Since the inception of our inaugural report in 2015, there has been no significant change in the size, structure or ownership of our oil palm operations. When the COVID-19 pandemic broke out in March 2020, Hap Seng Plantations managed to ensure that food safety was maintained and the health and safety of our workers was preserved.
2021 SUSTAINABILITY HIGHLIGHTS & ACHIEVEMENTS
2021 SUSTAINABILITY
Stakeholder meetings for freight and mill level must be held on an annual basis. Stakeholder meetings for group level must be held continuously once every two years.
MANAGING OUR MATERIAL MATTERS
Hap Seng Plantations creates value for its stakeholders by transforming its capital inputs into tangible and intangible outcomes in line with the Group's vision and mission. This year, we have described our value creation within the context of six forms of capital in accordance with the Integrated Reporting Framework.
OUR VALUE CREATION MODEL
To be a good corporate citizen in harmony with the environment and the communities we serve. To achieve the highest productivity and be the most cost effective manufacturer in Malaysia.
FINANCIAL HIGHLIGHTS
ABOUT HAP SENG PLANTATIONS HOLDINGS BERHAD
40,000 hectares
6,861 100% Markets
35,000 hectares
Onwards
Our replanting program (about 4% per year) ensures that we maintain the optimal age profile and productivity level. The average OER was 0.10% lower against the Sabah average, potentially influenced by high rainfall and the age profile of the palm trees.
639 Hectares
575,440 MT or 88.3% of FFB was produced by our own plantations while the remaining 76,465 MT or 11.7% was purchased from our neighboring independent local growers and small farmers. We operate two identity preservation (“IP”) mills and two mass balance (“MB”) mills in Lahad Datu where all these mills are RSPO and MSPO certified. In FY2021, 74% or 483,648 MT of FFB purchased from our own estates and independent local outgrowers and small farmers was processed by our identity preserved mills (JPOM 1 and BPOM), producing 98,496 MT of CPO.
587 Hectares
1,157 Hectares
OUR SUSTAINABILITY GOVERNANCE
Sustainability is an integral part of our board's agenda as it reviews and signs off on sustainability policies and disclosures. These include both new and updated policies and procedures such as the HALAL Policy, MSPO Policy, Sustainable Agriculture Policy, Equality Policy, Freedom of Association and the Right to Collective Bargaining Policy, Labor Policy for Foreign Workers as well as our Standard Operating Procedure for Traceability. Our CEO – Group Plantations chairs the CSR & Sustainability Committee, which is responsible for developing and driving our sustainability strategy, as well as developing time-bound plans to secure our sustainability certifications.
In line with Hap Seng Plantations' sustainability goals, we have actively sought to improve sustainability practices within our operations while addressing social, environmental and economic challenges. Hap Seng Plantations has launched several sustainability policies aimed at meeting our commitments without compromising on performance.
ENGAGING WITH OUR PEOPLE AND STAKEHOLDERS
ENGAGING WITH OUR PEOPLE AND STAKEHOLDERS
Support the MPOB to improve the well-being of the Malaysian palm oil industry through excellent research. To support the union to meet the needs and interests of agricultural employers.
ADDRESSING OUR MATERIAL MATTERS BASED ON OUR RISK PROFILE
Routine P & D inspection by experienced and well-trained staff, workers, mandors, field staff and managers; to be aware of any occurrence of P & D outbreaks. Close monitoring of four entry points in the estates, mills and piers using security cameras. Based on the linkages, strategies and mitigation programs have been put in place to address the challenges.
MARKETPLACE
RESPONSIBLE BUSINESS AND PRACTICES
MARKETPLACE – RESPONSIBLE BUSINESS AND PRACTICES
In 2021, we conducted two internal audits each for all seven independent domestic producers and smallholders. In 2021, Hap Seng Plantations continued to provide free technical support including training, policy implementation and development of SOP and training facilities, to assist local independent growers and smallholders in achieving their RSPO and MSPO certifications. Eight of our 11 local independent producers and smallholders have indicated their willingness to support and participate in activities towards RSPO and MSPO certifications.
The encouraging support motivated us to invest a lot of effort and resources in helping all 11 independent local growers and smallholders to obtain their RSPO and MSPO certifications. Since our engagement with independent local growers and smallholders in 2017, eight out of 11 independent local growers and smallholders have committed to adopting a.
TRACEABILITY
The main objective of installing a CPO laundry is to reduce the level of 3-monochloro-1, 2-propanediol, its esters (“3-MCPDE”) and glycidyl esters (“GE”) by removing chloride in the CPO. Currently, total chloride in CPO is one of the important parameters closely monitored due to its association with the formation of 3-MCPD, which has raised concerns about human health risks. RSPO 82% Land Bank From 2021 • SSGOE – 2nd Recertification Cycle – 2nd Annual Control Audit included Kawa as a supply based on March 2019.
SSGOE – Recertification of the 2nd cycle – 4th annual surveillance audit including Kawa as delivery based on March 2021. JGOE – Recertification of the 2nd cycle – 3rd annual surveillance audit in August 2021 (remote audit) and January 2022 (audit on location).
CARING FOR OUR PEOPLE
WORKPLACE
Unfortunately, the severity rate (average amount of time lost per accident) increased by 21% from FY2014 to FY2021. Our SOP requires all accidents to be reported and recorded at our clinic, while the Occupational Health and Safety Committee will conduct a thorough review of the cause of the accident and outline recommendations and actions to be taken to prevent future recurrence. Based on research, critical accidents recorded this year were due to an accident that had occurred while the employee was commuting to and from the workplace, which was also the biggest contributor to the increase in the accident rate.
