SDP employs a multinational workforce of 80,041 people across 12 countries in Asia-Pacific, Europe, Africa, and the Americas.[GRI 2-7, 2-8, 3-3]
Manual workers make up the bulk of our workforce, accounting for 64,543 or 81% of our total employees. The majority of these workers work at our estates in Malaysia, Indonesia, and Papua New Guinea (PNG) and Solomon Islands (SI). Only 307 workers are employed at our downstream operations, and all employees are hired on a permanent full-time basis.As a result of our innovations in automation, mechanisation, and robotics, we require fewer workers at our estates than before. Overall employment is down 17.7%, primarily in Malaysia and Indonesia, where these projects have advanced further than at our operations in PNG and SI.
In addition, we have experienced severe labour shortfall in Malaysia due to COVID-19 movement restrictions, a government-mandated freeze on hiring foreign workers, and workers stranded at home during holiday breaks. These factors have contributed to a workforce reduction of more than 7,600 people in 2021, representing a 23% drop compared to pre-pandemic years.
Reducing our reliance on manual labour is part of our overall business strategy. In the coming years, we will require fewer manual workers and will shift our focus to training and recruiting highly-skilled workers as part of our Project Infinity initiative.
1.‘Others’ covers downstream business unit workers across the Americas, the Netherlands, and Thailand.
2. 2019 data for ‘Others’ includes workers from our former upstream operations in Liberia.
Our Migrant Labour Workforce[GRI 3-3, 409-1]
SDP hires a large workforce of migrant workers at our upstream operations in Malaysia. These workers typically sign a three-year work contract. This is a common practice across the agricultural, manufacturing, construction, and services sectors, and Malaysia is a temporary home to approximately 3.85 million migrant workers8. At plantations, foreign workers are typically employed for harvesting, transportation, and maintenance work required to keep the estates productive.
In 2021, our migrant workforce in Malaysia comprised approximately 15,800 employees. These foreign workers make up the majority of our overall workforce in the country: 36.7% are from Indonesia, 22.3% are from India and Bangladesh, and a further 3.9% are from Nepal, the Philippines, and other countries. The number of foreign workers employed fell by 5,100 in 2021 compared to 2020 due to pandemic-related hiring freeze. To mitigate the labour shortages, we embarked on an aggressive programme to hire more local workers.
One key programme was the nationwide campaign – Kami Prihatin to promote the industry, its benefits and job opportunities to locals. We do not employ foreign workers at our operations in Indonesia or PNG and Solomon Islands. Many of our workers in these countries are local citizens from neighbouring states and provinces, and they are not subject to cross-border issues like foreign workers in Malaysia.
8Counting Migrant Workers in Malaysia: A Needlessly Persisting Conundrum [Internet]. ISEAS–Yusof Ishak Institute 2018. Available at: https://www.iseas.edu.sg/articles-commentaries/iseas-perspective/item/7354-201825-counting-migrant-workers-in-malaysia-a-needlessly-persisting-conundrum
Improving Labour Practices in 2021[GRI 2-24, 3-3, 409-1]
SDP conducts annual human rights due diligence assessments against the pillars of our HRC, as outlined in a programme set up in 2016 with the support of SHIFT, a leading centre of expertise on the UNGPs. These yearly exercises assess our operations on social-related concerns to identify critical issues and the likelihood and severity of their potential impact.
In 2021, whilst waiting for Impactt’s report to be completed, we assessed our Malaysian upstream operations against the 11 ILO Indicators of Forced Labour to understand any gaps or any areas of improvement, with a very specific lens on continuous improvement.
We have made tremendous strides in addressing these gaps and implementing all the improvements needed between July and December 2021, and our efforts are ongoing. A crucial part of our continuous improvement plan is an evaluation of our governance structure and management systems. Further details on permanent structures and board of directors’ involvement can be found in the Governance section of this report.
Workstream were established to address specific Forced Labour Indicators and had specific outcomes. A continuous improvement plan (CIP) was rolled out to enhance our human rights practices, comprising over 1,200 individuals across 10,000 meetings, totalling 500,000 work hours invested.
OSH and Workers'
Indicators (KPIs) -
Overview of Measures Adopted against the 11 ILO Indicators:
|ILO Forced Labour Indicators||New and Existing Measures Adopted|
|Abuse of Vulnerability||
Engaging with Indonesian, Sabah/Sarawak state authorities and families living on our estates to ensure that children without identity papers are registered and able to obtain passports.
Appointment of Child Welfare Officers in the states of Sabah and Sarawak at regional level to ensure all migrant children are equally protected and assisted.
Established new Social Welfare & Services department under upstream business support departments.
Children up to the age of 12 have access to free schooling, either with Indonesian government-run schools or with our Humana schools.
Free childcare is available at OUs for workers’ children.
All workers and their families and dependents have access to free medical facilities and medical care.
All contractors are monitored to ensure compliance with SDP’s policies and processes.
Enhanced grievance channels ensure that workers are able to raise any complaints or issue to management.
In cases where there are allegations of bribery and corruption, complaints are reported to the whistleblowing Unit.
|Retention of Documents||
Each worker is provided with a secure locker in his or her home for the safekeeping of personal documents. All passports are now in the possession of workers.
To ensure consistency of implementation of its policies, SDP implemented a Foreign Worker Management System (FWMS).
Implemented a centralised system whereby the initiation, execution and monitoring of passport renewals will be done at HQ level under the Workforce Management Unit.
|Restriction of Movement||
New policies and SOPs ensure that all workers are free to leave the estates or other SDP facilities, without having to seek permission outside of working hours.
During working hours, workers are entitled to leave the estate or other SDP facilities but must inform their supervisor or other appropriate estate personnel.
Workers are entitled to medical attention without permission at any time of the day or night.
A designated person-in-charge has been appointed at each OU to ensure that workers have transport to seek external medical attention should they need it.
New policies ensure workers are entitled to resign from their jobs at no cost.
Workers are entitled to take leave when they want to, and the type of leave will be based on their entitlement.
A normal workday comprises eight hours for up to 26 days in a month.
Each worker can only work a total of 104 hours (estates); 130 hours (mills in Peninsular Malaysia) and 120 hours (mills in East Malaysia) of overtime a month.
