KLK – Green Tigers Index Rankings

2018 SCORE

2016 SCORE

54

50.5

Kuala Lumpur Kepong (KLK), which was founded in 1906, has seen its score improve in 2018 to 55 from 48 in 2016. However, KLK and its 280,472 ha palm oil landbank still faces issues associated with deforestation and labor rights abuses.

After years of NGOs pressuring KLK, the company finally withdraw its permit to develop a portion of Collingwood Bay’s indigenous customary owned forest at the end of 2016. Nonetheless, KLK has not clarified its overall plans for its overall $8.7 million investment in its Collingwood Plantations Pte, that has a total land bank of 44,342 ha in the region or its 37,000 ha plantation deal in Sepik Province, Papua New Guinea.

KLK’s claims conflict with the rights of the nine tribes that live in the area, whose members have vehemently contested KLK’s right to destroy their forests and establish palm oil plantations. Both PNG Courts and the Roundtable on Sustainable Palm Oil have ordered KLK to stop work in the area.

Earlier in 2014, an executive at PT ADEI Plantation, a subsidiary 92 percent owned by KLK, was jailed for burning forests.

In January 2015, KLK made some progress by announcing it would employ the industry standard for High Carbon Stock forests. But the policy was widely criticized for not addressing the company’s suppliers, trading partners, or joint ventures, and for not committing to using the standard High Carbon Stock approach. KLK has since committed to the standard High Carbon Stock methodology, but its policy still does not bind KLK’s suppliers and partners to any No Deforestation practices, making it significantly weaker than other companies.’

Importantly, KLK’s policies do not stand alone. Batu Kawan, the publicly-traded holding company, owns 47 percent of KLK’s equity. Meanwhile Batu Kawan owns 92 percent of PT Satu Sembilan Delapan, its Indonesian subsidiary, which has a total palm oil landbank of 5,782 ha in Kalimantan. At the same time, KLK owns 62 percent of Equatorial Palm Oil, which has a 7,500 ha plantation in Liberia.

KLK is a member of the Roundtable of Sustainable Palm Oil.

POLICY

1.A

The company has a forest policy for palm oil produced, traded or processed that applies to its global operations including all subsidiaries and joint ventures. The company also requires its suppliers to follow the policy.

HALF

1.B

The policy excludes the sourcing of  raw materials or products originating from natural forests including both primary and secondary forests.

NO

1.C

The policy specifically excludes the sourcing of raw materials or products originating from High conservation Value (HCV) areas.

YES

1.D

The palm oil policy specifically excludes development on peat soil regardless of depth.

YES

1.E

The palm oil policy excludes the sourcing  of raw materials and products from developments in High Carbon Stock (HCS) Forests.

YES

1.F

The palm oil policy excludes the sourcing of raw materials and products from lands where burning has been used to clear vegetation.

YES

1.G

The company has pledged to use (or uses) a third party for compliance verification of its policy.

NO

1.H

The company has developed and published a non-compliance procedure that outlines thresholds for the suspension and/or cancellation of contracts with suppliers in breach of the policy.

NO

1.I

The company has committed to developing a traceability system that documents palm oil back to the plantation of origin within its entire supply chain.

YES

1.J

The company specifically commits (and requires its suppliers to do so) to respect the rights of Indigenous and local communities to give or withhold their Free, Prior and Informed Consent (FPIC) to development on their lands.

HALF

1.K

The company has programs that support small holders in its supply chain with support that goes beyond purely financial considerations and the palm oil supply chain but addresses longer term development.

YES

1.L

The company has policy to reduce the environmental and health impacts of chemical pesticides and/or fertilizers.

YES

IMPLEMENTATION & TRANSPARENCY

2.A

Date by which the company aims to achieve full traceability to plantation for its entire supply chain.

Full points are given if this date is by 2018. Half points are given if the date is 2019 or 2020. No points are given if the date is after 2020, no date is given or if the company does not commit to full traceability to plantations including for its third party suppliers.

HALF

2.B

The company or the relevant third party publishes detailed processes and results of the policy verification assessments.

NO

2.C

The company has established and published an accessible and transparent grievance and dispute resolution mechanism.

HALF

2.D

The company reports on its progress towards meeting its policy goals at least annually against measurable indicators.

YES

2.E

The company has published the  names or  detailed locations (that allow for coordinates to be obtained) of all palm oil mills in its supply chain.

HALF

3.A

Points are deducted for the following (occurring since January 1, 2015). There is public evidence that since January 1, 2015 the company has in its own operations not met criteria 1.C, 1.D, 1.E or 1.J (or uses palm oil from protected areas). Or the company has sourced from suppliers that have not met these criteria. Or the company had its RSPO license revoked or suspended since that date. Or there is evidence of significant workers rights violations or social conflicts.

YES

See all of the rankings of major palm oil and soy companies on their adherence to forest conservation requirements on the Green Tiger and Green Jaguar index.