Kencana Agri Ltd

Overall approach

7/16
- Overarching commitment on deforestation
  
  4/6
  
  Deforestation commitment
  
  Zero-deforestation
  
  4/6
  
  "EnvironmentalManagement: No deforestation of high carbonstock (“HCS”) forest areas and nofurther land clearing of potentialHCS areas until the results of theproposed HCS study are adopted. Preservation of High ConservationValue (HCV) Areas. Apply a zero burning policyin respect of new plantingand replanting. Refrain from undertakingnew development on peatland of any depth. Endeavour to align ourselveswith the industry practices andstandards generally adoptedby the market in relation tosustainable palm oil production."
  
  Open source document
- Signatory to an initiative tackling deforestation
  
  0/1
- Awareness of the value of forests
  
  1/1
  
  Awareness
  
  Yes
  
  1/1
  
  "Environmental Management • No deforestation of high carbon stock (“HCS”) forest areas and no further land clearing of potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of High Conservation Value (HCV) Areas. [...] "Many tropical regions are facing the risk of losing their High Conservation Value (HCV) areas due to extensive conversion of primary forests into plantations."
  
  Open source document
- Deforestation as a business risk
  
  1/1
  
  Business risk
  
  Yes
  
  1/1
  
  Does the company recognise the risk as financial, operational, competition, reputational, or other? Please detail.: Reputation and competition
  
  "In carrying our operations, we also implement the principles from both ISPO and ISCC within our operations. As our commitment, we conduct ISPO surveillance audits yearly and re-certification audits as required at all estates and companies. We also implement at all operation sites PROPER rating – environment performance rating by Indonesia’s Ministry of Environment and Forestry. We believe these initiatives provide competitive advantages in the market and help us ensure the quality, responsibility and sustainability of our products."
  
  Open source document
- High-level management of deforestion
  
  1/1
  
  High-level management
  
  Yes
  
  1/1
  
  Which commodities does it apply to?: Palm oil
  
  How often does the committee or board meet to assess company's progress on addressing deforestation-related issues?: 3 times a year
  
  "The Sustainability Team’s role is to provide advice and assistance to the Board in monitoring the decisions and actions of management in achieving Kencana Agri’ goal to be a sustainable organisation. Included in the process of Identification of Material Issues, the Team reports to the Board on the results and receives related feed backs that will take effect on the formulation of the Group’s sustainability policies, targets, and plans. Sustainability risk management is built into the Group’s risk management structure and remains under the Board through the Audit Committee. The Board has appointed the Executive Vice-Chairman to lead the implementation of sustainability initiatives and activities, supported by a Sustainability Team. The Team consists of Head of Sustainability, Manager of Sustainability, and coordinators both in Head Office and Site Office to conduct necessary engagement, review and reporting on related sustainability strategy and plans. Sustainability Team held three meeting in a year, together with the Audit & Risk Committee meeting."
  
  Open source document
- Executive compensation linked to deforestation
- Target to reduce emissions from land-use change
  
  0/3
- Reporting on emissions from land-use change
  
  0/3
- Disclosure of conservation activity
- Disclosure of reforestation activity
Commodity score

35/84
- Palm oil
  
  35/84
  - Commitment Strength
    
    18/28
    - Commitment to protect priority forests
      
      6/12
      - Commitment details
        Protects priority forests
        
        4/8
        
        Commitment to protect priority forests
        
        Protects priority forests
        
        4/8
        
        "No deforestation of high carbonstock (“HCS”) forest areas and nofurther land clearing of potentialHCS areas until the results of theproposed HCS study are adopted. Preservation of High ConservationValue (HCV) Areas [...] Refrain from undertakingnew development on peatland of any depth."
        
        Open source document
      - Commitment applies to all regions, suppliers and operation
        No
        
        0/2
        
        Commitment applies to all regions, suppliers and operation
        
        No
        
        0/2
        
        If no, what is excluded?: Segment
        
        What is the rationale for any exclusion?: Applies to own palm oil production operations, not applicable to suppliers of downstream operations
        
        Doesn't apply to suppliers - "The provisions of this policy apply to all operations of Kencana Agri Limited (Kencana Agri, its subsidiarycompanies and any associated companies where Kencana Agri has management control."
        
        Open source document
      - Target date
        Current/2020/Pre-2020
        
        1.3/1.3
        
        Target date
        
        Current/2020/Pre-2020
        
        1.3/1.3
        
        "No deforestation of high carbonstock (“HCS”) forest areas and nofurther land clearing of potentialHCS areas until the results of theproposed HCS study are adopted. Preservation of High ConservationValue (HCV) Areas [...] Refrain from undertakingnew development on peatland of any depth."
        
