Traceability & Supply Chain Management

Traceability

SIPEF is a leader in traceability, with all commodities it sells being fully traceable to their production location, either a block within an estate managed by SIPEF or a smallholder supplier block.

All of the sustainability certifications that SIPEF complies with require full traceability on sourcing in order to claim full sustainability of a product:

• SIPEF’s nine palm oil mills are all certified in accordance with the Roundtable on Sustainable Palm Oil (RSPO) standard, with eight of the mills under the Identity Preserved (IP) supply chain model. One mill is operating under the Mass Balance (MB) model due to a portion of its supply base undergoing the RSPO certification process.
• SIPEF’s two kernel crushing facilities are also RSPO certified. The facilities are fully integrated with the Company’s IP mills in Papua New Guinea, processing palm kernels that are 100% traceable to a fully certified supply base.
• SIPEF’s banana plantations and packing stations are all certified under the IP supply chain model in accordance with the requirements of Rainforest Alliance certification.

Further details on SIPEF’s certified palm oil production can be found in RSPO audit summary reports, which are accessible by doing a search on "SIPEF Group": 

• here, with regard to the RSPO Principles and Criteria;
• here, with regard to the RSPO Supply Chain Certification Standard.

Progress towards RSPO certification is reported annually through the RSPO Annual Communication of Progress (ACOP).

Supply chain management

All third-party fresh fruit bunch (FFB) suppliers, all of whom are smallholders, must comply with SIPEF’s Responsible Purchasing Policy (RPuP), which sets out criteria for selecting and working with oil palm smallholders on their journey towards certification. The policy ensures that the Group’s FFB suppliers are or will become certified to the RSPO Standard, wherever and whenever possible. To achieve this, SIPEF is committed to actively supporting existing and new smallholders through a step-wise approach to certification, as well as through its various smallholder programmes.

The RPuP also provides the framework for the procedures utilised to select, monitor and, if necessary, suspend, exclude, or expel smallholders in the Company’s supply base. These procedures are aligned with SIPEF’s Responsible Plantations Policy  (RPP) and are based on requirements linked to RSPO certification, legality, production location mapping, ethical business conduct, human rights and labour standards, and environmentally responsible production.

SIPEF manages compliance in its supply chain through an Internal Control System, which includes the provision of training/ awareness, inspections, and internal audits, all of which are conducted by the Smallholder Department and the Sustainability Department.

For non-conformances against critical criteria, SIPEF engages with them to address the root cause. If the non-conformances are not addressed on time, smallholders can be suspended. These critical criteria include, but are not limited to, SIPEF’s commitment to no deforestation and no new planting on peat. Suspensions are lifted only after the non-conformances have been closed out. Smallholders are provided the necessary support to address the non-conformances and have their suspension lifted.

Geo SIPEF: an interactive mapping application

As part of its commitment to transparency and to a fully certified sustainable and traceable supply base, SIPEF has developed an interactive mapping application called Geo SIPEF. This tool allows users to locate all SIPEF palm oil mills, kernel crushing plants, and their respective supply bases. It also provides additional information, including the status of certifications where relevant, details on production capacity, and the proximity of operations to key protected conservation areas and biodiversity-sensitive landscapes.