aqila-SD SR2016 PDF

SIME DARBY PLANTATION
INNOVATING
FOR THE FUTURE
SUSTAINABILITY REPORT 2016
SUSTAINABILITY REPORT 2016
Plantation Sustainability & Quality Management

(PSQM) Department
Level 3A, Main Block Plantation Tower

No. 2, Jalan PJU 1A/7, Ara Damansara
47301 Petaling Jaya
Selangor Darul Ehsan, Malaysia
T +(603) 7848 0000

F +(603) 7848 4363
sdp.sustainability@simedarby.com
www.simedarbyplantation.com
COVER RATIONALE
Sime Darby Plantation runs a diverse set of businesses worldwide, with a
global reach and expertise spread beyond topographic boundaries. Guided
by a clear vision and strategy, we are committed to deliver sustainable
returns without compromising on improvements for people, planet, and
prosperity. We believe in our people’s ability to maximise our operational
and strategic potential. Even in the toughest of times, our value-driven
culture, strong focus on sustainability, and innovation continue to help us
remain resilient and maintain our position as an industry leader in good
agricultural practices.
This report is printed on environmentally friendly paper.

WHAT’S INSIDE
About This Report
World’s Biggest Producer of Performance Highlights ASSURING OUR PRACTICES
06
> Sustainability Certifications
Certified Sustainable Palm Oil 002-005 > Participation in Standards

Development
> Responsible Agriculture Charter
KEY MESSAGE
01
• Plays a leading role in the development and promotion of sustainable practices in
> Managing Director’s Statement 040-045
the palm oil sector
• One of the founding members of the Roundtable on Sustainable Palm Oil
• Industry leader in good agricultural practices CARING FOR OUR PEOPLE
07
> Safety and Health
006-009 > Our Employees
> Working with Our Local
Communities
OVERVIEW OF SIME DARBY PLANTATION
02
> Educational Assistance
Sustainability Principles & Values: > Our Profile & Global Presence
Produces > Key Milestones 046-065
• Delivering Economic Growth
approximately > Our Supply Chain
2.4
• Respect for the Environment
• Respect for Community CARING FOR THE ENVIRONMENT
08
• Accountability & Transparency to > Biodiversity & Conservation
010-015
Stakeholders > Carbon Management
million tonnes
> Fire & Haze Management
VALUES, GOVERNANCE & ETHICS
03
> Our Core Values
equivalent to
4%
> Our Vision
> Sustainability Principles and Values 066-079
Core Values: > Sustainability Governance
> Our Sustainability Framework
• Integrity CARING FOR OUR FUTURE
09
> Our Sustainability Governance
• Respect & Responsibility Structure > Lean Six Sigma & Continuous
• Excellence > Risk Management Improvement
of world’s annual crude palm
• Enterprise > Stakeholder Engagement & > Research & Development
oil output
Material Disclosures > Sime Darby Renewables
> Sustainability Strategy
> Our 6 Winning Mindsets
080-085
016-031
ACHIEVEMENTS
10
FINANCIAL REVIEW
04
> Awards and Recognition
> Financial Review FY1415 – FY1516
> Key Highlights > Media Highlights
Upstream Activities: Downstream Operation is Present in 17 Countries:

032-033 086-091
• Malaysia • Malaysia • China
• Indonesia • Singapore • Germany SUSTAINABILITY AT SIME DARBY PLANTATION
05 11
• Liberia • Indonesia • United Kingdom
> Sustainable Palm Oil Manifesto > Global Reporting Initiative
• Papua New Guinea • South Korea • South Africa
& High Carbon Stock Study Content Index
• Solomon Islands • Brazil • Netherlands
> Traceability of Supply Chain > Glossary
• India • United States of America
• Thailand • Papua New Guinea
• Vietnam • Solomon Islands
• Japan 034-039 092-096
About This Report
Elphil Estate and Palm Oil Mill in Perak, Malaysia
This Sustainability Report is our second Reporting Period and Scope This
Report covers our global operations
Report Boundaries As part of our
materiality analysis, we mapped and
Sustainability Reporting Guidelines
(Version G4) at a Core level1. This
Assurance All financial data in this
report has been independently
stand-alone Report that covers the for the Financial Year ending analysed key issues identified report is intended for release on a assured as part the Group annual
30 June 2016. It contains through our annual review of the biennial basis. financial audit, while safety, carbon
Plantation Division’s sustainability information that span throughout Plantation Sustainability Blueprint, emissions and Lean Six Sigma (LSS)
performance, initiatives and achievements our supply chain, but excludes our management meetings, and based Greenhouse Gas Protocol Carbon performance data has been verified
operations in Papua New Guinea, on the stakeholder engagement emission data shown in this report through a limited assurance
that complements the Sime Darby Group Solomon Islands and United survey results in 2016. Our is for the period 1 January – engagement2.
Annual Report 2016 where highlights Kingdom. materiality analysis and stakeholder
engagement are detailed in the
31 December 2015 and is part of
the Group carbon inventory that is
from our other divisions, namely relevant section of this report. collated annually using the
Industrial, Motors, Property, and Global Reporting Initiative The

Sustainability Management System
(SMS), and is in accordance with the
Logistics, are illustrated. content of this Report is prepared in Greenhouse Gas (GHG) Protocol for
accordance with the Global Scope 1 and Scope 2 emissions.
Reporting Initiative (GRI)
1 Please refer to the GRI Content Index.

2 Please refer to Sime Darby Group Annual Report 2016 for further details.
002 Sime Darby Plantation Sustainability Report 2016 003

Performance Highlights
01 03
FINANCIAL HEALTH & SAFETY
Revenue (RMm)
11,876.5
Profit Before Interest and Taxation (PBIT) (RMm)
1,052.4
Lost Time Incident Fatal Accident Rate (FAR) More than
Return on Average Invested Capital (ROAIC)
Frequency Rate (LTIFR)
9.3 2.0 f or every 100 million

69,000
4.3%
incidents per million hours worked
manhours worked SIME cards were received in
FY1516
SOCIAL 02 ENVIRONMENT 04
Gender Committee Scholarships RSPO Certification HCS Study

In all our operations to facilitate women Merit and need-based educational assistance in 98% of our SOUs are RSPO-certified We are currently carrying out trials of the HCS+
development at the workplace countries of our operation and HCS Approach methodologies in our Liberian
operations
CSPO
Female Estate Assistant Managers Plantation Human Rights Task Force
16
(PHRiTF)
Formed in January 2016 to identify issues around
human rights that are material to our operations
2,196,186 MT Notable Prime Minister’s Hibiscus
Award
SDP won this award for the first time in 2015 for
our commitment in environmental management
Female Mill Assistant Managers CSPK
4 495,172 MT
Managing Director’s Statement
Dear Stakeholders,
We are pleased to share with you our

2016 Sime Darby Plantation Sustainability
Report. Similar to its inaugural edition
back in 2014, this report contains updates
on our sustainability journey as we stride
towards meeting our environmental and
social goals. This will include achievements
made in various critical issues as well as a DATUK FRANKI ANTHONY DASS
disclosure on the challenges we faced Managing Director,
Sime Darby Plantation
along the way. Guided by our
Sustainability Strategy, I am proud that
we have made significant progress in
fulfilling both internal and external
commitments made. However, we
recognise that our biggest challenge is to
increase sustainability awareness
throughout our supply chain, especially
when it involves independent suppliers.
We will continue to develop initiatives on
this front and many other outstanding
issues over the next few years.

ENVIRONMENT Recently, the Sime Darby Group has TRACEABILITY The protection of human rights
also launched the Responsible regardless of sex, race and
While the oil palm industry In the age of social media,
Agriculture Charter (RAC). The nationality continues to be an
continues to be accused for the companies have to be highly
Charter outlines our aspirations integral part of our value system
deterioration of the environment, conscious of how their brands are
towards continuous improvement wherever we operate. Sime Darby
we have consistently played our role perceived by customers. Growing
and commitments in addressing Plantation will continue to support
as a leader in plantation consumer interest in the original
challenges around no-deforestation, the principles charted in the United
sustainability. We are committed to source of their food products has
no-peat and no-exploitation. With Nations Global Compact, as well as
not only promote and adhere strictly further heightened the importance
focused commitments on preserving other sustainability standards. We
to various best practices, but to also of traceability in our supply chain.
human rights, the environment, and strive to ensure that all our
raise the bar on sustainability We realise the challenges that lie
corporate integrity, the Charter will employees are equally entitled to
standards. We have set ourselves ahead in achieving full traceability,
be applicable to the Company’s their rights without any
apart with zero burning replanting especially when it involves external
entire oil palm operations, including discrimination. As a big portion of
practices and even extended our suppliers. Nevertheless, guided by
all third party oil palm suppliers and our workforce is made up of
forest fire prevention commitment advanced systems and a structured
other agricultural supply chains by migrant workers, we are committed
beyond the boundaries of our Responsible Sourcing Guideline, we
2020. Additionally, results from the to ensure the credibility and
operations. Additionally, we are committed to strive towards
trials on the HCS+ and HCS transparency of their recruitment
continue to pursue our carbon 100% traceability in our supply
Approach conducted in our Liberian process, and that they receive
reduction strategy efforts and have chain.
operations are expected to further sufficient protection from human
further intensified our biodiversity
guide us on better management trafficking and exploitation in any
protection initiatives.
practices for any new developments form, for as long as they remain a
PEOPLE
in the future. member of our workforce family.
Employees are our most important
asset. We care about the livelihood Finally, it is important for me to
and well-being of not only our highlight that the achievements
workers and employees, but also highlighted in this report is the
their families and the surrounding result of the collective energy of
communities in our areas of our employees who truly believe in
operation. I am truly sad to report the importance of upholding
that we had a few fatalities in our sustainability in our operations.
operations in the past two years, Without their commitment, efforts,
despite our strict practices and innovative ideas and winning
policies on safety and health. mindset, the company would not
Accidents can come in the most have been able to achieve anything,
unexpected way, under conditions let alone continue pushing the bar
that are sometimes beyond our higher in implementing and
control. However, be assured that embedding sustainable agro-
we will continue to strive in management practices throughout
providing better working our operations.
environment and trainings for our
employees and contractors towards It is my sincere hope that as you
ensuring their safety and preventing read through the pages of this
accidents at the workplace. report, you will also aspire and
Although the number of fatalities in appreciate what all of us can do,
our operations has been on a collectively, to improve the world
downward trend over the past few that we live in for the benefit of
years, our efforts will not stop here. DATUK FRANKI ANTHONY DASS
our future generation. Thank you
I truly believe that we can reduce Managing Director,
for reading this report and for your
such incidents even further in the Sime Darby Plantation
interest in our journey.
near future.

Our Profile & Global Presence
18
COUNTRIES
988,599
TOTAL LANDBANK (HA)
71
Palm Oil Mills
254 628,995
ESTATES PLANTED HECTARAGE (HA)
102,551
Employees
02 010–015
Sime Darby Plantation is the largest division of the Sime
Darby Group, a Malaysia-based public listed conglomerate
with a business that spans the entire palm oil value chain.
As one of the founding members of the Roundtable on
Sustainable Palm Oil (RSPO), we are now the largest
producer of sustainable palm oil worldwide, a testament
Upstream
• 603,254 ha of oil palm, 11,174 ha of
rubber, and 5,613 ha of growing cane
plantations in Malaysia, Indonesia, Liberia,
PNG, and the Solomon Islands
OVERVIEW
to our commitment in embedding sustainability in the core • Oil palm, rubber, and growing cane
of our operations. We now manage approximately 629,000 cultivation
ha of planted areas in Malaysia, Indonesia, Liberia, Papua
• Palm oil milling, rubber factories, and
New Guinea (PNG) and the Solomon Islands.
bulking facilities
Our upstream operations encompass more than 254 • Composting & biogas
OF SIME
estates and 71 mills. Our current Downstream operations
comprise production of oils and fats, oleochemicals,
biodiesel, other palm oil derivatives and renewables as Midstream
well as the sales and marketing of these products in 17 • Trading
countries. Additionally, our Midstream segment is involved
• Marketing
in trading, marketing and logistics services. Sime Darby
DARBY
Plantation is backed by a diverse workforce of more than • Logistics services
100,000 people.
Our Key Markets Downstream

Malaysia, India, Thailand, Indonesia, United Kingdom, • Oils & fats, kernel crushing, biodiesel, and
PLANTATION
South Africa, Germany, China, Netherlands and Vietnam. oleochemicals production
• Sugar processing
United Kingdom
Netherlands Germany
Liberia
South Japan
USA China
Korea
Vietnam
India
Malaysia
SingaporeIndonesia
Papua New Solomon Islands
Guinea
Brazil
South Africa

Key Milestones
2012
Largest producer of
certified sustainable
palm oil, leading total
sustainable production,
food safety, CSR, and
GHG reduction
1985
Introduced zero
2010 2015
burning
First SCCS and Acquisition of New
ISCC certifications Britain Palm Oil
2002
Founding member of RSPO
1992
Elected to UNEP Global 500
2016 and beyond
2008
Roll of Honour for
commercialisation of zero
burning practice As signatory of the Sustainable Palm Oil
Manifesto we will test both HCS + and HCS
First RSPO
Approach methodologies to develop a
certification
single HCS methodology.
Sime Darby Group launched the Responsible

Agriculture Charter (RAC) in September
1990
2016
1994
Biological control
for IPM EMS-ISO 14001
2004
First GlobalGAP
certification
SIME DARBY PLANTATION IS A LEADER IN PLANTATION SUSTAINABILITY

• Pioneered the Zero Burning Replanting Technique in 1985
• One of the founding members of RSPO
• Largest producer of CSPO: Malaysia 100%, PNG and Solomon Islands 100% & Indonesia 96% certified
• No deforestation of primary and virgin forest
• No new development on peatlands
• No development of HCS areas, once defined
• Committed to Environmental and Social Principles – HCV & FPIC

Our Supply Chain
PALM OIL VALUE CHAIN Value Chain

98%
R&D Advisory & Research of mills
RSPO-certified
603,254
hectares of oil palm
Planted in Malaysia, Indonesia, ESTATES MILLS
Liberia, Papua new Guinea
and Solomon Islands
• Processing Technology
• Research & Advisory

• Seeds & Agriculture
• Biotechnology &
• Processing Technology
Breeding
• Product Innovation
Centres
R&D REFINERIES
• Processing
• Customer Requirements Technology
• Product
Innovation
Centres EDIBLE OIL & FATS
CUSTOMERS BIODIESEL
100%
Downstream
Business Units
RSPO-certified
OLEOCHEMICAL

Our Core Values
01. Integrity
02. Respect & Responsibility
03. Excellence
04. Enterprise
03 016–031
Our Vision
VALUES,
To be a leading integrated global plantation company
GOVERNANCE
Sustainability Principles and Values
& ETHICS
Delivering Respect for the Respect for the Accountability &
Economic Growth Environment Community Transparency to
Stakeholders
• Generate prosperity • No deforestation of • Deliver long term • Good corporate

primary and virgin benefits to local governance and high
• Continuously improve
forest communities ethical values
operational efficiency
and sustainable • No new development • Respect fundamental • Continuous
production on peatland human rights and social engagement with all
values stakeholders –
• Leader in sustainable
Government,
practices
Regulators, NGOs and
Communities
Disclose Engage Empower Protect Enhance Respect

