on the Compliance of Eight GAR/SMART Subsidiaries with the ... · subsidiaries (PT. Bangun Nusa Mandiri, PT. Agro Lestari Mandiri, PT. Cahaya Nusa Gemilang, PT. Kencana Graha Permai,

RISK ASSESSMENT on the Compliance of Eight GAR/SMART

Subsidiaries with the Forest Conservation Policy

& Social and Community Engagement Policy

(03 – 20 December 2013)

Prepared by:

TFT- Indonesia Programme

December 2013

CONFIDENTIAL – NOT FOR CIRCULATION

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DISCLAIMER

This report was compiled by TFT for the sole use of the Company. This report may not be relied upon or quoted by any other party without written agreement from TFT.

TFT exercised due care in preparing this report, but has not independently verified information provided by others. No other warranty, expressed or implied is made in relation to conducting the review and contents of this report. Therefore, TFT assumes no liability for any loss resulting from errors, omissions or misrepresentations made by others.

The use of this report by unauthorised third parties without written authorisation from TFT shall be at their own risk, and TFT accepts no duty of care to any such third party.

Any findings, opinions, or recommendations stated within this report are based on the circumstances and facts as they exist at the time TFT performed the work. Any changes in such circumstances and facts upon which this report is based may adversely affect any findings, opinions, or recommendations contained in this report.

No part of this report may be copied or duplicated without the expressed written permission of the Company and TFT.


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TABLE OF CONTENTS

DISCLAIMER ............................................................................................... 2 TABLE OF CONTENTS ............................................................................... 3 EXECUTIVE SUMMARY ............................................................................. 5

I. PREFACE

1.1 Background ................................................................................... 10

1.2 Objectives .............................................................................................. 10

Expected outcomes ........................................................................ 11

II. SCOPE OF THE STUDY

2.1 Locations of The Study .................................................................. 12

2.2 Aspects of the Study ...................................................................... 12

III. METHODOLOGY AND ANALYSIS

3.1 Study Methodology ........................................................................ 14

3.2 Risk Analysis ................................................................................. 15

IV. GENERAL INFORMATION ................................................................. 16

V. TYPOLOGY OF THE MANAGEMENT UNIT ...................................... 19

VI. RESULTS OF RISK ANALYSIS AND RECOMMENDATIONS .......... 23

APPENDIX

Appendix 1. Team and RISK Analysis Schedule .................................... 48

Appendix 2. Results of Risk Assessment of Each Company

2.1 PT. Agro Lestari Mandiri (AMNL)

2.1a. Results of Study

2.1b. Location Image of Field Observation

2.1c. Map of Observation Location

2.2 PT. Bangun Nusa Mandiri (BNM)




2.3 PT. Cahaya Nusa Gemilang (CNG)





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2.4 PT. Kencana Graha Permai (KGP)




2.5 PT. Buana Adhitama (BAT)




2.6 PT. Kartika Prima Cipta (KPC)




2.7 PT. Persada Graha Mandiri (PGM)




2.8 PT. Paramitra Internusa Pratama (PIP)





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EXECUTIVE SUMMARY

On 3–20 December 2013, a risk assessment for eight Golden Agri-Resources (GAR)/SMART subsidiaries (PT. Bangun Nusa Mandiri, PT. Agro Lestari Mandiri, PT. Cahaya Nusa Gemilang, PT. Kencana Graha Permai, PT. Buana Adhitama, PT. Kartika Prima Cipta, PT. Persada Graha Mandiri and PT. Paramitra Internusa Pratama) was conducted. The aim of the risk assessment was to study the achievements of FCP (Forest Conservation Policy) and SCEP (Social and Community Engagement Policy) implementation in those locations against six aspects, namely: 1) High Conservation Value (HCV) Management, 2) Peat land Management, 3) High Carbon Stock (HCS) Management, 4) FPIC (Free, Prior and Informed Consent) Implementation, 5) Conflict Management and 6) Legal Aspects of Estate Operations. The results of the risk assessment will be used to formulate strategic and operational recommendations for GAR/SMART management. The risk assessment was conducted by TFT, which fielded two teams, and observed by Greenpeace.

