32 FGV HOLDINGS BERHAD SUSTAINABILITY AT FGV SUSTAINABILITY RISK MANAGEMENT The following are some of the risks we have identified that may impinge upon the sustainability of our business. We spell out how we are taking the relevant measures to mitigate these risks. Risk Description Mitigation Measures Outcomes Suspension/ withdrawal of sustainability certifications Allocation of budget to ensure implementation of certifications requirements Achievement of RSPO and MSPO certifications for FGV’s estates and mills and RSPO SCCS and MSPO SCCS for FGV’s Downstream operations. Embarked on Strategic Partnership Programme to enhance human rights practices in FGV i. FGV became an affiliate of FLA and is participating in a five-year programme to undertake various initiatives to enhance FGV’s labour practices. ii. FGV-IOM-Earthworm collaborated in a tripartite labour supply mapping project to examine the recruitment process of migrant workers. iii. FGV will be collaborating with SUHAKAM to conduct an assessment of living and working conditions in FGV’s mills and plantations and among mill workers. iv. FGV is collaborating with Tenaganita on the development of a Human Rights module as well as training for employees, including foreign workers. Embarked on social compliance project to ensure adequate legal and sustainability compliance Resource tool on labour standards and Occupational Safety and Health. Enforcement of corrective action plan for major non-conformances based on internal and external audits Continuously committed to enforcement of corrective action plan. As at December 2019, 144 instances of non-conformance had been closed out of a total of 179 instances of non-conformance. Conducted capacity building, competency training and awareness related to Sustainability and Certification to ensure continuous improvement in FGV operations on aspects of labour practices, human rights and environment i. Undertook a socialisation programme to raise awareness and understanding on FGV’s sustainability commitments under its GSP among FGV’s operations, subsidiaries, suppliers and contractors. The GSP includes commitments to human rights and NDPE policy. ii. Embedded sustainability into operations by enhancing job descriptions to create a working culture that complies with sustainability aspects. Establishment of Sustainability Synergy Committee (SSC) Ensures successful implementation of sustainability initiatives within FGV Group to enable swift responses to FGV’s critical sustainability issues and risks. Unfair and non-transparent recruitment practices in source countries Developed recruitment guidelines for contractors in estates/mills on monitoring and enforcement of employment contracts Drafted and adopted new supplier guidelines with Group Procurement, reflecting the Group’s key sustainability values in relation to social and human rights aspects. Conducted verification audit on recruitment process for migrant workers Conducted verification audit in Q4 2019. Based on the verification audit conducted in the source country (Lombok, Indonesia), the recruitment of migrant workers was transparent and in compliance with ethical recruitment processes. Developed SOP relevant to recruiting migrant workers Developed Guidelines and Procedures for the Responsible Recruitment of Foreign Workers. Approved in Q2 2019. Drafted and adopted supplier guidelines with Group Procurement Adoption of Guidelines and Procedures for the Responsible Recruitment of Foreign Workers which reflects the Group’s sustainability values in relation to social and human rights aspects. Effective April 2019.
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