ENVIRONMENT

Peat Management

Since 2010, our Group has strictly adhered to No Deforestation and No new development on peat soils regardless of its depth policy. For existing plantation areas with Peat Soils best management practices are in place to minimize any adverse impact by operating on these fragile soils. The total land bank of United Plantations Berhad as of 31 December 2023 is 62,513Ha. The total planted area under oil palm is 46,227 Ha of which Malaysia has 37,507 Ha and 8,720 Ha in Indonesia. In Malaysia the total peat area is 4,130Ha and in Indonesia it is 280Ha, i.e total peat is approximately 4,410Ha equal to approximately 9.54% of our total oil palm planted area.

Our Research Team has re-assessed the peat area in our Indonesian estates, where significant areas of peat subsided over the years, and as a result , some of the peat area with high water table has been set-aside as peat rehabilitation area. This is in line with the latest peat inventory which has been submitted to RSPO Secretariat.

Water Management 

Water management is particularly important on the acid sulphate and peat soils. These soils are fragile and if over drained, they will rapidly deteriorate. On the acid sulphate soils, the water level should be maintained up to the jarosite layer, submerging the pyrite (FeS2) and preventing it from oxidizing to sulphuric acid, which can cause a steep drop in the pH.

Weirs for Moisture Conservation 

To conserve moisture during these periods, a series of weirs are constructed across the collection drains to hold back water and raise the water-table to within 50-75 cm from the surface.  To regulate the height of the water table, wooden planks are slotted into the desired level.

The density of weirs varies with the soil type, slope, rainfall and cropping system. On the average, one weir is provided for every 40 to 60 hectares or every 600-1000 m along the collection drain. Assisted by the water gates at the discharge ends of the main drains, the weirs are very effective in minimizing the adverse effects of the moisture stress.

United Plantations has recently engaged an external consultant to undertake a peat drainability study in our Malaysian operations to better understand the hydrological characteristics of our peat areas.

Monitoring of meteorological parameters 

Weather stations have been set up at strategically important locations throughout our Group. These provide a large amount of micro-climatic information critical to, particularly, make accurate fire-risk predictions.

Being able to predict the risk of fire allows the management in each estate to implement proactive measures, to prevent and minimize the risk of fire, as well as to be on high alert with firefighting equipment, in case of fire outbreak.

For more information, please click here to view our Standard Operating Procedure on peat soil management.

Energy Management

We, at UP, are committed towards energy reduction and promoting renewable energy. The implementation of green technology has resulted in reduction of fossil fuel usage and thus reduced greenhouse gas emissions. The fossil fuel consumption in all of our operations is closely monitored as part of Life Cycle Analysis (LCA) study.

Biomass Reciprocating Boiler

The first Biomass Reciprocating Boiler (BRBI) was successfully commissioned in 2006 and supplied green steam to Jendarata Palm Oil Mill as well as the Unitata Refinery, thus playing a crucial role in reducing the fossil fuel consumption at the refinery.

Since then the company has built and commissioned another 7 biomass reciprocating boilers with the latest unit at UIE (M) installed in 2019.

Biomass boilers in our mills are also equipped with VORSEP dust particle minimizing system, and an automatic fuel feeding system with greater energy efficiency, reduced dust emissions and a lower labour requirement.

Biogas to Grid 

Today, all our mills are equipped with biogas plants, and the biogas generated from the palm oil mill effluent is mainly used in our own operations as is or after being converted to electricity. If this is not possible, which is the case at our UIE mill, it is sold as electricity to the grid or used as a substitute fuel in the mill boiler. In 2023 a total of 7,585MWh of green electricity was generated from the UIE biogas plants and sold to the grid, which represents an increase of 14% compared to 2022.

Photovoltaic Cell Pilot Project

A pilot project was initiated in 2020 to evaluate the feasibility of photovoltaic cells to produce green electricity from sunlight to offset electricity consumption from the grid. Located on the roof of the Tissue Culture Laboratory, these cells generate about 525 kW/day for the Tissue Culture Laboratory, with the unutilised electricity channelled to other laboratories in the Research Department. A total of 201MWh of renewable electricity was generated in 2023. In May 2023, additional photovoltaic cells were installed at the Tractor Pool which generated a further 189MWh of electricity over an eight month period. In addition a larger photovoltaic project was commissioned at the Unitata Refinery in May 2022, which generated  760MWh of electricity throughout  2023. For the UP group a total of 1,150MVh of renewable electricity was generated during the year.

Conversion to Energy saving T5 Fluorescent lamps

As part of our efforts to improve energy efficiency and to reduce wastages, there is an on-going exercise to replace the existing T8 fluorescent lamps with the newer T5 lamps.

Some advantages of the T5 tubes are:

• A 25% gain in luminous efficacy vis a vis T8 lamps
• Light output that is closer to natural light spectrum which is beneficial to human health
• Less heat emitted during operation, with potential saving in air conditioning costs
• Minimal (5%) degradation in lumen output over the life of the lamp as opposed to 20% degradation for the T8 lamps
• Does not require replacing existing fixtures

To date 99% of the T8 lights at the Unitata refinery and another 60% of the lights in several estates which numbered in excess of 4,000 lights have been converted to T5 lighting, resulting in an energy saving of 92.5kW. Going forward the Company is also actively exploring other energy efficient measures.

Integrated Pest Management and Chemical Usage

Conducting our operations under the best principles of agriculture and to reduce chemical and pesticides usage thereby minimising the impact to the natural environment.

UP has a strong commitment to Integrated Pest Management (IPM), and in line with the Principles and Criteria of the RSPO we are continuously working on reducing the usage of pesticides. Our employees’ safety is a top priority and in this connection all sprayers are trained extensively and are required to use full Personal Protective Equipment.

According to CropLIfe International, a global federation representing the plant science industry, 42% of crop production throughout the world is lost as a result of insects, plant diseases and weeds every year in the tropics crop losses can reach as high as 75%.

Careful use of pesticides can deliver substantial benefits for our society through increasing the availability of good quality and more affordable priced food products. However, pesticides are inherently dangerous and it is in everyone’s interest to minimize the risk they pose to people and the environment.

IPM, means a pest management system that in the context of the associated environment and the population dynamics of the pest species, utilizes all suitable techniques and methods in as compatible a manner as possible and maintains the pest population at levels below those causing economically unacceptable damage or loss.

Source: FAO

Our commitment towards continuous improvements has resulted in minimizing the usage of pesticides in relation to other major oil seed crops, primarily through Good Agricultural Practices and improvement in planting materials. Today, UP’s use of pesticide is 5-8 times lower per tonne of oil produced compared to Rapeseed farmers and about 40-50 times lower compared to Soybean farmers.

Establishing Beneficial Flowering Plants 

To date a total of 282,790 broadleaf flowering plants have been planted in our plantations to encourage parasite and predator activities which is a vital part of our IPM programme. There has been a steady increase in the number of beneficial plants which were planted in our Malaysian and Indonesian properties over the last few years to function as shelter and food source for the beneficial insects.

However due to replanting activities in most of the Malaysian estates as well as the loss of beneficial plants to flood, beneficial plants numbers have set back for some years although numbers are expected to further rise in the coming years.

Surveillance and Monitoring of Pest Outbreaks 

The key to minimizing both the economic impact of pest and environmental impacts from excessive use of pesticides is by regular surveillance and monitoring. Treatment is only carried out when the damage exceeds established critical thresholds. Several census gangs are deployed on each estate to survey the extent of pest infestation. This is coupled with regular aerial reconnaissance in order to track and preempt pest build-up thereby more effectively treating potential outbreaks.

