Major Amendments in Company Policy
Wilmar International Limited is a reputed organization in Palm oil industry which was established in the year of 1991. The organization ranks one in Asia among all the agribusiness organizations operating in Asia and the company acquired a place among all the leading organizations OF Singapore with respect to the market capitalization on Singapore exchange. Globally Wilmar is active in the businesses of palm oil cultivation, seed crushing, processing of the edible oils and many more. Currently the organization has a net worth of 43.56 billion U.S dollars (Schouten and Glasbergen 2012). The organization currently has approximately 450 plants for processing palm oil across the countries like China, India, Indonesia and fifty other countries. This report stresses on some issues regarding various operations of the organization, such as how they would be able to maintain their commitment to the No Deforestation, Peat and Exploitation agenda. Apart from that in the memo it is been discussed that how an organization like Wilmar International balance maintaining the NDPE standards and IPOP together and what could be the possible strategies to overcome the oddities the organization is facing in the present.
To, C.E.O of Wilmar International: Kuok Khoon Hong
Topic: How to manage both the commitment to the NDPE and I.P.O collaborations.
Respected Sir,
As it is a fact that Wilmar international has agreed to commit to the NDPE standards realizing that the plantation development has contributed immensely to the economic development of many nations but this one fact cannot be denied that this process has a direct negative impact on environment and people. For this reason the company has agreed to work closely with other processors, growers, financial institutions and many industry stakeholders for the cause of protecting the forests, human and community rights, and peat lands. For this reason the organization has made a few major amendments in the company policies, and there lies a doubt as whether the organization could both maintain their commitment towards the NDPE agendas and the IPO collaboration, and how the company would be able to manage that.
Wilmar has agreed to amend some major company policies and those are provided below:
Deforestation
- Wilmar understands that forests can be categorized high, medium, low density forests and a regenerating or high carbon stock forest. Among these high carbon stock forests cannot be used in any kind of agricultural production. Wilmar realizes the fact that these high carbon stock forests should be reserved and protected in order to protect the environment (Pesqueira and Glasbergen 2013).
- Wilmar asserts to engage in protecting high conservation value areas in every estate in their supply chain. The company commits to identify that there are many lands with no forest but with high conservation value containing high cultural and social values. Apart from that, the organization has pledged to support conservation of many important forests, peat lands and other ecologically or culturally enriched landscapes within their area of operation. They would also engage in enrichment planting in many high conservation value lands, riparian areas, areas alongside highroads and also takes an oath to support conservation of endangered species, support to eliminate poaching of wildlife in prohibited lands and trying to control some tribal communities to control their hunting spirit to draw a balance in the stability of the nature (Brink et al. 2017).
- Wilmer has agreed to implement a No Burn policy. That means they would not use fire to prepare new plantations or any kind of developments.
- Wilmar has taken oath to protect the environment by identifying the main factors that increases pollutions and green house gas emissions and they will execute a a plan to annihilate them. The promise to do that by treating mill effluent to reduce the emission of methane gas and by avoiding deforestation. Not only would that Wilmar monitor regularly the progress of their effort to reduce these polluting agents (Pichler 2013).
No development on Peat
- Wilmar has agreed to the fact that a peat soil has organic matter more than 65% and they pledge to not to make any kind of developmental plans on peat lands regardless of the peats depth.
- Wilmar organization would identify the peat lands where earlier some developments in plantation have been done, and they would seek help of the experts to ensure the best practice of management on the peat lands.
- Whenever it would be feasible, the organization would try to explore options to restoration of the peat lands and peat forests (Paoli and Schweithelm 2014).
No exploitation
- Wilmar takes oath to support the universal human rights. They commit to promote the universal declaration of human rights.
- They pledged to respect the laws in the favor of the workers, indigenous people, local communities, contractors and many more (Padfield 2016).
- The company would not ever promote any kind of operations with active participation of child labor and would fight against such a social ill.
- The organization would not promote any kind of forced or under bond labors as well as they will try to prevent criminal activities like human trafficking by their social activities and not only that, they will provide support for the victims of these ills of the society.
