IOI Corporation Berhad (IOIC) has always been committed to its No Deforestation, No New Planting on Peat, and No Social Exploitation (NDPE) policy. As part of this effort, IOIC has collaborated with Earthworm Foundation (EF) to engage with a larger pool of stakeholders linked with its supply chain. IOI is acting as an implementing partner in the Sabah Landscape Programme, which is focused on the following:
Supply Chain Transformation
Palm oil mills play an important role in unifying not only the raw materials, or fresh fruit bunches (FFB), but also the precursors of this entire supply chain – smallholders, dealers, and plantations. Complete Traceability to Plantation (TTP) can only be established with the aid of palm oil mills in acquiring and compiling details of their suppliers. With this as a target, under the landscape programme, EF have engaged with a good number of mills to facilitate this. NDPE policy implementation and progress monitoring were also integrated with this engagement. This entire effort is set to advance engagement with more smallholders in the longer run.
Forest Protection & Restoration
One of the key agendas in this landscape is to curb deforestation linked to oil palm cultivation. As such, a substantial area has been covered by engaging local communities and stakeholders to intervene in deforestation in the landscape; by consulting related parties and developing plans to reduce deforestation. In addition to this, Human Elephant Conflict (HEC) mitigation activities are jointly carried out with the Sabah Wildlife Department, which involves training smallholders to save their crops from wildlife conflict and protect wildlife in a shared landscape.
Smallholders are farmers who primarily depend on the yield of their oil palm cultivation. Their focus on a single crop leaves them vulnerable to factors such as changes in market price, hikes in input costs and agronomic practices that influence production. To overcome this, farmers are being engaged to transform their livelihood. They were trained to boost their income through income diversification, proper agronomic practices, and sustainability initiatives.
Workers & Families
Though forced and child labour is a widespread matter, there is still a need to guide smaller plantation companies in improving comprehension of the topic. Thus, EF has joined forces with the Sabah Labour Department (JTK Sabah), Ministry of Human Resources, to raise awareness. Concentrating further, high priority mills were identified to conduct child risk assessments and provide training on tackling child labour.
The IOI Responsible Sourcing (RS) Department and the EF Sabah Landscape team had a Sabah Landscape On-Boarding Meeting on 23 August 2022, at the IOI Headquarters, to discuss the most current performance capabilities on the Sabah Landscape Programme. The Sabah Landscape's goal is to harmonise sustainable economic development, forest conservation, decent work opportunities and resilient livelihoods for communities, anchored in a farmer-centric landscape model.
One of the current areas of focus for the IOI RS Team is TTP, which is a crucial market requirement to demonstrate transparency in the supply chain by identifying the origin of FFBs, from production at estates and smallholder plantations to mills, refineries, traders, and brands. The Sabah Landscape Programme's supply chain transformation has made good progress. However, there are still difficulties in raising awareness and obtaining traceability to plantation from oil palm dealers. Sugut and Tongod areas are being given priority for engagement and transformation efforts; in the context of forest protection and restoration to reduce deforestation in the surrounding area. EF teams conducted consultation sessions with mills sourcing from these areas to understand deforestation trends in Sugut, driven largely by communities and local companies for logging and cash crops.
As part of the Sabah Landscape Programme which focuses on resilient farmers, a total of 127 smallholders have begun their transformational actions in 2022, including enrolling in the Malaysian Sustainable Palm Oil Certification Scheme, implementing best farm management practices, and starting to diversify their sources of income. Many small and medium-sized plantation companies lack guidance on what constitutes child labour and how to recognise, prevent, and mitigate risks encountered by children in plantations, which has an impact on workers and families. Reaching out to these plantation companies is often a challenge and thus EF collaborated with IOI as an implementing partner and other refineries, mills, and government entities to reach these plantations. There are further engagements planned, where IOI and EF are working together to make substantial advancements on the Sabah Landscape objectives.