Aqila SD SR2018

U N L O C K I N G VA L U E
RISE TO APEX
S U P P L E M E N T A R Y P R O G R E S S R E P O R T
O N S U S T A I N A B I L I T Y 2 0 1 8
INSIDE THIS REPORT
2 Our Approach to Sustainability

4 Our Total Quality Management
10 Our Social Performance
15 Our Occupational Safety and Health
17 Our Environmental Impact
27 Global Reporting Initiative (GRI)
33 Modern Slavery and Human Trafficking Statement
FY2018 (July – December)
PREFACE
This Sustainability Report is supplementary to With heightened scrutiny faced by the palm oil sector in
Sime Darby Plantation Berhad's (SDP or the recent times, SDP strives to leverage on Sustainability
Group) Annual Report for the financial period to Create Value by not only identifying and managing
ended 31 December 2018 (FPE 31 December supply chain sustainability risks but through strategic
partnerships that meet geographical markets’
2018). This Report provides further details on
expectations. We ensure operational excellence without
our sustainability performance, initiatives and
compromising our commitments to contributing to a
achievements, and has been prepared based better society, minimising environmental harm and
on key material sustainability issues* broadly delivering sustainable development.
agreed upon through our annually reviewed
Sustainability Blueprint, management meetings During the reporting period, we launched our Innovation
and stakeholder engagements. Here, we and Productivity Charter (IPC), which we report
present our approach to sustainability, provide extensively through our approach to total quality
updates on our total quality management, management. The IPC articulates our aspirations to
report on our occupational safety and achieve prosperity with high levels of productivity,
health, and discuss our social as well as our for the purpose of sustainable development. This
charter complements the pledges we have made in
environmental impact.
our Responsible Agriculture Charter (RAC) and Human
Rights Charter (HRC) to holistically implement leading
Supplementary Progress Report on Sustainability 2018

responsible agricultural practices across our global The structure and broad-based contents of this report
operations. Our continuous efforts in responsible have been prepared in accordance with the Global
practices and approaches have earned us various Reporting Initiative (GRI) Standards: Core Option.** Our
awards and recognitions globally. We continue to Carbon inventory Is reported on a year on year basis
report our efforts to flawlessly implement sustainability using the RSPO PalmGHG calculator version 3 and the
standards because we recognise that certification alone GHG Protocol accounting standard.
is no longer enough. We also realise that for us to lead in
the implementation and development of new standards In the spirit of continuous improvement, we welcome
and approaches, we cannot do it alone. Including our and value constructive feedback from you. Please email
stakeholders and communities in delivering sustainable us at : [email protected]
development is crucial to our sustainability journey.
* Please refer to the SDP Annual Report for FPE
This report is to be read in conjunction with the SDP December 2018, pages 20 and 21 for further details
Annual Report for FPE December 2018 (financial ** Please refer to the GRI Content Index on pages 27 to
performance) and the Yayasan Sime Darby Annual 32 of this Report
Report 2018 (philanthropic foundation's activities and
performance). Further information on our efforts can also
be found on our website: www.simedarbyplantation.com.
Supplementary Progress Report on Sustainability 2018 1

Ensuring Sustainable Values Sime Darby Plantation
OUR APPROACH TO SUSTAINABILITY
As the world’s largest producer of Certified Sustainable Palm

Oil (CSPO), we are committed to implementing responsible
agricultural practices whilst balancing a wide range of stakeholder
expectations. Our sustainability approach is in line with the
United Nations Sustainable Development Goals (UN SDGs) and
is guided by our sustainability purpose to contribute to a better
society, minimise environmental harm and deliver sustainable
development.
CONTRIBUTE TO A MINIMISE DELIVER SUSTAINABLE

BETTER SOCIETY ENVIRONMENTAL HARM DEVELOPMENT
This report complements our Annual Report and summarises These charters are available on our website at
our progress around key sustainability issues that we face. www.simedarbyplantation.com
This year, we successfully launched our Innovation and The RAC communicates our commitments to responsible
Productivity Charter (IPC) which articulates our aspirations environmental, social and governance practices whilst the HRC
across the value chain in achieving prosperity, via enabling conveys how we aspire to implement respect for human rights
high levels of productivity in delivering sustainable in line with the United Nations Guiding Principles on Business
development. The IPC is the third of our charters and and Human Rights (UNGPs). We monitor, verify and report on
complements our Responsible Agriculture Charter (RAC) our performance against commitments made in these charters
and Human Rights Charter (HRC), covering the aspect of via internal systems, policies and procedures.
Prosperity in delivering sustainable development.
FLAWLESSLY IMPLEMENT SUSTAINABILITY STANDARDS We also strive to embed a culture of innovation and
continuous improvement through our Operational Excellence
Our practices across our operations follow Good Agricultural and Quality Management programmes. In February 2018,
and Best Management Practices. We are committed to we launched our Operational Excellence and Innovation
flawlessly implementing sustainability standards. These Business Management Strategy 2.0 (OEIBMS 2.0), which
include international standards such as the Roundtable on will see Sime Darby Plantation (SDP) continue to enhance
Sustainable Palm Oil (RSPO) and Rainforest Alliance, as productivity towards a target of RM550 million in Lean Six
well as national mandated standards including the Malaysian Sigma derived cumulative benefits by FY2022.
Sustainable Palm Oil (MSPO) and Indonesian Sustainable
Palm Oil (ISPO) in the countries where we operate. LEADERSHIP IN DEVELOPMENT OF NEW STANDARDS
AND APPROACHES
One of our key priorities is the safety and health of all our
workers. We continuously enhance our approaches and We are proactively going beyond certification to meet the
procedures to ensure workers come to work safely, conduct increased expectations of our stakeholders. This is done
their work safely and go home safely. through participation in multiple thought-leadership and
collaborative platforms. One such platform is the High
Carbon Stock Approach (HCSA) that develops tools for
corporates to implement their no-deforestation commitments.
2 Supplementary Progress Report on Sustainability 2018

Sime Darby Plantation Ensuring Sustainable Values
OUR APPROACH TO SUSTAINABILITY
We continue to be an active member of the RSPO, most recently as part of the

Working Group that further strengthens the RSPO Principles and Criteria for the
production of sustainable palm oil.
Our leadership in responsible palm oil production and advancement of The world’s largest producer of Certified
sustainable practices was recognised by The Rainforest Alliance (RA), which Sustainable Palm Oil (CSPO) with a
presented New Britain Palm Oil Ltd (NBPOL) with the 'Sustainable Pathfinder production capacity of 2,464,175 million
Award.' This is the first time that such an award was given to a company in the tonnes (MT) per annum.
palm oil sector.
INCLUSION OF STAKEHOLDERS AND COMMUNITIES
We believe in engaging and collaborating with our stakeholders across our Operational Excellence and Innovation
operations. Our key stakeholders include our peers, customers and civil Business Management Strategy 2.0
societies with whom we collaborate to resolve complex issues via collective (OEIBMS 2.0) developed with a set
action. Such examples include: the Fire Free Alliance to combat regional target of RM550 million by 2022 to
further embed a culture of continuous
fire and haze issues; the Palm Oil & NGO (PONGO) Alliance which aims to
improvement.
effectively manage human-wildlife conflict in plantations; and the Decent Rural
Living Initiative, a pre-competitive collaborative platform with large influential
growers, aimed at tackling complex human rights and social challenges facing
the agricultural sector in rural settings.
MANAGE SUPPLY CHAIN SUSTAINABILITY RISKS Responsible Agriculture Charter (RAC)

articulates our commitments to
responsible environmental, social and
Our business is highly dependent on having a sustainable supply chain. For the governance practices.
year under review, our global supply chain is 98% traceable to the mill. Our Open
Palm Traceability Dashboard available at http://www.simedarbyplantation.com/
sustainability/open-palm-traceability-dashboard provides full transparency of our
supply chain and records actions we are taking in ensuring it remains sustainable.
It now includes a complete grievance register.
Human Rights Charter (HRC) articulates
our commitment to respect human rights
We are partnering with our stakeholders to manage sustainability risks within our in line with the United Nations Guiding
supply chain by identifying potential environmental and social risks associated Principles on Business and Human Rights.
with third-party suppliers. Our Responsible Sourcing Guidelines (RSG) have
programmes that assist our third-party suppliers including smallholders, to uplift
their practices to be in line with our sustainability requirements and to eventually
attain relevant certifications such as the RSPO, MSPO and ISPO. To further
manage the sustainability of our supply chain, we are developing an initiative that
Innovation and Productivity Charter
will further enhance and strengthen our approach to implementing responsible (IPC) articulates our aspirations to enable
agricultural practices throughout our supply chain and contribute towards higher productivity across the value chain
meeting, if not exceeding, expectations of our stakeholders around sustainability. to deliver sustainable prosperity.
This will be launched by 2019.
LEVERAGE ON SUSTAINABILITY TO CREATE VALUE
We believe our commitment to sustainability across our value chain will enable Participation in thought leadership
us to create value within our organisation and our diverse stakeholders. platforms, e.g. High Carbon Stock
Through our initiatives and efforts, we will be able to leverage on our unique Approach, Fire Free Alliance, PONGO
position to further develop responsible agricultural practices within the industry. Alliance and Decent Rural Living Initiative.

OUR TOTAL QUALITY MANAGEMENT
In October 2018, we launched the Innovation and Productivity Charter (IPC) to represent our commitment to
maximising stakeholders’ experience by delivering sustainable prosperity across the value chain.
Our IPC marks the third of our charters which will be delivered predominantly through quality management and operational
excellence. The focus for our Upstream Operations is to achieve a fresh fruit bunch (FFB) yield of 23MT/Ha and 23% oil
extraction rate (OER) by 2023. Sime Darby Oils Operations strives to ensure continuous Best-in-Class processes and cost
management practices which in turn, will ensure higher productivity and price competitiveness. This section focuses on key
initiatives that we have delivered through total quality management.
QUALITY MANAGEMENT
In pursuing our goals, we recognise that certification alone indicators). SCRA Q+ comprises three components;
is not enough. Hence, we continuously endevour to develop Structured Corp Recovery Assessment (SCRA) for palm oil
new, innovative approaches whilst upholding the interest of estates, Structured Oil Recovery Assessments (SORA) for
our wide range of stakeholders. palm oil mills and Quality & Hygiene Assessment (QHA)
for rubber. Completion of these assessments provides our
We have successfully combined our field assessments Strategic Operating Units (SOU) an overall score and rating
together into one programme called SCRA Q+ (Structured to aid in measuring quality as well as efficiency.
Crop Recovery Assessment with Quality and other relevant
PALM OIL
• Structured Crop Recovery Assessment

(SCRA) – Estate
• Structured Oil Recovery Assessment
(SORA) – Mill
Strategic Operating
SCRA Q+ Unit (SOU) Overall
Score and Rating
RUBBER
• Quality & Hygiene Assessment (QHA)
Structured Crop Recovery Assessment (SCRA) supports yield maximisation by addressing the yield loss factor (efficiency
of crop harvesting and evacuation to the mill). The assessment also includes crop quality, which directly affects performance
of the oil extraction rate (OER). Over the last four years, our SCRA scoring recorded a positive trend, reflective of good
harvesting and recovery culture in our operating units.

