Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on May 24, 2019

KUALA LUMPUR: Sime Darby Plantation Bhd (SDP) has launched an open access online tool, dubbed Crosscheck, that allows the public to trace sources of palm oil supply down to the mill level.

SDP executive deputy chairman and managing director Tan Sri Mohd Bakke Salleh said this is in line with the plantation giant’s commitment to responsible and sustainable production of palm oil.

Mohd Bakke said there is a worldwide concern that palm oil production is causing deforestation and that more major global customers require greater confidence that the palm oil they buy is not associated with deforestation acts.

“SDP believes the frontier to halting deforestation is traceability. Tracking supply back to its source will make it possible to identify where problems may exist, so that people can raise the alert for action to be taken.

“Crosscheck makes this possible for the very first time and it is an important step towards the full traceability of our supply chain,” he said at the launch yesterday.

Mohd Bakke said anyone who is concerned about preserving the world’s forests can use this tool to check whether palm oil is being sourced from high-risk areas.

The tool provides a map showing all the mills that supply each of SDP’s refineries, and information on who owns these mills; a risk map showing the 50km radius around each mill, highlighting areas of risks such as forests, animal habitats and biodiversity; and, as well as satellite maps which show any evidence of deforestation on the ground.

SDP’s chief sustainability officer, Dr Simon Lord, said the platform was launched after nearly three years in the works in order to “shed light where there is currently a shadow”.

“We are not only providing the names and locations of the mills but going further to provide information on who owns them, on associated risk areas, and links to satellite data. It will allow anyone to check data about mill locations against risk and real events on the ground,” he said.

Lord added that action, including suspension, will be taken on non-compliant players along its supply chain, with an opportunity for future re-engagement.

“To suspend without a route back drives people into what we call the leakage market ... and that’s not going to save the wildlife of the forests or of the peat, or prevent exploitation of people.

“We want to work in collaboration with the non-governmental organisations and many others across the industry to make the most of Crosscheck as a tool to drive deforestation out of the palm oil industry,” he said.

SDP is the world’s largest oil palm plantation company by planted area, producing about 4% of the global crude palm oil output.

The group is valued at RM32.08 billion based on its share price of RM4.66 yesterday.

The group’s upstream operations, which consist predominantly of oil palm cultivation, harvesting and milling, are spread across Malaysia, Indonesia, Papua New Guinea, the Solomon Islands and Liberia, while its downstream business spans across 14 countries worldwide and involves the manufacturing as well as the sales and marketing of oils and fats products, palm oil-based biodiesel, nutraceuticals and other derivatives.

The group spends about RM30 million to RM40 million per year on sustainability efforts, according to Mohamad Helmy Othman Basha, who is deputy to managing director and chief operating officer of upstream.

“We are happy to share the system with others. By being the first in the industry to do this, we are expecting other people to follow suit. It is a good thing for the industry.

“A lot of the things that are being talked about on palm oil is more of perception rather than facts, but you can’t go against the perception unless you have some facts to counter that. Slowly we hope that the [negative] perception [towards palm oil] will change,” he said.

On the European Union’s limit on use of palm oil in biofuels starting June 10, Mohamad Helmy said SDP sees minimal impact.

“We don’t sell biodiesel in Europe. In fact, it’s only a small percentage of our production that goes to Europe. So even with the ban of biodiesel, we are actually not very much affected.

“But we are not doing this (Crosscheck) because biodiesel is being banned by Europe. We are doing this because we believe sustainability is something that everyone must do,” he said.

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