Wilmar: To work with Forest Trust to accelerate sustainable supply-chain goals

Singapore five-dollar note Photo by Leslie Shaffer

Wilmar International said on Friday that it launched an “ambitious” plan to reach a No Deforestation, No Peat and No Exploitation (NDPE) compliant supply chain, independently verified by The Forest Trust (TFT) from 2020.

“This new action plan is us further strengthening our commitments and continuing to take the lead for sustainability in the oil palm industry,” Jeremy Goon, Wilmar’s chief sustainability officer, said in the statement filed to SGX on Friday.

“Over the last five years, we have managed to raise the bar on transparency in the industry, reduced our impacts on deforestation and
improved labour conditions. However, our work does not stop here,” Goon added.

Bastien Sachet, CEO of TFT, said the action plan aimed to ensure 100 percent NDPE compliance across all of Wilmar’s supply chain.

“We are encouraged by the commitment Wilmar is making and will be monitoring their progress carefully,” Sachet said.

Wilmar said that progress reports would begin in January and would be made regularly.

The plan comes just months after two senior executives at the palm oil company stepped down in the wake of a Greenpeace report which tied them to Gama Corp., an Indonesian firm allegedly involved in deforestation.

In a letter to Greenpeace in June, Wilmar Chairman and CEO Kuok Khoon Hong had noted that Wilmar had no management control over Gama Corp. and vice versa and that the two senior executives were not on the board. Kuok also said there should have been more stringent oversight of the ownership verification process, but that the three companies named in the Greenpeace report were not suppliers to Wilmar. He added that Wilmar had immediately stopped sourcing from suppliers allegedly associated with Gama.

Shenton Wire was unable to locate a contact for Gama Corp.

Real-time satellite monitoring

Among the key priorities of the plan, Wilmar is expected to provide more transparency across its palm oil operations and those of third-party suppliers, to ensure they are also compliant with the no-deforestation policy in the NDPE goal, it said.

“To achieve this, Wilmar will use near real-time satellite monitoring and provide independent verification of land use change on its own as well as its third-party suppliers’ plantations and operations at the group level,” it said.

Wilmar is aiming to deploy the global monitoring mechanism across supplying mill locations and concession maps in the first quarter of next year, it said.

Another key priority will be cross-industry collaboration to combat deforestation, Wilmar said.

Monitoring at-risk forests

“Other commodities are also implicated in deforestation,” Wilmar said, noting they are often produced in the same areas where the company sources its palm products.

Wilmar said it will lead the development of a platform to provide data on at-risk forests to begin talks with government bodies, local and international civil society organizations and relevant commodity industries.

“By prioritising these areas and monitoring them, it will be possible to understand what is driving deforestation and mobilise multiple actors to take joint action on forest conservation and explore options for remediation/restoration,” Wilmar said. It said it expected to begin reporting data findings during the first quarter of next year.

Studying labor issues

Wilmar also said it was working to improve the “No Exploitation” segment of its plan, with efforts aimed at labor and community-related issues in its own operations and in its supply chain.

“This involves a thorough review of all the work that has been undertaken to date so as to identify ways to strengthen its practices. Wilmar will design a framework for social audits across its entire supply chain to demonstrate compliance or otherwise of its No Exploitation policy,” the company said.

Wilmar said it planned independent assessments in the first quarter of next year, with a public, time-bound action plan to be published at the beginning of the second quarter.

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