OUR TOTAL QUALITY MANAGAEMENT
Structured Oil Recovery Assessment (SORA) supports the realisation of increased OER by reducing oil loss and ensuring
mill efficiency. This assessment covers 10 areas in addressing the effectiveness of mill processes including: leakages,
housekeeping, palm product quality, laboratories, oil and kernel losses, as well as safety and security.
SCRA Q+ aims to further realise the commitment of achieving high FFB yields and OER by increasing the efficiency of
harvesting and evacuation of crops, maximising crop quality, reducing oil losses and ensuring mill efficiency. The programme
was initially developed in our organisation as a Field Assessment in 2010 which underwent 3 stages of adaptation before
evolving into its final form, the SCRA Q+, in 2017.
We have also embarked on a new process called Near Infrared (NIR) analysis which allows rapid testing of oil content in
samples of pressed fibre, raw effluent, decanter or centrifuge (sludge) and empty fruit bunches for oil losses. This allows us
to implement immediate corrective actions to control oil losses thus improving our OER. To date, a total of ten mills in Malaysia
have adopted the NIR analysis.
T H E EVO LUT I O N O F S C R A Q + I N S I M E DA R BY P L A NTAT I O N
• Normal individual
assessment
• Assessment Criteria:
Infield UCLF, UHB, HBL,
Platform UCLF SCRA Q+
• SFA System
- Dec’11 – Peninsular
- Apr’12 – East Malaysia
• Started Sept’10
SCRA
• Normal individual
assessment
• Criteria: UCLF, UHB,
HBL, UCLF/CP
• Group assessment (SOU basis)
• Manual
• Started Jul’17 for both
SFA
Peninsular and East Malaysia
• Assessment Criteria:
• Group assessment - SCRA: Crop Recovery, Field
• Assessment started: Husbandry, Crop Quality &
- May’14 – Peninsular Freshness
Field
- Nov’14 – East Malaysia - SORA: 10 assessment
Assessment
• SFA System areas including mill losses
• Assessment Criteria: - Rubber: Quality & Hygiene
- Crop Recovery Assessment
- Field Husbandry
(Observation)
*SFA System: Structured Field Assessment System *UHB: Unharvested Bunch *UCLF/CP: Uncollected Loose Fruit per Collection Point
*UCLF: Uncollected Loose Fruit *HBL: Harvested Bunch Left

Rubber Quality Hygiene Assessment (QHA) focuses on

the cleanliness of tapping and collection of field latex, and
reception and preservation and despatching of field latex at the
latex stations. Cleanliness is the main factor that contributes to
the Volatile Fatty Acid (VFA) content of field latex.
The competencies and skills of our people are the main

contributors to the success of the SCRA Q+ programme. To
date, the assessment team comprises six (6) lead assessors for
SCRA and four (4) lead assessors for SORA, and is assisted by
53 FFB Graders (certified by the Malaysian Palm Oil Board).
In the period under review, we deployed the SCRA Q+ Deployment of SCRA Q+ at Sime Darby Plantation Liberia (SDPL) in
October 2018
programme at Ramu Agri Industries Limited (RAIL) in NBPOL,
Papua New Guinea (PNG) and and Sime Darby Plantation
Liberia (SDPL). Moving forward, we will continue to expand
the programme at all our operations in Indonesia and PNG.
OPERATIONAL EXCELLENCE
In February 2018, we embarked on the second instalment of Central to the implementation of our OEIBMS 2.0 is a holistic
our five-year Operational Excellence and Innovation Business approach which incorporates both our vision and measurable
Management Strategy (OEIBMS 2.0) which serves as a targets to achieve higher operational excellence develop
blueprint for achieving RM550 million in Lean Six Sigma capacity and skills of our people as well as encourage
benefits (both hard and soft) by FY2022. Hard benefits are cultural transformation within SDP. The operationalisation
derived from cost savings and improved revenue generation of OEBMS 2.0 is further strengthened by our four key
— soft benefits, from cost avoidance and other non-financial programmes:
indicators through the implementation of Lean Six Sigma
(LSS) projects across the Group.
1 2
Lean Palm & Value Chain Enterprise Clone Protocol
• To expand the coverage of Lean Six Sigma (LSS) • To replicate our successes and accelerate the
application across our value chain deployment of growth
3 4
Universal Learning War on Waste
• To enhance the accessibility of our Operational • To eliminate inefficiencies by encouraging a
Excellence resources online Continuous Improvment mindset amongst our
employees

Strategic Stewardship
In the financial period ended 31 December 2018, we successfully completed 723 projects on revenue generation, cost savings,
cost avoidance and other non-financial indicators such as safety, water, waste and carbon emissions.
TOTA L N UM BER O F PRO J EC TS CO M P L E T E D I N F I NA NC I A L PE R I O D E ND E D D EC 2 01 8
11 322
11
Upstream Malaysia
Upstream Indonesia
Downstream
Procurement
167 R&D
212
Tactical Development
OPE R AT I O NA L E XC E LL E NC E PR AC T I T I O NE RS
Our success to date is attributed to our pool of talented AC RO SS T H E G RO UP
people. Our Champion workshops aim to equip our managers
and members of senior leadership with the skills needed to 240 Champions Trained
prioritise high impact projects that are aligned to business
objectives and enable effective management of resources for
project completion. 5 Certified Master
Black Belts
Our Black Belt (BB) programme caters to the development

of change agents and internal consultants with modules 13 ASQ Certified Black Belts
focused on advanced statistical tools, leadership skills,

change management, effective communication, enterprise-
wide strategic deployment, operational excellence and
56 Black Belt Internal
Consultants Trained
innovation. The programme aids BB internal consultants to

strategically deploy and operationalise each unique Business
Unit roadmap within their areas of responsibility.
1,068 Practitioners Trained
Our Green Belt (GB) and White Belt (WB) workshops provide
practitioners with the skills to lead, analyse and complete
projects undertaken with structural and conceptual tools.
Throughout 2018, we produced five (5) certified master black
belts, 13 ASQ certified black belts, 56 black belt internal
consultants and 1,068 practitioners across the Group.

Cultural Transformation
In January 2019, our internal “War on Waste” programme

was awarded the “Most Innovative Approach to Driving WA R O N WA ST E PA RT I C I PAT I O N
Culture Change” at the OPEX Business Transformation World R AT E BY OPE R AT I NG U NI T
Summit 2019 in Orlando, USA.
With the aim of driving cultural transformation, we first

launched our organisation-wide “War on Waste” programme
in December 2015. This culture change programme was
80%
established in late 2015 and is now in its third installment,
successfully generating over 5,000 projects from 223
operating units (66%) across our operations and support
66%
services in FPE December 2018. The fourth edition of
the War on Waste (WOW 4.0) programme will see the 60%
introduction of the “Clone Protocol” framework - a platform 55%
to capture successful projects and replicate them throughout 50%
the business.
40%
In applying Lean Six Sigma methodology across our value
chain, we deployed the 5S system, abbreviated from the
Japanese words seiri, seito, seiso, seiketsu, shitsuke, which
translates to sort, set in order, shine, standardise and
sustain. This system aims to organise spaces so work can be 20%
performed efficiently, effectively and safely, in line with our 16%
continuous improvement culture.
For the financial period ended 31 December 2018, we

internally certified a total of two (2) operating units from our
Upstream Indonesia’s Kalimantan Selatan & Sebamban (KSS) WOW 1.0 WOW 2.0 WOW 3.0 WOW 4.0 WOW 5.0
FY2016 FY2017 FY2018 FY2019 FY2020
and Riau Utara & Aceh (RUA) regions. We also re-certified a
total of five (5) operating units from our Upstream Malaysia’s Target Actual
Northern and Sabah regions.
Tunku Estate, Sabah during the 5S audit

In October 2018, our Renewables team, the Green Turbo, won the PNB Group Innovation Challenge (PGIC) with their innovative
idea, “Energy Self-Sufficiency”, which involves generating higher power output at the mill using a Multistage Turbine.
Team PT GHN refinery and Team Rhimau Selatan with their Gold medals at the Asia Pacific Quality Organisation (APQO)
In December 2018, our teams from PT Golden Hope Nusantara (PT GHN) refinery and Rhimau Selatan were awarded gold
medals by the Asia Pacific Quality Organisation (APQO) in Abu Dahbi, UAE. The teams' winning project was aimed at
increasing RBDOL IV 56 yield and reducing loose fruit handling cost.

OUR SOCIAL PERFORMANCE
At SDP, we believe that the safety, wellbeing and development of people is important to our sustainability purpose.
We aim to contribute to a better society through the way in which we engage our people in the workforce, enrich
people through communities and influence positive change through socio-economic growth.
O UR WO R K F O RC E STAT I ST I C S A S AT 3 1 D EC E M B E R 2 01 8
95,537
Dec 2017 2.66%
UPSTREAM SIME DARBY R&D HEAD OFFICE AGRI BIO &

OILS RENEWABLES
92,057 1,790 1,085 515 90
19% 42.2%
Female
GENDER 81% 30.0%

Male
23.0%
3,398
Executive
2.4% 1.4% 1.0%
POSITION
12,805
Non-Executive
79,334
Worker
Malaysia Indonesia Papua New Liberia Solomon Islands
Guinea
RESPECTING HUMAN RIGHTS
In 2017, we launched our Human Rights Charter (HRC) that enshrines our commitment to promoting human rights in line with
the United Nations Guiding Principles (UNGP) on Business and Human Rights. The Charter highlights 9 salient human rights
issues which concerns us - equal opportunity, freedom of association, eradicating exploitation, working conditions, safety and
health, community rights, rights of children, rights of vulnerable people, and violence and sexual harassment. It also outlines our
approach, scope of persons within the sphere of influence, and responsibilities. For the full HRC, please visit our website at
www.simedarbyplantation.com. Our progress report on human rights is also enclosed in our Modern Slavery and Human
Trafficking Statement FY2018 (July – December), included in this Supplementary Progress Report.

