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Palm oil assessments

Kuala Lumpur Kepong (KLK) was established in 1906 and is a subsidiary of Batu Kawan.

  • Parent company:
    Batu Kawan Bhd
  • Landbank (oil palm):
    280,472 hectares
  • Palm cultivation revenue:
    51.13%
  • Market cap:
    6,455,920,000 USD
  • Thomson Reuters ticker:
    KLKK.KL
  • Bloomberg ticker:
    KLK MK
  • ISIN:
    MYL2445OO004
  • RSPO member?
    Yes
  • Website:

Company assessment: Kuala Lumpur Kepong Bhd – November 2018

SPOTT assesses companies against over 100 indicators across ten categories. Click on the icons or bars below to expand each category for further details, scoring and links to reports and sources.

Assessment date:

Total: 71.7% 88.5 / 123.5
  • Sustainability policy and leadership Sustainability policy and leadership 5.5 / 6 91.7%
    • Companies should publish sustainability policies or similar covering their entire supply chain — including third party suppliers — implemented and enforced through high-level leadership that engages with wider industry schemes.

    • Yes
      1 / 1
      Source

      1. Sustainable palm oil policy or commitment for all its operations?

    • Yes
      1 / 1
      Source

      2. Policy or commitment applies to direct and third-party suppliers?

    • Yes
      1 / 1
      Source

      3. High-level position of responsibility for sustainability?

      Sustainability Steering Committee chaired by the Chief Executive Officer

    • Yes
      1 / 1
      Source

      4. Sustainability report published within last two years?

    • Partial
      0.5 / 1
      Source

      5. Member of multiple industry schemes or other external initiatives to improve sustainability in relation to palm oil?

      The company is a member of the HCS Approach Steering Group. The company's subsidiary KOLB is a UNGC participant

    • n/a
      -
      No source

      6. Verification report on compliance with POIG Charter, if a POIG member?

      This indicator is disabled as it is not applicable to this company.

    • Yes
      1 / 1
      Source

      7. Activities with government, NGOs or academic institutions to improve palm oil sustainability?

      The company states it engaged with NGOs in meetings and joint exercises which has led to collaboration with smallholders and development of programmes, including with Wild Asia on assisting smallholders to achieve RSPO certification and with Liberia's Ministry of Agriculture on smallholder tree crops revitalisation support project

  • Landbank, maps and traceability Landbank, maps and traceability 14.5 / 19 76.3%
    • Companies should publicly report figures on their total landbank and details of different areas under their management. They should also disclose maps of their management areas and provide details on traceability of their products, both to mill and plantation level.

    • Yes
      1 / 1
      Source

      8. Total land area managed/controlled for oil palm (ha)?

      280,472

    • Yes
      1 / 1
      Source

      9. Total oil palm planted area (ha)?

      238,653

    • Yes
      1 / 1
      Source

      10. Plasma/scheme smallholders planted area (ha)?

      13,862

    • Yes
      1 / 1
      Source

      11. Unplanted (areas designated for future planting) (ha)?

      11,449

    • Yes
      1 / 1
      Source

      12. Conservation set-aside area, including HCV area (ha)?

      16,508 - Sum of HCV areas and other conservation areas

    • Partial
      0.5 / 1
      Source

      13. Area for infrastructure (ha)?

      9,873 - The company refers to "building sites, etc." but it is unclear what this includes and whether it relates solely to its palm oil operations

    • Yes
      1 / 1
      Source

      14. Number and names of company owned mills?

      24 - The company's RSPO ACOP states 24 mills. The Annual Report states 25 mills however one mill has been shut down

    • Yes
      1 / 1
      Source

      15. Maps or coordinates of company owned mills?

      The company discloses maps and coordinates of its 24 mills

    • Yes
      1 / 1
      Source

      16. Number and names of supplier mills?

      1,161 - The company states that it is has 1,161 third party mills in relation to KLK OLEO traceability. Names of mills supplying the refineries are available on the company's traceability webpage

