Wilmar SR 2009_single

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    SUSTAINABILITYR E P O R T 2 0 0 9

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    IntroductIonWelcome Stateme t rom the Chairma a d CEO 2O erall Assura ce Stateme t 4Our Targets or Impro eme t 7

    our busInessO er iew o Wilmar I ter atio al 10Our Pla tatio s 14Palm Oil i I do esia a d Mala sia 17

    sustaInabIlIty governance and strategy Leadership rom the Top 20Third-Part Sta dards, Certi catio s a d Commitme ts 22

    envIronmental Per ormanceCommitme t to Co ser atio 26Actio Agai st Climate Cha ge 34Soil Ma ageme t 36Co trolli g Fire a d Haze 37Reductio i Chemicals Use 38Protectio o Water Qualit a d Suppl 40

    emPloyeesDece t Worki g Co ditio s 44A Supporti e Work E iro me t 46A Sa e Workplace 48

    communIty Free, Prior a d I ormed Co se t rom Commu ities 52A Commu it s Perspecti e 56I estme t i Commu it De elopme t 58Basic Educatio or Childre 59Comme t rom Bor eo Child Aid Societ 60I cludi g Smallholders 62

    marketPlaceE couragi g Sustai able Practices i the Suppl Chai 66Respo sibilit i the Market 67

    annexesGlobal Reporti g I itiati e G3 I de 68Glossar 76Co tact Us

    CONTENTS

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    WELCOME STATEMEnT FROMTHE CHAIRMAn AnD CEOI am happ to be able towelcome readers to Wilmars

    rst Sustai abilit Report,which marks a ew stepi our o goi g jour e

    towards tra spare c a daccou tabilit .

    Our journe began in 1991, when Wilmar frstestablished plantations in Indonesia. Back then,we were not using the word sustainabilit ,and there was no structured guidance or ourindustr . However, we still knew that productiveand proftable plantations re uired highstandards, both in terms o workers conditionsand in terms o good agricultural practices.

    Toda almost two decades later the world isa di erent place. Wilmar is ull committed tothe Roundtable on Sustainable Palm Oil (RSPO)and its Principles and Criteria (P&C). We believethat this is an e ective bod and standard,which brings together the palm oil industr inimproving its practices in a manner which isacceptable to stakeholders and communitieswhile striving to conserve and protect theenvironment.

    Sustainabilit is about continuous improvement,and we know that we must ensure that thismindset is embedded throughout the compan .At Wilmar, we want to see pride and respect asvalues that are ingrained in ever emplo eesaction, whether management or workers.Thanks to the hard work o our emplo ees, wehave made tremendous strides orward overthe past ears. At the time o writing, we justpassed an important milestone with the RSPOcertifcation o two o our mills in Kalimantan,

    Indonesia and Sarawak, Mala sia both afrst in the industr . This also means that wehave success ull completed certifcation

    or all our Mala sian operations, exceptor one. We believe that our certifcation

    in such complex regions demonstratesthat palm oil can be sustainable, andcontribute positivel i developedcare ull and responsibl , and with theshared commitment o emplo ees.

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    Much debate has ocused on the cost o sustainabilit and certifcation. We do not

    think that the cost is burdensome. The mainchallenge is accepting the opportunit cost o re raining rom developing areas identifed ashaving high conservation values that must bemaintained, or the longer timelines involved inensuring the ree, prior and in ormed consento communities be ore development. But inthe longer term, these are sensible precautionsthat help us avoid problems in the uture.

    For larger companies, the cost involvedin certifcation against the RSPO P&C ismanageable it is the price o a sound business.We believe that companies the size o Wilmarhave an opportunit and an obligation to gobe ond certifcation and compliance, and investin continued improvements or our sector atlarge. Even or smaller established companies,the certifcation cost is negligible, and will pa

    or itsel within a ver short time rame. Thebottom line is that the standards set out in theRSPO P&C are basic sustainabilit standards,and should be adhered to b all operators

    in the industr . The palm oil industr is aproftable business, but companies need to beless concerned about their short-term P&L, andmore concerned on their long-term operationalhealth, which relies on good communit andworker relationships, ethical business dealingsand reductions in environmental impacts.Our industr should not wait or governmentintervention, but sta ahead and setan example.