Each worker can work up to 12 hours a day (inclusive of 4 hours overtime). Exceptions are only allowed under the law for deserving circumstances.
No worker can be compelled to work on a rest day.
Workers are aware that overtime work is voluntary and are informed of the applicable overtime wage rates.
A newly introduced process automation system tracks the clock-in time of workers though QR code and monitors overtime work.
|Abusive Working Conditions||
OSH management systems have been revised to be more worker-centric and its implementation is being monitored.
Discussions were held with workers at social dialogues on personal protective equipment and new/revisions to OSH policies to obtain feedback.
ESG Scorecard specificated to measuring performance related to these indicators.
A revised OHS organisational structure established with oversight at OU, regional and HQ levels.
Site Safety & Sustainability Officers (SSSOs) have been appointed at Strategic Operating Unit (SOU) level to support implementation of OHS and other initiatives.
Hazard Identification, Risk Assessment and Risk Controls (HIRARC) training conducted for all relevant OU management teams and workers to gather information and co-develop the mitigation plans.
Socialisation and communication on provision of adequate PPE for all workers, which are periodically replaced at no cost to the worker.
Regular communication to workers on safety and health policies.
Requirement for contractors to adhere to SDP's safety & health standards.
Enhance medical provisions such as healthcare facilities, appointment of panel clinics, establishment of medical council and appointment of Chief Medical Officer.
|Abusive Living Conditions||
Established Social Dialogues as a platform to raise issues and discuss solutions.
Provision of housing and facilities to workers that exceeds the Minimum Housing Act.
Dedicated budgets for repairs and maintenance amounting to MYR700 per house per annum is ring-fenced and cannot be reduced.
217 handymen as well as electrician/wiremen have been hired, ensuring minimum delays in repairs.
A revised Workers Housing and Management introduced that incorporates all the new changes includes guidelines on preventive maintenance, emergency maintenance and worker and tenant reporting monitoring.
A new digital housing complaints app, 'Oil Palm Pal', was introduced.
Each worker is entitled to 35 gallons/132.4 litres of free water per day.
Where water supply is disrupted or sporadic, SDP ensures that potable water is made available for workers.
The Migrant Worker Responsible Recruitment Procedure was updated in August 2021.
All recruits are given an offer letter in their own language.
Briefings are conducted on salient matters pertaining to employment and benefits at the point of recruitment to ensure that workers understand the terms of the offer and contracts are available in native languages.
A consultative process to determine the needs of workers in remote locations was established.
Ready access to free transportation to nearby towns or other amenities for remote sites.
Improvements in road infrastructure including budget allocation to build new roads.
Provision of recreational facilities.
Easy access to food and other essential items.
Availability of potable water, electricity and phone connectivity.
Housing with adequate personal space, inclusive of lockers for identity documents and other valuables.
Updated Migrant Worker Responsible Recruitment Procedure in August 2021.
Reimbursement of recruitment fees (unreported payments charged by agents, sub-agents or other third parties to our foreign workers in countries of origin, in contravention of SDP’s zero-recruitment fee policy).
Bank accounts opened for 3,206 current workers in Malaysia.
Sinking fund established for former migrant workers who were working for SDP on or after 1 November 2018.
Established a Sinking Fund Governance Committee comprising members of the board, senior management, and legal expert; to oversee the disbursement of reimbursement sums to former foreign workers.
Law firms appointed in six countries to ensure former workers receive their funds safely.
Advertisements taken out in six countries in over 20 national and regional publications to ensure former workers are aware of the reimbursement exercise.
Appointed PricewaterhouseCoopers (PwC) to undertake a 100% financial and document audit to ensure that workers had indeed received the reimbursement sum.
|Withholding of wages||
Instituted a new process automation system.
Overtime pay for piece rated workers, including harvesters.
Payslips in Bahasa Indonesia for Indonesians and Bahasa Malaysia for Malaysians.
Wage Codes Glossary for workers of nationalities other than Indonesian and Malaysian due to payslip system limitations.
Information packs for workers on the payslip components and wage posters in workers’ native languages.
Incentivise harvesters who harvest ripe fruit bunches only.
Control and monitoring of legal compliance on wage deductions.
Implementation of Guideline on Statutory Payments and Deductions.
No more hiring of workers under contract for services.
Briefing to workers on annual leave payments.
|Physical and Sexual Violence
The Gender Policy was updated/revised in 2020 and incorporated in our Human Rights Charter (HRC).
Gender committees have been established and strengthened in March 2021 at all estates and mills to advance workplace discussions affecting women.
Toolbox exercises with workers and site management to discuss acceptable and non-acceptable behaviours.
Gender Representatives of the Gender Committee’s responsibility includes reporting sexual harassment on behalf of workers.
New grievance channel governance in place to ensure that workers/complainants interests are safeguarded.
New Responsible Recruitment Procedure
As a matter of current practice, SDP is involved in every step of the process of hiring foreign workers. We oversee quota applications, recruitment drives in countries of origin (including interviews and the selection process), immigration clearances, and employee pick-ups at the Malaysian airport. However, we continue to face challenges with cross-border policy gaps and the deep-rooted socio-economic drivers of migration.
In August 2021, we published our new Migrant Worker Responsible Recruitment Procedure outlining our approach to respecting workers’ rights and our measures preventing all forms of forced or bonded labour, slavery, human trafficking, and sexual exploitation. We drafted this new procedure with the support and expertise of migrant labour specialist, Andy Hall.
This document provides operational guidance and includes the following improvements:
An open tender process on the selection of recruitment agents that is fair and transparent
Heavy emphasis on due diligence to ensure recruitment agents adhere to ethical recruitment practices
Training and mentoring recruitment agents
to support ethical recruitment processes
A strict definition of recruitment fees aligned with the ILO definition
Provision of individual lockers for
safe-keeping of passports
Improving transparency in job descriptions
by signing contracts pre-departure
Making grievance channels available at source countries to monitor recruitment mechanisms
The procedure applies to our employees, recruitment agents, and their affiliates at our upstream operations in Malaysia. We require vendors to adopt similar commitments within their own business practices and have started to conduct awareness briefings sessions to support their implementation of responsible recruitment practices. As an immediate control, all vendors sign a Vendor Integrity Pledge in agreement to the Vendor Code of Business Conduct that explicitly mentions adherence to the protection of human rights.