In general, the implementation of FCP and SCEP at the eight companies varies. The key findings for each aspect of the assessment are as follows:

1. HCV Management

Eight PT SMART subsidiaries (Limited Liability Companies) have completed the

identification and determination of HCV. PT KPC is now in the process of re-identifying

HCV. The assessment and establishment of HCV areas were conducted by an RSPO-

accredited assessment team.

Referring to the 2008 “Toolkit for Identification of High Conservation Values in

Indonesia”, the TFT Team noted some weaknesses during the HCV identification

process. The following weaknesses are based on TFT’s interpretation of the Toolkit:

a) The methodology used to collect primary data, either on flora, fauna, or

environmental services and economy, society and culture, is insufficient to draw a

comprehensive conclusion on whether or not the area has HCV.

b) Lack of involvement of the related parties in the identification activities, especially

at district level (such as government agencies).

Due to the weaknesses of this method, the TFT Team found there are potential areas of high conservation values that have not been established as HCV areas. There are also some locations that have been identified as HCV areas, yet there is no evidence of HCV management on the ground. However, the management in each of the eight companies have demonstrated efforts to manage HCV areas. These efforts were made by putting markers to indicate HCV locations and through building awareness. GAR and PT SMART management are committed to take responsible for managing HCV areas in the concessions. However, these efforts do not involve parties that could make a positive contribution to HCV


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management, such as the community, NGOs, and government institutions (such as the Natural Resources Conservation Centre (BKSDA), local forestry agencies, etc.). The activities in management and monitoring at PTs that have determined HCV areas are not focused on the viability of certain conservation targets, thus it is difficult to conclude whether an HCV will remain constant or increase in terms of value. There are activities that have the potential to violate the company’s commitment to protecting and managing the established HCV areas. Efforts have been made to restore areas that were cleared either before or after HCV assessments, but some of the restoration efforts have not been completed.

2. Peat Land Management

TFT Team was unable to obtain information on peat land due to the fact that the team was not allowed access to relevant information at any of the PTs, either in the form of maps, information on the total area, etc.; however, the team was able to visit protected peat land. Based on the desk study and field observation, peat land was identified at PT. KPC, PT. Paramitra Internusa Pratama (PT. PIP), PT. Persada Graha Mandiri (PT. PGM), PT. BAT and PT. Agro Lestari Mandiri (PT. AMNL) (five PTs), and no peat land was identified at the other three PTs: PT. Bangun Nusa Mandiri (PT. BNM), PT. CNG and PT. Kencana Graha Permai (PT. KGP). There are policies, organisational structures and procedures at the eight PTs to ensure no clearing on peat land. From the observed peat land (15 points of observation), the TFT Team concluded that estate management has made sufficient efforts toward protecting the peat land. However, this conclusion is not meant to represent all the existing peat land/potential peat land (which either has been identified or not yet identified) located in the concession area.

3. HCS Management

As a pilot project, a research study on HCS is currently being implemented in PT. KPC. Preparations for participatory mapping and identification of Non-Timber Forest Products in areas with high carbon stock potential (HCS areas) are being carried out as part of the method for HCS study and management.

As for the seven other PTs, potential HCS areas have been identified by interpreting strata (homogenous classes of vegetation) as can be seen on maps. The allocation of conservation targets is analysed by using a “decision tree for HCS patch selection”. The delineation of conservation targets is still on paper (map) and has not been implemented yet in the field. Estate management has received direction from the head office to prevent clearing on areas with high carbon potential. This direction refers to


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the “Procedures for slowing down bull dozers to check the type of vegetation while the “GO” zone maps are updated”. However, the TFT Team found clearing/planting on areas with high carbon potential at PT. BNM, PT. KGP, and PT. AMNL. In general, PT SMART’s commitment to conserving HCS areas is at great risk, due in part to the fact that neither the government, relevant industries, nor indigenous peoples are familiar with or have the ability to support HCS conservation.