    • Yes
      1 / 1
      Source

      17. Maps of estates/management units?

      Concession boundaries have been made available to the RSPO in 2017 and the company declares these represent 100% of its concession sites, but not all may be publicly available due to ongoing legal issues. Maps will become available on GeoRSPO

    • No
      0 / 1
      No source

      18. Maps of scheme/plasma smallholders?

    • Partial
      0.5 / 1
      Source

      19. Time-bound commitment to achieve 100% traceability to mill level?

      2,020 - The company does not clearly state 100% and this only refers to palm kernel oil

    • Yes
      1 / 1
      Source

      20. Time-bound commitment to achieve 100% traceability to plantation level?

      The company has a commitment to achieve 100% traceability to plantation level by 2019

    • Yes
      2 / 2
      Source

      21. Percentage of supply traceable to mill level (above 80%)?

      100% - The company reports traceability to mill of 100% in 2017. However, in 2018 the company also commits to trace palm kernel oil to palm oil mills by 2020, so current levels of traceability are unclear

    • Partial
      1.5 / 2
      Source

      22. Percentage of fresh fruit bunches (FFB) from own mills traceable to plantation level (above 75%)?

      The company lists 18 mills that are 100% traceable to plantation. Traceability to plantation then ranges from 60% to 99%

    • No
      0 / 2
      No source

      23. Percentage of fresh fruit bunches (FFB) from supplier mills traceable to plantation level (above 75%)?

  • Deforestation and biodiversity Deforestation and biodiversity 5.5 / 10 55%
    • Companies should commit to address deforestation and to set aside areas for conservation. They should report on any activities to manage or restore habitat in their conservation areas, or monitor deforestation in their supply chains. They should also provide evidence of species conservation and biodiversity protection.

    • Yes
      1 / 1
      Source

      24. Commitment to zero deforestation?

    • Yes
      1 / 1
      Source

      25. Deforestation commitment applies to scheme smallholders and independent suppliers?

    • Yes
      1 / 1
      Source

      26. Criteria for defining deforestation?

      HCS, HCV, peat

    • No
      0 / 1
      No source

      27. Evidence of monitoring deforestation?

    • Partial
      0.5 / 1
      Source

      28. Examples of habitat management and/or habitat restoration?

      Planting trees in conservation area

    • No
      0 / 1
      No source

      29. Implementing a landscape-level approach to biodiversity conservation?

    • Partial
      0.5 / 1
      Source

      30. Commitment to biodiversity conservation?

      The company commits to biodiversity conservation in the context of HCVs only

    • Partial
      0.5 / 1
      Source

      31. Commitment to not endanger species of conservation concern, referencing international or national system of species classification?

      The company commits to protecting rare, threatened and endangered species, but does not reference a system of species classification

    • Partial
      0.5 / 1
      Source

      32. Commitment to no hunting or only sustainable hunting of species?

      The company has "zero tolerance for the killing of animals or plants that are protected and endangered" but does not refer to the sustainable hunting of all species

    • Partial
      0.5 / 1
      Source

      33. Examples of species conservation activities?

      Provides nesting habitat for falcons

  • HCV, HCS and impact assessments HCV, HCS and impact assessments 8.5 / 11 77.3%
    • Companies should commit to the High Conservation Value (HCV) and High Carbon Stock (HCS) approaches, and to conduct social and environmental impact assessments (SEIA). They should develop and publish monitoring and management plans, and provide evidence through SEIA, HCV and HCS assessments, typically published in summary form due to the sensitive nature of certain sites.

    • Yes
      1 / 1
      Source

      34. Commitment to conduct High Conservation Value (HCV) assessments?

    • Yes
      1 / 1
      Source

      35. HCV commitment applies to scheme smallholders and independent suppliers?

    • Partial
      0.5 / 1
      Source

      36. Commitment to only use licensed High Conservation Value (HCV) assessors accredited by the HCV Resource Network's Assessor Licensing Scheme (ALS)?

      This company does not have an explicit commitment itself, but commits under the RSPO New Planting Procedures (NPP) as an RSPO member

    • Yes
      1 / 1
      Source

      37. High Conservation Value (HCV) assessments for planting undertaken prior to January 2015, and associated management and monitoring plans?

