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METHODOLOGY

AtSource is devoted to providing you with clear traceability and sustainability through the agricultural supply chain. Learn about our system in detail to help inform your decisions.

3rd party risk screening

Olam uses 3rd party risk screening tools as an indicator of the risk level of several material areas for every commodity in every country that we operate. The risk scores are aggregated and reviewed on an annual basis. 

If 3rd party risk scores show an elevated level of risk, we use this knowledge in 2 ways:

  1. Inform our Olam Supplier Code (OSC) engagement discussions with our suppliers. We are able to talk to suppliers about these elevated risk areas and provide advice on how to avoid and/or mitigate the risk.
  2. Inform our business strategy and plan to tackle these challenges. We recognise that risk scores give a general indication of risk for a particular topic and country. We use this information to identify areas for further exploration and to prioritise strategic risk mitigation interventions.

The risk scores are listed below:

Country Risk Screening Tool
Methodology
Economic Opportunity

UNDP Population in Multi-Dimensional Poverty

Elevated risk = score of 80 or above   

Acceptable level of risk = score below 80

Safe & Decent Work

UNICEF Rural Child Labour

Elevated risk = score of 80 or above

Acceptable level of risk = score below 80

Diversity & Inclusion

UNDP Gender Inequality Index

Elevated risk = score of 0.66 or above

Acceptable level of risk = score below 0.65

Education & Skills

UNDP Mean years of schooling

Elevated risk = Below 7 years

Acceptable level of risk = 7 years and above

Health & Nutrition

The Economist Global Food Security Index

Elevated risk = score of 50 or above

Acceptable level of risk = score below 50

HEALTH & WELL-BEING

UNDP HDI Life Expectancy at Birth

Elevated risk = Below 66 years

Acceptable level of risk = 67 years and above

Climate Change

ND-GAIN

Elevated risk = 1) high vulnerability, low readiness 2) high vulnerability, high readiness

Acceptable level of risk = 1) low vulnerability, low readiness; 2) low vulnerability, high readiness

Water Use

WRI Aqueduct country score

Elevated risk = 1) medium to high risk; 2) high risk; 3) extremely high risk

Acceptable level of risk = low to medium risk

Healthy Eco-Systems

Total tree Cover Loss since 2000 (%) (WRI GFW)

Elevated risk = Greater than 4%

Acceptable level of risk = Less than 4%

Healthy Eco-Systems

GMAP HCV proxy - PS6 Presence and impact on high or unique terrestrial biodiversity

Elevated risk = score of 80 or above

Acceptable level of risk = score below 80

Environmental Footprint

The environmental footprint methodology is based on the Life Cycle Impact Assessment (LCIA) methodology (ISO 14044). In the context of AtSource the scope covers the production of the raw material (i.e. crop) to Olam's client gate. The impact indicators chosen are climate change, water depletion and land use:

  • Climate change: the ReCiPe midpoint H impact assessment method is used, which uses the Global Warming Potential at 100 years from the IPCC. This indicator weights all greenhouse gases emissions according to their global warming potential (using CO2 as the reference value) and sums them into metric tonnes of CO2 equivalent.
  • Water use: The ReCiPe midpoint H impact assessment is used. This indicator sums all freshwater input inventory flows related to human water use (excluding turbined water). It is expressed in m3 of water use.
  • Land use: Land use is a measure of the total land required to produce a metric tonne of product. It is expressed in hectare (ha) of land use and does not use LCIA methodology. Currently AtSource solely focuses on the agricultural aspect of land use, namely the farming land used to grow the base product.

The calculator is based on EcoInvent’s Life Cycle Impact Assessment and updated using Olam primary data so as to allow the end user to establish a footprint unique to them. AtSource uses primary data generated within Olam’s value chain (i.e. yield, irrigation use, fertiliser use, pesticide use, logistic routes along with associated transportation distances and the various modes of transportation, processing data, etc). Further details of Ecoinvent LCIA can be found here: www.ecoinvent.org

What does AtSource Entry-Tier and AtSource Plus cover?

The footprint numbers, denoted in both absolute and intensity terms, provides an estimate of the environmental impact of an Olam agricultural product; from farm to customer. The data used to calculate the footprint is a combination of primary data from Olam’s value chain (yield, irrigation, fertiliser use, pesticide use, transport distances and modes, processing data, etc.) and secondary data derived from Ecoinvent (www.ecoinvent.org).

For AtSource Entry-Tier the primary data inputs represent averages of our operations in the country. For example, the yield assumed will be the average yield of Olam farmer groups producing the product in the origin country.

AtSource Plus provides further granularity, as primary data inputs are specific to the farmer groups or farms the customer’s products are sourced from.

All footprint data is broken down by value chain step (Agriculture, Processing and Transportation) and includes further break-downs of processes within these steps (e.g. “Electricity” within Processing).

Olam Supplier Code (OSC)

Olam actively pursues long-term relationships with third-party suppliers based on responsible business practices and trust. The Olam Supplier Code establishes the standard to which all suppliers of Olam raw materials and products shall adhere.