        Open source document
      - Interim target date
        Yes
        
        0.7/0.7
        
        Interim target date
        
        Yes
        
        0.7/0.7
        
        What date is given for the interim milestone(s)?: Current
        
        Target date is current - see 3.2
        
        Open source document
    - Commitment to protect High Carbon Stock areas and/or peatlands
      
      6/8
      - Commitment details
        Yes
        
        4/4
        
        Commitment to protect High Carbon Stock areas and/or peatlands
        
        Yes
        
        4/4
        
        Type of commitment: HCS; Peat
        
        "Environmental Management • No deforestation of high carbon stock (“HCS”) forest areas and no further land clearing of potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of High Conservation Value (HCV) Areas • Apply a zero burning policy in respect of new planting and replanting. • Refrain from undertaking new development on peat land of any depth"
        
        Open source document
      - Commitment applies to all regions, suppliers and operation
        No
        
        0/2
        
        Commitment applies to all regions, suppliers and operation
        
        No
        
        0/2
        
        What is the rationale for any exclusion?: not applicable to all production sites
        
        If no, what is excluded?: Segment
        
        What percentage of commodity production/sourcing is excluded?: 0 not specified
        
        "Environmental Management • No deforestation of high carbon stock (“HCS”) forest areas and no further land clearing of potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of High Conservation Value (HCV) Areas • Apply a zero burning policy in respect of new planting and replanting. • Refrain from undertaking new development on peat land of any depth"
        
        Open source document
      - Target date
        Current/2020/Pre-2020
        
        1.3/1.3
        
        Target date
        
        Current/2020/Pre-2020
        
        1.3/1.3
        
        "Environmental Management • No deforestation of high carbon stock (“HCS”) forest areas and no further land clearing of potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of High Conservation Value (HCV) Areas • Apply a zero burning policy in respect of new planting and replanting. • Refrain from undertaking new development on peat land of any depth"
        
        Open source document
      - Interim target date
        Yes
        
        0.7/0.7
        
        Interim target date
        
        Yes
        
        0.7/0.7
        
        "Environmental Management • No deforestation of high carbon stock (“HCS”) forest areas and no further land clearing of potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of High Conservation Value (HCV) Areas • Apply a zero burning policy in respect of new planting and replanting. • Refrain from undertaking new development on peat land of any depth"
        
        Open source document
    - Commitment to a traceable supply chain
      
      6/8
      - Commitment details
        Downstream company - traces to Processing Facility - checks compliance
        
        4/4
        
        Commitment to a traceable supply chain
        
        Downstream company - traces to Processing Facility - checks compliance
        
        4/4
        
        "PT. Sawindo Kencana received both Indonesian Sustainable Palm Oil (“ISPO”) and International Sustainability & Carbon Certification (“ISCC”) certifications in 2015 and is currently also a member of Roundtable on Sustainable Palm Oil (“RSPO”). The Group produced 22,567 tons of Certified Sustainable Palm Oil (“CSPO”) in 2015, which accounted for 14% of the entire Crude Palm Oil (“CPO”) produced within that year. Our CSPO is traceable to its mill and estates and output is expected to increase in the near future."
        
        Open source document
      - Commitment applies to all regions, suppliers and operation
        No
        
        0/2
        
        Commitment applies to all regions, suppliers and operation
        
        No
        
        0/2
        
        What is the rationale for any exclusion?: Only applies to PT. Sawindo Kencana
        
        If no, what is excluded?: Subsidary
        
        "PT. Sawindo Kencana received both Indonesian Sustainable Palm Oil (“ISPO”) and International Sustainability & Carbon Certification (“ISCC”) certifications in 2015 and is currently also a member of Roundtable on Sustainable Palm Oil (“RSPO”). The Group produced 22,567 tons of Certified Sustainable Palm Oil (“CSPO”) in 2015, which accounted for 14% of the entire Crude Palm Oil (“CPO”) produced within that year. Our CSPO is traceable to its mill and estates and output is expected to increase in the near future."
        
        Open source document
      - Target date
        Current/2020/Pre-2020
        
        1.3/1.3
        
        Target date
        
        Current/2020/Pre-2020
        
        1.3/1.3
        
        "PT. Sawindo Kencana received both Indonesian Sustainable Palm Oil (“ISPO”) and International Sustainability & Carbon Certification (“ISCC”) certifications in 2015 and is currently also a member of Roundtable on Sustainable Palm Oil (“RSPO”). The Group produced 22,567 tons of Certified Sustainable Palm Oil (“CSPO”) in 2015, which accounted for 14% of the entire Crude Palm Oil (“CPO”) produced within that year. Our CSPO is traceable to its mill and estates and output is expected to increase in the near future."
        
