SUSTAINABILITY

Fuji Oil’s Sustainable Procurement

SHEDDING LIGHT ON

SOCIALRESPONSIBILITY

・Setting target of traceability of oil palm plantations（100% by 2030）
・Handling of RSPO-certified oil
・Establishing grievance mechanism（No Deforestation, No Peat, No Exploitation）
Plantations

Fuji Oil Group
Agriculturalcompanies
Oil millAbove: Palm oil, produced from the fruit of oilpalm trees, can be efficiently produced and is inincreasing demand because of its good
production yield and the many commodities forwhich it can be used.
Right: An oil palm plantation in Malaysia.

for Sustainable Food Systems,
called “Strategy MeaDRI”. It aims
to increase the organic farmingarea to 25% of arable land (1million ha), reduce risk-weighted
chemical pesticide use by 50% andchemical fertilizer use by 30%, andreduce carbon dioxide emissions
in the agriculture, forestry andfishery sectors to zero by 2050.
Among several other sustainability
targets, the strategy also aims
to ensure that food companies
source imported raw materials
from sustainable backgrounds by
2030. Achieving this target would
support responsible production in
their supply chains.
One Japanese company that
alreadyemployssustainableprocurement as a key strategy
within its international operations
is Fuji Oil Holdings Inc., a providerof food materials including palm oiland cacao. Palm oil is derived fromthe fruit of oil palm trees grown intropical countries such as Indonesia
and Malaysia. It is used in various
daily products, from processed
foods to detergents and cosmetics.
However, with oil palm plantations
affecting the deforestation oftropical rainforests, there has long
been concern about the industry’s
impact on the environment. Inrecent years, issues surrounding
human rights have also emerged,
with stories of forced labor andchild labor.
“We have made efforts to consider
sustainability at all stages of thesupply chain based on the Fuji OilGroup management philosophy‘Work for people’,” explains Chief
ESG (Environment, Social andGovernance) Officer (C“ESG”O),
KADOTA Takashi. In 2004,Fuji Oil became a member of theinternational organization, theRoundtable on Sustainable Palm
Oil (RSPO). The company has

Oil processing
and refining

Consumerproducts

Distribution

Grievance Procedure
ReceivinggrievanceThere is a wide range of issues
that needs to be addressed globally
regarding the agriculture, forestry,
fishery, and food industries,
including climate change and theresultant increase in large-scaledisasters. The United Nations
Food Systems Summit will beheld in September 2021 for thepurpose of rebuilding sustainable
food systems on a global scale,from food production throughto consumption. In Japan, labor
shortages due to the country’s
declining, aging of the workforce
have been a growing concern.
Responding to these issues,on May 12 of this year, Japan’s
Ministry of Agriculture, Forestryand Fisheries unveiled its strategy

Primaryrefining“We are facing up to our responsibilities, working tostrengthen sustainable procurement for cacao andsoybeans as well. In the future, we hope to achievesustainable procurement, including that of shea nuts
too,” says KADOTA Takashi, the C“ESG”O at Fuji Oil.

Small holders

IN SUPPLY CHAINS

In building a sustainable food system, all the various processes are essential, from input and production to processing,
distribution, and consumption. Responding to the adverse impacts on environmental integrity and human rights ofspecific stages in the supply chain, Japan has been stepping up its sustainable procurement.

The Palm Oil Sustainable Supply Chain

Grievance Grievance Grievancevalidation registration handling

improved its sustainability by
procuring products from suppliers
complying with the environmental
and social criteria developed by theRSPO.
In 2016, the company established
the Responsible Palm Oil Sourcing
Policy, setting out its commitment
to NDPE—No Deforestation,
No Peat, No Exploitation. They
particularly focus on a commitment
to human rights issues. In 2018,Fuji Oil then created a grievancemechanism that enables complaints
to be lodged concerning any humanrights or environmental issues inthe supply chain. A mechanism has
thus been put in place to encourage
poorly performing suppliers toimprove their actions, ultimately
leading to the suspension ofdealings with those suppliers who
fail to improve.

Monitoring

Conclusion Closing

According to Kadota, 228 cases
were confirmed by March 2021,
with 90% of those suppliers now
making improvements. “Whenit comes to the complex palm oil
supply chain, with its plantations,mills, and refiners, the adverse
human rights impacts are less likely
to be visible than the environmental
impacts. It is vital to see what
is going on in order to make
improvements; however, since
we do not own palm plantations
ourselves, we are working closelywith NGOs that have a strong
influence on the ground, and are
guiding them in the creation ofsafe and fair working conditions
that comply with human rights
standards” Fuji Oil is also seeking
further development with its goalto achieve 100% traceability of its
oil palm plantations by 2030.

Fuji Oil works with multiple stakeholders in Indonesia, such as local governments,NGOs, and plantations, supporting activities that teach the skills necessary to protect theenvironment from the side effects of ignorant farming practices. Such activities include
teaching small-scale farmers the way to use chemical fertilizers and are linked not only tothe lessening of environmental impacts but also to the improvement of productivity.

Another factor crucial tosustainable procurement is making
the consumer more ethicallyaware. Fuji Oil has poured muchenergy into consumer education,
supporting projects that encouragemiddle and high school students
to consider ways to create asustainable society. Through Fuji
Oil’s class visits, students are madeaware of the problems surrounding
palm oil producers, and are taught
about the importance of ethicalconsumption, and of choosing
environmentally friendly andhuman-friendly products.
Handing down sustainableagriculture, forestry, fishery, andfood industries to the younger
generation protects the global
environment, while safeguarding
stable food supplies. Not only isJapan’s strategy for Sustainable Food
Systems providing a step along theway for the country’s agriculture,
forestry, fishery, and food industries
to achieve their aims, but it is also
actively engaged in building aninternational framework.