Minimising Environmental Impact - Overview
FGV is committed to implement good business practices and initiatives that reduce our environmental impact. Our commitment goes beyond our direct impact from our operations along our value chain, including our suppliers, vendors and other associated entities. Realising the complexity in oil palm supply chain, we will work progressively on this agenda by directly engaging with our business partners.
The Group’s environmental initiatives are also directed at managing potential environmental risks and opportunities rising from our operations.
Conserving the Nature
We strive to maintain the quality and fertility of our soil in order to sustain high yields. We enrich our soils with right amount of organic and inorganic fertilisers. Whenever possible, we recycle back palm organic matter to the plantation in the form of Empty Fruit Bunches (EFB) and compost to improve soil health. The deployment of best soil conservation practices that includes planting of leguminous cover crops, reduces soil erosion and improves soil properties. These legume cover crops also enrich soil nitrogen through the fixation of free atmospheric nitrogen.
Advancing Agriculture through R&D
Through its extensive Research & Development resources, FGV through its associate Felda Holdings Berhad has adopted a proactive approach to counter numerous challenges that could adversely affect the sustainability of oil palm if left unaddressed.
These include developing best clonal material to ensure higher yield, improving efficiency at harvesting stage and combating diseases such as basal stem rot of the oil palm plant.
Today, FGV is amongst the world’s top three largest producers and planters of non-GMO clonal palms. The Group’s breeding programmes continue to develop incremental improvements to oil yield. By using clonal techniques and marker assisted selection programmes, we are able to accelerate the production of planting material with the desired traits.
Some of our research breakthroughs already underway includes a molecular marker that will screen planting material susceptible to basal stem rot disease. We will also be introducing a patented screening technology for virescense palms, whose fruit colour visibly turns from green to orange upon ripening, to make manual harvesting more precise, and lay the foundations for automatic ripeness scanning and possible mechanisation in the future.
Utilising Innovative Bio-control
Another pillar supporting FGV’s sustainable palm oil programme is the use of ‘biocontrols’ in integrated pest management aimed at controlling significant palm oil pests such as rats, bagworm, and oryctes beetle. The integrated approach employs a combination of natural or benign pest control methods ,with minimal use of pesticide, to reduce damages caused to the crop by pests.
Some of the biocontrol methods adopted by the Group include the use of barn owls in our plantations to reduce the population of rats that eat the palm fruit, harness the services of hymenoptera wasps to keep bagworm under control. At the same time it also minimises the use of pesticides while monitoring the oryctes beetle population through the use of pheromone traps.
Polishing Plant in PUP
FGV never shies away from practices that can abate pollution, especially so in our operation near environmentally sensitive area. The recent one being the setup of Bio Dewatering Plant and Bio Polishing Plant at its subsidiary, Pontian United Plantation (PUP), in Sabah, East Malaysia.
With the dewatering plant, PUP’s Pontian Fico palm oil mill is able to remove solids from its effluent whilst the polishing plant is able to further filter the effluent water to achieve below 20 ppm (parts per million) of biological oxygen demand (BOD), which is a mandatory requirement by the Department of Environment for mill located in the vicinity of the Kinabatangan river. FGV continues to strive for better environmental protection particularly around its plantations and assets through best agriculture practices and best management practices.
Biodiversity is at the heart of FGV’s operations as some of the Group’s plantations are located within close proximity of forest reserves or conservation areas that are natural habitats of endangered, rare and threatened species. Operating sustainably means living in harmony with natural resources and biodiversity. FGV has put in place a policy that ensures its development area does not encroach into High Conservation Value (HCV) areas and to avoid peat land. The group has pledged to undertake conservation initiatives for the continuous protection of the natural ecosystem and its services.
Many of our oil palm plantations are in the fringes of natural forest reserves that are home to endangered, rare and threatened species. Therefore, as part of our sustainability commitment, our group has pledged not to undertake any new development in areas that are environmentally sensitive or under protection, such as primary forests, wildlife reserves, peat lands, or land containing any HCV. We are making continuous efforts to preserve the pristine environment of these areas whilst reducing the impact on biodiversity as much as possible.
By using practical approaches to protecting the flora and fauna, we engage in periodical awareness programmes organised in collaboration with governmental agencies and Non-Governmental Organisations (NGOs).
