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IOI Group’s First Progress Update on the Sustainability Implementation Plan (SIP)
November 01, 2016

This is our first SIP-update since it was published in August 2016. We would like to highlight a number of areas in this note where significant progress has been made:

Ketapang

1)     As part of our commitment to a Landscape Level Approach to manage peat land within and around our concession areas in the Ketapang landscape, we signed an agreement in August 2016, for the commencement of LiDAR mapping of peat land areas within and around the concessions. A draft version of the peat land protection plan at landscape level will be available by end of November 2016.

2)     We have, in conjunction with our various stakeholders in the immediate vicinity of the SNA Group (Ketapang concessions), jointly developed and implemented our Integrated Management Plan for PT BSS which is based on the Landscape Level Approach. It provides effective fire prevention and mitigation and peat and biodiversity conservation.  We are currently working closely with the local community (Desa Natail Kuini) and various Government agencies towards developing a partnership on fire prevention outside our concession boundaries by raising awareness and training.  We have also signed an MOU with Balai Konservasi Sumber Daya Alam (BKSDA), to work as our partner, on an action plan on fire prevention.

3)     On the development of our KPAM concession in Ketapang, we contracted Proforest to provide technical support. The first stage is to gauge whether existing reports are sufficient to ensure compliance with our Sustainable Palm Oil Policy. Following a five-day scoping visit, and comprehensive document review, Proforest delivered a phase 1 report in mid-October. Phase 2 will be to carry out work to fill gaps – if any. A decision on when the new planting will commence will be taken only after phase 2 has been completed. By the end of December this year, we will have completed all assessments, including the HCS assessment for the KPAM concession.

4)     We will also be making available our Ketapang (Indonesian) concession maps whilst all other maps (Malaysia plantations) will be made available to the RSPO before the end of 2016.

Labor rights

5)     We are finalizing the appointment of an external partner, to assist us in the implementation of fair labor practices especially in West Peninsula and Sabah. The consultant performs a full gap analysis of existing labor practices and provide assistance on procedure to handle foreign workers issues starting from January 2017.

Traceability to mill level

6)     We will achieve 100% traceability of our palm oil supplies to the mills by the end of this year. Our current traceability numbers can be found in our traceability report FY15/16.

Sustainability Advisory Panel

7)     In our SPOP, improving our level of engagement with stakeholders, including transparency on our performance and progress, is a key element in underpinning our policy commitments. We have therefore, added a new commitment to set up a Sustainability Advisory Panel (SAP). In addition we developed the Term of Reference, which has been completed in October, 2016

Grievance list

8)     We completed our grievance mechanism in consultation with a number of stakeholders and uploaded it on the IOI Group website in September. The grievance mechanism includes regular public disclosures on new grievances and updates on existing grievances. The grievance list is now available our IOI Group website. 

Transparent access to our progress

9)     We will introduce a public reporting system (company dashboard) to communicate traceability information, progress on resolution of outstanding complaints and updates on supplier engagement and verification by the end of this year.

a.    Traceability data available online

b.    List of supplying mills available online

c.    Online dash-board at group level available by 31 December 2016

Staffing

Last but not least, we understand the concerns voiced by our stakeholders regarding our capacity to implement our SIP. So, prior to the development of the SIP, we have started to restructure and revamp the personnel within the IOI Group as well as to increased resource allocation to support our sustainability efforts.

At Group level, in addition to the IOI Group Head of Sustainability (GHS) position, we now have an executive assisting the GHS and the two new positions of Sustainability Manager (Social & Labor and Environment) to assist the GHS in policy matters and implementation.  In the Plantation Division, with the appointment of a new Head of Plantation and the subsequent restructuring, we have moved to ensure resourcing at all levels. Ten new positions were defined to fill in gaps arising from this restructuring including a new Deputy Head of Plantation (Indonesia), a new Sustainability Head for SNA Group, as well as the new positions of Sustainability Coordinators for Plantation and Sustainability Managers in Peninsular & Sabah. Our aim here is to ensure the robust connection between policy and strategy with on the ground implementation. Additionally, due to our increased focus in traceability in our supply chain, we have increased the number of personnel involved in our mill verification exercise.

We end with the reaffirmation of IOI Group’s commitment to sustainability and to addressing past implementation issues as well as to our efforts to focus on the delivery of our commitments and continued constructive engagement with all stakeholders.

Please don’t hesitate to get in touch if you have any questions.

Best regards,

Dr. Surina Ismail
Group Head of Sustainability
IOI Corporation Berhad