Compliance Monitoring

Compliance Monitoring

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.

P&G’s Approach to Compliance Monitoring

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

  • Environment – including a focus on Deforestation and Development on Peat
    • Leveraging the counsel of experts, like Conservation International, to help us respond to the impacts we see within supply chains
    • Implementing proactive satellite monitoring of land use, deforestation and development on High Conservation Value and High Carbon Stock landscapes with Earthqualizer
  • People, Communities and Workers Rights
    • Participating in the SHIFT BUSINESS LEARNING PROGRAM looking at both strategic and operational questions, to help us effectively implement the UN Guiding Principles on Business and Human Rights
    • Driving change with the Fair Labor Association (FLA) to help identify and address challenges faced by workers in the palm industry. This includes working with FLA and Consumer Goods Forum (CGF) to develop the 2018 "Assessing Force Labor Risks in the Palm Sector in Indonesia and Malaysia Report" . Further we supported the implementation of an FLA program for the palm sector to support lasting solutions for workers at FGV.
    • Engaging Landesa, to deepen our understanding on land and resource rights including Free Prior and Informed Consent (FPIC)
    • Establishing a Workers Wellbeing Consultation approach in partnership with Embode

Role of RSPO Standards, Compliance Certification and Verification

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 Palm Oil Policy and Supplier Expectations require 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 a Complaints System 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.

Enterprise-Wide Satellite Environmental Monitoring of our Palm Oils Supply Chains

In 2020, P&G activated satellite enabled enterprise-wide monitoring across our palm supply chain. This work is 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 Palm 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.

During 2020-2021, we monitored 13.6+ million hectares of P&G supplier landbanks 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”. Where issues may have occurred, the robust information 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

Implementation of Satellite Enabled Enterprise-Wide Monitoring of Palm Supplier Operations

In 2020, we worked with Earthqualizer to deploy satellite/ mapping technology to allow us to enhance our proactive tracking and investigation of potential deforestation, development on peat and fires in our supplier enterprise-wide supply chains.

The system is based on the use of aerial/satellite imagery, concession maps and knowledge of high-conservation value (HCV)/ high-carbon-stock (HCS) areas. A key feature of this system is its accuracy, level of precision and timeliness of the tracking system at a supplier group level. It allows us visibility to track actions beyond the mills and at the plantation level. This enables us to quickly identify the emergence of a potential concern, to act swiftly to halt any destructive land-use practice and drive for timely resolution of conflict or concerns.

The combination of analytical capacity and big data has made the Earthqualizer system a useful tool to help monitor our No Deforestation and Peat (NDP) elements of our P&G Palm Policy and Supplier Expectations. This technology will enable us to monitor palm oil concession owned by companies inside our palm supply chain with a primary focus on Indonesia, Malaysia and Papua New Guinea.

Engaging to Understand and Drive Positive Change at FGV Holdings Berhad

P&G’s Commitment to Respecting Human Rights

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 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, meaningful outcomes for those affected.

FLA to Accelerate Long-Term Change for Workers at FGV

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 raised and acknowledges the actions already taken by FGV. However, it was our assessment that the steps taken were neither wide ranging enough nor being implemented with sufficient urgency. In 2019 we brought in the Fair Labor Association (FLA) to provide credible, transparent, and independent verification of FGV’s social remediation plans. We believe that our choice to engage and leverage our influence is in-line with the expectations of UNGPs.

FLA uses a unique and comprehensive methodology. Unlike a traditional audit which is a “snapshot” in time the FLA undertakes long term and on-going engagement. The FLA methodology helps improve workers' lives by gauging usual and normal working conditions to uncover root causes of problems and provide systemic lasting solutions. FGV, FLA and P&G have developed and are executing a comprehensive action plan. Transparency is a key component in work with the FLA, which allows interested stakeholders to monitor and provide feedback on action plans and progress.

FLA Action Planning and Monitoring Progress at FGV

The Fair Labor Association requires action planning and transparent reporting of progress. This was part of why we sought their help. P&G remains fully engaged in the process, providing support and encouragement where needed and monitoring FGV’s progress versus their commitments and established FLA action plans.

In March 2020, FGV worked with the FLA to develop an initial FGV-FLA Action Plan. Two further progress reports were published: FGV Progress Report September 2020 and FGV Progress Report March 2021.  A planned Independent External Assessment (IEA), to be conducted by FLA, was postponed due to the COVID-19 pandemic and the Malaysian Movement Control Order. The IEA has been conducted and the findings and associated corrective action plan to remediate the findings are expected to be published in 2022.

In March 2021 FLA Progress Report detailed on FGV’s progress in key areas, including versus the initial FLA FGV Action Plan established in 2020. This included:

  • Steps to Address Top Management Commitment and Workplace Standards – FGV has established a Board Level Sustainability Committee to provide oversight and direction on all sustainability topics, including human and labor rights. In 2020, the FGV Group Sustainability Policy Update was announced including focus on respecting human rights and environmental protection.
  • Regularization of Undocumented Workers – FGV has committed to regularization of approximately 6,000 undocumented workers with the Sabah authorities. This addresses the needs of a group particularly vulnerable to forced labor and intimidation. Steps have been taken to establish e-wallet (mobile app) payment of wages to ensure that workers receive, remain in control of their earnings and are able to purchase items or remit funds to families in their home country.
  • Worker Engagement and Recruitment –FGV has established a Foreign Workers Working Committee (FWWC) in order listen to workers, enable concerns to be raised and solutions identified. In addition, expert consultation on migrant worker recruitment practices has taken place with IOM, Earthworm Proforest, and SUHAKAM - Human Rights Commission of Malaysia. This enabled the development of ”Guidelines for Responsible Recruitment of Migrant Workers.”
  • Establishing Training –on human and employment rights and health and safety at work. This aims to reinforce the company’s expectations to managers and team leaders and to inform workers about their rights.

There is still work that needs to be done and we fully expect more areas of focus to be identified as on-going work continues. It will be important for FGV to demonstrate that plans are not only developed but implemented and operationalized and are resulting in better outcomes for its workers.

Full details of all FGV FLA reports can be found at: FLA - FGV Reporting

P&G Forestry Grievance Process & Tracker – Palm Oils

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 Palm Policy, share our investigative approach and report progress transparently via our P&G Palm Grievance Tracker.

We encourage anyone who identifies a potential concern about violations of the law or P&G’s policies to contact us. We are committed to reviewing all grievances with trained teams. Proper investigation is essential to promoting a culture of integrity, reducing the likelihood of repeated incidents, and increasing the willingness to proactively raise concerns. It is an important part of our commitment to ensure a sustainable supply chain for people and nature. Retaliation against anyone raising a concern in good faith is inconsistent with our values of integrity and trust and will not be tolerated.

  • How can I report a Grievance or Concern?
    Concerns can be reported to any P&G employee or confidentially 24 hours 7 days per week via a helpline manged by an independent third party at: P&G Worldwide Business Conduct Helpline
  • What Grievance Investigation Process does P&G follow?
    Investigations follow a 3 Phase process I. Receive and Evaluate II. Investigate III. Remediate. The process is outlined in our P&G Forestry Grievance Process
  • Where can I access information on Palm Oils Grievances received by P&G?
    Where issues have been raised to us, we will engage directly with complainants to keep them informed on the status of our investigations. We recognize that other people may have an interest in understanding more about our grievances and investigation. Since 2021 we have published a public grievance tracker. This is updated in April, August, December and you can find the latest tracker: P&G Palm Grievance Tracker