Sun Bear Conservation Programme (SCBP)
One of our landmark sustainability initiatives is the Sun Bear Conservation programme (SBCP). The SBCP is funded by FGV Holdings Bhd (FGV), and partnered with the Malaysian Nature Society (MNS), Department of Wildlife and National Parks Peninsular Malaysia (PERHILITAN) and Universiti Kebangsaan Malaysia (UKM).
SBCP involves in the rescue, rehabilitation and release of the injured/orphaned/confiscated Sun Bears back into the wild. One of the expected outcome of this programme is the management plan for Malayan Sun Bears in Peninsular Malaysia and guidelines for the rehabilitation of sun bears.
The SBCP is also preparing a training module for primary and secondary schools to build awareness on the importance of sun bear conservation through organised nature camps. The SBCP has successfully rehabilitated and released 17 sun bears back into the wild since its establishment in 2015.
The Malayan Sun Bear may be the smallest of the bear species found around the world, but they are not short of protectors, thanks to the Citizen Action Groups (CAG) communities now set up in five regions around Malaysia. They also calls themselves as the Sahabat Beruang Matahari (Friends of the Sun Bears). The CAG network of about 200 members has been set up.in areas of importance to wildlife /forest conservation. This is to foster a community, sympathetic to issues surrounding conservation of the sun bear and other threatened wildlife species in areas important regard to forest conservation. This CAGs are trained to identify environmental issues of concern within a stipulated location and the appropriate action to be taken with the help of local regulatory agencies. The CAG members have undergone basic training on HCV elements of interest in the region, map reading, GPS usage and protocols on boundary patrols.
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Rafflesia Conservation Interpretation Centre (RCIC)
Rafflesia is world famous as being the largest flower known on earth and one of the most prominent icons for conservation efforts. Today, Rafflesia microhabitat is at risk due to destruction of tropical rainforest and natural ecosystem. There are at least 10 species of Rafflesia in the wild but two of them (i.e. R.Azlanii and R.Cantleyi) are endemic in Peninsular Malaysia, i.e they cannot be found in any part of the world. Perak is the only state in Peninsular Malaysia that is home to three species (including the two endemic species and R.Kernii) and one of the significant spot is in Gerik, a small town near many FGV/FELDA plantations. Therefore, it is essential for FGV to play an important role to maintain or enhance the unique ecosystem to ensure their continued presence.
The Rafflesia Conservation and Interpretive Centre (RCIC) is a joint collaboration between GV Holding (FGV) with Forest Research Institute Malaysia (FRIM).The first in Peninsular Malaysia, RCIC will be a purpose-built facility located in Gerik, Perak on a 223 Ha plot of land for research and conservation of the Rafflesia species. It is scheduled to be completed in 2018.
This is the first collaboration project between the private sector and government agencies in Peninsular Malaysia dedicated to Rafflesia research and conservation. The initiative to establish RCIC started in 2013 following the discovery of a Rafflesia population at Felda Bersia Timur in the nearby Sungai Lebey area, Gerik, Perak. The RCIC is expected to serve as a ‘one-stop centre’ for research, education and conservation of the endangered species of Rafflesia. Perak is the only state where three (3) Rafflesia species is native to – Rafflesia Azlanii, R. Cantleyi and R. Kerrii.
Once completed, RCIC will also serve as a venue for international symposiums, workshops, colloquiums, environmental awareness programmes for both public and the scientific fraternity.
Partnership with Borneo Conservation Trust (BCT) & Sabah Wildlife Department (SWD) on Sabah Mega Biodiversity Project
The Kinabatangan area is one of the mega-biodiverse areas in the world, but at least 300 Bornean elephants here are at risk due to the limitation of suitable habitat and human-elephant conflict.
Realising this, FGV have strengthened our involvement in conservation programmes at the Kinabatangan, Sabah with five (5) years commitment with BCT and SWD in the Mega Biodiversity Corridor programme.
The objective of the programme is to re-establish a network of forest corridors that will enable safe migration of wildlife between key forest habitats, avoid human-wildlife conflict and protect wildlife habitat, especially for the Bornean elephants and orang-utans along Kg. Batu Putih to Kg. Bilit, the hotspot area along the Kinabatangan Mega Biodiversity Corridor. As to date, we have re-established the riparian reserves by alienating a minimum distance of 50 meters from our estates to the river bank and planted with saplings of indigenous timber tree species, bought from nurseries raised by local communities. This exercise involves voluntarily abrogating approximately 20 ha of productive and plantable land for the re-establishment of riparian reserves. This 20 Ha will now be part of the existing 280 Ha of riparian reserve which we are presently managing as a wildlife corridor.
