Kencana Agri Ltd

"We build trust and create values with the local community everywhere we operate through...Continually develop out plasma  program based on applicable  Indonesian laws and regulations and  facilitate the inclusion of qualified  smallholders into the supply chain...In 2020, We operate 6 mills and 13 nucleus oil palm plantations with a total of 68,150 ha of planted areas  within our palm oil plantations and 16,470 ha of this total planted areas are dedicated for our plasma smallholders". "The Plasma Programme is an initiative by the Indonesian Government that seeks to encourage plantation owners in Indonesia to provide economic and social assistance to surrounding villagers (small landholders) by helping them increase their income and welfare. Under the Plasma Programme, Kencana is committed to help the villagers till their land and purchase FFB from them at a price set by a pricing committee established by the Indonesian government.Through our Plasma Programme, over 3,800 local villagers who were previously plantation workers have now become new plantation owners. As plantation owners, local villagers benefit economically and socially with increased incomes and better welfare. They also receive training and education in oil palm cultivation. We believe that the improvement in their income will have a multiplier effect on the economy of the entire local community"

"We built our success on the principle of mutual respect with all stakeholders, especially the local communities and our workers. Therefore we: ... • Respect the right of indigenous and local communities to give or withhold their free, Prior and Informed Consent (FPIC) on lands to which they hold legal, communal or customary rights in line with applicable government regulations."

Kencana Agri, through one of our largest operations PT Sawit Kaltim Lestari, continues our collaboration with Golden Agri Resources (GAR) in a joint Sustainability Development Program study, which aimed to improve sustainability practices especially on product traceability, health and safety, workers’ capabilities and competencies, and many more. On top of that, GAR has been actively support us as one of their suppliers through on-line knowledge sharing sessions, namely trainings seminars, group discussion. The COVID-19 pandemic in 2020 did not subdued this collaboration with GAR in knowledge sharing and workers competencies improvement. As many as 68 employees from Kencana Agri participated in these knowledge sharing sessions which were all held through online platforms with various topics, namely: • Global Forest Watch Webinar, • Fair Employment of Casual Workers, • Setting Fair Targets and Wage Policies, • Mitigate Risk of Child Labour, • Planning and Implementation of Participative Community Empowerment Programs, • Handling Social Grievance and Conflict Resolutions, • FPIC Implementation in Sustainable Palm Oil Industry, • Social Dialogue and Effective Negotiation in Palm Oil Supply Chain, and • Sustainability Report as an Effort Towards Compliance and Seizing Global Markets." 

"We follow conducts and principles of No Deforestation of high carbon stock areas and the preservation of high conservation value areas, no burning and no new planting on peat of any depth as well as no exploitation of human rights... The Audit and Risk Committee was formed to assist the board in creating and maintaining an effective internal control system to safeguard the Group’s assets, and integrity of the operations of the Group, and to ensure compliance with relevant regulations and legislations applicable in the Company, including those related to sustainability issues... In carrying out its duties, the Group's risk management committee conducts a meeting quarterly and identifies its key risks to assess the effectiveness of the risk management and internal control systems, especially dealing with financial, operational, compliance and climate change risks. Furthermore, these risks are reviewed and are subsequently reported to the Audit board and the Risk Committee." 

"ISPO was initiated by the Government of Indonesia to ensure the sustainability of the production of oil palm. 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, Plantation Management, Protection and Utilization of Primary Forest and Peat land , Environment Management, Responsibility for Workers, Social Responsibility & Economic Environment , and Sustainable Business Improvement.We conduct routine ISPO surveillance audits on an annual basis and re-certification audits as required  at all estates and companies. In 2020, PT Sawindo Kencana achived new certificate from Mutu Hijau Indonesia". 

In their 2020 Sustainability Report, Kengana Agri Ltd state that "This year, the Group produced 569,348 tonnes and 133,285 tonnes of fresh fruit bunches (FFB) from the nucleus and plasma estates respectively, totalling to 702,633 tonnes of FFB which then processed in our mills to produce a total of 148,837 tonnes CPO. We recorded a yield of 11.92 ton/Ha and 9.70 ton/Ha for our nucleus and plasma operations respectively this year." 

"We are also vigilant about our environmental performance, with no significant environmental events reported in any of our operation in 2019. 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". 

"Kencana Agri has been actively implementing ISCC, ISPO and PROPER Principles and Criteria in all of our operations. Our mills and estates have been audited by third-party independent parties to assure that our implementation adheres to the high standards of those standards...PROPER was implemented at all of our operation areas. We work together with regional and national PROPER Committee in conducting regular reviews and assessments. I to ensure that PROPER principles were implemented thoroughly and properly at all plantations". 

"Stakeholder engagement in Kencana Agri is driven by the desire to build mutual respect and understanding of the ongoing tasks needed to achieve key sustainability goals. The stakeholder engagement process which includes a proactive and both formal and informal approach, is carried out to fully understand our stakeholder’s sustainability concerns and issues with a view to ensuring that their key interests in these areas are aligned with that of our Group. By getting to know our stakeholders, we are able to better understand what they want and how the companies' plans and actions will affect their expectation...The following tables provide an overview of the efforts involved in our group’s focus on stakeholder engagement