4. FPIC Implementation

The applicable procedures on the ground (Standard Operating Procedures [SOP] on Land Compensation, SOP on Grievances, SOP on Communication and Consultation) and the implementation of the land compensation programme are inadequate to fulfil the community’s rights to FPIC. The community can file complaints and has submitted them against the company. However, the community does not understand the procedure for filing a complaint and how the complaint is handled. Generally, the company will immediately follow up on the complaint and will solve the matter amicably through deliberative consensus. The documentation of estate development and complaint handling processes is incomplete. For example, the TFT team found that documentation of socialization efforts were poorly documented with no records of how the socialization was conducted nor who participated.

5. Conflict Management

The company has made efforts to manage conflict. However, the efforts were made in an unsystematic manner and thus they have been carried out in a way that is inconsistent with the policy for the responsible resolution of conflicts. The conflict management procedures remain passive/reactive in nature. Conflict/potential conflict has been identified at PT. PGM (Kampung Baru-Nanga Silat), PT. BNM (Silat Ulu), PT. BAT (the local community demanded an area for transmigration within PT BAT’s concession area) and PT. KPC (Mensusai, Kerangas and Kenabak Hulu).

6. Legal Aspects of Estate Operations

In general, the company follows a system to ensure compliance on legal affairs. All eight companies have shown their efforts to meet compliance regarding legal affairs and related performance monitoring. It has been found that PT BNM has several versions of concession area maps, with each version showing different borders. This is due to several changes that were made to the location permit. This can potentially cause breaches to legal requirements. In terms of employment, there are no basic violations or against the national regulation on

employment and the ILO Declaration on Fundamental Principles and Rights at Work (June 1988).


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A summary of the risk status for each PT is as follows:

No Policy Risk Status

PT. AMNL PT. BNM PT. CNG PT. KGP PT. BAT PT. KPC PT. PGM PT. PIP

Typology Status

Biologically safe

Physically vulnerable

Semi fragmented Low social intensity,

subsistence

Biologically vulnerable Physically vulnerable

Fragmented Low social intensity,

subsistence

Biologically vulnerable

Physically safe Semi

fragmented Low social intensity,

subsistence


Fragmented Low social intensity,

subsistence



subsistence



subsistence

Biologically vulnerable

Physically safe Fragmented Low social intensity,

subsistence



subsistence

1 HCV Management Medium High High High High Medium Medium Medium

2 Peat Land Management

Inadequate conclusion;

Low No peat land No peat land No peat land


Low


Low


Low


Low 3 HCS Management High High High High High High High High

4 FPIC Implementation

Low Medium Medium Medium Medium Medium Medium Medium

5 Conflict Management

Medium High Medium Medium High High High Medium

6 Legal Compliance Medium High Medium Medium Medium Medium Medium Medium


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I. PREFACE

1.1 Background

In order to implement sustainable oil palm plantation management, on 9 February 2011 GAR/SMART issued a commitment to ensure a no deforestation footprint in its production of palm oil.

This commitment is outlined in the GAR/SMART Forest Conservation Policy (FCP). There are five key points in the policy, in which GAR will ensure the following in relation to all of its palm oil production activities:

1. no development on high carbon stock (HCS) forests 2. no development on high conservation value (HCV) forest areas 3. no development on peat land 4. free, prior and informed consent (FPIC) for indigenous and local communities 5. compliance with all relevant laws and National Interpretation of RSPO

Principles and Criteria

To strengthen the relationship with the community around the estate, on 10 November 2011 GAR/SMART issued a Social and Community Engagement Policy (SCEP) which contains a commitment to:

1. Implementation of FPIC principles 2. Responsible handling of complaints 3. Responsible resolution of conflicts 4. Open and constructive engagement with local, national and international

stakeholders 5. Empowering community development programmes 6. Respecting human rights 7. Recognising, respecting and strengthening the rights of its workers 8. Compliance with all relevant laws and regulations and national interpretation

of the principles and criteria of RSPO

To date, these two policies have been implemented for two years. TFT and GAR/SMART share the same goal of understanding the degree to which these policies have been implemented and achieved in the field. Local, national and international stakeholders are also interested in understanding the progress that has been made on the implementation of these policies in the field. Therefore, TFT and GAR/SMART believe it is important to conduct a study on the system that supports and implements these policies. Considering the extensive scope of the FCP and SCEP, the study will prioritise HCVF, peat land, HCS, FPIC, conflict management and legal compliance.

