82 FGV HOLDINGS BERHAD THE MALAYSIAN SUSTAINABLE PALM OIL (MSPO) CERTIFICATION SCHEME The MSPO certification is the first national scheme for oil palmplantations and independent and organised smallholders in Sustainable Palm Oil Clusters (SPOCs) as well as other palm oil processing facilities to be certified against MSPO standards. It is an alternative to other sustainability certification schemes and it benefits smallholders due to its lower cost, without compromising on rigour. The MSPO is similar to the RSPO and International Sustainability and Carbon Certification (ISCC) but takes into consideration the national socio-economic agenda, focusing on developing local communities while ensuring compliance with all local, national and ratified international laws and treaties. FGV has been working closely with stakeholders and other members in the industry to develop the MSPO standards and we are among the first plantation companies to be MSPO-certified since 2015. FGV has strived to comply with the Malaysian government’s directive to make MSPO certification mandatory by the end of 2019. As at December 2019, a total of 55 complexes have been MSPO-certified, while the remaining 13 complexes have been audited. By February 2020, all 68 complexes were MSPO-certified. In keeping with our commitment to transparency, we have made public the auditors’ reports on our website. These positive steps taken by FGV were highlighted in the auditors’ reports but were not reflected in the decision letter by the CP. We feel that the directives by the RSPO CP were disproportionate to the overall findings of the audit exercise, and therefore FGV has submitted an appeal to the RSPO on 3 April 2020 against the 13 January 2020 decision of the CP. Irrespective of the outcome of the appeal, FGV remains committed to the RSPO’s P&C in their entirety, and will continue to strive towards full compliance. We also welcome RSPO to continue monitoring FGV’s progress in this regard. FGV’s direction is clear – it will execute its initiatives and programmes to ensure that its practices relating to labour are consistent with international labour and human rights standards. In 2019, the Group further strengthened its commitment to sustainability and human rights by implementing new guidelines and procedures for the responsible recruitment of migrant workers. As part of FGV’s commitment to ensure compliance with the RSPO P&C, we have embarked on a regularisation exercise specifically for undocumented workers in Sabah to ensure the workforce of FGV in Sabah is legally documented and in the process, ensure that the workers’ rights are protected. Taking into account the complex socio-geography of Sabah, this exercise was expected to be completed by the end of June 2020. However, the regularisation exercise was affected by the COVID-19 pandemic and the government’s MCO. FGV has, in April 2020, requested for an extension of the completion of the regularisation from the RSPO CP. Overall, FGV has bolstered its sustainability approach by revising and updating its Group Sustainability Policy (GSP). In addition, we have: Expanded the scope of the Sustainability Department to cover the whole Group with a direct reporting line to the Group Chief Executive Officer Established FGV’s Independent Advisory Panel for its Board, which was approved by the Board in November 2019. The members of the panel were announced in 2020 Adopted strategic alliances and collaborations with reputable and independent organisations such as the Fair Labor Association, International Organization for Migration, Earthworm Foundation and Malaysian Human Rights Commission FGV’s Sustainability Compliance and Certification Department (SCCD) is also making the necessary arrangements for smallholders’ RSPO certification at its Kechau B Complex, which will later be certified as an Identity Preserved category mill. TRUST AND TRACEABILITY Please turn to page 19 for more details on the Independent Advisory Panel in Sustainability Governance
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