Commitment towards supporting suppliers through their sustainability journey
Singapore – In pursuant to the Musim Mas announcement, “Tunas Sawa Erma: a moratorium on development with immediate effect” published on the Group’s website on 9 August 2016, the Musim Mas Group will continue engaging with the Korindo Group as it moves on to the establishment of a comprehensive No Deforestation, No Peat, No Exploitation Sustainability policy. Musim Mas is aware of the complexity of the process that cannot be handled alone and would call upon the participation of all stakeholders to provide scrutiny and encouragement to Korindo Group to ensure maximum outcome.
Musim Mas Group invites fellow industry buyers to be supportive of the transformation process, whereby the need for the existence of purchase motivation from customers when milestones have been achieved. If engagement is completely stopped, there is little or no incentive for the supplier to make positive changes, leading to business-as-usual continuity. No positive change will happen on the ground, simply as there is no motivation for doing so. However, products from the supplier will still find its way into the market place as there are sufficient outlets. This is illustrated in a stop-purchase precedence involving Austindo Nusantara Jaya (ANJ), which is continuing with its selling to-date.
Instead of prematurely disengaging a supplier and leaving a status quo outcome, Musim Mas desires to at the very least exhaust ways to encourage Korindo to take steps required to address all concerns, and undergo a positive transformation. So far this has led to the development of 24,000 ha forest putting on hold, a direct result of the moratorium.
A controlled-purchase approach is important for the commencement and continuation of the transformation, which will be contingent upon the milestones set and achieved by Korindo, namely the establishment of a Sustainability Policy by the end of Korindo’s three-month moratorium period taking into account all grievances raised. Under this approach, last crude Palm Oil contract Musim Mas bought from Korindo was in February and palm kernel in July. Musim Mas would like to appeal to its customers to give this process a fair opportunity to evolve and not to abandon it prematurely, making its failure a self -fulfilling prophecy.
Musim Mas Group will review its relationship with Korindo along every step of the transformation process. The Group will communicate directly with its customers regarding the link to their product supply chain and possible contributions they can make through this process.
For more information, please contact:
+65 6576 6500