In 2021, all SDP teams involved in the recruitment of workers were trained on this new procedure and webinars were conducted for all shortlisted agencies. This temporary pandemic-related hiring freeze on foreign workers has given us the time and opportunity to carry out an open tender process, perform due diligence, and launch mentorship programmes. Our new procedure will apply to all new foreign hires in 2022, once the recruitment of migrant workers can recommence.
New reimbursement policy for current and former workers
SDP committed to zero-recruitment fees through our Human Rights Charter established in 2015. Following this, we enhanced this policy to better align our practices to the ILO General principles and operational guidelines for fair recruitment and Definition of recruitment fees and related costs ILO definitions and conventions. In August 2021, we launched our Migrant Worker Responsible Recruitment Procedure to further supports our commitment to ensuring workers incur no fees during the hiring process. The procedure includes a list of allowable and prohibited costs to workers. SDP is committed to holding recruitment agencies contractually responsible for reimbursing recruitment fees and other illegitimate expenses incurred by workers.
In February 2022, we announced our intention to reimburse more than 34,000 current and former workers an aggregate sum of over MYR 82 million to remediate recruitment fees incurred. Individual reimbursements were calculated as a sum of the average worker-reported recruitment fees and related costs by nationality. Correct exchange rates, inflation since the date of payment and an interest (at 2%) was applied to represent at least part of the lost economic opportunity cost. All reimbursements will be paid as a single lump-sum payment to foreign workers. We have also established Sinking Fund Governance Committee to oversee the process of reimbursing former foreign workers.
In future, recruitment agents who do not comply with our ethical policies and standards will be required to reimburse workers with costs charged to them during the recruitment process and have their contracts terminated and placed on a list of banned suppliers.
Stakeholder Commentary |
Independent Migrant Worker Rights Specialist
Sime Darby Plantation Berhad (SDP) engaged me to advise the company on a dedicated ethical migrant worker recruitment procedure. They reached out almost immediately after I raised concerns about poor governance relating to SDP’s recruitment activities in Nepal. Throughout 2020 and 2021, we developed policies, procedures, and practices, launching a final procedure in August 2021.
Our outreach began before the US government sanctions imposed on SDP in early 2020, which arose from NGO complaints regarding similar issues on debt bondage. The company has since tried to address the Withhold Release Order issues. In early 2021, SDP approached a few parties, including me, to join the stakeholder panel of their Human Rights Assessment Commission to offer independent and expert assessments of the company’s entire Malaysia operations. However, Justine Nolan and I resigned from the panel due to a lack of transparency and limited sharing of information. It was clear that SDP needed to be transparent about their problems and make public their plans to address these issues.
These issues are not unique to SDP and apply to companies in certain Malaysian industries employing foreign workers. Clear and present systemic forced labour risks exist and are being documented. Companies like SDP must acknowledge and transparently work to fix issues pertaining to workers’ rights and labour conditions. Their efforts must include remediating disputes by determining how much workers paid in recruitment fees and reimbursing their costs. The company must then implement measures to prevent these abuses from recurring.
SDP has now adopted an extremely progressive ethical recruitment policy, and I consider them to be leading the industry on responsible recruitment. They have been responsive and have shown that they are willing to engage with civil society stakeholders and other relevant actors on the ground to make improvements. These are all positive signs. We must now see how they roll out the new recruitment procedure and work with the Malaysian government to address any limitations and make it a model for other companies to adopt.
About: Andy Hall is an internationally recognised human rights defender and migrant worker specialist. He acts in an advisory capacity to businesses and civil society entities across Asia and Europe on issues of migrant worker rights in global supply chains, with a particular focus on ethical recruitment and forced labour issues impacting migrant workers in Malaysia, Thailand, and the Gulf/Middle East. Andy Hall was engaged by SDP in 2020 to advise us on potential improvements to our recruitment processes. Amongst other things, Andy Hall played an advisory role in supporting SDP’s zero-cost recruitment commitments and ensuring processes are ethical.
Improved Access to Grievance Mechanisms[GRI 2-16, 2-25, 2-26, 2-28]
All workers across our operations are given access to enquiry channels and grievance mechanisms to raise their concerns.
Several grievance channels have been in place for many years. In 2019, we collaborated with Nestlé and ELEVATE to launch the “Suara Kami” (“Our Voice”) Helpline, to provide independent third-party help to our workers in Malaysia. (ELEVATE is a leading business risk and sustainability solutions provider). The “Suara Kami” Helpline provides an avenue for workers to report on working conditions, recruitment, safety and other issues. In line with our Human Rights Charter, we also work with our partners to empower unions to better disseminate information, improve awareness of workers’ rights and represent the welfare and well-being of workers.
However, on re-evaluating how these work in practice, we identified some gaps, particularly in the way that grievances were being monitored and escalated. It was observed that too few workers were using the channels available to air their grievances.
To remedy this, SDP carried out extensive work to identify the limitations of its grievance mechanism, then agreed on a workstream outcome and rolled out refreshed grievance mechanisms. With the aim of reinforcing trust, key areas of focus were to:
- (i) increase awareness of the grievance channels;
- (ii) improve oversight of grievances and accountability for grievance handling;
- (iii) ensure safeguarding of workers is guaranteed (no retaliation); and
- (iv) improve management capability to investigate and resolve grievances effectively.
At the end of August 2021, we introduced the Workers’ Helpline, an independent third-party worker grievance channel with multi-languages and multi-channel capacity, supported by the Ulula Case Management system, a platform that collects grievances and allows workers to anonymously raise concerns safely and securely at any time and to digitally connect with support for real-time case management. The Workers’ Helpline is similar to the “Suara Kami” Helpline and gives workers the flexibility to raise concerns, without fear of retaliation, and to call handlers in their native language. In conjunction with the roll-out of the Workers Helpline, we increased awareness of our Whistleblowing (WB) channels and “Suara Kami” Helpline by engaging our social dialogue worker representatives (see section below). We also created WhatsApp videos in the relevant languages to describe how workers can raise concerns. Reminders about these channels are also delivered at morning muster briefings, awareness sessions, and through posters and printed flyers that are distributed with payslips and displayed at prominent locations and common areas such as sports clubs and halls.
