FGV HOLDINGS BERHAD | SUSTAINABILITY REPORT 2022/2023 9 JOINT LEADERSHIP STATEMENT OUR COMMITMENT TO HUMAN RIGHTS FGV acknowledges that it has encountered challenges related to human rights in recent years, particularly in our labour practices. Addressing the concerns of the U.S. Customs and Border Protection (CBP), which issued a Withhold Release Order (WRO) against FGV, has been a priority for us and we have taken numerous steps in our bid to obtain a positive outcome in the modification of the WRO. Firstly, we established a WRO Task Force to oversee the development and implementation of FGV’s WRO remediation plan, comprising 12 focus areas. Next, we appointed LRQA (formerly known as ELEVATE) an independent consultant, to assess FGV’s operations and support FGV’s remediation plan. In addition, we appointed a US-based international law firm that has deep expertise in international trade to support us in the revocation of the WRO. As part of the remediation plan, we have enhanced our recruitment procedures by reinforcing the principle of no recruitment fee and strengthening the due diligence and selection process of recruitment agencies. Going forward, we will only engage recruitment agencies which demonstrate a strong commitment to responsible and ethical practices. The Board has also approved and allocated RM605 million for a three year plan from 2024 to 2026 to further improve the accommodation and living conditions of our workers. In keeping with our commitment to the principle of ‘no recruitment fees’, we have allocated a total of RM112 million to reimburse recruitment fees to our migrant workers. Of this amount, we have since paid out RM72.2 million as of September 2023 to a total of 20,153 migrant workers. FGV’s recruitment fee reimbursement programme for its former workers is ongoing. As such, the latest update regarding the WRO issue is that we will be making our submission to the CBP to modify the WRO by June 2024. The submission date was revised as the reimbursement payment was made in three phases, between March 2023 and September 2023 reimbursement of recruitment fees as well as the implementation of FGV’s remediation plan. Verification of FGV’s remediation is expected to take place in the first quarter of 2024, after which a petition to modify the WRO will be prepared for submission to the CBP. Finally, we understand that it will take time for the CBP to decide on the modification of the WRO, which is consistent with the experience of other companies that have been issued a WRO. FGV remains committed to ensuring that all its 66 mills and supply bases are RSPO-certified. As of the end of 2023, 30 of FGV’s mills and its supply bases are RSPO-certified, while the rest of the uncertified mills have undergone and completed all required preparations and are ready to commence the certification process. FGV expects to achieve RSPO certification for all its remaining uncertified mills within 24 months upon the removal of the deferment by the RSPO for FGV to certify its uncertified mills. The deferment was put in place due to the WRO against FGV. To further operationalise FGV’s commitment to child protection and as part of FGV’s participation in the National Pledge against Child Labour, we have adopted a Policy Statement and Guidelines on Respecting and Protecting Children’s Rights. The Policy Statement reiterates FGV’s zero tolerance for child labour throughout its business operations and supply chain. The key aspects covered by the Guidelines include equal treatment of children, child protection, adequate living conditions for children’s development, access to education, and prevention of child labour, among others. OUR COMMITMENT TO CLIMATE CHANGE In our contribution towards reducing the impact of climate change, FGV has set a target of achieving net-zero emissions by 2050. As part of that effort, we have completed our carbon emissions baseline and greenhouse gas emissions inventory for Scope 1 and Scope 2 for all 20 operational units based on 2019 data. Due to the complexity of our supply chain, FGV is facing challenges in ensuring the accuracy of our Scope 3 inventory. Despite this, we aim to finalise our inventory by 2024. FGV acknowledges its role in environmental stewardship and is dedicated to transparently addressing our environmental impact through actionable measures. To ensure ecological balance, FGV has continued to implement specific measures within our plantations. This includes the creation of buffer zones and pathways to facilitate the free movement of elephants and prevent potential human-wildlife conflicts. Such measures mitigate risks, as unchecked encroachments by wildlife can result in substantial financial implications. Looking forward, FGV is strategically positioned to evolve beyond traditional plantation operations in alignment with the growth of greener businesses. Leveraging our biomass resources, we aim to diversify into the bioenergy sector. We envision FGV becoming a leading biomass feedstock supplier, expanding our footprint in power generation, and facilitating broader access to bioenergy solutions for stakeholders. Adopted FGV’s Policy Statement and Guidelines on Respecting and Protecting Child Rights.
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