In addition to that, we are also engaged in REDD+ programme, Kinabatangan Component project that aims to tackle climate change through sustainable forest management and community development.
As the project will focus more on capacity building on developing sustainable eco-tourism, sustainable farming practices, forest restoration and empowering communities to create sustainable change or alternative livelihood, it will include a series of comprehensive capacity training programmes for the local communities in the area.
The tree planting programme under FGV-BCT could provide the relevant capacity building especially in fostering innovation and business skills.
Currently, we are working with BCT and other partners to develop a credible guideline to enable the local communities to estimate carbon assessment in several forest types and benefit from carbon trading schemes. These projects will also provide a strategy to identify alternative livelihood for at least 30 families of the local community, while ensuring the protection and conservation of the mega biodiversity corridor in Kinabatangan.
With these projects, we hope the local communities, flora and fauna (specifically elephant and orang-utan) within the FGV landscape, the Tourism Industry of Sabah at a wider scale and the earth as a global ecosystem will benefit from this initiative. Apart from these projects, we are also looking for opportunities to work with as many Stakeholders possible as the greatest impact in conservation can only be possible with bigger landscape programmes.
Climate Change and Management of GHG Emissions
No planting on peat
When peat is developed for agriculture, land transformation and drainage leads to peat oxidation and a higher frequency of fires, resulting in an increase in GHG emissions and carbon loss. The easiest way to limit Carbon Dioxide (CO2) and other GHG emissions is to avoid the development of oil palm plantations on peat by refraining from developing new plantations in areas with significant quantity of peat. In line with this stipulation, FGV Palm Upstream Cluster has not acquired any new land containing a significant amount of peat (area of peat not more than 20% of the total land parcel) in 2016.*As planting on peat is perceived to contribute to GHG emissions, FGV made a commitment not to develop any new area significant in peat.
FGV is also committed to reducing GHG emissions through operational approaches such as methane capture, bio-composting and the cogeneration of electricity from methane released by palm oil mills effluent (POME). We convert waste from our plantations and mills into biogas whilst producing palm oil-based methyl ester (PME) for use in biodiesel. The Group is committed to actively pursue opportunities to reduce its greenhouse gas emissions through its operational approaches to manage and report its carbon footprint. FGV targets to reduce its GHG emissions by 25% from our baseline year of 2014 by 2020. The majority of our emissions are in the form of biogas, which naturally forms when POME decomposes in the absence of oxygen. The capture of biogas from POME is, therefore, a clear priority for us in mitigating and reducing our overall GHG emissions.
Lowering GHG emission
FGV is presently the single largest plantation owner of biogas plants in the world, with a total of 25 biogas plants in our stable. In 2016, our data shows that our biogas plants have managed to reduce 87,429 MT* of CO2 equivalent in 15 biogas plants. Our CO2 reduction efforts over the past four (4) years are illustrated below.
Generating Power from Waste
In addition to reducing the amount of GHG that our mills emit into the environment, the biogas plants are reducing GHG emissions arising from the combustion of fossil fuels by generating electricity for domestic use.
Two (2) of our biogas capture plants in our palm oil mills in FPI Umas and FPI Serting Hilir have successfully generated electricity for the local area since 2013. These plants can generate up to a maximum of 1.2 megawatts of electricity.
In Umas, the electricity is channelled to residential areas, schools, offices and commercial complexes. Umas residents, prior to the construction of the plant, depended on power generated from diesel generators. Meanwhile, the electricity generated by the Serting Hilir plant is being fed back to the national grid.
Biomass for Electricity
Biomass power plants utilise the burning of organic waste to produce electricity and steam. Our Sahabat Biomass power plant built in Lahad Datu, Sabah, in 2004 is the first EFB based Clean Development Mechanism (CDM) project in Malaysia. It is also the first in the world to run on 100% treated EFB. This Sahabat Biomass power plant supplies steam and electricity to the neighbouring industrial premises, offices, residential areas and a resort.
