MSPO CERTICATION SUMMARY REPORT - tuv-nord.com · PDF fileSOP Standard Operating Procedure . 1. ... for example OHSAS 18001 or Occupational, Health & Safety ... stores, wastewater

MSPO CERTICATION SUMMARY REPORT

HAP SENG PLANTATIONS (RIVER ESTATES) SDN.BHD.

TOMANGGONG PALM OIL MILL

STAGE 2-CERTIFICATION AUDIT

Date: 25/01/2018

TUV NORD (Malaysia) Sdn Bhd No. 20, Jalan Tiara 3

Taman Perindustrian UEP Subang Jaya 47600, Selangor,

Malaysia Phone:+603 8023 2124 Fax: +603 8023 4140

Table of Contents

1. INTRODUCTION ...................................................................................................................... 4

1.1. Objective 4

1.2. Scope 4

1.3. Appointment and Qualification of team members 4

2. METHODOLOGY ..................................................................................................................... 9

3. ORGANISATION INFORMATION .......................................................................................... 10

3.1. Production volume 11

3.2. Maps of Company Location, Mill and Supply Base 11

4. CERTIFICATION ASSESSMENT .......................................................................................... 13

4.1. Certification audit Error! Bookmark not defined.

4.2. Stakeholders’ Consultation 13

4.3. Status of Non-Conformities Previously Identified 17

4.4. Detail of Audit Findings Identified During This Audit 17

5. CONCLUSION ........................................................................................................................ 21

6. RECOMMENDATION ............................................................................................................. 22

7. REFERENCES ....................................................................................................................... 23 Table 7-1: Documents provided by Tomanggong Palm Oil Mill Table 7-2: Background investigation and assessment documents Table 7-3: List Of Interviewed Persons And Stakeholders

Annex / Enclosures 27

Abbreviations

GAP Good Agricultural Practice

MPOB Malaysia Palm Oil Board

MS Malaysian Standard

MSPO Malaysia Sustainable Palm Oil

NC Non Conformance

OBS Observations

P&C Principles & Criteria

PPP Plant Protection Product

SOP Standard Operating Procedure

1. INTRODUCTION

Hap Seng Plantations (River Estates) Sdn Bhd has commissioned TUV NORD Malaysia Sdn Bhd to conduct certification audit for Tomanggong Palm Oil Mill according to MS 2530-4:2013 Part 4 General principles for palm oil mills.

1.1. Objective

The objective of this certification audit is to assess Tomanggong Palm Oil Mill by an independent certification body with the aim for compliance of the standards.

1.2. Scope

The certification is based on the documentation developed by the Tomanggong Palm Oil mill.

The supporting documents were provided to the audit team as well as information received by means of interviews and background investigation.

The documents and information were reviewed against the requirements and criteria based on MS 2530-4:2013 Part 4 General principles for palm oil mills. TUV NORD Malaysia has employed a risk-based approach in the audit, focusing on the identification of significant risks and reliability of the assessment and reporting.

In addition, the following reference was used as part of the assessment; the compliance of the requirements out of the guidelines applied was checked.

1. Malaysian Sustainable Palm Oil Part 4: General Principles for Palm Oil Mill audit guidance;

1.3. Appointment and Qualification of team members

A certification team consisting of one team leader was appointed. The onsite team members contributed to the review of documents, the assessment of the project activity and to the preparation of this report under the leadership of the team leader.

Qualification of the Lead Auditor: Terence Ang

Requirement Qualifications

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g. Environmental

Sciences, Life Sciences, Geological Sciences,

Natural Sciences,);

iii) Engineering, Process Technology;

iv) Energy Management, Quality Management;

v) Social Sciences and/or Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Diploma and Advance Diploma in Tourism Management

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process.

More than 8 years in sustainable related field

Requirement Qualifications

(e.g., sustainability, palm oil management; agriculture, ecology; social science)

Attended the MS 2530 series of standards training Successfully completed MSPO, RSPO P & C LA, SCC, RSPO Next and ISCC-EU training.

Conducted at least three (3) MSPO or equivalent sustainability certification audits as Lead Auditor-in-training with a minimum of fifteen (15) man-days under the supervision of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes within the last two (2) years.

Has conducted 3 MSPO and equivalent sustainability certification (RSPO ) as lead auditor in training

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Able to communicate in Bahasa Malaysia, English, and Chinese languages.

Field working experience in the palm oil sector, or demonstrable equivalent

1 year as Certifier and Reviewer for RSPO P&C and SCC schemes

1 year as Wildlife (Biodiversity) and Ecotourism Consultant (EMS &HCV)

3 years as Wildlife Guide (Licensed issued by Ministry of Tourism, Malaysia)

6 months as Field Technician for University of Montana on HC

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

1 year auditor for RSPO and MSPO schemes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

1 year auditor for RSPO and MSPO schemes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes

Successfully complete SA8000 Basic Training and 1 year auditor for RSPO and MSPO scheme

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

1 year auditor for RSPO and MSPO scheme

Good Milling Practices for example palm oil milling working experience or demonstrate equivalent.

Trainee auditor for RSPO and ISCC in refinery and mill.

Qualification of Team Members

Requirement Assessor Qualification Compliance

Post-secondary education, college or university diploma /

Leong Sak Kuan Graduate in Science (Physic)

Yes


degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g.

Environmental Sciences, Life

Sciences, Geological

Sciences, Natural Sciences,);

iii) Engineering, Process

Technology;

iv) Energy Management, Quality

Management;

v) Social Sciences and/or

Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Wan Jia Ann (Joanne)

Graduate in Environment Management Technology

Yes

Mohamad Norhisham Bin Mohd Salleh

Graduate in Applied Science (Major in Agrobiology)

Yes

Zul Hairi Bin Abu Hassan

Graduate in Plantation Industry Management

Yes

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)

Leong Sak Kuan More than 6 years as quality manager for ISO 14001 schemes.

Yes


5 years working experience in palm oil estates.

Yes


9 years working experience in estate management.

Yes

Attended the MS 2530 series of standards training

Leong Sak Kuan Successfully complete MSPO Lead auditor training course.

Yes


Successfully complete MSPO Lead auditor training course.

Yes


Successfully complete MSPO Lead auditor training course

Yes


Successfully complete MSPO Lead auditor training course

Yes

Conducted a minimum six (6) on-site audits for a total of at least 20 man-days of audit experience as an auditor-in-training under the direction and guidance of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes.

Leong Sak Kuan Qualified as auditor base on audit log.

Yes


Qualified as auditor base on audit log.

Yes


Qualified as auditor base on audit log.

Yes


A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Leong Sak Kuan Bahasa Malaysia, English and Mandarin.

Yes


Bahasa Malaysia, English and Mandarin.

Yes


Bahasa Malaysia and English.

Yes


Bahasa Malaysia and English.

Yes

Field working experience in the palm oil sector, or demonstrable equivalent

Leong Sak Kuan Working experience as auditor for RSPO and MSPO scheme.

Yes



Yes



Yes

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

Leong Sak Kuan 3 Years in RSPO P&C related to GAP and IPM.

Yes



Yes



Yes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

Leong Sak Kuan Successfully completed OHSAS 18001 and Working experience as auditor for ISO 14001 and ISO 9001.

Yes

Yes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes


Successfully completed Basic SA 8000 training and qualified as RSPO and MSPO sustainability auditor.

Yes


Successfully completed Basic SA 8000 training and qualified as RSPO and MSPO sustainability auditor.

Yes


Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

Leong Sak Kuan Successfully completed ISO 14001 training and auditing experiences.

Yes


Successfully completed EMS ISO 14001: 2015. Involved in RSPO, ISCC, MSPO Audit with work experience in waste management handling.

Yes


Successfully completed EMS ISO 14001: 2015. Involved in RSPO, ISCC, MSPO Audit.

Yes


Successfully completed EMS ISO 14001: 2015 Lead Auditor training.

Yes

Good milling Practices for example palm oil milling working experience or demonstrate equivalent.


Has involved in auditing for RSPO SCC standard

Yes

2. METHODOLOGY

The audit approach consists of the following steps:

Contract review;

Appointment of team members and technical reviewer;

Contact client for relevant documentation according to the applicable MSPO standards;

Audit planning;

Background investigation, desk review of submitted documents;

On-Site assessment, inspections, interviews with operational personnel, stakeholders and its contractors; review of documentation;

On-site reporting

Resolution of non-conformance (NC) (if any)

Draft audit reporting

Technical review

Final audit reporting

Peer review

Address Peer Review Comments (if any)

Final approval and issuance of certificate.

The list of reviewed documents refer to chapter 7, Table 7-1

The stage 2 was conducted on 25/10/2017 in accordance to the certification procedure.

Stage 2:

Stage 2 was conducted on 25/10/2017 covers the following activities but not limited to below:

Onsite inspection, observations and inspections of mill facilities such as process, workshops, stores, wastewater treatment system, waste handling and disposal sites, workers and staff living quarters, receiving and delivery of products for compliance to relevant Principles & Criteria of the applied standard;

Interview operation personnel for understanding for the work assigned;

Reviewed revised and updated documentation established and implemented;

Operating records;

Training records;

Reports established;

Work plans established;

Review and closed out of non-conformance raised during stage 1 audit;

Assessment reporting;

For list of all reviewed documents refer to chapter 7, Table 7-1

For list of personnel participated in the audits refer attendance sheet and Table 7-3.

On-site Assessment

The audit of the estates was conducted according to the MS 2530-4: 2013 Part 4: General principles for palm oil mills.

The methodology for collection of objective evidence included physical site inspections, observation of tasks and processes, interviews of stakeholders, communities, staff, workers and their families, review of documentation and data. Checklists and questionnaires were used to guide the collection of information. The comments made by external stakeholders were also taken into account in the assessment.

Non-conformance:

On the basis of the desk review, evidences presented during the audits as well as from the onsite visits non-conformance (NC) Major and Minor as well as Observations (OBS) may be raised during the audit.

Major non-conformance shall be addressed and responded with 60 days from date of audit. Minor NC and OBS will be reviewed and verified during the next audit. All minor non conformities shall be submitted with action prior to the certification decision.

3. ORGANISATION INFORMATION

Tomanggong Palm Oil Mill is the subsidiary of Hap Seng Plantations (River Estates) Sdn Bhd located at Lahad Datu, Sabah, Malaysia

Tomanggong Palm Oil Mill started operations in 15/03/1969 and met all Malaysia Palm Oil Board licensing requirement. The mill operating capacity is 40 MT per hour.

3.1. Production Volume

3.2. Maps of Company and Mill Location

Figure 1: Location of Tomanggong Palm Oil Mill.

Name of Mill Location Coordinates

Tomanggong POM 80km off Jalan Jeroco, Lahad Datu N 5.427306°; E 118.659306°

Volume for the past year Jan 2016 to Dec 2016

Actual volumes Jan 2017 to Dec 2017

Projected volume Jan 2018 to Dec 2018

FFB CPO PK FFB CPO PK FFB CPO PK

267,820 59,788 12,052 252,385 56,930 11,356 280,025 63,231 12,620

Figure 2: Location of Tomanggong Palm Oil Mill with other Hap Seng Plantations Group Estates and Mills.