        Open source document
      - Interim target date
        Yes
        
        0.7/0.7
        
        Interim target date
        
        Yes
        
        0.7/0.7
        
        "PT. Sawindo Kencana received both Indonesian Sustainable Palm Oil (“ISPO”) and International Sustainability & Carbon Certification (“ISCC”) certifications in 2015 and is currently also a member of Roundtable on Sustainable Palm Oil (“RSPO”). The Group produced 22,567 tons of Certified Sustainable Palm Oil (“CSPO”) in 2015, which accounted for 14% of the entire Crude Palm Oil (“CPO”) produced within that year. Our CSPO is traceable to its mill and estates and output is expected to increase in the near future."
        
        Open source document
  - Social Considerations
    
    6/18
    - Labour rights in the supply chain
      No
      
      0/4
    - Inclusion of small-scale farmers
      Yes
      
      4/4
      
      Inclusion of small-scale farmers
      
      Yes
      
      4/4
      
      How many smallholders do they support, and what percentage does this represent in terms of their sourcing from smallholders?: Not specified
      
      What is the nature of that support?: Certification; Technical assistance/support; Education and training; Economic
      
      "Community Development and Social Impact: Facilitate the inclusion of qualifiedsmallholders into the supply chain." "In 2019, we managed a total of 67,722 ha of plantedareas within our palm oil plantations and 16,136 ha ofthis total planted areas are dedicated for our plasmasmallholders." "Our initiatives include the plasma partnership thatthe Group initiated in 1997, where it consistentlysupports the smallholders to grow sustainablythrough the establishment of inclusiveagribusinesses where Kencanaoperates. We work with indigenousand local communities throughvarious plasma schemepartnerships." "We will support smallholders by sharing sustainable best practices, providing technical assistance and including them in our Group's supply chain."
      
      Open source document
    - Gender equality in the supply chain
      No commitment
      
      0/4
    - Commitment to remediation
      No
      
      0/2
    - Commitment to ensure Free, Prior and Informed Consent
      Yes the company commits to securing FPIC prior to acquiring new interests/developments/expansions
      
      2/4
      
      Commitment to ensure Free, Prior and Informed Consent
      
      Yes the company commits to securing FPIC prior to acquiring new interests/developments/expansions
      
      2/4
      
      "Respect the rights of indigenousand local communities to giveor withhold their Free, Prior andInformed Consent (FPIC) on landsto which they hold legal, communalor customary rights in line withapplicable government regulations."
      
      Open source document
  - Reporting and Implementation
    
    11/38
    - Reporting against commitments
      
      4/6
      - Commitment to protect priority forests
        Yes
        
        2/2
        
        Commitment to protect priority forests
        
        Yes
        
        2/2
        
        Does the company report on the degree of compliance/progress with commitments, disaggregated by relevant factors such as origin or supply chain stage?: No
        
        "Kencana Agri has achieved Sustainable Palm Oil certification from ISCC for 23.5%of our eligible nucleus palm oil plantation area which represents 12,126 hectaresof plantations that equal to 26,303 tonnes of CSPO, and equivalent to 14.3% of thetotal CPO produced by the group in 2019. This number has dropped significantlyfrom 2018 due to a drop in FFB production in PT.AKM, but also from a decision todelay PT. AKM’s ISCC re-certification process in 2019."
        
        Open source document
      - Commitment to protect High Carbon Stock areas and/or peatlands
        Yes
        
        2/2
        
        Commitment to protect High Carbon Stock areas and/or peatlands
        
        Yes
        
        2/2
        
        Does the company report on the degree of compliance/progress with commitments, disaggregated by relevant factors such as origin or supply chain stage?: No
        
        "Kencana Agri has achieved Sustainable Palm Oil certification from ISCC for 23.5% of our eligible nucleus palm oil plantation area which represents 12,126 hectares of plantations that equal to 26,303 tonnes of CSPO, and equivalent to 14.3% of the total CPO produced by the group in 2019. This number has dropped significantly from 2018 due to a drop in FFB production in PT.AKM, but also from a decision to delay PT. AKM’s ISCC re-certification process in 2019."
        
