Strengthening engagement with suppliers
24 June 2015, Singapore – The Musim Mas Group today would like to update on its engagement with its suppliers following its policy to work toward a sustainable and traceable supply chain. The Musim Mas Sustainability Policy was first announced in December 2014 and the first progress report was issued on 30th April 2015.
The Group has started the process of engaging its suppliers to explain the requirements of the Sustainability Policy. As reported in its first progress report, Musim Mas has mapped its full supply base which amounted to 446 mills. These mills provide Crude Palm Oil (CPO) and Palm Kernel (PK) for the Group's refineries across Indonesia. Musim Mas has recently sent out questionnaires to its suppliers to clarify the external understanding of the Sustainability Policy and facilitate the internal analysis of the supply bases.
Furthermore, the Group has also assessed some of the priority areas for engagement, especially the suppliers located in areas considered as a high risk to its stakeholders.
This work has highlighted the importance and the complexity of verifying the supply base of these mills on a FFB level. The mill situation can be very diverse in each supply base, as it can often involve more than 50 to 60 suppliers ranging from individual Smallholders , small growers, agents and plantations. The level of agricultural practices and the decision-making process to manage the land are also very different for each supplier.
In line with this work, the Group sought the inputs of stakeholders about specific situations such as the Leuser EcoSystem. This consultative process focused on supply chains that are not aligned to the policy and enhanced the verification procedures, resulting in various levels of actions including ground-level verification and a halt in purchasing from some of these suppliers. The Group also aligned the internal guidelines and fine-tuned the internal decision-making process to support the execution of the Sustainability Policy, which strengthened its commitment to meet the stated goals of the Musim Mas Sustainability Policy. Musim Mas will further review the current work plan and determine the assessment process involved to address the FFB level on a landscape level.
The work also underlined the urgency for the industry to work together to tackle the landscape issues. Musim Mas has taken an active role via multi-stakeholder platforms. The Group will lobby to extend the various companies’ sustainability policies to entire supply sheds, making sure that the Group’s measures will help conserve the Leuser EcoSystem.
Additionally, in consultation with different stakeholders, the Group will draft the grievance mechanism based on participatory principles. The consultation process will be accessible to all stakeholders.
The next progress report is due on the 15th July 2015.
For more information, please contact:
+65 6576 4770