FGV Annual Integrated Report 2019

108 FGV HOLDINGS BERHAD BOARD GOVERNANCE & RISK MANAGEMENT COMMITTEE REPORT PERFORMANCE REVIEW During the financial year, the Board evaluated the Board Governance & Risk Management Committee’s performance and the extent to which the Board Governance & Risk Management Committee met the requirements of its Terms of Reference, including the termof office and performance of the Board Governance & RiskManagement Committee and each of itsmembers. This performance assessment constituted part of the annual Board effectiveness assessment, pertaining to the assessment of Board Committees. This Report was made in accordance with a resolution of the Board of Directors approved on 17 April 2020. HOW WE ARE GOVERNED GOVERNANCE AT FGV: ACCOUNTABILITY Significant matters How these matters were addressed by the Board Governance & Risk Management Committee Outcome of the process undertaken RSPO and MSPO Certification • Took note of the non-conformance in operating units and suggested practical approaches to the recommended remedies to address the issues that could affect certification. • Guided plantation and palm oil mill operation on RSPO compliance to new P&C 2019. • Research on applicable labour standard. • Smooth progress of RSPO and MSPO certification. • Able to fulfill the new P&C requirements. • To provide clarity and uniformity on the applicable labour standard across FGV operations. Peat Soil Management • The Stop Work Order for new peatland development is still in effect and the local communities are still waiting patiently for PT CNP & PT TAA to develop the Plasma area for the benefit of the local community. • With FGV’s commitment towards no new planting on peat, the Management is considering planting a combination of long-term plants and short-term crops to give some immediate returns to Plasma smallholders. Furthermore, with Drainability Assessment being made mandatory by the local government (to determine the ability to replant in existing oil palm plantations on peatland as required in the RSPO P&C 2018), FGV is waiting for the Drainability Assessment Report from Kementerian Lingkungan Hidup & Kehutanan Republik Indonesia (KLHK) to guide the identification of suitable crops to plant on the peat area. Traceability of source of fresh fruit bunches (FFB) • FGV’s commitment is to trace and to conduct sustainability risk assessment for FFB sourced to the Group’s mills and mitigate its risks. The target was to cover 50% of external FFB supply in 2019 and another 25% for 2020 and 2021 respectively. • FGV, together with the Malaysia Institute for Supply Chain Innovation (MISI) and MIMOS, with the support of P&G, have come up with a traceability and risk mapping programme which seeks to identify suppliers and support them in addressing sustainability non-compliance. • 12 top dealers have been engaged to communicate and socialise FGV’s commitment to NDPE and the Group Sustainability Policy. • In the first part of 2019, 72 collection centres belonging to three top dealers were analysed for sustainability risks. The high-risk suppliers will be given priority for further engagement to verify the real sustainability risks associated with them.