As a responsible corporate citizen, Tradewinds Plantation Berhad recognised the need to observe practices that contribute towards the sustainability of the environment. We are also fully committed in safeguarding the safety, health and wellbeing of our employees. We achieve these objectives by operating in full compliance with the provisions of the Occupational Safety and Health Act 1994, its subsidiary regulations and the Code of Practice approved by the Ministry.

OCCUPATIONAL SAFETY AND HEALTH (OSH) IN 2009

Guided by the philosophy that achieving occupational safety and health is a continuous journey, the Group continued to accord high priority towards maintaining a safe and hazard free work environment. Staff safety awareness and vigilance continued to be reinforced through various initiatives including but not limited to mandatory morning or shift briefings, display of safety posters and signages as well as the conduct of related training and education.

During the year under review, an OSH Committee Training was conducted by the Kedah Project on 30 April 2009. During the training, there was active discussion and exchange of ideas on various aspects of OSH implementation.One innovation initiative taken to broaden the dissemination of safety and health information is the preparation of a Pictorial Safety and Health Guidelines which had been distributed to all estates. These guidelines served as the minimum OSH standard of the Group and shall be replicated by all operating units.

Routine Group-wide monitoring of OSH and other statutory requirements through the Monthly Monitoring System is a continual effort that requires the commitment for all levels of management. The monitoring gauges the implementation of the Group’s OSH directives and standard practices. It requires monthly feedbacks from all heads of operating units. The feedbacks were analysed and subsequently reported.

OSH COMPLIANCE PROJECT

One key initiative taken during the year under review was the implementation of the OSH Compliance Project which targeted selected operating units in all regions. The objective was to ensure full compliance of OSH standards by all estates and mills. Under this initiative, the selected operating units were required to comply with OSH standards including maintenance and management of Personal Protective Equipment (PPE), chemical safety training for sprayers, chemical storage, display of hazard warning signs, facilities for chemical handlers, transportation for workers. Upon successful completion of the project, these operating units would then serve as the standard bearers of the Company’s OSH compliance requirement and serve as model for others to replicate within the Group.

COMPLIANCE AUDIT AND INSPECTIONS

As part of compliance monitoring, safety audits were conducted throughout 2009 internally by the Group’s Safety and Health Unit. This is to ensure that all operating units comply with the statutory requirements set by the Department of Occupational Safety and Health (DOSH). All operating units were subject to audit based on the minimum OSH requirements stipulated by the OSH Compliance Project. With good internal control, no major findings were reported by the external auditors during the year.

ACCIDENT STATISTICS

The Group’s overall accident rate had continued to decline from 13.57 per 1000 employees in 2007 to 3.36 in 2009. Notwithstanding this positive trend, the Group is determined to adopt a zero-tolerance stance towards any major accidents in all operating units.

LAUNCHING OF THE RSPO IMPLEMENTATION

10th December 2009 marked a key milestone in the Group’s history when the implementation of Roundtable on Sustainable Palm Oil (RSPO) Principles and Criteria was officially launched by the Chairman, Dato’ Wira Syed Abdul Jabbar bin Syed Hassan. The historic occasion was held at Ulu Sebol Mill attended by senior management and regional heads. The RSPO was formed in 2004 in response to the urgent and pressing global call for sustainability produced palm oil with the objective of promoting the growth and use of sustainable oil palm products through credible global standards and engagement of stakeholders who are committed to the protection of the larger environment and well-being of the community. Approval of Tradewinds Plantation Berhad’s membership in May 2009 bore testimony to the Group’s commitment in the production of RSPO certified oil. Consequently, concerted efforts were initiated to promote the production, procurement and use of sustainable palm oil through credible global standards. The development, implementation and verification of credible global standards are supported by the engagement and communication of the various stakeholders along the supply chain. The Company accorded its utmost consideration to the three key priority areas of planet, people and profit in the production of sustainable palm oil. Strong commitment by the Board of Directors and senior management has given fresh impetus to the new approach of agricultural practices and management of the Group. A structured awareness campaign through training and road shows were organised to explain the eight RSPO Principles and Criteria which has since been adopted as guidelines for the Group’s estate management. Monitoring system and control mechanism were put in place to facilitate tracking and to ensure continuous improvement of practices and elevating the current standard of agriculture to a more competitive and globally acceptable level. The official launch marked the full initiative by all operating units in the Group to commence the implementation of the agricultural practices in accordance with the RSPO’s Principles and Criteria. Tenggara SBU is the designated pioneer project area for this project. External auditing by the independent auditors is targeted for the pioneer area two years after implementation thus paving the way for other JCC Teams to be RSPO certified.

