WHAT POLICIES HAS REA IMPLEMENTED?
REA is committed to operating in a responsible, sustainable and transparent manner in accordance with globally recognised industry standards and has made the policy framework that underpins this commitment publicly available since 2015.
REA publishes its statutory reports in accordance with the UK’s legal (CA 2006) and regulatory (FCA) frameworks, which include climate-related disclosures such as publication of emissions in accordance with SECR, TCFD, and, from 2024, IFRS S2.
In addition to the sustainability information published each year in the annual report, the group publishes in this section of the website more detailed information regarding the group’s environmental and social performance, as well as the sustainability challenges, in accordance with internationally recognised standards as further explained below. This allows the group to take responsibility for its impacts and allows stakeholders to monitor the group’s progress in meeting its sustainability commitments. This additional sustainability information is updated regularly through the year. This regular provision of updated information now substitutes for standalone hard copy sustainability reports such as were published by the group in the past.
Each year, the group participates in the SPOTT assessment by ZSL. SPOTT uses publicly available information to assess palm oil producers, processors and traders on the transparency of their disclosures regarding policies, operations and commitments to ESG best practice. The overall SPOTT score comprises three ESG disclosure categories: organisation (the operations, assets and management structure); policies (the commitments and processes that guide the operations); and practices (the activities that actively progress towards targets and implementation of policies and commitments). The number of assessment categories, indicators and companies varies from year to year.
The toolkit is designed to incentivise implementation of best practice with respect to, inter alia, sustainability and traceability, certification standards, forest management, biodiversity, HCVs, HCSs, peatlands, fire, GHG emissions, water, chemicals, pest management, smallholders, community (land) and labour rights, and grievances. In the 2023 SPOTT assessment, the group increased its score from 87.0 per cent to 88.7 per cent, compared with the average score of 47.2 per cent and the top score of 95.6 per cent, and is ranked 12th out of the 100 palm oil companies assessed against 186 ESG indicators across 10 categories.
The group follows a policy framework that underpins the group’s commitment to recognised sustainable practices and demonstrates the group’s desire to remain at the forefront of sustainable palm oil production. The group’s policies, which are regularly reviewed and updated, can be downloaded below. Together, these policies embody best practices with respect to NDPE and sustainable development, the provision of a traceable, legal and deforestation-free supply chain, socioeconomic benefits for local communities, the protection of biodiversity and ecosystem functions, zero burning, reducing GHG emissions, human rights and a zero-tolerance approach to bribery and modern slavery.
Commitments and Targets
| Commitment | Target | Status |
| Achieve the RSPO certification for REA’s three 3 existing palm oil mills | Ongoing |
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| Achieve RSPO certification for the 2 new palm oil mills that the group had expected to commission in 2019/2020 in CDM and PBJ | Not applicable | Development of the CDM mill has been delayed as there is no immediate requirement; PBJ was sold in 2018, obviating the need for an additional mill |
| Biodiversity | ||
| No new development after 15 November 2018 within the HGU area without an HCV and HCS assessment conducted by an independent HCV-HCS ALS (Assessor License Scheme) assessor | Ongoing |
Achieved. No new development is, or will be, permitted to take place before completion of an HCV assessment by an independent HCV-HCS ALS assessor
HCV assessment report for PU has been approved in February 2021 by the HCVRN quality panel HCSA standalone report for PU approved in June 2022 by HCSA Steering Committee New Planting Procedure for PU has been approved by RSPO on 12 October 2022 |
| Map all encroachment within the conservation reserves and develop an action plan to restore these areas | Ongoing | REA is continuously monitoring conservation areas and mapping encroachment sites, and has developed an action plan to tackle the encroachment and regenerate the areas |
| Climate change | ||
| No new development on peat | Ongoing | Achieved for all developing estates which undergo soil surveys prior to development. Areas previously planted on peat between 2020-2023 remains unchanged at 1,232.44 hectares – this area is RSPO certified |
| Reduce the intensity of GHG emissions per planted hectare | Ongoing |
Achieved. The 3 existing mills (POM, COM and SOM) have identified and monitored all sources of GHG emissions from their operational activities
REA achieved a 1.6% reduction in gross GHG emissions between 2022 and 2023, from 530,784 tCO2eq in 2022 to 522,196 tCO2eq in 2023. New planting activity in PU (in accordance with RSPO new planting procedures) and replanting of mature oil palm areas has led to an increase in gross GHG emissions per tonne of CPO produced from 2.80 tCO2eq in 2022 to 2.94 tCO2eq in 2023. Complying with RSPO standards, REA succeeding in maintaining its GHG emissions at 2.94 tCO2eq, which is well below the industry average of 3.41 tCO2eq/tCPO for RSPO certified oil palm operations and 5.34 tCO2eq/tCPO for non-certified oil palm operations (Jannick & Michele, 2020). In addition, GHG emissions from land use change reduced in 2022 with the increase in replanting of first generation oil palms to 277 hectares compared with 65 hectares of replanting in 2021. In the RSPO PalmGHG tool, emissions associated with palm to palm replanting are lower than those associated with first generation planting of forest to oil palm. By contrast, gross emissions associated with crop collection, milling and palm product distribution marginally increased by 0.75% in 2022 due to a small increase in diesel fuel consumption for processing higher crop volumes. Net GHG emissions associated with the group’s oil palm operations decreased by 48.3% in 2022 due to increased carbon credits earned by producing excess electricity supplied for domestic use and to the local community. Additional carbon credits were also earned though increased sales of kernel shell as biomass fuel and a reduction in emissions from KCP operations compared with 2021 |
| Reduce the volume of water used to process each tonne of FFB in all 3 mills | Ongoing |
The 3 mills (POM, COM and SOM) monitor water usage on a monthly basis; water usage remained at well below REA’s target of 2.5m3 in 2023, although there was a slight increase from 1.5m3 per tonne in 2022 to 1.6m3 per tonne in 2023 due higher domestic water consumption associated with the construction of additional housing and related facilities
The group is reevaluating its water usage and targeting reductions in 2024 by, inter alia, increasing the amount of recycled water used for facility wash downs |
| Health and Safety | ||
| No work-related fatalities | Ongoing |
Regrettably, at the end of 2022 there was one incident resulting in fatality when an oil palm harvester was electrocuted by cutting through an overhead power line.