Use of biological pesticides and pheromones

First line treatment against leaf pests i.e. Nettle Caterpillar and Bagworm is by biological treatment in the form of Bacillus thuringiensis. The use of pheromones to trap Rhinoceros Beetles thus reducing the dependency on chemical pesticides is also adopted on all estates.

Besides trapping out the beetles, pheromone traps also provide management with statistical information of the severity of the beetle problem and supplements the chemical spraying operations to minimise beetle damage.

Overpopulation of rats, beetles and various kinds of weeds can have a profound negative impact on production yield. UP Group attempts to minimize the usage of chemical control-agents where possible, and the BioD undertakes a number of research projects to maximise the usage of biological control agents where possible.  For example, leopard cat (Prionailurus bengalensis) is one of the key-predators of rats and other small rodents, and preliminary studies on the effect of these cats as rat-controllers in a plantation landscape is ongoing.

The results have been very promising, and UP’s biodiversity team is currently exploring ways to enrich the habitat conditions for leopard cats, to maximise the population density and thereby reduce the effect of rat damage. Apart from leopard cats, the team also records ecological parameters along with the effect on rat populations of other predators such as barn owls (Tyto alba), Spitting cobra (Naja sumatrana) and water monitor lizards (Varanus v. salvator).

Below is the 5-Step Integrated Pest Management Programme approach taken to contain and/or control Bagworm outbreak:

Mowing of Harvesters’ Paths

Blanket weeding is discouraged, soft weeds with shallow root system which do not grow to excessive heights are encouraged outside the weeded palm circle. Harvesters’ paths are mowed. This practice maintains a flora which is favourable to natural enemies of crop pests and reduce soil loss.

Use of Safer Class 3 & 4 pesticides wherever possible

In line with the RSPO’s continuous improvements initiative the Company’s Group Sustainability Committee monitors and reviews the pesticides usage, exploring avenues to reduce overall pesticide usage as well as evaluating alternative safer pesticides. In this context, UP has since February 2008 been working towards minimizing the usage of Paraquat, which has been documented in the annual RSPO Surveillance Audits. In May 2010, Management took the decision to voluntarily phase out the usage of Paraquat, a goal which was realized with effect from October 2010.

Monocrotophos phased out completely

In 2020, we have successfully phased out monocrotophos, which is a key milestone. Concerted efforts to source and evaluate alternatives for the Class 1A insecticide, monocrotophos, have been ongoing since 2006 through our collaboration with several multinational chemical companies, amongst others Bayer and BASF (Germany), Syngenta (Switzerland), Cheminova (Denmark), Sumitomo (Japan), Rainbow Agrosciences (China) and UPL (India). 

Multiple experimental and existing insecticidal compounds have been evaluated for bagworm control with our partners with no success in matching the efficacy of monocrotophos. In recent years our Research Department was able to test new formulations of an existing insecticide that hitherto gave inconsistent bagworm control. It has now been established that with these new formulations we are able to have a commercially viable and effective alternative to monocrotophos with a Class II toxicity rating which is a much safer product. 

As a result, we have since September 2020 successfully phased out the use of monocrotophos and metamidophos for trunk injection to control bagworm. This is a key milestone as our plantations can now dispense with the use of WHO Class 1A or 1B pesticides for bagworm control and replaced them with an equally effective product. 

Nonetheless, bagworm is an endemic pest in Lower Perak and the Federal Government has gazetted this as a “Dangerous Pest” on 15the November 2013. It is an offence under the Plant Quarantine Act 1976 if this dangerous pest is left without any control and can be fined up to RM10,000. 

Outbreaks of bagworms continue to occur in the properties neighbouring UP in the State of Perak, West Malaysia. This is of great concern as it is important that collaborated effort by the government authorities, neighbouring smallholders and other plantations are put in place in an attempt to eradicate this serious pest.

UP is working closely together with its neighbours as well as the authorities in the form of the Malaysian Palm Oil Board (MPOB) to achieve positive progress on this concerning issue. UP has extended its service to the neighbouring plantations the use of its airstrips for aerial bagworm control and also taking the plantation managers for aerial reconnaissance flights to monitor the extent of bagworm infestations in the region. 

The quantity of agrochemicals (fertilizer nutrients and pesticide/ herbicide) per tonne of oil produced in oil palm cultivation at UP over the last three years remain substantially lower than annual oilseed crops such as soybean, sunflower and rapeseed, a reflection on the resource utilization efficiency of the oil palm crop. 

Pesticide usage in 2023 was higher than 2022 level in Malaysia with more herbicides used in the immature areas and due to an increased need to control leaf pests in mature plantings. In our Indonesian operations the markedly higher herbicide usage in 2023 was needed to clean up the ground due to heavy rainfall received in the previous year. The direct fossil fuel energy consumption per tonne oil produced in 2023 remained similar to 2022.

Agrochemical and Energy Inputs in the Cultivation of Oil Palm and Other Oilseed Crops

Biological Control Agents to Substitute for Chemical Insecticides

Leaf eating pest outbreaks in immature oil palms will need to be treated with insecticides. The use of biological insecticides such as Bacillus thuringiensis is encouraged at this young crop stage to minimise collateral damage on beneficial insects in the field as well as to reduce dependency on chemical insecticides.

Fortunately, we have not had any severe infestation in neither our Malaysian operations nor in Indonesia over the last several years, hence there has been  no use of Bacillus thuringiensis.

Quantity (kg) of Bacillus thuringiensis applied in our Malaysian and Indonesian operations

Harnessing advances in pesticide technology to reduce herbicide inputs in mature oil palm

In the wet tropics, weed species rapidly cover the ground and if left unchecked, will encroach into palm circles to compete with the palms for nutrients and water as well as interfere with field operations. Consequently, herbicides are an important tool to keep the palm circles weed free. Of the total pesticides used in a mature field, herbicides will therefore account for more than half of the total pesticide load.

Thus, any improvement in the length of control for weeds will contribute significantly to a reduction in pesticide use for mature palms.

Over the years United Plantations has actively cooperated with leading agrochemical manufacturers to evaluate a range of herbicidal compounds.

Arising from the close collaboration with Bayer CropScience a new compound, Indaziflam, with long lasting weed control was extensively tested in our fields and was found to be able to slash the number of herbicide rounds from four rounds a year with the standard herbicide mix to two rounds a year with the Indaziflam combination. This confers the clear benefit of almost halving the herbicide input in a field and greatly improving labour productivity. Whilst  introduction of Indaziflam has contributed to reducing the overall herbicide usage per hectare in our Malaysian operations in 2023, the significantly higher 2023 rainfall in Indonesian operation has necessitated an increase in herbicide spraying in the past year to manage ground conditions.

Below is the statistics of herbicide usage (kg a.i./ha/year) in mature oil palm:

Calibration for Pesticide Application Equipment 

The Company engages the services of equipment suppliers to regularly monitor the calibration of the equipment to avoid application error (under and over applications) and safety to operators. Regular training and refresher courses are implemented, all of which are audited by accredited auditors of the MSPO and RSPO every year.

Biological pest control of rats 

Rats thrive in the oil palm ecosystem with an abundance of food sources (palm shoots, fruit mesocarp, kernels, weevil grubs etc.) as well as plentiful harborage amongst the cut frond heaps.  The common rat species encountered in an oil palm field are the Malaysian wood rat (Rattus tiomanicus), padi field rat (Rattus argentiventer) and the house rats (Rattus rattus diardii).

With its prolific reproductive rate, whereby a sexually mature female could conceive multiple times a year and produce an average of 8 pups in each litter, rat populations can mushroom and threaten the oil palm plantings within a short time, given the right conditions.

