Responsible Palm Oil Sourcing Policy

Introduction

As an important step towards improving our sustainability focus within environmental, social and economic areas of our business, Unitata is committed to high standards in responsible palm oil sourcing.  Being a subsidiary of United Plantations that received the world’s first RSPO certification in 2008, Unitata’s main use of palm oil is sourced internally and is certified and traceable to the plantations.  For externally sourced palm oil, Unitata is focused on supply that is produced in a manner that excludes the destruction of forest, the exploitation of workers, local communities and based on responsible agronomic practices.

Unitata therefore recognizes the important role it can play in encouraging a transition to more sustainable practices and commits to building a traceable supply chain.  As a step to ensure that our suppliers join us on the journey of full sustainability in the palm oil industry we have established a Supplier Code of Conduct.  This Code includes a requirement for all our suppliers of palm oil and their supply chain to adhere to fundamental UN Global Compact Principles of Labour and Human Rights, environmental protection and anti-corruption and to national laws in the country of which the supplier operates.
 
Specifically, based on our responsible palm oil sourcing policy Unitata makes the following commitments:-

1. Environmental Management

To source palm oil that has been produced sustainably whereby the supplier complies with the following criteria:-

  • No development on high carbon stock forest (HCS1).
  • No development on high conservation value forest (HCVF2) areas.
  • No new development on peat3 lands regardless of depth.
  • Reductions of Green House Gases (GHG 4) emissions.
  • No use of Paraquat weedicide and a commitment to reduce and phase-out pesticides that are categorized as World Health Organization Class 1A or 1B.
  • Zero burning for preparation or clearing of land areas.
  • Not to operate or develop land within international or nationally designated protected areas.
  • Compliance with all applicable local, national and international laws and regulations.

2. Human Rights and Workplace

To ensure suppliers adhere to the following criteria:-

  • Conduct business in a manner that respects the rights and dignity of people and local communities, complying with all legal requirements.
  • Prohibit child labour5, illegal, and forced labour6.
  • All employees are treated fairly and protected from any form of discrimination.
  • Equal opportunities provided to all employees regardless of religion, race, age, gender, nationality, or physical disability.
  • Compensate workers by providing wages and benefits in accordance to all applicable laws and regulations.
  • Respect rights of all employees to form, join, and participate in registered trade unions and to bargain collectively.
  • Respect land tenure rights as well as recognize duties and responsibilities associated with tenure rights.
  • Respect customary or native rights of indigenous and local communities and to commit to Free, Prior and Informed Consent (FPIC)7 in all negotiations prior to commencing any new operations.
  • Resolve complaints and grievances through an open, transparent, and consultative process.
  • Ensure a safe and healthy work environment for all workers in full compliance with legislative requirements.
  • Equip and train employees to use appropriate protective equipment and to develop a health and safety conscious citizen.

3. Traceable Supply Chains

To ensure that the palm oil and palm kernel oil used in the production of finished goods actually come from areas that live up to our Supplier Code of Conduct.  Unitata shall therefore engage with our suppliers to develop traceable and transparent supply chains in which volumes of palm oil and palm kernel oil can be traced back to its origins, namely palm oil mills and further to the plantations.  Unitata shall strive for 100% traceability to the mill8 level for all suppliers and aim to progressively increase traceability to the plantations.9

4. Community development and social impact

Suppliers are to drive positive socio-economic impact for local communities, as well as respect and contribute to the quality of life and wellbeing of the communities.  Suppliers are to engage effectively with communities and to resolve complaints and conflicts through an open and transparent manner through consultation.  Suppliers are also encouraged to include smallholders in the palm oil supply chain.

5. Legal compliance

Supplier complies with the legal requirements and standards of its industry under all applicable national and local laws.

Working with our suppliers

Unitata takes responsibility for ensuring our Sustainable Palm Oil Policy is communicated to all our suppliers.  Suppliers of palm oil, palm kernel oil and their derivatives are expected to meet the requirements of this policy and evaluated against the expectations of our policy and by signing our Supplier Code of Conduct.  Implementations of these commitments shall include the following mechanism:-

  • Suppliers shall be engaged regularly via discussions, assessments and site based trainings where necessary.
  • General questionnaire pertaining to our commitments shall be sent to our suppliers to measure their conformance.
We expect our suppliers to share similar principles and commitments thereby jointly building a sustainable palm oil supply chain and will recognize the efforts made by our suppliers showing progress and commitments towards sustainable palm oil.

We believe that this policy will support the transformation of the palm oil supply chain.  We only work with suppliers that actively commit to sustainable palm oil in line with our responsible palm oil sourcing policy.

In the event that any suppliers violating or breaching the above policies or our Supplier Code of Conduct and thereby is viewed as a high-risk supplier (self-assessment scores below 50%), Unitata shall immediately request for corrective measures to be implemented with a 60 days time-bound action plan and further engagement to ensure the suppliers live up to our Responsible Palm Oil Sourcing Policy. We will moreover through dialogue and co-operation, encourage, and coach the supplier to implement the action plan by providing necessary support to see how challenges can be overcome and implemented for positive change. If a supplier is unable or unwilling to take the necessary actions to conform to the expectations outlined in our policy, Unitata will as a last resort terminate its commercial relationship with the supplier.

Unitata will regularly report progress relating to the implementation of this policy in United Plantations’ Annual Sustainability Report.

Yours sincerely,
UNITATA BHD

Dato’ Carl Bek-Nielsen
Director In-Charge
Date: 24th February 2020

Unitata Bhd: Responsible Palm Oil Sourcing

Annex: Definitions

1.    High Carbon Stock (HCS)
The HCS Approach is a methodology to avoid deforestation in land development. The approach stratifies the vegetation on an area of land into different classes using analyses of satellite images and field plot measurements. Each vegetation class is validated through calibrating it with carbon stock estimates in the above-ground tree biomass.

2.    High Conservation Value Forest (HCVF)
The concept of High Conservation Value Forests was first developed by the Forest Stewardship Council (FSC) in 1999 as their ninth principle. The FSC defined HCVF as forests of outstanding and critical importance due to their environmental, socio-economic, and cultural biodiversity and landscape value.

3.    Peat
Peat is an accumulation of partially decayed vegetation matter. Peat forms in wetlands or peat lands, variously called bogs, moors, muskegs, pocosins, mires, and peat swamp forests.

4.    Green House Gases (GHG) Emission
Greenhouse gas or carbon emissions are gasses in an atmosphere that absorb and emit radiation within the thermal infrared range. This process is the fundamental cause of the greenhouse effect. The primary greenhouse gases in the Earth’s atmosphere are water vapor, carbon dioxide, methane, nitrous oxide, and ozone.

5.    Child Labour
According to the International Labour Organization (ILO) core labour standards, minimum age should not be less than 16 years old.

6.    Forced Labour
A person who is coerced to work under the threat of violence, intimidation, or undue stress of penalty.

7.    Free, Prior and Informed Consent (FPIC)
The principle that a community has the right to give or withhold its consent to proposed projects that may affect the lands they customarily own, occupy, or otherwise use.

8.    Traceability to Mill
The capability to track sustainable palm oil to a defined list of mills.

9.    Traceability to Plantations
The capability to track sustainable palm oil to a defined list of plantations.

Unitata Berhad (10769-H) - Jendarata Estate - 36009 Teluk Intan Perak Darul Ridzuan - Malaysia.

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