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Home (https://www.wilmar-international.com)  Sustainability (https://www.wilmar-international.com/sustainability)  Supply Chain Transformation

Supply Chain Transformation

Aggregator  

Refinery The Aggregator Refinery Transformation (ART) programme was built to strengthen every actor
in the supply chain to promote transformation, providing a collaborative framework for refiners,
Transformation millers and growers with an opportunity to work closely to overcome challenges faced on the
ground. Through ART, our refineries provide a central point for growers and millers to progress
on HCV; HCS and peat protection; environmental impact management; labour standards; Free,
Prior and Informed Consent (FPIC); and traceability.
Typically, 50 to 200 mills supply one refinery and it is impossible to carry out assessments along
Wilmar’s NDPE Policy requirements at every mill. With over 20 palm refineries in Indonesia and
Malaysia, and hundreds of mills in our supply shed, we have adopted a risk-based approach to
due diligence. Focus is first placed on identifying and creating transformation in areas with
commercial importance, as well as higher risk in terms of environmental and social impact,
before progressing to medium and low risk areas. Based on these initial criteria, we have
chosen nine key refineries covering six key landscapes in Malaysia and Indonesia. In addition,
we are also implementing parts of the programme with selected suppliers in Latin America and
West Africa.
 At year-end 2017, we have conducted 69 assessments in these areas. These assessments are
compiled into anonymised overarching reports by landscape, and each report summarises
representative issues that may be prevalent in that landscape. Through Broad-Level
Engagement (BLE) workshops, we socialise the common issues to all suppliers operating in that
region and share learnings and recommendations for improvement.

Mapping & Traceability 

ART is dependent on mapping all the mills supplying the refinery, as well as their FFB
sources, where possible. Currently, the ART programme only focuses on Wilmar's own
refineries and all direct mills supplying our refineries.
For a mill to be considered traceable, we need to be able to record all critical information,
including parent company name, mill name, address, GPS coordinates, and volumes
supplied to Wilmar refineries. A minority of mills are categorised as untraceable.
Untraceable does not imply we do not know who we buy from but instead means that the
supplier does not fully meet our traceability criteria, (e.g. parent company/group affiliation
or GPS coordinates).

Mill Prioritization Process (MPP) 

Deep Engagement and Mill Visits 

Broad Level Engagement and Sharing of Findings 

ART Overarching Reports 

Supplier Engagement with our third-party suppliers is an important part of ensuring that our No
Deforestation, No Peat, No Exploitation (NDPE (https://www.wilmar-
Reporting Tool international.com/docs/default-source/default-document-library/sustainability/resource/no-
(SRT) deforestation-no-peat-no-exploitation-policy.pdf?sfvrsn=e09ab362_2)) policy is implemented
effectively. To enable better assessment of our suppliers’ progress and their implementation of
the NDPE policy, we have developed and launched the Supplier Reporting Tool (SRT) in 2017.
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The SRT is an online self-reporting tool that is hosted on the OnConnect (https://enablon.com/)
system to allow suppliers to report their current compliance to environmental and social risk-
related issues within our supply chain.
 

Figure 1 – Sample OnConnect dashboard in Malaysia

The SRT is an annual program required for 100% of Wilmar’s direct supplying mills (including
own Wilmar mills) and their associated estates in Indonesia, Malaysia, and Latin America.

Figure 2 - Process Flow of SRT

Once the suppliers have completed the self-assessment online, they will receive a report with
action plans. Individual action plans for all direct supplying mills that have completed the SRT is
developed by Wilmar’s third-party supplier compliance team. These plans are generated using
the “Action Plan” feature within the OnConnect system. This automation ensures greater
consistency in recommendations, clarity on required follow-up actions, and timely completion
for all direct suppliers, which helps to ensure improved sustainability performance of our direct
third-party suppliers.
 