Sustainability Governance Our Sustainability Framework
2030
We recognise sustainability as a key business differentiator and
as such value it as a driver of our business. The Main Board is
accountable for sustainability strategy and performance while
our President and Group Chief Executive has overall
management responsibility for sustainability; and the Group
Chief Sustainability Officer is responsible for overall operational 5 YEAR ROLLING STRATEGIC GOALS
sustainability performance.
Sustainability Purpose
Contribute to a Better Society, Minimise Environmental Harm, Deliver Sustainable Development
BLUEPRINT, ROADMAPS and KPIs
RISK CULTURE DISCLOSURE VALUE LEADERSHIP
Sustainability Beliefs
Disclose, Engage, Empower, Protect, Enhance, Respect
The Plantation Division is led by its Plantation Sustainability Committee

Managing Director (MD) who is and is a member of the Group
actively involved in our Management Sustainability Corporate Values
sustainability direction and Committee which reviews our Integrity, Respect & Responsibility, Enterprise, Excellence
performance. The MD sets the overall sustainability direction. The
agenda for sustainability initiatives Plantation Sustainability Blueprint is
and drives business units towards reviewed annually with inputs from
industry-leading achievements. The business units and receives final
Plantation Division’s Flagship Board approval from the MD. The
assumes accountability for the Blueprint guides our strategic
Division’s sustainability strategy and actions in accomplishing
performance. The MD heads the sustainability targets.
Sustainable Development Goals

Our Sustainability Governance Structure
ANTI-CORRUPTION
DIVISIONAL
Sime Darby Plantation has a zero-tolerance approach towards bribery and corruption in any form and is committed
FLAGSHIP
to behaving professionally, fairly and with integrity in all our business dealings throughout our operating areas. We
SUBSIDIARY
SIME DARBY BOARDS
regularly engage with external agencies to support efforts to eradicate corruption, including with the Malaysian
Anti-Corruption Commission (MACC) and Transparency International-Malaysia (TI-M).
MAIN BOARD
GRIEVANCE AND WHISTLEBLOWING POLICY

We aim to settle any grievance between the Company and an employee or third party fairly, quickly and internally.
Our Grievance Policy provides a framework to support this process. An anonymous whistleblowing channel is also
available to receive complaints, so that further necessary action can be taken by the management.
BOARD
President &
SUSTAINABILITY
Group Chief
COMMITTEE
Executive
GROUP Group Chief

MANAGEMENT Sustainability
SUSTAINABILITY Officer
COMMITTEE
PLANTATION Plantation
SUSTAINABILITY Managing
COMMITTEE Director
Direct reporting
Administrative reporting
Note: The Plantation Managing Director chairs the Plantation Sustainability Committee. While the Group Chief Sustainability Officer chairs
the Group Management Sustainability Committee.

Risk Management
KEY PLANTATION SUSTAINABILITY RELATED RISKS AND MITIGATION MEASURES
Risk Description Mitigation Measures Risk Description Mitigation Measures
SAFETY AND Major accidents due to non- 1. Environment, Safety & Health (ESH) and HUMAN RIGHTS 2. Formation of Plantation Human Rights Task
HEALTH compliance to policies and Emergency Response policies & procedures (CONTINUED) Force to coordinate assessments to identify
procedures that may lead to death established and implemented areas for improvement where there may be
or severe injury potential human rights violations
2. ESH performance monitoring & reporting
implemented 3. Engagement with external consultant to
provide assessments and constructive advice
3. Regular safety training, dialogues & roadshows
on human rights practices
and dedicated OSH departments/committees
Further details can be found in the Safety & Health WASTE Impact of overflowing effluent waste 1. Established SOP on waste/effluent
section of this report MANAGEMENT to monsoon drains, streams/rivers management
causing pollution which can result in
2. Dedicated training courses (i.e. Certified
LOCAL Challenges arising from local 1. Establishment of clear Free, Prior & Informed prosecution, fines, disruption in
Environment Professional in the Palm Oil Mill
COMMUNITY community grievances due to real or Consent (FPIC) procedures operations and severe reputational
Effluent) conducted
GRIEVANCES perceived concerns that may lead to damage
2. Grievance mechanisms implemented and issues
operational disruptions and loss of 3. ESH performance monitoring & reporting
addressed
goodwill implemented
3. Regular engagement with stakeholders
FIRE & HAZE Open burning and trans-boundary 1. Zero open burning policy established and
Further details can be found in the Working with Our
haze from Indonesia implemented
Local Communities section of this report
2. Use of satellite surveillance to monitor
CLIMATE Impacts from climate change i.e. 1. Water and soil conservation efforts including hotspots 24/7
CHANGE rainfall patterns, water scarcity, initiatives to create water bodies/reservoirs
3. Regular engagement with local authorities
drought may adversely impact
2. Flood mitigation measures
operations 4. Emergency response and fire prevention teams
3. Reduction in operational carbon emissions as established
part of national and international reduction
efforts DEFORESTATION New compliance requirement that 1. Commitment to avoid deforestation of primary
does not allow development on forest as well as HCS & HCV area
4. R&D efforts into resilient planting material
natural ecosystem and land with
(e.g. drought-resistance, genome etc.) 2. Engagement with standard setters and NGOs
High Carbon Stock (HCS) and High
5. Fire prevention system & SOP to prevent and Conservation Value (HCV) 3. Part of HCS convergence negotiations
combat fires within 5km radius of operating areas
THREAT OF A The potential threat of disease 1. Breeding & utilisation of disease tolerant
MAJOR PLANT outbreak and/or pests either not planting materials RSPO NGO attacks on palm products and 1. Observe best agro-management practices in all
DISEASE being identified in a timely manner related products due to inconsistent field operations
OUTBREAK 2. Regular onsite monitoring and control vis-à-vis
or not being mitigated effectively practices which are against RSPO’s
pests and disease outbreak at estates 2. RSPO, ISCC & SCCS Certification
could potentially result in significant P&Cs
tracts of plantation being affected 3. Monitoring & reporting of RSPO Certification
and/or being wiped out Audit non-compliance status

4. Sustainability Management System Manual
implemented
HUMAN RIGHTS Potential allegations of human rights 1. GCAD, Group Compliance, Group HR, Group
abuses by NGOs/governments in SQM and SDP’s HR are conducting an
relation to labour practices assessment on internal HR practices. These
practices are assessed in terms of its
effectiveness and compliance with UN’s
Guiding Principles on Human Rights

Stakeholder Engagement & Material Disclosures
KEY STAKEHOLDER GROUPS AND THE TYPES OF ENGAGEMENTS CONDUCTED
At Sime Darby Stakeholder Group Types of Engagement Sustainability Topics Discussed

Plantation, Customers
we recognise Bulk and FMCG
Engagement survey, periodic
Environmental and social issues
such as deforestation, human
meetings, engagements and sharing
engagement with players
on latest developments within SDP
rights, biodiversity, and high
carbon stock
stakeholders as
fundamental to the Employees
Permanent & Annual employee engagement
way we do business. contractual survey, Open Days, volunteer
Briefing and training on
sustainability, health, and safety,
In line with our employees programmes, recreational events,
as well as sustainability direction
(foreign & local) trainings
commitment as a
palm oil producer, Non-governmental
Meetings, telephone conversations,
FPIC, expansion plans,
Organisations environmental issues
we strive to engagement surveys
Local and
comprehend the international Collaboration:
RSPO Certification, technical
assistance to achieve best
expectations of social and
environmental
• traceability
• social and environmental
management practices,
our stakeholders. NGOs projects through YSD
biodiversity, human rights,
campaign to raise Ebola
Their feedback is • health projects with IFRC &
other societies
Awareness
vital for us to gauge

Industry Groups
our performance Green technology, RSPO &
RSPO, MPOA, Working groups, task force,
and implement MPOB, MPOCC technical committees
MSPO standards developments,
carbon
higher sustainability
standards across our We engage our stakeholders Internally, we organised meetings Government
Agencies
operations. through multiple channels. Our key
stakeholder groups have been
with relevant key functions to
obtain their input on issues that
DOE, DOSH,
Regulatory
Periodic meetings, on-site
inspections, correspondence on Compliance, regulations
identified through various activities they perceive to be material for Agencies regulations
in the palm oil industry. They SDP. Additionally, Sime Darby
include shareholders, employees, conducted external stakeholder
customers, non-governmental engagement surveys in 2016, to Local Communities Regular on site meetings with PAC, Land rights, FPIC, fire and haze
organisations, industry groups, and gauge feedback and analyse gaps in Indigenous people
RSPO RT, RSPO complaints & prevention
government agencies. Our our previous reporting. The surveys, and communities
grievance
engagement approach is not only together with comments obtained in our operational
through formal meetings, but also from our internal team, helped us to areas
Engagement on RSG Sustainability practices
informal means such as surveys, have a better understanding of
websites, social media, and market issues material to stakeholders. Academic
research. Institutions University of Collaboration: Education on zero-burning
Our key stakeholder groups are Riau, ULM, UKM, • fire/haze management practices and zero waste
listed in the following page, and others • zero waste management management
together with an overview of our
engagement activities in the past
year and the major concerns raised.
Note:
IFRC : International Federation of the Red Cross
UKM : Universiti kebangsaan Malaysia
ULM : Universiti Lambung Mangkurat

Sustainability Strategy
MATERIAL DISCLOSURES
We define material issues as subjects that have the biggest influence to our business in terms of environment,
social, and economy, as well as ones with the most significance to our stakeholders. Our course of selecting SDP SUSTAINABILITY ROADMAP – CRITICAL KPIS
material issues was guided by the Reporting Principle and Guidance for Defining Content in the GRI G4
Sustainability Reporting framework. Objectives & KPI FY1516 FY1617 FY1718 FY1819 FY1920
Below are the sources and methodology used to identify our material issues: Protect Our Fatality cases
0 fatality 0 fatality 0 fatality 0 fatality 0 fatality
People by & rates
Developing a
LTIFR Reduce 10% Reduce 10% Reduce 7.5% Reduce 5% Reduce 5%
Safe Working
Culture With Concerned Commit target Achieve 10% Achieve 25%
50% 100%
INTERNAL EXTERNAL Zero Fatalities reporting by 2020 target target
63 Mil 126 Mil
Increasing LSS Financial 1% of 1.25% of 1.5% of
(0.5% of (1% of
Monetary benefits from FY1617 FY1718 FY1819
FY1112 FY1112
Benefits LSS projects Revenue Revenue Revenue
revenue) revenue)
• Management View. We analysed major • External Stakeholder Perception. We conducted
sustainability issues across the organisation. external stakeholder engagement surveys to gauge Stakeholder
Enhancing GRI 2nd Plantation Relook at
their feedback on critical sustainability issues. Sustainability Engagement Sustainability Integrated
• Division KPI. We identified and assessed SDP’s Sustainability Sustainability Target and
Stakeholder groups engaged were existing and Reporting Material Assurance Reporting
critical and trending sustainability Key Performance Reporting Report Commitment
potential customers, NGOs, Industry Groups and assessment
Index.
Investors. % intensity
• Risk Management Matrix. We reviewed SDP’s Risk Reducing GHG reduced from
Management Matrix and selected key sustainability 15% 20% 30% 35% 40%
Emissions baseline
risks expected. (Upstream)
Identify &
Reducing
establish
The major topics raised were Waste Waste 10% 25% 50% 100%
targets for
High Priority
then plotted on a materiality Generation

2020
matrix, where issues with
the highest significance to Determine
both internal and external Optimising Water Baseline 10% from
15% 20% 25%
stakeholders were selected: Water Usage Footprint &Target baseline
setting
EXTERNAL STAKEHOLDERS
Carbon Emissions
Low Priority
Biodiversity
Human Rights
Smallholders
Traceability
Deforestation Low Priority High Priority
INTERNAL STAKEHOLDERS

SDP SUSTAINABILITY ROADMAP – TRENDING KPIs
Sime Darby Plantation Sime Darby Plantation

Trending KPI Current Programmes Trending KPI Current Programmes
Sustainability Scorecard Sustainability Scorecard
• Update of the SDP Environment, Safety • Energy savings projects and initiatives at
& Health Management System (ESHMS) Plantation Tower
T5 Energy Reduction
• ESH Risk Workshops • Contribution of Renewable Energy to
T1 Implementing Divisional ESH Roadmaps National Grid via Biogas projects
• Periodical ESH data validation
• MSOSH and PMH Awards • Risk workshops + updated HIRARC &
• Improvement in Effluent Management EAI/ESH Risks registers (compliance with
Implementing, Measure and Monitor RSPO & Group Risk)
Capacity Building: T6 Environment Safety and Health (ESH) Risk
• Harvesting Safety (HCTP), Machinery
Management
• Launch Train-the-Trainer White Belt Safety (Model Mill), Transport/Road
Programme Safety & Bauxite Mining
• Conduct 3rd Batch of Black Belt
• Review the current reporting guidelines
Programme
Socialising Sustainability Policies and • Training for gender committee
• Conduct Centralised Green Belt T7
Procedures and deployed • Awareness programmes related to child
workshop
protection and reproductive rights
• Identify LSS Coordinator for each
operating Unit • Mill environmental Corporate Social
Responsibility (CSR) projects in
T2 Implementing Divisional LSS Roadmap collaboration with YSD. (Eg: emergency
Identify Gap and Opportunities:
response training for communities
• Launch LSS Maturity Index Assessment
affected by flood)
(Upstream, Downstream, and R&D) T8 Enriching Local Communities
• MOU with DOE Malaysia to collaborate
in conducting environmental awareness
Governance and Guidance:
programmes for communities around
• Launch LSS Standard Operating SDP’s operations by working together
Procedure (SOP) with YSD
• Revise 5S Certification SOP
• ESH Caucus – Plantation industry, GLC,
• War on Waste Awareness Event Contributing to National & International MAPA
T9
stakeholders platforms
• LSS White Belt Handbook • MSOSH and PMH Awards
• Implementation at Minamas & West New • Risk updates & BCM programmes
Implementing Sustainability Management Britain
T3 SQM alignment with Group’s GRC • MESHC & GSR + Effluent Management
System (SMS) • System enhancement for Carbon to T10
requirements improvement
integrate Palm GHG features
• Quarterly OSH data validation
• Update of the SDP ESHMS
• Introduce ESHMS-based internal audit in
Certifying to an Integrated OSHAS 18001 & collaboration with GSQM to drive
T4
ISO 14001 &/or ISO 9001 Standards ESHMS implementation & certification
• IMS-based audit for Upstream
Operations

Our 6 Winning Mindsets
One message rang loud and clear in the Sime Darby Group’s townhall in November 2015: we need to RISE to our
challenges. There is no doubt that the current global economy has been challenging. Lower commodity prices
coupled with the weak economy has affected multinational companies around the world. To see us through this
difficult time, and ensure that we meet our targets, we have initiated the RISE initiative (Results, Innovation,
Sustainability and Energy) as part of the Group’s five-year strategic blueprint. DELIVER RESULTS
We drive results
In another townhall held in February 2016, our President & Group Chief Executive revealed six Winning Mindsets
we will need to bridge the gaps in our performance. We have to look at means of enhancing our approach of doing
I exceed expectations
things, in order to stay relevant in the industries which we operate in. The 6 Winning Mindsets serve as a guide to
all employees to innovate and focus on the results we want by adopting a new approach.
CUSTOMER FIRST
We put customer first
I win with the customer
VALUE TALENT
We value talent
I am team palayer
WINNING
Mindsets BUILD TRUST
We build trust
I walk the talk
CONTINUOUS IMPROVEMENT
We improve and innovate
I do better, every time
EMPOWERED DECISIONS
We make empowered decisions
I am responsible and proactive