      The following HCV assessments are publicly available:
      East Kalimantan: PT Anugrah Surya Mandiri (PT ASM), PT Tekukur Indah (PT TI), LIBINCO (under subsidiary Equatorial Palm Oil)

    • Partial
      0.5 / 1
      Source

      38. High Conservation Value (HCV) assessments for all estates planted since January 2015?

      According to 2015 and 2016 RSPO ACOPs no new planting has occurred. However, the company has undertaken one HCV assessment for Kuala Gris Estate and Kemasul Estate, but no public summary is available

    • Partial
      0.5 / 1
      Source

      39. High Conservation Value (HCV) management and monitoring plans for all estates planted since January 2015?

      No new planting reported in 2015 or 2016 RSPO ACOP. However, the company has undertaken one HCV assessment for Kuala Gris Estate and Kemasul Estate, but no public management and monitoring plan is available. The company's 2017 ACOP reports new planting of 282.00 ha and that it has submitted an NPP, but nothing could be found on the RSPO's website

    • Partial
      0.5 / 1
      Source

      40. Satisfactory review of all High Conservation Value (HCV) assessments undertaken since January 2015 by the HCV ALS Quality Panel?

      No new planting reported in 2015 or 2016 RSPO ACOP. However, one HCV assessment has been declared unsatisfactory and another HCV assessment is satisfactory

    • Yes
      1 / 1
      Source

      41. Commitment to the High Carbon Stock (HCS) Approach?

    • Yes
      1 / 1
      Source

      42. High Carbon Stock (HCS) assessments?

      The company has completed three HCS assessments with public summaries available and has two assessments under review

    • Partial
      0.5 / 1
      Source

      43. Commitment to conduct social and environmental impact assessments (SEIAs)?

      As a member of the RSPO, the company commits under NPP

    • Yes
      1 / 1
      Source

      44. Social and environmental impact assessments (SEIAs) undertaken, and associated management and monitoring plans?

      The following SEIA assessments are publicly available:
      East Kalimantan: PT Anugrah Surya Mandiri (PT ASM), PT Tekukur Indah (PT TI), LIBINCO (under subsidiary Equatorial Palm Oil)

  • Peat, fire and GHG emissions Peat, fire and GHG emissions 9 / 15 60%
    • Companies should commit to protect peatland and undertake best management practices for soils and peat. They should also have policies on zero burning and to reduce their greenhouse gas (GHG) emissions. Companies should report their GHG emissions, as well as any fires that occurred in or around their estates, along with plans for managing and monitoring fires.

    • Yes
      1 / 1
      Source

      45. Commitment to no planting on peat of any depth?

    • Yes
      1 / 1
      Source

      46. Peat commitment applies to scheme smallholders and independent suppliers?

    • Yes
      1 / 1
      Source

      47. Commitment to best management practices for soils and peat?

    • No
      0 / 1
      No source

      48. Landbank or planted area on peat?

    • Partial
      0.5 / 1
      Source

      49. Evidence of best management practices for soils and peat?

      The company gives examples of best management practices for soils, but not for peat

    • Yes
      1 / 1
      Source

      50. Commitment to zero burning?

    • Yes
      1 / 1
      Source

      51. Zero burning commitment applies to scheme smallholders and independent suppliers?

    • Yes
      1 / 1
      Source

      52. Evidence of management and monitoring fires?

    • No
      0 / 1
      No source

      53. Details/number of hotspots/fires in company estates?

    • No
      0 / 1
      No source

      54. Details/number of hotspots/fires within surrounding landscape/smallholders?

    • Partial
      0.5 / 1
      Source

      55. Time-bound commitment to reduce greenhouse gas (GHG) emissions intensity?

      20% - The company had a target of achieving a 50% decrease in GHG emissions by 2017. It now states a target to reduce GHG emissions by 20% using FY2016 figure as the base, but the target is not time-bound and is not based on emissions intensity

    • No
      0 / 1
      No source

      56. GHG emissions from land use change?

    • Yes
      1 / 1
      Source

      57. Methodology used to calculate GHG emissions?

      RSPO Palm GHG Tool

    • Partial
      0.5 / 1
      Source

      58. Progress towards commitment to reduce GHG emissions intensity?

      The company reports a reduction in overall carbon emissions but does not report in terms of emissions intensity and it does not have a time-bound commitment.

