Written by Cheah Chi Ern, MPOCC

This article will provide an overview of the first principle: Management commitment and responsibility.

“Top management shall demonstrate leadership and commitment in implementing the Malaysian Sustainable Palm Oil (MSPO) system and achieving its aims.”

This shall be initiated by:

1. Establishing a policy for MSPO implementation, which is compatible with the organisation’s strategic direction and business processes.

2. Provide resources and support for its implementation, including reviewing the effectiveness and striving for continual improvement of their sustainable palm oil system.

The success or failure of any system is hinged on the commitment of the organisation’s top management towards it. This commitment should go beyond just simple approvals but should be on the level of understanding the objectives and mechanics of the system. This is no different for the MSPO which requires top management to provide the direction, commitment, and direction for the organisation to implement sustainable practices.

They should also display commitment by providing the necessary manpower, finance, and any other support necessary to ensure that the MSPO is successfully implemented and maintained. We can akin management support to the foundation and cornerstone of the organisation’s sustainability commitment. Without it, the building will not be stable or well structured, with the potential to collapse.

Principle 1 of the MSPO standard has listed 10 criteria to demonstrate management commitment and responsibility.

Criterion 1 requires that a policy be developed to enshrine a commitment to the MSPO or sustainable practices and continual improvement.

Criterion 2 sets requirements for new planting or new establishments to be carried out after considering land status and size, soil type and topography, alignment with the authorities’ land use plan, and industry-related government policies. An important point will be that no conversion of natural forests, protected areas, and High Conservation Value (HCV) areas after 31 December 2019. An Environmental Impact Assessment, Social Impact Assessment (SIA), and HCV shall be conducted to determine the status of the land before conversion.

Meanwhile, Criterion 3 mandates the use of standard operating procedures for all activities determined by the organisation. This is in line with good agricultural practices and best practices for steep slopes, peat, and the use of chemicals.

For replanting, Criterion 4 requires a replanting plan to be established by considering the review of the SIA, EIA, and HCV prior to replanting.

Focusing on the needs of employees, contractors, and (related) smallholders to an organisation’s operations, Criterion 5 requires that organisation’s training shall be determined analysis and planned with a training programme. MSPO requirements shall also be applicable to engaged contractors.

A business or management plan shall be established to ensure that the business is sustainable. Commitment to the economic and financial viability in Criterion 6 is demonstrated through the planning of a sufficient supply of source material, projected yield, and price forecasting.  Additionally, a long-term replanting programme shall be prepared and reviewed annually.

Criterion 7 expands the commitment beyond the boundaries of the organisation to its surrounding indigenous peoples and local communities by implementing local sustainable development through appropriate programmes.

As part of its commitment, the organisation shall establish a mechanism to handle complaints and grievances that ensures that it is handled effectively, timely, and appropriately. Criterion 8 also ensures that all parties accept the outcome and that no reprisal and/or discrimination against the complainant is taken while maintaining confidentiality and anonymity if requested.

Criterions 9 and 10 work hand in hand by requiring an MSPO internal audit to be conducted to ensure that all operations are addressed and are in line with the MSPO requirements, and it is followed by Management’s review of the internal audit results. The management shall also review its operations to consider external and internal issues that could be a threat to its sustainable commitment and take the necessary actions to address them.