For the period under review, we continued our efforts in operationalising the commitments of our HRC through mitigation
measures and improvement plans to address some of the issues below:
Eradicating Ensuring Favourable Improving grievance Freedom of Eliminating Violence

Exploitation Working Conditions mechanism Association and Sexual Harassment
Eradicating Exploitation
Currently, SDP has a total staff strength of 95,537, with over 80% of workers in fields, mills and refineries across the globe.
Within the upstream sector in Malaysia, over 24,000 workers are migrant workers, mostly from Indonesia, India, Bangladesh
and Nepal.
BR EAKDOWN OF M I GR A N T WO R K ERS I N M A L AYS I A BY

COUNTRY OF O R I GI N A S O F DEC EM BER 2 01 8
5% 6% 2%
23% Indonesian
Indian
Bangladeshi
Nepalese
Others
64% Recruitment of migrant workers conducted in the workers' countries of

origin by SDP employees
Challenges faced by migrant workers in Malaysia are not accept their positions voluntarily. We work closely with our
unique to the palml oil sector, and have varying levels of partners in the workers' countries of origin to understand
complexities depending on the workers' countries of origin. various administrative costs incurred in their respective
Some of these challenges are systemic such as workers countries. Throughout the recruitment process, we ensure all
incurring high debts from unreasonable recruitment costs, potential candidates understand that SDP does not impose a
accepting work offers with incomplete information, and the recruitment fee.
unlawful withholding of personal documents. We continue
to engage with a number of stakeholders in an effort to In our effort to eradicate exploitation, we continue to monitor
influence change. the handover of passports to our migrant workers in 125
estates and 33 mills in Malaysia. This initiative is aligned to
We continue to monitor and evaluate our migrant worker our commitment of not withholding passports, to ensure that
recruitment procedures in Malaysia. As far as possible, all workers are given freedom of movement. Newly hired
recruitment is conducted directly by our own teams in the workers are also reminded to ensure they are in possession
workers' countries of origin. In these countries, all briefing of their identification documents prior to leaving their
materials and contracts are translated into relevant local country of origin during our recruitment sessions.
languages to ensure potential workers understand and

Ensuring Favourable Working

Conditions
In September 2018, SDP rolled out

an initiative three months ahead
of the Malaysian government's
minimum wage enforcement to
ensure a fair wage rate for workers
in our Malaysian operations. The
national Malaysian minimum wage
for the period under review was
RM1,000 per month for workers in
Peninsular Malaysia and RM920
per month in East Malaysia.
In addition, SDP ensures workers SDP provides free housing to all its workers who are employed at its estates
are provided with decent living

and working conditions through
Improving grievance mechanisms
productivity-based income The national
incentives as well as various Malaysian
minimum In November 2018, we collaborated with Nestle and ELEVATE on a
free and subsidised benefits.
wage for the programme to provide an independent third party helpline for our workers
These include, among others, period under in Malaysia. The goal of the helpline is to provide an effective avenue for
free accommodation, potable review was
workers to report on working conditions, recruitment, safety and other
water, supply of rice, subsidised RM1,000
issues that might affect them directly or indirectly via a technology-
electricity, free medical treatment per month
for workers enabled communication channel. More information can be found in
for employees and their immediate
in Peninsular SDP's Modern Slavery and Human Trafficking Statement FY2018 (July –
dependants, as well as various Malaysia and December) annexed to this Report.
amenities such as school bus RM920 per
transport for employees' children month in
East Malaysia
Freedom of Association
and recreational facilities.
Number of employees
We continue our involvement in
Number of Collective covered under Collective
the Decent Rural Living Initiative,
Country Agreements Agreements
a pre-competitive collaboration
Malaysia 10 28,380
with other major industry players
Indonesia 37 29,878
namely. The initiative focused
initially on our Indonesian PNG 1 21,609
operations, seeks to improve the South Africa 1 68
protection of human and labour Netherlands 1 194
rights of workers in the agriculture Liberia 1 2,169
sector with the goal to empower Vietnam 1 232
rural communities through
Graph: Breakdown of collective agreements and number of workers covered under the agreements as at
cross-industry and stakeholder December 2018
partnerships. Implementation of
the action plans are targeted to In line with our HRC, we will continue to support capacity-building
commence in 2019. initiatives and the development of our union members. This includes
working with partners to empower our unions to better disseminate
information, improve awareness of workers’ rights and effectively
represent the welfare and well-being of workers.

In localities where formal unions do not exist, programme aims to provide capacity-building
comparable means of representation are created for respondents to better understand, identify,
7 sessions
such as joint consultative councils and other similar respond, and manage social issues at the estate have been
platforms for workers to raise their concerns level, specifically sexual harassment and domestic conducted
and safeguard their rights. Our goal is to ensure violence.
our workers, including those who are not union
members (approximately 30% of the workforce) Seven (7) sessions have been conducted across
have proper channels to air their grievances. four (4) regions in Peninsular Malaysia. More than
more
200 participants made up of gender committee
than 200
Eliminating Violence and Sexual Harassment members, auxiliary police as well as hospital and participants
medical assistants attended the two-day workshops.
For the year under review, SDP collaborated with Key outcomes from the workshops include
Women’s Aid Organisation (WAO) and Yayasan recommendations on action plans for greater
Sime Darby (YSD) on gender-based issues through awareness on these issues within our operations.
empowerment programmes on the ground. The
One of the seven (7) gender-empowerment programmes conducted in the FPE December 2018
The foundation has been laid for a management response and accountability
framework at the plantation level, which is survivor-friendly and progressive in
terms of women and children’s human rights standards. This should be replicated
with higher management as well as making this workshop a staple, alongside
conducting a refresher session once every six (6) months.
Women’s Aid Organisation (WAO) Malaysia
We aim to complete roll out of the programme in Sarawak and Sabah by 2019. The Gender Committees in the plantations have
been empowered to monitor and evaluate the outcomes of the programme. Upon completion, a more focused and targeted set
of trainings shall be developed to equip key functions to prevent and eliminate gender-based violence in our plantations.

OUR LARGER COMMUNITY
SDP believes delivering sustainable growth means leaving no one behind. As our business thrives, we continue to carry out
our role as a responsible global citizen in ensuring that the people surrounding our operations grow with us. We acknowledge
that sustainable development is not attainable by a single entity. This is reflected in our regular engagements with communities
and their representatives from local authorities, civil organisations, suppliers, and community leaders. We collectively deliberate
on challenges faced and to the best of our abilities, work with communities to develop practicable solutions.
Today, we are proud to have created positive impacts for the community at large, in our areas of operations. Three (3) of our
initiatives that have been successfully executed and replicated across our operations are described below.
CASE STUDY
Local Solutions
1. 2. 3.
Our Responsible Sourcing The Fire Hotspot Patrol Team One Hour Principle Partnership is
Guidelines (RSG) aims to bring all provides community members an a programme that empowers local
our suppliers onboard the sustainable opportunity to assist in fire prevention. community representatives to raise
palm oil supply chain. Here, we focus Community members are trained to fundamental human rights issues with
on small growers and small farmers monitor local weather and patrol areas their local governments. Priority areas
who require facilitation from us to for potential fire risks. SDP assists include access to drinking water,
fully benefit from the implementation the patrol team in notifying relevant health facilities and schools within one
of environmentally and socially parties and putting out actual fires. hour of their homes.
responsible practices. Please see page 26 of this Report for
more details of our actions to combat
fire and haze.
SDP engaging with smallholders in Indonesia

OUR OCCUPATIONAL SAFETY AND HEALTH
PERFORMANCE
LO ST T I M E I NJ U RY & LO ST T I M E
The Group regrets to report four (4) fatalities or Class 1 I NJ U RY F R E Q U E NC Y R AT E
accidents during the period under review and a Fatality Rate
(FAR) of 3.3 (3.3 fatalities for every 100 million hours worked). 45%
reduction
This is a 10% increase from the previous year. The causes of
23.7
these fatalities were work related transport (2), machinery (1) 6,000 25.0
19.7
and contact with hot substance (1). The accidents occurred 5,903 20.0
within Papua New Guinea (2), Indonesia (1) and Malaysia (1).
4,000
4,685 12.8 13.0 15.0
10.0
OCC UPAT I O N A L FATA LI T I ES 2,000 2,943
5.0
1,562
3 0 0.0
4 Upstream Malaysia FY15/16 FY16/17 FY17/18 FP2018
1 Upstream Indonesia
2 SDP LTI Cases SDP LTIFR
1 NBPOL
3 1
2
1
The Group also recorded a total of 6,243 lost days within the
FY16/17 FY17/18 FY2018 (T)
financial period under review, with Total Recordable Severity Rate
(TRSR) of 52.0 (52 lost days for every million hours worked).
This marks a 36% reduction compared to the previous year.
OCCUPATIONA L FATA LI T I ES & FATA LI T I ES R AT E

TOTA L LO ST DAYS & TOTA L R ECO R DA B L E
7 7 S E V E R I T Y R AT E
30,000
92.9
100.0
4 SDP Fatalities
81.4
FAR (per 100m Hours Worked) 22,110
3.3
3.0
18,772
2.9
20,000 52.0
50.0
FY16/17 FY17/18 FY2018 (T)
10,000
6,243
During this reporting period, four accidents resulted in 0 0.0
permanent disability injuries. These Class 2 accidents were also FY16/17 FY17/18 FY2018 (T)
recorded in Papua New Guinea (1) and Malaysia (3) and they
were due to machinery (3) and electrocution while harvesting Total Lost Days LTIFR
(1). With such an unfortunate number of cases, the Group is
determined to continue with mitigation efforts such as safety
programmes to keep our workers safe. Overall, there has been a 45% reduction in accident rates since
FY2016. These statistics will serve as a reminder for us to
During the review period, the Group recorded a Loss Time Injury continue ensuring the safety and health of our employees at
Frequency Rate (LTIFR) of 13.0, (13 injuries per million hours work.
worked). This marks a 2% increase compared to the
previous year.

