Director of MISI Center for Sustainable Value Networks
Palm External Advisory Panel (PEAP) Workshop 2 – Summary
The South East Asian regions especially Malaysia and Indonesia have been a primary source to procure Palm Oil (PO), Palm Kernel Oil (PKO), Palm Oil Stearin (POS) and other palm related products for most Multi-National Company (MNC). P&G procures approximately 90% of its PKO supply from within Malaysia, and its total PKO need is five times the need of palm oil related products.
P&G has made progress in the Independent Smallholder program for FGV’s trader / dealer supply network under the project with Malaysia Institute for Supply Chain Innovation (MISI). The clarification of a subset the trader/dealer supply chain and value chain provided the perspective for designing the plans and actions to improve the practices and productivity of the large complex network. This led to two smallholder management pilots with NGOs to develop models that can be reapplied to improve the larger FGV footprint for Independent Smallholders to meet P&Gs sustainability milestones.
This initiative addresses the challenge of procuring sustainably and holding social responsibility towards the various stakeholders, especially the independent smallholders and small growers in its palm kernel oil supply chain.
As the P&G palm commitment program advances, progress have revealed some key challenges that needs to be tackled in order to enable P&G and the industry as a whole to meet Traceability and No Deforestation goals. This P&G Palm External Advisory Panel (PEAP) Workshop 2 was a full-day workshop session attended by industry experts from various companies, NGOs and academia. This workshop was co-hosted by P&Gs corporate partner, Felda Global Ventures (FGV) at Menara FELDA, KL. P&G and FGV have join ventured into establishing an Oleo Chemical Plant called FPG based in Kuantan, Pahang. This whole sustainability initiative is based on the supply base to this plant.
The PEAP 2 workshop focused on brainstorming solutions on challenges and formulate solutions and potential action plans to address them. Based on current constraints and key challenges, this workshop has addressed a few discussion topics as to create a glide path towards sustainability within the PKO supply chain. Key topics brainstormed are as the following:
- P&Gs Independent Smallholder Management Framework – Improvement, Upscaling, Benchmarking other models
- Commitment drivers amongst traders and dealers for sustainable palm oil production
- Establishing a system to provide traceability to the mills and plantations
- Market pull for certified and non-certified palm materials
- Drive an aligned definition of HCS forests and consistent assessment approach and conservation principles across the industry.