Fuji Oil : Progress Report on the Responsible Palm Oil Sourcing Policy (821KB)

H1 2020 Progress Report

January 13, 2020

Progress Report on the Responsible Palm Oil Sourcing Policy

(January - June 2020)

Fuji Oil Group (Fuji) formulated and announced its Responsible Palm Oil Sourcing Policy in March 2016. The Responsible Palm Oil Sourcing Policy outlines commitments towards a No Deforestation, No Peatland and No Exploitation (NDPE) policy for all palm oil production within our supply chain - Fuji Oil Responsible Palm Oil Sourcing Policy. https://www.fujioilholdings.com/pdf/en/csr/sustainable/160310.pdf

The progress on our initiatives to implement the Responsible Sourcing Policy is shared every six months to our stakeholders. This report will provide information on new developments made since January 2020.

Progress

Fuji carries out a number of key activities to promote our Responsible Palm Oil Sourcing Policy as explained in Figure 1. This report focuses on 4 activities which have made progresses since January 2020:

1. Traceability
2. Grievance Mechanism
3. Transformation Activities for Palmaju Supply Chain
4. 1. Tools for Transformation (T4T): NDPE Self-Assessment & Monitoring Platform
   2. Engagements to implement "No Exploitation" commitments [LTP: Labour Transformation Programme]
   3. Engagements to implement "No Deforestation" commitments
5. APT Landscape Initiative (Indonesia - Sumatra)

To enable us to meet our Responsible Palm Oil Sourcing Policy goals, we work together with smallholders, millers, refiners and suppliers to identify and address gaps within our supply chain.

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H1 2020 Progress Report

【Figure 1: Overview of Main Activities to Improve supply chain based on Fuji's Responsible Palm

Oil Sourcing Policy】

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H1 2020 Progress Report

1. Traceability [ See Understanding Supply Chain through Traceability in Figure 1]

Fuji aims for a transparent NDPE compliant supply chain and plans to achieve full traceability to mills for all palm oil purchased and processed across the Group by 2020.

We are proud to announce that we have achieved a global palm oil traceability to mill score of 100 % for the period from January 2020 to June 2020, which is consistent with the last reporting period. This refers to a global average of 100 % for both Palm Oil (PO) and Palm Kernel Oil (PKO) products across all Fuji Business units across the world.

【Figure 2: Overview of Global Traceability To Mill Score From July 2018- June 2020】

Transition of Traceability Score to Oil Mills

Jul 2018-Dec 2018	Jan 2019-Jun 2019	Jul 2019-Dec 20192	Jan 2020- Jun 2020
100%	100%		100%	100%	100%	100%

99%

99%

99%

99%

99%

99%

Palm Oil

Palm Kernal Oil

Total

The continuous efforts in strengthening communication with suppliers within all Fuji's sourcing regions and across all Fuji business units have attributed to the increase in the traceability.

Fuji is committed to supply chain transparency as stated in our Responsible Palm Oil Sourcing Policy and will continue to strengthen engagement with suppliers to maintain the full traceability scores.

Note on results

• Traceability levels may vary over time due to data availability, changes in sourcing or other issues.
• All traceability numbers are based on self-disclosed information provided by our suppliers. In some cases, the GPS coordinates of mills were shared with our sustainability partner Earthworm Foundation (EF) and not directly with Fuji.
• Some mill data is bound to NDA's between EF and our suppliers. Plans for Fuji to hold this data are being developed.

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H1 2020 Progress Report

2. Grievance Mechanism [ See Grievance Management in Figure 1]

We have established and published our grievance mechanism in May 2018 to carry out our NDPE policy. The Grievance procedure and Grievance list have been published on our Grievance website on the following link: https://www.fujioilholdings.com/en/csr/grievance_mechanism/

In April 2020, we had revised the grievance procedure to enable us to respond to grievances in a more effective manner. The update on our grievance process has included our commitment on Group level association, establishing the suspension and engage protocol to all our suppliers and has shown that we have a clear procedure on how we handle each category of grievance that may come up.

The Grievance List is updated on a quarterly basis and the last update has been done in September 2020. Fuji continues to monitor, engage and communicate with our suppliers to ensure the grievances raised by various parties are dealt with and managed in accordance to our Commitment.

3. Transformation Activities for Palmaju Supply Chain

Since July 2016, we have partnered with Earthworm Foundation to implement our Responsible Palm Oil Sourcing Policy. As part of the policy implementation strategy, we had embarked on an Aggregator Refinery Plan (ART)i for the Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) suppliers in the supply chain of Palmaju Edible Oil which is our group's first refinery in Malaysia. The ART plan was implemented and aimed to provide support to enable changes to take place on the ground through our partners in the supply chain which ranges from refiners, millers to growers.

Our implementation strategy has now evolved around a number of specific transformation activities that are focusing on prioritized needs in the supply chain. These activities ranges from broad level engagements (trainings & seminar) to self-assessment, monitoring activities and one on one field engagements. The overview of all Transformation Activities (and Evolvement of ART plan) can be seen in Figure 3.

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