also starts at 2250CNY and we adjust the rate according to changes in the law.

Apical recognises the Universal Declaration of Human Rights and promotes equal rights. Child labour is strictly prohibited in all our operations. We condemn any form of sexual harassment and abuse of women, and we protect their reproductive rights. We respect the right of all workers to form or become members of labour unions and we respect their right for collective bargaining. We provide a safe and healthy working environment and practice a fair treatment policy.