Various researchers have estimated crop loss caused by rats feeding on fruit mesocarp to be able to reduce oil yield by 5 – 10% (Wood, 1976; Liau, 1990).  Badly gnawed male and female inflorescences, as well as young palms killed by rat attacks further contribute to crop loss.

Barn Owls

The Barn owl is a much-loved countryside bird by oil palm planters as it predates on rats, resulting in major reduction of rodent damage. It is also one of the most widely distributed birds in the world.

This bird is the best partner to growers due to its ability to adapt well to oil palm plantations.  It survives on a staple diet of 99% rats.  It is estimated that a pair of barn owls together with its chicks consume about 800 to 1,000 rats per year.

The barn owls are medium sized (34-36cm) with long legs that have feathers all the way down to their grey toes.  The owls have large, round heads without ear tufts and pale heart-shaped facial discs.  The owls ingest the rats whole and use their digestive juices to dissolve the nutrients of the fleshy parts.  The tougher indigestible parts such as the bones, skulls are regurgitated out.

Barn owl population in tandem with preys’ availability can be expanded in the plantation by construction of boxes at vantage points – about 5 meters from the ground and shaded by the palms’ canopies.

A zinc baffle or collar should be placed on the pole to prevent snakes etc. from predation of the owl’s eggs and new born chicks.  These boxes should be inspected regularly and repaired where necessary in order to optimize its occupancy.

At United Plantations, the barn owl is the first line of defence against this serious pest.  Where owls could not cope with the high rat population, first generation rat baits such as warfarin are employed to selectively bring down the population.

Warfarin baits are preferred as they are relatively safer to barn owls than second generation rat baits.  Based on the low usage of rodenticides in the past years, we can infer that the barn owl programme has been fairly successful in keeping rats under control.

 Leopard cats 

Since its formation in 2011, the Biodiversity Division in UP/PTSSS has recorded a surprising number of leopard cats, Prionailurus bengalensis, in the estates. The species is common throughout Southeast Asia in undisturbed as well as altered habitats. They are common in some oil palm estates; however, little is understood about their role as rat predators in a plantation landscape although studies have shown that rats and mice constitute 93% of the leopard cat’s mammalian diet (Rajaratnam at.,2007). Field observations demonstrate there is a negative relationship between cat numbers and rat population, with high abundance of cats associated with low rat numbers and vice versa (Silmi et al.,2013)

Since 2015, nine individual leopard cats have been collared and continuously tracked for 23 months and aided by 40 camera traps set up in a 800m by 800m grid generated estimates of the respective cats’ home-ranges and dispersal patterns. With at least 2-4 individual/km2 the leopard cat density in the oil palm estate is much higher than in the conservation forest with a density of less than 1 individual / km2. Leopard cat population in the study area declined in 2019 and 2020 and studies are underway to determine the cause of decline.

The cats are strictly nocturnal and prefer to hide and rest in thick bush, primarily consisting of sword-fern (Nephrolepis sp) during day-time, but forage both on the ground and in the palm canopy at night. Some preliminary results conclude that leopard cats can feed, reproduce and thrive in a palm oil estate, with a mean home range (95% MCP) for male leopard cats 1.39 km2 (n = 5; SD = 1.40 km2 ) and a mean home range of female cats smaller at  1.26 km2 (n = 4; SD = 0.36 km2).

In areas where rats constitute the main prey, leopard cats eat an average of 2-3 rats per day. Amphibians, snakes and birds are also on the menu. With a body weight range of 2.5-4.0 kg leopard cats are expected to consume more food than the much lighter barn owl, a factor which may be favourable in its role as a rat control agent (Silmi et al.,2013). Our observations reveal that leopard cats can reproduce rapidly with some females giving birth to 4 cubs, with a reproduction cycle every five to six months.

Zero Waste

We, at UP, are fully committed to sustainable palm oil production with the implementation of zero waste concept. The wastes from our business activities include solid and liquid waste. Solid waste consists of empty fruit bunches (EFB) of oil palm, fibre and shells. Liquid waste or Palm Oil Mill Effluent (POME) is generated from the processing of fresh fruit bunches to CPO. In order to minimise the use of chemical, including pesticides and chemical fertilisers, we implement effective biological pest control as well as promoting the use of organic fertilisers as stated above. Furthermore, we expect all our direct and indirect suppliers to show the same commitment and adopt similar practices.

Nutrient Recycling

Organic matter is an important constituent of soil health. It needs to be maintained at a healthy level for sustainable crop production. Malaysian soils, like most tropical soils, are low in organic matter. The situation in some areas is further aggravated by the fact that oil palm is already in the second or third generation of planting where organic matter depletion can be a serious problem.

Besides improving oil palm growth and yield, the recycling of the pruned fronds, trunks at replanting, spent male flowers and empty fruit bunches on land, on mineralisation release large quantities of locked carbon and plant nutrients to the soil. Herein, it is gratifying to note that the maintenance of the carbon cycle by returning the biomass to the field has enabled scout harvesting to commence at 28 months after planting rather than 36 months.

Biomass utilisation and economic value

In 2023, a total of 789,113MT of biomass residues were generated through the various field and mill operations of the Company’s Malaysian operations. 

Almost all of the total biomass generated (99.6%) or 785,934MT were effectively utilised as organic matter back to the fields applied as organic mulch in the nursery or as fuel source, thereby enriching our soils and displacing the use of fossil fuels whilst adding value to the biomass generated. 

Our Indonesian operations generated a total of 154,735MT of biomass dry matter in 2023. Here too, a very high proportion of biomass (154,253 MT or 99.7% ) was utilised through recycling in the field or as a green energy source. 

                                     Production and Level of Utilisation of Oil Palm Biomass Residues in UP -2023

  Fertilizer Equivalent and Monetary Value of Oil Palm Biomass Residues Recycled on Land in UP in 2023

With our commitment to sustainability and good agricultural practices, the recycling of field and mill biomass residues back to the oil palm land remains a cornerstone in UP. These measures have been shown to maintain and even improve soil fertility in the long term and enhance palm growth and yield.

In 2023, the total organic matter recycled on land in UP amounted to 602,726MT of dry matter which is equivalent to 349,581MT of carbon. This corresponds to an annual recycling rate of 17 MT organic matter or 10MT of carbon to each hectare of land, thereby  replenishing the soil carbon stock which is a vital component of soil health. 

Upon mineralisation, the organic residues release substantial quantities of previously locked plant nutrients to the soil which is available for palm uptake. The fertiliser equivalent of the material recycled on land is of the order of 41,797 MT of NPKMg fertiliser which in itself has a monetary worth of RM89.4 million based on the fertiliser prices in 2023.

For our Indonesian operations, a total of 121,248MT of biomass was recycled back onto our plantation land. This is equivalent to enriching our soils with 70,324MT of organic matter which on a hectare basis is akin to returning 15MT organic matter or over 9MT organic carbon to the land.

On the more sandy soils in Indonesia such inputs will improve long term soil health significantly as the soil carbon status is built up over the years enriches soil fertility . The nutrient content in the recycled biomass is equivalent to 9,147MT of inorganic NPKMg fertilisers, with a value equivalent to RM22.0 million at prevailing 2023 prices.

Clarification Sludge

The effluent from the clarification station, which accounts for 75% of the total BOD generated in the mill, is processed via a decanter and the resultant cake is mixed with inorganic fertilisers and dried in a rotary drier to produce organic fertilisers commercially marketed as Supergro, Turfgro and Bajaria. Apart from adding value to waste, the system reduces methane production by 75%. Additionally, the rotary drier used for drying the fertilisers also functions as a scrubber of unburnt carbon particles in the flue gas producing, in the process, cleaner emissions.

