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Protecting Our Planet

The relationship between the business world and the planet that sustains it has undergone profound changes. Pollution, climate change and natural have come to a point where the human race has to step up to the plate and take concerted actions to save our planet.

 

CONSERVING BIODIVERSITY

Kulim is well aware of the essential role it plays in protecting biodiversity and maintaining natural habitats. Our plantations in Johor border the Endau-Rompin National Park and the Labis Forest Reserve. The last survey to assess the state of the flora and fauna bordering our estates was conducted in 2008. According to the International Union for Conservation of Nature (“IUCN”), the biodiversity of wildlife on its Red List of Threatened Species has become even more precarious. Kulim has stepped up efforts to work closely with Government and Non-Governmental Organisations (“NGOs”) to strengthen its internal monitoring and control mechanisms to mitigate incidents of poaching.

 

High Conservation Value (“HCV”) Tools

The RSPO is committed to deploying HCV tools within the context of sustainably managed landscape through the RSPO Principles and Criteria. There are various HCV definitions, including endemic, rare, threatened or endangered species. Kulim’s man made reservoir has become a haven for a variety of wildlife, including two (2) species of migratory birds recorded by the Wildlife Conservation Society that come under the HCV category.

 

SAVING OUR NATURAL HERITAGE

Kulim is committed to protect the national biodiversity and endangered species. From time to time,incidences of human-elephant conflict have been reported at the Sungai Tawing, Siang, Sindora and Tunjuk Laut Estate. In 2017, 24 incidences of elephant encroachment were reported. A more serious growing problem is that of elephants encroaching into residential areas resulting from increasing activities at the surrounding estates.

 

We continue to collaborate with the Wildlife Conservation Society to consider a permanent solution to the encroachment problem. The Group is determined to put a stop to animal poaching and is also striving for biodiversity conservation. To this end our Kulim Wildlife Defenders (“KWD”) joins forces with the Johor National Parks Corporation, Wildlife Department, Forestry Department and the Police Force  under the Johor Wildlife Conservation Project to save our natural heritage. A total of six (6) programmes were conducted in 2017 at different locations in Johor, as follows:

 

No

Month

Location

1

February

Hutan Simpan Panti Kota Tinggi

2

March

Hutan Simpan Labis Segamat

3

April

Hutan Simpan Lenggor Kluang

4

Jun

Hutan Simpan Labis Segamat

5

July

Hutan Simpan Panti Kota Tinggi

6

September

Hutan Simpan Mersing

 

Enhancing Biodiversity Areas

As at 31 December 2017 Kulim has set aside 105.92 hectares of land for buffer zones. Another 39.23 hectares of jungle patches within our estates will be preserved as full-fledged HCV forests.

 

Six (6) years ago, Kulim launched the National Corridor Initiative linking natural habitats that have been separated by human-modified landscapes. These corridors are critical for the maintenance of ecological processes, among the most important being, it facilates the free movement of animals and the continuation of viable populations. To create these natural corridors, we have organised an annual tree planting event, Infaq 1 Warisan, which brings together employees as well as members of the public to play their part in enhancing biodiversity in our estates.

 

Through the Raja Zarith Sofiah Wildlife Defenders Challenge 2016, the Group has also participated in the Mangrove Seedlings Sales Campaign. A total of 5,000 mangrove seedlings were given to the Johor National Park Corporation (“JNPC”) to rehabilitate identified coastal The handing-over ceremony of the mangrove seedlings on 9 May 2016, was officiated by Her Highness Che’ Puan Khaleeda Bustamam as the official representative of Her Royal Highness Raja Zarith Sofiah, the Permaisuri of Johor. The next edition will took place in 2018 with theme ‘Johor Mighty Rivers’.

 

Mitigating Impacts

Kulim acknowledges the fact that the establishment of monoculture oil palm plantations has a number of environmental impacts. Among the most serious are the large-scale conversion of forests to plantations, loss of critical habitat for endangered species, soil,air and water pollution as well as possible social impacts if the livelihoods of local communities are affected. The Group has therefore initiated several measures to mitigate the negative impacts of its operations:

 

• All our estates are required to provide regular updates on the species found in and around the estates and track incidents of wildlife encroachment, particularly elephants.

• Buffer zones have been established at major water bodies in or around the estates and adjacent to forest reserves. Regular Rapid Biodiversity Monitoring is conducted in the identified hot spot areas within the vicinity of our operating units. Any encroachment by intruders into these conservation areas or hot spots is closely monitored.

• To minimise soil erosion, our roads have been realigned and silt traps constructed at appropriate locations. We have also planted soft grasses, mucuna and natural cover crops for young palms. In areas where erosion is severe, we have encouraged the planting of vertivar and Guatemala to minimise soil erosion.