ENVIRONMENT MANAGEMENT

Environment impact has increasingly become an important issue particularly at a time when green awareness and the green movement have assumed a global dimension. With the pressure to minimise adverse environment impact emanating from many different sources, the Group had taken steps to comply with discharge requirements and assumed full responsibilities in preventing pollution. High standards were set to ensure our activities, processes and products are compatible with the environment. The Group reduces wastages, treats the effluent, undertakes proper disposal of scheduled waste to Kualiti Alam Sdn Bhd and controls air and noise emission. The Group’s palm oil mills effluent (POME) is treated through a series of conventional ponding system prior to entering a tertiary treatment plant. The tertiary plant currently being initiated for Retus Oil Palm Mill incorporates technology to reduce the Biochemical Oxygen Demand (BOD) and suspended solids to the levels stipulated by the Department of Environment. The BOD measures the amount of organic compounds in water and is used as a gauge of the effectiveness of a wastewater treatment plant.

TOTAL QUALITY MANAGEMENT (TQM)

In line with the Group’s commitment to maintain high quality products and services, the Total Quality Management Strategic Business Unit (TQM SBU) continued its drive to promote continuous quality improvement and higher performance through teamwork. The Department was given added responsibility when the OSH Unit and its ongoing functions and initiatives were placed under its supervision. One of the notable successes achieved during the period under review was the improvement in oil extraction rate (OER) in ten of the Group’s palm oil mills. The Group’s OER has improved further to 21.20% in 2009 compared to 20.71% in 2008, an improvement of 2.37%. Five mills have succeeded in sustaining an average OER of above 21.0% in 2009 compared with only 3 mills in 2008. Through good teamwork and collaborative efforts of the Joint Consultative Committee (“JCC”) Teams, the Group’s OER has surpassed 21% during the financial year, a historic achievement since the Group’s establishment.

REWARD AND RECOGNITION

During the period under review, a reward and recognition programme was established for JCC Teams which succeeded in achieving the highest OER above the benchmark of 21.50% for every six-month period. The programme served as an incentive to maintain enthusiasm and work interest as well as inspiring motivation within the operating units. The Kota Tinggi JCC Team emerged as the Best Performing JCC Team for Financial Year 2009 after achieving the Highest OER Performance for two consecutive six-monthly periods namely January - June 2009 (21.87%) and July to December 2009 (22.15%) and for recording the
Most Improved OER Performance for July - December 2009 (22.15%). The Gua Musang JCC Team, however, achieved the Most Improved OER Performance for January - June 2009 (21.56%).

ISO 9001: 2008 CERTIFICATION

The Group also pursued its commitment in quality by observing the rudiments of business excellence model. During the period under review, the Quality Management System was implemented in accordance with the ISO 9001:2008 certification procedure for the Ulu Sebol and Sungai Kachur Palm Oil Mills located in the Southern Peninsular Region project area identified by the Director of Plantation.

The department undertook the monitoring of the ISO process in collaboration with the Head of the Southern Peninsular Region. The following components which account for some 90% of the Quality Management System under the ISO had been completed:

1. Creation of Awareness (20%)
2. Gap Analysis Review (10%)
3. QMS Documentation (40%)
4. First Stage Audit (Adequacy Audit) (20%)

The following steps are scheduled for completion in 2010:

1. Second Stage Audit – Final Audit (5%)
2. Issuance of ISO 9001 Certification (5%)

QUALITY DAYS

For the year under review, TQM SBU, in collaboration with the JCC Teams had successfully organised Quality Days for the Miri and Northern Peninsular Regions. Quality Days for the Sibu and Southern Regions were held in 2008. To complete the cycle, the Kuching and Sabah/Lawas Regions are scheduled to hold their Quality Days in mid- 2010.

The objectives of the Quality Day programme are:

• To chart the course for the Group’s vision by relentlessly stretching the innovative mindset of all Group estate and mill employees. This is done through continuously challenging the status quo and improving work processes as a way to maintain or reduce costs, enhance productivity and increase Group revenue.

• To guide the 11 JCC Teams in the Group’s estates and palm oil mills in addressing quality issues. This is achieved by creating a harmonious working environment through mutual support and cooperation among members through teamwork culture.

• Pursuing RSPO certification for the Group in collaboration with the Research and Development Department for 2009.