Palm Oil Mill Effluent (POME) and Palm Oil Refinery Effluent (PORE) Treatment

Palm oil mill effluent and palm oil refinery effluent are treated in treatment ponds to reduce their BOD and COD contents before they are used to irrigate the oil palm fields. The quality of effluent is monitored monthly as shown below and reported to the respective Government authorities. 

With the implementation of Biogas plant and other initiatives to reduce the BOD and COD of effluent, we aim to reduce the BOD and COD by 10% from the respective average of 550 and 2200 mg/L in 2021 by 2025.

In addition, we are commissioning a polishing plant to treat POME from the Optimill with the objective of reaching a BOD of <25ppm.

The above consolidated data are extracted from the respective mills and refineries. The data at the respective processing facilities are verified during RSPO annual audits where the Public Summary Reports are available in the RSPO website.

Steriliser Condensate

The steriliser condensate is anaerobically treated in biodegradation ponds and the digested effluent used for irrigating oil palms. Apart from improving the soil’s physical, chemical and biological properties, land application of digested effluent increases oil palm yield by up to 25%. Presently about 140 hectares in the Company is under land application. Analysis on BOD in effluent is carried out on a monthly basis to ensure the BOD level is below the permissible level recommended by the Department of Environment.

Empty Fruit Bunches (EFB)

Most of the EFBs that come out of the mill as waste are used as an organic fertilizer for oil palms via mulching in the field. This compliments the nutrient level and improves the physical properties of the soil.

Shells

The shells are commonly used as combustion material in the mill boiler/s to generate steam and electricity for our operations.

Waste Management

To avoid contaminating the environment and prevent misuse of pesticide containers and other scheduled wastes we have been collecting and disposing off triple rinsed pesticide containers, spent lubricants, used batteries and spent fuel filters through certified waste managers. The waste managers will either safely recycle these items or dispose of them in accordance with government regulations. There is no deemed hazardous waste under the terms of Basel Convention Annex I, II, III and VIII, that were transported, imported, exported or treated.

The Optimill Project

In 2015 the Board of UP decided to build a new palm Oil Mill called “Optimill”, with the most modern equipment and technologies available in the industry and incorporating this into a layout that would not only mirror the Danish Dairy Industry standards but also be a perfect example of the circular economy.

By choosing the right location and capacity for the Optimill it has enabled UP to close two of its older mills and process the crop from approximately 18,000 Ha of UP’s land. In addition, it was agreed that UP should explore the opportunities to utilize the enormous amount of biomass that would be available from the new mill. This amongst others would include an adjacent Biogas Plant thereby closing the loop and mitigating greenhouse gas emissions considerably as is the case at all of UP’s other Palm Oil Mills.

The Optimill, being the biggest engineering project undertaken in UP’s 113 years history was completed on the 29November 2017.

The Unifuji Project

With the large amounts of renewable energy available from the Optimill, UP managed to pursue a collaboration with the Japanese Company, Fuji Oil as they had been looking to expand their refining business to produce value added palm fractions made from RSPO certified plantations. The common objective was to do this without the use of fossil fuels as well as complying with the highest possible food safety and quality standards in the world.

The Unifuji Refinery Project, which is a 50:50 JV between UP and Fuji Oil, was therefore conceptually agreed upon in 2016 after which the initial foundation works and site preparations began.

During the second half of 2018, the JV materialized into a super modern and efficient integrated refinery setup including a solvent fractionation plant in Ulu Bernam Area of Lower Perak providing employment for about 60 people.

The state-of-the-art factory is a result of two companies coming together with a shared goal of producing value added palm components based solely on UP’s certified sustainability and traceable palm oil and Fuji’s expertise on technical capabilities.

With the completed projects depicted in the pictures above, UP and Fuji Oil have taken a giant leap forward in terms of encompassing and amalgamating the most modern equipment and technologies available in the industry and marrying this into a layout which today is a perfect example of what the circular economy can look like.

The projects are testimony to the fact that no one in the top is stronger than the pyramid of people who support them. Both UP’s and Fuji’s appreciation goes out to the team involved for their admirable dedication and commitment which exemplifies the spirit of being ‘second to none’’.

UP respects and recognises the importance of global initiatives to protect fragile ecosystems and combat climate change. Since 2005, UP has actively been pursuing means of identifying ways to reduce its Greenhouse Gas (GHG) emissions and with that its reliance on fossil fuels. On a global perspective much more attention must be directed towards the adverse impacts of fossil fuel usage and minimising this as about 70% of all CO2 (eq) emissions still come from burning fossil fuels. The world purchases about 93 million barrels of crude oil per day (equal to about 130 million MT per day), and it is therefore important to apply more pressure on mineral oil producers. As an example, the country like Norway today produces about 2 million barrels of crude oil per day. This alone is equal to 913,194 MT of CO2 emission /day or similar to the CO2 (eq) emitted from clearing 1,793 hectares of tropical jungles per day or deforestation rate of 650,000 hectares per year. 

Positive change can be made through individual accountability and collective action and it is therefore important that we focus on a balanced approach where we all have to help minimize the impact of deforestation and green house gas emission and not just a selected few. There must be a commensurate effort in reaching this goal and therefore things should be put in perspective and acknowledgement given to the fact that palm oil production is not the main cause of deforestation. In this connection, ongoing initiatives must be intensified to minimize the impact of not just agriculture but all activities that in one way or the other contribute to deforestation and global warming.

Life Cycle Assessment (LCA)
Significant reduction in UP’s GHG emissions since 2004

Below, time series of GHG emissions from palm oil at UP is presented. The time series for NBD palm oil at UP shows a reduction of 63% (with iLUC and nature conservation) from 2004 to 2023. In 2021, we achieved our internal goal of reaching a 60% GHG emissions reduction per MT of refined palm oil produced by 2025 when compared to 2004 levels, four years ahead of time.

This study highlights the fact that UP’s palm oil has significantly lower GHG emissions when compared to average RSPO certified palm oil as well as Rapeseed and Sunflower oil produced in Europe.

For more information on LCA 2023 covering all of our plantations, mills and refineries (Scope 1,2 and 3 emissions), please click here

We have been participating in Carbon Disclosure Project (CDP) since 2019. For more information about CDP, please refer to https://www.cdp.net/en/info/about-us

Background of UP’s LCA Study
In 2006 following the completion of the world ‘s first peer reviewed Life Cycle Assessment (LCA) study on the “cradle to grave” production of 1 MT of refined palm oil, various areas were identified within our production chain, which could mitigate GHG emissions.

Following that, the world’s first comprehensive LCA in accordance with ISO 14040 and 14044 International Standards on palm oil was finalized in 2008 and subsequently underwent a critical panel review.

Further annual updates to this LCA were carried out by 2.0-LCA Consultants involving Professor Jannick Schmidt from Aalborg, Denmark with the latest update undertaken in the period January to February 2022 thereby providing management with a detailed and clear overview of the development in the Company’s efforts to reduce its carbon footprint since 2004.

The updated 2021 LCA model incorporated the new EXIOBASE background database and the contributions from indirect land use change, peat emissions and nature conservation have been reviewed in light of new data. These studies indeed helped to identify additional areas in need of further improvement within our Group.

It should be noted that the GHG emissions per kg palm oil calculated in this study cannot be compared with the results obtained with the GHG accounting tool RSPO PalmGHG Calculator, due to key methodological differences between the two models.

