Action Plan to Build Full Fresh Fruit Bunch (FFB) Traceability

Transcription

1 Action Plan to Build Full Fresh Fruit Bunch (FFB) Traceability 1. Preamble Apical Group is one of the largest processors of palm oil/ palm kernel oil and exporters of palm oil products in Indonesia. It has an extensive palm oil business value chain from sourcing, to distribution. It is engaged in the refining, processing and trading of palm oil and its products for both domestic use and international export. It is important that our customers and consumers have the confidence that our products are made from palm oil that has been responsibly sourced from traceable, sustainable and transparent supply chains that respect the environment and local communities. In April 2014, Apical Group became a signatory to the Sustainable Palm Oil Manifesto. Apical announced its Sustainability Policy in September For more information on our Sustainability Policy, please refer to 2. Traceability to palm oil mills In 2014, we have successfully achieved 100 % traceability to all of our supplying palm oil mills to our refinery in Dumai (SDS) and Tanjung Balai (AAJ-TB). By December 2015, we target to achieve full mill traceability to all our 3 refineries in Indonesia. 3. FFB Traceability In this action plan we target to build full Fresh Fruit Bunches (FFB) traceability progressively by We plan to achieve at least 90% FFB traceability by Our FFB suppliers are from 3 main sources ie. Plantations > 500 ha including associated plasma smallholders, small-mid size growers ha and smallholders < 25 ha ( Figure 1 ). Plantation > 500 ha especially the certified ones are relatively easy to map. The focus in this action plan is to jointly develop and test mechanisms with TFT to build FFB traceability for the small-mid size growers ( ha) and small holders <25 ha. Smallholders are further divided into associated/ plasma small holders and independent smallholders. There is not much problem in tracing associated/ plasma smallholders as 1

2 they are under the same plantation management. We need to develop a practical approach specifically for the large numbers of independent smallholders which we have committed to include into our supply chain. Due to the large number of independent smallholders in our supply chain, we propose to zone the smallholders with about similar risks/landscape such as proximity to National parks, peat areas with recurrent open burning, etc. This zoning of smallholders will also facilitate engagement for transformation. A coordinator will be required to coordinate the activities of all the smallholders in a particular zone. Small growers and independent smallholders that do not have their own transport facility to palm oil mills normally sell their FFB to collectors or dealers. We therefore also need to work with FFB dealers to obtain their FFB traceability data. We need to determine the number of FFB dealers supplying to a particular mill. The mills need to record the name and ID number of each agent and estimate the % FFB input from dealers. A FFB supplier is considered as traceable when the following FFB traceability data are obtained and verified:- Category of FFB Supplier Plantations ( > 500 ha) including associated plasma smallholders FFB Traceability Data Required Name of parent company Name of plantation Location and address GPS coordinates of estate boundary Area (ha) Estimated FFB tonnage for last 12 months Certification status (RSPO, ISCC, ISPO) Small-medium size growers ( > ha) Independent smallholder zones Same as above. Name of independent smallholder (SH) zone Location and address GPS coordinates of SH zone boundary Estimated planted area (ha) of SH zone Estimated FFB tonnage for last 12 months 2

3 Figure 1: FFB Supply Chain 4. Supplier Engagement Achieving traceability to our FFB suppliers will eventually enable us to evaluate the potential risks associated in our supply chain. In Apical, we believe that providing sufficient technical support and working together with our high risk suppliers is the most effective way to influence our suppliers to implement similar commitments in traceability and sustainability, and eventually create positive transformation of our supply chain. Identified high risk suppliers will be engaged and assessed by our Supplier Engagement Team (SET) with the purpose to:- i) Communicate our Sustainability Policy and commitments to our suppliers. ii) Technically support/training our suppliers to be in compliance with our requirements. iii) Create a long-term traceable and sustainable business partnership with all our suppliers. 3

4 5. Suspension of supply sources with repeated violation of Apical Sustainability Policy Trade with repeated violators will be suspended as and when necessary after transformation efforts. 6. Action plan and timeline to achieve full FFB traceability Action Plans A) Plantations (> 500 ha) including plasma smallholders 1 Plantation FFB traceability data collection and verification 2 Mapping, identification and engagement of high risk plantations Targets on FFB Traceability 15% 40% 60% 80% 90% 100% B) Small-mid size growers (> ha) 1 FFB traceability data collection and verification 2 Mapping, identification and engagement of high risk small-mid size growers C) Independent smallholders (< 25 ha) 1 Study from dealers on their FFB sources from independent smallholders 2 Desktop zoning of independent smallholders 3 FFB traceability data collection and verification on smallholder zones 4 Identification and engagement of high risk smallholder zones 5 Support independent smallholder zones to adopt good agricultural practices for increasing productivity D) Capacity building 1 Continuous trainings and capacity building of our supplier engagement teams 4

5 7. Reporting of progress on FFB traceability Our progress on FFB traceability data collection, verification, mapping and engagement of high risk FFB suppliers will be reported at 3 monthly intervals on our online dashboard system. 5