Financial Review
Financial Results (RMm) 2015 2016
Revenue 10,268.6 11,876.5
Operating Profit 1,323.2 1,060.9
04
Share of Results of Joint Ventures and Associates (32.4) (8.5)
Profit Before Interest and Tax (PBIT) 1,290.3 1,052.4
Return on Average Invested Capital (ROAIC) % 6.6% 4.3%
032–033
FINANCIAL Key Highlights
REVIEW REVENUE (RMm)
2012
2013
14,126.4
11,672.1
PROFIT BEFORE INTEREST AND TAX
(PBIT) (RMm)
2012
2013
3,364.6
2,190.3
2014 10,953.3 2014 2,077.3
2015 10,268.6 2015 1,290.8
2016 11,876.5 2016 1,052.4
0 4,000 8,000 12,000 16,000 20,000 0 1,000 2,000 3,000 4,000 5,000
VALUE DISTRIBUTION RETURN ON AVERAGE INVESTED

CAPITAL (ROAIC) (%)
Providers of 2012 25.1

Capital and
Reinvestment 2013 15.9
(55%)
2014 14.6
2015 2015 6.6
Government
(-3%) 2016 4.3
Employees
(48%) 0 5 10 15 20 25 30
2016
2016

Sustainable Palm Oil Manifesto &
High Carbon Stock Study
05 034–039
SUSTAINABILITY
Palm oil is a nutritious and versatile processors, we are committed to deforestation and build a
food product that is fundamental to ensure sustainability and traceability transparent supply chain, we
the livelihood of millions of people throughout our supply chain. In became signatory to the Sustainable
in communities across Indonesia and alignment with our efforts to Palm Oil Manifesto (SPOM) in July
Malaysia. As oil palm growers and accelerate the journey to no 2014.
AT SIME DARBY
Our progress as a Signatory of SPOM is illustrated below:
Signatory to We halted all An independent HCS Study was

SPOM new oil palm HCS Study completed
PLANTATION
developments commenced
July 2014 September 2014 November 2014 December 2015
CONVERGENCE OF THE HCS values that may be developed. The convergence of the two. The HCS
APPROACH WITH HCS+ HCS Approach integrates with High Approach and the HCS+
METHODOLOGY Conservation Value (HCV) methodology are convergent in
We are currently carrying out trials assessments, peatland and many respects and planning is
of the HCS+ Methodology in our streamside (riparian) area underway for joint trials of the two
Liberian operations. As a signatory identification, and Free Prior and methodologies in diverse
to the SPOM, we will also trial the Informed Consent with local environments. These trials will allow
HCS Approach, as per customary communities. This the comparison of both the HCS+
recommendation in the final report Approach proposes a conservation and HCS Approach methodologies in
of the HCS Study. The report plan for a concession with areas for terms of conservation, risks, as well
concluded that the HCS + method protection and areas that can as practicality of implementation.
could be merged with the HCS potentially be developed as a This comparison will aid our efforts
Approach to provide clear and land-use planning tool. towards the development of a single
consistent guidance for companies HCS methodology for the oil palm
and governments. While the HCS Approach focuses sector. Additionally, we have also
more on conserving forests, the initiated a Light Detection and
The HCS Approach is a methodology HCS+ methodology focuses more on Radar (LiDAR) study to obtain a
that distinguishes forest areas for sustainable development, and the baseline carbon map of the area
protection from degraded lands methods and outcomes may be identified to carry out our trials in
with low carbon and biodiversity sufficiently complementary to allow Liberia.

Traceability of Supply Chain
SDP’s palm and lauric products are a vital tool in the palm oil industry As a participant of the UNGC, Sime OPEN PALM TRACEABILITY
widely used in the food industry, to assure sustainability claims in Darby Berhad is committed to DASHBOARD
especially in the production of relation to palm products, and develop more sustainable supply
Open Palm is SDP’s online
baked goods, dairy replacer, infant ensure respect for the community chain practices and encourage
nutrition, and frying oil. Our and environment throughout the As of business management methods that
dashboard that provides critical
information on the traceability of
commodities are sold globally, supply chain. 30 June 2016, explore fundamental issues in
our supply chain. Open Palm
where a growing number of improving the sustainability of our
92.9% of our
provides customers with access to
consumers are looking for product In A Guide to Traceability: A Practical sourcing practices. As of 30 June
key data on the origin of the raw
attributes such as origin of product Approach to Advance Sustainability in 2016, 92.9% of our FFB is traceable
materials used to produce all palm
and sustainability practices of the Global Supply Chains developed by FFB is traceable to the plantations. In downstream
products by our refineries, which
plantation prior to purchasing the the United Nations Global Compact operations, 83.6% of CPO and 100%
food item. Traceability provides a (UNGC) Traceability Taskforce,
to the plantations of PK is traceable to the mill. 78.9%
include information of the supplying
oil palm mills, right down to its
platform to satisfy consumers’ traceability is defined as the of our CPO and 85.8% of PK is
plantations, as well as third party
inquiries and create a connection following: traceable to the plantations.
plantations. Full access to the
with the brand advertised. It is also Realising the importance of
traceability dashboard is currently
traceability with the increase of
made available to our key clients
eco-conscious customers, we have
with traceability information that
“The ability to identify and trace the history, distribution, participated in various initiatives to
ensure transparency in our supply
ties back to the individual clients’
purchases.
location and application of products, parts and materials, chain.
to ensure the reliability of sustainability claims, in the areas

of human rights, labour (including health and safety), the
In downstream
environment and anti-corruption.”
operations,
83.6%
of CPO and
100%
of PK is traceable
to the mill
78.9% of our
CPO and
85.8% of PK
is traceable
to the plantations

This guideline covers sustainability Another challenge in achieving full enterprise through a MOU to assist
areas such as legal requirements, traceability is the complexity of the small oil palm producers in the
avoiding deforestation of primary supply chain, especially when Lower Kinabatangan area in Sabah
forests and HCV areas, human rights traders are involved. It is extremely in achieving RSPO certification. This
protection, and implementation of difficult to trace the FFB up to collaboration aims to secure the
social and environmental best plantation when it has gone through supply of oil palm Fresh Fruit Bunch
SCCS FULL SEGREGATION their choice. A majority of this practices. Two pilot RSG projects multiple layers in the supply chain, (FFB) from small producers including
group of smallholders are not RSPO are currently being conducted in as the fruits are often mixed up at certified small producers FFB under
Fully Segregated Palm Oil Supply Selaba, Perak and Merotai, Sabah. the collection centres before being the Wild Asia Group Scheme
certified yet, thus posing a
Chain RSG will be rolled out progressively transported to the palm oil mill. The (WAGS). We hope that this
humungous challenge to palm oil
The RSPO Supply Chain Certification companies in ensuring transparency PHASE 1: in the other remaining areas. complexity further increases in partnership will significantly
System equips refineries with the in their sustainability practices as Downstream operations, as the increase the participation of
capability to implement traceability part of our supply chain. In IDENTIFICATION OF KEY Traceability and sustainability refineries could be buying smallholders in our sustainable
of crude palm oil supply to alignment to SDP’s commitment to SUPPLIERS AND EFFECTIVE certification for smallholders have commodities from multiple mills. supply chain.
supplying mills and estates through sustainability, we have developed a COMMUNICATION remained extremely challenging to Additionally, many traders are
the RSPO e-Trace system and allows Responsible Sourcing Guideline achieve as obtaining sustainability hesitant in sharing the traceability Despite the numerous challenges
for the production of fully- (RSG) to lead our decision in certifications often comes with high information of their commodity, faced in our effort to be 100%
segregated certified palm oil sourcing externally. costs. For instance, in order to fearing losing their position as our traceable, we are continuously
products. About 70% of our mills in obtain RSPO Certification, direct supplier. Tracing the product engaging our suppliers to work
Malaysia and Indonesia are certified Development of Responsible Sourcing PHASE 2: smallholders will have to invest in back to its originating plantation is towards full traceability in our
as Identity Preserved (IP), processing Guideline (RSG) for Independent pre-audit requirements such as also difficult for commodities supply chain. We have further
only RSPO-certified FFB. Smallholders IDENTIFICATON OF PRE- conducting HCV, EIA, and SIA purchased from the open market, as strengthened our commitment
QUALIFIED SUPPLIERS assessments in addition to bearing the traceability information is not towards this cause by being co-
The RSG requires our third party THROUGH DESKTOP audit and staff training costs. This is readily available. chairs of the RSPO FFB Legality and
suppliers and dealers to not only
CHALLENGES IN ACHIEVING ASSESSMENT highly costly for independent Traceability Taskforce, striving
ensure compliance with relevant
FULL TRACEABILITY smallholders, as they often do not Collaboration with Wild Asia (WA) to towards developing a structured
legal obligations, but to also have a
One of the major challenges in benefit from the financial and Include Certified Smallholders in Our mechanism to trace the FFB derived
mechanism in place to implement
achieving full traceability is the technical support of a mill, unlike Supply Chain from external suppliers for all
the requirements as appropriate and
existence of third party smallholders associated smallholders. A majority In striving towards including more industry players.
as deemed practical without
in our supply chain, as outside crops compromising our social and
PHASE 3: of the smallholders do not have the certified smallholders in our supply
make up approximately 10% of the resources to set up a mechanism in chain, we partnered with Wild Asia
environmental obligations. Suppliers VERIFICATION AND
total FFB processed by our mills. place to assure full traceability in (WA), a Malaysian-based social
must be able to demonstrate CONTINUOUS ENGAGEMENT
Independent smallholders are their operations.
traceability and transparency of TOWARDS COMPLIANCE
self-financed and self-managed, thus supply chain, up to the supplying
they are not bound to any one mill. farms/estates. The RSG will be
Consequently, they may deal implemented in three phases:
directly with local mill operators of

Sustainability Certifications
Key Figures
CSPO CSPK
2,196,186 MT 495,172 MT
Total SOUs Certified:
06 040-045
58/59 (98%) –
Malaysia (100%)
Indonesia (96%)
ASSURING OUR
Roundtable on Sustainable Palm Oil 25,000 families. Out of approximately 75% of our mills in Malaysia and
(RSPO) Certification 45,000 hectares of land developed Indonesia are now Identity Preserved,
As founding members of the RSPO, for this purpose, we have obtained processing only RSPO-certified FFB.
we continue to support and uphold RSPO certification for close to 25,000 100% of our downstream business
the RSPO Principles & Criteria as a hectares (from 19,000 hectares in units have been RSPO Supply Chain
PRACTICES
benchmark and assurance of FY1415) with a production capacity Certification System (RSPO SCCS)
sustainable planting of oil palm. By of over 695,000 MT of FFB. Three certified, meaning that these units are
certifying almost all of our estates, smallholder schemes have successfully capable of delivering RSPO mass
the RSPO badge has become a key obtained RSPO certification in the balance and/or segregated products.
differentiator of Sime Darby palm oil reporting period. They are located in
products and are sought after in all Central Sulawesi (PT. Tamaco Graha
INDONESIAN SUSTAINABLE
markets; for quality and sustainability. Krida), South Kalimantan (PT. Laguna
PALM OIL (ISPO) CERTIFICATION
Mandiri) and West Kalimantan (PT.
Sime Indo Agro). The total certified ISPO is a mandatory certification
Supporting Smallholders in achieving
planted area is approximately scheme adopted by the Indonesian
RSPO Certification
12,000 ha and contributed government that aims to improve
Smallholders are a key part of the approximately 200,000 FFB. We are sustainable practices and reduce
palm oil supply chain, contributing committed to certify the remaining greenhouse gas emissions in the
approximately 40% to the global palm area under the RSPO Smallholder Indonesian oil palm industry. The
oil production. The RSPO defines Certification Scheme through scheme is based on existing
smallholders as farmers who grow oil engagement activities, facilitation Indonesian laws and regulations and
palm, alongside with subsistence and technical support. aims to facilitate compliance by
crops, where the family provides the producers. 12 of our SOUs in
majority of labour and the farm Indonesia have been ISPO certified
provides the principal source of RSPO CERTIFIED SUPPLY CHAINS remaining 13 undergoing different
income, and the planted oil palm area The RSPO Supply Chain Certification stages for verification.
are is less than 50 hectares. We are System equips refineries with the
committed to assist smallholders in capability to implement traceability of
increasing yields, improve agro- MALAYSIAN SUSTAINABLE
crude palm oil supply to supplying
management practices and eventually PALM OIL (MSPO) CERTIFICATION
mills through the RSPO e-Trace
achieve sustainable practices. system and allows for the production The MSPO Standard is a national
of identity preserved and fully- certification standard created by the
In Indonesia, we have continued to segregated certified palm oil Malaysian government and developed
provide local communities with the products. A number of sustainable with input from various stakeholders
means to make a living and raise their supply chain mechanisms exist for in the palm oil industry. It was first
quality of life through our Kredit palm oil, including identity preserved, launched in November 2013, and
Koperasi Primer Anggota (KKPA) and mass balance and book & claim. officially came into implementation in
Plasma schemes, impacting more than January 2015. The SDP supporting the
initiative throughout first verification
SOU Labu.

Participation in Standards Development
RSPO TASK FORCE AND WORKING GROUPS
In line with our sustainability goals, • 2 of Sime Darby’s representatives were nominated as
Task Force members in reviewing the Malaysian
we strive to contribute our experience National interpretation (MYNI) P&C, which was then
rolled out in May 2015.
and expertise in a number of industry
• SDP is a panel in the RSPO Complaints and Grievance
groups that seek to improve and raise Panel, Dispute Settlement Facility Advisory Group and
sustainability standards and actively also a member of the Human Rights Working Group,
FFB Legality and Traceability Task Force, Smallholders
engage with stakeholders. Working Group, and Emission Reduction Working
Group.
SDP is also participating in the Biodiversity and High

Conservation Value Working Group, and Compensation
Task Force for the development of the RSPO
Remediation and Compensation Procedures.
OTHER INVOLVEMENTS
• SDP is part of the Technical Working Committee of the
Malaysian Sustainable Palm Oil (MSPO) on the drafting
of MSPO Standard.
• Datuk Franki Anthony Dass is a member of the

Programme Advisory Committee (PAC) under the
Malaysian Palm Oil Board (MPOB).
• Datuk Franki Anthony Dass is the chairman of the

Malaysian Palm Oil Association (MPOA).
• Sime Darby was a Core Advisory and Steering Group

member of the United Nations Global Compact’s
(UNGC) “Voluntary Business Principles for Sustainable
Agriculture” process, which developed the Food and
Agriculture Business Principles (FABP).
• SDP is a member of the Technical Committee that is

currently developing national guidelines on ergonomics
under the purview of the Department of Occupational
Safety & Health (DOSH) Malaysia.
• SDP is a member of Malaysian TC 207/SC 1 Committee.

TC 207/SC1 is the ISO sub-committee that is
responsible for ISO 14001 – the international standard
for environmental management – and other supporting
standards.
• SDP is a member of Malayan Agricultural Producers

Association (MAPA).
• SDP represents MAPA in the Technical Committee on

Safe System of Work and Practices in Occupational
Setting, for the development of ISO 45001 standards.
• SDP is a member of the Malaysian Employers

Federation Health, Safety, and Environment (MEF HSE)
Committee.

