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What policies has REA implemented?

REA regularly evaluates its approach to sustainability to ensure that the group continues to address the risks and opportunities associated with its expanding business and meet the evolving expectations of its stakeholders.

The group is committed to operating in a responsible and transparent manner and has made its policy framework publicly available since 2015. In addition to the sustainability information published each year in the annual report, the group publishes more detailed information regarding the group’s environmental and social performance, as well as the sustainability challenge, in accordance with internationally recognised standards. This allows the group’s sustainability performance to be compared with that of other oil palm growers and allows stakeholders to monitor the group’s progress in meeting its sustainability commitments. This additional sustainability information is updated regularly through the year. The group no longer publishes a standalone hard copy sustainability report.

Each year, the group participates in the Sustainable Palm Oil Transparency Toolkit (SPOTT) assessment by the Zoological Society of London (ZSL). SPOTT uses publicly available information to assess palm oil producers, processors and traders on the transparency of their disclosures regarding policies, operations and commitments to environmental, social and governance (“ESG”) best practice. The overall SPOTT score comprises three ESG disclosure categories: organisation (the operations, assets and management structure); policies (the commitments and processes that guide the operations); practices (the activities that actively progress towards targets and implementation of policies and commitments).

Whilst the number of assessment categories, indicators and companies varies from year to year, the toolkit is designed to incentivise implementation of best practice with respect to, inter alia, sustainability and traceability, and the management of forests, biodiversity, high conservation values (“HCVs”), high carbon stocks (“HCSs”), peatlands, fire, greenhouse gas (“GHG”) emissions, water, chemicals, pest management, smallholders, community (land) rights, labour rights and grievances. The group scored over 79.8 per cent  in the 2020 assessment, increased from 75.7 per cent in 2019 and compared with an average score of 41.5 per cent for the 100 palm oil companies assessed against 180 ESG indicators.

The group follows a policy framework that underpins the group’s commitment to established, sustainable practices and demonstrates the group’s desire to remain at the forefront of sustainable palm oil production. The group’s policies, which are regularly reviewed and updated, embody best practices with respect to NDPE (no deforestation, no peat, no exploitation) and sustainable development, the provision of socio-economic benefits for local communities, the protection of biodiversity and ecosystem functions, zero burning, reducing greenhouse gas emissions, human rights and a zero-tolerance approach to bribery and slavery.

 


Commitments and Targets

Commitment

Target

Status

Achieve the RSPO certification for REA’s three 3 existing palm oil mills

Ongoing

  • POM & COM certification was obtained in June 2011
  • POM & COM recertification audit was conducted in June 2016
  • POM successfully obtained recertification in June 2016
  • COM successfully obtained recertification in July 2017
  • In 2017-2018, the first surveillance audits for POM and COM were successfully carried out
  • POM was excluded from the scope of certification during the 2019 annual surveillance audit due to an outstanding compensation liability
  • SOM is awaiting certification (pending resolution of an outstanding HCV compensation liability)

Achieve RSPO certification for the 2 new palm oil mills that the group had expected to commission in 2019/2020 in CDM and PBJ

 

Not applicable

Development of the CDM mill has been delayed as there is no immediate requirement; PBJ was sold in 2018, obviating the need for an additional mill

Biodiversity

No new development after 15 November 2018 within the HGU area without an HCV and HCS assessment conducted by an independent HCV-HCS ALS (Assessor License Scheme) assessor

Ongoing

Achieved. No new development is, or will be, permitted to take place before completion of an HCV assessment by an independent HCV-HCS ALS assessor

HCV assessment reports for PU and KKS have been approved in February 2021 by the HCVRN quality panel – valid for up to 3 years

Map all encroachment within the conservation reserves and develop an action plan to restore these areas

Ongoing

REA is continuously monitoring conservation areas and mapping encroachment sites, and has developed an action plan to tackle the encroachment and regenerate the areas