    • Partial
      0.5 / 1
      Source

      59. Percentage of mills with methane capture (100%)?

      6 (24%) - Only 6 mills have biogas capture

  • Water, chemical and pest management Water, chemical and pest management 8 / 12 66.7%
    • Companies should commit to managing water use and water quality, providing evidence through time-bound reduction plans, policies on toxic chemical use and treatment of palm oil mill effluent (POME).

    • No
      0 / 1
      No source

      60. Time-bound commitment to improve water use per tonne of FFB Processed?

    • No
      0 / 1
      No source

      61. Time-bound commitment to improve water quality (BOD and COD)?

    • Partial
      0.5 / 1
      Source

      62. Progress towards commitment on water use?

      The company reports figures on water consumption, water withdrawal and water recycled and reused, and reports it has reduced consumption of fresh water, but does not have a time-bound commitment it reports upon and does not report in intensity

    • No
      0 / 1
      No source

      63. Progress towards commitment on water quality (BOD and COD)?

    • Partial
      0.5 / 1
      Source

      64. Protection of natural waterways through buffer zones?

      The company states it maintains riparian zones but it is unclear if this is across all operations

    • Yes
      1 / 1
      Source

      65. Evidence of treating palm oil mill effluent (POME)?

    • Yes
      1 / 1
      Source

      66. Commitment to minimise the use of chemicals, including pesticides and chemical fertilisers?

    • Yes
      1 / 1
      Source

      67. No use of paraquat?

    • Yes
      1 / 1
      Source

      68. No use of World Health Organisation (WHO) Class 1A and 1B pesticides?

    • Yes
      1 / 1
      Source

      69. No use of chemicals listed under the Stockholm Convention and Rotterdam Convention?

    • Yes
      1 / 1
      Source

      70. Integrated Pest Management (IPM) approach?

    • Yes
      1 / 1
      Source

      71. Chemical usage per ha or list of chemicals used?

      The company reports a reduction in herbicide consumption from 2.45 litres/ha to 1.14 litres/ha and reduction of fertiliser consumption from 1.36 mt/ha to 1.18 mt/ha

  • Community, land and labour rights Community, land and labour rights 15 / 19.5 76.9%
    • Companies should commit to respect human rights, including those of indigenous peoples and local communities, consulted with free, prior and informed consent (FPIC). Companies should respect the rights of workers, report relevant workforce data, and comply with health and safety legislation.

    • Yes
      1 / 1
      Source

      72. Commitment to human rights, referencing the UN Declaration of Human Rights or UN Guiding Principles on Business and Human Rights?

    • Yes
      1 / 1
      Source

      73. Commitment to human rights applies to scheme smallholders and independent suppliers?

    • Yes
      1 / 1
      Source

      74. Commitment to respect legal and customary land tenure rights?

    • Yes
      1 / 1
      Source

      75. Commitment to respect indigenous and local communities' rights, referencing the UN Declaration on the Rights of Indigenous Peoples or ILO 169?

    • Yes
      1 / 1
      Source

      76. Commitment to free, prior and informed consent (FPIC)?

    • Yes
      1 / 1
      Source

      77. FPIC commitment applies to independent suppliers?

    • No
      0 / 1
      No source

      78. Details of free, prior and informed consent (FPIC) process available?

    • Partial
      0.5 / 1
      Source

      79. Details of process for addressing land conflicts available?

      The company states it has a conflict process but only limited details are given

    • Partial
      0.5 / 1
      Source

      80. Commitment to mitigate impacts on food security?

      The company's subsidiary, Equatorial Palm Oil, reports a case study on vegetable farming for local communities