Responsible Agriculture Charter
SDP launched its Responsible Agriculture Charter (RAC) on

21 September 2016. The Charter outlines our aspirations and
commitments to continuous improvement and to address
the continuing challenges around no-deforestation, no-peat
development and no-exploitation. We are committed to deliver
sustainable returns without compromising on people, planet and
prosperity. RAC is drawn from the foundational principles of RSPO
and frames our commitments in three key areas, namely human
rights and social development, the environment and corporate
integrity.
RAC IMPLEMENTATION TIMELINE

Human Rights and Social Environmental Commitments Corporate Integrity
Development Commitments Commitments With Effect from
• Protect and enhance forests Crops July 2017 2018 2020
Date of Publication
• Respect human rights and • Protect ethical standards
• Protect and disclose
empower communities All Sime Darby Palm Oil Full Charter commitments implemented
environmental impacts and • Disclose performance and
• Protect labour standards and minimise resource use objectives Full Charter commitments
enhance employment All Palm oil 3rd Party Suppliers
• Enhance supply chain implemented
conditions
traceability Human rights +
Human rights + High Conservation Full Charter
All Other Crops High Conservation
value + High Carbon Stock* commitments
Value
* Phased implementation of HCS for all other crops due to existing community commitments.
The commitments of this Charter are effective immediately for all of our palm oil operations, both upstream and
downstream, including associated smallholders. However, acknowledging the challenges that it will create to
independent smallholders in our supply chain, we strive to jointly find innovative solutions to ensure a balanced
outcome and avoid exclusion of any groups. Should breaches occur, we will work through constructive engagement
with our business partners to resolve and prevent further non-compliances. As part of our commitment to the RAC,
we will be disclosing our progress in implementing the charter regularly.
For more details on RAC, please visit http://www.simedarby.com/sustainability/reports-and-resources/reports-and-resources

Safety and Health
Lost Time Incident Frequency Rate (LTIFR)
(Incidents Per Million Manhours Worked)
FY1516
9.3
FY1415 FY1314 FY1213
07 10.8 9.8 13.4

046–065
CARING FOR
We take safety very seriously and strive to reduce the number of accidents in our operations. This concerns not
only our workers and employees, but also their families, contractors who work for us, and visitors to our facilities.
Overall, we have made progress with notable reductions in our LTIFR, while ensuring strict compliance to Standard
Operating Procedures that have been developed. Unfortunately, there were 4 fatalities in our operations in
FY1516. We offer our condolences to the families of the deceased.
OUR PEOPLE
Guided by a Five-year strategy – Target 2020: RISE to ZERO HARM, we will continue to promote a culture of
prevention among our employees and ultimately meet the target of zero fatality in our operations.
SDP OCCUPATIONAL FATALITY RATE
Fatality cases FAR

10 9 10
FAR
8 Fatality cases
8 8
6 6
6 6
4
4 4.3 4
3.9
3.1 2.9
2 2 2
0 0
FY1112 FY1213 FY1314 FY1415 FY1516

Fatal Accident Rate (FAR) of 2.0 for every
100 million hours worked – 31% lower compared to
the previous Financial Year
Lost Time Injury Frequency Rate (LTIFR) of 9.3 cases

per million hours worked – a 13% decrease
compared to the previous Financial Year. Total
reduction of 46% over the last 5 years
KEY PROGRESS
Malaysian Society for Occupational Safety & Health
(MSOSH) Awards 2015. 30 operating units in SDP
(2 Downstream, 2 R&D and 26 Upstream) won the
MSOSH Awards in 2015
5 of SDP’s Indonesian operations received the

National Zero Accident Awards another 5 operations
also received the Provincial Zero Accident Awards
FATAL CASES KEY RISK AREAS AND Harvesting Safety

Four fatal occupational cases were CONTROLS • 40% of LTI cases in estate
recorded in FY1516. Two of these Lost Time Incident (LTI) Analysis operations were reported
cases involved estate workers (one from harvesting-related
• 51% of the total reported LTI
each in Malaysia & Indonesia) – one activities such as cutting,
cases are from upstream
related to harvesting activity and pruning and the handling of
operations while 94% of
one pertaining to road accident FFB and fronds.
these cases are from estate
while transporting workers. The
operations. However, the • In view of the risks, SDP has
other two cases involved mill
average number of lost days developed the Harvesting
operators (one each in Malaysia &
for LTI cases is higher in the Competency Training
Indonesia) – in boiler and sterilizer
mills than the estate (138 Programme (HCTP) to
work stations respectively.
compared to 17), suggesting enhance competency of
that injuries are more severe workers, especially cutters
in the mills although the and pruners in harvesting
frequency of accidents is activities. This programme
lower than in the estates. aims to make harvesting as
safe as possible, by reducing
injury and improving
efficiency.

Induction
Selection of
training of new Competency Competency
workers & On Job
workers at Sua evaluation & re-evaluation
physical Training (OJT)
Betong Workers verification & renewal
health checks
Training Centre
• We are also enforcing the the steriliser and boiler Chemical Safety – Elimination of
use of non-conductive poles stations. Improvement actions Class 1B Chemical
for harvesting near overhead taken include;
• Malaysian Upstream
power lines.
– improving the Lockout/ operation is the only
Tagout (LOTO) standards operation in SDP that is still
Transportation Safety
using Class 1B chemical in the
– development of Model
• 33% of LTI cases in the form of Methamidophos for
Mills
estates were reported from pest control purposes.
the operation of vehicles by – development of Mill of
• In view of the high safety and
both SDP and our external the Future
health risks posed by this
contractors. These cases
chemical, we have targeted to
mainly involved tractors and Occupational Health & Hygiene
eliminate the use of this Class
lorries used in normal estate
• We conduct Hearing 1B chemical and substitute it
operations and replanting
Conservation Programme in with a safer chemical by
activities.
all our operations to manage 2017.
• Apart from enhancing the exposure to noise hazards.
• In FY1516, 70% of our
competencies of drivers/
• We are working together estates have started using an
operators through the TDCC,
with Universiti Putra Malaysia alternative chemical that is
OST (for tractor drivers), and ENHANCING ESH CULTURE IN
& Universiti Teknologi less hazardous, subsequent to
Suagate (for train gate SDP
Malaysia (UTM) to review positive tests and advice by
keepers), we also reviewed
ergonomic risk assessments the R&D team. Empowerment & Enforcement
transportation contracts,
and controls.
conducted contractor • To date, we have seen a • We strive to enhance
briefings, and increased our • 2 of our mills were selected marked reduction in the use ownership and accountability
enforcement efforts. to participate in the of Class 1B chemicals and we in implementing ESH policies
Systematic Occupational are positive in achieving our and procedures in our
• We continue prioritise safety
Health Enhancement Level target by 2017. operations. These initiatives
and health factors in the
Programme (SOHELP) include;
selection of machineries to
Programme organised by ESH Risk Management
be used in our estate – Introduction of
Department of Safety and
operations. • As part of our continuous Operational Safety &
Health (DOSH) Malaysia.
improvement strategy, we Health (OSH) Index as
• As commuting/road accidents
• We are reviewing the use of have revised our ESH Risk part of the KPI at every
continue to be an area of
Tanizawa helmets (shorter Management procedures to function and level.
concern for our workers, we
lids) for harvesters, especially make them more robust and
are continuously – Continuous training
when harvesting tall palms, practical. They have been
implementing Road Safety programmes for
due to the higher visibility reviewed based on the ISO
campaigns in our operations. Managers, ESH
offered. 14001:2015, OHSAS 18001,
Management
and ISO 22301 standards. The
Mill Machinery Safety • Our operations also carry out Representatives, and ESH
new procedure will be
dedicated Chemical Health Committee members at
• 27% of LTI cases in the implemented FY1617
Risk Assessments and conduct every OU.
estates were reported from onwards.
health & medical surveillance
the operation of mill – Assessment on adequacy
programmes to ensure that • All our biogas plants in
machineries, particularly in of controls in key
our chemical risks are As Low Malaysia and Indonesia
operational risk areas.
as Reasonably Practicable undergo Hazard and
(ALARP). Operability Study (HAZOP) – Issuance of Stop Work
for risk assessment. Order in situations where
risks are intolerable.

Our Employees
SDP employs more than 100,000 people globally. Employees

are our biggest and most important asset. We strive to provide
the best working conditions to all employees regardless of their
nationality, race, or gender.
Concerned reporting/SIME ENHANCING ESH GOVERNANCE ESH Governance
& COMPLIANCE IN SDP EMPLOYEE PROFILE
• SIME (Spot, Intervene, • SDP’s ESH Management
Modify, Execute) is a ESH Compliance As at 30 June 2016, our Malaysian operations had the highest head-count, followed by Indonesia, Liberia and
structure is defined in the
programme specifically Thailand respectively.
• SDP paid a total of RM139,300 SDP ESH Management
designed to speed up the System Manual that was
in fines/penalties/compounds
evolvement of safety culture issued in 2012. The Manual is
on 7 offences committed by
at work, where safety targeted to be reviewed in
its Malaysian operations in
concerns are raised by FY1617, focusing on an
FY1516.
employees for management Integrated Management
actions. • 4 of these fines were from System.
DOE, 1 from DOSH, 1
• More than 69,000 concerns • ESH-related internal audits
BOMBA and 1 from MBPJ.
were raised through the are conducted by the RSPO,
Summons from DOE were
SIME cards by our employees Quality Assurance, ESH, and
related to offences in
in FY1516. This is 13% higher our internal audit teams,
effluent and scheduled waste
than the same period in the which are followed by an
management in 3 mills and 1
last FY and 6 times higher external data assurance by
biodiesel plant in Sabah,
than when the programme PwC at the end of each FY.
Pahang, Melaka & Selangor
first started in FY1213. The ESH internal audit
respectively. This is certainly
Concerns raised were related structure is targeted to be
an area of concern and SDP
to near miss incidents, unsafe reviewed in FY1617.
has made the necessary
acts, and unsafe conditions.
provisions to; • The Plantation Safety &
– enhance the technological Health task Force (PSHTF) is
ESH Townhall Programme
capabilities at all of our the highest OSH authority in
• ESH Townhall is an open SDP, consisting of SDP’s
effluent treatment. We
dialogue and sharing session Heads of Operations around
are targeting to have
between workers and the the globe. The committee
zero-discharge-mills by
management. It is conducted discusses strategies and
the year 2020.
every 6 months at all of our reviews ESH performance on
operations. – enhance the capabilities a quarterly basis.
and competencies of our
• This programme helps in • The Plantation Operational
people through the
raising issues faced by Safety & Health Committee
Certified Environmental
workers directly to the (POSHC) is the highest OSH
Professional in the
management. authority in our Upstream
Treatment of Palm Oil
Mill Effluent (CepPOME) operations. The committee
• ESH Townhall is attended by
and Certified discusses operational policies
all workers and contractors,
Environmental and reviews OSH
sometimes even their family
Professional in the performance on a monthly
members, covering more than
Operation of Industrial basis.
70,000 people in every cycle.
Effluent Treatment
Systems (CepIETS)
programmes organised by
Environment Institute of
Malaysia (EiMAS).

EMPLOYEE BREAKDOWN AS OF FY1516 TURNOVER BY COUNTRY & EMPLOYEE CATEGORY
No. of Employees No. of Employees

6,780
35,000 33,807 7,000
No. of Turnover in FY1415
Male
6,000 No. of Turnover in FY1516
30,000 Female 5,178
5,000
24,114
25,000
4,000 3,500
20,000 3,000 2,351
2,000
15,000
1,000 405 533
119 132 85 90 192 277 2 4 2 21 28 62
10,000 7,542 7,699
0
Executives Non- Worker Executives Non- Worker Executives Non- Worker
5,000 2,382 Executives Executives Executives
421 272 150 214 102
62 34 1 4
Malaysia Indonesia Liberia
0
Country
Malaysia Indonesia Liberia Thailand South Africa Vietnam Singapore
Note: Information above only covers our operations in Malaysia, Indonesia and Liberia.
Country
HUMAN RIGHTS – RESPECTING sectors all over the world and by Section 54 of the Modern Slavery
In FY1516, we had a higher proportion of male employees compared to females in all different employee & PROTECTING OUR WORKERS sharing examples of good human Act 2015, we have drafted the Sime
categories. Nevertheless, we are committed to provide equal employment opportunities to everybody based on rights practices in our operations. Darby Slavery and Human
In recent years, global attention has
merit and talent. Trafficking Statement. This
focused on the rising issue of human
Plantation Human Rights Task Force statement would be our first
trafficking. Some human-rights
(PHRiTF) disclosure on our efforts to address
activists claim that the palm oil
TOTAL EMPLOYEES BY GENDER & EMPLOYEE CATEGORY The PHRiTF was formed in January the issues of slavery and human
industry, which has progressed with
2016 to identify issues around human trafficking in our supply chains. For
increasing demand from the U.S.
rights that are material to our more details on this statement,
No. of Employees and China, is part of the problem.
operations and develop a please visit http://www.simedarby.
2,000
The industry, with a growing need
methodology to ensure compliance com/clients/simedarby_sustainability/
No. of Male Employees for unskilled workers, is said to lure
to the Sime Darby Group Human assets/contentMS/img/template/
1,641 No. of Female Employees
undocumented migrants to Malaysia.
Rights policy, which is currently in editor/SDIAR%202016%20-%20
SDP strictly bans the use forced or
development. The task force will 386%20-388.pdf
1,500 1,377 compulsory labour. Employing more
than 100,000 people globally, we supported by other relevant
departments in implementing the SDP’s human resources policy
ensure contractual and permanent
human rights action plan and enshrines the following:
970 employees are treated with respect.
1,000
mitigating human rights impacts that
Non-discrimination on the grounds
Participation in the United Nation’s are linked to our operations.
657 of colour, race, religion, ethnicity,
Global Compact (UNGC) Additionally, we are working with an
national origin or gender.
independent partner, Shift, to assist
Sime Darby has been a signatory of
379 us in assessing human rights risks in
500 the UNGC since November 2010. We
205 our plantations in Malaysia. Shift is a Zero tolerance towards physical
are committed to upholding the ten
118 non-profit organisation that helps or verbal discriminatory
25 principles on human rights, labour,
companies, governments and other harassment in the workplace.
environment and anti-corruption and
stakeholders put the UN Guiding
0 also committed to embed the
Principles on Business and Human
Non-Executives Junior Management Middle Management Senior Management principles throughout our operations. Protecting the rights of
Rights into practice.
employees to be treated with
Employee Category Participation in Global Business dignity and respect.
Sime Darby Slavery and Human
Initiative (GBI)
Note: Information above only covers our operations in Malaysia, Indonesia and Liberia. Trafficking Statement
Sime Darby has also been a member Respecting the rights of employees
At Sime Darby, we believe that
Non-Executives = Non-Executives of the GBI on Human Rights since to freedom of association.
businesses have the responsibility to
Junior Management = Executives – Senior Executives 2012. We aim to advance the
Middle Management = AVPI – AVPII respect, support, and uphold the
respect for human rights in the
Senior Management = VPII and above fundamental human rights. This Ensuring grievance channels are
business sphere by learning from
includes the right to not be held in available.
the member companies from various
slavery or servitude. In pursuant to

