IOI Corporation Berhad (IOIC) continuously strives to uphold No Deforestation, No New Planting on Peat, and No Social Exploitation (NDPE) commitments and the implementation is monitored via supplier assessments and enhanced through various supplier engagements. The key factor in overseeing suppliers’ NDPE policy adherence is by establishing a chain of traceability of the materials where they are sourced from.
As such, IOIC has implemented two mechanisms of traceability, namely Traceability to Mill (TTM) and Traceability to Plantation (TTP). The former is the tracing of mills supplying the milled products (crude palm oil, palm kernels and crude palm kernel oil) and the latter is tracing both plantations and smallholders supplying raw materials (fresh fruit bunches or FFB) to the mills. To-date, IOIC has traced all its supplying mills and this effort has been extended to trace the FFB supplying entities, down to the extent of lands cultivated by smallholders.
In relation to this effort, IOIC Responsible Sourcing Team (IOI RS) and Earthworm Foundation (EF), with the support of IOIC’s buyer, Reckitt has engaged with a direct supplier, Sungai Kahang Palm Oil Mill (SK POM) to socialise the mapping of supplying chain linked to this mill. This mill is linked to various FFB dealers which subsequently links to a large pool of smallholdings. 8 December 2021 marked the start of a series of visits to SK POM and the day had been focused on engaging major suppliers of this mill on the importance of supply chain mapping and monitoring, including the traceability concept. Six major FBB dealers were engaged and briefed on the purpose of achieving TTP as well as the specific TTP information needed to be collected.
On a follow-up visit on 29 September 2022, SK POM’s management presented a progress update and we are pleased to share that each dealer gave their full cooperation to the mill management despite some challenges faced along the way. During the meeting, both IOI RS and EF teams provided insights on matters such as transparency requirements and we are confident that all parties are committed to continue working closely as this TTP mechanism will benefit both SK POM and their dealers towards attaining their Malaysian Sustainable Palm Oil (MSPO) certification – fulling the requirements under MS2530:2022 Part 4-3.
Monitoring and identifying deforestation risks in the supply chain is also crucial. As such, the EF team conducted a demo to Global Forest Watch, a free web-based platform to monitor deforestation activity linked to suppliers, and SK POM has been advised to register to gain access on this tool. In conclusion, IOI RS and EF teams will keep accelerating efforts to aid SK POM in building their TTP until completion.