OUR OCCUPATIONAL SAFETY AND HEALTH
KEY INTERVENTION PROGRAMMES Following our success in eliminating the usage of Class 1A and
1B pesticides from our operations and enforcing strict procedures
In 2018, we launched our latest initiative dedicated to ensuring on chemical usage, we continue to address other occupational
the safety and health of our employees, contractors and visitors health issues under the DOSH’s Systematic Occupational Health
under the banner of iCARE (Intervention, Communication, Enhancement Level Program (SOHELP), particularly the Hearing
Accountability, Risk Mitigation and Excellence). Conservation Program and Ergonomics Program.
One such programme is the OSH Townhall aimed at increasing We continuously strive to deliver value-added services to our
occupationalal safety and health (OSH) awareness at all levels operations as part of our commitment to Excellence. We work
of employment within the Company. The sessions are conducted with various stakeholders by providing input on safety and health
by Heads of Operating Units (OU), designed to demonstrate - for example, with new machineries such as the development
the commitment and accountability of management while of our mechanised buffalo prototypes. Another significant
emphasising the importance of cooperation and participation achievement is the prototype production of the Harvesters Safety
of all employees. Recognition is given during these sessions Helmet designed specifically for use in tropical countries using
to individuals or groups that have demonstrated notable anthropometry data of our workers. The safety helmet project was
contributions to improving OSH within the Company. In a collaboration with Universiti Putra Malaysia (UPM) and Universiti
demonstrating a collective commitment to safety and health, a Malaysia Perlis (UNIMAP).
KPI is also included for relevant members of management and
Heads of OUs. During the period under review, 35 OUs received the OSH Award
from the Malaysia Society of Occupational Safety & Health
Training programmes are organised to inculcate the culture (MSOSH) in various categories such as Gold Merit (2), Gold (28)
of responsibility and accountability in our OUs. The trainings and Silver (5), as well as the Highest Participation Award for the
include longterm programmes such as the Building Estate third consecutive year. In Indonesia, 21 of our estates and mills
Sustainability and Transformation (BEST) programmes, received the National Zero Accident Award from the Indonesian
Cadet Planters and Cadet Engineers, as well as short-term authorities.
programmes such as Ergonomics & Manual Handling and Safe
Chemical Handling. Basic Occupational First Aiders (BOFA)
training is also conducted to equip employees with life-saving
first aid knowledge. During the period under review, a total of
260 employees from our OUs within Malaysia were certified as
occupational first aiders. In addition to programmes designed to
tackle unsafe acts, we also continue to improve our approach to
eradicate unsafe conditions.
Various assessment programs have been introduced to ensure

significant risks are mitigated. These include HIRAC (Hazard
Identification, Risk Assessment and Risk Control), HAZOP
(Hazard and Operability Study) and CHRA (Chemical Health Risk
Assessment). We strive to prevent major accidents by identifying
unsafe conditions and unsafe acts and ensuring monitoring
through the SIME card (Spot, Intervene, Modify, Execute)
initiative and PIIRO (Preventing Incidents by Identifying Hazards,
Reporting Near Misses and Observing & Recognising Positive
Safety Behaviour) initiative. For the review period, the Group LEGAL COMPLIANCE
recorded a total of 60,318 SIME cards, equivalent to the number
of potential accidents which were successfully prevented. This During the period under review, the Group maintained full
was a 65% increase compared to the corresponding period in compliance to OSH legal requirements when it recorded zero (0)
the previous year. cases of non-compliance to OSH legal requirements.

OUR ENVIRONMENTAL IMPACT
At SDP, we view sustainability as a way to differentiate ourselves from bad practices and strive to minimise
negative impacts from our operations to the environment.
Our operational activities are governed by various certification schemes such as the Roundtable on Sustainable
Palm Oil (RSPO), Malaysian Sustainable Palm Oil (MSPO), Indonesian Sustainable Palm Oil (ISPO) and Rainforest
Alliance (RA) in NBPOL. Nevertheless, we recognise that certification is no longer enough. In addition to ensuring
compliance to these various schemes, we are guided in our efforts by our Responsible Agriculture Charter (RAC),
which lays down our commitment in “No Deforestation and No Development on Peatland”. Beyond regulatory
requirements, we also strive to minimise our carbon footprint, protect biodiversity in our landscapes, and ensure
responsible waste and water management.
DEF O R ESTAT I O N LI N K ED TO M A J O R AG R I C U LT U R A L CO M M O D I T I ES
TOTAL FOREST LOSS, 1990 – 2008 (MILLION HECTARES) AVERAGE ANNUAL FOREST LOSS, 2001 – 2011 (MILLION HECTARES)
Livestock Livestock
Beef and other Beef
ruminant products
13%
Pig and poultry
Exports
Crops
Crops Soybean
44% Exports
Soy
Maize
Palm Oil 40% Exports
Palm Oil
Wood products
Wood production 33% Exports
Rice
Sugarcane 0 1 2 3
Rubber Million hectares/year
= 1 million ha Production Export
Source: Climate Focus calculations based on European Commission, 2013 Source: Henders et al., 2015
The main commodities driving deforestation, from the analysis of Climate Focus based on two (2) different data sources. Climate Focus has concluded that the more important a
commodity is, the less likely that a company will have pledged to eliminate the deforestation that it’s causing. The report is featured in the “Progress on the New York Declaration on
Forests - Goal 2 Assessment Report & Update on Goals 1-10.”
CARBON AND ENERGY
Carbon emissions are a key environmental concern for oil palm plantations. We aim to provide greater transparency on our
carbon footprint by stringently monitoring and measuring our emissions to provide accurate data on our performance.
2018 Performance
Carbon Emissions
This year, we continue to collect and calculate emissions for our palm oil and rubber operations throughout the calendar year
2018 using the RSPO PalmGHG calculator version 3 and the GHG Protocol accounting standard. We used the RSPO PalmGHG
calculator to measure emissions from land use change1 (LUC) due to the replanting and new planting activities. The operational
emissions 2 data was collected and calculated in accordance with the GHG Protocol accounting standard.
1
LUC covers emissions and removal of GHGs resulting from direct human-induced land use, land-use change and forestry activities. Carbon is sequestered by forestry and grassland,
while carbon losses occur on existing cropland and natural land (e.g. grassland) that is converted to cropland or settlements.
2
GHG emissions arising from operations during palm oil growing, FFB processing and CPO processing, excluding emissions arising from changes in carbon stock during the
development of new planting and replanting.

From 1 January to 31 December 2018, our absolute We are continuously working towards improving the energy
Greenhouse Gas (GHG) footprint was approximately 4.89 efficiency of our operations. We focus on emissions directly
million tonnes of carbon dioxide equivalent (tCO2-e). from SDP’s operations including land clearing and preparation,
planting, fetilising, harvesting, extraction, transportation and
Our analysis shows that emissions from land use change processing of raw materials. We currently do not manage
(LUC) represent around 40.5% of our total GHG footprint, emissions that are generated by third parties who supply fresh
while emissions from palm oil effluent treatment (POME) fruit bunches.
accounts for 37.5%. However, it should be noted that
emissions from previous LUC continues to be included in our In 2018, we achieved an emissions intensity of 1.09 tCO2-e/t
emissions calculations today. A detailed breakdown of our CPO*, which represented a 5% increase from the baseline
GHG emissions is illustrated in the following graph: figure. In consideration of the current challenging business
environment, and with less than two (2) more years to meet
our original target of 40% emissions reduction from the
baseline level of 2009, we have concluded that a revision
BR EAKDOWN O F GH G EM I SSI O N S I N 2 0 18 of the entire carbon reduction strategy for our upstream
operations was necessary. As such, during the period under
review, the Group has decided to extend the target date to
0.7% 40.5%
achieve the desired emissions reduction level by another 10
1.4%
years, setting a more realistic and achievable target year date
1.9%
of 2030, from the initial commitment of year 2020.
2.1%
3.1% * tonnes of carbon dioxide equivalent per volume of production (tCO2e/t CPO)
6.2%
A NNUA L G H G E M I SS I O NS I NT E NS I T Y T R E ND *
(*Includes data from Liberia and NBPOL (from 2015 onwards))
6.7%
1.06 1.02 1.20 1.13 1.09
37.5%
Land Use Change

Effluent Treatment
Boilers
Fertilisers
Purchased Electricity
Electricity Generation
Machineries (Heavy Machineries, Agricultural
Machineries & Other Stationary Machineries
Transport (Controlled Vehicles)
Purchased Steam 2009 2015 2016 2017 2018
(baseline)
*Numbers may not add up to 100% due to rounding up of figures

Emission Intensity Target = 0.64 tCO2-e/ CPO produced

Energy
We consumed 30 million gigajoules

E NE RGY B R E A KD OW N
(GJ) of energy in 2018, marking a
decrease of 14% from the previous
year. This was mainly due to lower
3% Electricity
energy demand from our NBPOL
operations. Most of the energy
used by boilers still comes from 1% Medium
fuel oil
renewable sources such as biomass

84% Non-Renewable Sources 16% 7% Diesel
Renewables
(palm kernel shell and fibre), which
contributed to 84% of SDP’s overall
energy needs. This initiative has
avoided approximately 1.8 million
5% Natural gas
tCO2-e of emissions had diesel been
used instead.
Carbon Reduction & Renewable Energy Initiatives
As of 2018, we operate nine (9) biogas facilities within Flemington biogas facility in Kulai, Johor generated 7,986
Malaysia, Indonesia and PNG. These include five (5) facilities MWh while the Hadapan biogas facility in Bagan Datuk, Perak
at our palm oil mills in Malaysia, two (2) plants at the kernel generated 6,984 MWh, contributing to the renewable energy
crushing plants in Indonesia and two (2) in NBPOL in PNG. mix in the national grid. In addition, the Tennamaram, Merotai
These biogas facilities contributed to a 8% reduction in GHG and West Oil Mills in Malaysia commenced methane flaring in
emissions. 2017, while the two (2) kernel crushing plants in Indonesia
- Pemantang and Rantau - commenced methane flaring in
Agricultural biogas plants do not only generate renewable 2018. We also use a small amount of POME to enhance the
energy but also prevent methane emissions. Methane is a production of organic fertiliser, which helps to further avoid
high-impact GHG and is created when palm oil mill effluent the creation of GHG emissions if it were to sit in a retention
(POME) is stored in retention ponds. At the biogas facilities, pond.
POME from CPO production undergo retention for a certain
amount of time before being discharged into streams. The In NBPOL, the Mosa biogas facility supplies 900 kW to
biogas produced during the degradation of POME is then the PNG power grid and has another 1.6 mW available for
used to generate power that is fed into the grid, or flared, company operations and housing compounds. The Kumbango
ensuring that methane is not released into the atmosphere. biogas facility is mostly dedicated to powering the refinery
where 900 kW directly replaces diesel generated power.
In Peninsular Malaysia, we have two (2) biogas facilities that Power is also supplied to their boilers, which is equivalent
feed 100% of the generated power into the main grid. These to 1.6 mW in gas. This equates to a saving of approximately
facilities are a joint venture project with Tenaga Nasional 15,000 litres of diesel per day.
Berhad, the national electricity utility provider. In 2018, the
MOVING FORWARD
Despite a number of challenges, we have made meaningful progress in the implementation of green technology to reduce
carbon emissions throughout our operations. We are currently exploring other methane avoidance and renewable energy
initiatives to further reduce our emissions in order to meet our carbon reduction target.