1.2 Objectives

The objectives of this study are: 1. To conduct a review of the implementation of FCP and SCEP at eight PTs,

particularly for the following six aspects: a. HCV area management b. Peat land management c. HCS management d. FPIC implementation


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e. Conflict management f. Legal aspects of estate operations

2. To formulate strategic and operational recommendations for GAR/SMART management.

1.3 Expected Outcomes

The expected outcomes of this study are: 1. A thorough research study report on the implementation of FCP/SCEP,

specifically related to the six main aspects as noted above at the selected eight PTs.

2. Recommendations for GAR/SMART management.


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II. SCOPE OF THE STUDY

2.1 Locations of the Study

The study on the implementation of FCP and SCEP was conducted at the eight PTs as follows:

1. PT. Agro Lestari Mandiri (AMNL) 2. PT. Bangun Nusa Mandiri (BNM) 3. PT. Cahaya Nusa Gemilang (CNG) 4. PT. Kencana Graha Permai (KGP) 5. PT. Buana Adhitama (BAT) 6. PT. Kartika Prima Cipta (KPC) 7. PT. Persada Graha Mandiri (PGM) 8. PT. Paramitra Internusa Pratama (PIP)

2.2 Aspects of the Study

The study focused on the following: 1. HCV area management

An assessment of the company’s systems and performance in implementing the policy on not clearing areas identified as having high conservation values was conducted. The company’s systems for environmental management and monitoring to maintain and improve the presence and function of the HCV areas were also assessed.

2. Peat land management An assessment of the company’s system and performance in implementing the policy on not clearing peat land was conducted. The study team also analyzed the effectiveness of peat land management.

3. HCS management The study team assessed the company’s systems and performance in implementing the policy on identifying and protecting forest areas with high carbon potential.

Exception: Considering that HCS is still a pilot project, several procedures have not been set up to support this policy.

4. FPIC implementation The study team assessed the company’s system and performance in implementing the policy on recognising and fulfilling the community’s rights to FPIC in the plantation business, especially with respect to land acquisition.

5. Conflict management An assessment of the company’s systems and performance in implementing the policy for the responsible resolution of conflicts was conducted, specifically disputes related to the rights of traditional/local community and land claim.

6. Legal aspects of estate operations The study team assessed the companies’ compliance with the legal aspects of the plantation business, including: legality of the plantation business, legality


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of operational activities and legality of employment based on the ISPO/RSPO standards. Exceptions: Legal matters related to management of B3 (Hazardous and Toxic

Materials). Legal matters related to occupational safety and health. Legal matters related to financial obligations. Legal matters related to facilities/infrastructure (vehicles, clinics, etc.).


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III. METHODOLOGY AND RISK ANALYSIS

3.1 Methodology

3.1.1 Determining the location of the study The study on the implementation of FCP and SCEP was conducted at eight PTs as follows:

1) PT. Agro Lestari Mandiri (AMNL) 2) PT. Bangun Nusa Mandiri (BNM) 3) PT. Cahaya Nusa Gemilang (CNG) 4) PT. Kencana Graha Permai (KGP) 5) PT. Buana Adhitama (BAT) 6) PT. Kartika Prima Cipta (KPC) 7) PT. Persada Graha Mandiri (PGM) 8) PT. Paramitra Internusa Pratama (PIP)

These companies were selected as the locations of the study based on the following considerations:

1) Estate development is on going. 2) Stakeholders are concerned about the implementation of FCP/SCEP

policies in these PTs.

