Transformation

Apical recognizes the importance of supply chain transformation as one of the key growth factors for the company and our operations. This acknowledgment is reflected in our 2014 Sustainability Policy which declares our strong commitment to:

  1. Protect high conservation value (HCV) areas and high carbon stock (HCS) areas
  2. Protect peat land regardless of depth
  3. Drive positive socio-economic development.

We will ensure that this commitment is known and fulfilled in our operations, across our subsidiaries and even with our third-party palm oil suppliers.

Our Sourcing Policy, launched on October 2015, focuses on developing long-term relationships and synergy with all our suppliers. This Sourcing Policy sets clear standards and requirements for the procurement process. Both policies have been communicated and implemented through:

  1. Policy deployment : Engaging our suppliers to ensure they comply with our Sustainability and Sourcing Policies. A series of workshops at provincial level were conducted and suppliers were required to sign a declaration letter in support of the policies;
  2. Workshops/Trainings on Supplier Guidelines : Educating and guiding Apical suppliers on the technical guidelines through workshops/training;
  3. Risk analysis and prioritization : Apical engaged The Forest Trust (TFT) as an external consultant and verifier for the risk analysis (Mill Prioritization Process) of all of Apical’s suppliers through spatial analysis, readiness of policies, and publicly reported information (PRI).
  4. Priority Supplier Engagement Program (PSEP) : Apical launched our Priority Supplier Engagement Program to conduct comprehensive monitoring visits of Apical’s suppliers. In partnership with our external consultant, Apical will conduct scoping and verification exercises to various supplier mills to identify gaps and areas that need to be changed in order to comply with Apical’s sustainability policy;
  5. Traceability Outreach Program (TOP) : Apical has also implemented traceability programs as a means to identify third-party suppliers of our palm oil. This is in line with our commitment to ensure that we do not source from third-party suppliers who may engage in deforestation and burning activities. Apical is fully committed to ensure that our supply is transparent, traceable, and is harvested from legal sources (i.e., not from deforestation of natural forests, HCS or HCV areas or national parks, etc.);
  6. Grievance procedure : In 2015, we developed and published Apical’s grievance procedure to provide a platform for our key stakeholders to raise any issues regarding our suppliers. While Apical will engage suppliers to persuade them to adopt sustainable practices, we will not hesitate to stop buying from repeated violators;
  7. Implementation plan : Apical has developed programs to engage suppliers, prioritizing key mills for visits. These visits help us identify gaps and allow us to engage suppliers and encourage the adoption of sustainable practices;
  8. Targets : We will not knowingly source from suppliers who are not in compliance with our policy. The work to transform our supply chain is an on-going one and we will spare no effort to persuade suppliers as much as we can. We aim to achieve full traceability for FFB sources by 2020.

Apical has been working with strategic partners, such as TFT as our external consultant, and we have been adopting an integrated approach to help drive supply chain transformation for policy compliance. We will continue to proactively identify and handle grievance matters in open and transparent manner to ensure responsible sourcing and continuous improvement in our supply chain.

For more information, please refer to the Apical Sustainability Progress Reports.