The Committee for Safety and Health at Work ("OHS") conducts workplace inspections and provides regular in-house training for OHS. For example, immediately after an investigation into the cause of an accident or incident, the OSH committee will review the SOP and consider new control measures to prevent the recurrence of such an incident in the future.
WORKPLACE – CARING FOR OUR PEOPLE
In 2021, Hap Seng Plantations used drones to handle chemicals as an alternative to our pest and disease management. Currently, our dedicated spray team's process is to manually apply fertilizers and pesticides to our plantations. Although we recognize the right of our employees to form and join unions, there are no unions represented on our plantations.
We do not allow children or young people under the age of 18 to work on our properties. We have completed setting up three water treatment plants and are currently able to produce enough treated water to support all our employees living on our plantations, except for Pelipikan Estate (Kota Marudu region), which still relies on rainwater collection.
COMMUNITY
COMMUNITY ADVANCEMENT
COMMUNITY - COMMUNITY ADVANCEMENT
The Group continued to expand and expand its social responsibility initiatives in Sabah by creating targeted touchpoints with youth and community stakeholders, enhancing leadership competency among youth, building the capacity of community stakeholders and enabled community expansion through the 3E framework (Equipment, Empowerment and Expansion). via Hap Seng Group LUNCH P.A.D. A special tribute video was presented, capturing fond memories of the last five years of the program with the Tawau community. Many participants expressed their gratitude to Hap Seng for their continuous efforts in student development over the past five years.
For the second year, Hap Seng continues to build a community of digital markers in Tawau, Sabah by sharing digital literacy through coding. As part of the RSPO and MSPO certification requirements, seven of the 11 independent local growers and smallholders assisted by Hap Seng Plantation have pledged to respect statutory and customary land rights and indigenous and local communities.
ENVIRONMENT
ENVIRONMENT STEWARDSHIP
ENVIRONMENT –
ENVIRONMENT – ENVIRONMENT STEWARDSHIP
Hap Seng Plantations recognizes that climate change is a major threat to our planet and we are committed to monitoring and reducing our carbon emissions. This is Hap Seng Plantations' first to achieve greenhouse gas emissions below 1 MT CO2-e/MT CPO. This significant reduction was attributed to the commissioning of the new biogas plant at BPOM.
In FY 2021, direct greenhouse gas emissions (Scope 1) contributed 309,713 MT CO2-e, while no indirect greenhouse gas emissions (Scope 2) were contributed by operations. Greenhouse gas emissions were significantly reduced through greenhouse gas storage and credits obtained from our conservation efforts and the natural carbon removal capacity of the oil palms planted.
The oil palms that were planted within the coastal reserves in the 1980s have been left in place in accordance with guidelines issued by the Department of Irrigation and Drainage (“DID”). In FY2021, eight of the 11 local independent growers and smallholders who have committed to implementing RSPO and MSPO certification have also made a commitment to assess HCV as well as conduct social and environmental impact assessments ("SEIAs"). in their plantations. Covering approximately 122,539 hectares, this lowland dipterocarp forest is home to three of the largest mammals in Sabah - the Borneo pygmy elephant, the Sumatran rhino and the Tembadau.
Continuous monitoring of RTE species is carried out across our estates as well as in adjacent areas to protect wildlife identified by the Sabah Wildlife Enactments and the IUCN Red List. Our draft proposal to compensate the total liability of 579.48 hectares with hectare-by-hectare repairs combined with monetary compensation was rejected in FY2018 by the RSPO Biodiversity and HCV Compensation Panel (“BHCV-CP”).
SUSTAINING THE FUTURE
SUSTAINING OUR FUTURE
Hap Seng Plantations understands that poor waste management harms the environment and poses risks to societal health and well-being. As a responsible planter and in line with our goal for better waste management, Hap Seng Plantations has introduced a waste management program for the collection of plastic bottles, glass bottles, paper and aluminum. The competent person is responsible for providing training on planned waste to all operational units.
Most of the recycled waste consists of oil palm biomass, which is recycled for energy production and improvement of soil nutrients. Engaging with our people and stakeholders Composition of the highest governance body and its committees Our sustainability management 28.
GRI CONTENT INDEX
103-1 Explanation of the Material Subject and its boundary Managing our Material Matters 15 103-2 The Management Approach and its components Sustainability Performance Indicators – Targets. Workforce Safety and Health Responsible Employer Women in the workplace Community Development Respect land rights Protect our environment Carbon Management. 305-5 Reducing GHG Emissions Carbon Management - Action on GHG Emissions Nitrogen Oxides (NOX), Sulfur Oxides (SOX), and Other Important.
308-1 New suppliers that were screened using environmental criteria Engagement with our people and stakeholders Responsible supply chain. 414-1 New suppliers that were screened using social criteria Responsible supply chain Negative social impacts in the supply chain and actions taken Responsible supply chain 36 - 38 Socio-economic compatibility.
BASE DATA AND NOTES
GLOSSARY
Certification The Malaysian Certification Scheme for Sustainable Palm Oil (MSPO) is the national scheme in Malaysia for oil palm plantations, independent and organized smallholders and palm oil processing facilities to be certified according to the requirements of the MSPO standards. Traceability Traceability is the ability to trace sustainable palm oil along the entire supply chain. Toxicity per hectare A toxicity index for each herbicide used was calculated by multiplying the amount of active ingredient per liters or kg of applied product (in grams) with the inverse of the lethal dose for 50% of the rats tested when the active ingredient is administered orally (LD50 rats, oral).
The toxicity per hectare is calculated by multiplying the total amount of each product applied by the toxicity index and dividing this by the total planted area on each estate. Human Rights The Guiding Principles, also known as the Ruggie Principles, are a global standard for preventing and addressing the risk of adverse human rights impacts associated with business activities.
