Wilmar International Limited (Wilmar) and the Malaysian Palm Oil Certification Council (MPOCC ) are joining forces to help all of Wilmar’s suppliers in Malaysia to obtain certification by the end of 2019 as Asia’s leading agribusiness group continues its drive for a sustainable supply chain. More than 260 mill suppliers covering more than 55 percent of the entirety of mills in Malaysia are expected to benefit from this partnership.

With underlying mutual sustainability interests, three areas of collaboration have been identified to generate the biggest impact within the two-year timeframe. They are conceptualized to engage, share knowledge and lend support to the suppliers in preparing them for MSPO certification.

Supplier reporting tool
Developed by Wilmar, this tool enables suppliers to measure their performance against the MSPO requirements and with Wilmar’s No Deforestation, No Peat, No Exploitation (NDPE) Policy.

Wilmar and MPOCC, on the other hand, will be able to identify gaps and deploy resources such as audit assistance more effectively. The tool is expected to be rolled out towards the end of this month to suppliers of Wilmar’s PGEO refinery in Johor Bahru.

It will be extended to all of Wilmar’s suppliers in Malaysia by the end of 2018.

Group certification for small and medium suppliers in Sabah
Wilmar has identified several small and medium growers in the Sapi region who are facing challenges in meeting the MSPO requirements. These suppliers will be linked to specific mills and will have access to training and assistance for group certification under the MSPO certification scheme.

Sustainable best practices training for suppliers in Sarawak
A roadshow is planned in collaboration with MPOCC to assist in capacity building for suppliers in Sarawak to adopt sustainable practices including good agriculture practices which form part of MSPO requirements.

“We have always believed that working together with the different actors across the supply chain is crucial in transforming the palm oil industry,” said Jeremy Goon, Chief Sustainability Officer at Wilmar.

“With MPOCC, our collective effort will hopefully pave the way forward for a sustainable palm oil industry in Malaysia that includes smallholders benefiting from higher productivity, yields and income.”

“We also see this as a step towards higher compliance and fulfilling Wilmar’s commercial policies as well as meeting demands from consumers globally for certified sustainable palm oil.”

Datuk M. Nagarajan, Chairman of MPOCC, added: “MPOCC welcomes the initiative by Wilmar towards promoting and sourcing from MSPO certified entities in the supply chain.”

“In addition, the initiative by Wilmar will also encourage other major plantation companies to extend their cooperation by bringing on board their suppliers towards meeting mandatory MSPO certification by end 2019.”

“We believe this will further enhance the positive image of certified sustainable palm oil from Malaysia to the global markets,” he said.

The palm oil industry at large is often plagued by concerns about deforestations, human rights and child labor abuses, as well as other environmental impacts like endangering orangutans, and the palm oil industry is often in the spotlight for the wrong reasons.

Global consumers are increasingly aware of some of the challenges and impacts associated with the sector and are pushing for certified palm oil. This momentum has been gaining traction in recent years and now key players like Wilmar are taking bold steps to drive change.

Last November, Wilmar International Limited became the first palm oil firm to link bank loan to sustainability metrics when it partnered with ING to convert a portion of its existing bilateral, committed Revolving Credit Facility of US$150 million with the bank into a sustainability performance-linked loan.

In the same month, a subsidiary of Wilmar International Limited snapped up a Malaysia-based edible oils facility from agri-giant Cargill in a bid to bolster its presence in the southeast Asian country.

Wilmar Kuantan Edible Oils Sdn. Bhd, agreed with Cargill Palm Plantation Sdn. Bhd. for the purchase of Cargill’s edible oil facilities in Kuantan, which includes a palm oil refinery and a neighboring storage facility.