At P&G our palm oils Compliance Monitoring program applies to both social and environmental impacts. Its foundation lies in clear P&G Policies and Expectations. We engage proactively with suppliers and through independent monitoring of our supply chains. We use the RSPO 2018 Principles and Criteria (P&Cs) as part of our compliance verification. Our grievance reporting process is designed to encourage people to speak up so that we can investigate concerns and, where indicated, take appropriate actions.
Our goal is to do the right thing for people, communities, and landscapes. We engage and seek guidance from civil society groups, and experts, recognizing we are often knowledge holders but not always the experts on every topic. This work includes
P&G has been an active member of the Roundtable on Sustainable Palm Oil (RSPO) since 2011. Alongside civil society organizations, growers (including smallholders), producers and manufacturers, we actively work to support and promote the vision of making sustainable palm oils the “norm”. Our P&G Forest Commodities Policy requires that all our direct suppliers are members of RSPO and are committed to the RSPO 2018 Principles & Criteria (P&Cs). The RSPO P&Cs establish a set of stringent requirements governing production of sustainable palm oils. They are renewed every 5 years in-line with the ISEAL Alliance Standard. We support the on-going evolution and continual strengthening of RSPO’s P&Cs framework through direct engagement and through the Consumer Goods Forum. The P&Cs cover environment and social impacts – people, planet, and prosperity. RSPO certification supports and ensures compliance to the standards by offering benefits for responsible growers and smallholders, and incentives via creating a premium for certified oils. This delivers not only immediate livelihood benefits for farmers and communities but long-term benefits for landscapes through respect for sustainable farming practices.
Palm oils producers can achieve certified status for their materials subject to a strict verification of the plantation and production processes. This process is based on the RSPO P&C, RSPO Supply Chain Certification Standard (SCCS) and RSPO Independent Smallholder Standard (RISS). Standards are audited and verified by an independent Certification Body (CB). The accreditation of “CBs” is conducted by Assurance Services International. This ensures that the CBs are competent to undertake and conduct audits credibly and consistently. Post the initial certification, Surveillance Audits are conducted annually. If compliance to standards is not maintained, then certified status may be withdrawn. RSPO also operates an RSPO Complaints Systems where concerns raised are investigated and addressed. If substantiated this may lead RSPO to require remediation plans and/or suspension of certifications. These measures provide independent auditing, validation and monitoring of compliance to ensure sustainable palm production practices. While RSPO certification is an important element of our palm oils supply chain due diligence program, it is not the only element. We know that it is important to go further through supply chain mapping and traceability; environmental satellite enabled monitoring; engagement with suppliers and through active engagement with civil society and cross industry bodies. You can learn more about this work on palm below and throughout the P&G ESG for Investors website.
In 2020, P&G activated satellite enabled enterprise-wide monitoring across our palm supply chain. Tfhis is conducted in partnership with Earthqualizer, a non-profit organization “dedicated to transforming commodity supply chains for the benefit of people and nature”. Earthqualizer’s methodology uses big data analysis, integrating satellite tracking technology; concession mapping* and expert knowledge of high-conservation value (HCV)/high-carbon-stock (HCS) landscapes. This delivers a high degree of accuracy and precision which helps us track our supply chain. It enables us to look beyond the mills to act as a proxy for traceability to palm plantations. The program lets us monitor “real-time” compliance with our P&G Forest Commodities Policy. It enhances our ability to investigate and respond effectively to potential grievances raised to us by stakeholders. It allows us to make timely interventions which are essential when potential land-use change may be occurring. Since 2020 we monitored over 15+million hectares of P&G supplier landbanks annually across Indonesia, Malaysia, and Papua New Guinea. We tracked supply chains to over 1,600 plantations and determined that 99.98% of supply chain landscapes monitored were “free of deforestation or conversion issues” requiring further investigation. Where issues may have occurred, the robust information generated with Earthqualizer has allowed us to engage more effectively in discussions with our suppliers and to provide data to help guide remediation and monitor progress.