4. CERTIFICATION ASSESSMENT

4.1 Certification Audit

The objective of the Stage 2 is to assess the activities of the mill are in compliance with MS 2530-4: 2013 Part 4: General principles for palm oil mills.

The number of audit findings raised in this audit has been addressed in Section 4.4 of this audit report. For details of the assessment, refer to the P & C audit report attached to this summary report.

The details assessment of the Principles & Criteria, refer to P & C audit report attached to this summary report.

4.1.1. Stage 1

According to the Certification Scheme, operators who have obtained at least one international sustainability schemes for e,g. ISCC, RSB or RSPO certification are exempted from Stage I audit.

Therefore, in this aspect, Tomanggong Palm Oil Mill is exempted to undergo Stage I since it was ISCC and RSPO certified.

The audit team has applied the Malaysian Sustainable Palm Oil Part 4: General principles for oil palm mills audit guidance to assess the established documents against the Principles and Criteria of the

standard.

4.1.2. Stage II Audit:

The Stage II audit was conducted on 25/10/2017 covering Tomanggong Palm Oil Mill.

During the Stage II audit, 1 major NC, 1 minor NC and 4 observations were raised. The responses for the findings were reviewed and closed out by means of document review to verify the established corrections and implemented appropriately.

4.2. Stakeholders’ Consultation

A stakeholders’ consultation meeting was conducted on 25/10/2017 to gather information from the local communities in accordance to Certification Scheme and Stakeholder Consultation requirements. The topics of discussion are as below:

1. Introduction of Tomanggong POM applying for MSPO certification.

2. Development of oil palm plantations by Tomanggong POM.

3. Community service and support provided by Tomanggong POM

4. Wildlife management and wildlife corridor established by Tomanggong POM.

5. Type of wildlife sighted at Tomanggong POM and wildlife corridor.

6. Local communities’ development.

The following relevant Principles & Criteria of the applied standard have discussed during the stakeholders’ consultation:

1. Principle 2 Criteria 2 Indicator 1: Consultation and Communication with stakeholders:

The stakeholders could confirm they have attended meetings with Hap Seng Plantations Group personnel on MSPO certification.

2. Principle 4 Criteria 2 Indicator 3 & 4: A complaint form should be made available at the premises, where employees and affected stakeholders can make a complaint

The stakeholders’ advice they have been informed a logbook and form is available to lodge any complaints or suggestions is available at the office.

3. Principle 4 Criteria 3 Indicator 1: Contribute to local development in consultation with the local communities.

The stakeholders could confirm the company has provided assistance and support to communities.

4. Principle 6 Criteria 4 Indicator 1: Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information

The stakeholder who provides maintenance and service could confirm briefing on MSPO requirements have been provided.

There no issues raised during the stakeholder’s consultation in terms of tenure and/or use rights, social or environmental aspects of management and operations that need to be addressed by the certified unit. It can be concluded the relevant Principles and Criteria clauses of the applied standard are in compliance.

The list of stakeholders who attended the meeting refer to Table 7-3.

Items Subject discussed Audit team findings Company response and proposed action to be taken

1 Any information from Group Manager/Company [thereafter known as GM] in regards to the MSPO/RSPO audit?

Interviewed stakeholders were aware of the certification scheme taken by Hap Seng Plantations Group. They aware of other scheme certificates held by Hap Seng Plantations Group other than MSPO such as RSPO and ISCC.

Positive comment

2 Social context During the consultation, it was noted that there was a school SK Tomanggong assisted by Hap Seng Plantations Group. It was also noted that there has no discipline problem arise at the plantation due to influence from worker. This is well noted even the school is situated in the plantation.

Villages on the surrounding are in good relation and have confirmed the job opportunities for the younger generation in this location.

Neighbouring plantations have also good relationship with the management and there have not been any social issues arise between

Positive comment


workers who ae mainly is consist of foreigners.

When asked on child labour, there is no child working for the plantations. It could have been years ago if this had happened.

3 Understanding of “NCR Land”?

A few attendees from different group have noted that there were no issues concerning NCR land arise. In the previous issue of “Tanah Perkuburan” the villages have informed that they admit the land have taken into Hap Seng Plantations Group territory. Nevertheless, they have applauded the effort and cooperation from Hap Seng Plantations management in handling the issue and the assistance provided to the local villages concerning the piece of land.

Positive comment

4 Economy / livelihood

Is there any impact on livelihood after the introduction of MSPO/RSPO?

Local villagers have confirmed the opportunity of work had increased in relation to Hap Seng Plantations Group. Many of the younger generation are now working with Hap Seng Plantations group which have been a great impact to the livelihood of the people and have been applauded by the attendees.

Positive comment

6 HCV and environmental understanding

The attendees are clear on the HCV and environmental issue. Some have confirmed on the training they have attended which is very educational.

Positive comment

7 Awareness towards species, habitats, and high conservation values?

They are aware of the habitat and conservation value of the site.

Internal stakeholders could name the animals which are listed as protected and mention in the training. It was confirmed from interview that there have been no hunting.

Positive comment


Interview with Jabatan Hidupan Liar confirmed that there have been no complaint on Hap Seng Plantations Group and hunting have not been noted in the area. It was mention by 2 officers that Hap Seng Plantation Group have taken great step in handling human wildlife conflict which had been a great success. It was confirmed that the conflict have not raised for the year 2017.

8 Support to smallholders Attendees from other estates have mention that Hap Seng have provides great support and cooperation. They are thankful and hope that this good relation will continue.

Positive comment

9 FFB quality There has been no complaint on quality of FFBs. Although they have mention that Hap Seng Plantations Group have a strict grading. They confirmed that they are abiding to the quality of hap Seng Group and are glad that Hap Seng Group also provide training to improve their FFB harvesting.

Positive comment

11 Do you consider any management is in conflict with the MSPO principles and criteria?

All attendees confirmed they have been no conflict with MSPO principles.

Positive comment

12 Do you have any suggestions for management? Other matter

Most of the stakeholders acknowledge they are satisfied with Hap Seng Group and have a good relationship and cooperation given.

Although one of the attendees mention it will be great if some of the road Hap Seng Group could reconsidered the safety. In addition to this, it is also noted on that Hap Seng Group effort have been well recognize in road management

Positive comment


School suggestions have been taken up which have been a much delight to the School management. It was confirmed by the school representative, the school management have involve them in many of the stakeholders process.

4.3. Status of Non-Conformities Previously Identified

The stage 1 audit findings of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have been implemented to address the identified audit findings. Details of the follow up action taken on stage 1 audit findings were recorded in the Stage 1 audit report.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have implemented to address any nonconformity identified.

The last audit results of this system have been reviewed, in particular to assure appropriate corrections and corrective actions have not been implemented effectively. The non-conformity will be re-raised.

X Not applicable. No non-conformity raised in previous audit.

Note 1: If a minor non-conformity raised in last audit, is not closed out, then this finding will be re-raised to a Major non-conformity.

Note 2: All minor NCs raise in last audit are required to capture in this report together with the closing of the non-compliance.

4.4. Detail of Audit Findings Identified During This Audit

This section gives an overview of the non-conformities raised during this audit.

AUDIT OUTCOME

MAJOR Non-Conformities 1

MINOR Non-Conformities 1

OBSERVATION 4

Non Conformity Number < 01 >

Indicator: 4.2.1.2: Management documents shall be publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

Location Tomanggong POM

Description of Finding / Objective Evidence:


Procedure “List of Publicly Available Document” sighted with 20 document mentions to be make publicly. However, on their procedure for List of publicly available document have not been clearly followed. Certificate was not updated and have expired. There is also policy which was not updated where MSPO policy was not made available. Public announcement for the audit was also not updated and uploaded into the website to announcement to stakeholder for the audit.

Classification Major Minor Observation

Deadline for

implementation 27/12/2017

Root Cause Analysis (by company):

Lack of understanding on MSPO's full requirement for the publicly available document.

Correction (by company):

To immediately obtain approval from Top Management to make available the relevant document on the company website. Approval is obtained on 10.11.2017. (Attachment 1.1 M)

The Sustainable Agriculture Policy, MSPO Policy and Occupational Safety and Health Policy are uploaded in the website as below.

https://www.hapsengplantations.com.my/download/sustainabilitypolicies/mspo-policy.pdf

Corrective / Preventive Action (by company)

The independent Sustainability Team will monitor quarterly whether the updated relevant document is timely uploaded to the company website by the group compliance personnel.

Review of Correction & Corrective / Preventive Action

Website have been reviewed and have been deemed sufficient to addressed the NC raised.

Closed: Yes No Site verification : Yes No

Name of Lead Auditor / Auditor:

Terence Ang

Date of Closure:

27/12/2017

Review of Implementation for Major NC (where applicable)

Closed: Yes No


Date of Closure:


Indicator: 4.4.4.2: The occupational safety and health plan shall cover the following: b) The risks of all operations shall be assessed and documented


Description of Finding / Objective Evidence: 4.4.4.2 (B)

The risk assessment HIRARC have been conducted. Hap Seng have included element of likelihood, severity and risk in to the assessment. The action plan following to this have been set up. HIRARC have included the action plan and all required actions to be conducted. However, the plan did not clearly segregate according to the risk specify. Therefore, to avoid confusion from reader the management can consider separating the action plan according to the risk.


Classification Major Minor Observation

Deadline for

implementation 26/10/2018

Root Cause Analysis (by company):

Lack of understanding on the requirement that action plan for the HIRARC is needed to be segregated based on the individual hazard risk.

Correction (by company):

To immediately segregate the Action Plan of the HIRARC based on the individual Hazard Risk.

Corrective / Preventive Action (by company)

HIRARC will be yearly monitored by Sustainability Team through internal audit to ensure the Action plan of the HIRARC segregated based on individual Hazard Risk.


Action plan accepted. Implementation will be reviewed in the next surveillance.




Date Review Action Plan:

27/12/2017

Review of Implementation for Major NC (where applicable)

Closed: Yes No


Date of Closure:

Observation < 01 >

Indicator: 4.1.4.1: The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company.



The CIP can be more improve by properly segregating and identify clearer mitigation plan and improvement plan.





Terence Ang


27/12/2017

Observation < 02 >

Indicator: 4.4.2.2: The system shall be able to resolve disputes in an effective, timely and appropriate manner that is accepted by all parties.


Observation < 02 >

Description of Finding / Objective Evidence: 4.4.2.2

The management could consider separating request comment from complaint in the complaint form. Currently both are using the same form where can be misleading as some of this comment were not complaint or grievance





Mohamad Norhisham Bin Mohd salleh


27/12/2017

Observation < 03 >

Indicator: 4.5.3.2 A waste management plan shall be developed and implemented, to avoid or reduce pollution. The waste management plan should include measures for identifying and monitoring sources of waste and pollution



Oil trap could be installed at the drain for CPO tank no.5 to prevent accidental discharge of oil.





SK Leong


27/12/2017

Observation < 04 >

Indicator: 4.5.5.1 The management shall establish water management plans to maintain the quality and availability of natural water resources (surface and ground water).

Location Water treatment plant


The water treatment plant has not been using chlorine for the past one month but no water quality analysis has been conducted yet to determine the water quality, especially on E-coli and coliform count.