In particular, main differences between the models are: the approach used to deal with land use changes and nature conservation, the modelling of by-products; emission models for nitrogen related field emissions, and peat soil emissions. 

Moreover, the current study operates without cut-off, i.e. no-inputs to the system is excluded. Further, the currently study includes the GHG emissions relating to the production of pesticides, and results are presented per kg refined palm oil, whereas the RSPO Palm GHG Calculator does not include emissions for the production of pesticides, and results are presented per kg crude oil. The GHG emissions calculated in the current LCA study are systematically higher compared to a similar calculation using the RSPO Palm GHG Calculator.

2030 Target 

In 2021, we achieved our internal goal of reaching a 60% GHG emissions reductio per MT of refined palm oil produced by 2025 when compared to 2004 levels (with iLUC and nature conservation), four years ahead of time. However, in line with our Group’s commitment to environmental leadership, we acknowledge that even more can be done and we therefore set a new target of 66% reduction by 2030 (all-in target for Scope 1, 2 and 3) when compared to 2004 levels (with iLUC and nature conservation). We shall relentlessly pursue to reach and exceed this through more initiatives and further investments over the next 7 years.

Emissions Reductions & Biogas Plants

Since 2005, significant investments have been made in promoting green energy starting with the Biomass Reciprocating Boiler cum Power Plant and the first Biogas Plants built and commissioned in 2006. These projects combined have since helped to significantly reduce our emissions of CO2 by 70% and CH4 by 80% at the respective operating units thereby paving the way for additional green investments. 

Biomass Reciprocating Boiler

The first Biomass Reciprocating Boiler (BRBI) was successfully commissioned in 2006 to supply green steam to Jendarata Palm Oil Mill as well as the Unitata Refinery, thus playing a crucial role in reducing our fossil fuel consumption. 

Since then the company has built and commissioned another 7 biomass reciprocating boilers with the latest unit at UIE (M) installed in 2019. 

Isokinetic Monitoring of Gaseous Emissions from the Palm Oil Mills

In conformance to the Department of Environment’s stipulations as well as to monitor the quality of our gaseous emissions, flue gas compositions were regularly checked by certified assessors throughout 2023.

In all Malaysian mills the average dust concentrations were below the limit of 0.15g/Nm3 set by the Department of Environment as per the Environment Quality Act (Clean Air Regulations) 2014and the Lada mill emissions is well within the 0.3g/Nm3 set by the Peraturan Menteri Negara Lingkungan Hidup No 07 Tahun 2007 in Indonesia.

VORSEP Dust Collector System

The VORSEP dust collector system was first installed on our Biomass Reciprocating boiler at Ulu Basir Palm Oil Mill replacing the old conventional multi-cyclone dust collector system. The unit was commissioned in June 2015 followed by progressive installation of additional units in the rest of the mills. With the commissioning of the VORSEP system at UIE(M) mill in 2019 all of UP’s palm oil mills are now fitted with the VORSEP dust collector system.

These units were installed primarily to meet the DOE’s Environmental Quality Act (Clean Air Regulation) 2014 among others requires a cleaner emission standard from the boiler with the following conditions: –

1. The dust concentration emitted from the stack should not be more than 0.150g/Nm3
2. The smoke should not exceed shade No. 1 on the Ringlemann chart and should be less than 20% opacity.

Climate Risk Assessment

In UP, we recognise the threat of climate change and its effect on the planet and livelihoods. Unpredictable and extreme weather patterns directly impact agriculture operations and are a risk to food production. This may have substantial financial or strategic impact on our business too.

We have therefore conducted an assessment in line with the guidelines by the Task Force on Climate- Related Financial Disclosures (TCFD) to identify risks, opportunities, and challenges across all our operations in Malaysia and Indonesia to build resilience for our business and mitigate climate change.

The identified transition risks are summarised in the table below, which has been produced by the Sustainability Team of UP who is well-versed with the TCFD guidelines and the identification of transition and physical risks.

Climate related transition risks, opportunities, challenges and processes to mitigate the risks

Physical Risks

UP is committed to continuously improve and operationalise the short-, medium- and long-term measures and strategies to minimise the identified climate risks. This goes hand in hand with our strategic focus on the “circular economy” concept of converting waste into renewable energy via innovations and investments in new technologies to reduce our GHG emissions.

The UP Group’s GHG emissions intensity baseline and target covering plantations, milling, and refining operations are assessed and monitored annually, and in line with the TCFD’s recommendations, we have also initiated our disclosure of GHG emissions for Scope 1, 2 and 3. For more information on our journey to reduce the company’s carbon footprint vis-à-vis our baseline monitoring in 2004, reduction trends and targets, please refer to page 66.

All strategies, programmes and developments related to the climate risk assessment are headed by the Chief Executive Director of UP and any significant resources required for related projects are subject to approval by the UP Board. The climate risks will be deliberated and reviewed as deemed necessary during the Group Sustainability Committee (GSC) Meeting. Lastly, climate change is also listed as an important indicator under our materiality assessment and the level of prioritisation is assessed annually based on feedback from our stakeholders.

For more information on the financial disclosures and targets related to climate related risks, please click here

Tree Reserves

Grut Sanctuary

UP´s commitment to sustainable agriculture originated with its founder, a Danish Engineer & Entrepreneur, Svend Aage Westenholz who established UP in 1906.

One of the key figures during the foundation of UP was Westenholz’s brother-in-law, a navy officer, Commander William Lennart Grut. The two stalwarts, Westenholz and Grut not only linked together in kinship, also shared common values of Vision, Compassion and Discipline and introduced the first jungle sanctuary (The Grut Sanctuary) as well as the concept of mulching to maintain soil fertility in the 1930´s.

Lima Blas Jungle Reserve

With the acquisition of Lima Blas Estate from Socfin Plantations Sdn Bhd in December 2003, United Plantations also inherited an 85 hectare jungle in the estate. Situated on a hill behind the site of the now decommissioned palm oil mill, the manager’s house situated in the midst of this reserve was designed by a Mr B M Iversen, the brother of Mr W M Iversen who was the first manager of Lima Blas Estate. Built in the late 1920s, this 90 years old bungalow still stands tall in the midst of the jungle reserve today.

The jungle reserve has been enriched with Malaysian native jungle trees sourced from Kingham nursery over the years and as part of an on-going exercise, forest rangers have been invited to identify and catalogue some of the trees in the reserve which is believed to include trees from Magnolia sp. amongst other native tree species.

The Lagoon Tree (‘Kingham-Cooper’) Reserve

This 7.50 hectares area established in 2008 started as a barren piece of land surrounding the Lagoon (man-made-lake supplying UIE Palm Oil Mill with processing water). The Lagoon Tree Reserve had since been planted with several thousand local trees, and now resembles a natural thick jungle, with over 250 diverse species and 12,500 trees at this area alone.

A major source of planting material, serves as a gene-bank for the on-site Nursery to germinate harvested seeds and for growing the saplings to be planted on this Estate, as well as the other Estates in the Group to be able to establish its own reserve areas. The Lagoon is well stocked with a variety of local fish species, attracting numerous bird types (fish eagles, kingfishers, bee eaters, egrets & herons) as well as mammals such as the Malayan Otter.

UIE Main-Office Tree Parks

Extending beyond the Lagoon, are a number of other fields planted with more diverse trees, emphasis on rare and valuable hardwoods such as the Dipterocarpaceae Family (Shorea, Hopea, and Dipterocarpus). Additionally, a variety of “food chain” species have been planted to provide food & nesting for birds, habitat for wildlife.

