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SUSTAINABILITY

Responsible Sustainable Palm Oil Policy

Incorporating NDPE
(No Deforestation, No Peat, No Exploitation)

INTRODUCTION

Palm oil is a vital vegetable oil crop which contributes to economic development, and requires less land to produce more oil than any other vegetable oil crop. Palm oil is a crucial commodity to the world. It is because palm oil are the most cost effective oilseed crop since the production of palm oil gives the highest yield per hectare while using the least area compared to other vegetable oil crop. Palm oil is seen as a solution when it comes to feeding the growing number of people on our planet. By 2050, it is estimated that the global population will increase up to 9 billion people. The production of this vegetable oil provides job opportunities, supports livelihoods and eradicates poverty for communities and workers in developing countries in whole world.

 

PURPOSE

Pacific Medan Industri one of industrial companies to promote NDPE (No Deforestation, Peat and Exploitation). PAMIN has implemented several management systems which reflect NDPE compliance such as RSPO (Roundtable on Sustainability of Palm Oil) certification.

By adopting the Responsible Palm Oil Policy incorporating NDPE commitments, as palm oil company, PAMIN believes that the producing palm oil sustainably safeguards environment, economic viability and supports social elevation of communities living and working in palm oil plantations. PAMIN commits to play a significant role in supporting sustainable practices in the palm oil industry. PAMIN also compels to adopt these sustainability standards in its own business operations.

 

SCOPE

This policy is applicable with immediate effect to all PAMIN operations and we expect all our third party suppliers of palm oil, palm kernel oil and its derivatives to adhere to these commitments in their operations. PAMIN will work to ensure that our third party suppliers comply to our policy and PAMIN will only source our supplies through transparent and traceable network.

 

PRINCPLES

The following principles reflect the core of our policy which consists of three elements as described below:

No Deforestation

  • High Carbon Stock Forest
    PAMIN commits to preserve High Carbon Stock Forest (High, Medium, Low Density Forest, Regenerating Forest, Young Scrub and Cleared/Open Land Area)
  • High Conservation Value Areas
    PAMIN commits to preserve, and ensure there is no new development on, High Conservation Value Land areas.
  • No Burning
    PAMIN commits to no burning for all operations including land development such as new planting or replanting.

No New Development on Peat Land

  • No new development activities on peat land
  • Ensure all third parties do not develop their business on peat land and ensure Best Management Practices on their existing operation.

No Exploitation of People and Local Communities

  • Respect and support universal declaration of human rights
  • Respect and recognize the rights of all workers
  • Respect Labor Fairness
  • Respect and recognize the rights of Indigenous and Local Communities
  • Respect to the rights of employees’ health and safety during employment in the company

Note: Those above principles will be elaborated in detail below –

 

COMMITMENTS

Refers to the above principles, PAMIN is committed to ensure a transparent, traceable and responsible supply chain by adopting no deforestation, no peat land planting and no exploitation of local communities and workers in plantation. It is further explained in the following core commitments:

  1. Compliance
  2. Environmental Responsibility
  3. Social Responsibility
  4. Engagement and Inclusivity
  5. Transparent and Traceable Supply Chain

 

COMPLIANCE

Legal Compliance

PAMIN adheres to all national laws (regulations), existing industry best practices in our operations. We expect our third party suppliers to adhere to national legislation as    compliance, including the national    certification scheme   requirement, if any.  

 

RSPO Role

PAMIN is a proud member of the Roundtable on Sustainable Palm Oil (RSPO), a global palm oil industry certification scheme operator, and remains committed to engaging and maintaining dialogue with its business associates, clients and wider stakeholders to achieve the mutual goal of responsible and sustainable palm oil development. Wherever possible, we will encourage our suppliers to join as RSPO member and implement RSPO Best Practices.

 

ENVIRONMENTAL RESPONSIBILITY

No Deforestation

PAMIN requires no development on High Conservation Value (HCV) areas and/or High Carbon Stock (HCS) forests in our supply chain management, from our suppliers to our business operations.

 

The third parties which are running in plantation business must ensure plantation development activities identify HCV areas and/or HCS Forest for complying best practice guidance from RSPO principles and criteria, High Conservation Value Resource Network (HCVRN) 1 and the High Carbon Stock (HCS) Approach2.

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1For more details, refers to https://www.hcnetwork.org/

2For more details on methodology, refers to https://highcarbonstock.org/

 

PAMIN also requires that third parties commits to implement best management practice for environment and sustainable management of natural resources by respecting the traditionalrights of indigenous groups and communities to hunt with controlled manner and in areas designated for those purposes provided that their hunting activities are legal, non-commercial, do not involve rare, threatened, or endangered species, do not threaten the long-term viability of the species, and do not have negative impacts on ecological processes important for agriculture and local ecosystem sustainability.

 

No New Development on Peat Land

PAMIN will not tolerate and accept any new development on peat-land, regardless of the depth, in accordance to the scope of this policy. For plantations that have been established in peat-land areas, these are required to implement the best management practice of peat-plantation, which is aligned to RSPO BMP for Management & Rehabilitation of Peatlands.