    We would o course hope that the bu erso palm oil will also see value in supportingsustainable palm oil. In our largest markets,China and India, we are seeing an increasedinterest in sustainable development, albeitit will still take some time be ore sustainableproducts become mainstream in those markets.Using the slow uptake o certifed sustainablepalm oil, however, as an excuse or inaction isneither acceptable, nor wise. For Wilmar, thedriver or sustainabilit is simpl that it makesgood business sense. Responsible practices

    lead to higher productivit through betterields, worker retention and even cost savings.

    Some stakeholders eel that irresponsibleactions in our industr should lead to

    bo cotts and exclusion o companies romthe marketplace. We pre er to encourageimprovements through positive engagement.Bo cotts will not stop destructive behaviour.One o our ke contributions is to demonstrateour continuous improvements, and sharesolutions with our industr , through e.g.co-chairing the RSPO working groupon greenhouse gases, or working withconservation groups to develop wa s to protectendangered species.

    We are not per ect, and we have received ourshare o criticism. Some issues raised in the pastwere relevant and helped us move orward, butothers were simpl ill-in ormed. We welcomeengagement with various stakeholders andsee it as an opportunit or collaboration.The needs o local people, however, mustnever be ignored, so it is important to us thatNGO partners share our vision to supportopportunities or development and job creationwhile ensuring environmental protection.

    For Wilmar, responsibilit is not merel aboutphilanthrop . In a world where climate changeand povert pose major threats to humanit ,we must act. We believe that providingdecent jobs and development opportunities

    or remote communities is the most e ectivecontribution. Likewise, we want to conservethe natural environment pro-activel andreduce emissions, rather than tr ing to rectidamage a terwards.

    As one o the largest companies in theindustr , Wilmar has a responsibilit to investin sustainabilit and show leadership. Our sizemeans that we can invest in fnding innovativesolutions, and document these in a wa that wehope can enlighten and inspire others.

    k kh HChairman and Chie Executive O fcer,Wilmar International Limited

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    INTrOduCTION

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    It is a pleasure to comme to Wilmar I ter atio als rstSustai abilit Report or theOil Palm Pla tatio Di isioo its global operatio s.

    The report lau ches a bie ial series todescribe Wilmars corporate commitme ts tosustai abilit , a d per orma ce toward meeti gtargets or co ti ued impro eme t. It represe tsa major step orward i tra spare c or o e o the worlds largest corporatio s i egetableoils, a d a leadi g member o the Rou dtableo Sustai able Palm Oil (RSPO). This reportembodies sig i ca t work to compile, re iewa d prese t data i relatio to a broad ra geo sustai abilit co cer s. Wilmar deser essubsta tial recog itio or this e ort.

    As Wilmars rst e er Sustai abilit Report,this report will treat some issues too lightl ithe mi ds o some readers, a d o erlook theothers e tirel . Wilmar seeks critical i put oe actl this issue to deepe a d broade uturereports to address issues o greatest co cer .Here, I describe m iews o where the reporte cels, a d pro ide recomme datio s or how

    uture reports ca be stre gthe ed.

    OvERALL ASSURAnCE STATEMEnT

    ABOUTDR. GARy PAOLIDR. GARy PAOLI IS AnECOLOGIST AnD BOTAnISTWITH A PhD FROM THEUnIvERSITy OF MICHIGAn

    He has conducted basic and applied researchon biodiversit conservation in Indonesia since1991, and is a ounding Director o DaemeterConsulting, a leading provider o technical

    support to achieve responsible orestr andagricultural practices (www.daemeter.org).Dr. Gar is a leading advocate on proper useo the High Conservation Value (HCV) tool

    or balancing multiple objectives in naturalresource sectors. He contributes to nationaland international meetings on sustainabilit andpublishes peer-reviewed papers and reports onIndonesian biodiversit and its conservation inproduction and protected landscapes.

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    These our issues sta d out as stre gths i the curre t report, i cludi g discussio o stre gths,weak eses, a d areas where urther impro eme ts will be made.

    toPIcs descrIPtIon

    Tra spare c Demo strated b its participatio i the Carbo DisclosureProject, a i estor-led tra spare c i itiati e to highlightemissio reductio pote tials, a d release i to the publicdomai at least o e High Co ser atio value (HCv) areaassessme t o a ew pla tatio i West Kalima ta .

    Ge der equalit Illustrated b programmes to impro e ge der bala ce amo gemplo ees, especiall opportu ities or wome , curre tlreprese ti g 30% o the work orce, to ad a ce to ma agerialle els, wh