Sustainability Policy

Introduction
Palm oil is the most widely used vegetable oil in the world, and, as the global population increases, it is well positioned to remain a crucial part of the food production process.
Palm oil production has the highest oil yield per hectare and provides a livelihood to millions of people in tropical agricultural communities around the world.

The foundation of our Policy is our set of principles for Sustainable Palm Oil that are designed to build upon the RSPO Principles & Criteria and New Planting Procedure, as well as adhere to all relevant national and international laws and conventions.
As leaders in our industry, we are committed to driving the RSPO forward and have committed to requirements that go beyond the current RSPO Principles & Criteria United Oil believes all agricultural supply chains should be environmentally sustainable and economically beneficial to local communities. Sustainable palm oil must be produced in a manner that is legally compliant and traceable, that protects forests and biodiversity, reduces greenhouse gas (GHG) emissions and respects the rights of indigenous peoples, workers and local communities.
United Oil is committed to building a supply chain that reflects these beliefs and the principles cited in this policy, which is based on current best practice and informed by stakeholder input.
Moving forward, in consultation with our stakeholders, we will review, adjust and improve our approach, and will strive to implement leading sustainability standards and apply the highest levels of transparency and stakeholder engagement.

Scope
United Oil Processing and Packaging is an active participant in the palm oil supply chain.
We recognize the important role we can play in encouraging, through sourcing decisions and industry engagement, a transition to more sustainable practices.
This policy applies to all physical palm oil and derivatives that the company, have management control, sources, trades, processes and utilizes worldwide, via existing and new suppliers. It is effective immediately.
We expect all of United Oil’s (third-party) suppliers of palm oil products to adhere to all of
the commitments in this Policy.

Commitments
Legal Compliance
– Compliance with all applicable national and local laws.

Environmental management
– No deforestation
– No conversion of High Conservation Value (HCV) areas.
– No conversion of High Carbon Stock (HCS) forests2.
– No burning in the preparation of new plantings and re-plantings.
– A progressive reduction in greenhouse gas emissions associated with existing
plantations.
– No development on peat
– No new development on peat regardless of depth.
– Application of RSPO Best Management Practices for existing plantations on peat.
– Work with experts and stakeholders to explore options for peat restoration where feasible.

Human Rights and Workplace
– Respect and uphold the rights of all workers, including contract, temporary, and migrant workers, in accordance with the Universal Declaration of Human Rights, the International Labor Organization’s core conventions, United Nations Guiding Principles on Business and Human Rights and the principles of Free and Fair Labor in Palm Oil Production.
– Uphold the right to freedom of association and recognize the right to collective bargaining. Allow trade unions to have access to workers. Ensure employees have access to credible grievance mechanisms that respect anonymity of complainants and whistle-blowers
– Eliminate all forms of illegal, forced, bonded, compulsory or child labor and, in particular, follow responsible recruitment practices, including not charging recruitment related fees at any stage in the recruitment process, including by agents or their subagents in receiving and sending countries.
– No retention of workers’ passports/identity documents or withholding of workers’ wages other than that prescribed by law.
– Pay all workers the statutory monthly minimum wage and overtime compensation, in accordance with the current labor regulations.
– Provide fair and equal employment opportunities for all employees, regardless of race, nationality, religion or gender.
– Promote a safe and healthy working environment that is free of harassment.
– Provide adequate equipment and training on the implementation of health and safety policies.

Additional Commitments and requirements for New Plantings

Sustainability commitments, in addition to those stated previously, which are applicable to any new oil palm plantings by suppliers to United Oil and their third party suppliers
include:
– No deforestation and protection of High Conservation Value (HCV) areas.
– No deforestation and protection of High Carbon Stock (HCS) areas, using the revised High Carbon Stock Approach ( http://highcarbonstock.org/the-hcs-approach-toolkit/ ).
– No development of peatlands regardless of depth, and protection of peatlands
through water management and fire prevention.
– Respect the land tenure rights of indigenous and local communities, including their right to give or withhold their Free, Prior and Informed Consent (FPIC) to operations on land over which they hold legal, communal or customary rights in accordance with the United Nations Declaration on the Rights of Indigenous Peoples (UNDRIP) and the Social Requirements for Conserving High Carbon Stock Forests.

Traceable Supply Chains

• Traceability is defined as traceable to a defined list of mills and plantations.
• United Oil’s goal is to ensure that all volumes of palm oil and its fractions will be 100%
traceable to mills. We will strive to increase traceability to plantation level over time.
• We will actively promote and support the transformation of the palm oil supply chain
through a process of supplier engagement. We will continue to engage with key suppliers
to promote our policy commitments and build capacity of supplier companies to ensure
compliance. If there are suppliers who are unwilling to transform or prove to continuously
miss the targets set in their time-bound plans, we will cease to do business with them.
• We will work with independent experts to develop a program of mill-level verification
assessments, using risk assessment tools to identify high-risk mills and ensure their
adherence to the stated sustainability commitments.

