Palm oil is a crucial commodity to the world. It is the most cost effective oilseed crop since the production of palm oil gives the highest yield per hectare while using the least area compared to other vegetable oil crops. Palm oil is seen as a solution when it comes to feeding the growing number of people on our planet. The production of this vegetable oil provides job opportunities, supports livelihoods and eradicate poverty for communities and workers in developing countries.
PALMINDO, being a processor in palm oil industry, believes that producing palm oil sustainably safeguards environment, economic viability and supports social elevation of communities living and working in palm oil plantations. Being a leading global player, PALMINDO commits to play an active role in supporting sustainable practices in the palm oil industry. PALMINDO will also adopt sustainability standards in its own business operations.
This policy is applicable to all PALMINDO operations and we expect all our third party suppliers of palm oil, palm kernel oil and its derivatives to adhere to the commitments in this Policy in their operations. PALMINDO will work to ensure that our third party suppliers complies with our policy and will only source our supply through transparent and traceable network.
PALMINDO has developed their respective responsible sourcing policy over the period 2020 -2021. Based on feedback from stakeholders as well as practicality of implementation, the Sustainability Steering Committee of PALMINDO has decided to issue a policy which comes into effect 1 October 2022..
PALMINDO is committed to ensure a transparent, traceable and responsible supply chain by adopting no deforestation, no peatland planting and no exploitation of local communities and workers in our operations. PIL Group’s promise is further explained in the following core commitments:
1.1. Legal Compliance
Adherence to all relevant local and national laws in our operations and sourcing of palm oil. We expect our third party suppliers to comply with national and international certification requirement, where relevant.
PALMINDO upholds highest ethical conduct and corporate responsibility standards. We do not tolerate any forms of corruption or bribery and our suppliers shall comply with this.
1.2. Supplier Code of Conduct
This Code is applicable throughout the supply chain to ensure compliance to our policy and No Deforestation, No Peat and No Exploitation (NDPE) commitments.
1.3. Roundtable on Sustainable Palm Oil (RSPO):
PALMINDO is a proud member of the RSPO, the palm oil industry’s certification and regulatory body and remains committed to engaging and maintaining a dialogue with its business associates, clients and wider stakeholders to achieve the mutual goal of responsible and sustainable palm oil development.
Wherever possible, we will engage our suppliers to implement RSPO certification and existing industries best practices within their operations.
In line with RSPO Code of Conduct for members, PALMINDO commits to continuous improvement in our practices.
2. ENVIRONMENTAL RESPONSIBILITY2.1. No Deforestation:
PALMINDO will not knowingly source palm oil from plantations established on areas of significant environmental or cultural importance from November 2020 . We support the conservation of High Conservation Value (HCV)2 areas and Carbon Stock (HCS)3 forests.
High Conservation Value (HCV) areas which we recognize that in some circumstances, non-forest areas particularly those with significant cultural or historical value may also be considered as HCV land and such areas would fall within the scope of this policy
Carbon Stock (HCS) forests such as primary forests, high, medium and low density forest and young regenerating forests.
We expect our third party suppliers to identify areas of conservation and protection through High Conservation Values (HCV) and High Carbon Stock (HCS) assessments. These assessments must be led by licensed HCV assessors accredited by the HCV Resource Network's Assessor Licensing Scheme (HCVRN-ALS) and HCSA registered practitioners. HCS areas are protected using Carbon Stock Approach as defined by the HCS Approach Toolkit.2.2. No Peat:
PALMINDO will not accept any new development on peatland regardless of depth. For existing plantations (indirect suppliers) on peat, best management practices for soil and peat plantations must be implemented, preferably in accordance with the RSPO Manual on Best Management Practices for existing oil palm cultivation on peat.
Zero burn policy in all operations and require our suppliers and indirect suppliers not to use fire in land preparation for new planting, re-planting or any other developments
PALMINDO supports to conduct Social & Environmental Impact Assessments (SEIA) in any new developments or operations by third party suppliers that might impose adverse impacts on environment and local communities.
Respect the traditional rights of indigenous groups and communities to hunt with controlled manner in areas designated for those purposes, provided that their hunting activities are legal, non-commercial, do not involve rare, threatened, or endangered species, do not threaten the long-term viability of the species, and do not have negative impacts on ecological processes important for agriculture and local ecosystem sustainability.