The Anak Macang Riverbank Reserve

This 5.85 kilometres strip of land along the southern boundary to Anak Macang River (which is not permitted to be cultivated with commercial crops, as regulated by the RSPO, and which has to revert back to natural vegetation). Since 2011, it has been enriched with a variety of jungle tree species and become a pleasant, diverse area for biodiversity.

Numerous valuable hard-wood (Dioterocarpaceae species like Anisoptera Marginata, from James Kinghams Nursery. Penawar Hutan Sdn. Bhd) as well as Hopea species and Shorea species from the UIE Nursery have been planted here.To date, well over 3,000 trees have been planted along the Anak Macang Riparian Reserve, adding to the variety of wild trees available for the desired range of Biodiversity.

The main focus during 2020 has been the harvesting and raising of tree seeds to the sapling stage, for transplanting and supplying the other Estates in the Group, which one day should replicate the project commenced on UIE in 2008. The trees serve “a 360 degrees purpose”: not only being admired as magnificent life form but also to provide future generations of planting material for propagation and conservation. To date, over 18,500 trees have been planted on UIE in the numerous Parks and Reserves which will no doubt be a lasting legacy for generations to come.

Ulu Bernam Optimill

A sizeable number of trees from the UIE indigenous tree nursery have been sent to the UP Group Estates, Upriver, and in particular for the new Ulu Bernam Optimill project for establishing its own Tree Park which can be used for gathering seeds and conservation later on.

Apart from UIE’s tree nursery, a wide variety of large ‘rare and endangered’ trees have been sourced from Penawar Hutan Nursery, Malaysia’s leading supplier of rare jungle trees, so that United Plantations will be able to carry out its commitment to conservation and future development of Indigenous Malaysian Jungle trees.

As usual we are grateful to Malaysia’s “Tree Guru” (Mr James Kingham and his family, owners of one on Malaysia’s largest and most diverse tree nurseries) who has provided us with much generous time and advice over the years for direction and the way forward.

UP strictly adheres to No Deforestation and No New Development on Peat Soils regardless of its depth since 2010 which is embedded in the Environment and Biodiversity Policy. In addition, we are committed to live up to the European Union Deforestation Regulation (EUDR). We have been collaborating with an internationally recognized real time satellite monitoring database, palmoil.io since the 3rd quarter of 2023 to monitor the deforestation in our concessions as well as our direct and indirect suppliers.

We are pleased to inform that the due diligence on deforestation for both UP and suppliers’ concessions was conducted and externally verified by a third-party satellite monitoring database company based on the land cover assessment. To view the external assurance statement, please click here 

                      *Updated as of 31st December 2023

In addition to the above, we also subscribe to Global Forest Watch (GFW) to monitor any forms of deforestation and /or conversion of natural ecosystem either through illegal logging or fire within our own concessions and our suppliers’ concessions. GFW monitoring system is real time and notification will be sent to our Sustainability Team once any deforestation/land use change is detected.

The extent of monitoring covering all UP Malaysia and Indonesia concessions (63,000ha) and three direct third-party FFB suppliers for our Indonesian Mills (approximately 890ha). The radius or outer ring of monitoring is 500m.

All of our Malaysian Mills sourcing FFB from UP owned plantations only. The outcome of monitoring is summarised on a monthly basis. From January to December 2023, there is no deforestation and/ or conversion of natural ecosystem detected in our own concessions and direct third-party FFB suppliers.

We contribute to the protection of critical ecosystems and biodiversity in and around the landscapes where we operate. Furthermore, we are committed towards restoration or rehabilitation of non-compliant deforestation or HCV loss in our plantations and the similar commitment applies for our direct and indirect suppliers.

RSPO Remediation and Compensation Procedure (RaCP)

The Remediation and Compensation Procedure (RaCP) was established by RSPO to address land clearance and plantation development undertaken since November 2005 without prior High Conservation Value (HCV) assessment. The procedure requires growers to first disclose any new land development that took place without conducting a HCV assessment, calculate environmental liabilities through a Land Use Change Analysis (LUCA), and to carry out onsite or offsite remediation for the affected sites or remediation with affected parties. 

The objective of LUCA is to:

1. Identify the area which have been cleared by the organization for commercial purpose (for developing of oil palm plantation and its supporting infrastructure), as of November 2005 until the date of HCV assessment period;
2. Access the company’s compensation liability as a result of such land clearing without prior HCV assessment

For more detail on the assessment, please click here to view our LUCA report.

RSPO New Planting Procedure (NPP)

The NPP applies to any development of new plantings, regardless of size (Ha). The intention is that new oil palm plantings will not negatively impact primary forest, HCV, HCS, fragile and marginal soils or local people’s lands. UP subscribes and supports this stance.

It is not enough to set aside areas for conservation. Patrolling  of the conservation areas need to be conducted to protect these areas from intruders and fires so that the biodiversity is truly conserved.

The main assessments of the NPP are as follows:

1. Soil suitability and topographic surveys
2. Social Environmental Impact Assessments (SEIA)
3. HCV and HCS assessments
4. Stakeholders engagement/consultation including Free, Prior and Informed Consent (FPIC)
5. Land Use Change Analyses (LUCA)
6. GHG assessments

A successful implementation of the NPP ensures that all the indicators of the RSPO Principles and Criteria (P&C) are being implemented and therefore in compliance when the new development starts.

One of the outputs of the NPP is a report that proposes how and where new oil palm plantings should proceed, or not, for a given management area. The NPP report is posted on the RSPO website for public consultation for a duration of 30 days. Planting and any associated development (such as road development) can only begin once the NPP is completed and RSPO approval is granted.

The RSPO NPP underwent review in 2014 and the final document was endorsed on 20th November 2015. The additional requirements are as follows:

1. Requires that new plantation developments are designed to minimize net GHG emissions, taking into account avoidance of land areas with high carbon stocks (HCS) and/or sequestration options. 
2. Land use change analysis from November 2005 shall be conducted prior to any conversion or new planting. 
3. Endorsement of the High Conservation Value Resource Network (HCVRN) Assessor Licensing Scheme (ALS) as a robust and credible replacement for the RSPO HCV Assessor approved list, now obsolete. The ALS is effective from 1st January 2015. 

The current NPP guideline is under revision and consultation process and will be released upon the endorsement by the RSPO Board of Governors.

The last NPP submitted and approved by RSPO was back in 2014. The more information on our NPP report, please refer here

Social and Environment Impact Assessment (SEIA)

We have engaged an independent consultant to conduct a comprehensive SEIA in the proposed new clearing area in accordance to NPP requirement. The SEIA was conducted with participation of relevant stakeholders and the management plan is reviewed annually. The similar commitment applies for our direct and indirect suppliers.

High Conservation Value (HCV) Assessment

As a RSPO member, UP is 100% committed to embrace and implement the sustainability concepts outlined in the RSPO Principles and Criteria (P&C). In line with the RSPO P&C as well as Indonesian laws, Social and Environmental Impact Assessments (SEIA) and HCV Assessment were conducted prior to commencing plantation development by UP. 

UP has not only followed the recommendations of these assessments but expanded the scope to include much larger conservation areas than that stipulated in the SEIA and HCV assessments. To date more than 8,000Ha are set aside as conservation areas in line with the Company’s policy to maintain and manage the ecological integrity of the landscape in which UP operates its palm oil plantations, as well as to provide necessary habitat for endangered and critically endangered species that are found in or adjacent to UP properties.

We are committed to only engage HCV assessors who are accredited under High Conservation Value Resource Network (HCVRN) Assessor Licensing Scheme (ALS) since 1st January 2015. The similar commitment applies for our direct and indirect suppliers. The HCV assessment shall undergo satisfactory review by the ALS Quality Panel prior to any new land clearing after 1st January 2015.