The last water analysis was conducted in August and the next one is in Feb (every 6 months)

Water quality analysis could be conducted on a more regular basis for critical parameters like E-coli and coliform count.





SK Leong


27/12/2017

5. CONCLUSION

Hap Seng Plantations (River Estates) Sdn Bhd., has commissioned TUV NORD (Malaysia) Sdn Bhd to conduct Stage 2 certification audit for Tomanggong Palm Oil Mill according to MS 2530-4:2013 Part 4 General principles for Palm Oil Mill.

The 1 Major NC raised in this audit was closed out successfully. Furthermore, corrective action plans have been submitted for the 1 Minor NC and 4 Observations raised in this audit that will be verified in the next surveillance audit.

From the review of the standard operating procedures, relevant forms, work flow charts established and implemented; the subsequent background investigation and interviews conducted during this surveillance audit have provided TUV NORD Malaysia with sufficient evidence on the fulfilment of the applied standard Principles & Criteria.

In conclusion the certified unit has been established, implemented and continued to improve in managing the estates are in line with the Principles & Criteria of the applied standards of MS 2530-4:2013. Part 4.

As a result of this certification audit, the audit team confirms that:

Certified CPO January to December 2018: 63,231 mt

Certified PK January to December 2018: 12,620 mt

MSPO Certification Summary Report

Company Name: Hap Seng Plantations (River Estates) Sdn. Bhd.

Certifying Unit: Tomanggong Palm Oil Mill

Client Number: 92-036

Audit Type: Stage 2-Certification Audit

MSPO-F04c / Rev 2 22 of 27

6. RECOMMENDATION

The audit team conducted a process-based audit focussing on significant aspects/risks and objectives required by the standard(s). The audit methods used were interviews, observations, sampling of activities and review of documentation and records.

The structure of the audit was in accordance with the audit plan included in to this summary report.

The audit team concludes that the organisation has established and maintained its management system in line with the requirements of the standard(s) and demonstrated the ability of the system to achieve requirements for products and/or services within the scope and the organisation’s policy and objectives.

Therefore, the audit team recommends that, based on the results of this audit and the system’s demonstrated state of development and maturity that this management system certification be

X Recommended for Certification

Recommended for Continuity of Certification

Recommended for Suspension of Certification

Subang Jaya, 01/01/2018 Subang Jaya, 25/01/2018

Terence Ang

TUV NORD Malaysia Sdn Bhd

Audit Team Leader

Cheong, Chun Yuen (Robert)

TUV NORD (M) Sdn Bhd

Technical Reviewer and Final Approval







7. REFERENCES

Table 7-1: Documents provided by Hap Seng Group.

Client Reference Document

Occupational Safety and Health Policy dated 01/04/2015

Sexual Harassment Policy dated 01/08/2012

Labour Policy for Foreign Workers dated 28/09/2015

Human Right Policy dated 01/10/2016

Child Labour Policy dated 02/01/2017

Malaysian Sustainable Palm Oil Policy dated 24/03/2017

Zero Burning Policy dated 21/02/2017

Internal Audit Report dated 10/08/2017

Social Impact Assessment dated 02/10/2017

Standard Operational Procedure on CSFFB Traceability dated 02/01/2017

Carta Aliran Laporan Aduan Hap Seng Plantation Sdn. Bhd

Organisational Safety and Health Meeting minutes dated 02/08/2017

Workers Employment Cards

Employment Contracts

Environmental Impact Assessment 05/10/2017

Water Management Plan dated 05/10/2017

Contract Completion Certification







Client Reference Document

Tomanggong Palm Oil Mill Budget 2017

Fossil Fuel Management Plan dated 05/10/2017

Table 7-2: Background investigation and assessment documents

Reference Document

Malaysian Sustainable Palm Oil Part 4: General Principles for Palm Oil Mills Audit Guidance

MSPO Certification Scheme Doc. No: MPOB/MSPO/CS/01

Environmental Quality Act & Regulation –Act 127 Environmental Quality (Scheduled Wastes) Regulations 2005 Environmental Quality (Clean Air) Regulations1978

Factories and machinery Act,1967 Factories and machinery act with regulations – Act 139

Estate Hospital Assistance(registration)-Act 1965

Akta Keselamatan dan kesihatan Pekerjaan dan peraturan-peraturan-Akta 514 OSHA (Classification, labelling and Safety data Sheet of Hazardous Chemicals) Regulations 2013

Code of Good Milling Practice for Palm Oil Mills

Employment Act 1995 Employees Social Security Act 1969-Act 4 (SOCSO)

Land Ordinance 1972 (Cap.68)

Workers Minimum Standards of Housing & amenities Act 1990 Act 446

Malaysian Palm Oil Board Act 1997-Act 582

Table 7-3: List of Interviewed Persons and Stakeholders

No. Name Organisation / Function

1 Sabperi B.A Adanan SK Tomanggong

2 Salleh Tahir Jabatan Hidupan Liar








3 Rayner Benedict Jabatan Hidupan Liar

4 Wong Wan Fatt CNY Chemical Engineering

5 Arimuddin Labiru Pacm Mach Sdn Bhd

6 Eldi Jay M&M Sdn Bhd

7 S. Mariappan First Raintree Sdn Bhd

8 Mohd Ejandi Baham PLE Plantation

9 Delvan Manikan LPC Plantation

10 Mansor Hj Salam Bulat Kretam

11 Jais Silimal Bulat Kretam

12 Hamsah Lahita Kg Litang

13 Abd Hama B. Abd Karim Kg Litang

14 Daniel Hap Seng (Internal stakeholder)

15 Yohanis Hap Seng (Internal stakeholder)

16 Adi Putra Hap Seng (Internal stakeholder)

17 Amir Hap Seng (Internal stakeholder)

18 Rudin Hap Seng (Internal stakeholder)

19 Aiman Hap Seng (Internal stakeholder)

20 Jusman Hap Seng (Internal stakeholder)








21 Saha Hap Seng (Internal stakeholder)

Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives

This report is sent to the certification body or bodies, the members of the audit team and the audit representative of the organisation. All documents (such as this report) regarding the certification procedure are treated confidentially by the audit team and the certification body. This audit report remains the property of the certification body.

An audit is a procedure based on the principle of random sampling and cannot cover each detail of the management system. Therefore nonconformities of weaknesses may still exist which were not expressly mentioned by the auditors in the final meeting or in the audit report.

The responsibility for continuous effective operation of the management system always rests solely with the audited and certified organisation. Salvo clause: The audit report will be left to the organisation at the end of the audit - subject to approval by the certification body. The independent release process may cause modifications or additions. In these cases a modified revision will be sent to the audited organisation.

The objective (goal) of the audit is to establish compliance of the management system of the aforementioned organization with the requirements of the aforementioned standard in order to achieve or maintain certification through an independent and accredited certification body. Identification of possibilities to improve the management system can also be a component of the audit and is considered simply to be an enhancement; it does not constitute consultancy or advice with regard to the management system.

Annex / Enclosures

Annex / corresponding audit documentation

P&C Audit Report / Checklist(s)

Audit Plan

Additional annexes, number

Malaysia Sustainable Palm Oil – MS 2530 Part 4 for Palm Oil Mill P & C Report

Company Name: Hap Seng Plantations (River Estates) Sdn. Bhd. Client No: 92-036

Certifying Unit: Tomanggong Palm Oil Mill Audit Type: Stage 2 Certification

MSPO-F05c / Rev 2 Page 1 of 40

Item Description

1. Company Name Hap Seng Plantations (River Estates) Sdn, Bhd.

2. Certifying Unit Tomanggong Palm Oil Mill

3. Address 80km, Off Jalan Jeroco, Lahad Datu, Sabah, Malaysia

4. Contact Tel:+6089-278183 Fax: Website: https://www.hapsengplantations.com.my

5 Location of Palm Oil Mill

Lahad Datu, Sabah, Malaysia

6 Geo Coordinates of Palm Oil Mill

5.427306°N, 118.659306°E

7 Contact Person Name: Mr. Kee Keow Chong Tel: +6089-278183 Mobile:+6019-553 2412 Email: [email protected]

8 Date of Audit 25/10/2017

9. Audit Team Members

Team Leader / LA Ang Wei Sheng, Terence (TA)

Auditor Member Leong Sak Kuan (LSK) ; Mohamad Norhisham Bin Mohd Salleh (HS) ; Wan Jia Ann, Joanne (JW)

Expert / Trainee / Observer

Zul Hairi Bin Abu Hassan (ZH)-trainee





Clause Principle & Criteria

Verification Guidance Guidelines. Findings & Comments Conformity Yes / No

4.1 Principle 1 Management Commitment & responsibility

4.1.1 Criterion 1 Malaysian Sustainable Palm Oil (MSPO) Policy

4.1.1.1 Indicator 1 A policy for the implementation of MSPO shall be established.

(MAJOR)

- A written statement to indicate commitment to implementation of MSPO, signed by CEO or Head of Mill / Engineering Department

- A written policy statement on the commitment towards sustainable production of palm oil. This policy shall be communicated to all levels of the workforce and stakeholders

- Interview of personnel and stakeholders whether they are aware of the MSPO Policy and its implementation at the site

Policy was sighted and displayed at the notice board for all units audited.

Malaysia Sustainable Palm Oil (MSPO) Policy dated 24/03/2017 approved by Chief Executive – Group Plantation.

Policy specified 7 keys MSPO commitment which include the example below

1. Management Commitment and Responsibility

2. Transparency

3. Compliance to legal requirement

Communication of the policy was conducted through a training dated 12/09/2017. Training agenda and presentation was reviewed which cover relevant MSPO requirement. Site interviews with workers demonstrate they were aware of MSPO and the elements.

Yes

4.1.1.2 Indicator 2 The policy shall also emphasize on the commitment to continual improvement with the objective of improving the milling operation.

(MAJOR)

- The policy shall indicate commitment towards continuous improvement in milling operations

“MSPO Policy”

Statement “HSPHB is also committed for continual improvement practices by harnessing its resources of people, process and technology in order to ensure the continuous production of oil palm product in a sustainable manner”

Yes

4.1.2 Criterion 2 Internal Audit

4.1.2.1 Indicator 1 Internal audit shall be planned and conducted regularly to determine the strong and weak points and potential area for further improvement.

- Internal audit plans should be documented

- Internal audit should be conducted to highlight strong and weak points in the

Internal audit was conducted on 10/08/2017. Internal audit conducted was combined with other schemes where documents and sites have been verified.

Yes







(MAJOR) specific area that needs further improvement

- Assessment of internal documents:

MSPO internal audit procedures document

Internal audit report/results, including non-conformities, if any.

Mechanism of follow-up activities such as verification of the actions taken & the reporting of verification results is to be established.

Evaluation of the competency of internal auditors

MSPO part 4 checklist have been used.

Tota: 3 majors raised.

4.1.2.2 Indicator 2 The internal audit procedures and audit results shall be documented and evaluated, followed by the identification of strengths and root causes of nonconformities, in order to implement the necessary corrective action.

(MAJOR)

- The findings made by the internal auditor shall be documented

The internal audit results were documented and covering all aspect of Non-compliance.

Indicator 4.5.4.3

NC: Meeting with employees regarding environment quality regularly was not available.

