Sustainable and Responsible Palm Oil

Supporting sustainable palm production on our own plantations

We believe that palm oil should be produced sustainably and we are committed to responsible and sustainable palm production on our own palm plantations. For some time, we have had clear social and environmental policies for each of our five palm plantations in Indonesia and Papua New Guinea and we are making a substantial contribution to local community development. We have already made progress in preparing our plantations to meet the RSPO Principles & Criteria and are working towards achieving certification as quickly as possible.

Conserving high value forest and peat lands – We have committed not to plant on areas of high conservation value forest (HCVF). We will not develop new plantations on peat land. We also have a strict "no-burn" policy for land preparation. Before beginning any proposed development or expansion we undertake a thorough environmental assessment and we will not develop areas if surveys reveal the presence of HCVF. We also comply with local laws on forest clearance and obtain relevant government approvals.

Supporting local community land rights – We are committed to not threatening or diminishing the resources or tenure rights of indigenous people. We diligently strive to ensure we have the legal right, and are recognized by the country’s government as the rightful entity, to use and manage the land. Poorly defined land rights between the local population and the government and multiple claims over the same area of land do result in disputes. We consult with local communities on land rights issues and provide fair compensation for any loss or damage.

In Papua New Guinea, there is a statutory procedure where communities can lease their land to commercial enterprises. Known as “lease-leaseback”. This system allows clan groups to form an incorporated land group (ILG) to mobilize their land for plantation development. On palm plantations this lease is usually for 20 years, which is the typical lifecycle before palm must be replanted. At the end of the lease period, the ILG can reclaim the land or agree another 20-year lease. When agreeing lease-leasebacks with local communities, we ensure the community is fully and accurately compensated for this land according to national norms, we cover all of the ILG’s costs to develop the land and also strive to employ ILG members on the plantation.

In Indonesia, we negotiate directly with individual landowners and local community leaders. The entire process is witnessed by local officials and requires us to compensate the local community leaders for existing crops, together with full notarization of agreements documenting our ownership of the land rights. We ensure that all mutual agreements with communities and individuals are clearly defined, documented, and legally established.

Protecting local water systems – We monitor and treat all wastewater we produce to ensure that it complies with the applicable legal standards. Wastewater generated from our milling operations contains organic materials from crushing palm fruits, which we reduce by passing the water through a series of cooling, settling, mixing, anaerobic and aerobic ponds. By relying on the natural activities of anaerobic and aerobic bacteria to break down the organic materials, wastewater can be treated to legal standards without adding chemicals. Where permitted, some of our plantations use the treated wastewater from this process to irrigate and fertilize the trees on our plantations, enabling us to conserve water and reduce the need to apply additional fertilizer.

Supporting employee rights – We abide by the laws in the countries in which we operate, pay competitive wages and offer performance bonuses to attract and retain our employees. Our policies include the rights of workers to organize, join a union and voluntarily negotiate on our plantations as outlined in International Labor Organization (ILO) Conventions 87 and 98.

Ensuring responsible labor practices – We do not accept or support the use of illegal, abusive, or enforced labor in any of our operations anywhere in the world. We adhere to national laws that require those working on farms to be at least 15 years old in Indonesia and at least 16 years old on plantations in Papua New Guinea, provided this does not disrupt school attendance and these employees are fully protected from potential economic exploitation, moral and physical hazards.

Improving access to health and education – As part of our long-standing commitment to ensure employee health and safety, we provide free basic health care where we operate, as well as free day-care and free housing to most permanent plantation employees. In Papua New Guinea we also offer HIV/AIDS testing and treatment. In addition, we have built schools for plantation workers and their families, and support teachers’ salaries by providing funds to the local governments for the schools.

Supporting local smallholders – Oil palm smallholders in Indonesia and Papua New Guinea are a significant contributor to the success of our plantations. In Papua New Guinea, we are working with the local agricultural extension service – OPIC – to provide support for smallholders to develop new plantations, return plantations to production, increase their current yields and incomes and provide better access to mills. These activities include helping them meet RSPO sustainability criteria, replanting and seedling access programs, providing interest free credit to purchase fertilizers and tools, and agricultural management training to improve productivity. We are also helping local landowners develop their fallow land into income generating palm estates at no cost as we pay for the development, rental fees and crop royalties to the landowner. In partnership with OPIC and the World Bank we are supporting a US$60 million expansion program to add 4,000 hectares of smallholdings, while meeting the RSPO sustainability guidelines and upgrading roads. We want to protect the investment that smallholders are making as we recognize the importance of ensuring smallholders have a market for their crops and therefore we are committed to accepting smallholder fresh fruit bunches (FFBs) ahead of even our own company crop.

Related resources:

< The Roundtable on Sustainable Palm Oil (RSPO) | Protecting endangered animal species and natural habitats >