LDCA traceability to the mill results
LDC and TFT work together to deliver traceability updates every six months across LDC’s Indonesian refineries and Singapore-based commercial operations.
For the period between January and June 2016, the internal suppliers of both LDC refineries confirmed 100% traceability to mill. Traceability of external suppliers to LDC’s Singapore activity, increased from 66% in FY 2015 to 79% for H1 2016. For the period between July and December 2016, both LDC refineries achieved 100% traceability to mill, with the Singapore commercial flow at 75%.
The Full Year 2016 traceability results across both the internal and external suppliers averaged 88% versus 81% in 2015, as per the chart below.
Traceability data for the period January to June 2017 confirms 100% traceability to mill for both LDC refineries and an improved 86% for the Singapore-based commercial operations, averaging 92% traceability for H1 2017.
How TFT works with LDC on palm oil
In September 2015, LDC and TFT engaged on a short-term project. The shared objective was to map both the suppliers who serve LDC Indonesia refineries (“internal” suppliers) as well as those suppliers linked to LDC’s Singapore commercial operations (“external” suppliers). In addition, TFT carried out a desktop analysis to review environmental and social dimensions of the mills supplying LDC’s own refineries in Lampung and Balikpapan.
In 2016, LDC continued on its palm oil sustainability journey by becoming a TFT member and committed to a 15-month plan to further improve responsible practices across its entire supply chain. LDC released its comprehensive Palm Sustainability Policy in September 2016, which applies to all LDC stakeholders engaged in their palm oil supply chains, including third party suppliers and customers. The LDC Palm Sustainability Policy stipulates that all palm activities should:
- Safeguard all high conservation value (HCV) lands or high carbon stock (HCS) areas
- Leave all peat untouched, regardless of depth
- Uphold the rights of local communities or indigenous people
- Comply with ILO conventions on forced labour and discrimination
- Abide by rigorous anti-bribery and corruption standards.
In addition, the policy strongly demands full compliance with all applicable national and international laws.
Work plan - September 2016 to December 2017
LDC and TFT are currently implementing the following work plan. The main activities can be classified into four work streams, each work stream building on each other to support the policy implementation.
- Sustainability Policy and Supporting Processes
Following the publication and roll-out of the LDC Palm Sustainability Policy, LDC and TFT are working together to establish and upgrade the supporting processes to the policy, including procedures for traceability, managing prospective suppliers and addressing grievances.
Together LDC and TFT are maintaining the ongoing traceability of the supply chain, tracing the flow of product back to mill level. The scope of this work currently includes LDC’s two Indonesian refineries and LDC’s commercial operations in Singapore. Data is processed, verified and published on a six-monthly basis, in line with other industry players. LDC traced 92% of these volumes back to mill level for H1 2017, up from 81% in FY 2015.
- Supplier Engagement
In addition to strengthening procedures and traceability, LDC is actively socializing its policy to all suppliers and customers. Several engagements are planned with key suppliers who serve the LDC Indonesian refineries. The aim of these high-level engagements is to further discuss the policy, to review opportunities for collaboration to mitigate any gaps and to improve supply chain sustainability excellence. Subsequent in-depth field visits will provide the granularity needed to come to an agreed action plan and follow-ups.
LDC is a participant in the Landscape project in East Kalimantan, Indonesia. The Landscape, or Area Prioritas Transformasi (APT) approach recognizes that individual companies are most impactful when they work together with a broad set of constituents on the ground, in a targeted location. The Landscape project incorporates multiple stakeholders across commodities, government entities and NGOs to address shared challenges regarding identified areas of high conservation value.
The Landscape project aims to:
- Help build collaborative, participatory local processes for land-use planning, including through capacity building.
- Support and guide land use planning processes with TFT initiatives, tools, and techniques.
- Cross-pollinate knowledge and best practice solutions to scale-up impact.
- Identify and support the development of new opportunities for land use planning.