BIODIVERSITY In PNG, we have several existing forest restoration

projects which are focused on riparian and
In total, we
SDP’s palm oil production is concentrated in some of coastal areas within replanted areas of pre-RSPO have set aside
the most biologically-diverse areas in the world. We are plantations. In these areas, there is sufficient 39,997
committed to enhancing our environmental and wildlife natural forest in the immediate vicinity enabling us ha of HCV
management in every location where we are present. to conduct assisted natural regeneration activities. areas for
conservation
This entails regularly removing any non-native across
In total, we have set aside 39,997 ha of High vegetation, vines and other weeds to enable forest our global
Conservation Value (HCV) areas for conservation tree species to grow. In addition to this, we maintain operations
across our global operations and continuously train our own tree nurseries such as the nursery in
our workforce on the monitoring of such HCV areas. Ramu, which has 96 native tree species. Since
2014, 69,911 trees have been planted on 426.5 ha successfully
planted
Tree planting has been one of our biggest in PNG. In West New Britain, we are working with
1,367,901
conservation efforts, aimed at preserving endangered a local school and environmental NGO to restore trees over 10
plant species and creating wildlife corridors that 86 ha of mangrove forest and have planted 10,914 years
are critical to various animal species. We set aside saplings of Rhizophora sp. and Bruguiera sp.
160 ha of unplanted area for this purpose at Jentar sourced from a community-based nursery.
Estate, Pahang. A total of 136,036 trees made up of
126 species, 60 of which are threatened, have been Fire, whether created naturally or by people, affects Since 2014,
successfully planted and maintained in Jentar Estate biodiversity within our plantations and the surrounding 69,911
in the past five years, making it the largest collection lands. In this respect, we continue to work with the trees have
been planted
of Endangered, Rare and Threatened (ERT) tree Selangor Forestry Department and Global Environment
on 426.5
species in a single oil palm plantation area in Malaysia, Centre (GEC) on our fire patrolling initiative (Peat
ha in PNG
and possibly South East Asia. We have successfully Swamp Forest Protection and Rehabilitation Project)
planted 1,367,901 trees over 10 years, which is part at the Bukit Talang Estate along the Raja Musa Forest
of a bigger program with Yayasan Sime Darby (YSD) Reserve in Selangor. The initiative serves to protect
and Forest Research Institute Malaysia (FRIM). biodiversity in our plantations and the forest reserve
This achievement comprises four (4) projects – the by actively monitoring water table in the area. SDP
Sime Darby Plant-A-Tree (SDPAT) programme; the has also embarked on the second phase of this
reforestation and rehabilitation of Orang Utan habitats project, which aims to further promote community-
in Northern Ulu Segama with the Sabah Forestry based resource management, maintain and enhance
Department; the Kinabatangan RiLeaf Project with technical support to smallholders and adjacent
Nestlé Malaysia; and the peat swamp protection and landowners. It also aims to enhance awareness among
rehabilitation project in the Raja Musa Forest Reserve key stakeholders about undertaking an ecosystem
with Global Environment Centre (GEC). approach towards conservation.
SDP's Plant-A-Tree project

Northern Ulu Segama
On 8 December 2018, the 10-year orangutan Over the last 10 years, over RM25 million has been
conservation project at Bukit Piton Forest Reserve invested by SDP to rehabilitate 5,400ha of the over
(renamed in 2012 and previously known as Bukit Piton Forest Reserve. Nearly 300,000 trees RM25
Northern Ulu Segama), came to a close with the from 95 species have been planted, which serve as million has
been invested
project officially handed over to the Sabah Forestry important food sources for orangutans and other by SDP to
Department (SFD). The closing ceremony was wildlife species. The project has been deemed a rehabilitate
attended by SFD Chief Conservator of Forest, Datuk success as there have been multiple sightings of a 5,400ha
of the Bukit
Mashor Mohd Jaini, YSD Governing Council member large number of orangutan nests in the rehabilitated
Piton Forest
Datuk Jeffri Salim Davidson and SDP's Deputy area. The forest was also reclassified from a Class Reserve
to Managing Director & Chief Operating Officer, II (Commercial Forests) to a Class I (Protection
Upstream, Mohamad Helmy Othman Basha. Forests) in March 2012 and acquired the status of
being a Totally Protected Area (TPA).
PONGO Alliance
Taking a further step towards enhancing biodiversity is the Kinabatangan basin in Sabah where it is
conservation, we have joined the Palm Oil NGO developing a programme to retain, plant and nurture encourages
collaborative
(PONGO) Alliance. The PONGO Alliance, founded orangutan food plants and nesting trees within oil palm
efforts to
in 2015 and officially launched in 2017, encourages plantations. A survey on the presence of orangutans protect
collaborative efforts by the industry's various in the area was conducted recently to explore the orangutans
stakeholders to protect orangutans and their habitat potential of introducing orangutan food plants on or and their
in oil palm landscapes. The Alliance was co-founded between the oil palms at our estates in Sandakan Bay. habitat in
by oil palm growers (SDP, Musim Mas, Wilmar and oil palm
ANJ) and wildlife conservation bodies (BORA, In Indonesia, the Alliance will focus on the Ketapang landscapes
HUTAN, AidEnvironment, Copenhagen Zoo and district. The Alliance has appointed Darmawan
Orangutan Land Trust). Liswanto, a conservationist with over 25 years
of work experience. His role as a consultant will
The PONGO Alliance represents a paradigm shift be to provide a holistic overview of the various
within the sector, not only in linking oil palm threats and opportunities related to conservation of
growers, businesses and conservation organisations orangutans and other wildlife species in Ketapang
under a united vision, but also in imagining that oil and provide expertise on direction and action for the
palm plantations can represent habitats for some PONGO Alliance.
rare wildlife species. Its current focus in Malaysia

ENVIRONMENTAL MANAGEMENT
Malaysia
SDP has continued to take the lead in implementing the We have allocated a budget and resources for the
Guided Self Regulations (GSR) in our Malaysian mills, rubber continuous development of our facilities such as mini
factories and refineries. GSR is a strategy by the Malaysian labs for in-situ monitoring as well as the installation and
Government to empower the industry for effective environment maintenance of pollution control systems. About RM90
management using the 7 Environmental Mainstreaming Tools million will be invested to ensure compliance with more
- Policy, Budget, Monitoring Committee, Facility, Competency, stringent air emission and effluent standards affecting
Reporting & Communication, and Transparency. our mills in Malaysia. We also ensure we have technically
competent employees such as Certified Professionals in
To date, all relevant operations have adopted and implemented Palm Oil Mill Effluent (CePPOME), Certified Professionals
the 7 Environmental Mainstreaming Tools through the in Scheduled Waste Management (CePSWaM), and Certified
Environmental Regulatory Compliance Monitoring Committee Environmental Professionals in the Operation of Industrial
(ERCMC) at all six (6) upstream and downstream regions. Effluent Treatment Systems (CePIETSO – PCP/BP, etc).
Individual operating units report their performance through the Moving forward, we will be adopting a similar GSR strategy
online Continuous Emission Monitoring System (CEMS), Online for estate operations in Sabah, in collaboration with the
Environmental Reporting (OER) and Electronic Scheduled Environment Protection Department (JPAS).
Waste Information Systems (eSWIS).
In recognition of recent efforts, SDP received the Langkawi
Our mills have maintained compliance to effluent discharge Award 2017/2018 from the Malaysian Government for
standards, as regulated by the Malaysian Department of the first time since the award’s inception in 1998 for its
Environment (DOE): commitment to environmental protection and sustainability
for the nation.
• Sabah Region complies with the Biochemical Oxygen
Demand (BOD) limit of 20 ppm
• Sarawak Region complies with the BOD limit of *50 ppm
• Northern, Central East and Central West regions comply
with relevant BOD levels, which vary from 5,000 ppm for
land application to *50 ppm for water discharge
• Southern Region is moving towards compliance with a
BOD limit of 20 ppm and 100% water recovery
* Parameters are being revised by local authorities.
Indonesia
In 2018, a total of eighteen (18) units in our Indonesian operations received the Programme for Pollution Control, Evaluation
and Rating (PROPER) award. Sixteen (16) units were awarded the blue rating, which signifies compliance with national
regulatory standards. The remaining two units were awarded the red rating, which indicates that the factory/mill displays some
sort of pollution control efforts but does not fully comply with the regulatory standards.
The national-level programme has been in place since 1995 with three key goals:
1 to promote industrial compliance

with pollution control regulations 2 to facilitate and enforce the
adoption of clean technology 3 to improve environmental
management systems
By encouraging better public disclosure, accountability and transparency, the programme hopes to ensure better pollution
control.

Papua New Guinea (PNG) & Solomon Islands (SI)
The Spatial Monitoring and Reporting Tool (SMART) is At Ramu, the first Integrated Conservation Land Use Plan,
being trialled to monitor 193ha in two High Conservation using the High Carbon Stock (HCS). Approach, has been
Value (HCV) areas in West New Britain. SMART is designed developed as part of the new planting procedure. Local
to measure, evaluate and improve the effectiveness of our communities whose land development plans were yet to be
site-based conservation activities. This tool is scheduled for established were highly participative and engaged in the
roll out to all estates in 2019. All other sites implementing process. From a total of 10,652ha of land, the communities
SMART are targeting completion by the end of 2020. decided that 31% (3,293 ha) would remain available for
SMART is envisioned to be a beneficial platform to share our their own use, 10% would be retained as conservation
progress in managing HCV areas with external stakeholders. areas (1,017 ha), leaving up to 59% (6,280 ha) for potential
planting of oil palm.
WATER AND WASTE
Water
Water is a critical resource for our operations and we

continuously monitor our usage to ensure there is sufficient
water for irrigation. This is especially important in estates
that are prone to drought conditions due to lower rainfall. In
these areas, we are undertaking several irrigation projects to
create water bodies and enhance distribution of piped water.
Top priority is also given to ensuring the availability of

safe drinking water for our employees. Periodic testing
of water samples taken from river systems has shown no
significant water quality deterioration in. Our Research
and Development Centre in Carey Island which houses an
accredited Water and Waste Water Lab, ensures waterways
and waste water discharged are within safe limits as
specified by legal and local authorities' requirements.
In PNG, an estimated 60% of the population do not have

access to safe water supply. NBPOL, in partnership with
Nestlé and Tropical Forest Trust has initiated a collaborative
water project with thirty-one (31) communities in the vicinity
of Higaturu oil palm plantation in the Oro Province. The
project was officially launched in July 2018 to provide safe
and accessible drinking water through the installation of
water pumps. Thus far, the first nine (9) water well pumps
have been installed and are operational. The remaining
Member of a local community in PNG with a water pump
twenty-two (22) pumps are scheduled for installation in the
second quarter of 2019.