 

Zero Burning

PAMIN will not accept the use of fire / burning in oil palm production and require third parties not to use fire in land preparation for new planting, or re-planting or any other development, in accordance with the full scope of this policy. Any deliberate burning activities for land clearing by our suppliers will not be tolerated.

 

GHG Reduction

PAMIN is committed to progressively reduce green house gas (GHG) emission by implementing Best Management Practices prescribed by RSPO . We encourage suppliers to also adopt these practices.

 

SOCIAL RESPONSIBILITY

PAMIN consistently ensures that human and worker rights, rights of indigenous and local communities, and labor fairness are respected, recognized and implemented properly.

Human Right and Worker Right

PAMIN commits to respect and protect human rights, the rights of all workers which includes contract, temporary and migrant workers, the elimination of discrimination in employment, promotion of equal rights and constantly ensures that PAMIN is not complicit in human rights abuse.

The position of PAMIN on No Exploitation aspect in NDPE, action plans and management system are guided by National Labor Laws/Regulations which are mostly established by Ministry of Labor of Indonesia. These provisions apply for all workers, contractors, indigenous people, local communities and anyone affected by our operations under the full scope of this policy, as outlined in our Human Rights Policy.

PAMIN also persuades the third parties (plantations) to commit to upholding smallholders’ right and encourage them to develop programs related to best management practice in plantation.

Indigenous and Local Communities

PAMIN pledges to respect and recognize the rights of indigenous and local communities to give or withhold their Free, Prior, and Informed Consent (FPIC)3 to operations on land to which they hold legal, communal or customary rights and individual right. PAMIN strongly encourage engagement with local stakeholder communities to ensure FPIC processes are correctly implemented and continuously improved.

 

Labor Fairness

PAMIN will not accept the use of child labor, forced or bonded labor in its operations and similarly, will be intolerant of its third-party suppliers that are using children as their workers. PAMIN will ensure all the workers are able to access grievance mechanism which is related to their rights. PAMIN has implemented several practices of labor fairness to protect worker’s fairness which is mentioned as below:

 

  • Be paid at least the legal minimum wages (refers to the laws of Labor Ministry of Republic Indonesia)
  • No retention to employees’ passport, ID card, personal documents and belongings.
  • Upholding the right of workers, decent work and living conditions and resignation from employment.
  • Ensure the ethical requirements such that workers do not incur any recruitment fees at any stage of the recruitment process.
  • Eliminate indentured labor slavery and trafficking of persons, and restrictions on workers’ freedom of movement
  • Provide accident insurance for the employees.

 

Health and Safety

In health and safety aspects, PAMIN strictly ensures the following points that support to protect workers’ health and safety while under employment in the company:

  • Ensures the right of employees to a secure and safe working environment and condition, as outlined in PAMIN’s health and safety policy
  • Respects diversity, and provision of a working environment free from discrimination, harassment and abuse

 

ENGAGEMENT AND INCLUSIVITY

PAMIN commits to be proactive and constructive in engaging with all stakeholders including communities, governments, and customers regarding the impacts of PAMIN’s operations. PAMIN will adjust and improve our policy implementation in ways that are consistent with our goals of protecting forests (no burning), peat lands, local communities and human rights.

 

Supplier Engagement

PAMIN will engage with suppliers to implement and uphold our commitments, consistency and also to comply with our policies which will include several activities such as verification, complaint or grievance monitoring and supplier’s progresses towards meeting our responsible palm oil (sourcing) policy.

 

Client Engagement

PAMIN is committed to share the sustainability mechanisms for improvement with our clients for evaluation and assessment to create better services.

 

Smallholders Inclusivity

PAMIN is committed to supporting the inclusion of smallholders into its supply base chain. Smallholders are a critical part of the industry and they face unique challenges in meeting sustainability compliance which could sideline them from the palm oil supply chain.

In this part, PAMIN will conduct transparent and traceable supply chain management which means access to specific resources throughout its supply chain.

 

Traceability

PAMIN will work towards a traceable, transparent and responsible supply chain as required by this policy. PAMIN will work with suppliers to achieve full traceability to mills and plantations. This information will be updated periodically. We will engage with suppliers to disclose data on traceability to plantation.

PAMIN also commits to:

  1.  Traceability to Mill by Year 2020
  2. Traceability to Plantation by Year 2025

 

Grievance and Compliant Guarantee

PAMIN is committed to resolve grievance and complaint through an open, transparent and consultative process. PAMIN will establish a transparent grievance mechanism procedure (recently refers to PAMIN Procedure) to ease stakeholder reports grievance and complaint as well as a process to resolve complaints within our supply base. We will work with relevant parties to accomplish all the conflict solution in a timely manner.

 

Continuous Improvement 

PAMIN commits to continuous improvement to meet the standards or requirement and expectations of stakeholders in an evolving global market and customers’ needs.

PAMIN  will intensively develop and review its own NDPE implementation plan. PAMIN also recognizes that policy commitment alone is not substitute for transparency and credible implementation.

We will continue to analyze the policies as well as implementation processes, and engage constant review and improvement process. As new developments or requirements are implemented, PAMIN will adjust and improve our policies in ways that are consistent with our sustainability commitments of protecting forests, peat lands, indigenous and local communities and human rights.