High Carbon Stock (HCS) Assessment

UP adheres to HCV combined with HCS assessments and Land Use Change Analysis (LUCA) for new plantings since 2014, UP in October 2014 requested Daemeter Consulting to perform a Land Use Change analysis as part of RSPO’s New Planting Procedure (NPP). 

Daemeter Consulting is a leading consulting firm promoting sustainable development through responsible and equitable management of natural resources, particularly in Asia’s emerging economies. (For more info, please refer to www.daemeter.org)

The objective was to produce a land use map indicating exactly which areas ideally should be set aside for conservation and what areas ideally should be set aside for its Plasma commitments in Kumai Concession area.

This has been fully adhered to and the plasma development project in the Kumai conservation area has progressed well during 2018, and is a fine example of how development and conservation can go hand in hand for the benefit of the local community and the environment.

The more information on our HCV and HCS summary report, please refer here

Monitoring of Deforestation

Monitoring and managing conservation areas and biodiversity resources requires a comprehensive knowledge of baseline ecological conditions before commencing on agricultural development.

The BioD Team has set up a comprehensive GIS-database with several hundred information layers (e.g. rivers/streams, topography, boundaries, channels, planted areas, soil composition, flow-direction, water sampling sites, neighbouring forests reserved, conservation areas and many more).

The UP/PTSSS GIS-database is built up around ESRI’s ArcGIS® software platform that is considered the world’s most powerful GIS software. The software handles every type of data-input, from NASA’s high-resolution satellite images, to general orangutan observation way-points.

Built into the BioD GIS-database is the Spatial Monitoring and Reporting Tool (SMART) that was developed by a conglomerate of international conservation agencies. The SMART system is the world’s preferred, most comprehensive and user-friendly conservation monitoring system. The added advantage of using SMART is its statistical power that allows the BioD to compile and develop trend-lines and other forms of analyses pertaining to managing and protecting conservation areas and species.

Environmental concerns

Oil palms are highly efficient producers of vegetable oil, requiring less than any other oil-producing crop. Despite being one of the more sustainable sources of vegetable oil there is concern that the growing demand for food and biofuel could lead to rapid expansion of palm oil production and result in serious environmental and social consequences.

NGOs and Palm Oil

Palm oil producers worldwide, continue to be exposed to much criticism by predominantly Western Non-Governmental Organizations (NGOs). Their accusations take the form of generalized views that disregard the positive socio-economic impact of the industry and continue to highlight mainly allegations of deforestation, environmental degradation, social conflicts, and economic problems.

Nonetheless, dialogue with NGOs in a constructive atmosphere of goodwill and fairness is essential in order to pursue the process of achieving a balance between the natural environment and habitat as well as the need for economic development. Those dedicated to this cause always need to be aware of the other side’s case and thereby do their best to remain objective.  

Consequently, the RSPO promotes palm oil production practices that help reduce deforestation, preserve biodiversity, and respect the livelihoods of rural communities.

Land zoning issues in Indonesia and the challenges of protecting forest areas from development

Since our foundation in 1906, UP has been focusing on economic development combined with social and environmental care. This is in line with our core principle of being a good corporate citizen through proper governance and doing business responsibly by adhering to and respecting all applicable laws and regulations in the countries where we operate. 

In 2006, a century after commencing our operations in Malaysia, UP ventured into Indonesia in order to further expand our involvement within the palm oil industry. To date, more than 8,720 ha of oil palm and approximately 1,398 ha of Plasma have been planted and more than 7,901 ha of conservation area set aside. These conservation areas make up about 44% of the concession area in our Indonesian operations and are a testimony to our Group’s commitment towards maintaining an important balance between economy and ecology and where conservation means development as much as it does protection of the environment.

Whilst our Indonesian operations are running smoothly, we have during the years encountered some land zoning complications over forest boundaries between Provincial and Central Governments. This can be exemplified by the incompatibility between the Provincial-Level Spatial Plan (RTRWP, 2003) and the Forest Land Use Plan (Tata Guna Hutan Kesepakatan, TGHK, 1982) that affected several hundred companies in Central Kalimantan across various sectors. Despite discussions, advice and recommendations from the Provincial Government, PTSSS (UP) became one of the affected companies after entering Indonesia in good faith based on the Provincial-Level Spatial Plan (RTRWP, 2003) in early 2007, which mapped this land area as non-forest area (KKP – Kawasan Pengembangan Produksi and KPPL – Kawasan Pemukiman dan Penggunaan Lain). However, when this incompatibility of the maps came to light thereby designating a part of our concession/planted area as being in a forest zone, PTSSS (UP) immediately consulted the Ministry of Forestry in 2009 and have since taken all necessary steps to resolve the incompatibility in line with the Indonesian Government’s regulations.

Since 2009, PTSSS (UP) has worked closely with the Ministry of Forestry to resolve this land zoning incompatibility and it is pleasing that we are now in the final stages of obtaining the forest zone release letters, which is an important milestone in obtaining the HGU (land title) for these affected areas. For a full overview of the above process, please refer to the below table, which provides an insight into the complexity of land zoning in Central Kalimantan.

Further details of our Indonesian concessions are outlined in the RSPO Annual Communication of Progress (ACOP) summary report: https://www.rspo.org/members/33/united-plantations-bhd

Deforestation – How to balance Development & Conservation

UP has a clear commitment against deforestation as enshrined in our Environment and Biodiversity Policy: ’No primary forest clearing policy (1990), “No deforestation, no new development on High Conservation Value (HCV) and no new development on peat soils regardless of its depth (2010)’ () and ‘HCV combined with HCS assessments & land use change analysis for new plantings (2014)’.

Whilst a certain portion of oil palm cultivation, just like all other agriculture, is a result of land use change, it is incorrect to single out the oil palm industry as the lightning rod for the world’s growing anger on global warming and deforestation. Globally, according to the Food & Agricultural Organization (FAO), 12 million hectares of forests are cleared every year. 

Between 1990 to 2018, more than 375 million hectares of forests were cleared and converted into other uses such as commercial ranching, agriculture, town expansion as well as infrastructural projects amongst others. Oil palm areas globally have increased from 3.7million hectares in 1990 to 20 million hectares in 2018 or a net increase of 16.3 million hectares or equal to less than 5% of the total deforestation from 1990 to 2018.

Whilst fully supporting and recognising that ongoing initiatives must be intensified to minimise the impacts of deforestation and greenhouse gas emissions, there is an acute need by the NGO fraternity and scientific network including politicians in the West for mutually balanced impact on deforestation and greenhouse gas emissions.

In this context, it was with much interest that the US NGO, The Union of Concerned Scientist (UCS) who on  the 14th of December 2016 published an article entitled “Ending Tropical Deforestation Have we got our Priorities Backwards?’’ which concluded that the NGO fraternity including the UCS had got their priorities wrong. The findings concluded that the main drivers of commodity-based deforestation were in fact not palm oil production but several other commodities.

An article by the USC states,
Quote:” I don’t want to go overboard with the mea culpa here. Companies have to take responsibility for their actions, and lack of action. They can’t just “The NGO community made me do it.” But the Climate Focus Report and the new data from the Amazon demonstrate forcefully that when we get the priorities wrong, there are consequences”

Earlier in the same article it is also stated that
Quote: “The data is pretty clear: by far the biggest driver of deforestation is beef. Soy is second, but far behind in terms of importance and palm oil and wood products are even smaller drivers, causing only about a tenth as much deforestation as beef”. 

