Page 4 - sr_2013.PDF

DEAR STAKEHOLDERS,
Over the years, IndoAgri has continued to strengthen our sustainability
practices and outreach efforts as part of our corporate responsibility
towards environmental conservation and social development.
It is a deep commitment that started many years ago, through
breeding higher yielding oil palm seeds, voluntarily certifying our
estates to the RSPO standard, using barn owls, adopting zero
burning, and many other initiatives, long before current stakeholders
talked about sustainability.
2013 was a pivotal year for us as we extend the sustainability
programmes across our supply chain, with clear key indicators
es tabl i shed towards accompl i shing sus ta inabi l i t y and
traceability milestones.
This is our second Sustainability Report since we embarked on
a formal accounting of our sustainability efforts in 2012 that is
based on disclosure of our key materiality issues. This report
follows version 4 of the Global Reporting Initiative guidelines.
KEY ACHIEVEMENTS AND MILESTONES IN 2013
RSPO is recognised globally as the highest standard in sustainable
palm oil production. In the area of sustainable agriculture, we
have approximately 30,000 hectares of PT SIMP’s oil palm
plantation audited and subsequently certified by RSPO in 2014,
bringing our total certified Crude Palm Oil (CPO) output to
291,000 tonnes. PT Lonsum also attained its first ISPO certification for
45,000 tonnes of CPO.
We published our first Sustainability Report in 2013 in an effort
to institutionalise and strengthen traceability across the Group’s
operations. To support reporting by the Group’s sustainability
teams, a Sustainability KPI Data Management System is being
developed using SAP infrastructure.
WIDENING RESPONSIBILITY ACROSS VALUE CHAINS
IndoAgri is a vertically integrated agribusiness. As a trusted
international brand, we firmly believe that while we are providing
quality and safe products to our customers, we are achieving this in
a sustainable way that does not disadvantage the local communities
or compromise the environment in which we operate. Through
our sustainability efforts, we are leveraging on our influence as
a CPO buyer, nucleus and oil palm seed breeder to effect this
transformation in our palm oil value chain.
In our 2012 Sustainability Report, we set out clear timelines and
targets for our own plantations. In 2013, we extended this effort
and began the process of co-creating a traceable and sustainable
supply chain with our external CPO suppliers. We engaged
them in regular dialogues on sustainable farming practices, and
developed a set of Palm Oil Sourcing Policy and Responsible
Supplier Guidelines to support sustainable farming practices.
These guidelines will start to be implemented from June 2014
for all our external CPO suppliers.
We intend to expand similar programmes to the other crops in
future, so that as a Group, we can attain sustainable operations in
all our plantations, mills and refineries, and across the entire
value chain.
INTEGRATING TRACEABILITY AND SUSTAINABILITY
INTO KEY OPERATIONS
A key strategy to accelerate our sustainability efforts is to establish
key targets for our materiality issues and to embed sustainable
practices into all our operations.
We aim to manage all our crops according to their respective
industry sustainability standards. We are currently supporting the
development of some of these standards by actively participating
in RSPO, ISPO and the Partnership for Indonesia Sustainable
Agriculture (PISAgro) for palm oil, as well as the Cocoa Sustainability
Partnership for cocoa.
As palm oil is one of our key products, we have been improving
the yield per hectare of the crops through agronomy, process
reengineering and technology application over the years. Together,
our two oil palm seed businesses, Sumbio and PT SAIN, can
produce over 30 million high yielding oil palm seeds each year
for planting in our estates as well as selling to third parties.
Yield can only be improved if the oil palm seed already possesses
the genetic potential to do so. It is therefore critical to use parental
materials with the best yield in our seed breeding programmes.
Using more productive seeds will also ensure optimal land use.
Amongst other initiatives and KPIs to integrate sustainability into
our operations that are detailed in this report, we are implementing
an RSPO carbon accounting tool to measure our carbon footprint
comprehensively, and to establish a carbon baseline across the
Group. Our initial results can be seen on page 37 of this report.
We have also developed a system to monitor the sustainability
KPIs online and to provide real-time operational and agronomy
data to the managers. These initiatives will be implemented across
the Group in 2014.
IMPROVING LIVES OF LOCAL COMMUNITIES
In 2013, we have 41,405 employees working within the Group. We
recognise their contributions to the success of our business, and
ensure that every employee is adequately rewarded by complying
with the minimum wages stipulated by the local governments.
As a Group, we are constantly seeking ways to improve the safety,
hygiene and living conditions for our employees, as well as the
workers and their families living on the estates. Currently, every
estate provides essential services and basic amenities, including
clean water, electricity, proper medical care, housing, sports
facilities, roads and schools.
We believe education is instrumental in human capital development
and have employed 975 teachers in the 171 schools and
kindergartens on our oil palm estates to provide free education
for the children of our employees.
We actively pursue two of the United Nation’s Millennium
Development Goals to reduce child mortality and promote the
health of pregnant women. Besides the medical clinics in the
estates, we support the operations of 206 posyandu or integrated
health posts that are run by the local communities. We also provide
pregnant mothers with free immunisation, essential vitamins and
minerals, prenatal checks and medical care services in an effort
to reduce infant mortality rate.
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