• Hunting, fishing and taking of fauna within our estates and adjacent protected areas are strictly prohibited.

 

The Group’s Environmental and Biodiversity Unit serves as a point of reference for all matters concerning environmental issues, notably in the areas of biodiversity protection and pollution control. The Unit collates and analyses environmental and wildlife data, publishing its findings and outcomes in environment and biodiversity bulletins.

 

Beyond Our Estate Boundaries

Our work in biodiversity conservation sometimes extends beyond the boundaries of the Group’s estates.Incidents of human-wildlife encounters happen occasionally, as when elephants encroached into the Sungai Tawing, Siang, Sindora and Tunjuk Laut Estates. The incursion into the four (4) estates incurred damage estimated at around RM184,715. We work closely with the Wildlife Conservation Society (“WCS”) and the Johor Department of Wildlife to mitigate the possibilities of human-wildlife conflicts. In our efforts to find a solution to the problem, we also participated in dialogues and meetings with the State Government and outgrowers.

 

WATER CONSERVATION

In Kulim’s updated materiality matrix, water usage by the Group’s estates and mills and the risk of chemical contamination, were among the primary concerns raised by our stakeholders.

 

In 2017, the Group’s water consumption decreased slightly to 1.17 m3 per tonne FFB from 1.18 m3 per tonne FFB recorded the previous year. The drop was due to the recycling of steriliser condensates for  use in mill operations. Water is mainly used to maintain our nurseries or for domestic consumption. To ensure that the processes water that is supplied to our workers is safe for consumption, water quality is closely monitored to ensure it meets the parameters set by the National Water Services Commission (“SPAN”).

 

ERODED SOIL PARTICLES

Soil erosion can be a major contaminant of our waterways and as a standard operating practice,fast-growing leguminous cover crops are planted in erosion-prone areas. Extensive use of chemical fertilizers will also pollute rivers and underground water sources. To reduce pollution from heavy metals and wherever feasible, the Group has combined inorganic with organic fertilizers derived from Empty Fruit Bunches (“EFB”), a waste product from the milling process.

 

The utilisation of effluents for land application raises concern over the Biological Oxygen Demand(“BOD”) levels. BOD is the amount of dissolved oxygen needed by aerobic biological organisms in the oxidation of organic matter. The average BOD from our mill effluents has decreased by 89.89% compared to 2016. This is due to the inactive microbes in the newly constructed biogas reactor at the Pasir Panjang Mill during its commissioning stage, accounting for higher BOD of effluent coming out from the biogas reactor. While the final discharge levels are high,they are still below the limits approved by the Department of Environment(“DOE”).

 

The Group has a growing Agrofoods business and as at 31 December 2017, we had a total cattle population of 6,930 heads. We are closely monitoring the problems associated with cattle rearing, which include soil compaction, over-grazing and soil erosion. Going forward, the challenge is to ensure that our business targets are in line with Good Agricultural Practices.

 

Reducing Chemical Usage

Waterways are also contaminated by the use of chemicals such as pesticides and herbicides. Kulim has long endeavored to find an alternative to pesticides and in 2008, we introduced cattle rearing as a natural weeding programme to reduce the use of chemicals. In lieu of pesticides, we have also adopted Integrated Pest Management (“IPM”) techniques to control pests, diseases, weeds and invasive species introduced to the environment. IPM techniques include the use of barn owls, which were introduced to our efforts to control the rodent population.

 

Paraquat has been banned or its use disallowed in 32 countries, mainly for health reasons. The herbicide is acutely toxic and corrosive. Apart from causing health problems, paraquat isnot readily biodegradable and has the potential to contaminate groundwater. The RSPO has commissioned as study on Integrated weed Management and Alternatives to Paraquat and we are closely following developments.


 

Minimising Solid Waste

Standard operating procedures are in place for the disposal of solid waste. EFB is used as biocompost, while more than half of the palm fibres and shell produced by our estates are used as biomass in milling operations. The remaining palm fibres are used as biocompost while the shells are sold. A small amount of boiler ash is produced when palm fibres and shell are burned, and this is recycled into the soil to reduce acidity levels. An authorized agent has been appointed to transport the small amounts of hazardous scheduled waste for safe disposal at designated facilities.

 

ADDRESSING CLIMATE CHANGE

At the Paris Summit in December 2015, 196 countries met to sign a new climate change agreement.Despite the United State’s rejection of the Paris climate accord, world leaders again gathered met in Paris in December 2017 to give new momentum in the fight against global warming.