Recognising that they have different preferences, all workers now have access to three mechanisms to make enquiries, log requests, and lodge complaints:
- Platform: voice call, SMS,
- Managed by live operator
- Available in 8 languages
- Available in Malaysia
- Platform: Call back interactive voice-response system
- Available in multiple languages
- Available in Malaysia
- Platform: eForm, email, letter,call hotline
- Specifically to raise concerns about wrongdoing
- Available across all regions
The improved confidence in our grievance channels is reflected by an increase in the monthly average number of calls. Prior to September 2021, the average was around 15 calls a month; whilst between September 2021 and January 2022, we handled a monthly average of 69 calls. All our grievance channels respect the rights of workers to remain anonymous and protect the confidentiality of workers.
We have also strengthened our support system for handling grievances and complaints of wrongdoing, clearly defining roles and responsibilities for case management, investigation and reporting. All grievances received are channelled to the newly established Grievance Unit which is a centralised unit at Headquarters (HQ), to capture informal and formal complaints and concerns systematically. This allows us to address issues that can be readily resolved or refer issues to the investigating team when substantive expertise is necessary, and then follow up with the complainant via the call handler to ensure that the issue is resolved in a fair and timely manner.
On a weekly basis, the Grievance Committee (GC) and Steering Committee monitor the status of new complaints, on-going complaints, complaints resolved to ensure that they are all appropriately addressed up to the point of resolution within the established timelines. Cases are handled based on the nature of the investigation required, severity of event (as it relates to an ILO indicator) and potential threat to workers, and thereafter reported and deliberated on by the Board Sustainability Committee (BSC) at their meetings. Any cases of wrongdoing are additionally tracked and monitored by the WB Unit, WB Committee and the Board GAC, to ensure that appropriate consequence management actions are taken when wrongdoing has been found.
This enhanced system of central grievances monitoring ensures that our standard operating procedures, terms of reference and our group policies can be updated and developed to reflect issues identified in the field. The system has also helped to improve independence over grievance monitoring and established clarity in the reporting lines.
Whilst we acknowledge that the spike in cases has impacted the ability of our investigation teams to complete some investigations speedily, we continue to improve our investigation capability by investing in additional resources. We have increased communications with our workers significantly via briefings during daily morning musters and the fortnightly social dialogues to reiterate that there should be no fear of retaliation and to encourage workers to come forward and share relevant information to aid investigations. The adequacy of investigation teams is also continuously monitored to ensure that anticipated case investigation delays are to be mitigated via acquiring additional support, internally and externally. SDP has developed a set of Frequently Asked Questions (FAQs) to assist call handlers and local operating units. The FAQs will be regularly reviewed to ensure it remains current.
As well as helping us to resolve issues swiftly, this work supports the organisation in identifying human rights risks across our operations, addressing issues expeditiously, to ensure situations do not deteriorate. The periodic meetings of the relevant units and committees which monitor case progress and resolutions ensure a programme of ongoing improvement. Crucially, clear grievance KPI measures have been set to ensure that operating units can show that their workers are aware of the grievance channels and that grievance claims are addressed in line with Group policies, whilst any reports of retaliation against workers are swiftly addressed. Worker satisfaction surveys on the grievance process have also been carried out with over 10,000 responses received from workers. Based on the findings of the survey, 91% of workers were satisfied with the resolution of their grievances and only 1% stated that they do not trust the available channels. In addition, the feedback we obtained will be leveraged upon to further improve our grievance programme. More information on our grievance system and governance is available in our website.
Repatriation requests during the pandemic
Clarifications on wages
Workers' health and safety concerns
(e.g. COVID-19 related)
Complaints about housing in disrepair
Workers’ Grievance Cases Lodged by 2020-2021 (no.)
Workers’ Grievance Cases Lodged by
Nature 2020-2021 (no.,%)
Note: Examples of grievances raised under ‘others’ include but are not limited to physical, verbal, and sexual harassment, discrimination, extortion, retention of documents, restriction of movement, resignation, reimbursement payment, recruitment, contracts and bonded labour.
STAKEHOLDER COMMENTARY |
SDP is a leader in palm-oil industry innovation and an ideal partner for Nestlé. A worker helpline is a crucial mechanism for safeguarding workers’ rights because it allows them to raise grievances about issues they encounter during their employment. SDP and Nestlé are aligned in our desire to protect workers’ rights. When we realised that palm oil industry workers in Malaysia lacked such a mechanism, we decided to take action.
That is why SDP and Nestlé partnered with ELEVATE to establish Suara Kami, a helpline initially developed for the manufacturing sector, which we adapted and rolled out across SDP’s Malaysia operations. Suara Kami provides workers with several ways to file grievances, including social media, telephone calls, email, and messaging. Despite taking longer than we anticipated to roll out, the data we collected and the reports we have compiled show that workers have embraced the system and that uptake is driven by its availability in workers’ native tongues. Workers are regularly engaged across all sites on using this essential tool.
Nestlé's ultimate goal is to give all workers across our value chain access to Suara Kami and to expand the programme to companies other than SDP.
The Suara Kami helpline is another step forward in our effort to address social issues in our supply chain through our Human Rights Road Map and our Palm Oil Labour Rights Action Plan. Through these initiatives, we have adopted a holistic approach to social issues instead of addressing them in silos. For example, we are looking at how forced labour and child labour are connected instead of treating them as separate issues. Nestlé’s new Human Rights Roadmap allows us to systematically look at suppliers, Human Rights Due Diligence (HRDD) and how it cascades across their supply chains, including their upstream operations. Nestlé has reviewed SDP’s Human Rights Charter and concluded that it is robust and transparent, implements effective measures, and is based on solid partnerships.
About the stakeholder: Emily leads Nestlé’s sustainability sourcing activities for palm oil and oversees climate-related matters pertaining to forests. She works closely with SDP’s team on specific sustainability initiatives. William is the head of procurement for vegetable oils and fats, and sugar at Nestlé. He engages with SDP on procurement and the commercial aspects of sustainability.