        Open source document
      - Commitment to a traceable supply chain
        No
        
        0/2
    - Reporting is independently verified
      
      0/4
      - Commitment to protect priority forests
        No
        
        0/1.3
      - Commitment to protect High Carbon Stock areas and/or peatlands
        No
        
        0/1.3
      - Commitment to a traceable supply chain
        No
        
        0/1.3
    - Deforestation cut off date
      No
      
      0/2
    - Collaborative actions
      Yes
      
      2/2
      
      Collaborative actions
      
      Yes
      
      2/2
      
      What is the nature of that participation?: Attending & contributing to meetings
      
      What initiatives does the company participate in?: Gabungan Pengusaha Kelapa Sawit Indonesia, Indonesian Palm Oil Conference,ISCC, ISPO and ISO
      
      "To date, the Group has participated actively asa member in a number of associations, namely:Gabungan Pengusaha Kelapa Sawit Indonesia(“GAPKI”), Indonesian Palm Oil Conference (“IPOC”),ISCC, ISPO and ISO (PC 248)."
      
      Open source document
    - Risk assessments for forest risk
      No
      
      0/2
      
      Risk assessments for forest risk
      
      No
      
      0/2
      
      How frequently are assessments conducted?: Quarterly
    - Operations assessed to comply with law
      Yes
      
      2/2
      
      Operations assessed to comply with law
      
      Yes
      
      2/2
      
      "The strengthening of Indonesian Sustainable Palm Oil Organization (ISPO) is a real commitment from the government and business community in Indonesia to build a sustainable oil palm sector. Kencana has implemented sustainability strategies at our plantations that are in compliance with ISPO certification main assessment criteria. ISPO aspects that we adopts include: Legality [...] As our commitment, we conduct ISPO surveillance audits yearly and re-certification audits as required at all estates and companies."
      
      Open source document
    - Accessible grievance mechanism
      No
      
      0/4
      
      Accessible grievance mechanism
      
      No
      
      0/4
      
      Does the company publish grievances that have been made against it, as well as responses and resolutions including status and timeframes: yes - "In 2019 there was one grievance filed to one of our estates, PT Sawit Kaltim Lestari (SKL) with regards to allegation on environmental pollution to a river in Desa Sabintulung, Kecamatan Muara Kaman. The allegation was first reported to Department of Environment and Forestry in April 2019. The case was based on accusations from the local village, related to the presence of several fish that died in the river and itchiness that arose after several residents bathed in the river." http://kencana.listedcompany.com/misc/Kencana_Agri_SR_2019.pdf
    - Report volumes of commodity
      Reporting non-certified/non-compliant volume
      
      2/4
      
      Report volumes of commodity
      
      Reporting non-certified/non-compliant volume
      
      2/4
      
      What is the non-certified/non-compliant volume?: 187,899 tons
      
      "Thetotal CPO produced was 187,899 tonnes or 4.7% lowercompared to 2018 production of 197,149 tonnes."
      
      Open source document
    - Upstream: Impact assessments for land development/acquisition
      Yes
      
      4/4
      
      Upstream: Impact assessments for land development/acquisition
      
      Yes
      
      4/4
      
      "We conducts HCV assessment for all new development areas through accredited independent HCV assessors [...] As our commitment towards environment, we undertake High Conservation Value (HCV) Assessments as well as Social and Environmental Impact Assessments for all our new development areas. We carried out evaluation on habitat quality, soil conditions, peat presence, river quality, and community cultural identity."
      
      Open source document
    - Upstream: Reporting production/processing locations
      No disclosure
      
      0/4
      
      Upstream: Reporting production/processing locations
      
      No disclosure
      
      0/4
      
      What is the total area (in ha) of natural ecosystem on land owned, managed, or controlled by the company?: 42,600 ha
      
      In what country(ies) does the company operate and/or source material?: Indonesia
      
      What type of conservation designation and/or conservation status is used?: Concession areas - High Conservation Value forest
      
      For what percent are boundaries (of certified land holdings) disclosed?: 0%
      
      For what percent are point locations (of certified land holdings) disclosed?: 0%
      
      In what jurisdiction(s)/subnational region does the company operate and/or source material?: Sumatra, Kalimantan, Sulawesi
      
      For what percent are point locations (of land holdings and processing facilities) disclosed?: 100%
      
      What is the total land area owned, managed, or controlled by the company for the forest risk commodity?: 188,784 hectares
      
      What is the total area of land (in ha) that is available for future production, e.g. concessions?: 121,062 ha
      
      From what sub-national jurisdiction(s) does the company source material?: Sumatra, Kalimantan, Sulawesi
      
      For what percent are boundaries (of holdings under conservation) disclosed?: 0%
      
      For what percent are point locations (of holdings under conservation) disclosed?: 0%
      