Root cause: Lack of understanding in MSPO requirement and awareness towards environment quality

Correction: To immediately conducted the meeting according to the EIA report

Corrective action plan: To conduct the meeting quarterly in a year

Yes

4.1.2.3 Indicator 3 Report shall be made available to the management for their review.

(MAJOR)

- The decisions arising from the internal audit shall be documented

- Top management review comments shall be minuted.

Results of Internal audit was presented at management review meeting was reviewed. Management review meeting as in 4.1.3.1 was sighted.

Part 4 mention the results of internal audit.

Yes

4.1.3 Criterion 3 Management Review







4.1.3.1 Indicator 1 The management shall periodically review the continuous suitability, adequacy and effectiveness of the requirements for effective implementation of MSPO and decide on any changes, improvement and modification.

(MAJOR)

- Management review report shall be documented

- Minutes of management meetings shall be reviewed


Agenda and minutes of management review meeting

Internal audit report

Results of corrective action plan

- Improvement plan and timeline for implementation

Management review report dated 11/08/2017 chaired by General Manager Processing.

Meeting of minutes covering various aspect example;

- Internal audit report

- Result of corrective action

- Improvement plan

- Complaint

- Waste management

Yes

4.1.4 Criterion 4 Continual Improvement

4.1.4.1 Indicator 1 The action plan for continual improvement shall be based on consideration of the main social and environmental impact and opportunities of the company.

(MAJOR)

- Such action plan shall be made available to the auditors.

- To include the 3P’s

People

Planet

Profit

Action plans are available in separate document of EIA and SIA report. Both documents have considered the action plan required.

EIA and SIA dated 02/10/2017-05/10/2017

EIA Appendix 2 pg16 specify management action plan and continuous improvement plan for Tomanggong palm oil mill

SIA report in appendix covering different stakeholder and the relevant action and mitigation plan.

Example- EIA

Impact: oil mill discharge of POME to the stream which could increase the BOD and affect aquatic lives.

CIP: to reduce BOD by pumping of high pH water (Aerobic pond to Anaerobic pond 1 of low pH to maintain the bacteria alive. The pH is monitored daily. The cut off pH is 5.5).

Observation:

OBS 1







The CIP can be more improve by properly segregating and identify clearer mitigation plan and improvement plan.

4.1.4.2 Indicator 2 The company should establish a system to improve practices in line with new information and techniques; and for disseminating this information throughout the workforce.

(MAJOR)

- Verify the system.

The system must be able to establish the validity or practicability of the new practices before being adopted.

Training matrix proposed to enable understanding and adoption of improved practices.


Continuous improvement plan for key social and environmental impacts, implementation and monitoring

Verification of the system in terms of the appropriateness & effectiveness

Budget allocation for implementation of social, environmental activities/new technologies and their timeline

Training programme to the relevant personnel involved in the implementation of new technology/techniques.

- Interview of personnel and stakeholders regarding the following:

CIP was used to check the need of new development required. A study will be conducted on the feasibility on the process.

Training matrix has been set up on yearly basis of field and by month. Training “program latihan 2017”.

For the month of September 2017, total of 14 training has been planned and conducted. Training includes for example Water treatment, Incinerator dated 01/10/2017.

SIA assessment

Impact: Communication coverage

Action taken: HSP has made complaint through official letter to correspondence communication agencies. The feedback has yet been provided to HSP but however, HSP will continue to follow up with the agency.

Impact: Good road maintenance

Mitigation plan: Continuous monitoring and maintenance of road condition.

Yes

4.2 Principle 2 Transparency

4.2.1 Criterion 1 Transparency of information and documents relevant to MSPO requirements

4.2.1.1 Indicator 1 The management shall communicate adequate information to other stakeholders on

- Requests, responses and release of information must be recorded (refer to

Communication has been provided on both mill level and group level.

Yes







environmental, social and legal issues relevant to sustainable practices in the relevant languages and forms.

(MAJOR)

4.2.2.3)

- Assessment of internal documents.

Mill level are conducted on 11/04/2017

Example of topic covered

1. Kebersihan dan kesihatan information.

2. Hal Hal bangkit – Slowing vehicle on mosque area, vehicles are in good maintenance,

Group level conducted on 23/05/2017

Latest JCC meeting conducted on 05/10/2017 has included external stakeholder including school and shop owner. This meeting has included the involvement of MSPO certification.

4.2.1.2 Indicator 2 Management documents shall be publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

(MAJOR)

- For public listed companies the annual reports are the accepted primary public documents

Procedure “List of Publicly Available Document” sighted with 20 documents made publicly.

Documents include HSPHB annual report, land dispute, Human right policy, Grievance book.

Non conformity:

Procedure “List of Publicly Available Document” sighted with 20 document mentions to be make publicly.

However, the procedure for List of publicly available document have not been clearly followed.

Certificate was not updated and have expired. Policy was not updated and MSPO policy was not made available. Public announcement for the audit was not published in the website to announcement to stakeholder for the audit.

Maj NC 1







4.2.2 Criterion 2 Transparent method of communication and consultation

4.2.2.1 Indicator 1 Procedures shall be established for consultation and communication with the relevant stakeholders.

(MAJOR)

- SOP e.g. Enquiry Register Book to record request for information from relevant stakeholders


- Verify records for appropriateness & effectiveness of the actions taken/ follow up actions required (if any).

- Interview with personnel and stakeholders:

Awareness of consultation and communication procedures

- Availability of management response with regards to their requests /complaints( if applicable)

-

All staffs from the mill (e.g. administration, laboratory, engineers, general workers, etc) has been informed with regards to the MSPO.

Communication has been provided on both mill level and group level.

Mill level conducted on 11/04/2017

Example of topic covered

1. Kebersihan dan kesihatan information.

2. Hal Hal bangkit – Slowing vehicle on mosque area, vehicles are in good maintenance,

Group level conducted on 23/05/2017

Example of topic covered including

1. Extend of electricity provided in the Kenduri Akikah.

2. Requested to appoint personnel in charge for the purpose of communication between school and company.

Attendance list for all the meetings have been verified.

Yes

4.2.2.2 Indicator 2 The management shall nominate management officials at the operating unit responsible for issues related to Indicator 1 (4.2.2.1)

(MINOR)

- Discretion of the companies

- Appointment letters Procedure “memohon Maklumat Syarikat” point 4 and point 5 specify pengurus lading/kilang sawit is the person in charge for providing such information.

Beyond the list, confidential document require approval from General Manager – processing / Senior Planting Advisor / Chief

Yes







Executive Group Plantation.

4.2.2.3 Indicator 3 A list of stakeholders, records of all consultation and communication

and records of action taken in response to input from stakeholders shall be properly maintained.

(MAJOR)

- Verify records.

- Lists of stakeholders

- Communities in the area / neighbourhood

- Employees

List of stakeholders is available. This was reviewed prior to the audit and has been deemed to be adequate.

Management have provided and handled relevant stakeholder request. Sampled company ABC request for Daily production record tonnage through telephone call. The info was provided directly from phone communication.

Yes

4.2.3 Criterion 3 Traceability

4.2.3.1 Indicator 1 The management shall commit itself to implement and maintain the requirements for traceability and shall establish a standard operation procedure for traceability.

(MAJOR)

Own estate ;

- Weighbridge ticket- estate, field.

To conduct pre and post traceability.

Sales agreement/ undertakings between estate and mill

External supplier;

- Weighbridge ticket- licensed supplier

To include pre and post traceability.

Standard operating procedure for supply chain and chain of custody has been reviewed. Dated 30/12/2016. At the time of audit there is no specific requirement for supply chain in MSPO

The procedure is applicable to:

1. Incoming of CSFFB from certified sustainable estate and normal FFB from Non-certified estate

2. Preparation of the CSPO and CSPK sales contract

3. Delivery of CSPO and Normal CPO from mill to refinery by road and by barge

4. Delivery of CSPK and Normal PK from mill to refinery by road

5. Preparation of the invoice once the delivery of CPO and PK has been done.

There is no sales agreement at the time of audit.

Yes







4.2.3.2 Indicator 2 The management shall conduct regular inspections on compliance with the established traceability system.

(MAJOR)

- Internal check on a regular basis as per SOP on traceability.

- Internal audit


- Visual inspection:

Checking of fresh fruit bunches for identification

Note: Individual oil mills can develop their own traceability system documentation. Alternatively they can refer to the guide by MPOB (see Annex 1).

The inspection has been conducted during the internal audit. Site inspection has include.

Finding have been document

1. Random checking conducted on FFB weighbridge ticket (WT) & Delivery Notes (DN) in the month of December 2016 - March 2017

2. Checking of CPO sustainability Declaration & Delivery notes from January 2017 – August 2017.

Yes

4.2.3.3 Indicator 3 The management shall identify and assign suitable employees to implement and maintain the traceability system.

(MINOR)

- An executive to hold ownership to maintain the implementation traceability system

- Training of employees

Organization chart dated 06/09/2017 was reviewed on responsible person for traceability. Person in charge is Mill assistant.

Appointment letter dated 08/08/2017 as person in charge have been sighted

Yes

4.2.3.4 Indicator 4 Records of storage, sales, delivery or transportation of crude palm oil and palm kernel shall be maintained.

(MAJOR)

- Verify documents

- Hard or soft copies are accepted Monthly Palm Kernel Dispatch Report dated 05/09/2017 was reviewed.

Examples:

Seller:

Tomanggong POM

Date:17/09/2017

Lorry number: ST 2987Y

Ticket number:275518

DN Number: 00709

Weight: 14,620 mt

Buyer:

XYZ Sdn Bhd

Yes







Date: 18/09/2017

Ticket number:8350110144738 R

Weight: 14,410 mt

Weighbridge ticket from seller can be trace back to buyer via mill ticket number and lorry number.

4.3 Principle 3 Compliance to legal requirements

4.3.1 Criterion 1 Regulatory requirements

4.3.1.1 Indicator 1 All operations are in compliance with the applicable local, state, national and ratified international laws and regulations.

(MAJOR)

- Verify compliance

- MPOB to list down the ratified International Law and Regulations applicable

- Interview of personnel and site management:

Awareness of the applicable laws and regulations

Compliance with the applicable laws and regulations and on-going efforts of compliance



Ability of site management to demonstrate compliance of the relevant laws (e.g. concerning storage of scheduled waste, bulk fuel storage

Reference:

Annex 1 - List of international laws ratified by Malaysia

Business license no. A232597, expiry 31/12/2017.

DOE license no. 003446, expiry 30/06/2018.

MPOB license no. 50003460400, expiry 31/03/2018.

Electricity generation license no. 20024, expiry 15/03/2018.

Foreign workers license no. 40531P, expiry 08/01/2018.

Diesel storage license no. S002207, expiry 05/02/2018.

Permits for water tube boiler, vacuum tank, vacuum deaerator, vacuum oil dryer, etc are pending awaiting issuance of new permits after JKKP inspection on 13/09/2017.

Current permits expired on 20/10/2017.

Yes







Annex 1 – List of applicable state and national laws applicable to the palm oil industry

4.3.1.2 Indicator 2 The management shall list all relevant laws related to their operations in a legal requirements register.

(MAJOR)

- Verify the following:

List of applicable laws and regulations.

List of relevant licenses, certificate of fitness, etc.