The OSC principles ensure that suppliers:

  • Commit to corporate governance and integrity (where applicable)
  • Guarantee the quality of goods and services they supply
  • Uphold labour standards and human rights
  • Respect the natural environment
  • Conduct their business in a way that honours local communities
  • Ensure compliance

For AtSource entry tier, we assure that our suppliers are engaged on the OSC principles and commit to the conditions of the OSC by signing the OSC Supplier Declaration. This is achieved through the following process:

Olam policies

Our own operations are committed to meeting the requirements of the following Olam Policies

  • Fair Employment Policy
  • Health & Safety Policy
  • Quality and Food Safety Policy
  • Living Landscapes Policy
  • Plantations, Concessions and Farms Code
  • The Olam Code of Conduct

AtSource Plus

Establish the Context

The first step to establishing a supply chain / programme for AtSource Plus, is that desired outcomes and potential hazards must be identified for all 12 topics of AtSource.

Monitor Performance and Risks

All criteria for AtSource entry-tier must be met for AtSource Plus. 

In addition, we collect data on core KPIs across all 12 topics in addition to metrics specific to Action Plans. Context-specific targets are set for the core KPIs.

EVALUATE RISKS

The level of risk for each topic is evaluated based on the 3rd party risk screening, identified hazards and performance against the indicators.  Risks or topics may be ‘de-prioritised’ if 3rd Party Risk Screening is low likelihood of risk, KPIs meet threshold, and hazards are few or controlled.

PLAN ACTIONS

Action Plans are generated for topics that are prioritised, based on the risk evaluation and customer or programme priorities. Action Plans help farmer groups and farmers implement best practices to mitigate challenges identified from the AtSource Plus process. 

Action Plan indicators and their targets are added to the core KPI list.  They are monitored at least every 12 months, and continuous improvement progress must be demonstrated against the intended targets. 

AUDIT AND VERIFICATION PROCESS

External verification is required for AtSource Plus and AtSource Infinity at least every three years, starting from one year from programme inception.  Internal Olam verification occurs annually for all three AtSource tiers, starting from the project preparation phase. The scope of verification includes compliance, validity of processes and methodologies, and achievement of targets against relevant KPIs. Suppliers’ compliance to the Olam Supplier Code may also be audited on a sampling basis.

Labour Practices
Labour Practices
Definitions

# and % of farmers trained
on good Labour practices in a farmer group    

Topics covered may include: 

  • Use of child labour
  • Use of forced or involuntary labour
  • Employees’ rights to form and join unions
  • Providing fair wages / benefits
  • Inclusion and non-discrimination
  • Working time (i.e. pauses in the day and days of work)
  • Avoiding harsh or inhumane treatment including physical abuse, verbal abuse, sexual harassment and other forms of intimidation

Active and effective Child
Labour Monitoring and Remediation System (CLMRS) in place for high risk farmer
group    

A ‘CLMRS’ is considered 'active and effective' if it conducts unannounced farm visits on a monthly basis (throughout the period where children are susceptible to be engaged in child labour), and any non-compliance identified leads to additional remediation actions within the reporting period 

Health and Safety
Health and Safety
Definitions

LTIFR in Olam’s processing facilities in the last year

Lost time injury frequency rate (LTIFR) refers to the amount or number of lost time injuries, that is, injuries that occurred in the workplace that resulted in an employee's inability to work the next full work day, which occurred in a given period relative to the total number of hours worked in the accounting period.

% of Olam employees trained on health & safety practices

This covers Olam employees associated with the product’s value chain, including field staff, factory staff and management.  “Olam employees” include direct full-time employees (at any job category: manager, officers, staff, workers). Seasonal and sub-contracted employees are not included. Trainings include formal workshops, modules, and inductions. Daily safety briefings and ad hoc discussions on safety are part of the safety routine and are not considered as trainings.

# and % farmers trained on Health & Safety practices

Training topics covered include:

  • Safe use of machinery and tools
  • Safe chemical storage, handling and application procedures
  • Risk to human health and environment for workers conducting hazardous tasks
  • Avoiding risk tasks for pregnant or nursing women
  • Use of Personal Protective Equipment
  • Safety attitudes and behaviours

Diversity and Inclusion
Diversity and Inclusion
Definitions

% of registered farmers who are women

If farms are co-owned by a male and a female, then they will both count as owners.  

% of leadership positions in farmer groups held by women

Farmer group leaders are people who represent the groups’ members

A group may have one leader or many leaders

Typical leadership positions may include “president”, "chair",  "vice chair", “treasurer”, “secretary”, “manager”, "group leader", "group representative" etc.

% of people attending Good Agricultural Practices (GAP) training who are female

All GAP training participants are counted, whether or not they are registered farmers.  In other words, family members, labourers and community members who attend trainings are counted.

Food Safety and Quality

Same requirement as for AtSource entry-Tier: all practises with our suppliers are compliant with Olam Quality and Food Safety Policy and with our commitment that over 90% of product volume we deliver is from Olam Supplier Code (OSC)-signed suppliers.