      What is the total area in production (in ha)?: 67,722 hectares
      
      What types of ecosystems are these?: Tropical rainforest "greenfield" sites
      
      For what percent are boundaries disclosed?: 0%
      
      "With a total land bank of 188,784 hectares and total planted area of 43,340 hectares (including Plasma plantations) as at 30 September 2010, our Group has a significant cultivatable land bank with considerable planting potential. Our oil palm plantations are strategically located in the Sumatera, Kalimantan and Sulawesi regions of Indonesia where the climate is well-suited for oil palm plantation. All our current plantations were successfully cultivated from greenfield land." "Kencana has several oil palm estates, palm oil mills, kernel crushing plants, port and bulking terminals, and biomass power plant across Indonesia. They include the following: [lists facility names]." "By the end of 2019, we currently conserve and protect more than 42,600Ha of HCV forest inside our concession areas [...] In 2019, we managed a total of 67,722 ha of planted areas within our palm oil plantations and 16,136 ha of this total planted areas are dedicated for our plasma smallholders [...] To date, over 12,126 hectares of 2 (two) mills have received ISCC certification."
      
      Open source document
      Open source document
      Open source document
    - Downstream: Publishing supplier lists
      No disclosure
      
      0/4
    - Upstream: Monitor compliance of production/processing
      Yes using an internal monitoring system
      
      4/4
      
      Upstream: Monitor compliance of production/processing
      
      Yes using an internal monitoring system
      
      4/4
      
      What tools, processes, bodies carry out monitoring of the company's production or processing operations?: SAI Global, TUV Nord, Ministry of Environment and Forestry
      
      How frequently is compliance assessed?: regularly
      
      Does the company use a certification system?: Yes
      
      Does the company use a jurisdictional monitoring mechanism?: No
      
      "We have conducted regular assessments to review our compliance with the PROPER, ISCC, and ISPO provisions. It is our commitment to maintain ISPO certificates at all plantations with mills. [...] In Kencana Agri, to ensure the implementation of ISCC, ISPO and PROPER in our plantation, we collaborates with independent certification bodies, namely SAI Global & TUV Nord, and the Ministry of Environment and Forestry in conducting regular reviews and assessments. In addition, an annual surveillance audits are conducted to ensure that ISPO principles were implemented thoroughly and properly at all plantations."
      
      Open source document
    - Downstream: Monitor compliance in supply chain
      No
      
      0/4
    - Downstream: Engagement with non-compliant suppliers
      Engage with suppliers but with no time-bound threat of exclusion
      
      1/2
      
      Downstream: Engagement with non-compliant suppliers
      
      Engage with suppliers but with no time-bound threat of exclusion
      
      1/2
      
      Does the company engage non-compliant indirect suppliers in order to address and remedy non-compliance?: Yes
      
      What criteria does the policy specify for blacklisting or exclusion?: Not specified
      
      What type of support does the company offer to its suppliers to help them achieve compliance with commitments?: Training and certification
      
      "The following tables provide an overview of the efforts involved in our group’sfocus on stakeholder engagement [...] Stakeholders: Smallholders (Plasma & 3rd Party FFB Suppliers). Issues: Sustainable agricultural practices. Engagement method: Training and introduction towards ISCC and ISPO standards. Outcome: Safe working condition and correct use of PPE."
      
      Open source document
    - Downstream: Disclosure of non-compliant suppliers
      No disclosure
      
      0/2
Commitment strength

18/28

Avg. score
Reporting and Implementation

11/38

Avg. score
Social considerations

6/18

Avg. score

Profile

Kencana Agri is a palm oil plantation company based in Indonesia with a planted area of over 65,000 ha. Kencana Agri Ltd is selected as a powerbroker for palm oil.

Sector

Industry sector

Agri commodities

Segments

Producer, Trader

Singapore

Collective Commitments

Consumer Goods Forum member

New York Declaration on Forests signatory

How we assess the Forest 500

To ensure deforestation free supply chains, companies need to adopt and implement timebound and measurable policies for forest risk commodities.

All assessments use policies published on company websites, some links may have changed or been removed since the time of assessment.

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Disclaimer

This assessment has been carried out following the methodology developed for the Forest 500 project, available here. Please see our disclaimer applicable to all information contained within this site and our terms and conditions for use of data presented on this site.

All assessments use policies published on company and financial institution websites, and while we endeavor to keep them updated some links may have changed or been removed since the time of assessment.

Please contact us with any concerns or feedback about this or other assessments included in the Forest 500.

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Kencana Agri Ltd

Total

Score:

Total score:

42%

Profile

How we assess the Forest 500

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Disclaimer

kencara_agri_limited_logo.png

Kencana Agri Ltd

Total

Score:

Total score: 42%

Profile

How we assess the Forest 500

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Total score:

42%