Check on expiry date

List of legal register-POM dated 16/03/2017.

EQA, FMA, Fire Service Act, OSHA, Poison Act, etc. Latest update on 16/03/2017 for Food Act 1983 and Food regulation 1985.

Yes

4.3.1.3 Indicator 3 The legal requirements register shall be updated as and when there are any new amendments or any new regulations coming into force.

(MAJOR)

- Verify the register

- Legal Requirement Register (LRR) .Refer to indicator 4.3.1.2 Yes

4.3.1.4 Indicator 4 The management should assign a person responsible to monitor compliance and to track and update the changes in regulatory requirements.

(MINOR)

- Executive or appointed personnel to hold ownership to maintain the regulatory requirements.

Mill manager is appointed as PIC for monitoring compliance and update of changes. Appointment letter dated 08/08/2017, approved by GM for processing.

Yes

4.3.2 Criterion 2 Land use rights

4.3.2.1 Indicator 1 The management shall ensure that their oil palm milling activities do not diminish the land use rights of other users.

(MAJOR)

- Verify land ownership or land use rights

Sabah Syarat-syarat Nyata.

Sarawak - Land title, Provisional Lease (PL), License for Planted Forest (LPF) are acceptable.

- Verification of land use rights by means of official/legal documents. The following documents are accepted:

Land title and terms and conditions.

Provisional Lease (PL) / License for Planted Forest (LPF) (for

The mill is located inside the plantation that remains to be one of the first in Sabah. Land has been obtained since 1880’s. Throughout the duration there have not been complaint arise on the matter of user right. This was further confirmed through RSPO audit which have been conducted by other certification body

Yes







Sarawak)

Lease Agreement

Quit rent paid by the holding company (if applicable)

Perimeter survey map containing boundary markers

Records of disputes and resolution process

Records of agreements/legal documents between the previous owners and occupants

- Visual inspection of for example:

Legal perimeter boundary markers

4.3.2.2 Indicator 2 The management shall provide documents showing legal ownership or lease, history of land tenure and the actual use of the land.

(MAJOR)

- Verify land ownership or land use rights The mill is located inside the plantation the remains to be one of the first in Sabah. Land has been obtained since 1880’s. Throughout the duration there have not been complaint arise on the matter of user right. This was further confirmed through RSPO audit which have been conducted by other certification body.

Yes

4.3.2.3 Indicator 3 Legal perimeter boundary markers should be clearly demarcated and visibly maintained on the ground, where practicable.

(MAJOR)

- Refer to estate titled land (PL or LPF) as some Mills are inside estate titled land

- Site verification and verify record

Map of Hap Seng plantations have been reviewed.

The mill is located inside the plantation that remains to be one of the first in Sabah. Land has been obtained since 1880’s. Throughout the duration there have not been complaint arise on the matter of user right. This was further confirmed through RSPO audit which have been conducted by other certification body.

Yes







4.3.2.4 Indicator 4 Where there are, or have been disputes, documented proof of legal acquisition of land title and fair compensation that have been or are being made to previous owners and occupants; shall be made available and that these should have been accepted with free prior informed consent (FPIC).

(MINOR)

- Verify record

- There has not been any conflict, nor does any negotiation arises. FPIC process is not required at the time of audit. Refer stakeholders’ consultation .

Yes

4.3.3 Criterion 3 Customary land rights

4.3.3.1 Indicator 1 Where lands are encumbered by customary rights, the company shall demonstrate that these rights are understood and are not being threatened or reduced.

(MAJOR)

- Assessment of internal documents There is no land conflict where involve customary right land. This has been verified in the stakeholders’ consultation.

Hap Seng Plantations obtain land through leased or sub-leased. Land titles were verified

Yes

4.3.3.2 Indicator 2 Maps of an appropriate scale showing extent of recognized customary rights shall be made available.

(MAJOR)

- Official maps from Land Survey for recognized customary rights is made available

- Verify record

There is no land conflict where involve customary right land. This have bene verified in the stakeholders’ consultation.

Hap Seng Plantations obtain land through leased or sub-leased. Land titles were sighted and verified.

Yes

4.3.3.3 Indicator 3 Negotiation and FPIC shall be recorded and copies of the relevant agreements should be made available.

(MAJOR)

- Verify record There is no land conflict where involve customary right land. This have bene verified in the stakeholders’ consultation.

Hap Seng Plantations obtain land through leased or sub-leased. Land titles were verified.

Yes

4.4 Principle 4 Social Responsibility, health, safety and employment condition

4.4.1 Criterion 1 Social impact assessment (SIA)

4.4.1.1 Indicator 1 Social impacts should be identified and plans should be implemented to mitigate the

- Verify the assessment report

- Feedback from local community Social Impact Assessment dated 2-5/10/17. was conducted internally by Hap Seng

Yes







negative impacts and promote the positive ones.

(MINOR)

- Social impact assessment can be conducted internally


Note:

Identification of social impact may be carried out internally in consultation with the affected parties.

Oil mill management may have a social impact on factors such as:

1. Access and use rights

2. Economic livelihood and working conditions

3. Subsistence activities

4. Cultural and religious values

5. Health and education facilities

6. Other community values, resulting from changes in improvement of transport/communication/influx of migrant labour force.

Group internal assessment team led by Sustainability Executive. No issue raised by stakeholders in SIA JCC Stakeholder meeting.

Feedbacks obtained from the stakeholders for both positive and negative impact.

Example:

Company XYZ

Negative Impact : Gate KM2/Kretam, Main gate, gate menuju ke sempadan UNICO

Pemohonan Gate Pas yang lambat jawapan

Medical treatment (Emergency)

Action plan

1. GM TMGOE explained that the main gate is closed for security purpose. They will always open the gate if any emergency case especially for medical reason.

4.4.2 Criterion 2 Complaints and grievances

4.4.2.1 Indicator 1 A system for dealing with complaints and grievances shall be established and documented.

(MAJOR)

- Complaints and grievances procedure:

Establish a system to filter out irrelevant complaint (not related to MSPO)

Establish a system to deal with it


- Interviews with personnel and stakeholders:

Awareness of complaints and grievances procedures and how to make complaints

- Verify if the complaints and grievances

Mill has established complaint form for external and internal stakeholders.

Example complaints for internal related to wages matters and social used the same form.

Interviews with workers and stakeholders feedback on stakeholder meeting indicates that they aware and understand the grievance procedure.

Yes







by the affected parties are resolved in an effective, timely and appropriate manner.

4.4.2.2 Indicator 2 The system shall be able to resolve disputes in an effective, timely and appropriate manner, which is accepted by all parties.

(MAJOR)

- Acknowledgement of the decision by both parties

Carta Aliran Mekanisma Aduan dan Masalah dated revised 03/08/2016 was available at the mill notice board.

Estate has established a grievance book external internal stakeholders for record purposes.

Workers were interviewed and they understand and aware of the complaint procedure.

Induction training conducted for worker include safety and health at workplace

Internal complain was address within the time frame. There were no external complaints recorded for January 2017 until September 2017

Observation:

The management could consider separating request comment from complaint in the complaint form. Currently both are using the same form where can be misleading as some of this comment were not complaint or grievance

OBS 2

4.4.2.3 Indicator 3 A complaint form should be made available at the premises, where employees and affected stakeholders can make complaints.

(MINOR)

- Verify availability of complaint forms

The company has established complaints form for external and internal stakeholders. However, request for comment and complaints use the same form. This issue has been raised as observation in indicator 4.4.2.2.

Yes

4.4.2.4 Indicator 4 Employees and the surrounding communities - Notice board to inform all concerned JCC meeting conducted to inform Yes







should be made aware of its existence and that complaints or suggestions may be made at any time.

(MINOR)

about the availability of complaints form and the drop boxes

participants on complaint procedure.

The complaint form was available at the guard house and information at the notice board.

4.4.2.5 Indicator 5 Complaints and resolutions within the past 24 months shall be documented and made available to affected stakeholders upon request.

(MAJOR)

- Verify the document and check those not resolved in 24 month

Document for internal and external stakeholders sighted. The documents are archived and available for year 2015 onwards. Review on grievance records indicates no pending issue arise.

Yes

4.4.3 Criterion 3 Commitment to contribute to local sustainable development

4.4.3.1 Indicator 1 Palm oil millers should contribute to local development in consultation with the local communities. Where the mill is an integral part of a plantation, such contribution to local community development may be regarded as a joint effort by the mill and the plantation.

(MINOR)

- Documented evidence of positive contribution to the community

- Joint activities carried out with estates are accepted

- Assessment of internal documents

The contribution made by the mill was centralized under Hap Seng Plantations (River Estates) Group and TPOM Among the contributions were funding on social event such as sport days for school.

Yes

4.4.4 Criterion 4 Employees safety and health

4.4.4.1 Indicator 1 An occupational safety and health policy and plan which is in line with Occupational Safety and Health Act 1994 and Factories and Machinery Act 1967 (Act139) shall be documented, effectively communicated and implemented.

(MAJOR)

- Verify document and assess the implementation

Safety and Health Policy has been established, dated 01/04/2015 sign by Chief Executive-Group Plantation made available and display at main notice board.

The mill has established OSH Plan 2017 which include health and safety plan activities, workplace inspection and schedule and health programme.

Yes

4.4.4.2 Indicator 2 The occupational safety and health plan shall cover the following:

(MAJOR)

a) A safety and health policy, which is communicated and implemented

- Compliance with 4.4.4.1 Safety and Health Policy has been established dated 01/04/2015 sign by Chief

Yes







Executive-Group Plantation. Policy was available and display at main notice board.

Policy training as part of induction training for new workers.

b)The risks of all operations shall be assessed and documented

- Verify risk assessment report e.g. HIRAC.

The risk assessment was reviewed on 31/04/2017 and 07/09/2017. Risk assessment conducted comprise of all the possible risks at the work place. Risks for all work place are evaluated based on possibility and severity.

Min Non conformity:

The risk assessment HIRARC have been conducted. Hap Seng have included element of likelihood, severity and risk in to the assessment. The action plan following to this have been set up. HIRARC have included the action plan and all required actions to be conducted. However, the plan did not clearly segregate according to the risk specify. Therefore, to avoid confusion from reader the management can consider separating the action plan according to the risk.

Min NC

c) An awareness and training programme which includes the following requirements for employees exposed to chemicals used at the palm oil mill:

- Verify training record:

i. all employees involved are adequately trained on safe working practices; and

- Safe working practice. Training on PPE exchange dated 15/08/2017. Interviewed with workers demonstrate they understand their work and aware of safet.

Yes

ii. all precautions attached to products should be properly observed and applied

- MSDS of chemicals used (products refers to chemicals used at palm oil mill)

The MSDS is made publicly at important locations. Example, workshops, chemical and lubricant storage area. Site visit

Yes







observed that all the required precaution has been adopted and MSDS valid and up to date.

d) The management shall provide the appropriate personal protective equipment (PPE) at the place of work to cover all potentially hazardous operations as identified in the risk assessment and control such as Hazard Identification, Risk Assessment and Risk Control (HIRARC)

- Visual observation and verification of records.

Site visit to operation area, POME ponds, belt press, all worker were provided adequate PPEs as per SOP. PPEs Issuance book sighted state name and type of PPE issue. Interviews with workers could demonstrate they understand PPE functions and wear PPEs correctly.