Waste
Upstream Malaysia has achieved 43% reduction in the the plastic and be fantastic!’, has been extremely effective in
number of internal landfills through diversion of waste to reducing the amount of rubbish in the town area.
municipal waste landfills, mainly in Peninsular Malaysia.
We aim to further minimise the number of internal landfills NBPOL’s Guadalcanal (GPP) operations in Solomon Islands
(infield waste disposal) by 50% throughout our upstream has also introduced a waste management program called
operations in Malaysia. Additionally, various programs are ‘Go Green’. On a designated day every month, all employees
being identified to enhance recycling initiatives, such as and their dependents undertake clean-up activities such
waste segregation at source and ensuring recyclable plastic as composting, and waste segregation on the Company's
materials are converted into useful products. grounds. We hope that this initiative will lead to long-term
behavioral change with respect to how waste is managed
In PNG and the Solomon Islands, NBPOL continues to place within local households.
emphasis on waste management. This includes not only
ensuring adherence and improvements to internal waste The 3R initiative conducted at SDP’s headquarters, between
management procedures/processes, but also engagement July and December 2018 contributed to an increase of 86%
with all relevant stakeholders to educate the general public in volume of recyclable waste collected compared to the first
about the importance of proper waste disposal and the 4R’s half of 2018. SDP's partnership with Community Recycle for
(Reduce, Reuse, Recycle, Recover) of waste management. Charity (CRC) was able to raise the target value of RM10,000
In December 2018, NBPOL’s Ramu Agri Industries (RAI) from recycling other types of waste. This money was then
operations worked with local police, businesses and schools donated to a charity of our choice.
to ban the use of plastic bags. The initiative, called ‘Ditch
Our partnership with Fabric Recycling

Movement Kloth Cares in July 2018
SDP donated
resulted in the collection of 1,172kg RM4,000
of recycled fabric in just 6 months, and other
surpassing the 575.15kg of fabric household
items such as
waste collected from previous
food supplies,
years combined (FY 2016/2017 and toiletries
FY2017/2018). As our employees and other
continue to embrace recycling necessities to
CRC Charity
culture, SDP will look into expanding
the initiative and identifying new
partnerships to create beneficial
financial and social outcomes from our
waste thus providing our employees
the opportunity to give back to the
community.

CASE STUDY
Unwanted towels, linens, cotton t-shirts, fleece and flannel blankets can be repurposed into industrial wiping
cloths when recycled.
Grade A Fabric
will be exported to Africa for charity
Grade B Fabric
sold at the second-hand shop, Best Bundle, and given to charitable organisations including MAKNA and the Malaysian
Association for the Blind
Grade C Fabric
is recycled into industrial wiping cloths and Refuse-Derived Fuel (RFD)
MOVING FORWARD
We are committed to continuously improving the way we manage water and are undertaking efforts to reduce our water
consumption. New approaches are being considered for reviewing our waste streams and identifying different types of
waste generated. Diverting waste to municipal landfills can only be an interim measure. Once we have completed an
extensive review of our waste management, we hope to set a waste reduction benchmark.
We have also embarked on a journey to transform our headquarters into a ‘zero plastic’ building with a full-fledged
programme planned for FY2019. Future key initiatives include the creation of a sustainability dashboard to manage data
for water and waste across our operations.

FIRE AND HAZE
Hotspot Management at Sime Darby Plantation
Since the launch of Sime Darby Hotspot Alert Dashboard in Based on the data, Indonesia recorded the largest number
2015, we have been proactively monitoring and managing of potential fires. Out of the 606 fires, on-the-ground
fire and haze issues within SDP’s operational areas. The verification confirmed that only 94% were actual fires. From
dashboard tracks and reports hotspots occurring not only these, 559 fires occurred outside of our estate boundaries.
within our concession areas but also within a 5km radius Indonesia is located near the equator and has high humidity
outside our concession boundaries1. The dashboard is conditions, which means that naturally-occurring land fires
available on SDP’s website to provide stakeholders with are very rare. Upon investigations, it was deemed that the
information on the number of hotspots recorded and actions majority of these fires were caused by land clearing by
taken to address these hotspots. the local community for farming practices, such as paddy-
planting, especially in Kalimantan and Sumatra. Land fires
Near real–time fire hotspot monitoring information is in Indonesia are generally aggravated by prolonged drought
retrieved from the ASEAN Specialised Meteorological associated with climate phenomena, such as El Nino, that
Centre (ASMC) and NASA’s Fire Information for Resource results in the early retreat of the rainy season. By July, most
Management System (FIRMS) websites. This information of Sumatra and Kalimantan usually transitions into the dry
is linked to SDP’s own geospatial program based on the season, which coincides with peak paddy planting. This,
Google Earth maps platform. If a hotspot is detected, all coupled with the incomplete combustion of fuel during peat
relevant parties are notified and our Emergency Response fires, generall results in haze that affects both Malaysia and
Team (ERT) is immediately dispatched to conduct ground Indonesia.
verification and initial fire suppression if a fire is spotted.
All ERT members receive training on basic firefighting and In Indonesia, we strive hard to develop prevention systems
undertake simulation exercises regularly, which ensures on the ground to control land fires. To date, we have
that they are always ready to manage fires. The ERT is also 72 watchtowers that are 15 metres high to enhance our
responsible for conducting regular patrols and measuring surveillance in strategic locations throughout our Indonesian
water levels on peatlands as part of their mitigative role. estates. Simultaneously, we also implemented community–
based fire prevention programmes in collaboration with local
For the period under review, data from MODIS, VIIRS, and universities to ensure our precautionary efforts begin at the
NOAA satellites detected a total of 604 fire hotspots. field/ village level. Since the programme’s inception in 2015,
local communities in high risk areas are more aware about
ways to conduct land preparation without slash and burn
No. of fire detected by
activities and implementing composting practices.
Location satellites
Malaysia 2
Indonesia 596 I ND O NES I A : NO . O F F I R E D E T EC T E D BY SAT E L I TE
Liberia 1 500
Papua New Guinea 7 450 444

400
Overall 606 350
300
1
The fire – risk areas are monitored in and up to 5km outside of concession boundaries
250
for sites in Indonesia only due to rampant slash and burn activities by the community.
For Malaysia, Liberia, PNG and Solomon Islands – monitoring of hotspots is confined 200
to our concession areas (planted areas) only. 150
100
92
32
50 23 1 4
0
Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018

Sime Darby Plantation Other Information
GLOBAL REPORTING INITIATIVE (GRI)
The Global Reporting Initiative (GRI) is a multi-stakeholder standard for sustainability reporting, providing guidance on determining
report content and indicators. Sime Darby Plantation Berhad Annual Report (AR) and the Supplementary Progress Report on
Sustainability have been prepared in accordance with the GRI Standards: Core option. The following summary table details the
location of specific disclosures throughout the report. It also includes additional supporting commentary and reasons for the
omission of data, where relevant. Unless stated, the page numbers stated are from the Annual Report. For further details, please
visit www.simedarbyplantation.com.
GRI 101: Foundation 2016

GRI 102: General Disclosures 2016
Disclosure Page or reason for omission
Organisational Profile
102-1 Name of organisation About This Report - Annual Report (1)
102-2 Activities, brands, products, and services Who We Are - Annual Report (6)
102-3 Location of headquarters Our Corporate Information - Annual Report (11)
102-4 Location of operations Who We Are - Annual Report (6)
Our Global Presence - Annual Report (8-9)
102-5 Ownership and legal form Our Corporate Information - Annual Report (11)
102-6 Markets served Our Global Presence - Annual Report (8-9)
102-7 Scale of the organisation Our Global Presence - Annual Report (8-9)
Group Financial Performance - Annual Report (30)
102-8 Information on employees and other workers Human Capital Development - Annual Report (48)
Our Social Impact – Annual Report (56)
Supplementary Progress Report (10)
102-9 Supply chain Our Value Creation Model - Annual Report (18)
102-11 Precautionary Principle or approach Letter from Our Chairman - Annual Report (24)
Statement on Risk Management and Internal Control - Annual
Report (104)
102-12 External initiatives Our Approach to Sustainability – Annual Report (12)
102-13 Membership of associations Our Approach to Sustainability – Annual Report (12)
Our Environmental Impact – Annual Report (61)
Strategy
102-14 Statement from senior decision-maker Letter from Our Chairman - Annual Report (24)
102-15 Key impacts, risks, and opportunities Our Market Landscape - Annual Report (14)
Our Value Creation Model - Annual Report (18)
Managing Our Material Matters - Annual Report (20)
Our Strategic Plan - Annual Report (22)
Report (104)
Ethics and integrity
102-16 Values, principles, standards, and norms of Corporate Governance Overview Statement - Annual Report (75)
behavior Statement on Risk Management and Internal Control - Annual
Report (104)
102-17 Mechanisms for advice and concerns about ethics Corporate Governance Overview Statement - Annual Report (75)
Report (104)

Other Information Sime Darby Plantation
Governance
102-18 Governance structure Corporate Governance Overview Statement - Annual Report (75)
102-19 Delegating authority Corporate Governance Overview Statement - Annual Report (75)
102-20 Executive-level responsibility for economic, Our Leadership Team - Annual Report (70)
environmental, and social topics
102-21 Consulting stakeholders on economic, Our Approach to Sustainability – Annual Report (12)
environmental, and social topics Supplementary Progress Report (2)
Our Strategic Plan - Annual Report (22)
102-22 Composition of the highest governance body and Our Board of Directors - Annual Report (64)
its committees
102-23 Chair of the highest governance body Our Board of Directors - Annual Report (64)
102-26 Role of the highest governance body in setting Our Board of Directors - Annual Report (64)
purpose, values, and strategy
Stakeholder Engagement
102-40 List of stakeholder groups Managing Our Material Matters - Annual Report (20)
102-41 Collective bargaining agreements Our Social Performance – Annual Report (56)
102-42 Identifying and selecting stakeholders Managing Our Material Matters - Annual Report (20)
102-43 Approach to stakeholder engagement Our Approach to Sustainability – Annual Report (12)
Corporate Governance Overview Statement - Annual Report (75)
102-44 Key topics and concerns raised Our Market Landscape - Annual Report (14)
Reporting Practice
102-45 Entities included in the consolidated financial Notes to the Financial Statements - Annual Report (131)
statements
102-46 Defining report content and topic Boundaries About This Report - Annual Report (1)
102-47 List of material topics About This Report - Annual Report (1)
102-48 Restatements of information Who We Are - Annual Report (6)
102-49 Changes in reporting About This Report - Annual Report (1)
102-50 Reporting period About This Report - Annual Report (1)
102-51 Date of most recent report About This Report - Annual Report (1)
102-52 Reporting cycle About This Report - Annual Report (1)
102-53 Contact point for questions regarding the report Our Corporate Information - Annual Report (11)
102-54 Claims of reporting in accordance with the GRI About This Report - Annual Report (1)
Standards
102-55 GRI Content Index Global Reporting Index (GRI) Content Index - Annual Report
(353)

