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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 detailed information regarding the group’s environmental and social performance, as well as the sustainability challenge, in accordance with the internationally recognised Global Reporting Initiative (GRI) standard. 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.

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 3 disclosure categories: organisation (the operations, assets and management structure); policies (the commitments and processes that guide the operations and practices); practice (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, peatlands, fire, GHG emissions, water, chemicals, pests, smallholders, community rights and labour rights.  The group increased its score from 75.7% in 2019 to 79.8% in 2020, compared with an average score of 41.5% for the 100 palm oil companies that were assessed against 180 ESG indicators across 10 categories.

In 2015, REA established a set of policies that underpin the group’s commitment to sustainable practices and demonstrate the group’s desire to remain at the forefront of sustainable palm oil production. These policies cover business ethics, responsible development, environment and biodiversity conservation, human rights, health and safety, and reporting publicly its GHG emissions. To further define the group’s commitment to sustainable development, REA has recently issued a supplementary policy: No Deforestation, No Peat, No Exploitation (NDPE). The group’s policies incorporate the requirements of all of the sustainability standards and certifications to which the group has committed. These standards are embodied in various certification schemes, specifically the Roundtable on Sustainable Palm Oil (RSPO, Principles & Criteria 2018), Indonesian Sustainable Palm Oil (ISPO) and International Sustainability and Carbon Certification (ISCC), which focus on no-deforestation, transparent feedstock supply chains and measurement of greenhouse gas emissions. The group remains committed to ensuring that all of its plantations and mills achieve and maintain certification under these internationally recognised schemes. Other standards to which the group is committed include the International Standards Organisation’s Environmental Management System (ISO14001), the Occupational Health and Safety Management System (OHSAS 18001), and regulatory requirements, such as the UK Bribery Act 2010 and the Modern Slavery Act.

REA’s Business Ethics policy (updated in 2020) prohibits the giving or receiving of bribes or facilitation payments. This commitment is reinforced by way of internal memoranda (11769 / HRD-CEN / VIII / 2019 20 August 2019) regarding compliance with the group’s code of ethics.

In addition to these commitments, all suppliers must sign an agreement stating that they will comply with REA policies on health & safety, environmental protection and all other standard operating procedures (SOPs).  This includes independent smallholders selling FFB to the group.

The full text of each policy is available to download here:


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
  • 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 and HCS assessment by an independent HCV-HCS ALS assessor

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 2019, gross carbon dioxide emissions associated with REA’s oil palm operations in Indonesia were slightly lower compared to 2018, reflecting lower emissions from peat oxidation, fertiliser use and POME.  By contrast, there were slightly higher emissions from land conversion, whilst emissions from fuel consumption were broadly similar.  Net emissions in 2019 were higher than in 2018, first because some of the plantations are now over 25 years old and the PalmGHG calculator (v.3.0.1.) assumes replanting after 25 years so that they no longer sequester carbon even though this does not necessarily reflect the facts, and second because of lower carbon sequestration in the conservation areas following the sale of PBJ in 2018

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 2019 improved slightly compared to 2018, to 1,69 m3 per tonne FFB

Health and Safety

No work-related fatalities

Ongoing

In 2018, there were no work-related fatalities and one non work-related fatality

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

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 2019, 1,171 Lost Time Incident (LTI) days were recorded compared with 2,249 LTI days in 2018

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 decreased from 15% in 2018 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

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