Assessing risk of non-compliance for direct mill suppliers
The SRT allows us to collate reports on specific NDPE related criteria as reported by each
supplier mill. Based on the reports, we are able to utilise the SRT to identify potential risks within
our direct mill suppliers. The criteria that are reported on include:
Legality

High Conservation Value (HCV), High Carbon Stock (HCS), and peat protection

Environmental impact management

Child protection

Occupational health and safety

Labour rights and standards

Access to grievance mechanisms

Free, Prior and Informed Consent (FPIC)

Legal and customary (or traditional) land rights

Traceability

We first identify a risk assessment

(http://daemeter.org/en/publication/detail/68/neighborhood-risk-assessment-a-methodology-
for-environmental-risk-assessment-of-palm-oil-mills#.XYTVSVQzbIU) score based on geospatial
analysis which includes legality of land use, occurrence of protected areas, prevalence of fire
and/or recent deforestation, and existence of forest and peat. Mills are scored and ranked for
individual indictors of risk and for their overall combination. Mill-based environmental risk is
then combined with certification status and grievances for an overall mill-based risk score. The
SRT results are then integrated with risk assessment scores to determine the “risk level” in order
to determine which mill(s) warrant a site assessment.
 

Site assessments
Following this, site assessments are carried out to evaluate practices at the supplying mill and
any plantations under its direct operations. The purpose of the site assessments is to:

(a) Evaluate the accuracy of SRT self-reported results;

(b) Measure directly performance of specific mills, as a basis for creating bespoke action plans
through dialogue with mill management, and;
(c) Obtain on-the-ground insights into sustainability challenges that are widespread throughout
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each region or at group level, as a basis for developing approaches to address these challenges Top
at scale (as opposed to the individual mill). 
 Site assessments require us to conduct:
documentation reviews;

physical observations of practices and conditions at the mill and plantations under its
direct operations, including workplaces, and housing/living quarters on-site;

interviews with mill/plantation management staff;

confidential interviews with mill/ plantation workers at working areas and/or housing areas
(without the presence of management staff); and

action plan development.

We carry out the site assessments with the help of a digital mobile audit tool called Nimbly
(https://hellonimbly.com/). Nimbly generates automated reports with time-bound action plans
for the supplier mills and plantations assessed. This tool ensures that our suppliers receive
assessment results and feedback from Wilmar immediately with minimal lag time.
Assessed suppliers are expected to review, clarify findings, and sign-off on the suggested time-
bound action plans from Wilmar. Wilmar will then bi-annually monitor the suppliers’ progress
on the agreed time-bound action plan. If egregious social or labour issues are identified as
potentially present during any of the monitoring process, Wilmar will conduct further
investigations, possibly through a second, longer, site assessment, which process is determined
based on the potential issues found. If environmental issues such as deforestation or peat
development are identified in the site assessment, Wilmar will verify the findings by reviewing
data from the Supplier Group Compliance Programme (SGCP) (https://www.wilmar-
international.com/sustainability/supply-chain-transformation/supplier-group-compliance-(sgc)).
If an issue is verified as a case of non-compliance through the SGCP or our further assessments,
the case will be escalated to Wilmar’s Grievance (https://www.wilmar-
international.com/docs/default-source/default-document-
library/sustainability/grievance/grievance-sop/grievance-procedure_final.pdf?
sfvrsn=7670cea2_2) team.
 

Figure 3- Nimbly APP for Site Assessment

Supplier Group With over 1,000 direct suppliers in our supply chain, we have invested substantial resources to
develop extensive programmes to socialise and implement our NDPE policy across our supply
Compliance chain. As part of our verification framework for supplier compliance, in addition to the ART
approach at refinery level, the Supplier Reporting Tool, and Grievance Procedure, Wilmar has
(SGC) also been implementing the Supplier Group Compliance (SGC) verification programme since
December 2013, to proactively monitor risk of association at supplier group level.
 
The SGC verification programme, was developed and is executed with support
from Aidenvironment Asia (http://www.aidenvironment.org/expertise/aidenvironment-asia/). As
of end 2019, the programme monitors more than 20 million hectares, which covers over 500
parent groups representing more than 3,000 plantations units, spanning across Malaysia,
Indonesia, Papua New Guinea, Cambodia, Myanmar and Thailand.
Please refer to our  Supplier Group Compliance page (/sustainability/supply-chain-
transformation/supplier-group-compliance-(sgc)) for more information.

 
 

Partnerships & Grievance Procedure Policies

Collaborations
Collective action to effect real and Raise new grievance cases and No Deforestation, No Peat, No
lasting change on the ground. 
access our full list of grievance 
Exploitation Policy and other 

cases and progress updates. sustainability related policies.

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