About Responsible Operations
Instilling Environmental Responsibility And Sustainable Practices
Being one of the globally leading oils and fats manufacturers, we acknowledge our role and responsibility to minimise our environmental impacts by advocating and practicing sustainable operations. Through our Sustainable Palm Oil Policy and Supplier Code of Conduct, we continuously engage our employees and stakeholders to improve their knowledge and skills on environmental responsibility and sustainable practices. In addition to our efforts to reduce emissions, we began to cover our Sustainability Stories which mostly feature our Corporate Sustainability Initiatives (CSI).
Upholding food safety and quality standards
As the CPO and PKO processed at our facilities are manufactured for human consumption, ISF places particular emphasis on food safety and quality within our supply chain. We take stringent measures to eliminate and exclude contaminants and conduct scheduled surveillance monitoring pollutants in our crude oils and finished products.
In 2018, ISF launched our Supplier Assessment Programme for food safety and quality to identify areas of improvement at mills and minimise compliance gaps in food safety and quality requirements. We carry out annual evaluations, monitor supplier and service provider performance, and also provide information about such gaps and areas of improvement so that suppliers can bring themselves up to our standards.
Contaminants such as mineral oil saturated hydrocarbons (MOSH) and mineral oil aromatic hydrocarbons (MOAH) can migrate directly or indirectly from packaging materials, such as adhesives and printer inks, to foodstuffs during transportation and production. There has been evidence linking these to potential health risks affecting the liver and lymph nodes. Some of our suppliers use food-grade lubricants to minimise contamination from MOSH/MOAH. These are typically our RSPO-certified suppliers. ISF is looking to roll out similar requirements for our non-certified suppliers at critical points of their production process to ensure they are up to par with these standards.
We also monitor for contaminants such as 3-monochloropropanediol (3-MCPD) and its esters, and glycidyl esters (GE), which may emerge in the processing of refined palm oil. These potential carcinogens can be detrimental to the health of consumers. In recent years, their adverse effects have become more apparent, and in 2018, the EU Commission issued regulations stipulating permissible levels 3-MCPD and GE in foodstuff. ISF adopted technology and measures to safeguard against these contaminants in 2010.
Minimising Environmental Impacts
ISF is committed to playing our role and mitigate the Greenhouse Gas (GHG) emissions and other environmental impacts generated by our operations, in line with the United Nations Environment Programme’s (UNEP) reports that global emissions need to be reduced by 7.6% yearly between 2020 and 2030 to limit the average global temperature rise to 1.5°C.
We have been gathering and analysing data from the four key areas where the details can be found in our new web-based Global Reporting Initiative (GRI) reporting. Using the gathered data as a baseline, we aim to reduce our usage intensities from the four areas by 5% by 2025.
We aim to operate responsibly by focusing on the key areas:
- Scope 1 (Direct emissions from ISF facilities)
- Scope 2 (Indirect emissions from imported electricity
- Natural gas
- Imported electricity
- Optimising our energy usage with solar panels
- Adopting water conservation technologies
- Sourcing municipal water, rainwater and groundwater
- We manage our waste following the Environmental Quality (Scheduled Wastes)
- Regulations 2005 100% of our spent bleaching earth repurposed as raw material
Within our operations, we strive to be a responsible producer by optimising the use of resources. We have begun monitoring our greenhouse gas (GHG) emissions, energy consumption, water consumption, and waste, and we educate employees to be environmentally responsible. Our stand-alone Environmental Policy outlines these operational commitments and our compliance with relevant environmental regulations. We monitor and continuously improve the implementation and effectiveness of our environmental management system as we are ISO 14001:2015-certified.
Since 2018, we have annually submitted our data to the CDP’s Forests programme within the scope of their global environmental disclosure system that helps measure and manage risks and opportunities on deforestation.
The United Nations Environment Programme reports that global emissions need to be reduced by 7.6% annually between now and 2030 to limit average global temperature rise to 1.5°C.3 This is a monumental task, and businesses need to work with governments, financial institutions, NGOs, and the public sector to take aggressive action to address climate change. To do our part, we are committed to accounting for the GHG emissions generated by our operations.
Our Port Klang and Dengkil facilities are located in remote areas away from urban centres and are therefore prone to water shortages. Optimising water consumption is therefore vital as it is a shared resource. We continuously work to improve water conservation efforts at our factories by adopting water-saving measures, technologies and innovations.
We source rainwater and ground water, but municipal water utility companies supply the bulk of our sourced water. We are aware of the adverse impacts that refineries can have on the air, land and water that surround our operations and therefore have published and implemented water pollution management manuals and waste treatment rules. In compliance with legal requirements under the Environmental Quality (Industrial Effluents) Regulations 2009 of the Environmental Quality Act 1974, all effluent is treated before being discharged into the drainage system. We also reuse wastewater to cool down machinery before it is treated a second time. In October 2019, we began using rainwater in our systems. The water we collect and use in this manner will be recycled at our sites’ cleaning facilities. We also plan to integrate roofing gutters to channel rainwater that can then be utilised in various processes at our refineries.
We have implemented systems to measure and dispose of the waste we produce in a responsible manner, following the Environmental Quality (Scheduled Wastes) Regulations 2005. All waste classed as hazardous or as scheduled waste requires special storage, packaging, labelling and management of containers. All scheduled waste is disposed of via a qualified waste recovery facility.