Relates to UP’s measure to preserve and protect waterways and manage the use of water throughout our organisation.
United Plantations fully appreciates that much more can be done in terms of water productivity. In order to maximize the available water resources, United Plantations has, since 1913, gone to great length to construct an extensive system of water gates, bunds, weirs, canals and drains hereby enabling us to harvest and optimize the usage of rainwater. In addition, leguminous cover crops are established in all our immature plantings to conserve moisture.

It is in this context, it is important to mention that except for the nursery areas, none of United Plantations’ planted areas under oil palms or coconuts is irrigated. All our areas are under rain-fed agriculture, thus making use of whatever water comes naturally from above. We are continuously working to mitigate our water footprint related to mill waste, maintaining buffers along natural waterways, harvesting rainwater, frugal domestic water usage and judicious use of pesticides and weedicides.

Drip Irrigation System in the Oil Palm Nursery

The consumptive use of water (evapotranspiration) of these crops ranges from 120-150 mm per month. To meet requirements, the monthly rainfall should equal or preferably exceed this figure, failing which moisture stress would occur. The rainfall in the UP Group ranges from 1,600 to 2,500 mm per year, with the average being 2,000 mm. Weirs have been constructed across the collections drains to harvest rainfall and hold back water to raise the water table during the drought season.

Moisture stress causes a reduction in cell division and cell elongation – two important growth processes. Its effect on oil palm and coconuts is summarized in the table below.

Effects of Moisture Stress 

Hydrology and Limnology

Clean water is critical to sustaining all kinds of life form on Earth. In rural Indonesia, thousands of local residents are dependent on water supplies from lakes and rivers. Maintaining a clean and uninterrupted supply of water constitutes one of the most critical components in sustainable palm oil production.

The Biodiversity team has developed a “Hydrology map” and identified a number of permanent sites for sampling water quality. Using the state-of-the-art equipment, the team measures and records organic, inorganic and physical pollution parameters in the field.

Potential trace elements and toxins are measured with a spectrophotometer in the laboratory. In the event of a sudden deterioration in water quality, the team will identify the source of pollution and initiate a process to rectify the problem.

This includes identifying any unusual organic contamination, usually due to empty fruit bunches that mistakenly have slid into a stream or if an unusually high level of inorganic contamination is detected, it is usually a result of excessive wash-out of fertilizer. Such information is communicated to the respective estate manager, allowing them to rectify a potential problem within a very short time period.

In our pursuit to conserve this depleting precious gift, every effort is being done to educate our residents to be frugal on its usage. Old water pipes, water tanks, faulty taps are being replaced from time to time to arrest leakages. We aim to reduce our domestic water consumption by 10% from the average of 80 gallons per capita per day in 2025.The domestic water is sourced from either Government supply or our own treated water from river to reservoir. In 2023, domestic water consumption in Malaysia has seen some reduction while in our Indonesian operation water consumption is still much lower than two years ago as seen from the table below.

Erosion Monitoring Plots

To better understand the dynamics of soil, water and nutrient loss that can occur in our property, several erosion monitoring plots measuring 6m x20m were set up in one of our estates on slightly sloping land under mature oil palm. Thereafter the amount of soil loss, surface runoff and nutrient losses in each of these fractions are being closely monitored to determine the major routes of soil, water and nutrient loss.

Such studies illuminate the areas of major loss through which mitigating measures can be developed to minimise the depletion of these vital natural resources.

Rain Harvesting

As part of our effort to conserve water resources and minimise wastage, we have embarked on a programme to fit workers’ housing with tanks to store harvested rain water which is especially beneficial during periods of prolonged dry weather.

Planting of Leguminous Cover Crops

Leguminous cover crops are established in all our immature plantings to conserve moisture.

Monitoring of Water Quality

Clean water is critical to sustaining all kinds of life form on Earth. In rural Indonesia, thousands of local residents are dependent on water supplies from lakes and rivers. Maintaining a clean and uninterrupted supply of water constitutes one of the most critical components in sustainable palm oil production.

The Biodiversity team has developed a “Hydrology map” and identified a number of permanent sites for sampling water quality. Using state-of-the-art equipment, the team measures and records organic, inorganic and physical pollution parameters in the field.

Potential trace elements and toxins are measured with a spectrophotometer in the laboratory. In the event of a sudden deterioration in water quality, the team will identify the source of pollution and initiate a process to rectify the problem.

This includes identifying any unusual organic contamination, usually due to empty fruit bunches that mistakenly have slid into a stream or if an unusual high level of inorganic contamination is detected, it is usually a result of excessive wash-out of fertilizer. Such information is communicated to the respective estate manager, allowing them to rectify a potential problem within a very short time period.

Mill Water Consumption Rate

Water consumption rate in our Indonesian operation has improved over the recent years and is now holding steady whereas the mill water consumption rate in our Malaysian operations has also improved with the phasing out of the older mill and the commissioning of the new Optimill. We aim to reduce the average of 1.6MT water/MT FFB processed by 2025.

There shall be no use of open burning/fire in new on ongoing operations for land preparation, land management, or any other reason other than justified and documented cases of phytosanitary emergency.

Monitoring of Meteorological Parameters

A dozen weather stations have been set up at strategically important locations in PTSSS/UP. These provide a large amount of micro-climate information critical to, particularly, make accurate fire-risk predictions.

Being able to predict the risk of fire allows the management in each estate to implement proactive measures, to prevent and minimize the risk of fire, as well as to be on high alert with firefighting equipment, in case of a fire outbreak.

Global Forest Watch Fires (GFW Fires)

GFW Fires is a dynamic online forest monitoring and fire alert system that provides near-real-time information that can empower people to better combat forest and land fires before they burn out of control.

The GFW Fires interactive map includes near real-time fire alerts from NASA and NOAA, real-time wind direction and air quality data, maps of concessions and forest cover, high-resolution satellite images, and geo-tagged social media conversations about where fires occur.

Plantations under United Plantations Berhad have subscribed to the monitoring system to receive fire alert when there is fire occurrence within estate territory as well as 500m of outer ring.

Zero Burning Policy

Our fire prevention is managed through our strict zero burning policy since 1989, as well as through our fire management and monitoring standard operating procedure. These are continuously reviewed to ensure they are effective. Our emergency response teams (ERTs) are regularly trained in fire prevention and firefighting in all our plantations. The causes of fires vary greatly. The impacts can be catastrophic, including loss of life and loss of primary biodiversity.

We have ongoing community workshops to educate our local communities about the environmental and social consequences of slash-and-burn farming, as well as to promote alternative methods of land clearance.

Training sessions are done regularly in-house, as well as in conjunction with the local authority, fire brigades, and the Ministry of Forestry. Any fire that starts within an outer ring of 500 m from any of our plantations’ borders is immediately reported to the local fire brigade for their action. We will be conducting a series of community workshops to educate our local communities about the environmental and social consequences of slash-and-burn farming, as well as to promote alternative methods of land clearance.

A fire within an outer ring of 500 m is fought by our ERTs. We embrace fire safety in various ways such as promoting anti-smoking, tracking and identifying fire brigade locations and water sources.

Our goal is the total eradication of fire as a means to clear land by the local communities. This year thankfully there was no severe drought in Indonesia. 

To further enhance the fire patrol, four additional fire watch towers were constructed at strategic points and purchased additional six units of GPS devices. 

There were some isolated fire incidents which burnt approximately 1.06 Ha within our Plasma area(inner ring) and 13.2Ha at the outer ring adjacent to our concession. However, the fire was immediately extinguished by our ERT in PTSSS.