Working with Suppliers

We believe in extending our efforts to achieve a fully transparent and traceable supply chain to palm fruits sourced from third-party suppliers, and adhere to our Responsible Sourcing Policy when buying third-party crop.

Sime Darby Plantation’s Responsible Sourcing Policy (RSP)  includes:
  • Guidelines for Sourcing of Third Party Fresh Fruit Bunches (FFB)
  • Guidelines for Sourcing of Third Party Crude Palm Oil (CPO) and its Derivatives
The RSP covers no deforestation of primary forests and High Conservation Value (HCV) areas, human rights protection, and the implementation of social and environmental best practices.

Our RSP programme assists third-party suppliers, including smallholders, to uplift their practices to be in line with our sustainability requirements and to eventually attain relevant certifications such as the Roundtable on Sustainable Palm Oil (RSPO), Malaysian Sustainable Palm Oil (MSPO) and the Indonesian Sustainable Palm Oil (ISPO).



Drawing the line – Our Approach

Our ambition is to draw the line on deforestation and the practices that contribute to it across the industry. We have updated our approach to working with suppliers through our new Draw the Line policy that clearly outlines the No Deforestation, No Peat, No Exploitation (NDPE) standards as well as our expectation that suppliers adhere to those same standards.

At Sime Darby Plantation, we believe that we need to provide a path to re-engagement. In our view, suspension alone does not improve practice, and often has the unintended consequence of driving poor practice elsewhere into the industry’s supply chain. Therefore, if a non-compliant supplier commits to stopping clearance immediately and putting in place a plan to meet our conditions, we are prepared to  re-engage with them and support their progress to NDPE in hopes we can attain our ultimate goal to expand the sphere of oil palm companies operating to NDPE standards and drive deforestation out of palm oil production.

In the event a supplier violates NDPE standards, they are required to:
  • Stop work immediately on the affected land.
  • Develop a plan for remediating the damaged forest, including conducting High Carbon Stock Approach (HCSA)/HCV assessments, as necessary.
  • Develop a programme to improve their ongoing operational practices to meet NDPE standards.
If the supplier concerned is unwilling to make these commitments, it is our policy then to remove them from our supply chain. Once a supplier is no longer in our supply chain, purchases will not resume until they meet the conditions above.
 

working with suppliers to draw the line on deforestation




Risk Assessment

We have also developed procedures to assess risk levels for supply from all our own and third-party mills. For our own mills, we monitor risk levels through RSPO audit reports that provide independent third-party verification on our implementation of No Deforestation, No Peat and No Exploitation policies as well as other sustainability requirements as laid out in the RSPO's Principles and Criteria.

For our third-party mills, we identify potential issues within our supply chain through a database of oil palm mills.

We use the database to identify:
  • The mills and concessions that supply to us directly
  • The mills and concessions that do not supply to us directly but are affiliated due to the business relationships that we have with the company groups.
Our supplier engagement programme seeks to verify the cases of potential non-compliant land conversion that have been detected by satellite monitoring and investigate reported cases of social issues. Individual issues of non-compliance and each engagement with suppliers are recorded in our publicly available Supplier Grievance Register.

Supplier grievance register


 
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