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  • Overall approach
    6/12
    • Overarching commitment on deforestation
      3/4
      Zero deforestation/Deforestation-free commitment or, for timber, pulp & paper companies only, commitment to well implemented harvest and no deforestation of HCV & HCS areas
      3/4
      "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
    • Signatory to an initiative tackling deforestation
      0/1
    • Awareness of the value of forests
      1/1
      Yes
      1/1
      "The New York Declaration on Forest (NYDF) recognise the need to restore 150 million hectares of degraded land and forest by 2020 and 350 million hectares by 2030. Kencana Agri aspires to take part and do our part in this global efforts. For us conserving, restoring, and protecting natural habitat and biodiversity is immensely crucial for sustainability, hence it is integral to Kencana Agri’s environmental and sustainability policy and strategy... Our policy and strategy include: No deforestation if high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted". 
    • Deforestation as a business risk
      1/1
      Yes
      1/1
      Does the company recognise the risk as financial, operational, competition, reputational, or other? Please detail.: Reputational
      "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."
    • High-level management of deforestion
      1/1
      Yes
      1/1
      Which commodities does it apply to?: Palm oil
      "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 feedbacks 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. Sustainability Team hold three meetings a year, together with the Audit & Risk Committee meeting."  
    • Executive compensation linked to deforestation
    • Target to reduce emissions from land-use change
      0/2
    • Reporting on emissions from land-use change
      0/2
    • Disclosure of conservation activity
      Yes
      0/0
      How many hectares of conservation area are being supported or facilitated by the company on land it does not own or manage?: 18,081 hectares
      "As of December 2020, a total of more than 18,081 hectares at our palm oil estates is conserved."
    • Disclosure of reforestation activity
    • Target to reduce emissions in scope 1/2
  • Commodity score
    37/88
    • Palm oil
      37/88
      • Commitment Strength
        14/20
        • Commitment to protect priority forests
          5/8
          • Commitment details
            Zero-gross deforestation
            4/6
            Commitment to protect priority forests
            Zero-gross deforestation
            4/6
            Does the company have a commitment to the protection of other specific named ecosystems?: HCS; Peat
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
          • Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            If no, what is excluded?: Segment

            What is the rationale for any exclusions?: Doesn't apply to suppliers
            "The provisions of this policy apply to all operations of Kencana Agri Limited (Kencana Agri, its subsidiary companies and any associated companies where Kencana Agri has management control." 
          • Target date
            Current/achieved
            0.7/0.7
            Target date
            Current/achieved
            0.7/0.7
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
          • Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil."
        • Commitment to protect High Carbon Stock areas and/or peatlands
          4/5
          • Commitment details
            Yes
            3/3
            Commitment to protect High Carbon Stock areas and/or peatlands
            Yes
            3/3
            Type of commitment: HCS; Peat
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
          • Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            If no, what is excluded?: Segment

            What is the rationale for any exclusions?: Not specified
            "The provisions of this policy apply to all operations of Kencana Agri Limited (Kencana Agri, its subsidiary companies and any associated companies where Kencana Agri has management control."  
          • Target date
            Current/achieved
            0.7/0.7
            Target date
            Current/achieved
            0.7/0.7
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
          • Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            What date is given for the interim milestone(s)?: Current
            "Our policy and strategy include: • No deforestation of high carbon stocks (“HCS”) forest areas and no further land clearing potential HCS areas until the results of the proposed HCS study are adopted. • Preservation of high conservation value • Apply a zero-burning policy in respect of new planting and replanting. • No new development on peat land (NDPE) of any depth of any depth. • Strive to adopt industry practices and standards regarding sustainable palm oil." 
        • Commitment to a traceable supply chain
          5/6
          • 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
            "Traceability in our supply chain is important aspect in actualizing a sustainable palm oil production. Kencana Agri traces supply flows so we can map our supply base, evaluate supplier performance against our sustainability policy, and engage with our suppliers to drive continuous improvement. We strive to make our supply chain as transparent as possible to all stakeholders...  Providing clear traceability to guarantee that our CPO and FFB were produced in and by reputable sources.."; "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."
          • Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            Commitment applies to all regions, suppliers and operation
            No
            0/1.3
            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."
          • Target date
            Current/achieved
            0.7/0.7
            Target date
            Current/achieved
            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."
          • Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            Interim target date
            NA (target date current or achieved or 2022)
            0.3/0.3
            "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."
      • Social Considerations
        8/18
        • Labour rights in the supply chain
          No
          0/4
          Labour rights in the supply chain
          No
          0/4
          Details of commitment: ILO; Discrimination; Forced labour; Child labour; Freedom of association

          Other workers' rights commitments: Living wage; Only work legal working hours; Guaranteed safe and healthy workspaces; Free from abusive practices/undue disciplinary procedures
        • Inclusion of small-scale farmers
          Yes
          4/4
          Inclusion of small-scale farmers
          Yes
          4/4
          What is the nature of that support?: Certification; Technical assistance/support; Education and training; Economic

