As a processor and trader of palm oil, Apical is committed to ensuring sustainability in our entire supply chain – from cultivation to consumption. Since the launch of our Sustainability Policy in September 2014, we have embarked on a journey of transformation to adopt and implement global standards (RSPO, ISCC, HACCP and ISO) and best practices within our operations and subsidiaries, and in partnership with our smallholders. We believe that ensuring delivery of high quality products go hand-in-hand with promoting sustainability.
Apical is fully committed to ensure that we source responsibly, partner equitably and create shared value for everyone, driving positive socio-economic impact for smallholders and communities.
The following roadmap provides a working framework of our key objectives in our continuing journey towards sustainability.
- Objective 1
Traceability to Mills
While we achieved full traceability to mills supplying our refineries in 2015, we have engaged new suppliers in line with business growth. Apical aims to have these new suppliers demonstrate full traceability by 2020.
Consistent with the Apical Sourcing policy, we require all suppliers to be screened and pre-qualified based on their company profiles and possession of proper licenses/permits to meet legal compliances. They also need to fill up a questionnaire on their sustainability status and information of traceability for supplies to our refineries. It includes transparency clauses in every purchase contract requesting for information of the origin (names of mills, addresses) of CPO/PK sold to APICAL. Similar terms applied in our trade relations with other buyers.
Apical will continue to support suppliers in completing their Traceability Declaration Documents (TDDs) and ensure they are updated quarterly. These TDDs help us draw up our supply chain map which in turn determines which engagement programme needs to be conducted.
- Objective 2
Traceability to Plantations
Apical recognizes that traceability needs to go beyond the mills and into the realm of suppliers. To this end, Apical has adopted a holistic approach towards achieving FFB traceability of all of our suppliers by 2020.
Apical will continue to proactively engage our suppliers and key members of local communities to seek cooperation and support in establishing FFB traceability to plantations and farmers’ estates. Given the various socio-economic challenges of this task, Apical will continue to seek the perspectives of key stakeholders, including NGOs, experts, consultants and community leaders.
Apical has developed a Traceability Outreach Programme (TOP) to strengthen the traceability system via a series of deep engagement activities and dialogues with key stakeholders. We will pilot several runs of TOP with priority suppliers in the provinces of Riau, Jambi and Kalimantan from 2017 to 2018.
- Objective 3
Transformation through Supplier Engagement and Inclusion
In line with Sustainability Policy implementation, Apical has enhanced our internal standard operating procedures (SOPs) and developed sub-level programs to support policy deployment and realization of sustainability commitments in our supply chain. Amongst the key initiatives that we will continue to implement are:
- Apical has been working in partnership with The Forest Trust (TFT) in conducting risk analysis for all of our suppliers; using spatial data, publicly-reported information, and to identify priority suppliers through the TFT’s Mill Prioritization Process (MPP). Together we have been implementing Aggregator/Refinery Transformation (ART) programs, through proactive engagement with the suppliers, in order to provide support and capacity building towards sustainability good practices.
- As of October 2016, Apical and TFT have conducted joint-field assessment of about 10% of the priority suppliers for the refinery at Lubuk Gaung, Dumai, Sumatra in Indonesia. Apical will continue to support our suppliers and aid transformation of the supply chain through direct engagement and inclusion of high-value (priority) suppliers.
- In 2017, Apical will be intensifying our support to suppliers through our Shared Value Program to promote sustainable business practices and capacity building through sharing key topics; including the Apical Sustainability Policy, FPIC/Social, Traceability, HCV/HCS and peat protection, and so on. This complements the organized workshops in 2016 that helped support suppliers through policy deployment and guidance.
- More workshops will be organized in 2017 to keep Apical’s internal team abreast with latest principles, techniques, and toolkits in sustainability implementation. These sessions will build on the capacity building exercises, such as technical training by TFT on the key aspects of the Sustainability Policy, that were organized in 2016.
- Objective 4
Apical will continue to monitor our suppliers and ensure that they adhere to our sustainability commitments. We have strengthened and published our Grievance Process, and capitalize on our Grievance Alerts System to receive prompt notifications on any matter raised against our suppliers. Our integrated and transparent approach aims to ensure that it goes through the due process, prompting immediate and necessary action.
Any potential violations of our sustainability commitments will be handled in an open and transparent manner through direct stakeholder engagement.
We will continue to require any of the implicated suppliers to clarify the alleged violations within a stipulated period of time. Suppliers are required to provide a concrete and time-bound corrective action plan on proven violations. Suppliers who fail to respond and commit to take remedial action will have their contracts suspended until progress has been made or the issue has been resolved. We will cease all and any transactions with suppliers who repeatedly violate our commitments.
- Objective 5
Sustainability Report 2017
Apical aims to publish our first sustainability report in 2017.