ROUNDTABLE ON SUSTAINABLE PALM OIL (RSPO) CERTIFICATION
FGV Obtained Its Own RSPO Membership
As a key proponent of the RSPO, FGV has played an active role in promoting sustainable practices in its application of the guidelines since its inception in 2004.
FGV was amongst the first agricultural companies to obtain the mill certification in 2010; and the first in the world to organise a smallholder group to obtain the RSPO Fresh Fruit Bunch (FFB) Certification. In the process of certifying our mills, we had also certified about 40,000 FELDA schemed smallholders. Although we had initially targeted to complete auditing all of our mills by 2017, we made such rapid progress to have all certification to be completed by 2015.
However, FGV’s decision to withdraw from RSPO Principles and Criteria (P & C) Certification on 3 May 2016 was made to ensure any issue along the supply chain would be addressed and that the improvements had been implemented. In tandem with this, FGV has started anew in its RSPO certification plans. FGV had undergone a partial certification exercise in October 2016, when it was highlighted that FGV shall not be RSPO certified under the FELDA’s membership. This was due to the fact that FELDA does not have controlling interest in FGV. As such, FGV needed to be certified under its own membership and the request was tabled to the RSPO Board of Governors on 7 November 2016 and approved on the same date. On the 28 December 2016, FGV received its Confirmation of Membership (RSPO) with effect from 27 December 2016
FGV will continue to move forward with its 72 mills complexes RSPO Certification programme in January 2017.
Apart from the mill and FFB certifications, we also certified four of our kernel crushing plants, one refinery and a biodiesel plant to RSPO’ s Supply Chain Certification System (SCCS).
INTERNATIONAL SUSTAINABILITY AND CARBON CERTIFICATION (ISCC)
The Group is diligently pursuing the International Sustainability and Carbon Certification (ISCC), which is the first international certification system that can be used to prove sustainability and greenhouse gas (GHG) savings for biomass and bioenergy. ISCC is oriented towards reducing GHG emissions, the sustainable management of land, the protection of natural biospheres and social sustainability. To date, we have obtained ISCC for 15 mills and a biodiesel plant. The achievement signifies that, apart from being sustainable, FGV’s palm oil production system is contributing towards mechanisms to reduce global warming based on standards set by the European Commission.
MALAYSIAN SUSTAINABLE PALM OIL (MSPO) CERTIFICATION
MSPO is similar to the RSPO and ISCC but takes into consideration the national socio-economic agenda – focusing particularly on developing marginalised local communities – while adhering to all local, national and ratified international laws and treaties. FGV has been actively involved in developing the standard, and is among the few plantation companies to volunteer to pilot- test it.
GOOD AGRICULTURAL PRACTICES (GAP) AND GOOD MANAGEMENT PRACTICES (GMP)
The sustainability of our businesses is interdependent with the sustainability of the ecosystem surrounding our operations. We have been implementing a number of Good Agricultural Practices (GAP) and Good Management Practices (GMP) to ensure the efficient use of natural resources hence safeguard the long-term productivity of the land that we cultivate. We are keen advocates of zero-burning, implementing Leguminous Cover Crop (LCC) and Integrated Pest Management (IPM). We also employ science-based nutrient management and enrich the soil with organic fertilisers as well as beneficial microorganisms as standard practices in all our oil palm plantations.
RESEARCH AND DEVELOPMENT (R&D)
FGV has invested in strong R&D support services and have reaped the benefits of high-yielding plant materials as well as technological advances to enhance operations. Our seeds are of such high quality that we have led as the market leader in oil palm seed production and sale for over five years. We have also invested in the latest technologies to assist us in selecting materials with specific traits; and use in- vitro propagation for mass production in our state-of-the-art laboratories. We have more than 100 researchers working on R&D applications for both upstream and downstream.
FGV has committed to not undertake any new developments in primary forests, on land containing one or more High Conservation Values (HCVs) and areas with significant peat. When there is suitable land for development, we ensure due protection is given to the existing biodiversity, cultural heritage and customary land use. At the same time, we uphold the principles of free, prior and informed consent with the local communities before developing the land. Further protecting the nation’s flora and fauna, we regularly organise Conservation Awareness Programmes with the Wildlife Department and non-governmental organisations (NGOs) and have signed memorandums of understanding (MoUs) on several initiatives such as securing biodiversity corridors, Rafflesia conservation and sun bear research. Together with governmental institutions, NGOs and institutions of higher learning, we are also conducting research on effective conservation methods, especially for endangered plant and animal species.
PROTECTING WATERWAYS AND RIPARIAN RESERVES
The commitment of all our plantations in safeguarding the quality of rivers has led to positive results. In 2014, our Sustainability Department analysed the water quality in 41 out of 51 major river systems passing through our plantations in selective regions and found no significant deterioration. Since 2013, we have checked a total of 76 river systems, all with positive results.
Whilst ensuring cleaner rivers, widened riparian reserves also add to our wildlife corridor initiative in Sabah. We plan to establish a network of forest corridors to enable large mammals such as the Bornean elephant and orangutan to migrate safely between key forest habitats. Towards this end, we are also involved with BCT and the Sabah Wildlife Department to secure a mega biodiversity corridor in the Lower Kinabatangan region, which FGV will contribute a sum of approximately RM1.7 million over five years to the joint venture. The five-year project is a first of its kind to create a mega biodiversity corridor in the lower Kinabatangan basin. Another key aspect of the project is to provide a sustainable alternative livelihood for the local communities living along the Kinabatangan River, through a community homestay programme.
CLIMATE CHANGE AND MANAGEMENT OF GHG EMISSIONS
As planting on peat is perceived to contribute to GHG emissions, FGV made a commitment on 16 June 2014 to not develop any new area significant in peat. FGV is also committed to reducing GHG emissions through operational approaches such as methane capture, bio-composting and the cogeneration of electricity from methane released by palm oil mills effluent (POME). We convert waste from our plantations and mills into biogas whilst producing palm oil-based methyl ester (PME) for use in biodiesel.
Our 1.2MW biogas capture plant in Felda Umas in Tawau, generates electricity for 3,000 households in our settlement, where the 15,000 residents previously depended on electricity from diesel-powered generators. In Maokil, we successfully connected a 1.0MW biogas power plant to the national grid. Our stand-alone Sahabat Biomass Power Plant, which supplies clean steam energy and electricity to neighbouring industrial installations, offices, a resort and residential area, delivers the equivalent of more than 3,500 tons of CO2. This plant will soon be complemented by our second large scale stand-alone biomass power plant in Jengka 9, Pahang. The 12.5MW Jengka Advanced Renewable Energy Plant consumes 320,000 tonnes of biomass annually and is expected to feed the national grid in 2015.
In terms of biodiesel, we made a significant breakthrough when we successfully powered three oil tankers on a total of 1,200km shuttle route with B30 biodiesel (consisting of 30 percent PME and 70 percent conventional carbon-based diesel) from our FGV Transport depot in Gebeng, Kuantan to our palm oil mill in Bukit Sagu, Pahang.
The Government currently requires biodiesel blends to have at least 7 percent PME content. Our PME content, which is more than four times higher than this minimum, demonstrates our willingness to go beyond statutory standards in our commitment to operate in the most environment-friendly and sustainable manner.