RECRUITING FOREIGN WORKERS
SDP employs more than 25,000 foreign workers and has developed a transparent process of bringing them into
our plantations. This process ensures that workers are provided with adequate information on their rights, The induction programme is conducted in Bahasa Malaysia/English and duly
INDUCTION
safety, and health prior to starting work, as demonstrated below: translated into other relevant languages
The briefings will cover introduction to SDP, Malaysian culture, safety at workplace,
Malaysian laws, immigration regulations, labour law and employment contract, as
well as Child Protection Act
DEPLOYMENT Workers are deployed to Operating Units (OUs)
Manpower Agencies are appointed through Procurement Tendering Process

AGENT SELECTION and approved by Plantation Division Tender Committee (PDTC) to avoid any
bias in the selection process
Communication and interview arrangement are made by

the SDP’s Workers Management Unit (WMU)
INTERVIEW IN
SOURCE COUNTRY Ground arrangements for the interview are made by the
SUPPORT FROM ANNUAL EVALUATION WMU’s Careline Team will visit
selected Agent VISITS BY CARELINE all OUs to check on workers’
CARELINE TEAM welfare, salary, attendances,
TEAM AT OUs safety, and any grievances
Careline Team will handle any

Careline Team provides workers grievances/issues raised during
AIRPORT PICKUP Foreign workers are picked up at with a structured channel to inquire the visit
the airport by the WMU team or voice out their grievances and
after completing the necessary raise any issues throughout their
legal procedures time with SDP
PRE-INDUCTION Foreign workers are briefed on Safety and

relevant rules & regulation while at WMU
ANNUAL VISITS BY AGENTS AT OUs
WMU’s Careline Team will conduct a joint visit with the respective
MEDICAL CHECK UP agency to assist the workers in understanding their rights with
regards to their contract terms and benefits
Arrangement is made for FOMEMA registration and completion
of medical check up (all cost fully borne by SDP)

MANAGING GRIEVANCES CHALLENGES IN RECRUITING ensuring full transparency in our
In addition to conducting annual FOREIGN WORKERS hiring process, we do not have
control over the incidental costs
visit to the estates and engaging Although SDP has developed this
borne by workers prior to
with the workers should they have structured process to bring foreign
recruitment. However, we are
any grievances, the Careline team is workers into our plantations, we still
determined to assure their well-
available to provide workers with a face challenges in ensuring full
being and lessen their financial
channel to voice out their grievances transparency in recruitment when it
burden by supporting their traveling
throughout their employment. Any involves sub-agents, who are also
cost to our plantations,
complaint raised by the workers are known as Sponsors. Some
accommodation, and medical costs
handled by a Careline executive that Manpower Agencies appoint
upon hiring them as our workers, in
initiates further investigation as Sponsors to pool applicants from
addition to providing them with
required. This grievance across the source country for our
safe housing complexes, medical
management mechanism ensures recruitment. During recruitment,
and prayer facilities, and other basic
that workers are able to raise their workers will have to incur the cost
amenities. Additionally, we do not
concerns directly to the of local transportation to the
charge any recruitment fee to our
management and their welfare is interview location, accommodation
foreign workers for them to get
well taken care of throughout their and meals prior to the interview.
employment with us.
employment with SDP. Additionally, Additionally, they will have to bear
an anonymous whistleblowing the cost of preparing Identity Card,
channel is also available to report Family Card or marriage certificate
complaints, if any, to the that are required in applying for a
CENTRALISED HOUSING
management. passport. If workers cannot afford
COMPLEXES
to pay these incidental costs, the SDP provides safe housing
Sponsor will pay on their behalf. complexes for all employees. SDP is
Consequently, workers will then also on a mission to develop Central
have to settle this debt once they Housing Complexes (CHCs) in all of
start working. our estates. CHCs are high quality,
centralised community living spaces
Humana school children in uniform
The money owed to the Sponsors that is comprised of residences,
vary for each worker and might offices, public amenities, and
differ according to the sub-agents. recreational facilities, which are all FREEDOM OF ASSOCIATION Humana Learning Centres Additionally, we also provide a
Although SDP is striving towards nucleated in one location within AND COLLECTIVE BARGAINING childcare centre for employees in
Realising the importance of
easy reach of each other. our headquarters. This childcare
We affirm the importance of the education for children, we have
collaborated with Humana Child Aid centre is subsidised by the company,
right to collective bargaining, which
Society in Sabah to provide formal thus requiring only minimal fees
is recognised as an essential
education to children of migrant from the employees every month.
element in the fundamental right of
workers residing in our estates. We aim to provide high-quality care
freedom of association. Employees
From its humble beginnings in 2008, for the children in a child-centred
of the Sime Darby Group are
the programme has now expanded learning programme where children
represented by 48 collective
to cover more than 800 children in are respected and nurtured. The
bargaining agreements in nine
11 Humana Centres across Sabah. centre promotes the growth of
countries, namely Malaysia,
Apart from constructing the centres children through a developmentally
Indonesia, Australia, Singapore,
and furnishing the schools with the appropriate curriculum.
Liberia, Vietnam, South Africa, the
Netherlands and recently, Papua necessary amenities, SDP also funds
utility costs and provides Kem Bijak Periksa for Employees’
New Guinea.
accommodation for the teachers. Children
SDP organises a motivational and
CHILDREN IN OUR OPERATIONS Employees’ Childcare Centre educational camp for the children of
SDP provides free childcare services our employees sitting for their UPSR
SDP’s Child Protection Policy
for our plantation workers through and PT3 examinations. This two-day
ensures that children of employees
the Nurturing Estate’s Toddlers camp is held on an annual basis and
who live within its housing
(NEST) programme. NEST centres is free of charge. It aims to help the
complexes are provided adequate
are located across our operations, children in preparing for their
protection and care. The company
where workers can safely leave their examinations and obtain valuable
strictly prohibit below 18 years old
children under the care of trained tips on different subjects.
employ children and strives to
prevent any occurrence of caretakers while attending to work.
mistreatment of children.

Working with Our Local Communities
MOA Awareness Programme

We organised a full-scale MOA
awareness programme for three clans
(Manoah, Zepeh, and Upper Togay)
involving all key stakeholders to ensure
smooth implementation of planned
activities.
The Paramount Chief of Senjeh (right) seeking clarity during the MOA Awareness
Support to Refurbish Zarmian Town

School
We provided support to the Senjeh
Community to refurbish their Town Hall
to be converted into a school. The
Land Committee implemented the
project and handing over ceremony
carried out on 10 December 2015. The
project was highly welcomed by the
community as it provides a conducive
learning atmosphere for their children.
SDPL also provided funds to support
the operational costs of the school for
FY1516, as requested by the Partial view of the renovated Town hall (left); Handing Over Ceremony (right)
committee.
FREE, PRIOR AND INFORMED CONSENT (FPIC)

At SDP, we always seek to gain the Free, Prior, and Informed Consent (FPIC) of local communities before
embarking on any new development. Our FPIC process is as illustrated below: Assistance to Beafinie Clinic
We provided support to the Beafinie
Clinic for two quarters, based on the
Once consent is amount stipulated in the MOA. The
A new plantation
obtained, we funding was used to purchase
Identify & Participatory is established
engage NGOs if essentials medicine for the clinic in
engage with mapping, SEIA with a grievance
necessary to agree order to provide better health care
community assessments & resolution
on compensation services to the citizens of Senjeh.
representatives HCV assessments mechanism in
and legal The citizens of Senjeh watching as the clinic staff and Bomi County Health
place
arrangements with Team Representative inspect the medicine
the community
Building and Repairing Hand Pumps and

IDENTIFY ASSESS CONSENSUS ESTABLISH Latrines
In fulfilment of the MOA, we repaired
three hand pumps in Senjeh. Two
KEY FPIC INITIATIVES IN FY1516: surrounding villages benefited from the
repair exercise intended to provide
DEVELOPMENT OF MEMORANDUM OF AGREEMENT (MOA) BETWEEN SDPL & SENJEH COMMUNITY
safe and clean water facilities. The
An MOA was developed between Sime Darby Plantation Liberia (SDPL) and Senjeh Community on 23 July 2015. construction of three new hand pumps
This was followed by the payment of crop compensation to 199 farmers. The following activities have been held in and four new latrines in four Community dwellers utilising the repaired hand pump in Zarmian Town (left) as SDPL
collaboration with the community, with consultation by the Bomi Civil Society Organization (CSO) Secretariat: communities is ongoing. WATSAN Team train the youths on how to maintain the water pump (right)

Educational Assistance
AWARENESS PROGRAMME ON HCS STUDY
We engaged land committees in Zodua and
Senjeh to conduct an awareness programme
on HCS Study. This programme aimed to
explain the importance of the study to the
communities as well as obtain their consent
to carry it out with their involvement.
Bomi CSO Chairman responding to concerns raised by participants
LIBERIA – ENGAGEMENT WITH PROJECT AFFECTED COMMUNITIES

(PAC)
In 2009, SDPL’s development in Liberia faced a huge resistance from
the inhabitants of 17 PAC. They claimed that the ownership of the
land under the concession agreement (CA) was not given to the
company with their full consent. In September 2011, the PAC filed a
complaint to the RSPO compliance committee. The complaint was
withdrawn in January 2012, after which we engaged The Forest Trust
to help us to establish an SOP on obtaining FPIC and establishing
clear guidelines on resolving community grievances.
We continue to work with all key stakeholders under the framework

of the Sustainable Partnership Initiative (SPI). SPI aims to develop a
new, sustainable model for large scale plantation development in
Liberia. Experience gained from SPI will guide the industry and the
Government of Liberia on what needs to be done, policy-wise, to
make the oil palm industry in Liberia more sustainable, both in terms
of profitability and benefits to the local communities and the country
as a whole.
PT MAS – RESOLVING THE CLAIMS OF PLASMA FARMERS

Despite our efforts in implementing FPIC and achieving 100% RSPO certification in our operations, there is still one
SOU in Indonesia that has not received its RSPO certification due to legacy claim issues. SDP took over
At Sime Darby Plantation, we believe sustainable development
management control of PT Mitra Austral Sejahtera (PT MAS), located in West Kalimantan, in 2007. We have cannot be achieved by technological advancement or financial
developed four estates, MAS 1 – 4, since then. To-date, total planted area of these four estates is over 11,000
hectares. 30% of this area belongs to Plasma farmers.
contribution alone. We are guided by the belief that progress
in education would have a far reaching effect in ensuring the
14 legacy claims were submitted to PT MAS in August 2007 by the PAC from nine villages in MAS 2 Estate. In
November 2012, a report was filed to the RSPO on the 14 unresolved claims, after which SDP committed to sustainability of our business development. With this end in
voluntarily report on the resolution progress on a quarterly basis to the RSPO. To-date, 12 of the 14 claims, have
been resolved. The remaining two unresolved claims are of land matters, i.e. the ownership of nucleus plantation
mind, we are committed to encourage learning and education
after the expiry of land tenures, and allocation of Plasma plots within the Plasma original village/customary area. amongst all our employees, their family members, and surrounding
The resolution of these two claims would require the involvement of various stakeholders, including the Indonesian
government.
communities. Through Yayasan Sime Darby (YSD) or Sime
Darby Foundation, the philanthropic arm of Sime Darby Berhad,
We have continued direct engagements with the PAC through regular on-site bi-monthly meetings with the
community leaders and side meetings with the community representatives at each RSPO Roundtable Annual we endeavour to provide educational assistance to qualified
Meeting (RT). SDP is working closely with the local authorities, as well as relevant NGOs, to find the best stakeholders.
resolution to the remaining unresolved claims. Upon satisfactorily resolving these claims, we will resume our efforts
to obtain RSPO certification for PT MAS.

SCHOLARSHIPS FOR MALAYSIAN EMPLOYEES AND EMPLOYEES’ CHILDREN Scholarships in Liberia
YSD offers scholarships to deserving employees and employees’ children to pursue undergraduate studies in Since 2012, YSD has awarded scholarships worth USD700,000 to 55 outstanding and deserving Liberian students to
notable local institutions. To date, YSD has awarded scholarships to the following recipients: pursue their tertiary education in Liberia and Malaysia. 51 Liberians are now pursuing undergraduate and vocational
studies Bomi Community College and other selected universities in Liberia, while the remaining 4 students are
pursuing mechanical and civil engineering degrees in Universiti Kebangsaan Malaysia (UKM).
• Three Sime Darby Plantation employees are pursuing Bachelor’s scholarships worth
Degree, and two others are pursuing PhD in local universities
RM394,000
• Twelve children of Sime Darby employees are pursuing diplomas bursaries worth
and degrees in local institutions
RM516,000
Scholarships in Indonesia
In Indonesia, YSD provides scholarships to promising students through a collaborative effort with PT. Minamas “Due to financial constraint, I could “My father dropped out of school in “I took up several odd jobs after high
Gemilang; Sime Darby Plantation’s subsidiary. Since the inception of the Minamas – Sime Darby Scholarship not enter university right away. I the 10th grade due to poverty. I was school before being employed as a
Programme in 2009, approximately 216 deserving individuals including employees’ children and underprivileged found a job in the oil business and forced to accept the same fate, as my construction supervisor by the Rural
residents from the communities within and around Minamas operations, have benefited from the scholarships that then in construction before enrolling family could not afford to continue Agriculture and Development
in a vocational training programme. sending me to school. I begged for Programme. I agreed for them to
are worth more than RM4.8 million. Minamas now has a dedicated team to manage the scholarship programme in Due to financial hardship, I had to assistance from my relatives and took withhold my salary so that at the end
Indonesia. drop out of the programme. I’m up odd jobs to support my studies. of the project, I can use the money
grateful to Sime Darby for changing Sime Darby helped me to not only for my education. Unfortunately,
my life and helping me to pursue a obtain a Bachelor’s Degree in upon project completion, they left the
wonderful education in Cuttington Cuttington University, but also an country without paying me. I was
University” Advance Certificate in Peace and forced into the coal mining business
Conflict Resolution. I am so proud to to support myself. I saved USD20 and
Jacob Sumowor be part of this big family!” used it to pay the entrance fee to
Cuttington University, without any
hopes of enrolling. Subsequently,
Sam Robin Weah Sime Darby offered me this
scholarship and it completely changed
my life. I hope to pursue a Master’s
Scholarship in Papua New Guinea Degree in the future and serve the
company with full honesty.”
YSD embarked on a scholarship programme with funding worth
USD500,000 for 23 outstanding citizens including two Papua New
Saturday V.S. Quellie
Guinean students to pursue engineering degrees in Universiti
Kebangsaan Malaysia (UKM) beginning August 2016.
“This scholarship has helped me in “This scholarship helped me to be the Scholarship in South Africa
incredible ways. I am now able to first in my family to pursue an YSD also provides educational support to an outstanding and deserving young talent in South Africa to complete a
attend Bogor Agricultural Institute, undergraduate degree. I am forever four-year undergraduate course, with job opportunities at Sime Darby Hudson and Knights in Boksburg, South
one of the best colleges in the grateful to Sime Darby for not letting Africa upon completion of his studies.
country. Thanks to this funding, I am financial hardship stop me from going
also able to get the much-needed after my dreams”
pocket money every month, purchase Senii School in Liberia
a laptop, and all my text books” Apart from offering scholarships to Liberian students to pursue higher level of education, YSD also chipped in a
funding of RM1.21 million to construct a community school for the PAC, called the Senii School. Since its launch in
Aulia Rahman Purba Deri Nurrahman November 2013, 351 children and youth from nine nearby townships of Senii, Damah, Timbo, Sengamah, Lein,
Kaylia, Johnson Town, Baaka and Kenemah have enrolled as students in the school. The school also provides
employment opportunities to 10 teachers, consequently elevating their lives from extreme poverty. YSD’s funding
is used for paying the salaries of both the teachers and staff, in addition to purchasing teaching and learning
materials for the students.