Wages and Decent Living[GRI 3-3, 202-1, 401-2]
All workers receive minimum statutory wages based on national labour laws in the countries where we operate. Our plantation workers are paid a daily rate or a per-piece rate which is productivity-based with set volume targets. Harvesters are further incentivised and are paid premiums on additional fresh fruit bunches they collect and harvest. Wage penalty for harvesting of unripe fruit bunches has ceased. Instead, an incentive scheme has been introduced in 12 pilot estates in November 2021 to incentivise harvesters who do not harvest unripe fruit bunches. The impact of this incentive scheme is being analysed for implementation in all operating units.
Overtime pay for piece rated workers including harvesters were also implemented in 2021. Wages for these workers were previously paid based on productivity regardless of working hours. To maintain a decent standard of living, we guarantee workers a minimum wage even during low-fruit seasons and may assign them other tasks that are not based on volume. We also use ‘top-up’ systems to ensure they reach minimum wage levels. In high-fruit seasons, workers receive productivity bonuses when they exceed their volume targets.
SDP has reviewed the minimum wage paid to employees in Malaysia to align it with the recent government directive increasing the base salary from MYR1,200 to MYR1,500 and are committed to implement it by May 2022.
In addition to wages, workers are provided with other in-kind benefits such as housing, access to healthcare, transport to work, childcare facilities, bimonthly supply of rice and subsidised water. Electricity is charged according to usage based on applicable domestic rate. With the added value of benefits provided, workers’ take-home pay is higher than legally required. It is also aligned with RSPO guidance on decent living wage provisions and local collective bargaining agreements, where applicable.
Improving Communication on Wages
SDP is committed to being transparent with employees regarding remuneration. Employment contracts clearly state when and how employees are paid, and salary slips provide easily understandable details on workers’ wages. Due to language barriers, migrant workers in Malaysia may face challenges in understanding payslips. In 2021, we updated all payslips at affected operations to Bahasa Malaysia and Bahasa Indonesia. We started supplying Wage Codes Glossary for workers of nationalities other than Indonesian and Malaysian to assist workers in understanding their wage components. Payslips in these workers native languages cannot be implemented due to a system limitation which only recognises alphabets and no other language characters.
We also developed dedicated communication packs in these languages, covering payslip components, minimum wages, working and overtime hours as well as calculation of incentives such as Productivity/Outturn Incentive, Special Gratuitous Payment and Price Bonus. Wage posters in workers’ native language explaining wages for daily rated workers, piece rated workers and harvesters as well as wage top-up mechanism to meet the minimum wages was further initiated to ensure clarity on wage components.
Improving Wage Payments
To mitigate the possibility of human error arising from manual recording of attendance and productivity databy supervisors, whilst is subsequently keyed into the system manually by checkroll clerks at the operating units an automated system was implemented. This new process automation system through handheld devices by supervisors, records the workers clock in time through QR code, assignment of work and productivity information for calculation of wages.
In addition, control and monitoring of legal compliance on wage deductions are now conducted by HQ to ensure deductions do not exceed 50% of wages earned by workers per month. As a result of our review, a total of 31 wage deductions have been inactivated. Voluntary deductions made by the company on behalf of workers to third parties, such as personal savings schemes, housing/personal loans and voluntary contributions will cease, after operating units assist workers in making alternative payment arrangements with third parties. These loans and contributions are initiated by workers without prior consultation with the company on affordability and impact to their wages. Guideline on Statutory Payments and Deductions to ensure legal compliance on classification of wage components that attract statutory payments were implemented to streamline control measures at the operating units.
Improving Workers’ Housing
All our migrant workers live within our OU compounds in furnished houses with basics as required in the Employees’ Minimum Standards of Housing, Accommodations & Amenities Act 1990 (Act 446). In total, SDP owns about 19,000 houses for workers, which are all maintained to specifications and guidelines provided under Malaysian law, including Act 446. Whilst houses vary in terms of size, a typical house for SDP workers would be a three-bedroom unit with a bathroom and a toilet as well as a kitchen, living area and dining area.
In FY2020, new budgets for repairs and maintenance were approved. These budgets amounting to MYR700 per house per annum is ring-fenced and cannot be reduced. As of December 2021, we have built 312 units of new workers quarters and refurbished an additional 1,086 housing units, completing 58% of the planned construction and refurbishment activities scheduled to be completed by the end of 2022.
As at 28th March 2022, 217 handymen as well as electrician/wiremen have been hired across all OUs to assist in the speedy resolution of repair and maintenance requirements. To complement this, a revised Workers Housing and Management Procedure was approved in November 2021. It includes guidelines on preventive maintenance, emergency maintenance and worker and tenant reporting monitoring. A new app, “Oil Palm Pal” was introduced which is a digital housing complaints system. Workers can use the app to log their complaints in their native languages. These complaints are documented and resolutions are monitored.
Gender Equality[GRI 3-3, 405-1, 406-1]
We strive to promote gender equality at every level of employment at SDP by implementing clear no-gender discrimination policies and running programmes to provide women with fair and equal access to work.
Excluding PNG and Solomon Islands and the UK, SDP employs 12,210 women9. This comprises 20.8% of our total workforce. Our gender-equality programmes have increased female representation across all categories of employment. The most notable improvements were amongst senior managers and managers from 2018 to 2021, whereby the percentage of women employees rose by 5.7% and 3.9%, respectively. A total of 30 women occupy high-level positions at SDP, including three Board members and 27 senior managers (first-tier vice presidents and above).
9Excluding PNG, Solomon Islands and UK employees, as gender breakdown is not available due to data privacy regulations. This follows the EU General Data Protection Regulation.
- Data does not include PNG and Solomon Islands and the UK due to privacy laws.
- VP stands for ‘Vice President’ and AVP stands for ‘Assistant Vice President’.
- Women’s representation on the Board decreased in 2021 due to the appointment of an additional male member.