Supplier engagement and capacity building
In order to build a traceable and sustainable palm oil supply chain, we actively engage our suppliers to ensure that all palm products are sourced responsibly, and we are proactively working with suppliers who support certification schemes. Our suppliers are required to demonstrate compliance with the NDPE commitments in our Sustainable Palm Oil Policy above and beyond national and international certification requirements.
By agreeing to sell palm products to ISF, suppliers must accept and adhere to our Supplier Code of Conduct. Established in 2017, the Code defines basic requirements ISF suppliers must adhere to and implement throughout their business, including full compliance with applicable laws, environmental, and social and corporate governance standards.
In conjunction with our implementation partner Proforest, we annually assess suppliers against our sustainability commitments to measure progress towards alignment. Suppliers are first assessed and prioritised based on the risk of deforestation, followed by an analysis of any higher relative risk for social and environmental issues. Onsite verification is carried out in the form of an audit, resulting in a report that highlights areas of improvement and provides recommendations for continuous improvement, and against which action plans are developed to close the gaps identified. To date, two of our supplying mills have also undergone verification, one in Kelantan in April 2018, and another in Pahang in September 2018.
A formal Enterprise Risk Management (ERM) framework
Our strategic, financial, operational, and compliance-related risks are assessed and reviewed by our headquarters’ Risk Management Team. This dedicated unit works with relevant departments to identify company risks before developing and implementing mitigation and management action plans. In 2021, ISF engaged an independent consultant to adopt a formal Enterprise Risk Management (ERM) Framework based on ISO:31000 2018 (Risk Management) guidelines and establish a risk escalation structure that ensures the prompt communication of risks to our management team.
In October 2019, ISF received an Environment Assessment Loan (or ‘eco-loan’) from Sumitomo Mitsui Banking Corporation (SMBC) Malaysia, amounting to MYR 34.5 million (JPY 900 million). Eligibility for this type of loan is assessed based on the company’s environmental measures and awarded to companies that incorporate sustainability into their business and environmental management practices. ISF obtained a Gold+ rating in our assessment, indicating that we proactively implement environmental and sustainability initiatives and have a basic understanding of environmental and sustainability issues related to our business.
Upholding rights in the workplace
Our employees are the backbone of our business, and we strive to build a productive, healthy and satisfied workforce by providing fair and competitive conditions for all our workers. Our Human Resource Management (HRM) is responsible for ensuring that employee rights are respected and implemented by monitoring these elements in collaboration with the Employee Representative Committee (ERC). We respect workers’ rights, as set out in the International Labour Organization (ILO) Core Conventions and are committed to the principles of the Universal Declaration of Human Rights. The provisions of our Sustainable Palm Oil Policy cover our employees and also require our suppliers to uphold the same employment standards. These include:
- Providing equal opportunity without discrimination
- Abstaining from using illegal, forced, bonded or child labour
- Allowing workers the freedom to join trade unions and collectively bargain
- Upholding responsible recruitment practices for all labourers, including migrant, contract and temporary workers.
As an additional measure, ISF participates in periodic ethical and social audits conducted by third parties to ensure compliance with those elements. We believe in providing equal opportunity to all employees with no discrimination based on sexual orientation, gender, religion, race, disability, age, political affiliation, marital status or national origin. Our workers are free to join trade unions or engage in other forms of collective bargaining, if they so choose, to the extent permitted by law.
Employee retention and development
We strive to create a comfortable, challenging and fulfilling work environment. In addition to base salary and allowances, we provide benefits such as insurance, healthcare, retirement provisions and parental leave to all local and foreign workers. We also organise regular recreational and sporting activities, including annual employee dinners to build morale and to foster a sense of camaraderie.
Occupational safety and health
The safety of our employees is critical to the success of our operations. Our Occupational Safety & Health (OSH) Policy and OSH Management Programme guide our commitment to upholding legislative requirements on health and safety, instilling a culture of continuous improvement to prevent injuries and minimise workplace accidents, and carrying out audits and reviews of OSH measures. We convene OSH Committee meetings four times a year to discuss and address any health and safety issues.
We provide regular health and safety training to ensure employees remain safe and are prepared to handle critical situations and emergencies. Our training programmes include instruction on operating heavy machinery like forklifts, inculcating safety behaviour in day-to-day work practices, confined-space rescue procedures, first aid and CPR, as well as fire drills. All employees are given the required personal protective equipment in line with regulations, and the training required on its use. We have also authored clear policies prohibiting the use of tobacco, drugs and alcohol, and are raising awareness about HIV/AIDS at our sites. All new employees receive induction training and annual refreshers on these matters. In addition to these employee programmes, we hold bi-annual Safety Days to promote and provide exposure to occupational safety and health practices for our employees, vendors and contractors.
We monitor our sites annually for potentially dangerous impacts to employees in accordance with statutory requirements, and we carry out periodic health check-ups. All of our employees are covered by our OSH management system, which also extends to all contractors.
Solar Panel Project
Reducing Our Greenhouse Gas Emissions
The idea of a solar panel project surfaced with aims to reduce the total of 29,552,965 kWh (2019) energy consumed at our Dengkil operations alone. These panels will harness energy from sunlight to produce 1,035,924 kWh per year, accounting for 3.5% of our total annual consumption. The project was successfully launched in mid-2020 and the energy generated from solar power will be consumed during peak hours at our operations. We aim to extend the solar panel project to our Port Klang operations should the current project yield positive results.