FGV drives palm oil sustainability awareness through supply chain

11 Dec 2017 --- Malaysian-based global agricultural and agri-commodities company, Felda Global Ventures Holdings Berhad (FGV), is on a training mission promoting good agricultural practices, improving labor conditions and boosting sustainability throughout its palm oil value chain.

As the third largest palm oil company in the world by planted acreage, in Malaysia FGV controls more than 850,000 hectares of land, which includes around 500,000 hectares that it leases and manages for 112,635 FELDA smallholders.

The Federal Land Development Authority (FELDA) is a Malaysian government agency that was founded to handle the resettlement of rural poor into newly developed areas and to organize smallholder farms growing cash crops.

Customized training 
FGV has implemented a structured, systematic and customized training program for its key stakeholders such as Felda employees, Felda settlers (smallholders), third-party fresh fruit bunch suppliers and FGV contractors. The objectives of the training program are in areas of good agricultural practices, improving labor conditions and other sustainability practices throughout FGV’s palm oil value chain.

FGV Group President and CEO, Dato’ Zakaria Arshad, says that as part of FGV’s commitment to sustainability and strict criteria imposed by the market to curb deforestation, habitat destruction and labor exploitation, it’s imperative that FGV engages with its key stakeholders in the palm oil value chain to keep them abreast of sustainability issues and drive change on the ground, while striving for long-term growth for the industry and community.

Since FGV withdrew its Principles and Criteria certificate in May 2016, FGV and FELDA have remained committed to RSPO certification and taken the necessary measures to ensure that the sustainability aspects of the business are continuously monitored and enhanced. 

Certification
FGV is in the process of certifying its palm oil mill complexes to Roundtable on Sustainable Palm Oil (RSPO) requirements. FGV plans to be RSPO-certified within five years from 2017 to 2021 and also expects to obtain the first RSPO certification for eight palm oil mill complexes before the end of 2017, subject to obtaining the necessary clearance from the RSPO audit process.

In the first phase of the training program, that initially started in October 2016, FGV focused on a few categories of stakeholder groups, such as Felda employees, Felda settlers (smallholders) and FGV’s contractors who provide various kinds of services to FGV’s estates and deploy contract workers to perform various services.

FGV has also been working closely with the Malaysian Palm Oil Board (MPOB) to train and increase Felda settlers’ knowledge on improving labor practices and good agricultural practices to improve fresh fruit bunch (FFB) yield, oil extraction rate and other relevant agricultural practices.

The MSPO training was conducted through good agricultural practices for six sessions for over 2,000 employees and Felda settlers from July to October 2017.

The RSPO and MSPO Awareness Training Programmes were conducted through Stakeholders Consultation at 16 FGV complexes and 22 Felda schemes involving more than 7000 settlers.

In 2017, more than 1,640 FGV and Felda top management and field supervisors have jointly attended specially-tailored sustainability awareness training programs spread over 60 sessions.

“It is absolutely crucial for FGV’s contractors to embark on this sustainability journey with FGV to reap the benefits over the long term. Thus, FGV has performed a series of contractors’ training sessions in Malaysia involving more than 250 contractors on improving labor management practices in 2016 and 2017,” said Zakaria.

Contractors were trained on the best practices to increase labor productivity and improve on administration of worker-related matters such as employment contracts, minimum wages, personal protective equipment, housing & amenities, insurance, passport and work permit requirements. 

The outcome of the training programs with contractors was very positive in that the two-way communication format provided an avenue for them to voice out their concerns and ways to improve going forward.

Felda settlers contribute to at least 40 percent of FGV’s FFB supply base to FGV’s 70 mills located all over Malaysia. FGV also trains independent smallholders who supply FFB to its palm oil mills on harvesting quality FFB and other relevant good agricultural practices. 

The training provided to the settlers ensures that FGV and FELDA continue to collaborate with settlers achieving their RSPO and MSPO certification within the stipulated time frame and to meet market demands for sustainable palm oil.