Supply Chain Accountability

Supply Chain Accountability

The Company’s commitment to sustainability extends beyond the framework of the Company to all of our suppliers, including smallholders and independent cooperatives that collaborate with the Company to purchase extra raw materials for processing in all PTPN mills. The Company recognizes that if the social and environmental aspects of its supply chain are not properly managed, it will have a direct impact on the Company’s Sustainability/ESG performance.

In line with its commitment to responsible and sustainable operations, the Company’s considers it important to apply PTPN’s ESG standards to the entire PTPN supply chain.

Procurement Process Management
Throughout the procurement process, PTPN has implemented initiatives to ensure compliance with sustainability principles. These measures include:
1. ESG Due Dilligence by ensuring the availability of land mapping and concession legality documents
2. ESG criteria in supplier contracts
3. Regular monitoring of suppliers’ ESG, both internally and externally
4. Improvement of supply chain performance, through training and workshops for suppliers, assisting the Palm Replanting Program of the Indonesian Oil Palm 5. Plantations Fund Management Agency (BPDKS), and other initiatives.

Product Traceability
In keeping with its commitment to responsible sustainable development and acknowledging the environmental impact of our FFB suppliers, the Company believes that local economic growth must be balanced with environmental protection. The use of traceability in FFB procurement can help to reduce environmental risks.

The Company emphasizes two areas of traceability: traceability to the plantation where the FFB is sourced and traceability to the mill where the CPO is processed. As a company, PTPN is responsible for the traceability of FFB processed at our mills. Furthermore, the Company’s role is to inform suppliers and intermediaries about the traceability and sustainability standards that the Company must follow; hence, the Company requires data from suppliers in order to map traceability to plantations, as PTPN has been working on. Traceability is implemented by PTPN in accordance with nationally and internationally recognized quality and certification system standards (RSPO/ISPO).

In complying with the provisions of RSPO and the Company’s Environmental Policy, PTPN is committed to ensuring traceability of its supply chain and systematically ensuring RSPO protocols are adhered to.