Yes

e) The management shall establish Standard Operating Procedure for handling of chemicals to ensure proper and safe handling and storage in accordance to Occupational Safety Health (Classification Packaging and Labeling) Regulation 1997 and Occupational Safety Health (Use and Standard of Exposure of Chemical Hazardous to Health) Regulation 2000.

- Verify SOP (Check on the compliance and Chemical Register requirement – this should applies to both estates and mills.

SOP on chemical handling has been establish. HSPSB/SOP/20-17 SSOP for Chemical Store

SOPs on handling and storing chemical and proper labelling of chemicals, and safety precaution on chemical store area.

Yes

f) The management shall appoint responsible person(s) for workers' safety and health. The appointed person(s) of trust shall have knowledge and access to latest national regulations and collective agreements

- Responsible person(s) for workers health, safety and social aspects.

Safety and Health responsible person

For group level was Safety and Health executive appointed on 29/06/2015 while for the mill, the appointment was Mill Manager dated 01/01/2017 as chairman of Safety and Health committee.

Yes

g) The management shall conduct regular two-way communication with their employees where issues that affect their business such as those related to employee's safety, health and welfare are discussed openly. Records from such meetings shall be kept and the concerns of the employees and any remedial actions taken shall be recorded

- Verify minutes of meetings. (Follow estates guidelines).

The latest safety meeting was conducted on 02/08/2017 involved both representatives from company and workers. The meeting agenda include matters of last minutes s, clinical report, training report and accident issue.

Yes







h) Accident and emergency procedures shall exist and instructions shall be clearly understood by all employees

- Verify documented procedures and random interview with employees.

- Emergency shower and eye wash to be provided in the lab.

Emergency procedure are available at the notice board both on office and operation area.

Emergency shower and eye wash present and functional at the weighbridge area and operation area.

Yes

i) Employees trained in First Aid shall be present at all mill operations. First Aid equipment should be available at each worksite

- Verify training records and check availability of First Aid equipment particularly in the workshop, lab, supervisor’s office and the general office.

- Inspection of, for example:

First aid kits, emergency equipment, personal protective equipment (PPE), Emergency shower and eye wash to be provided at the lab.

Danger / warning signage’s, safety instructions, MSDS/CSDS, emergency actions.

Availability of PPE storage facility.

First aid and CPR training were conducted on 01/10/2017sighted list of participant, material and pictures. First aid kits available at the operation area, laboratory and office. Items inside first aid kits are updated and any changes or issuance of first aid items are recorded. Interviews with workers demonstrate they understand the usage of PPE.

Emergency shower available at the weighbridge and operation area.

All the warning sign are installed at critical point area.

Yes

j) Records shall be kept of all accidents and be reviewed periodically at quarterly intervals

- Verify records

- Review during OSH Committee meeting

- Visual inspection and assessment of internal documents:

Occupational Safety and Health Policy

Records of OSH Committee Meetings, agenda, minutes,

Latest Safety and health meeting was conducted on 01/10/2017. Previous safety and health meeting conducted 10/04/2017 and 11/02/2017 respectively.

- The latest risk assessment was conducted 31/04/2017 and 07/09/2017 cover all the risks.

- First aid training was conducted on

Yes







attendance list

Manuals or procedures concerning health and safety

Safety risk assessments and their controls (periodically reviewed)

Annual training programme on safety aspects e.g. First Aid

Training, records of training attendance

PPE issuance and replacement record

Accident and emergency response procedures

Records of accidents and investigations reports

Internal audit reports concerning

safety aspects, possibly occurred non conformities, reports on action plan and implementation

Warning signs installed in all areas with assessed risks

Evidence of qualification of personnel in charge of safety and health

- Interview personnel regarding the following:

Knowledge of occupational safety and health policy and implementation

Knowledge of job risks and controls

Knowledge of accident plans, emergency plans, and use of

01/10/2017

- SOP Chemical pre mixing at Boiler dated 01/02/2017

JKKP 8 was sent to DOSH dated 04/01/2017.

Site interviews with workers demonstrate they understand the important of using PPEs and work activity as per SOP.

First aid kit was available at important area such as engine room, laboratory, and workshop.

MSDS was available and up to date which was based on type of material stored.

Warning sign such as PPE sign was available at operation area.







emergency equipment’s

Use of personal protective equipment, cleaning and storage

Knowledge of danger and warning signs, safety instructions and emergency actions

- Inspection of, for example:

First aid kits, emergency equipment, personal protective equipment (PPE), emergency shower and eye wash to be provided at the lab

Danger/warning signage’s, safety instructions, MSDS/CSDS, emergency actions

- Availability of PPE storage facility

4.4.5 Criterion 5 Employment conditions

4.4.5.1 Indicator 1 The management shall establish a policy on good social practice regarding human rights in respect of industrial harmony. The policy shall be signed by the top management and communicated to the employees.

(MAJOR)

- Verify policy signed by top management and communicated in any way

- Displayed at Mills’ general notice board

The mill has established Human Right Policy and publicly available at the notice board and signed by Chief Executive Plantations Group dated 01/10/2016.

Interviews with workers shows they understand their right as workers.

The human right policy was available and publicly display at notice board in both Malay and English languages.

Yes

4.4.5.2 Indicator 2 The management shall not engage in or support discriminatory practices and shall provide equal opportunity and treatment regardless of race, colour, sex, religion, political opinion, nationality, social origin or any other distinguishing characteristics.

- Random feedback from employees on any discriminatory practices

Complaints records for internal and external stakeholders sighted. No discriminatory issue reported.

During on site interview with workers indicates that no discrimination cases at TPOM.

Yes







(MAJOR)

4.4.5.3 Indicator 3 Management shall ensure that employees’ pay and conditions meet legal or industry minimum standards as per agreed Collective Agreements. The living wage should be sufficient to meet basic needs and provide some discretionary income based on minimum wage.

(MAJOR)

- Check collective agreements and verify compliance with legal requirements on minimum wage

Agreement for worker A meet legal industry minimum requirements of RM 35.83/day or RM 920.00 monthly for Sabah.

The appointment letter dated 24/07/2017. The September 2017 pay slip for the worker show RM 1,296.39 and above the requirement legal industry.

Yes

4.4.5.4 Indicator 4 Management should ensure employees of contractors are paid based on legal or industry minimum standards according to the employment contract agreed between the contractor and his employee.

(MINOR)

- Letter confirming compliance signed by the contactor. (including records of payments)

- Check the contractor’s agreement and compliance to it

There are no contractor workers sighted at the time of audit.

Yes

4.4.5.5 Indicator 5 The management shall establish records that provide an accurate overview of all employees (including seasonal workers and subcontracted workers on the premises). The records should contain full names, gender, date of birth, date of entry, a job description, wage and the period of employment.

(MAJOR)

- Verify records. (To adopt MSPO part 3 guides)

- Refer to employee register

The mill has established name list of employee which comprise of executive, staff and worker data update in September 2017. Total 101 workers

Example:

Name: Worker A

Gander: Male

Designation : FFB Grading Attendant

Nationality: Indonesia

IC/Passport: AT 961739

Date of Birth: 25/12/1973

Date join: 25/06/2012

Wage September 2017: RM 1,211.77

Yes

4.4.5.6 Indicator 6 All employees shall be provided with fair contracts that have been signed by both employee and employer. A copy of employment contract shall be made available

- Verify records

Appointment letter for local workers / workers registration form

Appointment letter / contract for the local workers was sighted and reviewed Sample t water treatment operator contract signed both employee and employer. Start work on

Yes







for each and every employee indicated in the employment records.

(MAJOR)

Employment contract for foreign workers

Any document related to employment is acceptable

- Employee register

29/10/2007 and new update agreement dated 12/10/2017for the new rate.

Appointment letter / contract for the foreign workers was sighted and reviewed Sample general worker contract signed by both employee and employer. Work start on 11/05/2013 and new update agreement dated 12/10/2017 for the new rate.

4.4.5.7 Indicator 7 The management shall establish a time recording system that makes working hours and overtime transparent for both employees and employers.

(MAJOR)

- Verify records

- Check roll records

- Display of working hours at the Mill’s general notice board

The working time was standardized for the mill operation which is

Working time:

7.00 am – 3.00pm morning shift

3:00pm – 11:00pm afternoon shift

Rest time:

Morning shift: 12.00 – 1:00 pm

Afternoon shift: 7.00 - 8.00 pm

The working time was display at the office notice board.

Yes

4.4.5.8 Indicator 8 The working hours and breaks of the individual worker indicated in the time records shall comply with legal regulations and collective agreements. Overtime shall be mutually agreed upon and shall meet the legal requirement applicable.

(MAJOR)

- Verify records

- Leave entitlement can be taken as evidence of compliance

- Pre-approved overtime sheet

- Visual inspection and assessment of internal documents:

- Availability of signed policy on good social practices e.g. People Policy, Employment & Labour Policy, Sexual Harassment Policy

- Guidelines on prevention of sexual harassment at the workplace

- Employment contract for workers

- Records of registered employees for compliance with minimum age for

Working hours stated in worker contract signed by both worker and manager. Sighted employment contract for workers.

For overtime works, the rate was based on Sabah Labour Ordinance, rated 1.5 times per hour for ordinary work days and 2 times per hour for Sundays and public holidays..

Yes







employment

- Compliance to minimum wage policy and records to show no discrimination in terms of payments of daily wages to workers, records of payments, pay slip available and given to workers

- Display of working hours at office notice board

- Temporary housing and amenities acknowledged by Jabatan Tenaga Kerja and local authorities are acceptable.

- Records of social contributions

- Availability of complaint forms, records of complaints and actions taken to resolve them.







4.4.5.9 Indicator 9 Wages and overtime payment documented on the pay slips shall be in line with legal regulations and collective agreements.

(MAJOR)

- Verify records

- Records from check roll the source documents for pay slip

Summary of workers pays on monthly basis was reviewed and all were above the minimum wages required by Minimum Wages Order 2016.

Pay for the month of September 2017

Name: Worker A

Income (RM)

Deduction (RM)

Allowance 442.25

De-Electricity

14.84

De-Passport

100.00

Om-Process labour

707.60

Om-process ot

165.84

Total 1,315.69 114.84

Net Pay 1,200.85

Yes

4.4.5.10 Indicator 10 Other forms of social benefits should be offered by the employer to employees, their families or community such as incentives for good work performance, bonus payment, support of professional development, medical care provisions and improvement of social surroundings.

(MINOR)

- Verify records

- Interview employees For Tomanggong Palm Oil Mill, benefits to workers were based on performance and decision from the management. Sighted employees wage summary. Medical surveillance for all workers were conducted once a year and audiometric test or hearing test for workers were conducted once every six month.

Yes

4.4.5.11 Indicator 11 In cases where on-site living quarters are provided, these quarters shall be habitable and have basic amenities and facilities.

- On-site verification.

- Interview There are no living quarters within the mill area. Mill workers are staying at estate workers quarters.

Yes







(MAJOR)

4.4.5.12 Indicator 12 The management shall establish a policy to prevent all forms of sexual harassment and violence at the workplace.

(MAJOR)

- Verify policy.