* A Palm Concession is an area of land where a government or local authority has granted a license or permit, to a private company to establish oil palm plantations on public lands. RSPO publish Members Palm Concession Maps
At P&G respecting human rights is fundamental to everything we do. This is a “must have” not a “nice to have” and is at the heart of our companies Purpose Values and Principles (PVPs). We support and apply the UN Guiding Principles on Business and Human Rights (UNGPs) to our work. We establish clear expectations of our direct suppliers, including the expectation to respect internationally recognized human rights, comply with all applicable laws and conduct their business ethically and responsibly.
P&G is committed to creating a work environment internally and with our business partners that fosters open communications and supports individuals in reporting potential violations. Retaliation for raising concerns in good faith will not be tolerated. You can learn more about our approach and expectations at: P&G - Respecting Human Rights our Approach , SPEAK UP
We are aware that concerns have been raised regarding human rights in palm supply chains in Malaysia and Indonesia. We have chosen to actively engage in order to identify how better outcomes for workers and affected stakeholders can be achieved. Where issues are brought to our attention, we apply the framework of the UNGPs. We engage, assess the issue, and identify ways to leverage our influence to drive better solutions. Often these cases are complex, requiring long-term commitments to resolve, and the choices we face are not straightforward. It may feel instinctively “right” to simply “walk away” but doing so may result in little change for the workers most impacted. Choosing to stay and engage for change can be more difficult for companies like P&G. But where there is willingness from our suppliers to work together it can offer the best opportunity to deliver real change for current and future employees. Where we make these choices, we share them transparently, through our Grievance Tracker, and hold ourselves and our partners accountable for delivering progress that aims to achieve tangible outcomes for those affected.
Over the years, concerns relating to potential human and labor rights violations at FGV plantations have been raised by several different groups. P&G does not currently source any palm oil or palm kernel oil from FGV. However, we do operate a Oleochemicals plant Joint Venture with FGV.
P&G has taken careful account of all the concerns shared with us and acknowledges the actions that had already been taken by FGV. In 2019 we stepped in to support FGV in accelerating change for its workers. We believe that our choice to engage and leverage our influence is in-line with the expectations of UNGPs.
In order to develop robust and meaningful social remediation plans we, together with FGV, recognised their need for external expert engagement to help drive progress. P&G secured the support of the Fair Labor Association (FLA) to help create a robust foundational program. This includes evaluation of systems and processes, development of action plans and credible, independent verification of progress. P&G also funded engagement with Embode (a human rights consultancy) to conduct a worker’s voice assessment to bring FGV more closely in touch with their workers. FGV’s commitment to progress led them to seek guidance and expert consultation on migrant workers recruitment practices from IOM, Earthworm, Proforest and SUHAKAM – Human Rights Commission of Malaysia.
In July 2022 FLA published the findings of a Baseline Independent External Assessment which concluded significant progress had been made vs. 2020 Action Plan. In parallel, FGV engaged ELEVATE, an expert consultant in sustainability and human rights in supply chains, to conduct assessments versus the 11 International Labour Organisation (ILO) indicators of force labour. In 2023 FGV announced that going-forward they will work with ELEVATE to continue the evolution of the foundational social remediation program established and implemented with the FLA. They also announced a program to provide remedy for any recruitment fees paid by present or past workers which will be validated by ELEVATE
P&G recognises much has been achieved, with meaningful progress since 2019, but that there is always more to achieve. We will remain engaged and monitor closely FGV as they continue their commitment to progress and the outcomes of their program with ELEVATE. We continue to offer our voice and use our leverage in support of affecting change for FGV workers.
Grievance investigation and resolution has always been an integral part of our palm oils supply chain work. We want to ensure compliance with P&G Forest Commodities Policy, share our investigative approach and report progress transparently via our P&G Palm Grievance Tracker.