    • Yes
      1 / 1
      Source

      81. Commitment to provide essential community services and facilities?

    • Yes
      1 / 1
      Source

      82. Commitment to respect all workers' rights?

    • Partial
      0.5 / 1
      Source

      83. Reference to Fundamental ILO Conventions or Free and Fair Labour Principles?

      The company does not refer to minimum age

    • Yes
      0.5 / 0.5
      Source

      84. Total number of employees?

      36,932 - 34,104 employees at KLK Plantations and 2,828 employees at KLK OLEO

    • No
      0 / 1
      No source

      85. Percentage or number of temporary employees?

    • Yes
      1 / 1
      Source

      86. Percentage or number of women employees?

      8,279

    • Partial
      0.5 / 1
      Source

      87. Commitment to pay minimum wage?

      The company states it pays equal to or exceeding the minimum wage but no evidence is given

    • Yes
      1 / 1
      Source

      88. Commitment to address occupational health and safety?

    • Partial
      0.5 / 1
      Source

      89. Time lost due to work-based injuries?

      3.67 - Lost time injury rate ((no. of accidents x 1,000,000) / total man-hours worked)) is provided for KLK Oleo. For the plantation division the company only reports the number of lost days, not a rate

    • Yes
      1 / 1
      Source

      90. Number of fatalities as a result of work-based accidents?

      2

    • Yes
      1 / 1
      Source

      91. Provision of personal protective equipment and pesticide training?

  • Certification standards Certification standards 11 / 18 61.1%
    • Companies should become members of credible certification standards and report in accordance with all appropriate categories of membership. The Roundtable on Sustainable Palm Oil (RSPO) requires members registered as growers to submit data relating to certification targets for their estates, scheme smallholders and independent fresh fruit bunch (FFB) suppliers, via an annual communications of progress (ACOP) report.

    • Yes
      1 / 1
      Source

      92. Member of the Roundtable on Sustainable Palm Oil (RSPO)?

      2,004

    • Yes
      0.5 / 0.5
      Source

      93. Submitted most recent RSPO Annual Communication of Progress (ACOP)?

    • Yes
      0.5 / 0.5
      Source

      94. Listed all countries and regions in which operates in most recent RSPO Annual Communication of Progress (ACOP)?

      The company states all the countries and regions in which it operates (the company has also leased land in Papua New Guinea which is currently not developed): Indonesia (Kalimantan Tengah; Kalimantan Timur; Kepulauan Bangka Belitung; Riau; Sumatera Utara), Malaysia (Johor; Kedah; Kelantan; Negeri Sembilan; Pahang; Perak; Sabah; Selangor), Liberia

    • Yes
      0.5 / 0.5
      Source

      95. Time-bound plan for achieving 100% RSPO certification of estates within 5 years or achieved 100% RSPO-certification of estates?

      2,019 - Note this has been moved from a previous target of 2018

    • Yes
      0.5 / 0.5
      Source

      96. Time-bound plan for achieving 100% RSPO certification of scheme/associated smallholders within 5 years or achieved 100% RSPO-certification of scheme/associated smallholders?

      2,019

    • No
      0 / 0.5
      No source

      97. Year expected to achieve 100% RSPO certification of all palm product processing facilities?

    • Yes
      0.5 / 0.5
      Source

      98. RSPO-certified within three years of joining the RSPO or by November 2010, for companies joining prior to finalisation of the RSPO certification systems in November 2007?

      2,009

    • Yes
      2 / 2
      Source

      99. Percentage of mills RSPO-certified (above 75%)?

      19 (76%)

    • Partial
      1.5 / 2
      Source

      100. Percentage of area (ha) RSPO-certified (above 75%)?

      183,439 (65.4%)

    • No
      0 / 2
      Source

      101. Percentage of scheme/associated smallholders (ha) RSPO-certified (above 75%)?

      0 (0%)

    • Partial
      0.5 / 2
      Source

      102. Percentage of FFB supply (tonnes) from independent FFB suppliers that is RSPO-certified (above 75%)?

      5,755 (1.3%) - 751.00 tonnes from independent smallholders and 5,004.00 tonnes from outgrowers

    • No
      0 / 2
      No source

      103. Percentage of all palm oil and oil palm products handled/traded/processed (tonnes) that are RSPO-certified (above 75%)?