- Refer overall Check roll records Policy on Prevention and Eradication of Sexual Harassment in the Workplace dated 28/09/2010, sign by Chief Executive-Group Plantation. The policy includes procedure on sexual harassment, flow chart on reporting on sexual harassment

Yes

4.4.5.13 Indicator 13 The management shall respect the right of all employees to form or join trade union and allow workers own representative(s) to facilitate collective bargain in accordance with applicable laws and regulations. Employees shall be given freedom to join trade unions relevant to the industry or organize themselves for collective bargaining. Employees shall have the right to organize and negotiate their work conditions. Employees exercising this right should not be discriminated against or suffer repercussions.

(MAJOR)

- Check for compliance. Conduct random interview with employees.

- Foreign workers to follow National and/or State Immigration Act

- Interview with personnel/employees:

Knowledge of policies concerning good social practices such as no discrimination, no forced labour etc

Knowledge of basic principles regarding equality and non-discrimination

Compliance with laws and regulations with regards to employment, labour rights, immigrations requirements

Compliance with Collective Agreements

Knowledge of employment contracts and its contents


Workers housing and amenities

Policy on Freedom of Association dated

22/03/2016 sign by Chief Executive-Group

Plantations mention on the right of employee

to join trade union.

JCC meeting has been conducted on 05/10/2017 which involve both representative form management and workers. The meeting among other discuss on wellbeing of the workers.

Interviewed workers at operation area do understand their right as workers and right to form union.

Yes

4.4.5.14 Indicator 14 Children and young persons shall not be employed or exploited. The minimum age shall comply with local, state and national legislation.

- Verify records and on-site inspection Child labor Policy was established dated 02/01/2017 sign by Chief Executive-Group Plantations. The policy strictly bans on the exploitation of child labor.

Yes







(MAJOR) Workers register and site inspection observed no child or young person being hiring by the mill.

4.4.6 Criterion 6 Training and competency

4.4.6.1 Indicator 1 All employees and contractors shall be appropriately trained. A training programme shall include regular assessment of training needs and documentation, including records of training.

(MAJOR)

- Verify records.

- Contractors shall mean contract employees in this indicator


Training programmes and records such as attendance lists, photos, trainer and training contents

Training needs analysis/matrix for each operation/task

Appropriateness of training programme based on workers’ competency

Note: Contractors are contract employees

Training regarding MSPO, induction, Job related for boiler, sterilizer, biogas system, ram operation and first aid has been conducted and sighted.

All the training conducted were based on workers job and work conditions.

Example training;

- SOP Chemical mixing at Boiler room dated 01/10/2017

- HIRARC Training dated 05/09/2017

Yes

4.4.6.2 Indicator 2 Training needs of individual employees shall be identified prior to the planning and implementation of the training programmes in order to provide the specific skill and competency required to all employees based on their job description.

(MAJOR)

- Verify records:

Training needs analysis

Training records

Mill has established the training programme for 2017. Training was provided as per job specific and working conditions.

Yes

4.4.6.3 Indicator 3 A continuous training programme shall be planned and implemented to ensure that all employees are well trained in their job function and responsibility in accordance to the documented training procedure.

(MINOR)

- Verify relevant records. Annual Training Plan 2017 Tomanggong POM is established, including training on SOP, safety, environment, operation maintenance.

For example:

- recycling and 3R dated 12/08/2017.

- Chemical handling including MSDS/ CSDS dated 06/09/2017.

Yes







- HIRARC training dated 05/09/2017

- SOP on Chemical Mixing at Boiler dated 01/10/2017

4.5 Principle 5 Environment, natural resources, biodiversity and ecosystem services

4.5.1 Criterion 1 Environmental management plan

4.5.1.1 Indicator 1 An environmental policy and management plan which shall be in line with the relevant country and state environmental laws shall be established, effectively communicated and implemented.

(MAJOR)

- Verify document and assess the implementation.


Availability of signed environmental policy concerning management and protection of the environment according to the applicable laws.

Environmental management plan which was developed from results of aspect and impacts analysis, mitigation and monitoring plan and records of implementation and timeline.

Continual improvement programme

Awareness and training programme on environmental management and improvement plan, minutes of meeting, attendance list, photos

- Interview of personnel and stakeholders regarding the following:

Knowledge of environmental policy and efforts to protect the environment e.g. compliance to applicable laws

Environment charter dated 02/04/2014, approved by Chief Executive Plantations Group).

Environment impact assessment, management action plans and continuous improvement plans dated 05/10/2017 for Tomanggong POM – compliance to legal requirements, organization chart and responsibilities, improvement plans, environment impact assessment, list of waste generated and waste management plan, fossil fuel management plan.

Yes







4.5.1.2 Indicator 2 The environmental management plan shall cover the following:

(MAJOR)

a) An environmental policy and objectives - Compliance with existing regulatory requirements

Environment charter as stated above. Yes

b)The aspects and impacts analysis of all operations

- Environmental Aspect Impact (EAI) Aspect / impact assessment – POM effluent, EFB, fiber/shell, washing of floor, smoke emission, noise, scheduled waste, etc

Yes

4.5.1.3 Indicator 3 An environmental improvement plan to mitigate the negative impacts and to promote the positive ones, shall be developed, implemented and monitored.

(MAJOR)

- Verify plan. Actions plans established – POME apply to land irrigation, monitoring of water quality, usage of fiber /shell for boiler operation, oil traps for water discharge, scheduled waste disposal to licensed contractor, etc.

Yes

4.5.1.4 Indicator 4 A programme to promote the positive impacts should be included in the continual improvement plan.

(MINOR)

- Verify programme or action plan Reduce BOD by pumping effluent from high pH aerobic pond to anaerobic pond o.g low pH, scheduled for desludging to be budgeted, installation of belt press, etc.

Yes

4.5.1.5 Indicator 5 An awareness and training programme shall be established and implemented to ensure that all employees understand the policy, objectives and management plans and are working towards achieving the objectives.

(MAJOR)

- Verify records

- Records of training Policy and objectives are covered during induction of new works, e.g. Induction programme for field worker dated 12/10/2017.

Yes

4.5.1.6 Indicator 6 Management shall organize regular meetings with workers where concerns of workers about environmental quality are discussed.

(MAJOR)

- Check for minutes of meetings. Latest meeting conducted on 05/09/2017 – continuous emission monitoring system, POME, scheduled waste, monitoring of noise, etc. Minutes approved by Environment committee chairman.

Yes

4.5.2 Criterion 2 Efficiency of energy use and renewable energy







4.5.2.1 Indicator 1 Consumption of non-renewable energy shall be optimized and closely monitored by establishing baseline values and trends shall be observed within an appropriate timeframe. There should be a plan to assess the usage of non-renewable energy including fossil fuel, electricity and energy efficiency in the operations over the base period

(MAJOR)

- Non-renewable energy consumption / usage (per tonne FFB) records and data shall be documented

- Baseline value shall be established based on the suitable timeframe decided by management

- Comparison to be made based on per tonne FFB processed

- Energy optimization plan shall be made available


- Availability of monitoring records of consumption of non-renewable energy with baseline values observed for 3-5 years.

- Comparison to be made based on per ton FFB processed.

- Energy optimization plan shall be made available.

- Documentation of renewable energy produced

- Visual inspection of, for example:

- Any application/new techniques/technology using renewable energy e.g. use of biodiesel in transport, use of solar energy etc

5 years diesel consumption from 2013 – 2017. Usage for 2016 was xxxK liter, yyyK liter for 2017 till July. Higher usage in 2016 due to low crop for producing fibre for burning.

Baseline set at aaaL (average usage from 2013-2016).

Fossil fuel management plan – regular servicing of gen-set and vehicles, schedule for fuel usage and monitoring 3 times per week, ensure water pump is not overused, etc.

Yes

4.5.2.2 Indicator 2 Palm oil millers shall estimate the direct usage of non-renewable energy for their operations, including fossil fuel, and electricity to determine energy efficiency of their operations.

(MAJOR)

- Per tonne FFB

- Contractor: Not applicable to palm oil mill

(some Mills engaged Contractor(s) to “clear their FFB”, transport CPO to the refinery etc)

Energy efficiency was sighted and reviewed.

Example:

x.xx liter/tCPO and y.yy6 liter/tFFB for 2016. 2017 result so far is zz.zz liter/tCPO and a.aaliter/tCPO.

Yes

4.5.2.3 Indicator 3 The use of renewable energy should be - Documentation of renewable energy Renewable energy utilization for 2017 till Yes







applied where possible.

MINOR)

produced (kW.hr) Sept sighted. Average energy produced for past 9 months is cc.c kWH.

4.5.3 Criterion 3 Waste management and disposal

4.5.3.1 Indicator 1 All waste products and sources of pollution shall be identified and documented.

(MAJOR)

- Identify any waste product and its management/disposal


Identification of all waste products and polluting activities (e.g scheduled &domestic wastes), source of pollution (e.g POME)

Procedures/management plan developed from waste identification according to their appropriateness and effectiveness, monitoring of implementation plan

Records/documentation on recycling programme

Standard Operating Procedure for handling of used chemicals in accordance with regulations

Location map of rubbish pit/landfill


Schedule & method of domestic waste disposal

Type of waste identified – POME, EFB, fibre / shell, wastewater from floor washing, scheduled waste, smoke emission. Documented in Environmental impact assessment dated 05/10/2017.

List of waste generated and management plan at Tomanggong POM has been established

Domestic wastes are disposed at the landfill.

Yes

4.5.3.2 Indicator 2 A waste management plan shall be developed and implemented, to avoid or reduce pollution. The waste management plan should include measures for:

(MAJOR)

- Documentation of action plan

- Reduce, reuse and recycle to minimize waste.

- Management of major waste stream, ie. EFB, POME etc. which is important to be utilized and monitor its usage.

- Verify document on disposal of

a. Identifying and monitoring sources of waste and pollution

Waste management plan included in Environment impact assessment,

OBS 3







hazardous material management action plans and continuous improvement plans dated 05/10/2017

Observation:

Oil trap could be installed at the drain for CPO tank no.5 to prevent accidental discharge of oil.

b. Improving the efficiency and recycling potential of mill by-products by converting them into value-added by-products

Apply POME to land irrigation, mulching of EFB, fibre / shell for boiler operation, etc.

Yes

4.5.3.3 Indicator 3 The palm oil mill management shall establish Standard Operating Procedure for handling of used chemicals that are classified under Environment Quality Regulations (Scheduled Waste) 2005, Environmental Quality Act, 1974 to ensure proper and safe handling, storage and disposal. Scheduled waste shall be disposed as per Environmental Quality Act 1974 (Scheduled Wastes) Regulations, 2005.

(MAJOR)

- Verify SOP. Scheduled waste disposal to Legenda Bumimas dated 15/09/2017 for 80kg of SW102, 3 kg of SW110, 1 ton of SW305, 253 kg of SW 306, 12 kg of SW409, 58kg of SW410 (filters), 90 kg of SW410 (used PPE) and 60 kg of SW430 (chemicals).

Summary report of inventory for Sept 2017 sighted. Scheduled waste are stored and labelled adequately.

Yes

4.5.3.4 Indicator 4 Domestic waste should be disposed as such to minimise the risk of contamination of the environment and watercourse.

