Other Key Performance Indicators for ADM 2016-2017 Palm Oil Action plan
1.To reach 95% traceability to POM globally by the end of 2016
Achieved. For Palm 98% and for Kernal 95.5% for Q4 2015-Q3 2016
2. To ensure 100% volume is coming from ADM direct suppliers with action plans for implementing ADM’s No DPE Policy
3. To ensure that 30% of volume from refineries with Aggregator/Refiner Transformation (ART) plans underway
Achieved. Complete. 95% palm/kernal combined
4. Develop a public-facing Issues and Resolutions mechanism, and a procedure which outlines a clear process for resolutions of issues that may emerge
5. Investigate practical and viable solutions to improve sanitation and water conditions for the properties owned by the smallholders related to ADM’s Pará small holder palm oil project
How we work with ADM on palm oil
ADM committed to No Deforestation, No Peat, and No Exploitation (No DPE) in their global palm oil supply chain in March 2015. ADM and TFT have been working as partners to implement this commitment since May 2015, towards the goal of building traceable and transparent agricultural supply chains.
During our initial phase of work together, ADM and TFT implemented global initiatives to gain visibility in ADM’s palm oil supply chain and communicate expectations to suppliers. Together, we identified all facilities processing or trading palm oil globally to establish ADM’s palm oil footprint, developed a methodology for the calculation of traceability to the palm oil mill (POM) scores, identified all direct suppliers, and launched ADM’s Progress Tracker to publicly share periodic progress reports, traceability data, and action plans. ADM now reports traceability scores and mill lists for ADM North America and the six ADM Europe refineries on a biannual basis
Once traceability and transparent communication of the No DPE Commitment were integrated into ADM’s operations, ADM began more intensive supplier engagement to prioritize dialogue with suppliers on compliance with their No DPE Policy. We also developed an Issues and Resolutions Mechanism as a tool to systematically receive, address, and share grievances within ADM’s supply chain. We also worked together to refine the traceability process, and build ADM staff capacity to lead traceability work.
ADM recently embarked on the transformation phase of their No DPE implementation. Through supplier engagement and supply chain analysis, we have worked to identify the most strategic opportunities for transformation— both within ADM’s third party supply chain and ADM’s own smallholder palm operation in Pará, Brazil. TFT is currently supporting ADM to identify and advance transformation activities, with a strategic focus in Sabah, Malaysia.
Progress in ADM’s May 2016 – April 2017 work plan
- Refined and mapped traceability process, and supporting ADM to assume greater responsibility for traceability calculations and reporting
- Initiated systematic supplier engagement using the Engagement for Policy Implementation (EPI) tool
- Identified transformation opportunities within ADM’s third party supply chain, with a focus Aggregator/Refiner Transformation (ART) in Sabah, Malaysia
- Developed an ADM Issues and Resolutions Mechanism to address grievances within the supply chain
- TFT carried out two field assessments of ADM’s smallholder palm oil plantation in Pará, Brazil, where ADM is pursuing Roundtable for Sustainable Palm Oil (RSPO) certification for ADM and for integrated independent smallholders. Three priority recommendations were identified for transformation:
- Aid smallholders to find subsidized credit lines to purchase agricultural inputs
- Find alternative methods to load & weigh FFB at smallholders’ properties
- Build capacity within smallholder associations
Summary of ADM’s May 2017- April 2018 Work plan
Transparency and Traceability
- Traceability: Report and maintain global traceability for Palm Oil and Palm Kernel Oil
- EPI: Implement ADM’s policy with direct suppliers through shared values approach
- Issues and Resolutions Mechanism: Enhance transparency via launch and ongoing implementation
- Communication and Reporting: Improve transparency through regular public updates and communication with stakeholders on implementation progress
- Study tour: ADM and TFT carried out a study tour in Sabah, Malaysia, in partnership with Wilmar. The purpose of the tour was to better understand challenges and good practices on the ground, and identify possible opportunities to support transformation. The study tour included visits to plantations, Rurality smallholder projects, and mills, among other Wilmar facilities and initiatives.
- Implement transformation initiatives within ADM’s third party supply chain, within critical geographies both highly relevant to ADM’s supply chain, and where transformation needs are identified. Transformation activities will be determined over the course of the work plan, and may include investment in Landscapes, ART, Kumacaya, and/or Rurality.