 

A strong climate agreement is needed to protect the planet’s ecosystems and biodiversity.According to the Intergovernmental Panel on Climate Change, key Greenhouse Gases (“GHGs”) in the atmosphere have reached unprecedented levels; heat waves will occur more frequently and for extended periods; the oceans will continue o warm and acidify and sea levels are predicted to continue to rise due to increased melting of land-based ice such as glaciers and ice sheets. Climate change will amplify existing risks and create new ones for natural and human systems.

 

A report by the National Oceanic and Atmospheric Administration (“NOAA”) showed that the global surface temperature in 2016 was the highest ever since record keeping began in 1880,raising new concerns about the accelerating pace of climate change.

 

The temperature changes are largely driven by increased carbon dioxide and other human-made emissions into the atmosphere. In December 2015, Malaysia submitted its action plan to the UN Framework Convention on Climate Change (“UNFCC”), pledging to reduce its GHG emissions by 45% by the year 2030. The RSPO Principles and Criteria requires oil palm growers to monitor, manage and educe GHG emissions across their entire operations.

 

Biogas Plants

The Group is establishing biogas facilities using methane capture technologies to convert Palm Oil Mill Effluents (“POME”) to electricity. Two (2) plants have already been commissioned at Sedenak and the Pasir Panjang Palm Oil Mill (“POM”). A third biogas plant, at the Sindora POM, was physically completed in December 2017.

 

Kulim has set a target to reduce the Group’s overall carbon footprint to 58% by 2020 and to establish biogas plants at all of its five (5) mills by 2025.The installation of biogas plants at the remaining two (2) POMs are expected to be completed by 2025 to meet the requirements of the DOE.


Carbon Emission Baseline

In 2013, Kulim had the distinction of being the first Malaysian plantation company to publish a Carbon Footprint Report using the GHG Beta Version 1a Guidelines. These guidelines were developed with funding from RSPO in order palm oil producers to estimate the net GHG emissions produced during palm oil production.


In November 2016,Palm GHG Version 3.0.1, which is a new and improved version was released. The new version only needs one (1) year’s data compared to Palm GHG Version 2.1.1 which required an average of 3-years data. Starting from 1 January 2017,  the RSPO Palm GHG will be used to calculate GHG emissions from operations, including land use change GHG emissions after November 2005. Public reporting of GHG emissions is mandatory through annual audit summary reports published on RSPO’s website.


In November 2017, Kulim produced its third biennial Carbon Footprint Report for year 2016 using Palm GHG Version 3.0.1. During the process of producing the report, we have amended our calculation and include Pasir Panjang POM in the calculation. Our net GHG emissions for 2016 amounted to 422,000 mt CO2e or carbon dioxide equivalent. This is equivalent to 1.23 mt CO2e per mt CPO and PK. For 2017 our next GHG emission amounted 431,000 mt CO2e, which equivalent to 1.14 mt CO2e per mt CPO and PK.

 

Palm Kernel Shells

As another waste product of our milling operations, about 92,650 tonnes of Palm Kernel Shells (“PKS”)were produced in 2017. About 78,244 tonnes or 84% was used internally for power generation, while 14,406 tonnes were sold for external use as a replacement for fossil fuels. We were able to incorporate a carbon credit of 31,246 tonnes CO2e because of ongoing tracking and monitoring of PKS that was sold.

 

Fertilizer Reduction

GHG emissions from the production, transportation and use of chemical fertilizers are among concerns being addressed by Kulim in its efforts to reduce the impact of its operations on the environment. In order to mitigate the excessive use of fertilizers without affecting FFB yields, Kulim has initiated a long-term organic fertilizer programme. Collection of field data is underway to optimise the combined use of chemical and organic fertilizers. In addition, all our mills have established composting projects to recycle the nutrients from EFB and POME back to the fields.

 

Outgrower Engagement

In preparing its 2012 Carbon Footprint Report, Kulim began a long-term engagement process with its outgrowers, who are estimated to account for more than 30% of its total footprint. This work has continued through 2017 and has now evolved into a full-scale programme to assist these outgrowers achieve RSPO certification. Two(2) outgrower groups have, so far, achieved certification, while we continue to work with the others. We believe that good agricultural practices, including the efficient use of fertilizers, will help to reduce emissions from third-party FFB.

 

International Sustainability and Carbon Certification (“ISCC”)

ISCC is a multi-stakeholder initiative with a multi-pronged objective of reducing GHG emissions, promoting the sustainable use of land, protecting the natural biospheres and effecting social sustainability. On 19 March 2017, the Pasir Panjang POM was our latest mill to be certified to ISCC. The Group’s Sindora,Tereh and Sedenak POMs were audited during the year and successfully recertified to  the ISCC standard. Our next goal is to achieve ISCC status for the Palong Cocoa POM.