Traceability is an essential element of our business and is instrumental in fulfilling our commitment to responsible sourcing. We are committed to continuously improving the traceability of sourced raw materials and actively monitoring compliance with applicable sustainability standards throughout its supply chain, as well as ensuring that our products are not linked to any deforestation, planting on peat, and exploitation of human rights, which is in line with FGV’s Group Sustainability Policy (GSP).
1. Traceability in Oil Palm
In Malaysia, FGV has a total of six (6) vegetable oil refineries. Four (4) of them are fully managed by FGV subsidiaries; FGV Refineries Sdn Bhd (3), and Delima Oil Products Sdn Bhd (1). The other two (2) refineries are managed by our joint venture FGV IFFCO Sdn Bhd.
FGV also has joint ventures with vegetable refineries overseas, one respectively in Turkey and Pakistan. However, FGV has no direct management control over those facilities.
In order to ensure our palm products are sourced from responsible sources, we started to trace our raw materials in 2017. Our traceability covers Traceability to Mills (TTM) and Traceability to Plantations (TTP).
1.1 Traceability to Mills (TTM)
We consider mills traceable when details such as their name, parent company’s name, address /GPS coordinate, and volume supplied are known. Our TTM has been at 100% since 2019 for all our midstream and downstream facilities which include FGV Refineries Sdn Bhd, FGV Kernel Products Sdn. Bhd., FGV Biotechnologies Sdn Bhd, Delima Oil Products Sdn Bhd as well as our JVs in Malaysia, FGV IFFCO Sdn Bhd.
Most of the CPO processed by our own vegetable refineries (FGV Refineries Sdn Bhd and Delima Oil Products Sdn Bhd) is from our own internal sources. In 2022, we only sourced from two (2) third-party mills that contribute less than 1% of our total CPO processed by these refineries. These facilities also processed 61% of RSPO-certified CPO.
As for our JV’s in Malaysia, FGV IFFCO Sdn Bhd, the traceability information can be view at here.
1.2 Traceability to Plantations (TTP)
Due to the complexity of the FFB supply chain that involves multiple categories of players/levels, our requirement for TTP varies between supplier categories. The suppliers are considered traceable to the plantation when details as follows are available:
|Element/Information||Third-party Estate||Smallholders*||Dealer/Cooperative/Collection centres**|
|Parent’s company name||√||NA||√|
|GPS Location of supplier||√||√
(location of village/sub district is sufficient)
|Size of land||√||√||X|
|Volume supplying to mill||√||√||√|
NA: Not Applicable
*This requirement is for independent smallholders supplying to FGV mills. Information for scheme/plasma smallholders are available at https://felda.gov.my/peneroka/lokasi-rancangan
**For Dealer/Cooperative/Collection Centres receiving FFB from estates, full information of the estates as mentioned in the table above (Third-party estate) is required. If the sources are from smallholders, name of the smallholders and quantity supplied are sufficient.
***Supplier defines as an entity with legal authority to supply palm oil materials to any FGV facility.
****Parent company – A holding company (large cooperation) or individual producer (grower) that has legal authority to sell palm oil material.
Of all the 67 palm oil mills operated by FGV, only two (2) mills sourced 100% of FFB from our own plantation. The remaining 65 palm oil mills received a mixture of FFB from internal and external sources.
As of the end of 2022, we achieved 99% TTP which is very close to our target of 100% TTP by the end of 2022. Considering the significant contribution from the smallholders, we are committed to assisting them on technical grounds to improve their productivity.
Palm Oil Traceability Dashboard (January 2022 – December 2022)
Traceable to mill
Traceable to plantation
Crude Palm Oil
Palm Kernel Oil
Crude Palm Oil
Palm Oil Mill
Palm Kernel Oil
Palm Oil Mill
Crude Palm Oil
FGVR & DOP
Palm Kernel Oil
|FGVR : FGV Refineries Sdn Bhd||FGVBSB : FGV Biotechnologies Sdn Bhd||DOP : Delima Oil Products Sdn Bhd|
|FGVKP : FGV Kernel Products Sdn Bhd||FGVPM : FGV Plantations (Malaysia) Sdn Bhd|
For more details on the traceability and location of our scheme/plasma smallholder’s farms, independent smallholders, and third-party estate/plantation supplying FFB to FGV, please refer to our traceability portal at https://fgvtop.fgvholdings.com/. List and geolocation of FGVH plantation, FELDA scheme smallholders, and third-party suppliers (smallholders and estates) are also available in the traceability portal. As for FGVH plantation and FELDA scheme smallholders, Shapefiles of these areas has been made available to the RSPO as part of its estate maps. Due to security reason, these shapefiles are not uploaded in this portal.
Traceability in Rubber
FGV sources cup lumps as the raw materials for its milling process from FGV’s Group estates, FGV associates (FELDA), private/external organizations, and traders. The four (4) rubber processing mills in Malaysia produce Standard Malaysian Rubber (SMR) for end users in local and international markets.
Considering rubber may have some similar sustainability concerns as oil palm, FGV continued to expand traceability in the rubber sector in early 2020. As of December 2022, we are 83% traceable to plantation/assembly centres. It decreased by 14% from before due to the complexity and adoption of new criteria for rubber traceability. We expect to achieve 100% TTP traceability by the end of 2023.
Rubber Traceability Dashboard (January 2022 - December 2022)
While we are able to trace all our FFB and PK up to supplying mills, tracing FFB to the plantations of origin has been challenging for external crops. To facilitate better traceability of our products, we are working with our business partners to develop a model to identify sustainability risks associated with specific geographical areas.
In promoting greater traceability, we have developed a computerised traceability system called Traceability of Product (FGV-ToP), which is part of an overall sustainable palm oil management system that also includes Audit Integrated System (FGV-AIMS). FGV-ToP System which provides comprehensive information of FFB/CPO/PK/PKO movements together with instant traceability compliance status and attributes such as the certification, geo-location and production per month at a FGV mill in a user-friendly and interactive manner. This system covers all palm oil related products from FGV subsidiaries with some information being accessible to customers and suppliers.
Strategic Partnership with MIMOS and ASB
Due to the complexity of our FFB supply chain, we have established Traceability & Validation Task Force (TVTF) in association with Asia Business School (ASB) with the help of our value chain partner to assist in tracing our FFB in the dealers’ networks. Apart from tracing the source of FFB, the TVTF also provided training on NDPE and will be assessing suppliers’ compliance to FGV’s Group Sustainability Commitments.
Smallholder farmers play a critical role in the palm oil industry, especially for FGV. In 2022, FGV sources 6,631,930 (46.5%) FFB for all our POM in Malaysia from the smallholder category. 45.1% of FFB from around 112,638 scheme smallholders (FELDA settlers) and 1.4% of FFB from more than 664 independent smallholders.
FGV maintains an ongoing collaborative effort with our smallholder partners to continuously improve their agricultural practices, aligning with our commitment to becoming a responsible and sustainable palm oil producer.
From 2022 to 2023, a total of 82% of smallholders (out of all invited smallholders) have been involved in our smallholder training program with the objective to provide them with training on technical advice on agronomy, industry awareness updates on the palm oil industry’s development, challenges, and regulatory requirements.