Biodiversity & Conservation
PLANT-A-TREE PROJECT Darby, approximately 694,000 trees around the nursery. The first phase
have been planted through the Ulu of planting activity was done at the
As SDP’s palm oil production is
Segama Rehabilitation and RiLeaf Bukit Angin site in January 2014.
heavily focused on some of the most
programmes in Sabah, and North
biologically diverse areas in the
Selangor Peat Swamp Rehabilitation Planting initiative proved to be
world, we strictly adhere to both
Programme. difficult from day one, as the sites
national and RSPO guidelines on
were located against the backdrop
biodiversity conservation. Sime
One of our most challenging of extreme, unfavourable weather.
Darby’s “Plant-A-Tree” Programme,
08
initiative thus far would be the Rain is very scarce in the area,
which was initiated in 2008, aims to
Plant-A-Tree Project in Jentar. The consequently exposing the trees to
increase biodiversity value in our
Jentar Nursery began operations in scorching sun every day. The
plantations with a target of planting
September 2013 as a site to breed El-Nino phenomenon experienced in
one million trees by the year 2020.
Endangered, Rare and Threatened the country since 2015 added to the
To date, we have planted a total of
(ERT) indigenous tropical forest tree obstacles, as the bad weather was
330,000 trees comprising 276
066-079 species. The trees were then further compounded.
species in our estates. Additionally,
planted in several sites identified
CARING
in collaboration with Yayasan Sime
FOR THE
ENVIRONMENT
“Plant today, for tomorrow”

– Datuk Franki Anthony Dass

PRESERVING HIGH PEATLAND MANAGEMENT
CONSERVATION VALUE AREAS SDP strictly prohibits new planting
Many tropical regions are facing the in peat areas. No new plantings
risk of losing their High have been established on any peat
Conservation Value (HCV) areas due lands in any of our concession areas
to extensive conversion of primary since 2013, as per our commitment
forests into plantations. This in the Environment & Biodiversity
destruction of biodiversity will Policy. Additionally, we employ best
continue unabated without strict management practices for our past
legislation and commitment of plantings on peat aimed at
industry players to conserve these minimising the risk of peat fires and
areas. SDP has a trained internal subsequent carbon emissions. Our
team that conducts HCV water management technique
assessments in all our operating ensures that the water table is
units to identify, categorise and maintained at around 50 –70 cm
maintain high-risk zones from below the surface to reduce
development. We also train our decomposition rates of dried peat.
personnel on the ground on HCV
After almost three years, the project,
area management methods as well We are also committed to maintain
conducted at three sites – Bukit OTHER CONSERVATION & BIODIVERSITY as the necessity of periodical existing vegetation on peatland in
Angin (59ha), Bukit Kiab (71.7ha) and
Bukit Pasir (22.71ha) – has shown
PROJECTS THROUGH YSD monitoring to ensure the and adjacent to our oil palm
effectiveness of management plantations. In our effort to prevent
promising signs of achievement with
activities. To date, we have set slash and burn activities, we engage
93,161 trees comprising 96 species Danau Girang Field aside 31,793.04 ha of HCV area for with local communities to educate
planted by the end of FY1516, 64 of Stability of Altered Forest Centre Projects conservation in our Malaysian, them on sustainable management of
which are ERT species. This is about Ecosystems (SAFE) Project Conservation of Indonesian, and Liberian operations. peat areas.
85% from the overall target of The world’s largest experiment Proboscis Monkey,
110,000 trees to be planted to date to understand the impact of Bornean Banteng
in these three areas. On top of that, forest alteration on biodiversity Programme, and
PROGRAMME FOR POLLUTION CONTROL, EVALUATION, AND RATING (PROPER)
there are 99,707 seedlings that are and ecosystem functions Conservation of Sunda
still being nurtured at the nursery. Clouded Leopard in Indonesia’s PROPER is a national-level public environmental reporting initiative. This regulatory tool aims to
Due to difficulties in sourcing and The Management Fragmented Landscape promote industrial compliance with pollution control regulations, facilitate and enforce the adoption of
and Ecology of Programme practices contributing to clean technology, and ensure a better environmental management system. PROPER
identifying available ERT seedlings
Malaysian discloses information via a five-colour code, in which each participating firm is assigned a colour according
and the need to include more
Elephants (MEME) Borneo Rhinoceros Sanctuary to its environmental status.
technical and research element into First large-scale Usage of advanced reproductive
the project, SDP approached the research in Malaysia to study technology to ensure the survival
Forest Research Institute of Malaysia the Asian Elephants of the Requirement
(FRIM) to explore the possibility of Sumatran
collaborating on this project. SDP Restoration and Rhinoceros The facility has made The facility has made The facility has met legal
and FRIM signed a Memorandum of Protection of Orangutan species virtually no pollution some pollution control standards and has
Collaboration (MoC) on 5 February Habitats in Northern Ulu control effort effort, but failed to meet reasonably frequent
2016. Segama Forest Reserve legal standards and had reporting
Partnership with Sabah Project RiLeaf insufficient reporting
Forestry Department A collaborative
Thus far, a total of 122 seedlings The facility’s pollution
(SFD) to rehabilitate project with Nestle
from 14 ERT species received from is significantly below The facility has met
5,400 ha of degraded Malaysia to restore
FRIM in December 2015 have been forest riparian reserves legally required international standards
planted at Bukit Pasir site. With standards and it has of environmental
constant care and maintenance, the Global Environment Centre (GEC) excellence
conducted good
team managed to record 97% Raja Musa Forest Reserve Reef Check Malaysia equipment maintenance,
survival rate at this site as of June Aims to strengthen (RCM) – Cintai Tioman
efforts in fire reporting, and
2016. With this encouraging survival Aims to build the In 2015, 20 of our SOUs in
prevention and environmental work
rate, we hope to ultimately hit our resilience of coral Indonesia have been awarded
rehabilitation of 50 ha reefs
target of having the biggest ERT
of degraded forest
with rating Blue
collection in South East Asia by the Rating
end of 2018 when the project ends. Note: F
or more information on our biodiversity & conservation projects in collaboration
with YSD, please refer to Yayasan Sime Darby Annual Report 2016

HUMAN-WILDLIFE CONFLICT aiming to develop a long-term SUNGAI JOHOR AMMONIA On 26 July 2016, we received a as our commitment to implement collaboration aims to promote and
Conflict between communities and
elephant conservation strategy CONTAMINATION ISSUE letter from the Department of improved control measures at our publicise environmental restoration
based on the understanding of Environment, Johor, reinstating the mills. In order to further strengthen activities to the general public.
animals, caused by competition for Authorities detected a high level of
elephant behaviour, ecology, and license to operate our Ulu Remis our commitment in conserving the We are committed to protect the
food and space, is one of the ammonia in the raw water from
relationships with people. It is led Palm Oil Mill. In the letter, the environment through various environment and conserve
biggest threats to the survival of Sungai Johor on 12 July 2016.
by Dr Ahimsa Campos-Arceiz in Department cancelled the awareness programmes, SDP, biodiversity in all our areas of
wildlife around the world. People Consequently, they stopped the
the School of Geography at The suspension notice allowing the Mill together with YSD, signed a MOU operation, as sustainability is a
end up losing their crops and operations at three water treatment
University of Nottingham Malaysia to resume its operations, based on with the DOE Malaysia on prime consideration in all aspects
livestock, while the animals, many of plants, which caused a major water
Campus. the initiatives we have taken as well 25 September 2016. This of our business development.
which are already threatened or disruption in southern Johor. SDP
endangered, may end up injured or worked closely with the authorities
In East Malaysia, we have
dead. Human-wildlife conflicts in to investigate the cause of this
continuous engagement with Sabah
our plantations mainly involve
Wildlife Department (SWD), Borneo
pollution. During a joint-inspection 1
long-tailed macaques, elephants, in one of our estates within the
Conservation Thrust (BCT) and
and wild boars, with elephants vicinity, we discovered an overflow
Danau Girang Field Centre (DGFC) in
posing the biggest risk. SDP of treated POME in 1 out of 109
has collaborated with a few
managing our wildlife conflicts. We
field furrows. On 14 July 2016, 2
have conducted several meetings
organisations to find the best SDP received a Notice of 60-day
and trainings prior to constructing
solution in managing this dilemma. Suspension of License for our Ulu
the fences. DGFC, a collaborative
Remis Palm Oil Mill from the
research and training facility 3
In West Malaysia, we have been Department of Environment (DOE),
managed by Cardiff University and
working closely with the Johor, due to this overflow. We
SWD, has pointed out that electrical
Department of Wildlife and National worked together with the authorities,
fencing is the best method to Overflow was immediately cleaned
Parks (DWNP) on managing wildlife including the DOE, Badan Kawalselia
manage elephant intrusion, provided
conflicts and also reviewing the Air Johor and Syarikat Air Johor, to
the fences are well-maintained. To
establishment of electrical fencing rectify the issue.
date, we have established electrical
in our high-risk estates. Prior to The furrow was cleared
fencing in three areas: Lanchang,
constructing the electrical fences, Our investigation showed no
we also consulted elephant
Bandar Tenggara, and Sukau, in a
physical evidence of POME being 4
total of seven estates. Additionally,
behaviour researchers from the the cause of contamination in
we are also developing new
Management & Ecology of Sungai Johor. To further confirm The furrow bund was restored
Standard Operating Procedures
Malaysian Elephants (MEME), to that fact as well as to rule out the
ensure that the fences do not cause
(SOP) on managing elephant
possibility of contamination from
5
intrusion, managing wooden
any harm to the elephants. MEME is fertilizer application in our estate,
fencing, and monitoring electric
a 5-year research project that we took water samples from various
commenced in March 2011,
fencing.
points in both Sungai Remis and 6
Sungai Sayong (both lead into
Sungai Johor) and tested them at
our own R&D labs. The results and Cleaning activities were carried out
physical verification conducted on around the area of overflow
the site indicated that indeed, there
was no clear evidence that the mill
or estate could be the cause of Buffer drain construction
ammonia contamination. We 7
continued to give full cooperation
to the local authorities to determine
Identification of Critical Point (CP)
the actual cause of high ammonia for monitoring purposes
content in Sungai Johor.
Clean water was observed around

the overflow area after restoration
activities

Carbon Management
We have monitored our carbon year 2015 includes SDP’s operations ANNUAL EMISSIONS BY SOURCE
footprint since 2009 via the in Liberia, Papua New Guinea and
Sustainability Management System, Solomon Islands covering oil palm Total Carbon
Emission
a carbon monitoring tool that operations. This has resulted in an (Millions tCO2-e)
SDP TOTAL EMISSIONS enabled us to calculate our carbon increase in the Division’s overall
emissions in accordance with the carbon emissions in the year 2015. 3.50
(tCO2-e) 2.96 2.99
GHG Protocol and identify hotspots The carbon data for our operations
3.00
that would enable us to reduce in Malaysia, Indonesia, and Liberia 2.59 2.56
2,988,116
2.41 Effluent Treatment
2.30 2.33
those emissions. For the first time, have been independently verified. 2.50 Boilers
the carbon emissions data for the
2.00 Fertilisers
Purchased Electricity
1.50
Others
ANNUAL EMISSIONS BY BUSINESS UNIT
1.00
Total Carbon
Emission 0.50
(Millions tCO2-e)
0
3.50 2009 2010 2011 2012 2013 2014 2015
2.96 2.99 OP Mill
3.00 2.59 2.56 OP Estate
2.41
2.30 2.33
2.50 Downstream
Emission Source 2009 2010 2011 2012 2013 2014 2015
2.00 Rubber
Effluent Treatment 69.6% 70.7% 71.4% 71.7% 65.8% 69.1% 72.2%
1.50 (tCO2-e) 1,799,617 1,629,373 1,826,392 2,121,035 1,532,760 1,667,658 2,156,658
1.00 Boilers 13.8% 14.2% 13.8% 12.9% 15.9% 12.9% 12.3%

(tCO2-e) 356,291 326,245 353,950 383,025 370,395 310,701 367,122
0.50
Fertilisers 8.2% 7.8% 7.4% 6.2% 6.1% 5.6% 6.8%
0
(tCO2-e) 212,955 179,856 189,875 183,784 142,516 134,612 201,903
2009 2010 2011 2012 2013 2014 2015
Purchased Electricity 1.7% 2.2% 2.1% 2.2% 3.5% 6.8% 4.0%
(tCO2-e) 43,894 51,287 54,352 64,046 81,920 163,044 118,998
Business Unit 2009 2010 2011 2012 2013 2014 2015 Others 6.7% 5.1% 5.2% 7.0% 8.6% 5.7% 4.8%
(tCO2-e) 174,236 116,949 133,770 208,090 200,770 137,694 143,435
OP Estate 12.9% 11.5% 11.1% 9.9% 11.5% 11.2% 10.6%
(tCO2-e) 332,611 263,956 285,007 293,944 268,584 270,337 317,546 Total 2,586,992 2,303,710 2,558,340 2,959,980 2,328,361 2,413,708 2,988,116
OP Mill 81.4% 82.1% 83.0% 83.5% 79.9% 81.2% 82.7%
(tCO2-e) 2,106,332 1,892,421 2,123,366 2,472,206 1,861,426 1,960,547 2,470,589
Downstream 5.5% 6.2% 5.6% 6.4% 8.2% 7.2% 6.5%
(tCO2-e) 142,222 142,847 143,812 188,986 191,784 174,960 193,852
Rubber Operations 0.2% 0.2% 0.2% 0.2% 0.3% 0.3% 0.2%
(tCO2-e) 5,827 4,486 6,155 4,845 6,566 7,863 6,128
Total 2,586,992 2,303,710 2,558,340 2,959,980 2,328,360 2,413,708 2,988,116