Transparency and Wider Engagement
Improving our level of engagement with stakeholders, including transparency on our performance and progress, is a key element in underpinning our policy commitments. We are committed to the following:
– Resolving complaints and conflicts within our supply chain effectively and responsibly via a credible, accessible and transparent grievance process.
– Following a multi-stakeholder approach as the right way forward to transform the palm oil sector. We will work with various stakeholders including suppliers, customers, trade unions, governments and independent verification bodies to implement our Policy.
– Continuing to be an active supporter of the Roundtable on Sustainable Palm Oil (RSPO) and will work to strengthen the RSPO standard and its enforcement.
– Collaborating with palm oil producers, processors, traders and users in improving industry wide palm oil sustainability commitments.

United Oil Processing and Packaging Sustainable Palm Oil Sourcing Policy:
Annex – Implementation of Policy Commitments by (Third Party) Suppliers
This Annex details the specific mechanisms for implementation of policy commitments.

1. Scope
Any existing or potential supplier to United Oil, both direct and indirect through a trading partner, is required to comply with United Oil Sustainable Palm Oil Policy.
United Oil takes responsibility for ensuring that our Sustainable Palm Oil Policy is communicated to all our suppliers. United Oil may delegate responsibility for these steps to an implementation partner or trading partner (indirect supply) on a case-by-case basis. United Oil remains accountable for ensuring these tasks are completed and for ensuring pro-active monitoring using best-available data to verify our suppliers’ compliance with the policy. As part of our commitment to support industry
transformation, United Oil will develop implementation and monitoring systems that are compatible with the work that others are doing in this sector.
United Oil sustainability team coordinates the implementation of United Oil’s
Sustainable Palm Oil Policy, including this annex.
The Sustainability & Corporate Responsibility Committee of United Oil’s Board of Directors provides governance of sustainability activities throughout United Oil’s operations and supply.

2. Implementation mechanisms:
2.1 Addressing policy compliance in suppliers’ wider operations
United Oil will take the following actions to identify potential non-compliance by companies in our supply chain at group-level:
– Conduct group-level risk reviews of all supplier companies. This will include requesting all
companies in our supply chain to provide permits, legal licenses and concession maps
(in shapefile format and where legally possible) for their entire operations, as well as environmental impact assessments and HCS and HCV studies where available.
Relevant sources of information include:
– Company concession maps.
– HCS, HCV and environmental impact assessments.
– Government maps, including peat, forest cover and moratorium area
– RSPO complaints
– Other traders’ active grievance procedures
– Reports, investigations and publications by civil society organizations
– Third-party mapping websites, including Global Forest Watch and Greenpeace’s KepoHutan
– Articles in the media
– Government action (e.g. investigations or court proceedings related to illegality, corruption and in response to forest fires)
2.2 Procedure for dealing with breaches in policy compliance
The identification and tracking of breaches of our policy by both direct and indirect supplier mills, as well as group-level non-compliance, will be subject to oversight by
United Oil’s Grievance Committee.
2.2.1 Direct supplier mills
For mills in our direct supply chain, we will continue to implement our program of engagement visits where an engagement visit finds that a mill in our direct supply chain is in non-compliance with our policy, United Oil will engage with the supplier to agree a time-bound action plan to bring the mill into compliance within 12months.
The action plan will include appropriate conservation /compensation/ restoration measures where applicable. If a direct supplier mill does not comply with the targets in their time-bound plans, United Oil will initiate the grievance procedure (see section 2.4).

2.2.2 Indirect supplier mills
Each of our trading partners is expected to implement an equivalent program of milllevel engagement visits. Where an engagement visit finds that a mill is in non-compliance with our policy, the trading partner will agree a time-bound action plan to bring the mill into compliance within 12 months. If a mill does not comply with the targets in their timebound plans, United Oil will initiate the grievance procedure.
2.3 Grievance procedure
When we initiate our established grievance procedure, we will:
– Issue a requirement to immediately cease development where clearing potential HCS, HCV or peat is detected by United Oil, its implementation partners. If a supplier does not comply with a requirement to cease clearing issued by United Oil, we will cease to do business with them.
– Ensure the claims are investigated and, where appropriate, verified by independent
experts.
– Engage with the supplier (where appropriate, through the relevant trading partner).
– Agree a time-bound action plan for the mill or company to bring its operations into
compliance within 12 months.
– Where groups are suspected of serious or ongoing environmental, social and labor violations, United Oil shall consider suspending purchases from the group until investigations are concluded and any policy violations resolved.
– Require the company to carry out appropriate conservation / compensation /
restoration measures where applicable, to adequately address all non-compliant activities.