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Collaborating with other organisations to create sustainable ventures and enhance economic prosperity.
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 2018 and has now evolved into a full-scale programme to assist these outgrowers achieve RSPO certification. Two (2) outgrower groups have, so far, achieved this 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 which in turn has the multi-pronged objective of reducing GHG emissions, promoting sustainable use of land, protecting natural biospheres and achieving social sustainability. The ISCC standard verifies compliance with the requirements of the European Unions, Renewable Energy Directive and Germany’s Sustainability Ordinance and it is now amongst the most successful certification schemes.

Five (5) of our mills namely, Palong Cocoa, Sindora, Tereh, Sedenak and Pasir Panjang have been accorded to ISCC status. The sustainable production of commodities has now become mainstream, with Governments, industry players, traders and buyers, indigenous groups and consumers coming together to voice their concerns and forge systemic solutions to move forward. To allay the growing concerns of environmentalist and consumers, the RSPO was established in 2004 to promote the sustainable production and use of palm oil. RSPO has drawn Principles and Criteria (“RSPO P&C”) that define sustainable palm oil production. One of the most important governing the category of land that can be turned into oil palm plantations. No primary forests or areas that contain significant concentrations of biodiversity, fragile ecosystems or are fundamental to meeting the traditional needs of indigenous communities may be cleared for the cultivation of oil palms. An infringement of the rules and standards may result in the RSPO certification being withdrawn at any time.

In 2019, total production of palm oil from 2.80 million ha certified area amounted to 13.61 million tonnes or 19% of the global production (Source: RSPO, 28 February 2019). The demand for responsibly produced palm oil is growing as environmentally and socially aware buyers are willing to pay premium prices for ethical products. Kulim was among the first palm oil companies to become a member of the RSPO. Since January 2009, almost all of our plantations, including those of JCorp managed by Kulim, have been fully RSPO-certified. All our five (5) mills have also been certified, the latest being the Pasir Panjang POM, which was certified on 9 March 2017. RSPO certification is valid for five (5) years with a surveillance audit conducted annually and a recertification audit at the end of the fifth year. After five (5) year of application by RSPO members, RSPO P&C 2013 were reviewed by RSPO Principles and Criteria Review Task Force, leading to the RSPO P&C 2018. The New RSPO P&C 2018 basically had been improved from its previous version, with the reduction in principles without disregarding its core elements to achieve sustainability. This document, RSPO P&C 2018 is effective after adoption by the RSPO 15th General Assembly (“GA15”) on 15 November 2018. The P&C 2018 core objectives are now given better outcome focused through its alignment with RSPO Theory of Change (“ToC”) impact area of Prosperity, People and Planet.
Since countries differ in their laws for the same criteria, the RSPO P&C 2018 are further adapted for use by individual countries through National Interpretations. At a meeting on 07 November 2019, the RSPO Board of Governors has endorsed the revision of the Malaysian National Interpretation (“MYNI”) document. MYNI 2019, as it is known, is based on the RSPO P&C 2018 and it supersedes MYNI 2014 which was used for certification of plantations and mills in Malaysia.

The RSPO also developed a mechanism for supply chain traceability from the plantation to the end user. Kulim’s Certified Sustainable Palm Oil (“CSPO”) can be purchased through three (3) mechanisms approved by the RSPO. The “Book and Claim” option is the simplest method, allowing buyers to obtain the product without incurring high administrative costs and relying on complex logistics. Presently, CPO from the Tereh POM, Pasir Panjang POM and Palong Cocoa POM are sold under Identity Preserved (“IP”) status. CPO from two (2) other mills is sold under the Mass Balance (“MB”) mechanism where CSPO is mixed with conventionally produced CPO and tracked throughout the supply chain.


STAKEHOLDERS’ ENGAGEMENT

It has been many years since organisations could exist in isolation. Today, the stakeholders’ answer to are more sophisticated, better informed and more engaged than ever before. The modern stakeholder also has higher expectations about how corporations respond to their concerns. Hence, stakeholder engagement is no longer to be treated as a “nice-to-have” option, but is, in fact, a critical element of good corporate governance.



At Kulim, we see engaging with our stakeholders as a welcome opportunity to align our business practices with their needs and expectations, helping us drive long-term sustainability and shareholders’ values. We pursue stakeholders’ engagement in sync with our business strategies, as an integral part of an generating ideas, and becoming more innovative and collaborative.

At Kulim, concerted efforts are continuously being made to build good relations and rapport with our employees, business partners, investors, members of the media, suppliers, government agencies, NGOs, pressure groups, unions and the community at large. We take the utmost care to solicit and accept the views and opinions of a broad spectrum of stakeholders. To ensure balanced and fair representation of opinions on a subject matter, we recognise the importance of bringing opposing and critical voices on board.

Stakeholders’ issues cannot be treated in isolation. Going back to 2008 and in line with the principles of the Global Reporting Initiative, Kulim has engaged with its internal and external stakeholders to develop a materiality process. This process will identify and prioritise the issues that are of highest interest to our stakeholders and have the greatest bearing on our business across the entire value chain.


MAPPING THE MATERIAL MATTERS TO SDG’s

Identifying and assessing aspects of our business that can be mapped to economic, environmental and social sustainability is important in building a strong and meaningful strategy for sustainability.


Events of the past decade have pushed sustainability to the top of every responsible company’s agenda. We’ve discovered that business growth and sustainable practices are not mutually exclusive. In fact, they are closely tied together. Today we live in a world where both the public and private sectors have a role to play in being socially responsible, safeguarding the environment, guarding against unethical practices, and being more accountable and transparent. In order to do this, companies must treat sustainability as a core consideration in every business decision they make.

As the world’s human population increases, it puts strain on the natural resources. Kulim recognises that it is up to each of us to do our part in slowing down trends such as loss of biodiversity, deforestation, ocean acidification, air and water pollution, and other threats to the only world we have. Hence, now is the time for us to step up and forge ahead. Kulim is well aware that the road ahead will be rocky and challenging. Nevertheless, we believe it is possible to find a middle ground, where decisions can be made that are good for business, the environment and humanity.

The journey towards sustainability will enable Kulim to join the global movement “meeting the needs of the present generation without compromising the ability of future generations to meet their own needs”. It may not always be a clear path, but Kulim remains determined to help define as well as walk that road and achieve peace and prosperity for present and future generations.