ANNUAL UPSTREAM INTENSITY CARBON REDUCTION STRATEGY (b) Bio-Natural Gas (BioNG) Project CHALLENGES IN REDUCING
Division Intensity SDP targets to achieve 40%
in Collaboration with SIRIM CARBON EMISSIONS
Emission Intensity
tCO2-e/mt CPO Target = 0.64 tCO2-e/CPO produced reduction in upstream emission Project in progress at Merotai In 2015, we successfully reduced
intensity. Our key carbon reduction Oil Mill. It aims to capture, 6.5% of our carbon emissions
1.20 1.06 1.04 1.03 1.01 1.00 1.02 initiatives are methane abatement store and refine methane so intensity based on the 2009
0.94
through biogas trapping and that it could be used as an emission baseline, for our operations
0.90 methane avoidance through alternative to natural gas in in Malaysia and Indonesia. We
composting. gas-fired power stations and expect increased reductions in the
0.64 0.64 0.64 0.64 0.64 0.64 0.64 NGV vehicles. future with the completion of
0.60
Composting biogas projects under various stages
Closed system composting plants in (c) Captive Power Project for of planning and construction. For
0.30
Malaysia. In 2015, composting Electricity Supply to Kernel the reporting period, our key
helped us to successfully reduced Crushing Plant challenges in carbon reduction
6.5% of our carbon emissions include a challenging economic
0 2 biogas projects in various
intensity based on the 2009 environment, operational delays in
2009 2010 2011 2012 2013 2014 2015 stages of implementation in
emission baseline, for our operations the commissioning of biogas plants,
Reporting Year Pemantang and Rantau Oil Mill and lower FFB yield that has
in Malaysia and Indonesia. in Indonesia. consequently limited the overall
Biogas Projects production capacity of our compost
(d) Other Biogas Projects
ANNUAL DOWNSTREAM INTENSITY plants. We are currently reviewing
(a) Joint Venture between SDP and the methane reduction programme
Project in Tennamaram Oil Mill
Emission intensity tCO2-e/10 mt Tenaga Nasional Berhad (TNB)
Emission Intensity commissioned. 5 other biogas including biogas projects at the oil
tCO2-e/10 mt Target palm mills due to operational and
2 biogas capture for grid- projects across Malaysia in
1.60 connected electricity supply various stages of economic challenges. Nevertheless,
projects in in various stages of implementation. we are committed to further reduce
1.15
1.08 implementation at Hadapan and our carbon emissions in the years
1.20 1.01
0.92 to come.
0.85 Flemington Oil Mill.
0.82 0.79
0.80 0.77 0.77 0.77 0.77 0.77 0.77 0.77
CLEAN DEVELOPMENT
0.40 MECHANISM (CDM)
Four of SDP composting projects
0 (Lavang, Pekaka, Kerdau, Merotai)
2009 2010 2011 2012 2013 2014 2015 were registered under the Kyoto
Reporting Year
Protocol‘s Clean Development
Mechanism (CDM), which delivered
183,897 certified emissions
reductions (CER) to Denmark and
ANNUAL ENERGY CONSUMPTION BY FUEL TYPE total net revenue of nearly RM5.9
million from 2010 to end-2012.
Total Energy Consumption
(Millions GJ) 39.43
On 4 February 2015, an appreciation
40.00
Biomass meeting and luncheon was held at
33.42
31.04 Diesel Wisma Sime Darby between
28.65
27.69 representatives from the Danish
30.00 25.74 25.74 Electricity
Energy Agency (DEA): Mr Ole Emmik
Petrol
Sørensen and Mr Bo Riisgard
20.00 Natural gas Pedersen; Mr Henrik Rytter Jensen,
Others Country Head, Danish Energy
Management (DEM), and Sime Darby
10.00
Plantation management, represented
by the Managing Director, Datuk
0 Franki Anthony Dass.
2009 2010 2011 2012 2013 2014 2015

Fire & Haze Management
WHAT CAUSES FIRE? FIRE MANAGEMENT IN SIME Programme (UNEP)’s Global 500 3. Hotspot Alert Dashboard and
DARBY PLANTATION Award for outstanding Daily Hotspot Monitoring
Haze has become a Fires can be started easily during the dry season, by even the smallest
source such as a lighted cigarette butt. Forest fires can be caused by Despite having had its share of
achievement in the protection The Hotspot Alert Dashboard is
yearly phenomenon excessive drainage of peat land, as this results in the top layer of soil being listed as one of the culprits,
and improvement of the our initiative at being transparent
environment for the
in Southeast Asia drying out, making these areas extremely susceptible to burning. Sime Darby Plantation (SDP) and its
commercialisation of our
about the occurrence of hotspots
in our concession areas. We are
Additionally, fires could also be deliberately started by communities in subsidiaries do not engage in slash
in recent years. the course of land clearing. In Indonesia, a majority of smallholders are and burn activities under any
zero-burning replanting committed to prevent and
Come the dry season still practising the slash and burn technique. This activity is propelled by circumstances. We have
technique. monitor hotspot occurrence not
the fact that the Indonesian law allows land owners to burn up to two- implemented various policies and only in our concession area, but
beginning June, the hectare of land for land clearing purposes. During the dry season, sparks initiatives to ensure a sustainable
2. Peatland Planting Policy also within a 5km radius from our
air in some parts of or flying debris from a burning field can easily land on adjacent land and fire management system in our Realising the vulnerability of boundaries. The dashboard,
Indonesia, Singapore cause rapid fire. operations and consequently, an
environmentally-conscious approach
peat lands to fires, we employ
best management practices
available on Sime Darby’s website
(http://www.simedarby.com/hotspot-
and Malaysia gets in our businesses. aimed at minimising the risk of alerts/), provides the public with
polluted with peat fires and subsequent information on the number of
1. Zero-Burning Replanting carbon emissions in our past hotspots recorded throughout the
smoke. The major Technique plantings. Our water year and actions that have been
contributor to this Over the years, various
management technique ensures taken by the respective estates if
air pollution is the sustainability practices have

that the water table is
maintained at around 50-70 cm
the hotspots are confirmed to be
real fire within our areas. This is a
been implemented in SDP’s
burning of forests operations. Of all these
below the surface to reduce the round-the-clock monitoring
to clear land for oil practices, the zero-burning
decomposition rates of dried
peat. Additionally, we are
system that utilises NASA
satellite data for more accurate
palm plantations replanting technique can be
considered as the hallmark of
committed to maintain existing hotspot detection. The system
in Indonesia and, our sustainability practices. We
vegetation in and adjacent to will be triggered whenever there
our oil palm plantations in is a hotspot detected within or
to some extent, pioneered this method in 1985,
peatlands. We also engage with nearby our concession areas.
which was later adopted as an
Malaysia. The fires industry practice in Malaysia. In
local communities to educate Consequently, email alerts are
are said to be caused 1992, SDP won the United
them on sustainable
management of peat areas in an
sent to the respective estates for
investigation and immediate
by multinational Nations Environment
effort to prevent slash and burn action to extinguish the fire. The
corporations as activities. respective estates will then revert
with feedback either confirming
well as small-scale the alert or on the action taken.
farmers who use
the slash-and-burn
technique to clear
vegetation for oil
palm plantations.

ALLEGATION ON SIME DARBY Meanwhile, there are local
PLANTATION – UNCLEAR communities, smallholders as well as
BOUNDARY ISSUES other plantation companies residing
within the original concession area.
Although SDP has implemented
Therefore, fires caused by these
various initiatives to prevent and
communities or companies will
mitigate fire in our estates, we have
trigger the satellite signal. Although
still been alleged of causing forest
the hotspots would eventually be
fires in Indonesia. In the recent haze
identified to be outside the HGU,
in 2015, which many agreed to be
they will still be recorded to be
the worst haze episode to date, a
under SDP’s original concession.
number of SDP subsidiaries in
According to the law, since the
Sumatra, together with other oil
concession is still recorded as
palm and pulp and paper companies,
belonging to SDP, we are
were again accused as the culprits.
responsible for the fire occurrence.
Although none of our subsidiaries
were confirmed as offenders by the
authorities after investigation, this
incident raises the question on why
CONCLUSION
SDP is continuously alleged for any As the pioneer of Zero-Burning
episode of haze. Replanting Technique, SDP strictly
bans slash and burn activities in our
The main contributor to these concession areas. Additionally, we
allegations is the prevailing issue of adhere to the no new planting on
unclear boundaries. There are peatland areas policy and ensure
discrepancies in the Decree of proper water management of
Forest Release or “Surat Keputusan existing peatland plantings. Haze is
Pelepasan Kawasan Hutan” issued a regional issue that requires
by the Ministry of Forestry and collaboration from neighbouring
Environment in 1980’s and 1990’s countries to tackle its root cause.
and the subsequent land title or the We need commitment from all
“Hak Guna Usaha (HGU)” that was parties involved to educate the
issued by the National Land Board. practitioners of the slash and burn
After the issuance of the HGU, the technique to adopt a more
Decree of Forest Release was not environmentally-friendly method of
updated to the actual land size land clearing. Ending the practice of
stated in the HGU. Hence, the slash and burn is vital. Companies,
original concession area map is regardless of the size, must be held
larger than the actual HGU. The accountable, before the law and the
satellite data for the hotspot market, if found guilty.
4. On-the-ground Fire Prevention
monitoring by SDP uses the original
In addition to the satellite monitoring system, each estate also has its own fire prevention team that is concession maps, which show a
well-equipped and trained to combat fire. There are also security personnel patrolling estate boundaries in all much bigger area than the actual
our estates. Complementing the manpower, we also have monitoring infrastructures such as watch towers for area in our HGU.
more effective surveillance.
5. Collaboration with Neighbouring Communities

This collaboration includes the setting up of community fire prevention team or “Masyarakat Peduli Api”
through the training of local men in combating fire. In occurrence of fire, these trained men will be able to
assist our estate’s fire prevention team. Additionally, we also initiated a collaborative programme with
University of Riau (UNRI) which educates communities in four villages neighbouring our PT Bhumireksa Nusa
Sejati (PT BNS) about zero-burning farming. Following the encouraging results from this project, we have
embarked on an expansion programme in Riau and South Kalimantan since April 2016. We have engaged
another university – University of Lambung Mangkurat, Kalimantan to conduct the programme at seven
villages surrounding three of our subsidiaries in South Kalimantan.

Lean Six Sigma & Continuous Improvement
Lean Six Sigma Benefits (RM’million)
FY1516
FY1415 FY1314 FY1213
91.28 42.2 44.5 16.3

09 080–085
AMERICAN SOCIETY FOR QUALITY (ASQ) WORLD CONFERENCE QUALITY AND
IMPROVEMENT 2015
CARING FOR
Project in collaboration between SDP’s R&D and LSS team won the Best Organizational Impact Award
PNB INNOVATION QUALITY (IQ) AWARDS

SDP has been crowned the Champion for 5 consecutive years
OUR FUTURE SDP has embraced Lean Six Sigma (LSS), a term used to describe a management structure that aims to eliminate
waste (muda in Japanese), so that all processes along the production stream create value. The Sime Darby LSS
Business Management Strategy was implemented in 2013 to achieve operational excellence and capitalise on
cross-divisional synergies. The financial benefits achieved in FY1516 is an evidence of the commitment shown by
our business units in producing real results that reduce non-value adding activities and increase organisational
capability.
FINANCIAL BENEFITS HARVESTED FROM LSS PROJECTS IN 2016
Benefits (RM) Percentage (%)

40,0000,000 37,085,663 100.0 100
96.8
30,436,900
32,0000,000 80
74.0
24,0000,000 20,855,623 60
16,0000,000 40.6 40
8,0000,000 20
2,903,097
0 0
Downstream Procurement Others Upstream
Department

Research & Development
As part of War on Waste (WOW) campaign launched by the Group in FY1516, SDP also participated in the Kaizen
Waste Elimination Challenge (KWEC) with the following results:
KWEC 2016
Total Projects Potential RM Saved within Potential Hours Saved

Completed 12 months within 12 months
1,279 RM 35,528,854 974,287 hours
FIRST PLANTING OF GENOME Over the past few years, our R&D the potential to produce at least
SELECT OIL PALM team in Biotechnology and Breeding 15% more oil than SDP’s Calix 600,
has sequenced over 200 oil palms currently our best planting material.
SDP has been in the forefront of
which were carefully selected to Under optimal growth conditions,
agriculture research and
represent the diversity of Sime the potential yield from the Genome
development since early 1900s. We
Darby’s collection. These genetic Select palms can go above 11 MT
are committed to revolutionise the
codes were analysed to identify the oil/ha, resulting in average yields
process of oil palm breeding
traits of high yielding palms. The above 6.1 MT oil/ha across all
through innovative solutions and
team was then able to produce a environments in our Malaysian
technologies. In 2009, we were the
formula to provide a genetic test, plantations, compared to Calix 600
first in the world to successfully use
selecting the naturally high yielding yields of 5.3 MT oil/ha. By 2023, we
new (2nd generation) technology to
variants from our current premium will have enough genome materials
sequence, assemble and annotate
seeds without any genetic to meet all of our Malaysian
the complex sequence of 1.8 billion
modifications. replanting requirements.
chemical units that make up the
CASE STUDY: genetic code of the oil palm.
The Genome Select Oil Palm Our innovation in oil palm breeding
The Blue Ocean Journey
planting initiative will be a major does not stop here. We will
Seven years after successfully
The Blue Ocean team is a strategic partnership between Downstream Jomalina Refinery and R&D Processing milestone that allows us to produce strengthen our R&D efforts to
decoding the oil palm genome, we
Technology. The team successfully completed a Lean Six Sigma (LSS) project titled “To Reduce Chemical more oil with existing land, in line produce palms that are not just high
commenced our first large scale
Cost of Waste Water Treatment Plant (WWTP) from Mean of RM2.29/m3 Influent to RM1.87/m3 Influent in with our sustainability commitment yielding, but are also more resilient
planting of Genome Select high
Jomalina Refinery by June 2015”. This project focused on chemical consumption at the Coagulation and to minimise green and brown field to weather fluctuations and other
yielding oil palms in April 2016.
Flocculation processes in WWTP, as it contributes to 97% of the total variable cost. The project has directly expansions. The selected palms have environmental conditions.
reduced chemical cost by 31%, at RM1.58/m3 influent, with a potential benefit of RM173,254 per year.

Sime Darby Renewables
SDR PORTFOLIO OF COMPANIES
Business unusual – Sime Darby Renewables (SDR) aspires to

re-define the traditional oil palm industry
RENEWABLES
Biosynthetic Technologies MYBiomass Verdezyne
ESTATES MILL Biosynthetic Technologies, MYBiomass is a joint-venture Verdezyne, based in Carlsbad,

based in Irvine, California, with Felda Global Ventures and California, is focused on
manufactures a revolutionary Sime Darby to pioneer high developing unique fermentation
new class of bio-based value green chemicals bio- processes for producing drop-in
synthetic molecules that are refinery through coordinated alternatives to petroleum
PIONEERING Trunks • Fronds • EFB • Fibers • POME • Studge oil made from organic fatty acids aggregation derived chemicals from
INNOVATION found in plant oils, including sustainable materials, including
palm-based materials palm-based products and by
PALM KERNEL products
CRUSHING
PLANTS
PKO
CPO
OLEOCHEMICAL SPECIALITY
PLANTS FATS & OILS
MAIN PRODUCTS
Fatty Acids • Glycerine • PFAD • Soapstocks • Expeller • Shells
BIODIESEL EDIBLE OIL

PLANTS REFINERIES
Palm Methyl Ester Refined Oils
SDR is SDP’s department established to invest in complementary and integrated platform to leverage the various
products and by-products along the palm oil value chain, transforming these into high value-added goods. SDR
aims to create a symbiotic portfolio of sustainable businesses in the industrial biotechnology sphere and invest in
promising technologies at the point of pre-commercialisation.

