FGV Annual Report 2016

ANNUAL INTEGRATED REPORT 2016 65 REPORTING ON WHAT MATTERS SUSTAINABILITY STATEMENT ADDRESSING ECONOMIC IMPACT INTERNATIONAL SUSTAINABILITY & CARBON CERTIFICATION (ISCC) ISCC is the first biofuel standard to be recognised by the EU and the most widely acknowledged amongst the many biofuel standards available today. Independent third-party certification ensures compliance with high ecological and social sustainability requirements, greenhouse gas emissions savings and traceability throughout the supply chain. FGV has sought ISCC certification since 2011, and the number of mills with ISCC certification is dependent on market demand in order to accommodate the requirement for sustainable biofuel market in Europe. Thus, while FGV had certified up to 15 mills in the past, we only kept five (5) mills* under ISCC certification as of 31 December 2016 due to lower market demand. MALAYSIAN SUSTAINABLE PALMOIL (MSPO) CERTIFICATION FGV has been working closely with Stakeholders and other members in the industry in developing MSPO, the first Malaysian palm oil sustainability certification scheme. The MSPO certification will be an alternative to the other sustainability certification schemes and benefits producers especially smallholders due to the cheaper cost involved in MSPO certification without compromise on rigour. We are also among the first few plantation companies to beMSPO certified since 2015. Currently, we have three (3) mill complexes certified to MSPO and may increase when the situation warrants. FREE, PRIOR AND INFORMED CONSENT (FPIC) FGV respects the right of its indigenous and surrounding communities by ensuring that any development or acquisition in or around the vicinity of their land is not in violation of their rights based on traditional and customary practices. FGV upholds the principles of FPIC, which is clearly stated in the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP). The aim of FPIC is to establish bottom-up consultation of customary land users and local communities prior to commencing any development. This is to ensure that we secure the understanding, cooperation and support of the local communities in our development and to establish appropriate boundaries and expectations between all parties. Our aim is to mitigate any risk of conflict arising from our developments and to align the interests of the communities with the Group. We are committed to holding proper consultations and engagements with the local community(ies) to identify expectations, terms and insights to obtain FPIC. The determination of local communities' tenure rights will be based on the findings of a SIA and through continuous engagement in fair and informed negotiations over access rights to land and other natural resources. Multiparty commitment to the restoration of river reserves and enhancement of buffer zones in Sabah. * This data point has been independently audited. Please refer to our Independent Assurance Report on pages 355-356.