- The wilmar organization declares that smallholders are an essential part of the industry and they face various unique situations, so the organization will be engaged in some activities like providing them with technical guidance and support them to achieve rapid compliance with the policy (Ruysschaert and Salles 2014).
- The organization respects the tenure rights and thus realizes the duties and responsibilities liked with tenure rights, for an example, protection and sustainable use of land, forests and fisheries.
- The organization respects the rights of indigenous and local communities to withhold their free, prior and informed consent to the activities of the organization on the area of their operation.
- Finally the last part in this segment is that the organization, Wilmar International takes oath to deal with all the complaints and conflicts through a systematic process and they will try to resolve all the issues as soon as possible in a very transparent process (Nesadurai 2013).
To successfully execute the policies Wilmar has taken oath to amend, in my opinion, they should surely create a transparent sourcing network having full traceability. Wilmar should try to work with their suppliers and should provide ample support to shift development away from the areas like HCS, HCV or peat rapidly. The organization’s commitments should be applicable to all subsidiaries, mills and refineries those are under ownership of Wilmar International regardless of the equity and third party suppliers we purchase goods from or we have business relations with. By this time, we should realize that the organizations need ample time to implement the core provisions mentioned in the policy and also understands that there lies a need for rapid action to delink its operations from deforestation. Apart from that we, as a team should expect that the suppliers should be pretty much compliant with all the provisions of these policies mentioned earlier. Apart from that the organization Wilmar needs to cease doing business with the suppliers who does not take spontaneous remedial actions to correct their violations of these policies or who are not willing to follow these policies (Lucey 2014).
How to Implement these Ideas
We the employees of Wilmar International have faith in innovation constructive discussion and cooperation between the stakeholders and the key players of the industry. The organization must believe that it is very much possible to transform the industry into a contributor to the economic as well as environmental well being of many countries across the globe. We should believe in active engagement and if all the organizations of this industry fight for these issues with full cooperation the oddities would be overcome with ease.
To flourish in business Wilmar has to value the importance of the inputs made by the stakeholders of the organization and we should reach the local and international N.G.Os, governments, communities, employees and many experts and other stakeholders to assist us with the implementation of these policies (Johari et al. 2015). We must seek and use their inputs on the performance of the suppliers and should quickly investigate and do according to the stakeholder’s identification of the violation of the policies. We need to work with N.G.Os, governments and many other stakeholders to support the adoption of these policies to make an industry without ruining the environment and creating a stable economic and environmental domain.
A pledge was signed at the United Nation’s climate summit back in the year of 2014 by four leading companies including Wilmar, Golden Agri Resources, Cargill and Asian Agri and later they were joined by two other organizations to make the products more sustainable by fighting with the oddities like deforestation. It was disappointing when in July 2016 the dissolution came as the government took some actions against some organizations who were adopting weaker standards of IPOP, and those organizations were almost bullied by the government of Indonesia. It is a fact that IPOP was an important mechanism to differentiate Indonesian organizations from other competitors and its dissolution can be said as a step backwards in today’s environmental situation (Erian 2016).
We should understand the need of continuous reviewing of the effectiveness of the policies made and the execution of those policies. We should conduct frequent analysis of the implementation of the policies procedure and get engaged totally with the stakeholders in a continuous review and improvement process. Whenever new information or knowledge comes under a spotlight, we should adjust and improve our policies in a way that would be consistent with our goals of conserving the forests, peat lands, local communities and universal human rights.
Wilmar has established a grievance procedure to allow any stakeholder to raise any grievances against the organization or any party. The grievances are kept logged under grievances procedure is dealt within a short span of time and al the investigations are reported with maintaining total transparency. We must seek inputs from all the stakeholders on the grievance procedure provisions and the procedures to make sure an effective grievance mechanism.
We should acknowledge that failing to unequivocally enforce these policies made would lead to a poor execution. So, we need to establish a clear assessment procedure to get a hint of the supplier’s and our performance against the policies. The most important sanction we have available is ceasing doing business with a supplier and we must reserve the right to disengage from any supplier based on their performance against these policies (Varkkey 2013).
