SUSTAINABILITY

Download Corporate Responsibility & Sustainability Report 2008

At Olam, Sustainability is not a distinct and separate activity – it's the way we conduct our business. Sustainability initiatives are aimed at making meaningful social impact in the communities within which we operate. We continually challenge ourselves to create a more inspirational and compelling business case for sustainable development, based on creating shareholder and societal value concurrently.

As supply chain managers of agricultural products, our sustainability initiatives are integrated into our business model. We identify opportunities to create societal value in the communities within which we operate and use our expertise and resources for making a meaningful impact. The relevance of the context and the domain expertise makes us more effective, while the reciprocal value for Olam and the community helps sustain these initiatives over time.

In line with this philosophy, we have built long term relationships with our suppliers comprising of small-holder farmers, village level buying agents and associations. We provide direct farm inputs, micro-financing schemes for farmers, capital for local buying agents, advice to improve farming practice and post-harvest care, fair and transparent pricing and regular market updates.

We undertake local capacity building initiatives, which create significant longer term social and economic impact. For instance, our cashew factory at Mtwara, Tanzania, enables technology transfer, earns more foreign exchange through value addition, provides skill development and training for local workers and creates employment opportunities for about 2,000 women, who were otherwise unemployed.

We are committed to protecting and nurturing the environment around us. Olam has undertaken various initiatives in this regard, which includes our efforts to promote sustainable forestry management practices amongst small and medium foresters in Africa.

Structure
Olam’s sustainability initiatives are governed by a dedicated Corporate Social Responsibility and Sustainability Board Committee, which reviews the progress of current programmes, sets future direction and provides a framework within which new initiatives can be developed. An Executive Committee is responsible for developing specific policies and programmes as well as driving implementation across our businesses and geographies.

Partners
Within our various themes and high impact programmes we have partnered with various governments, international donors and external agencies like Technoserve, USAID, Kraft Foods, the Government of Cote d’Ivoire, the International Institute of Tropical Agriculture (IITA), the Office, National of Cocoa and Coffee (ONCC) in Cameroon, the Ugandan Farmers Association & Agricultural Productivity Enhancement Program (APEP) and Success Alliance and Blommer.

We believe that our programmes can have greater impact and scalability by partnering with these agencies, and we also get the opportunity to contribute to other programmes being conducted by these agencies.

Policy Implementation and Monitoring
As a part of our sustainability focus, we have set out policy guidelines in respect of Employment & Labour, Health & Safety and Environment & Waste Management.

In addition to these, policy guidelines in the area of Product Quality & Safety are under development. Our country management teams have been tasked with the implementation of these policies, while the Executive Committee for Corporate Social Responsibility and Sustainability is responsible for monitoring and auditing the same.

Policies and Programmes
We have formalised our sustainability initiatives into four major themes, which we believe can be scaled up and implemented effectively across many of our businesses and geographies.

1. Supplier Assistance: Our engagement with suppliers, comprising of smallholder farmers, village level buying agents and associations, goes far beyond purchasing their produce at fair prices. We have gained a deep insight into suppliers’ requirements and formulated specific programmes to provide direct farm inputs, offer micro-finance to help farmers become more efficient and improve their overall incomes from their efforts.
   
   We initiated a programme in Cameroon to make eight farmer associations (comprising about 20,000 farmers) commercially viable, and implemented an educational campaign on handling coffee for Arabica farmers along with the Office of National Cocoa and Coffee. We developed associations in Cote d’Ivoire and Burkina Faso to generate employment for women in rural areas and also sponsored the cultivation of teak through our suppliers in Cote d’Ivoire as a part of an ongoing reforestation programme by planting teak parcels in an area covering 100 hectares.
   
   
2. Farm Productivity: Olam is engaged in various programmes aimed at increasing crop yields, improving crop quality and enhancing the overall income for the farmer. As a global player, we have intimate knowledge of problems affecting crops, trends in yields, and best agronomic practices. This enables us to play a meaningful role with farmers to address their specific problems and improve their agronomic practices based on transfer of knowledge across countries.
   
