Petaling Jaya, 17 November 2022 – Sime Darby Plantation Berhad (SDP) notes the conclusion of the Roundtable on Sustainable Palm Oil (RSPO) verification assessment process, undertaken in stages between late 2021 and June 2022.

We are delighted that the RSPO recognises the many measures SDP has undertaken to ensure the safety, wellbeing and rights of our workers. These measures are part and parcel of the continuous improvement programme (CIP) we have in place, which is today an essential and entrenched part of our operations. As a founding member of the RSPO, SDP is committed to advancing standards in the palm oil industry.

Our CIP involves regular awareness programmes and training of both our operations’ management teams and our workers to ensure awareness and appreciation of workers’ rights. As part of this work, SDP reviews, revises and where necessary, upgrades its management systems and processes.

We have developed and implemented measures that are entirely new to the industry, which we hope will be adopted by others and considered and incorporated by the RSPO in its Principles & Criteria. More information on the announcement of the sweeping changes we have instituted throughout our operations are available on our website.

These measures include among others, the reimbursement of all SDP’s current workers who may have previously paid agents or sub-agents to secure employment with the company. Since March 2022, SDP has commenced the process of making similar payments to eligible former workers. Meanwhile, we appointed PricewaterhouseCoopers (PwC) to conduct a 100% validation on all remediation payments made. We would be delighted to share our methodology and learnings, to help all foreign workers in our industry who are suffering the scourge of debt bondage, having paid recruitment fees to agents or sub-agents.

To ensure that we make every effort to eliminate debt bondage, SDP introduced our enhanced Responsible Recruitment Procedure (RRP) in August 2021. This was developed in partnership with independent specialists. We have implemented our enhanced RRP and we believe the controls we put in place will eliminate the debt bondage issue among migrant workers.

We have also provided all workers with personal secure lockers within which they can safely store documents such as passports.

We had already in the past, established channels through which our workers could report grievances or concerns. However, this was an area we identified as requiring significant improvement in 2021. Thus, we improved our grievance systems to ensure our workers have a voice and it is heard loud and clear. This entire exercise has been incredibly effective, and we are proud to have earned the trust of our workforce, as evidenced by the increase in the numbers of grievances or concerns raised and the keen interest shown by our workers in the various platforms.

• As an example, we established social dialogue platforms in all our operations In Malaysia where workers elect representatives from every nationality to meet with estate management fortnightly. Of our 24,000 workers, 11,000 participated in the free and fair elections among the workers, which we were happy to facilitate. As a result, we now have 1,625 formal worker representatives across our operations. Since the social dialogues have been introduced, a total of 12,800 issues have been raised via this platform, with 94% having been resolved to date. Issues are typically resolved between 3 – 7 days depending on the type of issue raised. Issues requiring changes in policy or capital expenditure are escalated to the regional management/HQ as it will take longer to resolve.
• We have three (3) active dedicated organised helplines for workers and whistleblowers, including those of our contractors. Two of these grievance lines are independently administered with a loop-back mechanism to complainants prior to closure of grievances. Between 1 April 2021 – 11 November 2022, SDP received a total of 1,219 grievances through all our grievance channels. Depending on the type and complexity of the issues raised, we take between 2 weeks to 3 months to resolve them. Based on internal surveys of more than 17,000 workers across our Malaysian operations, we found that 95% are aware of, and 94% are comfortable with the grievance channels in SDP.
• We also developed an industry first mobile phone application for workers to log in requests for house repairs. These issues are closely monitored for speedy resolution. As of 14 November 2022, we have received over 36,000 requests or complaints and resolved 97% of them within the stipulated timeframe provided by the standard operating procedure of the housing repair app. Issues are verified/inspections are conducted immediately or within 24 hours to 3 working days upon receiving a report, depending on the level of risks (i.e. low, medium or high) with resolution to repair immediately.

When we realise that many workers did not understand their wage calculations, we embarked on a two-pronged strategy to correct the situation. First, we engaged PwC to conduct an audit of our wage system, mainly to ensure that there was no underpayment of workers. This was undertaken between August 2021 to November 2021. PwC established that there were no systemic issues, and where there were miscalculations of both underpayment and overpayment of workers, it was due to human error. Thus, we engaged Ernst & Young (EY) to automate the tracking of our workers’ working hours and we commenced the implementation of the new system in our operations from November 2021 until March 2022. We are currently working with EY to further enhance the functions of the system to incorporate new features for better efficiency and effectiveness in eliminating the chance of human error. Secondly, we undertook efforts to educate our entire workforce in the calculation of their wages. They are briefed, before they leave their countries of origin, when they arrive in Malaysia and regularly in engagements with estate management. There are pictorials in their welcome packs and posters placed in public areas around the estates. However, we do appreciate that there will still be some who are unable to understand fully how wages are calculated, and thus, they are reminded regularly at morning musters that any and all questions can be raised at any time with estate staff or through social dialogues or through any of the other channels available to workers. To date, we have received about 190 queries on wages through our grievance channels, which is a testament to the fact that workers know of the channels to inquire on their wages. Of these queries, we have resolved over 80% in a timely manner in accordance with our internal Standard Operating Procedures.

Because we understand that many of the improvements and changes implemented are new, we needed to ensure that all improvements and initiatives planned and implemented are sustainable. As such, the SDP Board has approved an ESG scorecard that carries as much weight as the operational scorecard for our Malaysian operations. Additionally, a new Social Welfare & Services (SWS) department has also been established to oversee the implementation of policies and procedures related to the well-being and safety of workers, and to ensure that our operations comply with internationally recognised best practices. To further support the implementation of our sweeping changes, we have appointed a Chief Medical Officer and 40 full-time Site Safety & Sustainability Officers (SSSO) for all Strategic Operating Units in our Malaysian operations.

SDP will continue to conduct regular stock takes, internal audits and verifications, which would help us to identify areas requiring further monitoring, evaluation and employee education. Most crucially, we regularly conduct surveys which are open to every single worker to ensure our measures are effective and working for them.

“With all the measures we have in place, we are confident that we are able to mitigate the risks of forced labour in our operations. We are confident in the management systems we have implemented that enable us to detect any issues and respond effectively and efficiently,” said Rashyid Redza Anwarudin, SDP’s Chief Sustainability Officer.

“We look forward to working with the RSPO and our supply chain partners to share lessons learned with the wider industry. As the world’s leading sustainable palm oil producer, SDP expects the highest level of scrutiny, and it is vital that the industry as a whole does all it can to meet its responsibilities to our people and to the planet,” he added. “SDP’s workers have freedom of movement and association, they are free to practice their faiths, control their own funds and enjoy the many benefits of working at SDP. They are free of debt bondage and work in a safe and secure environment. This is what we want for all workers.”