Coconut Responsible Sourcing Policy
As the coconut supply chain has specific characteristics which predominantly involve smallholders, we have developed a three-pillar approach to drive the coconut sector towards sustainability.
- Responsible Sourcing Policy
- Protecting Children's rights
- Wilmar CSR programmes
Responsible Sourcing Policy
We are embarking on the next chapter of our sustainability journey through our Coconut Responsible Sourcing Policy, which aims to establish a transparent coconut supply chain that is produced and sourced ethically and responsibly while supporting resilient livelihoods in the rural communities where we operate.
We have mapped out key principles and approaches in the policy that will support partnerships with our suppliers to drive improvement in the coconut sector for sustainable long-term benefits. This applies to all Wilmar coconut operations globally, including those of our subsidiaries and joint ventures as well as the operations of our direct suppliers of coconut product
Principles
The following principles are the core of this Policy:
Addressing the well-being of smallholder producers through sustainability initiatives and programmes to improve farmer productivity and rural livelihoods such as:
- Training in agricultural best practices to improve and maximise farm productivity
- Training to improve copra production and explore potential high-value product development
- Increasing access to technological and technical resources
Creating a transparent sourcing network through traceability mapping to understand our supply chains and gain visibility to origin. Wilmar will work with our suppliers to progressively build a traceable coconut supply chain, where we expect suppliers to share traceability data.
Similar to our commitment towards traceability and transparency in our palm oil supply chain, we will apply a consistent approach and leverage this Policy to inform the enhancement of traceability in our coconut supply chain.
Traceable Coconut Supply Chain
Establishing transparency within supply chains has always been a strategic priority for Wilmar. To meet our sustainability commitments, we recognise that identifying the provenance of our raw materials is crucial as it enables us to evaluate suppliers’ performance against our Coconut Responsible Sourcing Policy, assess practices and drive continuous improvement efforts.
Coconut trees begin bearing fruit at around three to five years and take about 12 to 15 years to fully mature and can continue to bear fruit up to 60 or 70 years. The coconut supply chain is complex, fragmented and dominated by traders and dealers buying from millions of smallholder farmers who make up over 90% of global production. The process of mapping out this multiple change of hands and smallholders greatly adds to the complexity of the operation.
Fig: Typical Coconut Supply Chain
Wilmar operates five copra crushing plants and seven coconut refining facilities in Indonesia and Philippines respectively. Our sourcing network originates largely in Indonesia and Philippines with a small fraction of crude coconut oil originating from Papua New Guinea and the Pacific Islands.
Wilmar’s Approach to Traceability
Wilmar uses a volumetric-basis approach to determine traceability. Our copra crushing plants (CCP) receive copra directly from either smallholders/farmers or dealers/sub-dealers whilst crude coconut oil (CCNO) is supplied to our downstream facilities.
Traceability to First-Tier at Copra Crushing Plants
To be traceable to First-Tier at CCP, we require:
- Parent company name (if applicable)
- Dealer/ Farmer name (direct only)
- Municipality/Districts
- Longitude and Latitude coordinates
- % Volumes
Traceability to CCP at Origin Refinery
To be traceable to CCP at Origin refinery, we require:
- Parent company name
- Copra Crushing Plant (CCP) name (own and third party)
- Address
- Longitude and Latitude coordinates
- Volumes
Where any part of this information is incomplete, volumes from that particular supplier will be treated as “untraceable”. However, “untraceable” does not mean that we do not know who we procure from but that it does not fully meet the above criteria. We have information on the names and addresses of all our first-tier suppliers.
Sourcing from coconut supply chains that are free from deforestation and conversion of peatlands, both to protect biodiversity and mitigate the impacts of climate change.
This commitment remains aligned with our approach and core beliefs as indicated in the original NDPE policy to protect forests, people, and communities while promoting progress in operational efficiencies and best practices.
As a multinational company operating across borders, employing people from different nationalities, and interacting with a wide range of cultures, Wilmar takes our responsibility to protect human rights seriously.