   For example, we have set up 50 model farms in Nigeria by working closely with Cocoa farmers there. Also we are jointly running a programme in collaboration with the local government and two other development agencies to improve the quality of the cocoa beans, impacting over 4000 farmers in Indonesia. Similarly, we are working on coffee yield improvement programmes with about 250 farmers in Cameroon.
   
   
3. Capacity Building and Community Development: Most of our origin countries can benefit enormously from focused investment in processing, quality enhancement, capacity building and infrastructural development. These investments have greatly contributed to the economic growth through increased local employment and foreign exchange earnings. We have positively touched the lives of thousands of individuals and hundreds of communities, helping them to become more self-reliant through investment, capacity building programmes, technical assistance and information access.
   
   Specifically, we have set up a cashew processing factory in Dimbokro in Cote d’Ivoire, providing employment to over 1,000 people, mainly women, in an area that has few other economic activities. We are working closely with cocoa associations (with 400 farmers) in Cote d’Ivoire to upgrade their ability to handle cocoa. In addition, we have trained over 540 delegates from cooperatives to bring about awareness on worst forms of child labour under a project, in collaboration with the Cote d’Ivoire government. We also collaborated with IITA under the Sustainable Tree Crop Programme in setting up of farmer field schools for Cocoa in Ghana.
   
   
4. Traceability, Certification and Fair Trade: We actively support organic farming practices based on the recognition that a healthy, vibrant ecosystem significantly benefits crops, improves farmer incomes and provides the consumer with a healthy lifestyle. We run a variety of traceability programmes to track and certify the history of a product, even identifying the specific farms, regions and processes that the raw material has undergone before reaching our customers. We firmly believe in Fair Trade and are actively involved in the advocacy to achieve more open and competitive global markets. We believe that it is important to build a sustainable future based on the producers’ own abilities and comparative advantage.
   
   We have identified three programmes, which we felt would have a very high positive impact across many countries where we operate. These High Impact Programmes (HIPs) are:
   
   
   • Sustainable Development of the Cashew Sector in African origins.
     Ten African countries produce about a third of the world’s raw cashew nut crop, while less than 3% of the cashew is processed or consumed in the whole of Africa. We believe that there is a significant impact that can be created through our programme, which would focus on:
     
     
     • Increasing farmer incomes through improved production technology, improved crop quality, post-harvest handling, agronomic research, by-product utilisation and local trade facilitation.
       
     • Establishing viable processing operations in origin countries and helping them to become competitive.
     • Increasing export earnings and promoting economic growth through employment creation, infrastructure development and increase of export volume and value.
       
       
   • Promoting Rice Cultivation in Africa
     Africa is a huge importer of rice while it has the capability to become self sufficient through its own production. We have initiated a programme on Rice Cultivation in Africa in 2005, which would include:
     
     
     • Development of rice cultivation in Benue State in Nigeria by increasing the number of model farms and the inclusion of over 3,000 farmers under the out-grower programme.
     • Demonstrating modern farming practices to the farmers involved in the programme and helping them increase the yield from the farms.
     • Imparting training to the various farmer groups.
     • Extending the programme to Ghana and explore possibilities in other countries in Sub-Saharan Africa.
       
       
   • Discouraging the use of child labour in Cocoa and Cotton.
     This programme would be focused on Africa and Asia. The detailed scope for the programme is being finalised in consultation with our project partners and will include:
     
     
     • Micro-financing by providing additional wages to parents to cover the cost of educating children.
     • Investing in training women to take up work in different areas.
     • School-to-work apprenticeship programmes aimed at providing vocational training to youth with a focus on agricultural techniques.
     • Mentoring programmes to assist in developing entrepreneurial skills amongst the youth.

The Future
Agricultural subsidies, protective tariffs and non-tariff barriers have significantly reduced profitable market access to some of the poorer nations, who otherwise have a natural advantage in producing various agricultural products. We are actively involved in advocacy to achieve more open and competitive global markets that honour the legitimate comparative advantages of the producing countries that we operate in.

We are excited about the tremendous opportunities ahead for Olam, to create societal and economic value, advance responsible corporate citizenship and contribute to a more sustainable and inclusive global economy.