No Deforestation

Natural forests are critical carbon sinks and host the vast majority of the world's terrestrial biodiversity. They also play an important role in supporting the livelihoods of millions of people, particularly indigenous and local communities. Deforestation is one of the most significant drivers of climate change and biodiversity loss, and it can lead to long term soil degradation, including causing erosion and desertification, resulting in lasting impacts on ecosystems and agricultural productivity. To address these issues and impacts, SIPEF has made the below commitments that apply to both its own operations and to those of its suppliers.

SIPEF has made  a Group-wide commitment to no deforestation and  no new plantings on peat (NDP) of any depth for all of its crops, with a cut-off date of 31 December 2025. This commitment is upheld as part of its broader  Responsible Plantations Policy (RPP). This commitment includes:

• Ensuring new oil palm developments do not take place in High Conservation Value (HCV) areas, High Carbon Stock (HCS) forests, peatland, or on fragile or marginal soils. For SIPEF’s banana operations, the requirements of the relevant certification standards, Rainforest Alliance, Fairtrade and GlobalG.A.P., are followed.
• Following the RSPO New Planting Procedure (NPP) prior to any new developments in its own oil palm operations. Prior to any land development for new oil palm projects, an integrated HCV-HCSA assessment must have been completed and consent obtained from affected communities through a robust Free, Prior and Informed Consent (FPIC) process.
• Monitoring and verifying areas under the Company’s concessions and areas managed under third-party suppliers, for any land use change and potential illegal deforestation activities.

Additionally, SIPEF complies with the RSPO Remediation and Compensation Procedure (RaCP) for its own oil palm operations, which focuses on assessing historical plantation development undertaken since November 2005 that has not undergone HCV assessments. The Group is committed to restoring the ecosystems and value of any areas impacted by its operations, should deforestation or conversion be identified.

Monitoring Activities

To uphold its NDP, SIPEF has implemented a third-party monitoring system that ensures compliance across its supply base. This system covers SIPEF’s own estates and those of its suppliers in Indonesia and Papua New Guinea, with a focus on detecting and verifying land use changes within and around concession areas. The monitoring system utilises both historic and near real-time satellite imagery to detect land cover changes. Reports on the results are provided on a quarterly basis and include any incidents that may contravene the Group’s NDP commitment.

In addition to ongoing monitoring, a historical NDP compliance assessment was conducted by Earthqualizer (EQ), evaluating SIPEF’s operations against industry-wide NDP benchmarks for the period  from 31 December 2015 to 31 December 2023. The assessment covered land within SIPEF’s estates and smallholder areas.  One instance of liability was identified, relating to 24 hectares of historical deforestation within SIPEF’s own concessions in Papua New Guinea. SIPEF is committed to addressing this through its recovery programme in collaboration with EQ . No liability  was identified within the areas operated by  SIPEF’s smallholder suppliers. The results of the monitoring activities are disclosed in SIPEF's Integrated Annual Report. In addition, a visual layering of the locations of any verified illegal/non-compliant land development identified through the monitoring activities can be enabled using the SIPEF traceability platform, Geo SIPEF.