          How many smallholders do they support, and what percentage does this represent in terms of their sourcing from smallholders?: 3800
          "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"
        • 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, or expansions
          4/4
          Commitment to ensure Free, Prior and Informed Consent
          Yes, the company commits to securing FPIC prior to acquiring new interests, developments, or expansions
          4/4
          "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."
        • Commitment to resolve land conflicts
          No
      • Reporting and Implementation
        15/50
        • Reporting against commitments
          1/2
          • Commitment to protect priority forests
            Yes, for partial or unclear commodity exposure
            0.8/1.7
            Commitment to protect priority forests
            Yes, for partial or unclear commodity exposure
            0.8/1.7
            Does the company report on the degree of compliance/progress with commitments, disaggregated by relevant factors such as origin or supply chain stage?: No

            (Upstream 2.1 only) How many hectares of land owned, controlled or managed is certified?: 7,331 hectares
            "By the end of 2020, We have achieved Sustainable Palm Oil certification from ISCC for 10.8% of our eligible nucleus palm oil plantation area which represents 7,331 hectares of plantations that equal to 14,207 tonnes of CSPO, and equivalent to 9.5% of the total CPO produced by the group in 2020."
          • Commitment to protect High Carbon Stock areas and/or peatlands
            Yes, for partial or unclear commodity exposure
            0.8/1.7
            Commitment to protect High Carbon Stock areas and/or peatlands
            Yes, for partial or unclear commodity exposure
            0.8/1.7
            "By the end of 2020, We have achieved Sustainable Palm Oil certification from ISCC for 10.8% of our eligible nucleus palm oil plantation area which represents 7,331 hectares of plantations that equal to 14,207 tonnes of CSPO, and equivalent to 9.5% of the total CPO produced by the group in 2020."
          • Commitment to a traceable supply chain
            No
            0/1.7
        • Reporting is independently verified
          0/1
          • Commitment to protect priority forests
            No
            0/1
          • Commitment to protect High Carbon Stock areas and/or peatlands
            Yes, using an internal verification system.
            0.5/1
            Commitment to protect High Carbon Stock areas and/or peatlands
            Yes, using an internal verification system.
            0.5/1
            "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."
          • Commitment to a traceable supply chain
            No
            0/1
        • Suppliers aligned with deforestation commitments across supply chain
          No
          0/2
        • 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?: Knowledge sharing with: 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.
          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." 
        • Risk assessments for forest risk
          Yes
          2/2
          Risk assessments for forest risk
          Yes
          2/2
          How frequently are assessments conducted?: Quartely
          "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." 
        • Operations assessed to comply with law
          Yes
          2/2
          Operations assessed to comply with law
          Yes
          2/2
          "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". 
        • Accessible grievance mechanism
          No
          0/4
        • Report volumes of commodity
          Reporting total volume
          2/2
          Report volumes of commodity
          Reporting total volume
          2/2
          Total/partial volume reported: 148,837 tonnes CPO
          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." 
        • Report verified volumes of commodity
          No disclosure
          0/6
        • Upstream: Monitor compliance with human rights
          No
          0/4
        • Upstream: Impact assessments for land development/acquisition
          Yes
          4/4
          Upstream: Impact assessments for land development/acquisition
          Yes
          4/4
          "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". 
        • Upstream: Reporting production/processing locations
          No disclosure
          0/4
          Upstream: Reporting production/processing locations
          No disclosure
          0/4
          In what country(ies) does the company operate and/or source material?: Indonesia

          In what jurisdiction(s)/subnational region does the company operate and/or source material?: Sumatra, Kalimantan, Sulawesi
        • Downstream: Publishing supplier lists
          No
          0/4
        • Upstream: Monitor compliance of production/processing
          Yes, using an internal verification system
          4/4
          Upstream: Monitor compliance of production/processing
          Yes, using an internal verification system
          4/4
          Does the company use a certification system?: Yes

          Does the company use a jurisdictional monitoring mechanism?: No

          What tools, processes, bodies carry out monitoring of the company's production or processing operations?: SAI Global, TUV Nord, Ministry of Environment and Forestry, Department of Environment, East Kalimantan Province

          How frequently is compliance assessed?: Regularly 
          "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". 
        • Upstream: Reporting hectares of deforestation
          No
          0/4
        • Downstream: Monitor compliance in supply chain
          No
          0/4
        • Downstream: Reporting hectares of deforestation
          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
          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

          Does the company engage non-compliant indirect suppliers in order to address and remedy non-compliance?: Yes
          "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
        • Downstream: Disclosure of non-compliant suppliers
          No disclosure
          0/2
  • Commitment strength
    14/20
    Avg. score
  • Reporting and Implementation
    15/50
    Avg. score
  • Social considerations
    8/18
    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
HQ
HQ 
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.

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.