We expect our third party suppliers to minimize the use of chemicals; pesticides and chemical fertilizers in plantation operations. We prohibit the use of pesticides classified under World Health Organization (WHO) Class 1A and 1B, Stockholm and Rotterdam Convention, and the use of paraquat by our suppliers in the production of palm products, except in specific circumstances permitted by government authorities
Measure and progressively reduce Greenhouse Gas (GHG) emission and encourage suppliers to improve continuously by implementing RSPO Best Management Practices to Reduce Total Emissions from Palm Oil Production.
3.SOCIAL RESPONSIBILITY3.1. Human Rights
PALMINDO supports Universal Declaration of Human Rights (UDHR) to respect and to protect human rights of all workers, including permanent, temporary, contract, and migrant workers. We will constantly ensure that our suppliers’ operation does not complicit in human rights abuse.
PALMINDO recognizes and respects the rights of indigenous and local communities in line with Universal Declaration on the Rights of Indigenous Peoples (UNDRIP) to give or withhold their Free, Prior, and Informed Consent (FPIC)4 in all operations.to operations on lands to which they hold legal, communal or customary rights. We strongly encourages engagement with local stakeholder communities to ensure the FPIC process is correctly implemented and continuously improved.
We respect and recognize duties associated with land tenure rights in which local stakeholder communities hold legal, communal or customary rights. We encourage long-term protection and sustainable use of land and forests. This is done in accordance with our policy, local laws and regulations of the country we operate in..
PALMINDO is committed to ensure that the rights of all workers covered under this policy are according to local and national law, and aligned to the five fundamental conventions of International Labour Organization (ILO)5 . We also commit to ensure international best practices in place, where legal frameworks are not yet in place. The following principles are part of our policy:
Child labour – shall not knowingly use or promote the use of child labour, and shall take appropriate measures to prevent the use of such labour in connection with their operations
Forced labour - shall not knowingly use or promote the use of forced or bonded labour or human trafficking, and shall take appropriate measures to prevent the use of such labour in connection with their operations.
No discrimination - shall ensure that workers are protected from any form of harassment, abuse and discrimination including gender discrimination related to employment that would constitute a violation of their human rights
Ethical recruitment – shall not incur any recruitment fees at any stage of the recruitment process, provision of decent work and freedom of resignation from employment.
Document retention – will not withhold wages, identification cards, passports or other travel documents, or other personal belongings without worker’s consent or other than required by law.
Wages - shall ensure all workers are paid a wage equal to or exceeding the legal minimum wage.
Employment contract - shall ensure that workers are given in writing, in a language that they understand, the details of their working conditions, including but not pmited to the nature of the work to be undertaken, rate of pay and pay arrangements, working hours, vacation and other leave, and all other benefits of employment.
Working hours - shall ensure that workers do not work more than permissible hours per week according to respective local law6 , including overtime; that overtime hours are worked on a voluntary basis; and that workers have at least one day off per week.
Record keeping -shall maintain a transparent and reliable record of working hours and wages for all workers.
Accommodation - shall ensure that the accommodation is decent, adequate and safe with separate and segregated accommodations for men and women with no restriction of movement.
Committed to provide a secured and healthy working environment free from occupational hazard.
4. ENGAGEMENT AND INCLUSIVITY4.1. Supplier Engagement
We will engage with our key suppliers to uphold our commitments and policies. This will include verification and monitoring of grievances, policy compliance and supplier progress towards meeting our responsible sourcing policy.
Suppliers who do not comply, or compliance cannot be confirmed with our Sustainable Palm Oil Sourcing Policy from November 2020 will be subjected to our Grievance Procedure and activation of Control Purchase Plan (CPC). We will work with them to develop time bound action plan, where necessary. Failure to respond to our Grievance Procedure and remedial action will cause suspension from PALMINDO’s supply chain.
PALMINDO is committed to share the sustainability mechanisms for improvement with our clients
Committed to support the inclusion of scheme and independent smallholders in our supply base and improve their livelihoods by good agricultural practices, certification, initiating yield improvement programs, etc.
5. TRANSPARENT AND TRACEABLE SUPPLY CHAIN MANAGEMENT5.1. Traceability
PALMINDO will work towards a traceable, transparent and responsible supply chain.5.2. Grievances:
PALMINDO has established a transparent grievance mechanism including an avenue for stakeholders to report grievances and a process to resolve complaints within our supply base.
PALMINDO will work towards continuous improvement to meet the standards and expectations of stakeholders in an evolving global market. We will continue to analyze the policies as well as implementation process and engage in a constant review and improvement process. As new development or requirements are implemented, PALMINDO will adjust and improve our policies in ways that are consistent with our sustainability commitments of protecting forests, peat lands, indigenous and local communities and human rights.