Women workers at our operations traditionally face challenges balancing work and family responsibilities. SDP does not discriminate and offers equal work for equal pay regardless of gender. We respect maternal and paternal leave regulations according to national laws. Pregnant women and mothers with newborns are assigned jobs which do not expose them to any occupational hazards, at equal pay. They are also provided with dedicated spaces and breaks for breastfeeding and given access to childcare centres during work hours. We also collaborate with local health authorities to support mother and child health programmes such as immunisation, infant health, maternal check-ups, reproductive health awareness, and birth registration at our operations. Visiting medical officers also regularly make rounds at our plantations. Gender committees have been established at all estates and mills to advance workplace discussions affecting women on violence and sexual harassment, women’s health, and financial and retirement planning.
Female Manager Development Programme in Malaysia
SDP runs a Female Manager Development Programme (FMDP) at our upstream operations in Malaysia to close the gap between men and women in managerial roles and provide equal opportunities for women to lead and manage estates and mills. The programme offers a combination of formal classroom learning and informal learning through technical on-the-job training and mentoring and coaching by women senior managers. As of December 2021, three women are working as managers at our operations, one of whom is SDP’s first female mill manager.
|Sime Darby Plantation's first female mill manager||Women in Research and Development||Women in Leadership|
Nor Azian Anuar is SDP’s first female mill manager. Based at our Sandakan Bay mill in Sabah, Malaysia, Azian oversees 121 staff and workers. Leading her team, Azian is focussed on making Sandakan Bay mill a model mill that is efficient, fully certified, and stands out in every way. Encouraged by former managers, Azian believes that putting women in positions of authority catalyses change that uplifts the company and the industry.
Like many women in a male-dominated sector, I had to work twice as hard to prove my capabilities. By rising to the challenge and setting a good example, I can change perceptions and create new opportunities for women in the industry. – Nor Azian Anuar
Our Sime Darby Research Centre at Carey Island, Malaysia, is proud to employ a team of women scientists. Led by Head Chemist Norliza Saparin, this team ensures that our products are safe for consumers through research and development in quality control processes. Product manager Kawsalyavathi Kuppan and Dr Slyvia Kong Pei San of the product development team of the Asian Innovation Centre at Sime Darby Research Sdn. Bhd also play essential roles in optimising products through their R&D initiatives.
I believe that women can take on great challenges if given the opportunity and space to develop their talent and potential. – Norliza Saparin
I am happy to work at Sime Darby Plantation because the company provides continuous training and a mentoring programme to improve my skills and learn from more experienced colleagues. – Dr Slyvia Kong Pei San
Recognising the benefits of diversity and gender parity in leadership, SDP appointed Nik Maziah Nik Mustapha as Head of Transformation for our NBPOL business unit in March 2021. The transformation programme that started in 2019 identified 60 initiatives, of which 38 were completed as of December 2020. The cost-optimisation initiatives alone achieved MYR43.24 million in savings, which represents 75% of the overall targeted savings. Nik Maziah, who was previously Chief Integrity & Assurance Officer, contributes her knowledge of governance and operations in maintaining the momentum set from the earlier phase of the transformation. Her leadership is envisioned to inspire and create opportunities for greater diversity within SDP.
A strong focus on gender equality in Papua New Guinea and Solomon Islands
Achieving gender equality in PNG and Solomon Islands is challenging because violence against women, particularly domestic violence, is an endemic and a serious concern. This is mainly due to the prevailing cultural attitude that women have lower status than men. Acknowledging the complexity of the issue, our New Britain Palm Oil Limited (NBPOL) operations strive to provide gender-based programmes that empower women at all their sites.
Launched in 1997, the Mama Loose Fruit scheme ensures that women benefit from their families’ oil palm blocks. The project introduced the Mama Card, which directly pays women (including smallholders and dependants) for their work. The scheme has over 6,000 Mama Cardholders who benefit from an extra income and directly contribute to the welfare of their families.
NBPOL has been working with the Women Empowering Women (WEW) association in West New Britain to encourage women in PNG and Solomon Islands to use natural resources to generate income. We are also providing a platform to enhance the skills and capabilities of local women whilst raising awareness about gender-based violence.
NBPOL is also engaged in a four-year research programme with Curtin University, James Cook University, the Cocoa Board, the Coffee Industry Corporation, and the University of Technology (Unitech) to identify opportunities and constraints in engaging rural women in small-scale enterprises in Papua New Guinea. The project was launched in 2017 and is funded by the Australian Centre for International Agriculture Research (ACIAR) – latest progress.
Freedom of Association[GRI 2-30, 3-3, 407-1]
We respect our employees’ right to enter into collective bargaining agreements and form or join a trade union. Trade unions and collective bargaining agreements vary from country to country, depending on national laws, but generally cover all workers and staff – including executives and non-executives. In the absence of a formal workers’ union at certain localities, we encourage employees to form joint consultative councils and other similar platforms empowering workers to raise their concerns and safeguard their rights. In 2021, a total of 45,096 employees, or 56% of our global workforce, were covered by collective bargaining agreements.
Improving worker-management discussions through ‘Social Dialogue’
In October 2021, we took our commitment to workers’ rights a step further at our Malaysian operations and piloted a formal ‘Social Dialogue’ process. It is a platform to encourage discussions between workers and management on matters beyond the scope of collective agreements. Unlike local union discussions where representation may be limited to Malaysian citizens, the Social Dialogue process is inclusive of all workers, including foreign nationals, members from Indigenous communities, and women.
Elected workers’ representatives from all nationalities and OU management can discuss issues related to workers’ welfare and concerns. Workers’ Representatives (WR) are not only appointed through nominations by the workers themselves but are also empowered to suggest improvements. We believe this is the first programme of its kind amongst palm oil plantation companies in Malaysia, and it is hoped that it will become a key platform to discuss many other initiatives.
The following measures support the Social Dialogue initiative:
Implementing a Short Message Service (SMS) voting system to support worker representative election processes
Conducting workshops on listening and speaking skills to support effective discussions
Hosting Social Dialogue sessions by operating units fortnightly or monthly on issues such as PPE, working conditions and housing
Developing an online digital platform to track and monitor the progress on issues raised at social dialogue sessions
The process is supported by a Social Dialogue Toolkit (which includes an escalation protocol for issues that cannot be resolved at OU level, along with guidelines for issues resolution). A clear set of KPIs and a Social Dialogue Online Tracker, developed in-house, ensures the effective and efficient reporting and monitoring of social dialogues, and that issues are resolved in a timely way.
