Case study: How Apical promotes ethical business behaviour
Apical Group is one the largest exporters of palm oil in Indonesia, managing the downstream business of palm oil production including sourcing, refining, processing, manufacturing, trading, and the distribution of palm oil and its products for the domestic and international markets. Apical is firmly committed to conducting all its business activities with integrity Tweet This!, and in accordance with strict legal and ethical standards.
This case study is based on the 2019 Sustainability Report by Apical published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Carrying out its business activities ethically and according to the highest governance standards is a key priority for Apical. In order to promote ethical business behaviour Apical took action to:
- implement a Code of Conduct
- apply a robust grievance handling process
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) Apical has identified;
- How Apical proceeded with stakeholder engagement, and
- What actions were taken by Apical to promote ethical business behaviour
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2019 Sustainability Report Apical identified a range of material issues, such as product quality and safety, employee wages and benefits, emissions reduction, community livelihood & empowerment, climate action. Among these, promoting ethical business behaviour stands out as a key material issue for Apical.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Apical engages with:
To identify and prioritise material topics Apical engaged with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers & Consumers | · One-on-one communication (periodic) · Conference calls (regularly) · Sustainability Report (annually) · Presentations and meetings (ad-hoc) · Apical Website (ad-hoc) · Apical Sustainability Dashboard (ad-hoc) · Survey (periodically) · Materiality assessment (every 2-3 years) · Consumer Focus Group Discussions |
| Banks & financial institutions | · E-mail updates (regularly) · One-on-one meetings (periodic) · Sustainability Report (annually) · Apical Website (ad-hoc) · Apical Sustainability Dashboard (ad-hoc) · Survey (periodically) · Materiality assessment (every 2-3 years) · Site visits (ad-hoc) |
| Industry groups, trade associations and certification bodies | · One-on-one Meetings (regularly) · Multi-stakeholder forums (regularly) · Sustainability Report (annually) · Apical Website (ad-hoc) · Apical Sustainability Dashboard (ongoing) · Survey (periodically) · Materiality assessment (every 2-3 years) · Multi-stakeholder forums and events (regularly) |
| Employees | · Annual appraisals and PRP · Townhall meetings (annually) · Major festivals celebrations (annually) · HR training programmes (ongoing) · Apical Website (ad hoc) · Apical Sustainability Dashboard (ongoing) · Materiality assessment (every 2-3 years) |
| Local community
| · Dialogue with community groups and representatives facilitated by Apical’s dedicated SSL team (regularly) · Outreach programmes to improve livelihood (annually) · Apical’s grievance mechanism to understand and address community concerns including FPIC and environmental conservation (ongoing) · Complaint handling, grievance procedures and conflict resolution engagement (ad hoc) · Surveys (periodically) |
| Governments and regulatory bodies | · One-on-one meetings (ad hoc) · Multi-stakeholder forums and events (regularly) · Consultations (regularly) · Apical Website (ad hoc) · Apical Sustainability Dashboard (ongoing) · Materiality assessment (every 2 years) · Field visits (regularly) · Survey (periodically) |
| Suppliers including smallholders | · Anchor Programmes · One-on-one communication (ongoing) · Apical Website (ad-hoc) · Sustainability Report (annually) · Apical Sustainability Dashboard (ongoing) · Materiality assessment (every 2-3 years) · Survey (periodically) |
What actions were taken by Apical to promote ethical business behaviour?
In its 2019 Sustainability Report Apical reports that it took the following actions for promoting ethical business behaviour:
- Implementing a Code of Conduct
- All members of Apical’s BoD and employees must adhere to the RGE Global Code of Conduct (RGE Code), which is disseminated as part of Apical’s new hire orientation process. The RGE Code guides Apical’s daily business conduct by providing a framework for how Apical should behave in line with its values to achieve sustainable business practices and maintain a strong reputation. Everyone at Apical has a responsibility to report illegal, irregular, dangerous or unethical activities which contravene the RGE Code and related key documents, without the risk of reprisal. As a first point of contact, employees can get in touch with their reporting manager or Human Resources representative. For more severe cases of misconduct, employees may contact the Internal Audit Confidential Hotline. In 2019, there were no cases of breach of the RGE Code, including corruption. There were also no significant fines and non-monetary sanctions for non-compliance with laws and regulations in the environmental, social and economic area. Additionally, Apical complies with the various tax systems that the Group operates in (Indonesia, Singapore, Malaysia, Spain, China etc). Apical carries out monthly tax reviews to make sure all key tax positions such as transfer pricing, cross border transactions, tax compliance and tax planning decisions are taken. Key decisions for tax matters are undertaken collectively between the Group and the corporate office tax team, to ensure checks and balances.
- Applying a robust grievance handling process
- To make sure that the standards set out in its policies are being adhered to, Apical has set up a robust grievance handling process for all stakeholders to raise concerns related to Apical’s business or suppliers. All grievances raised are dealt with in a transparent and accountable manner. The grievance process is managed and implemented by Apical’s Grievance Steering Committee (GSC), Grievance Secretariat, Stakeholder Engagement Team and Verification Team. The Apical Grievance Procedure covers all activities related to the management of stakeholders’ concerns. Apical’s grievance process includes a whistleblowing channel and a Grievance Alert System that delivers prompt notifications on matters raised against Apical or its In 2019, there were 22 grievances raised against Apical’s suppliers, which were related to the clearing of forest and peatland areas. Apart from grievances tracked at group-level, each refinery also has their own grievance management process.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 205-3 Confirmed incidents of corruption and actions taken
2) Disclosure 419-1 Non-compliance with laws and regulations in the social and economic area
Disclosure 205-3 Confirmed incidents of corruption and actions taken corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.5
Disclosure 419-1 Non-compliance with laws and regulations in the social and economic area corresponds to:
- Sustainable Development Goal (SDG) 16: Peace, Justice and Strong Institutions
- Targets: 16.3
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
1) This case study is based on published information by Apical, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original, please revert to the original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) https://www.globalreporting.org/standards/gri-standards-download-center/
Note to Apical: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.