Material Topics
GRI Standard Disclosure Page or reason for omission
Economic
Economic Performance
GRI 103: 103-1 Explanation of the material topic and its Letter from Our Chairman - Annual Report (24)
Management Approach Boundary Group Financial Performance - Annual Report (30)
2016 103-2 The management approach and its Group Financial Performance - Annual Report (30)
components
103-3 Evaluation of the management approach Group Financial Performance - Annual Report (30)
GRI 201: 201-1 Direct economic value generated and Group Financial Performance - Annual Report (30)
Economic Performance distributed Notes to the Financial Statements - Annual Report (131)
2016
Market Presence
GRI 103: 103-1 Explanation of the material topic and its Our Global Presence - Annual Report (8-9)
Management Approach Boundary
2016 103-2 The management approach and its Our Market Landscape - Annual Report (14)
components
103-3 Evaluation of the management approach Our Market Landscape - Annual Report (14)
GRI 202: 202-2 Proportion of senior management hired Our Leadership Team - Annual Report (70)
Market Presence 2016 from the local community
Procurement Practices
GRI 103: 103-1 Explanation of the material topic and its Board Tender Committee Report - Annual Report (102)
2016 103-2 The management approach and its Board Tender Committee Report - Annual Report (102)
components Statement of Risk Management and Internal Control - Annual
Report (104)
103-3 Evaluation of the management approach Statement of Risk Management and Internal Control - Annual
Report (104)
Anti-corruption
GRI 103: 103-1 Explanation of the material topic and its Governance and Audit Committee Report - Annual Report (84)
2016ment Approach 103-2 The management approach and its Governance and Audit Committee Report - Annual Report (84)
2016 components
103-3 Evaluation of the management approach Statement of Risk Management and Internal Control - Annual
Report (104)

Environment
Water and Effluents
GRI 103: Management 103-1 Explanation of the material topic and its Our Environmental Impact - Annual Report (61)
Approach 2016 Boundary Supplementary Progress Report (17)
103-2 The management approach and its Our Environmental Impact - Annual Report (61)
components Supplementary Progress Report (17)
103-3 Evaluation of the management approach Our Environmental Impact - Annual Report (61)
Biodiversity
GRI 304: Biodiversity 304-1 Operational sites owned, leased, Our Environmental Impact - Annual Report (61)
2016 managed in, or adjacent to, protected Supplementary Progress Report (17)
areas and areas of high biodiversity
value outside protected areas
304-2 Significant impacts of activities, Our Environmental Impact - Annual Report (61)
products, and services on biodiversity Supplementary Progress Report (17)
304-3 Habitats protected or restored Our Environmental Impact - Annual Report (61)
Emissions
GRI 305: 305-1 Direct (Scope 1) GHG emissions Our Environmental Impact - Annual Report (61)
Emissions 2016 Supplementary Progress Report (17)
305-2 Energy indirect (Scope 2) GHG Our Environmental Impact - Annual Report (61)
emissions Supplementary Progress Report (17)
305-4 GHG emissions intensity Our Environmental Impact - Annual Report (61)
305-5 Reduction of GHG emissions Our Environmental Impact - Annual Report (61)
Effluents and Waste
Environmental Compliance

Social
Employment
GRI 103: Management 103-1 Explanation of the material topic and its Human Capital Development – Annual Report (48)
Approach 2016 Boundary
103-2 The management approach and its Human Capital Development – Annual Report (48)
components
103-3 Evaluation of the management approach Human Capital Development – Annual Report (48)
Labour/Management Relations
GRI 103: Management 103-1 Explanation of the material topic and its Human Capital Development – Annual Report (48)
103-2 The management approach and its Human Capital Development – Annual Report (48)
components
103-3 Evaluation of the management approach Human Capital Development – Annual Report (48)
Occupational Health and Safety
GRI 103: Management 103-1 Explanation of the material topic and its Our Social Performance – Annual Report (56)
103-2 The management approach and its Our Social Performance – Annual Report (56)
103-3 Evaluation of the management approach Our Social Performance – Annual Report (56)
GRI 403: Occupational 403-1 Occupational health and safety Our Social Performance – Annual Report (56)
Health and Safety 2018 management system Supplementary Progress Report (15)
403-2 Hazard identification, risk assessment, Our Social Performance – Annual Report (56)
and incident investigation Supplementary Progress Report (15)
403-4 Worker participation, consultation, and Our Social Performance – Annual Report (56)
communication on occupational health Supplementary Progress Report (15)
and safety
403-5 Worker training on occupational health Our Social Performance – Annual Report (56)
and safety Supplementary Progress Report (15)
403-6 Promotion of worker health Our Social Performance – Annual Report (56)
403-9 Work-related injuries Our Social Performance – Annual Report (56)
Training and Education
GRI 103: Management 103-1 Explanation of the material topic and its Human Capital Development - Annual Report (48)
103-2 The management approach and its Human Capital Development - Annual Report (48)
components
103-3 Evaluation of the management approach Human Capital Development - Annual Report (48)
Diversity and Equal Opportunity
components
GRI 405: 405-1 Diversity of governance bodies and Our Social Performance – Annual Report (56)
Diversity and Equal employees Supplementary Progress Report (10)
Opportunity 2016 Our Board of Directors - Annual Report (64)

Social (Continued)
Non-discrimination
components
Freedom of Association and Collective Bargaining
GRI 103: Management 103-1 Explanation of the material topic and its Our Social Performance - Annual Report (56)
103-2 The management approach and its Our Social Performance- Annual Report (56)
103-3 Evaluation of the management approach Our Social Performance - Annual Report (56)
Child Labour
103-2 The management approach and its Our Social Performance - Annual Report (56)
Forced or Compulsory Labour
103-2 The management approach and its Our Social Performance - Annual Report (56)
Human Rights Assessments
GRI 103: 103-1 Explanation of the material topic and its Our Social Performance - Annual Report (56)
Management Approach Boundary Supplementary Progress Report (10)
2016 103-2 The management approach and its Our Social Performance - Annual Report (56)
Local Communities
GRI 103: 103-1 Explanation of the material topic and its Our Social Performance - Annual Report (56)
Management Approach Boundary Supplementary Progress Report (10)
2016 103-2 The management approach and its Our Social Performance - Annual Report (56)
GRI 413: 413-1 Operations with local community Our Social Performance - Annual Report (56)
Local Communities engagement, impact assessments, and Supplementary Progress Report (10)
2016 development programmes
413-2 Operations with significant actual and Our Social Performance - Annual Report (56)
potential negative impacts on local Supplementary Progress Report (10)
communities

MODERN SLAVERY AND HUMAN TRAFFICKING STATEMENT

FY2018 (JULY – DECEMBER)
This statement is published in accordance with the Modern Slavery Act 2015 of the United Kingdom (Section
54). The period of reporting for this statement is for the six months ended 31 December 2018. This statement
serves as a progress report following key actions taken subsequent to the Modern Slavery and Human Trafficking
Statement FY2018.
OUR ORGANISATION, STRUCTURE AND SUPPLY CHAIN
About Sime Darby Plantation
Sime Darby Plantation is the world’s largest oil palm plantation company by planted area, producing about 4% of the global Crude
Palm Oil output. We are also the world’s largest producer of Certified Sustainable Palm Oil (CSPO), accounting for around 20% of
market share of world production by volume.
As a globally integrated plantation company, Sime Darby Plantation is involved in the full spectrum of the palm oil value chain, from
upstream to downstream activities, R&D, renewables and agribusiness. Our upstream operations, consisting predominantly of oil palm
cultivation, harvesting and milling, are located across Malaysia, Indonesia, Papua New Guinea, the Solomon Islands and Liberia. Our
downstream business, spanning across 16 countries worldwide including the United Kingdom, involves the manufacturing as well as
the sales and marketing of oils and fats products, oleochemicals, palm oil-based biodiesel, nutraceuticals and other derivatives. Sime
Darby Plantation is also involved in rubber and sugarcane plantations, as well as cattle rearing
>> UPSTREAM DOWNSTREAM >>

Speciality Food Palm Oil Products
Refineries • Cooking Oil
• Speciality Oils and Fats
• Refined PKO
• Spreads
• Shortenings
Bulk • Infant Formula
refineries/ • Dairy Fat Replacers
Seed Oil Palm Estate Mills-CPO & Bulking
Production Nursery Management PK Production Facilities
Non-Food Oleochemicals
Ruber/ Smallholders Trading & Bulk Sales Biodiesel

Sugarcane/Cattle Aggregation Aggregation
Products of CPO
Rubber Products
Sugar Products
Beef Products
Frond Palm Fibres, PFAD

Sludge Oil,
POME, EFB, PKE
Waste to Wealth By Product
Compost Gasification/ Animal Feed Tocotrienols Biodiesel

Biogas
Further details of our company can be found in our website - www.simedarbyplantation.com


OUR COMMITMENT, POLICIES, PROCEDURE AND GOVERNANCE
Commitment and Governance: Human Rights Charter and Human Rights Task Force
At Sime Darby Plantation, we believe that it is our responsibility as a corporation to respect and protect the rights of people within
our sphere of influence, which includes our employees, contract workers, third party operators, business partners, and communities
surrounding our estates.
We integrate the responsibility to respect human rights into our culture to foster and support appropriate behaviours, beliefs and
values. These values are encapsulated in our Human Rights Charter (the Charter)1, which outlines our commitment towards the
prevention of modern day slavery and human trafficking.
In the Charter, we endeavour to adhere to the standards and practices that are aligned with international principles2, subject to the
restrictions of the governing laws and regulations of the countries and territories in which we operate. When there is a conflict
between local and international norms and/or standards, we aspire to uphold the higher standards, whenever possible.
The Charter articulates our commitments in:
• Providing equal opportunities,

• Respecting freedom of association,
• Eradicating exploitation,
• Ensuring favourable working conditions,
• Enhancing safety and health,
• Respecting community rights,
• Protecting the rights of children and vulnerable people; and
• Eliminating violence and sexual harassment.
Sime Darby Plantation continues to monitor and verify the progress of human rights initiatives within our operations through our
Human Rights Task Force. Members of this task force comprise of representatives from various key departments that are fundamental
in upholding human rights and the task force reports its progress to the Plantation Leadership Committee, Sustainability Committee
and the Board of Directors.
1
The Sime Darby Plantation Human Rights Charter can be found at the Sime Darby Plantation Website at http://www.simedarbyplantation.com/sites/default/files/sustainability/sime-
darby-human-rights-charter.pdf
2
Which includes, among others, the International Labour Organisation (ILO) core labour standards and relevant industry standards