Following a fatality, Indonesian safety regulations stipulate that a mandatory 6,000 lost working days must be recorded in the group’s annual safety performance records. Accordingly, working days lost in 2022 increased from 1,010 in 2021 to 6,830 in 2022. Any fatality within the group’s premises is treated extremely seriously and the group responds in the same way irrespective of whether or not the incident is considered to be work related. The group has a rigorous accident reporting and investigation procedure to ensure that the cause of any incident is properly identified, and senior management and operational teams implement any necessary remedial actions across the group to prevent, or minimise the risk of, repeat occurrences. |
| Obtain ISO 45001:2018 certification | 2023 |
Delayed until end of 2023 as the group works towards full implementation with monthly internal audits and inspections conducted in accordance with the standard.
In addition, the development of a management system is directed at establishing commitment and safety leadership which is the most important indicator in the ISO 45001:2018 certification process |
| Reduce lost time incident rates | Ongoing |
In 2022, 202 Lost Time Incident (LTI) cases with 6,830 working days lost were recorded compared with 183 LTI cases with 1,010 working days lost in 2021.
The significant increase in the number of lost days recorded results from the 1 fatality case which occurred in December 2022. According to Indonesian government regulations, if 1 fatality case occurs, 6,000 lost working days must be recorded in the reported accident statistics. The company is committed to continuing to reduce the number of work accidents through safety programs that are integrated with operational activities. The focus of continuous improvement to achieve zero accident rates is to raise safety leadership standards at all levels from the foreman to senior management. Best management practices (BMPs) are continuously improved and worked upon through promoting and campaigning for safe work environments and compliance with standard safety equipment and infrastructure |
| Labour | ||
| No employees under the age of 18 | Ongoing | Achieved: no employees under the age of 18 |
| Reduce employee turnover rates | Ongoing | The total employee turnover ratio decreased from 11% in 2021 to 9.4% in 2022 |
| Smallholders | ||
| Develop PPMD and plasma smallholder oil palm plantings equivalent to at least 20% of the total area planted by the REA group | Ongoing | Delayed. Land has been acquired to increase this percentage and is currently undergoing the appropriate assessments prior to development into oil palm |
| Achieve RSPO certification for the mature associated smallholder plantings supplying the group’s 3 existing mills | 2025 |
The group is focusing on the RSPO certification plan for smallholder cooperatives, but this will take time to achieve with significant preparatory work required, such as providing socialisation and training to several independent farmer cooperatives. 2 smallholder cooperatives, Plasma Kahad Bersatu and Etam Bersatu, have completed the audit process as part of the POM and COM surveillance audits. After the Compensation Plan for the two smallholder cooperatives has been approved by RSPO, a certificate will be issued by the Certification Body. Plasma Kahad Bersatu and Etam Bersatu’s certifications are expected to be achieved by the end of 2023.
The other 3 smallholder cooperatives (Plasma Anugerah Sejahtera, Bangun Sari, and Pekalai Murip, all within the SOM supply base) will be certified no later than 3 years after SOM is certified. The Time Bound Certification Plan was approved by RSPO on 29 March 2023. 30% (1,634 hectares) of the total Plasma smallholder area (3,142 hectares) is RSPO certified. In 2023, 17.5% of FFB supply from independent smallholders/outgrowers/third-party suppliers was RSPO certified, compared with 5.0% in 2022 |
| Communities | ||
| No new development without the FPIC of local communities | Ongoing | No new development takes place without the FPIC of the local community |
| Traceability | ||
| 100% traceable supply base for all three mills | Completed in 2018 & ongoing | 100% traceable FFB supply base to plantation level for all 3 CPO mills and both REA’s KCP facilities at COM & SOM: mapping and tracking of smallholders was completed in 2018 |