Codes of practice - towards improving productivity and sustainability

The Malaysian Palm Oil Board (MPOB) Codes of Practice (CoPs), first launched in 2007, have the objectives of harmonizing the industry practices throughout the supply chain in fulfilling minimum standards of quality, food safety and sustainability. The CoPs consist of seven Codes of Practice starting from nurseries, smallholders and estates, mills, palm kernel crushers, refineries, transportation and bulking installation. In 2008, MPOB officers underwent training to be competent auditors under the guidance of consultants. Actual practical auditing of oil palm premises based on CoPs' requirements started in 2009. The first batch of industry volunteers certified under this scheme was fourteen premises. The numbers soon increased in 2010 (17 premises) and to date a total of 42 premises comprising of four nurseries, twenty-three estates, seven mills, four palm kernel crushers and four refineries over the supply chain were certified. Estates formed the major group and the total area certified under MPOB CoPs is 50,206 ha. MPOB CoPs therefore has been slowly gaining recognition locally. Oil palm is now used as one of the 12 National Key Economic Areas (NKEAs) of the Economic Transformation Programme (ETP) roadmap to make the country to be a high income nation that is both inclusive and sustainable. For the industry, eight core entry point projects (EPPs), five upstream and three downstream have been identified and the MPOB CoPs being private-sector led and Government-facilitated are used to monitor the concrete changes in the implementation of the five upstream productivity and sustainability EPPs. They are EPP1: Accelerated replanting, EPP2: Improving Production of Fresh Fruit Bunches (FFB), EPP3: Improving Workers Productivity, EPP4: Increasing mill oil extraction rate (OER) and EPP5: Developing Biogas at Oil Palm Mill. Under the Malaysian National Interpretation of other sustainability criteria such as that of Roundtable on Sustainable Palm Oil (RSPO) and also the International Sustainability and Carbon Certification (ISCC), the MPOB Code of Good Agricultural Practice for Oil Palm Estates and Small Holdings is also used as one of the requirements for assessing best agricultural practices. As the CoPs' aim is to ensure that the production of oil palm products is food safe, of high quality and sustainably produced, the audit of the best practices under the codes will focus on the processes for the production of the oil palm products such as the planting of the oil palm trees, safe usage of agrochemicals, milling of the FFB, crushing of the palm kernels, refining of crude oils, etc. They also emphasize on safety of workers, environmental requirements, biodiversity, conservation of wildlife and corporate social responsibility. The legal requirements, about 60 of them, to produce oil palm products are especially stressed in one of the clauses. Some of the companies acknowledge that the implementation of CoPs assist them in increasing their productivity. This certification scheme is a form of third party audit of the processes of the supply chain in terms of compliance to CoPs, which the industry implemented in their premises. Daily practice of the operations has become a routine habit such that the operators may become unaware of some of the weaknesses in the process and it takes a third party audit to actually show them the weak points, which can be further improved through corrective actions. The audit findings will also show differences from the standard practices. The managers of the premises will take the non-compliance and observations identified in a positive manner and find way to improve their processes thus leading to continuous improvement. The suggestions for improvement based on the requirements of MPOB CoPs are readily acceptable to the companies and with greater adoption of MPOB CoPs confidence that all process at the oil palm premises will be standardized, harmonized and realized. This paper describes the continuous improvements made by the oil palm premises under CoPs.