FGV Annual Report 2020

P LANTAT I ON BUS I NESS SUGAR BUS I NESS As part of our commitment to align FGV’s human rights and labour practices to international standards, we became an affiliate to the Fair Labor Association (FLA). In 2020, we developed an action plan in consultation with various stakeholders that outlines a number of initiatives that seek to strengthen various aspects of our labour practices including recruitment of migrant workers, capacity building, grievance mechanisms as well as monitoring and remediation systems. Our efforts under this affiliation are independently monitored and assessed by the FLA. (For more details on our human rights initiatives, please refer to our Sustainability Section, Respecting Human Rights, on pages 118 to 139 of this report) Achieved 81% Traceability to Plantation Geared for 100% crop traceability in 2021 Affiliation to the Fair Labor Association (FLA) To uphold Group’s sustainability commitment to respect human rights and uphold labour standards The Group is confident of the long-term prospects of the Sugar Business. During the year, we focused our attention on paring down operational costs by improving operational efficiency, cash flow and the competitiveness of the business. We also developed new value added products to be launched in the marketplace. Consolidated sugar operations at Prai and Tanjung Langsat refineries to pare down operational costs Continued leveraging on “Just in Time” procurement arrangements Explored opportunities to grow the Group’s downstream business Upgraded Tanjung Langsat refinery to introduce new value added products such as liquid sugar and refined syrup to penetrate regional markets Operational Efficiency Improvements Better Cash Flow Business Competitiveness New Value Added Products In Conversation with Group Chief Executive Officer Through our robust traceability initiatives, in 2020, we achieved 81% Traceability to Plantation (TTP). This is on track with our goal to achieve 100% TTP by 4Q FY2021. Traceability initiatives ensure that our sourcing of FFB is in line with FGV’s Group Sustainability Policy (GSP) and our commitment to No Deforestation, No Peat and No Exploitation (NDPE). While the Group’s FFB is 100% Traceable to Mills (TTM), we face a unique set of challenges in tracing FFB from our smallholder supply chain. Moreover, two-thirds of our FFB is sourced from external suppliers, comprising FELDA settlers, independent smallholders as well as FFB traders. Only one-third comes from our own estates. (For more details, please refer to our Sustainability Section). 38 FGV HOLDINGS BERHAD Annual Integrated Report 2020