A weekly dashboard showing the progress of the Social Dialogue platform is submitted to the CEO of Upstream Malaysia, the Regional Chief Executive Officers (RCEOs) and Regional General Managers (RGMs) on a weekly basis. They also have full access to the Social Dialogue Online Tracker for their respective locations so they can monitor the issues being raised. For workers in remote locations, we have also developed an offline form for those with limited internet access, and this has already been rolled out. As of December 2021, we have logged more than 200 Social Dialogue sessions across almost 50 operating units.
To validate the effectiveness of the entire Social Dialogue process and ensure consistency across all operating units as per the guidelines included in the Toolkit, we have created Social Dialogue Check Points conducted at different levels and recorded for improvement. These check points focus on reviewing the progress of specific steps, such as the post-training/workshops, issues resolution, Social Dialogue functions and process satisfaction. A Workers Satisfaction Survey is also being rolled out and will be held quarterly which captures the performance of the Social Dialogue initiative and identify areas for improvement.
“Many changes have happened since Social Dialogue sessions have begun. Issues are often resolved as quickly as two to three days after one of these sessions.”
Workers’ Representative, Sungai Samak Estate
“Social dialogue sessions solve issues through communication and build trust between workers and managers. Representatives of both sides agree on an issue and discuss solutions, which is better than the previous hierarchical approach that required workers to report an issue to a supervisor, manager, or assistant manager, who would then delegate an assistant to take action.”
Workers’ Representative, Bukit Selarong Estate
Upholding Children’s Rights[GRI 3-3, 203-1, 408-1]
We recognise that child labour is an important concern at palm oil estates. Many workers across our operations live with their families, which increases the chance of children being present at plantations. We take the matter seriously and strive to ensure there are no instances of child labour or any form of child exploitation or abuse at our facilities. We have adopted strict procedures to ensure no persons under the age of 18 are employed in any way at our plantations, even if local laws allow employment at a younger age. For example, in Papua New Guinea, the minimum age for employment is 16.
Nevertheless, keeping children out of our fields is continuously communicated to all workers. SDP will work with relevant NGOs and civil society organisations to implement appropriate remedies if any children are found working at our plantations. To date, no such instances have arisen.
A crucial component of eradicating child labour is ensuring children have access to education. Providing access to free primary and secondary education to all school-age children at our plantations results in regular school attendance. It minimises the risk of children being physically on-site at plantations and creates opportunities for a better future.
Across all operations, we have built and operate 53 schools for children at our plantations and those from surrounding communities. We also provide transportation and ensure access to government-run and third-party schools, including institutions run by the Humana Child Aid Society and the Indonesian embassy in Malaysia, catering to stateless and non-Malaysian children. In Indonesia and Malaysia, we operate 42 kindergartens and 105 crèches – or daycare centres – where pre-schoolers are cared for whilst their parents are at work.
|Region||Schools built||Schools supported||Kindergartens||Crèches|
|PNG and Solomon Islands||28|
Note: Schools supported in Malaysia are run by the Humana Child Aid Society and the Indonesian Embassy in Malaysia, catering to stateless and non-Malaysian children.
Family and children’s well-being in East Malaysia
From 29th November to 3rd December 2021, SDP conducted a family and children’s well-being assessment at our Sabah and Sarawak plantations. Our goal was to ascertain whether workers may have been compelled to bring children into the fields or children had work to support family households. We also assessed whether children had access to educational services and facilities that ensure their well-being, such as safe play areas.
The assessment showed that parents have strong childcare support and understand the importance of education for their children. Our study concluded that local and foreign workers and their families recognise that their children have better access to schools in Malaysia compared to other countries.
This assessment demonstrated SDP’s strong commitment to providing parents with sufficient income to support their families without requiring their children to work. The study also found that the children of estate workers prefer to work in cities and urban environments when they are of legal working age.
Employee Development and Succession Management[GRI 3-3, 404-2]
Our Human Resources team is dedicated to growing the SDP labour pool by hiring and nurturing new employees and providing them with opportunities to build careers with us. We also offer current employees continuous opportunities for training and development and invest in succession planning to recognise and reward long-serving individuals as they grow with the company. SDP runs dedicated programmes for all employees across divisions and around the world, including offering scholarships, internships, and management trainee programmes for young graduates.
Health and Safety: Creating a Zero Harm Culture[GRI 3-3, 403-1, 403-2, 403-4, 403-5, 403-9]
Protecting the health and safety of our workforce is of utmost impor tance to SDP, and the COVID-19 pandemic has made this more important than ever. Whilst we continue to address issues related to the pandemic, our overarching goal is to ensure all workers and employees are operating in a zero harm environment.
Our measures are governed by relevant health and safety policies and management systems in line with international standards, such as ISO 45001 and 14001, covering all employees and contractors.
We are compliant to local safety and health laws including the Occupational Safety and Health Act (OSHA). Our downstream operations, Sime Darby Oils (SDO), obtained our first centralised multi-site ISO 14001:2015 and ISO 45001:2018 certifications in July 2021. We also have relevant systems in place to identify hazards, assess risks, and investigate incidents across all operations, in line with the applicable national standards of the countries where we operate.
All operations have health and safety committees in place with worker and manager representatives who are consulted on critical issues. We continue to provide employees with free PPE and training on its use, conduct regular health and safety training based on their job responsibilities, and implement corrective action plans in response to any incidents.
Fatalities and accidents
We regret to report seven workplace-related fatalities during the reporting period, six in 2020 and one in 2021. Four of these occurred at our upstream NBPOL operations in PNG and Solomon Islands, whilst two occurred at our upstream Malaysian operations. The seventh was our first downstream operations fatality in 2020 at our Morakot refinery in Thailand. The four fatalities at NBPOL were vehicle-related accidents, and two involved workers hit by company trucks or loaders. In one instance, a worker fell off a moving trailer during transportation. The remaining NBPOL fatality was a road traffic-related incident. One fatality in Malaysia and the fatality in Thailand resulted from falls from heights. The remaining fatality in Malaysia resulted from an injury when a worker came into contact with a sharp sickle.
