Understanding the motivation of our suppliers to adopt and extend the No Deforestation, No New Planting on Peat, and No Social Exploitation (NDPE) policies across their supply chain was our focus during the IOI Corporation Berhad (IOI) 2023 supplier engagements.

We engaged a combination of high-medium-low supplier categories in our engagement programmes as guided by the Mill Prioritisation Profiling. The objective of our engagement was to minimise gaps and enhance our suppliers’ practices to deliver IOI’s NDPE requirements. We initiated three engagement activities in the Peninsular Malaysia region in January and February 2023, involving three of our direct suppliers namely Rompin Palm Oil Mill, Rakyat Ketengah Perwira Palm Oil Mill and Felcra Jayaputra Palm Oil Mill.

(File pic by IOI Corporation).

(File pic by IOI Corporation).

These engagements which took place at their respective offices were a part of our efforts to provide our suppliers with technical support and focused on the following areas:

1. IOI Standard Operating Procedures (SOP) for Tier-2 suppliers 
2. Traceability-To-Plantation (TTP) data collection 
3. IOI supplier assessment tool 
4. Deforestation monitoring tool 
5. Introduction on procedures to re-enter into supply chain for suspended palm producers due to deforestation or peat exploitation

It is fascinating to observe that both our direct and indirect suppliers are aligned with our Sustainability policies and requirements in terms of their understanding and commitment towards the requirements. During the engagement session, we briefed about IOI’s SOP for Tier-2 suppliers and encouraged our suppliers to adhere to the SOP as well as extend it among their suppliers.

These engagement sessions also provided us an opportunity to perform a pilot run on our revised TTP data collection forms with our suppliers. The feedback received was constructive and beneficial for us to refine our TTP data collection process, and had been shared to assist in the implementation of TTP pilot run in Sabah. We are pleased to inform that the engaged suppliers have excelled their TTP declaration in our latest round of TTP data collection exercise.

A refresher training on Tools for Transformation (T4T), our online supplier self-assessment platform was conducted. Emphasis was on assisting our suppliers to maximise the usage of this tool. The T4T is a platform that helps our suppliers to identify gaps and provide appropriate action plans to strengthen their NDPE implementation.

Satellite monitoring on land use changes is one of the fundamental approaches to curb deforestation activities within our product supply chain. Such satellite monitoring service provider often incur a considerable amount of investment. As an alternative, our suppliers were introduced to a free web-based application which can assist them to monitor deforestation activities in their surrounding areas. They were also briefed on techniques to verify deforestation allegation reports and follow up actions needed, as well as the remediation procedures available for parties involved in any deforestation activities.

Our Responsible Sourcing team will continue to engage more suppliers to facilitate their good practices in complying to IOI’s NDPE commitments. Contents of the engagement activities will be customised according to the needs of our suppliers.