    • Yes
      1 / 1
      Source

      104. Sells or processes/trades RSPO-certified palm oil through Segregated or Identity Preserved supply chains?

      Mass Balance, Segregated, Identity Preserved

    • Partial
      0.5 / 1
      Source

      105. Indonesia Sustainable Palm Oil (ISPO) certified (100%)?

      Nine mills ISPO certified

    • Yes
      1 / 1
      Source

      106. Malaysia Sustainable Palm Oil (MSPO) certified?

      According to the MSPO, the company has all of its mills certified

    • Yes
      1 / 1
      Source

      107. Certified under voluntary sustainability certification scheme (e.g. ISCC, SAN, RSB, etc.)?

      ISCC

  • Smallholders and suppliers Smallholders and suppliers 5.5 / 7 78.6%
    • Companies should report details of any programmes or schemes to support both schemed and independent smallholders, as well as criteria to assess suppliers on compliance with company policies, and in what cases suppliers should be suspended or excluded due to non-compliance.

    • Yes
      1 / 1
      Source

      108. Programme to support scheme smallholders?

      Kredit Koperasi Primer Scheme (KKPA) assist in the development of oil palm plantations, provides initial financing and management

    • No
      0 / 1
      No source

      109. Number or percentage of scheme smallholders involved in programme?

    • Yes
      1 / 1
      Source

      110. Programme to support independent smallholders?

      Training programmes facilitated by Wild Asia including concepts relating to labour contracts and wages, environmental sustainability and HCV, best management practices, Occupational Safety and Health, storage facilities, general housekeeping and domestic and scheduled waste management

    • Yes
      1 / 1
      Source

      111. Number or percentage of independent smallholders involved in programme?

      55

    • Yes
      1 / 1
      Source

      112. Process used to prioritise, assess and/or engage suppliers on compliance with company's policy and/or legal requirements?

      The company developed a questionnaire and categorised suppliers into high and low priority and have conducted field assessments

    • Partial
      0.5 / 1
      Source

      113. Suspension or exclusion criteria for suppliers?

      The company states in its sustainability policy "We continue to proactively engage with those suppliers who have yet to respond to our questionnaire sent to them during the course of mid-2015 or those showing reluctance to share their data. We will consider reviewing the sourcing relationships with them in the event of lack of interest or any substantive progress." However, the steps taken and timeframes for action are not given

    • Yes
      1 / 1
      Source

      114. Percentage of suppliers assessed and/or engaged on compliance with company requirements?

      4 - The company states field assessments were undertaken for 3 external suppliers and 1 dealer

  • Governance and grievances Governance and grievances 6 / 6 100%
    • Companies should operate in an ethical manner at all levels, providing accessible channels and clear procedures for both employees and external stakeholders to raise any grievance or complaint with the company, as well as allowing for whistleblowing.

    • Yes
      1 / 1
      Source

      115. Commitment to ethical conduct and prohibition of corruption?

    • Yes
      1 / 1
      Source

      116. Whistleblowing procedure?

    • Yes
      1 / 1
      Source

      117. Own grievance or complaints system?

    • Yes
      1 / 1
      Source

      118. Grievance or complaints system is accessible to internal and external stakeholders?

    • Yes
      2 / 2
      Source

      119. Details of grievances disclosed?

Media monitor: Kuala Lumpur Kepong Bhd

SPOTT monitors global media sources for coverage of assessed companies. The media monitor gathers reports about specific activities related to the assessment indicator categories. ZSL does not assess the validity of media coverage, but users can explore the media monitor to provide context on implementation, and infer risks associated with reported operations on the ground.

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Research protocols: Kuala Lumpur Kepong Bhd

Research protocols guide how ZSL conducts SPOTT assessments and allocates scores to ensure a fair and consistent approach, setting the expectations for companies on how they should publish ESG data. The full palm oil indicator framework contains 119 indicators across 10 categories, aligned with corporate reporting initiatives.

SPOTT is a ZSL initiative.
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