Awards and Recognition FY1415 – FY1516
Description Received from Received by Date received
Permodalan Nasional Berhad

– Challenge Trophy KKS Sungai Dingin
– Champion Permodalan Nasional
Berhad (PNB) Innovation & November 2014
Permodalan Nasional Berhad Quality Awards
– Challenge Trophy Morakot Industries
– Second Place
Good Performance &
BJC Foods Limited Morakot Industries November 2014
10
Service Award 2014
Malaysian Palm Oil Industry
Self-Sustaining Kernel Plant Award 2013/2014 – Kernel Nuri Kernel Crushing Plant January 2015
Crushing Plant
I'm Lovin' It Golden Ribbon
086-091 Award for "Quality Award Mc Thai Co. Ltd Morakot Industries February 2015
2014"
ACHIEVEMENTS
American Society for
Best All All-Around
Quality (ASQ) World
Presentation and Speaking SD Biodiesel May 2015
Conference Quality and
Skills
Improvement 2015
Malaysian Society for
SD Austral
Gold Class I Occupational Safety &
SD Research
Health (MSOSH)
SD Biodiesel
SD Technology Centre
Sandakan Bay POM
Merotai Estate
Mostyn Estate
Malaysian Society for Lavang POM
Gold Class II Occupational Safety & Bradwall Estate
Health (MSOSH) Jentar Estate
Sg. Dingin POM
Flemington POM September 2015
Kempas POM
Seri Intan Estate
Padang Buloh Estate
Tali Ayer Estate
Rasan Estate
Charquest Estate
Malaysian Society for Elphill POM
Silver Occupational Safety & Kok Foh POM
Health (MSOSH) Lambak Estate
New Labu Estate
Pekan Estate
Salak Estate
Permodalan Nasional Berhad Permodalan Nasional
– Challenge Trophy Berhad (PNB) Innovation & R&D and Sime Darby Austral November 2015
– Champion Quality Awards
Prime Minister’s Hibiscus
Notable Achievement Sime Darby Plantation Sdn. Bhd. December 2015
Awards (PMHA)

Description Received from Received by Date received
Pemantang Factory (PT TSA)

Pondok Labu Factory (PT PSA)
Provincial Zero Accident Gubernur Kalimantan
Bebunga Factory (PT LMR) February 2016
Award 2016 Tengah
Angsana Factory (PT LSI)
Rantau Factory (PT LMI)
American Society for
Quality (ASQ) World
Best Organizational Impact R&D and Sime Darby Austral
Conference Quality and
Improvement 2016
Teluk Siak Factory (PT AIP) May 16
Ministry of Manpower & Pinang Sebatang Estate (PT AIP)
National Zero Accident
Transmigration Republic of Aneka Persada Estate (PT AIP)
Award 2016
Indonesia Teluk Siak Estate (PT AIP)
Minamas Research Center (PT ASM)
Malaysian Society for SD Austral
GOLD CLASS I Occupational Safety & Jomalina Refinery
Health (MSOSH) SD Research
SD Technology Centre
Elphil POM
Melalap POM
Bukit Puteri POM
Seri Pulai Estate
Ulu Remis Estate
GOLD CLASS II Occupational Safety &
Sungang Estate
Health (MSOSH)
Tingkayu Estate
Serkam Estate
Bukit Cheraka Estate
Bukit Puteri Estate
Chartquest Estate
Tangkah Rubber Factory
Pagoh POM
August 2016
Kalumpang Estate
Yong Peng Estate
Tali Ayer Estate
Sabak Bernam Estate
Sungei Bahru Estate
SILVER Occupational Safety &
Dusun Durian Estate
Health (MSOSH)
Bradwall Estate
Sg. Senarut Estate
PD Lukut Estate
Chenor Estate
Rasan Estate
Chaah Estate
BRONZE Occupational Safety & St. Helier Estate
Health (MSOSH)
Best Performing
Cargill Meat (Thailand) Ltd. Morakot Industries
2014 – 2016

090
MEDIA HIGHLIGHTS
Sime Darby Plantation Sustainability Report 2016 091
Global Reporting Initiative Content Index
This report has been prepared according to the ‘In Accordance’ – Core option as provided by the GRI Guidelines.
The index shows each disclosure and relevant references within the report.
GENERAL STANDARD DISCLOSURES
Disclosures Description Reference Section Page Disclosures Description Reference Section Page
Strategy & Analysis G4-24 Stakeholder groups
Statement by the highest decision- G4-25 Basis for identification

G4-1 maker in the organisation on Managing Director’s Statement 6-9 Stakeholder Engagement & Material
Approach to stakeholder 24-26
sustainability G4-26 Disclosures
engagement
Organisational Profile
G4-27 Key topics, concerns
G4-3 Name of the organisation Overview of Sime Darby Plantation 11
Report Profile
G4-4 Primary brands, products & services Overview of Sime Darby Plantation 11
G4-28 Reporting period
G4-5 Location Overview of Sime Darby Plantation 11
G4-29 Date of previous report
G4-6 Countries of operation Overview of Sime Darby Plantation 11
G4-30 Cycle
G4-7 Legal ownership Sime Darby Group Annual Report 2016 3 About this Report 2-3
G4-31 Contact point
G4-8 Markets served Overview of Sime Darby Plantation 11
G4-32 Chosen content index option
G4-9 Scale of the organisation Overview of Sime Darby Plantation 11
G4-33 External assurance
G4-10 Employment Caring for Our People 53-59
Governance
G4-11 Collective bargaining Caring for Our People 59
G4-34 Governance Structure Sustainability Governance 18-21
G4-12 Supply chain Our Supply Chain 14-15
Ethics
G4-13 Organisational changes Overview of Sime Darby Plantation 11
G4-56 Organisational Principles & Values Values, Governance & Ethics 17-21
G4-14 Precautionary approach Risk Management 22-23
G4-15 Externally-developed charters Assuring Our Practices 41-45
G4-16 Membership of associations Assuring Our Practices 41-45
Identified Material Aspects and Boundaries
G4-17 Entities Sime Darby Group Annual Report 2016 55, 178
G4-18 Process to define report content
G4-19 Material aspects identified
G4-20 Internal aspect boundary Stakeholder Engagement & Material

24-26
G4-21 External aspect boundary Disclosures
G4-22 Restatements of information
G4-23 Significant changes
Stakeholder Engagement

SPECIFIC STANDARD DISCLOSURES
Material Aspects Indicators Reference Section Page Material Aspects Indicators Reference Section Page
Economic Human Rights
Economic Financial Review, Sime Darby G4-DMA Disclosure on Management Approach 47-65
G4-EC1 Direct economic value generated 33, 55
Performance Group Annual Report 2016
Freedom of Operations and suppliers identified in
Indirect Association and which the right to exercise freedom of
Economic G4-EC8 Significant indirect economic impacts Assuring Our Practices 41-43 association and collective bargaining Caring for Our People
Collective G4-HR4 59-62
Impacts Bargaining may be violated or at significant risk,
and measures taken to support these
Environment
rights
G4-DMA Disclosure on Management Approach 67-79
G4-DMA Disclosure on Management Approach 59
Energy consumption within the
Energy G4-EN3 Caring for the Environment 74 Operations and suppliers identified
organisation
Child Labour as having significant risk for incidents Caring for Our People
G4-EN6 Reduction of energy consumption 72-75 G4-HR5 of child labour, and measures taken 59
to contribute to the effective
G4-DMA Disclosure on Management Approach 67-79 abolition of child labour
Biodiversity Caring for the Environment
G4-EN12 Operational impacts on HCV areas 69 G4-DMA Disclosure on Management Approach 55-59
G4-DMA Disclosure on Management Approach 67-79 Operations and suppliers identified
Forced or as having significant risk for incidents
G4-EN15 Scope 1 emissions 72-75
Compulsory of forced or compulsory labour, and Caring for Our People
Emissions G4-EN16 Scope 2 emissions Caring for the Environment 72-75 Labour G4-HR6 55-59
measures to contribute to the
G4-EN18 GHG emissions intensity 72-75 elimination of all forms of forced or
compulsory labour
G4-EN19 GHG emissions reductions 72-75
Total number of incidents of Sustainability at Sime Darby
Percentage of new suppliers that Indigenous 38-39,
G4-HR8 violations involving rights of Plantation, Caring for Our
G4-EN32 were screened using environmental Assuring Our Practices 44-45 Rights 59-62
indigenous peoples and actions taken People
Suppliers criteria
Environmental Total number and percentage of
Significant actual and potential Sustainability at Sime Darby
Assessment operations that have been subject to 36-39,
G4-EN33 negative environmental impacts in Caring for the Environment 67-79 Assessment G4-HR9 Plantation, Caring for Our
human rights reviews or impact 59-62
the supply chain and actions taken People
assessments
Social Supplier Human Percentage of new suppliers that Sustainability at Sime Darby
36-39,
Rights G4-HR10 were screened using human rights Plantation, Caring for Our
G4-DMA Disclosure on Management Approach 47-65 59-62
Assessment criteria People
Employment New employees, turnover by age, Caring for Our People
G4-LA1 53-55 Human Rights Grievances about human rights
gender and region
Grievance G4-HR12 impacts filed and resolved through Caring for Our People 59-62
G4-DMA Disclosure on Management Approach 47-52 Mechanisms formal grievance mechanisms
Occupational
Health and Type of injury and rates of injury, Caring for Our People Society
Safety G4-LA6 occupational diseases, lost days, and 47-48
Caring for Our People
absenteeism
Operations with implemented local
Diversity & Equal G4-DMA Disclosure on Management Approach 47-65 Local We have carried out external
Caring for Our People G4-SO1 community engagement and impact 60-65
Opportunity Communities and internal social impact
G4-LA12 Number of employees by gender, age 53-55 assessments
assessments for all our
Supplier plantations
Screening of suppliers based on Sustainability at Sime Darby
Assessment for G4-LA14 35-39
labour practices Plantation Grievance Number of grievances about impacts
Labour Practices
Mechanisms for on society filed, addressed, and
G4-SO11 Caring for Our People 60-65
Impacts on resolved through formal grievance
Society mechanisms

Glossary Notes
BCT Borneo Conservation Thrust MPOA Malaysian Palm Oil Association

BioNG Bio-Natural Gas MPOB Malaysian Palm Oil Board
CDM Clean Development Mechanism MPOCC Malaysian Palm Oil Certification Council
CER Certified Emission Reduction MSOSH Malaysian Society for Occupational Safety
CHC Central Housing Complex & Health
CPO Crude Palm Oil MSPO Malaysian Sustainable Palm Oil
CSPK Certified Sustainable Palm Kernel MYNI RSPO Malaysian National Interpretation
CSPO Certified Sustainable Palm Oil NEST Nurturing Estate’s Toddlers
CSR Corporate Social Responsibility NGO Non-governmental Organisation
DEA Danish Energy Agency PAC Project Affected Communities
DGFC Danau Girang Field Centre PBIT Profit Before Interest and Taxation
DOE Department of Environment PDTC Plantation Division Tender Committee
DOSH Department of Safety & Health PHRiTF Plantation Human Rights Task Force
EFB Empty Fruit Bunch PK Palm Kernel
ERT Endangered, Rare and Threatened PNG Papua New Guinea
ESH Environment, Safety & Health POME Palm Oil Mill Effluent
FAR Fatal Accident Rate R&D Research & Development
FABP Food and Agriculture Business Principles RAC Responsible Agriculture Charter
FFB Fresh Fruit Bunch ROE Return on Average Shareholders’ Equity
FPIC Free, Prior and Informed Consent RSPO Roundtable on Sustainable Palm Oil
FRIM Forest Research Institute of Malaysia SAFE Stability of Altered Forest Ecosystems
Project
FY Financial Year
SCCS Supply Chain Certification System
GBI Global Business Initiative
SDP Sime Darby Plantation
GHG Greenhouse Gas
SDPL Sime Darby Plantation Liberia
GRI Global Reporting Initiative
SMS Sustainability Management System
HCS High Carbon Stock
SPI Sustainable Partnership Initiative
HCV High Conservation Value
SPOM Sustainable Palm Oil Manifesto
IFRC International Federation of the Red Cross
SWD Sabah Wildlife Department
ISCC International Sustainability & Carbon
Certification SWO Stop Work Order
ISPO Indonesian Sustainable Palm Oil TI-M Transparency International-Malaysia
KKPA Member’s Primary Co-operative Credit UNEP United Nations Environment Programme
scheme or Kredit Koperasi Primer Anggota UNGC United Nations Global Compact
KWEC Kaizen Waste Elimination Challenge UNMIL United Nations Mission in Liberia
LSS Lean Six Sigma UNRI University of Riau
LiDAR Light Detection and Radar WA Wild Asia
LTIFR Lost Time Incident Frequency Rate WAGS Wild Asia Group Scheme
LRC Liberia Red Cross WOW War on Waste
MACC Malaysian Anti-Corruption Commission YSD Yayasan Sime Darby
MD Managing Director
MEME Management and Ecology of Malaysian
Elephants
096 Sime Darby Plantation

Notes

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SIME DARBY PLANTATION

SUSTAINABILITY REPORT 2016

Plantation Sustainability & Quality Management

Level 3A, Main Block Plantation Tower

T +(603) 7848 0000

This report is printed on environmentally friendly paper.

World’s Biggest Producer of Performance Highlights ASSURING OUR PRACTICES

Certified Sustainable Palm Oil 002-005 > Participation in Standards

Upstream Activities: Downstream Operation is Present in 17 Countries:

Elphil Estate and Palm Oil Mill in Perak, Malaysia

Industrial, Motors, Property, and Global Reporting Initiative The

1 Please refer to the GRI Content Index.

002 Sime Darby Plantation Sustainability Report 2016 003

9.3  2.0 f or every 100 million

Gender Committee Scholarships RSPO Certification HCS Study

Female Mill Assistant Managers CSPK

We are pleased to share with you our

006 Sime Darby Plantation Sustainability Report 2016 007

008 Sime Darby Plantation Sustainability Report 2016 009

Our Key Markets Downstream

010 Sime Darby Plantation Sustainability Report 2016 011

Sime Darby Group launched the Responsible

SIME DARBY PLANTATION IS A LEADER IN PLANTATION SUSTAINABILITY

012 Sime Darby Plantation Sustainability Report 2016 013

PALM OIL VALUE CHAIN Value Chain

• Research & Advisory

014 Sime Darby Plantation Sustainability Report 2016 015

• Generate prosperity • No deforestation of • Deliver long term • Good corporate

Disclose Engage Empower Protect Enhance Respect

016 Sime Darby Plantation Sustainability Report 2016 017

BLUEPRINT, ROADMAPS and KPIs

RISK CULTURE DISCLOSURE VALUE LEADERSHIP

The Plantation Division is led by its Plantation Sustainability Committee

018 Sime Darby Plantation Sustainability Report 2016 019

GRIEVANCE AND WHISTLEBLOWING POLICY

GROUP Group Chief

020 Sime Darby Plantation Sustainability Report 2016 021

KEY PLANTATION SUSTAINABILITY RELATED RISKS AND MITIGATION MEASURES

Risk Description Mitigation Measures Risk Description Mitigation Measures

022 Sime Darby Plantation Sustainability Report 2016 023

KEY STAKEHOLDER GROUPS AND THE TYPES OF ENGAGEMENTS CONDUCTED

At Sime Darby Stakeholder Group Types of Engagement Sustainability Topics Discussed

vital for us to gauge

024 Sime Darby Plantation Sustainability Report 2016 025

then plotted on a materiality Generation

Deforestation Low Priority High Priority

026 Sime Darby Plantation Sustainability Report 2016 027

Sime Darby Plantation Sime Darby Plantation

028 Sime Darby Plantation Sustainability Report 2016 029

030 Sime Darby Plantation Sustainability Report 2016 031

Financial Results (RMm) 2015 2016

Revenue 10,268.6 11,876.5

Operating Profit 1,323.2 1,060.9

Profit Before Interest and Tax (PBIT) 1,290.3 1,052.4

Return on Average Invested Capital (ROAIC) % 6.6% 4.3%

FINANCIAL Key Highlights

REVIEW REVENUE (RMm)

2014 10,953.3 2014 2,077.3

2015 10,268.6 2015 1,290.8

2016 11,876.5 2016 1,052.4

VALUE DISTRIBUTION RETURN ON AVERAGE INVESTED

Providers of 2012 25.1

9.3 2.0 f or every 100 million