Climate change

No new development on peat

Ongoing

Achieved for all developing estates which undergo soil surveys prior to development

Reduce the intensity of GHG emissions per planted hectare

Ongoing

Achieved. The 3 existing mills (POM, COM and SOM) have identified and monitored all sources of GHG emissions from their operational activities

In 2020, gross carbon dioxide emissions associated with REA's palm oil operations in Indonesia were slightly lower compared 2019, reflecting lower emissions from peat oxidation, fertiliser and fuel use. By contrast, there were slightly higher emissions from POME. The increase in emissions from POME is due to an increase in the volume and COD value of POME

Net emissions in 2020 were lower than in 2019, due to overall reduced emissions from several sources and increased carbon sequestration from excess electricity and the addition of areas designated as high carbon stocks outside of the HCV areas. However, there is a decrease in carbon sequestration from oil palm where plantations are now over 25 years old. This is because the Palm GHG calculator (v.4.0.1.) assumes replanting after 25 years, so they are no longer included as a source of carbon sequestration despite the fact that this does not necessarily reflect the true situation

Reduce the volume of water used to process each tonne of FFB in all 3 mills

Ongoing

The 3 mills (POM, COM and SOM) monitor water usage on a monthly basis; efficiency of water use in 2020 decreased slightly compared to 2019, to 1.39 m³ per tonne FFB

Health and Safety

No work-related fatalities

Ongoing

In 2019, there were three incidents resulting in four fatalities. One such incident that resulted in two fatalities, though not directly work-related as it occurred outside working hours, took place on the return journey home by private motorcycle and, therefore, constitutes a work-related incident for health and safety reporting purposes

In 2020, there were regrettably two incidents that led to two fatalities. Both incidents constitute work-related incidents for health and safety reporting purposes and resulted from failure by the individuals concerned to follow the appropriate group procedures and clear guidelines

The group treats any fatality within its premises extremely seriously and responds in the same way irrespective of whether or not the incident is considered to be work-related. There is a rigorous incident investigation and reporting procedure to ensure that the cause of any incident is properly identified and that the senior management and operational teams implement any necessary remedial action across the group to minimise the risk of repeat occurrences  

Obtain OHSAS 18001 certification

2020

Delayed until 2020 as the group works towards full implementation with monthly internal audits and inspections conducted in accordance with the standard

Reduce lost time accident rates

Ongoing

In 2020, 821 Lost Time Incident (LTI) cases with 14,067 working days lost were recorded compared with 1,171 LTI cases with 26,697 working days lost in 2019

The company is committed to continuing to reduce the number of work accidents through safety programs that are integrated with operational activities. The focus of continuous improvement to achieve zero accident rates is to improve safety leadership which must be present at all levels from the foreman to senior management. Best management practices (“BMPs”) are continuously improved and worked upon through promoting and campaigning for safe work environments and compliance with standard safety equipment and infrastructure

Labour

No employees under the age of 18

Ongoing

Achieved: no employees under the age of 18

Reduce employee turnover rates

Ongoing

The total employee turnover ratio was 13% in 2020 compared to 12% in 2019

Smallholders

Develop PPMD and plasma smallholder oil palm plantings equivalent to at least 20% of the total area planted by the REA group

Ongoing

Delayed. Land has been acquired to increase this percentage and is currently undergoing the appropriate assessments prior to development into oil palm

Achieve RSPO certification for the mature associated smallholder plantings supplying the group’s 3 existing mills

2025

The group is focusing on the RSPO certification plan for smallholder cooperatives, but this will take time to achieve with significant preparatory work required, such as providing socialisation and training to several independent farmer cooperatives. There are currently 2 associated smallholders preparing the certification plan for approval by the RSPO

Communities

No new development without the FPIC of local communities

Ongoing

No new development takes place without the FPIC of the local community

Traceability

100% traceable supply base for all three mills

Completed in 2018 & ongoing

100% traceable supply base for all 3 mills: mapping and tracking of smallholders was completed in 2018