84 FGV HOLDINGS BERHAD TRUST AND TRACEABILITY GRI-103-1/2/3 TRACEABILITY AND RISK MAPPING FGV’s commitment to sustainable development is not limited to its operations and subsidiaries. Our suppliers are also expected to comply with the principles, regulatory rules and standards that FGV is committed to. We acknowledge that traceability is integral in fulfilling our commitment to responsible sourcing as it underlines transparency in our business. Today, FGV’s palm oil is 100% traceable to our mills and we are committed to enhancing traceability of our raw materials. TRACEABILITY IN THE OPERATIONAL UNITS Upstream Palm Oil Mills (68 Mills) TTP (Tier 1) Palm Oil Mills 83% Downstream Kernel Crushing Plants (FKP-4 Plants) TTM TTP (Tier 1) Semambu 100% 67% Pasir Gudang 100% 80% Pandamaran 100% 86% Sahabat 100% 93% Refineries - CPO/PKO (FGVR-4 Plants) TTM TTP (Tier 1) Kuantan Oil Products - CPO 100% 75% Kuantan Oil Products - PKO 100% 83% Sahabat Oil Products - CPO 100% 94% Tawau Oil Products - CPO 100% 78% Delima Oil Products - CPO 100% 80% Biodiesel (FGVBSB-1 Plant) TTM TTP (Tier 1) FGV Biotech 100% 74% TTM : Traceability To Mill TTP : Traceability To Plantation Tier 1 : The last gathering point of a product before it reaches FGV’s business unit FGV continues to work closely with our value chain partners to ensure that traceability and transparency are embedded in their own practices. To this end, we have established a traceability and risk mapping programme to identify and address non-compliance among suppliers. The programme helps to ensure that our suppliers, in consultation with FGV, develop an action plan with specific timelines to address the identified areas of non-compliance. We will monitor the progress of the implementation of the mutually agreed action plan and will provide support to the supplier concerned as and when necessary. FGV will terminate the supplier’s contract if the supplier fails to progress or is not willing to address the areas of non-compliance within the pre-determined timeframe. With traceability becoming a major concern in multinational palm oil companies, FGV’s Group Sustainability Division (GSD) rolled out initiatives in 2018 to identify and trace the source of palm products from our external sources to mitigate the risks associated with these sources. This ensures that the FFB sourced by FGV are not linked to deforestation, planting on peat and open burning, which go against the Group Sustainability Policy (GSP) and the No Deforestation, No Peat and No Exploitation (NDPE) commitment. We were able to trace all our CPO and PK to supplying mills but tracing to the plantations of origin was challenging for external crops. As at end-2019, we managed to trace 83% of externally sourced FFB to our mills. We identified our top dealer and communicated our GSP and NDPE commitment. In addition, we measured its sustainability risk level using the Global Forest Watch (GFW) Pro platform, an open-source web application that monitors global forests in near real-time. The platform measures global deforestation rates and detects and monitors illegal clearing activity. Our target is to assess 100% of our suppliers’ sustainability risks by 2021. FGV is currently developing a model with our business partners to identify sustainability risks associated with specific geographical areas in order to ensure better traceability of our products. To promote greater traceability, we have also created Traceability of Product (FGV-ToP), a computerised traceability system that enables customers to obtain details such as the certification, geolocation and production per month of a mill. FGV-ToP is part of an overall Sustainable Palm Oil Management System (SPOMS) that includes an Audit Integrated Management System (FGV-AIMS).
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