We also recorded six permanent disabilities across our upstream, downstream, and R&D businesses. In three instances, employees were caught in machinery at our site. One harvester in Malaysia was struck by a falling object in the field, and an upstream worker was attacked by a wild crocodile in Indonesia. The fatality at our R&D facility was from a diabetic employee suffering a gangrenous blister.
We have also recorded that the overall severity of accidents at Group level has increased by 36% since 2019, from 3.70 lost days per accident to 5.03 lost days per accident.
The SDP health and safety teams take these concerning numbers seriously. We have taken corrective actions and are implementing stricter safety measures for high-risk tasks. We have also assessed and improved the condition of equipment and work areas related to these incidents, updated workplace SOPs to address maintenance safety, and developed and improved traffic management plans. We have conducted training on these safety measures addressing all types of incidents, including driver training programmes at NBPOL. We are also rolling out a Culture of Care programme, starting at Sime Darby Oils, a zero harm approach initiative to minimise risks that lead to fatalities.
On a positive note, we have made great strides on improving the Group-wide accident rate. Since 2017, we have seen a 54% reduction in lost-time injury frequency rates (LTIFR), from 16 injuries per one million hours worked in 2017, to 7.3 in 2021. Our target is to improve accident rates year-on-year by 15%. We met this goal in 2020 but were just shy of meeting it in 2021. Nevertheless, the decline in accident rates year-on-year indicates a positive overall improvement.
Occupational Fatalities by Business Segment and Region 2017 – 2021 (no.)
Note: Data up to 2019 includes our former operations in Liberia.
Permanent Disabilities by Business Segment and Region 2017 – 2021 (no.)
Note: Data up to 2019 includes our former operations in Liberia.
- Data up to 2019 includes our former operations in Liberia.
- LTIFR measures productivity lost due to accidents and is calculated as follows: number of accidents divided by total hours worked, multiplied by 1,000,000.
- Severity rate measures the seriousness of accidents and is calculated as follows: total number of days lost divided by the total number of accidents.
New Culture of Care at Sime Darby Oils
In 2021, Sime Darby Oils assessed our health, safety and environment (HSE) measures using the Hearts and Minds safety culture toolkit. This behavioural health and safety framework, made available by Energy Institute, is designed to identify key areas to implement proactive interventions and develop a strong safety culture. Following this assessment, SDO created the Culture of Care banner that will guide our HSE initiatives as part of SDO’s broader transformation programme to boost the value of our business from 2022 to 2025.
Recognising that transformational change starts with leadership, SDO’s senior and middle management teams in Malaysia took part in a series of refresher workshops to improve leaders’ approaches to health and safety by creating a culture-of-care mindset. These workshops combined in-person and online training due to pandemic restrictions.
By 2023, we aim to roll out the Culture of Care programme across all Group operations in two phases: the first will establish programmes and the second will implement initiatives. We have begun integrating some of these components into existing initiatives at our upstream operations.
New training programme to protect hearing
In 2021, our Malaysian operations embarked on a collaboration with Universiti Kebangsaan Malaysia (UKM) to train and certify 19 OSH officers globally under the structured, evidence-based Dangerous Decibels® programme. This programme trains personnel to reduce the incidence of noise-induced hearing loss (NIHL) and tinnitus (ringing in the ear), which can be a risk in some jobs at operations where there is prolonged exposure to loud noises. In 2022, our trained educators will roll out the programme across all our operations, providing training to all employees exposed to noise as part of their job.
Improving health and safety for workers in Malaysia
SDP pays particular attention to working conditions at plantations and mills. Following the ILO Forced Labour assessment in 2021, we refined worker-centric health and safety measures in Malaysia. We focussed on improving health and safety-related living and working conditions to be more worker centric in four key areas:
- Reviewing safety and health committee structures at operating units and hiring 40 new site safety and sustainability officers across the region,
- Reviewing Hazard Identification, Risk Assessment and Risk Controls (HIRARC) through engagement with workers, improving hierarchy of controls, and improving PPE and ergonomics management,
- Improving controls with contractors and vendors by introducing monthly KPIs, and including OSH as a performance indicator when assessing vendors,
- Improving and streamlining SOPs and documentation to support these improvements.
All SDP workers have access to healthcare and medical facilities across all operations. Employees receive an annual medical check-up from an appointed occupational health doctor. Monthly check-ups by medical assistants, clinic doctors, and visiting medical officers are also available. In Malaysia, we rolled out improved measures based on the ILO indicator assessment in 2021. These include:
- Improving SOPs on medical access in multiple languages, including making emergency cash available to workers at their first point of entry,
- Recruiting additional medical assistants and upgrading clinics and facilities; and
- Revamping the organisational structure, which now includes a Medical Advisory Council, regional-level medical personnel, and medical officers. A Chief Medical Officer is also slated to be appointed in 2022.
In 2021, we also rolled out SDP NEW which stands for Nurturing Employee Wellness - a comprehensive physical and mental health support programme for our employees in Malaysia. More information on the programme is available on page 73 of the Annual Report 2021.
Moving to e-Reporting for unsafe conditions at the workplace
As part of our initiative to embed safety into our work culture, we introduced the SIME programme in 2014. Our Spot, Intervene, Modify, Execute programme was explicitly designed as a behavioural-based safety awareness assessment for employees to identify, mark, and intervene when they encounter unsafe actions and conditions using a physical SIME card. In May 2021, we implemented an eSIME card for online reporting. We offer awards to recognise the efforts of those who implement safe working conditions.
Despite all our measures to limit exposure to the coronavirus, 3,945 employees across our operations were confirmed to have contracted COVID-19 in 2020 and 2021. We are deeply saddened to report that 40 of these cases resulted in deaths, with the majority occurring at our Indonesian and Malaysian plantations.
In 2020, we formed COVID-19 taskforces at the head offices of each of our operations to enforce strict measures and procedures that maintain good hygiene, minimise physical interaction between employees, and detect potential cases. We continue to conduct regular briefings, communicate COVID-19 safety measures, and provide hand sanitiser, masks, and other personal PPE to all employees.