(MINOR)

- Onsite inspection and verification

- Designated area Domestic waste is disposed to the landfill.

Landfill is adequately maintained with fencing and signage.

Yes

4.5.4 Criterion 4 Reduction of pollution and emission including greenhouse gas

4.5.4.1 Indicator 1 An assessment of all polluting activities shall be conducted, including greenhouse gas emissions, particulate and soot emissions, scheduled wastes, solid wastes and effluent.

(MAJOR)

- Identify other solid waste

- Refers to DOE report

- Verify assessment report (refer to MPOB for calculations; excluding CO2 from renewable energy resources)

- The relevant GHG are CO2 (derived from non-renewable resources) and CH4 only.

Assessment of all polluting activities included in Environment impact assessment, management action plans and continuous improvement plans dated 05/10/2017

Stack emission monitoring report no. CK/MO407/1082-1/17 dated 15/07/2017 by Chemsain Konsultant.

Average dust emission load was 0.zzz g/Nm3

Yes








Identification of all waste products and polluting activities (e.g. scheduled &,domestic wastes), source of pollution (e.g. POME, black smoke)

Procedures/management plan developed from waste identification, monitoring of implementation of plan

Refer to 4.5.3.1, 4.5.3.2, 4.5.7

Reports submitted to the Department of Environment (DOE)

Verify assessment report (refer to MPOB for calculations; excluding CO2 from renewable energy resources)

compared to permissible value of 0.xx g/Nm3

as stipulated in the Environmental Quality (clean air) regulations 1978.

EIA listed the waste generated by Mill.

Among identified:

1. Organic waste

2. Domestic waste

3. Digestive waste/fecal matter

4. Maintenance oil

5. Empty chemical container.

Example: Organic waste

Impact: Attract rodent and causes odour

Mitigation/action plan

Disposal of domestic waste done on daily basis and is kept at landfill which is far from waterway.

Fossil fuel management (page 33)

Generator Set – Diesel usage

Mitigation measure: Regular servicing of the generator set for smooth running of engine and prevent excessive emission of greenhouse gasses.

Environment impact: Release of carbon to the atmosphere may cause smog (NOx, Sox and etc) and may effect to human health such as lung cancer.

Greenhouse gases Management plan dated 25/02/2017

Example:

Methane (CH4): it is emitted during the production of POME especially when it is







channeled to the effluent pond for treatment.

Report to DOE dated 06/10/2017 for environmental quality reviewed. Report water consumption and affluent discharged.

Greenhouse Gases Management Plans dated

4.5.4.2 Indicator 2 An action plan to reduce identified significant pollutants and emissions shall be established and implemented.

(MAJOR)

- Verify the action plan. Included in action plan for aspect / impact assessment – monitoring of leaks in cyclone, implementation of air pollution meter gauge, adjustment of moisture of fibre and shell, implementation of continuous emission monitoring system (CEMS).

EIA report has been established with the action plan to reduce pollutant and emission. Total of 3 main sources have been generated.

1. Generator set

2. Vehicle

3. Water pump.

example

Fossil fuel management (page 33)

Generator Set – Diesel usage

Mitigation measure: Regular servicing of the generator set for smooth running of engine and prevent excessive emission of greenhouse gasses.

Environment impact: Release of carbon to the atmosphere may cause smog (NOx, Sox and etc.,) and may effect to human health such as lung cancer.

Yes

4.5.4.3 Indicator 3 Palm oil mill effluent (POME) shall be treated to ensure compliance with standards as

- Verify the compliance according to the conditions in approved license

Monthly analysis of effluent at final discharge, upstream and downstream.

Yes







stipulated in the relevant Environmental Quality (Prescribed Premises) (Crude Palm Oil) Regulations 1977. POME discharge limits and method should be in accordance with the respective state and national policies and regulations.

(MAJOR)

- Latest national and/or state regulations on POME discharge quality

Latest report from Indelab dated 17/10/2017 complying to requirements on pH value, TSS, COD, BOD, ammonia Cal nitrogen and total nitrogen.

License DOE: 003446

Tarikh tamat: 03/06/2018

Jadual permatuhan

ASSH(B)31/152/000/007 specify the discharge of affluent.

Water test for the date 09/10/2017 have been verified.

Example

BOD 22mg/l

COD 208mg/l

Test are within the legal limit per specify in legal Jadual permatuhan

4.5.5 Criterion 5 Natural water resources

4.5.5.1 Indicator 1 The management shall establish water management plans to maintain the quality and availability of natural water resources (surface and ground water). The water management plan may include:

(MAJOR)

- Establishment of water management plan.


a) Verify the water usage:

Recommended water to FFB ratio 1.35 excluding domestic usage (for the standard mill).

Verify the incoming meter consumption for the mill and domestic usage only.

b) Verify record submitted to DOE (effluent)

a. Assessment of water usage and sources Water management plan for Tomanggong group of estates and Tomanggong POM dated 05/10/2017 – raw water treatment, water storage, water consumption monitoring, water pollutant/waste, water analysis, etc.

Water consumption for 2017 till September sighted

OBS 5







c) Observation of water wastage:

Efforts made to reduce, reuse and recycle

Average usage is 0.xx cu, m/tFFB and y.yy cu.m/tCPO. Source of water is from Sg. Segama.

b. Monitoring of outgoing water which may have negative impacts into the natural waterways at a frequency that reflects the mill’s current activities

Water analysis conducted on upstream and downstream on a monthly basis. Sighted effluent test report dated 17/10/2017 complying to specification for pH, TSS, COD, BOD, ammonia Cal nitrogen and total nitrogen.

Water analysis conducted on a 6 monthly basis by external lab. Sighted COA no. GN/8990/17 dated 11/08/2017 from Indelab.

Observation:

The water treatment plant has not been using chlorine for the past one month, but no water quality analysis has been conducted yet to determine the water quality, especially on E-coli and coliform count.

The last water analysis was conducted in August and the next one is in Feb (every 6 months)

Water quality analysis could be conducted on a more regular basis for critical parameters like E-coli and coliform count.

OBS 5

c. Ways to optimize water and nutrient usage to reduce wastage (e.g. having in place systems for re-use, night application, maintenance of equipment to reduce leakage, collection of rainwater, etc.).

Rainwater harvesting system implemented in housing and offices.

Yes

4.5.5.2 Indicator 2 Where open discharge of POME into water course is practiced, mills should undertake to

- Effort made to reduce, reuse and recycle

- Evidence or action plan on effort made in Discharge of POME to land irrigation Yes







gradually phase it out in accordance to the applicable state or national regulations.

(MAJOR)

reducing the discharge of treated POME into water course

- Verify record submitted to DOE (effluent)

4.6 Principle 6 Best Practices

4.6.1 Criterion 1 Mill management

4.6.1.1 Indicator 1 Standard operating procedures shall be appropriately documented and consistently implemented and monitored.

(MAJOR)

- Verify the SOP


- Standard operating procedures on best management practices

- Visual inspection concerning for example:

- Oil mill operation

Safe / Standard Operation Procedures (SOPs) were sighted seen and reviewed.

During mill inspection, SOPs were sighted at boiler, oil room, sterilization station, kernel plant, etc.,

Yes

4.6.1.2 Indicator 2 All palm oil mills shall implement best practices.

(MAJOR)

- Inspection of operation and documentation.

Tomanggong Palm Oil Mill has established and implemented SOPs.

Workers were interviewed and they could demonstrate the operation they are assigned.

JKKP inspection was conducted on done 13/09/2017.

Annual Training Plan 2017 is established, including training on SOP, safety, environment, operation maintenance. For example:

Recycling and 3R dated 12/08/2017

Chemical handling including MSDS/ CSDS dated 06/09/2017.

HIRARC training dated 05/09/2017.

Yes

4.6.2 Criterion 2 Economic and financial viability plan

4.6.2.1 Indicator 1 A documented business or management plan shall be established to demonstrate attention to economic and financial viability through

- Verify business and management plan:

Budget

Book keeping

A 5 years management financial plan 2017-2021 was sighted and reviewed.

TPOM budget for 2017 was sighted and

Yes







long-term management planning.

(MAJOR)


Business or management plan which includes operational plan for at least 2 years projection

Review of business plan for the last 2 years’ performance

reviewed.

The mill has projection for 5 years business plan for FFB, CPO & PK production ref memo no: TPOM-GMP/B5/IC-279/2016.

4.6.3 Criterion 3 Transparent and fair price dealing

4.6.3.1 Indicator 1 Pricing mechanisms for the products and other services shall be documented and effectively implemented.

(MAJOR)

- Documentation of the pricing mechanisms.

- Assessment of internal documents, for example:

Monthly oil mill accounts

Sales and purchase agreements and/or contract, service contract, credit terms

Evidence of timely payment

Documentation of pricing mechanism

Methodology in promoting transparency under this indicator

The contract for the logistic contractor was reviewed and the job invoice. The contract completion certificate dated16/05/2017 approved by the mill manager

Yes

4.6.3.2 Indicator 2 All contracts shall be fair, legal and transparent and agreed payments shall be made in timely manner.

(MAJOR)

- Verify contract terms and its execution in accordance to ethical standard:

Sales contract

Purchase contract

Service contract

The contract Oil Palm Fruit Purchase Agreement between Hap Seng Plantations (River Estates) Sdn Bhd and Seller A

The date of agreement made is 26/02/2014 with effect 01/12/2013-30/11/2015 and therein shall continue automatically on yearly basis

Yes

4.6.4 Criterion 4 Contractor

4.6.4.1 Indicator 1 In case of the engagement of contractors, they shall be made to understand the MSPO requirements and shall provide the required

- Awareness of MSPO requirements:

Written communications

Acceptance of the terms

The agenda and engagement to the contractor including MSPO briefing. Part 3 General Principle for Oil Palm Plantations

Yes







documentation and information.

(MAJOR)


Contract agreement shall include a special clause on MSPO compliance where applicable to them

Work completion certificate or evidence of progress payment reports

- Interview of contractors regarding the following:

Awareness on MSPO and requirements

and Part 4 General Principles For Palm Oil Mill the slide was prepared by Sustainability Executive & Agronomist

The representative attended the meeting is 16 persons including contractor 5 persons

Kedai Yong Seng

Mohd Amin Beddu - LPC

Selvam A/L Manikam - LPC

Spark Glory S/B

Lim Engit Fum S/B

4.6.4.2 Indicator 2 The management shall provide evidence of agreed contracts with the contractor.

(MAJOR)

- Verify agreed contracts Management have agreed contract with contractor that doing work to renewal thresher drum. The contract letter award to the contractor date 19/04/20167. The Minor Job Contract no was sign both party contractor and verified by Mill Manager and General Manager-Processing

The invoice and contractor completion certificate from management was been reviewed that mention job requirement and amount of the contract.

Example:

Sabah Steel Engineering Works contract for renewal of thresher drum at TPOM

Yes

4.6.4.3 Indicator 3 The management shall accept MSPO approved auditors to verify the assessments through a physical inspection if required.

(MINOR)

- Management to cooperate with appointed accredited MSPO auditors.

The company of Hap Seng Plantations (River Estates) Sdn Bhd contracted accredited Certificate Body TUV NORD Malaysia to conduct the certification audit.

Yes