DI AGR A M : WO R K ST R E A M S / WO R K I NG G RO UPS
CODE OF BUSINESS CONDUCT
BOARD OF DIRECTORS
SUSTAINABILITY COMMITTEE
PLANTATION LEADERSHIP COMMITTEE
Report upwards and

HUMAN RIGHTS TASK FORCE communicate downwards
CHAIR & SECRETARIAT
on policy and implementation
HUMAN RIGHTS WORK STREAMS/

WORKING GROUPS
UPSTREAM DOWNSTREAM
OPERATIONS OPERATIONS
HUMAN RIGHTS CHARTER
Policies: Code of Business Conduct (COBC) & Vendor COBC
The Code of Business Conduct (COBC) articulates our business core values and acts as guidance to outline the standards of behaviour
required. The COBC applies to all directors and employees of the Group, including employees on secondment to joint ventures,
affiliates or associates. Counterparties are also expected to comply with the COBC while our business partners are encouraged to
adopt similar principles and standards of behaviour.
The Vendor COBC on the other hand, provides guidance on the standards of behaviour required from all vendors of Sime Darby
Plantation, and applies to all vendors of Sime Darby Plantation when conducting work for the Company, and all vendors’ subsidiaries,
affiliates and other parties that they have appointed to conduct work for Sime Darby Plantation.
The Group Procurement Policies and Authorities require our vendors to undergo a due diligence process and periodical performance
evaluation to ensure compliance to their contractual obligations that are related to human rights.
IMPACT ASSESSMENT AND MITIGATION PLANS
For the year under review, we continue to implement recommended improvement plans and
continue to monitor progress. We evaluate the outcomes from the action plans to ensure we
reduce human rights risks to people.
On-going: Enhancing Workers Experience by Upholding Freedom of Movement
Since April 2018, we have successfully implemented our passport return programme to all 125 estates and 33 mills in Malaysia. The
procedure for safe keeping provides workers with the opportunity to decide how and where they want their passports to be kept.
Various engagement sessions have been conducted for workers to fully understand their options and exercise their freedom of choice.
We will continue to monitor and evaluate the effectiveness of the programme to identify areas for improvement.


On-going: Responsible Recruitment Practices in the Plantation Upstream Operations in Malaysia
During this period, we continue our work to improve recruitment practices of our migrant workers in upstream operations in Malaysia.
This includes our support and involvement in various studies, research and advocacy for policy change with key national level and
international stakeholders. We seek to address issues surrounding the recruitment process that affect our workers; particularly,
unreasonable costs of recruitment leading to possible debt by workers in some countries of origin.
Direct hire
Sime Darby Plantation selects and recruites workers directly in the respective countries of origin. This includes participating in
socialisation roadshows to attract potential candidates. To ensure candidates are fully aware of the terms and conditions of work, prior
to acceptance, materials such as videos, presentation slides and briefings are conducted in local languages. Candidates are required to
provide written consent to confirm their voluntary acceptance of the job offer.
Direct hiring of workers allows for better control and management of the process. We work closely with our agents to have better
oversight of sub-agents in the supply chain. Where we may leverage, Sime Darby Plantation endeavours to influence the market to
instill responsible recruitment practices.
We recognise that longterm solutions will require multi-stakeholders involvement and government interventions. We will continue
to engage and work with our stakeholders to jointly seek solutions to resolve the underlying issues facing recruitment of migrant
workers. In Indonesia, Sime Darby Plantation owns around 280,000 hectares of land with 70 estates and 23 mills. As of December
2018, we employ over 31,000 people and provide housing, healthcare and schools for their dependants.
This year, we continue to work on prevalent issues in our Indonesia operations and monitor implementation of improvement plans
from our various assessments. On-going consultation with workers and other stakeholders are being conducted to address challenges
pertaining to union capacity, casual workers vulnerability, working conditions, as well as health and safety in our estates.
MONITORING, DISCLOSURE AND REPORTING
Our business operations are subject to periodical internal audits, which include assessment of human rights risk areas to ensure the
effectiveness of our policies and procedures. Human rights violations, if any, can be reported through our Whistle Blowing Channel
and Grievance Procedures. The Whistle Blowing Channel can be accessed via e-form, email or telephone and guarantees a secured
avenue for employees, counterparts, business partners and individuals to report.
Action Taken: Enhancing our grievance mechanism
As part of our continuous improvement initiative, we will be focussing on improving our grievance channels to be more effective by
making it accessible to all, allowing greater reach and providing a rights-based approach.
In November 2018, an enhanced helpline for our plantation workers employed at our estates in Malaysia was launched. The goal of the
helpline is to provide an effective avenue for workers to report on working conditions, recruitment, safety and other issues that might
affect them directly or indirectly via a technology-enabled communication channel.
The helpline allows workers to choose the channel they feel most comfortable with, whether via SMS, Facebook Messenger or a toll-
free number, staffed 7 days a week at peak call times, with messaging options for off-hours. The system’s multi-language capability is
expected to enhance communications, thus raising further understanding, accessibility and promoting trust in the use of the helpline
among workers of different nationalities.


The helpline not only provides an effective channel for our workers to raise any issues they may have, but more importantly ensures
these issues are handled via clear protocols with consistent attention to follow-up and resolution to the fullest extent possible.
Independent monitoring by a third party will accord a higher level of accountability for us to act on our workers’ grievances. This
collaborative approach together with Nestlé leverages on the worker voice system co-developed by Responsible Business Alliance’s
(RBA) Responsible Labour Initiative, and by ELEVATE which implements the world-class Amader Kotha helpline in Bangladesh. The
enhanced helpline strengthens existing established grievance procedures and whistle blowing channels which are already available to
all of our employees and external parties.
CAPACITY BUILDING
In Sime Darby Plantation, we invest in capacity building and education of our employees so that they are empowered to carry out their
tasks and responsibilities well. For the year under review, we continued to build the capacity of personnel/duty bearers on the ground
serving key support functions for vulnerable groups such as migrant workers, women and children.
STAKEHOLDER ENGAGEMENT
Sime Darby Plantation is committed to strengthen our engagement with NGOs, industry bodies and civil society to ensure continuous
improvement in our own operations and extended supply and value chains.
This year, we proceeded to develop on-going solutions to overcome complex and common human rights challenges. We continue to
maintain good relations and engage in constructive dialogues with multiple stakeholders. They include local and international non-
governmental organisations, as well as international development agencies which focus on issues surrounding human rights.
BOARD APPROVAL
The Board of Directors of Sime Darby Plantation Berhad and New Britain Oils Limited have endorsed this statement of commitment at
their respective board meetings.
Tan Sri Dato’ Mohd Bakke Salleh

Executive Deputy Chairman & Managing Director
On behalf of Sime Darby Plantation Berhad
Andrew Worrall
Managing Director
On behalf of New Britain Oils Ltd

www.simedarbyplantation.com
SIME DARBY PLANTATION BERHAD

(Company No.: 647766-V)
Main Block, Level 10
Plantation Tower
No. 2, Jalan PJU 1A/7, Ara Damansara
47301 Petaling Jaya, Selangor Malaysia
Tel: (603) 7848 4000
Fax: (603) 7848 4172

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U N L O C K I N G VA L U E

2 Our Approach to Sustainability

Supplementary Progress Report on Sustainability 2018

Supplementary Progress Report on Sustainability 2018 1

OUR APPROACH TO SUSTAINABILITY

As the world’s largest producer of Certified Sustainable Palm

CONTRIBUTE TO A MINIMISE DELIVER SUSTAINABLE

2 Supplementary Progress Report on Sustainability 2018

OUR APPROACH TO SUSTAINABILITY

We continue to be an active member of the RSPO, most recently as part of the

INCLUSION OF STAKEHOLDERS AND COMMUNITIES

MANAGE SUPPLY CHAIN SUSTAINABILITY RISKS Responsible Agriculture Charter (RAC)

LEVERAGE ON SUSTAINABILITY TO CREATE VALUE

Supplementary Progress Report on Sustainability 2018 3

OUR TOTAL QUALITY MANAGEMENT

• Structured Crop Recovery Assessment

• Quality & Hygiene Assessment (QHA)

4 Supplementary Progress Report on Sustainability 2018

OUR TOTAL QUALITY MANAGAEMENT

T H E EVO LUT I O N O F S C R A Q + I N S I M E DA R BY P L A NTAT I O N

Supplementary Progress Report on Sustainability 2018 5

OUR TOTAL QUALITY MANAGAEMENT

Rubber Quality Hygiene Assessment (QHA) focuses on

The competencies and skills of our people are the main

6 Supplementary Progress Report on Sustainability 2018

OUR TOTAL QUALITY MANAGAEMENT

TOTA L N UM BER O F PRO J EC TS CO M P L E T E D I N F I NA NC I A L PE R I O D E ND E D D EC 2 01 8

Our Black Belt (BB) programme caters to the development

focused on advanced statistical tools, leadership skills,

innovation. The programme aids BB internal consultants to

Supplementary Progress Report on Sustainability 2018 7

OUR TOTAL QUALITY MANAGAEMENT

In January 2019, our internal “War on Waste” programme

With the aim of driving cultural transformation, we first

For the financial period ended 31 December 2018, we

Tunku Estate, Sabah during the 5S audit

8 Supplementary Progress Report on Sustainability 2018

OUR TOTAL QUALITY MANAGAEMENT

Supplementary Progress Report on Sustainability 2018 9

OUR SOCIAL PERFORMANCE

UPSTREAM SIME DARBY R&D HEAD OFFICE AGRI BIO &

92,057 1,790 1,085 515 90

GENDER 81% 30.0%

RESPECTING HUMAN RIGHTS

10 Supplementary Progress Report on Sustainability 2018

OUR SOCIAL PERFORMANCE

Eradicating Ensuring Favourable Improving grievance Freedom of Eliminating Violence

BR EAKDOWN OF M I GR A N T WO R K ERS I N M A L AYS I A BY

64% Recruitment of migrant workers conducted in the workers' countries of

Supplementary Progress Report on Sustainability 2018 11

OUR SOCIAL PERFORMANCE

Ensuring Favourable Working

In September 2018, SDP rolled out

are provided with decent living

12 Supplementary Progress Report on Sustainability 2018

OUR SOCIAL PERFORMANCE

Supplementary Progress Report on Sustainability 2018 13

OUR SOCIAL PERFORMANCE

OUR LARGER COMMUNITY