In the coconut production landscapes, the socio-economic welfare of the farming communities is a crucial area for attention and intervention. Such interventions may seek to:
- Improve on the ground visibility to eliminate exploitation of workers and children;
- Improve access to services to meet the basic needs of the farming communities, through maximising farm capacity and value, thereby supporting stable living incomes;
- Educate on and reduce the use of chemicals on the farm.
We have a Grievance Procedure in place that enables any stakeholder to raise concerns against Wilmar and/or our third-party suppliers regarding the implementation of our Policy. All grievances logged under the Grievance Procedure shall be dealt with in a timely manner, and all investigations and findings will be reported transparently with full public disclosure.
Wilmar also operates a Whistleblowing Policy, under the full scope of this Policy, where internal and external personnel may, in confidence, raise concerns about possible corporate improprieties, and establish a framework for independent investigations.
We value stakeholder inputs and are committed to proactive and constructive engagement with all stakeholders, including communities, governments, customers and civil society organisations (CSOs) at the local, national and international levels. In our reporting on the progress of the implementation of the Coconut Sustainability Policy, we also welcome stakeholders to provide constructive input where relevant.
Our dedication to sustainability is encapsulated within the guiding principles of our Responsible Sourcing Policy, creating a holistic framework that addresses Corporate Social Responsibility (CSR) and champions child protection through a multi-tiered program.
Protecting children in the coconut supply chain
In 2021, a consortium of organisations and companies, including Wilmar, agreed to join in efforts to protect children’s rights in the coconut supply chain in the Philippines. The four-year programme is funded by the Netherlands Enterprise Agency (RVO) and is currently ongoing
In the first phase, the research conducted as part of the programme found that child labour risks were higher in the upstream coconut production in areas with poor social and economic infrastructure. The research also disclosed that in these areas, families lack basic education, inadequate knowledge of good agricultural practices and insufficient means to hire workers. The findings indicate that children as young as seven years old may be at risk of not attending school due to the need to work in order to support their families financially.
The second phase of the programme focuses on preventing and remediating the risk of child labour. The idea is to set up a system in partnership with schools and local authorities to track children’s attendance. The system would flag instances of child labour and alert relevant stakeholders to take action.
During this phase, poverty alleviation will also be addressed by introducing a new business model to help farmers increase their income.
Wilmar CSR Programmes Philippines
Wilmar aims to contribute to a sustainable future in the Philippines, where we actively engage in practices that safeguard natural ecosystems while empowering the local communities.
See also our Sustainability Brief
Wilmar established a tertiary education scholarship program for the children of smallholders from the surrounding communities where we operate. Our involvement in the scholarship programme does not stop at financial contribution. We continuously monitor and review the academic performance of the scholars at the end of every semester, ensuring that they have access to resources to help them excel.
Our Nutrition Enhancement Programme (NEP), which has been running since June 2014, aims to improve the health and well-being of school children through the provision of nutritional food. Local schools in the Philippines are identified with students who are severely undernourished or with malnutrition to participate in the programme.
In addition, the NEP also raises awareness among parents and students on the importance and nutritional benefits of a well-balanced diet.
We developed and manage privately-owned free clinics in the vicinity of our operations that offer basic healthcare services to our neighbouring communities, including medical consultation, generic medication as well as first-aid for emergencies, among others. Our clinics are staffed by qualified and licensed doctors accompanied by experienced nurses and midwives.
In addition to medical and healthcare services, our clinics also channel efforts to raise awareness on the prevention of diseases by providing patients with education and counselling.
Wilmar has been operating a nursery which can accommodate at least 10,000 seedlings. The main objective of the nursery, which was established in 2014, is to sustain the production of coconut products among the local farmers and ensure they continue to have a stable income. The coconut seedlings are distributed to farmers in the Zamboanga del Norte and Misamis provinces at no cost to them in an effort to encourage them to continue replanting coconut.
Wilmar initiated the Tree Planting Programme in 2008 to address climate change and maintain ecological balance while protecting the groundwater supply. Over the last 14 years, we have planted over 1.5 million mahogany trees as part of the programme. We also have a tree care programme to ensure the nurturing of these seedlings until they reach full maturity. This care programme involves manual round weeding, soil cultivation, and grass cutting, undertaken by a team of dedicated workers.