FGV also garnered another feather in the hat when FPI collaborated with Tenaga Nasional Berhad (TNB) to install and operate FTJ Biopower Sdn Bhd in Jengka, Maran. This renewable energy power plant successfully achieved its Commercial Operation Date in October 2016 and produces 10 megawatts of electricity for the national grid that would otherwise emit 43,560 MT of CO2 equivalent per year if fossil fuels (diesel) were to be used to generate electricity. This biomass plant is capable of utilising 300,000 MT of EFB annually for power generation.
Utilisation Of Biomass And Mill By-Products
Empty Fruit Bunches (EFB) is suitable for conversion into renewable fuel feedstock. Our biomass residue of EFB is shredded and utilised as solid fuel for the operation of steam boilers. This utilisation of EFB as a fuel for firing steam boilers delivers significant cost savings because the by-product can be put to economical use rather than becoming a waste product.
FGV is proud to showcase our maiden EFB biofuel plant located in Semenchu, producing a total of 2729.77 MT pellets since 2015. These pellets are produced using EFB from our palm oil mills and is commercially sold to third parties for power generation as a replacement for conventional fossil fuel.
FPI also develops dried long fibre and EFB shredded fibre by converting EFB as a low value waste to high value environmental friendly renewable products. These dried long fibres were processed from shredded EFB to be sold as raw material for industrial applications such as mattress manufacturing.
Our composts are derived from aerobic decomposition of EFB mixed with POME. These composts are very practical for maintaining soil moisture, preventing soil erosion, and also serve as an effective alternative source of weed control. Palm oil mills also produce other biomass by-products apart from EFB, they include Palm Kernel Shell (PKS) and Decanter Cake. PKS is a high grade renewable biofuel resource and is widely-used as feedstock for boiler, pyrolysis process, gasification process and also cement manufacturing process. On the other hand, Decanter Cake is the solid sludge separated from the POME which can be directly used as organic fertiliser or to be blended with EFB fibre for the production of organic composts.
Bio-compressed Natural Gas
Our research on biogas has led to the establishment of the first commercial scale palm-based Bio-Compressed Natural Gas (Bio-CNG) plant in Sg. Tengi, Kuala Kubu Baru, Selangor. A collaboration between Felda Palm Industries Sdn Bhd (FPI), the Malaysia Palm Oil Board (MPOB) and Sime Darby, the plant demonstrates that biogas can be used on a commercial scale producing 80,000 million BTUs of Bio-CNG annually. Bio-CNG is a viable alternative to fossil fuels and commenced commercial production for its first customer in April 2016.
We monitor our impact on water systems closely, and have identified a total of 135 major river systems that are affected by our operations. A sample of these rivers are tested annually with 41, 65 and 29 tested in 2014, 2015 and 2016 respectively. The data from these tests has shown no significant deterioration of the water quality in these systems. Future assessments of stream water quality will be conducted based on the need for such analysis.
Our monitoring processes cover the water discharged from our mills, which cannot be returned back into the environment in its raw state. On average, palm oil mills generate about 2.5 MT of POME for every MT of CPO. While organic, raw POME is highly acidic and has a high Biological Oxygen Demand (BOD) due to its rich nutrient content. To ensure that the water discharged from our mills do not pollute our water systems, the discharged water undergoes a number of treatment processes to ensure that the concentration of BOD falls within safe levels.
Our average BOD data for 2016, 2015 and 2014 are 75 parts per million (ppm), 63ppm and 47ppm respectively, which is well below the discharge limit. Despite stringent requirements, there are occasions when the concentration of BOD exceeds regulatory limits, especially during high crop seasons when mills process FFB beyond their stipulated capacity. We are aware that this may occur at some of our mills and we are looking at ways to ensure that our discharge limits are always well within safe levels.
Water is essential for irrigating our oil palms and the production of CPO (approximately 5-7.5 MT of water is needed to process 1.0 MT of CPO from FFB). The sustainable harvest and return of water to our river systems are critical for both our operations and our surrounding ecosystem as the interruption of a clean water cycle could cripple our operations and damage the surrounding ecosystem beyond repair. Our ultimate aim is to reduce our water usage to 1.0 MT of water for each MT of FFB processed. In 2016, we used 1.34 MT of water on average to process 1.0 MT of FFB on average.