FGV Annual Report 2016

FELDA GLOBAL VENTURES HOLDINGS BERHAD 64 REPORTING ON WHAT MATTERS SUSTAINABILITY STATEMENT ADDRESSING ECONOMIC IMPACT OUR MEMBERSHIP IN THE RSPO FGV, as part of the FELDA Group, is one of the earliest member of the RSPO which was established in 2004. The RSPO is a global organisation aimed at transforming the palm oil industry in collaboration with the global supply chain to put the industry on a sustainable path. One of its key missions is to monitor and evaluate the EES impacts of the cultivation, distribution and use of palm oil in the market. As of 30 April 2016, we have certified 58 of our 72 palm oil mills which has a projected supply capacity of 1,830,900 MT* of CSPO. However, the Group made a decision in May 2016 to voluntarily withdraw the RSPO certification of all 58 mills following the discovery of labour issues in the supply chain of the mills. We remain committed to RSPO certification and have taken steps to re-certify our mills after addressing the labour issues as well as registering FGV as RSPO member separate from FELDA. We have been in active communication with the RSPO and other regulatory bodies in making sure that the sustainability of our business and operations are intact. To this end, FGV has engaged a sustainability partner to provide independent advice in managing the labour and social issues evident in some of the FELDA settlers and contractors. In December 2016, FGV has obtained its own RSPO membership, separate from FELDA. With the separate membership, 16 mills were ready for re-certification at the end of 2016 and will be audited in 2017. We aim to complete the re-certification of all our mills by 2021. We also target to take smallholders and independent smallholders on board with sustainable certification and support independent smallholders to deploy sustainable palm oil practices. During the Roundtable 14 event organised by RSPO in Bangkok on 7-10 November 2016, FGV participated as one of the panellist under the topic 'Emerging Issues on Labour Working Conditions', sharing our experience and approach towards social compliance specifically with regard to the ethical treatment of our foreign guest workers and the need for industry and government to collaborate to address prevailing issues. We have certified 58 of our 72 palm oil mills which has a projected supply capacity of 1,830,900 MT* of certified sustainable palm oil (CSPO). Briefing Stakeholders on FGV's sustainability targets and commitments. * This data point has been independently audited. Please refer to our Independent Assurance Report on pages 355-356.