Supporting the Suppliers
Thus to conclude it can be said that Wilmar International currently is a leading organization in agriculture industry and maybe we are facing some issues nowadays from various sources like government officials, N.G.Os, some suppliers but we are determined to overcome all the oddities and earn the rank one title in the agricultural industry once more and we should prepare ourselves in a way, so that, we could thrive in challenges. It is a fact that for an organization like Wilmar International whose business is dependent upon the natural resources, in today’s world it is quite evident that they have to face some obstacles while doing business as their industry contributes hugely to the development of economical structure of the various nations as well as they are responsible for losing balance of the environment and so they must engage themselves in such activities that would help the environment to get out of the polluting agents and by amending some policies the organization actually can contribute a lot in balancing the environmental issues. The path is not very smooth but with determination and proper strategy we can definitely overcome all the oddities we are facing now and hopefully within a couple of years we can surely regain our throne as a rank one organization all over the world in agricultural industry with strategy and their accurate execution.
References
Brink, H., Kusumaningtyas, R., Riemersma, M. and Warmerdam, W., 2017. Deforestation and land grabbing in the palm oil sector.
Erian, N., 2016. ESG issues in the palm oil investments: an event study on the listed palm oil companies in Singapore, Indonesia, and Malaysia(Master’s thesis, University of Twente).
Johari, A., Nyakuma, B.B., Nor, S.H.M., Mat, R., Hashim, H., Ahmad, A., Zakaria, Z.Y. and Abdullah, T.A.T., 2015. The challenges and prospects of palm oil based biodiesel in Malaysia. Energy, 81, pp.255-261.
Lucey, J.M., Tawatao, N., Senior, M.J., Chey, V.K., Benedick, S., Hamer, K.C., Woodcock, P., Newton, R.J., Bottrell, S.H. and Hill, J.K., 2014. Tropical forest fragments contribute to species richness in adjacent oil palm plantations. Biological Conservation, 169, pp.268-276.
Nesadurai, H.E., 2013. Food security, the palm oil–land conflict nexus, and sustainability: a governance role for a private multi-stakeholder regime like the RSPO?. The Pacific Review, 26(5), pp.505-529.
Padfield, R., Drew, S., Syayuti, K., Page, S., Evers, S., Campos-Arceiz, A., Kangayatkarasu, N., Sayok, A., Hansen, S., Schouten, G. and Maulidia, M., 2016. Landscapes in transition: an analysis of sustainable policy initiatives and emerging corporate commitments in the palm oil industry. Landscape Research, 41(7), pp.744-756.
Paoli, G. and Schweithelm, J., 2014. CASE STUDY 6 MITIGATING BIODIVERSITY IMPACTS OF OIL PALM THROUGH A COMPREHENSIVE APPROACH TO CONSERVATION WILMAR INTERNATIONAL. Best Management Practices in the Indonesian Palm Oil Industry, p.59.
Pesqueira, L. and Glasbergen, P., 2013. Playing the politics of scale: Oxfam’s intervention in the Roundtable on Sustainable Palm Oil. Geoforum, 45, pp.296-304.
Pichler, M., 2013. “People, planet & profit”: Consumer-oriented hegemony and power relations in palm oil and agrofuel certification. The Journal of Environment & Development, 22(4), pp.370-390.
Ruysschaert, D. and Salles, D., 2014. Towards global voluntary standards: Questioning the effectiveness in attaining conservation goals: The case of the Roundtable on Sustainable Palm Oil (RSPO). Ecological Economics, 107, pp.438-446.
Schouten, G. and Glasbergen, P., 2012. Private multi-stakeholder governance in the agricultural market place: an analysis of legitimization processes of the roundtables on sustainable palm oil and responsible soy. International Food and Agribusiness Management Review, 15(B), pp.53-78.
Varkkey, H., 2013. Malaysian investors in the Indonesian oil palm plantation sector: home state facilitation and transboundary haze. Asia Pacific Business Review, 19(3), pp.381-401.
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