3.1.2 Determining the location of the villages for verification of FPIC & Conflict Management The locations were selected using a purposive sampling method with the following criteria:

1) A minimum 10% of the village area is located within and around the estate 2) The locations represents the village conditions inside and outside of the

estate 3) The villages draws the attention of external stakeholders 4) The villages become one of the focal points in the HCV study

3.1.3 Determining locations for HCV & Peat land

The locations were selected using a purposive sampling method with the following criteria:

1) The areas contain many/combinations of several HCVs 2) When the locations do not contain HCV as mentioned in point 1, select

other areas that contain such HCV 3) Areas that are prone to erosion 4) The largest peat land

3.1.4 Determining locations for HCS The locations were selected using a purposive sampling method with the following criteria:

1) The largest areas 2) Proximity to access roads and the community 3) Low priority location (the company plans to clear the area for

development)

3.1.5 Selection of respondents 1) Company Respondents


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Company respondents were selected based on the relevance of his/her roles and responsibilities and the issues being assessed by the study team.

2) Community Respondents The respondents were selected through consultation with both

formal/informal community leaders. Respondents were selected from community groups with either

positive or negative perceptions of the oil palm plantations.

3.2 Risk Analysis

The analysis was conducted using the following steps: 1. Conduct typology analysis at management level by studying the existing factors

(both social and biophysical) that have the potential to influence the difficulties that management faces in implementing the policies.

2. Analyse facts by comparing the physical evidence/findings in the field with the Company’s procedures and policies,

3. Analyse risk by comparing gaps between policies and the implementation. The bigger the gap, the higher the risk.

4. Analyse sources of the gaps and their causes.

Determining Risk Status: Risk Status Description High Risk Has a major/widespread/significant implication or impact;

Requires considerable effort (cost, time, resources, material, methodology)

Medium Risk Has medium implication or impact; Requires moderate effort (cost, time, resources, material, methodology)

Low Risk Has low implication or impact; Requires little effort (cost, time, resources, material, methodology)


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IV. GENERAL INFORMATION

Type of Information PT. Agro Lestari Mandiri

(AMNL) PT. Bangun Nusa Mandiri (BNM)

PT. Cahaya Nusa Gemilang (CNG)

PT. Kencana Graha Permai (KGP)

Estate’s Name & Area 1) Kayung Estate (KYNE)

2) Pekawai Estate (PKWE)

3) Sungai Kelik Estate (SKKE)

4) Nanga Tayap (NTYE)

5) Kayung Kemitraan Location Permit = 19,000 (18,843 ha based on the research study of BPKH3 or the Regional Office of Forestry Planning Region III)

1) Gaharu Estate (GHRE) : 2,021 ha

1) Kenanga Estate (KNNE) : 3,007 ha

2) Cempaka Estate (CMPE) : 921 ha

1) Kencana Estate (KNCE) : 2,849 ha

2) Cendana Estate (CDNE) : 2,623 ha

RSPO Time Bound Plan 2014 2015 2014 2014

Supplied Palm Oil Mill Pekawai Mill Kenanga Mill Kenanga Mill Kenanga Mill

PSM (Perkebunan Sinar Mas)

7 7 7 7

Region Ketapang 1 Ketapang 2 Ketapang 2 Ketapang 2

Administrative Location The Villages of Sungai Kelik, Nanga Tayap, Lembah Hijau 1, Lembah Hijau 2, Siantau Raya, Tajok Kayong and SP 3 Sembelangaan – Nanga Tayap Subdistrict – Ketapang District

- Sengkuang & Harapan Baru Villages – Air Upas Subdistrict

- Asam Jelai, Biku Sarana and Penyarangan Villages – Jelai Hulu Subdistrict

- Kelampai, Terusan, Kemuning and Merabung Villages – Manis Mata Subdistrict – Ketapang District

Rangkung, Randai and Batu Payung 2 Villages – Marau Subdistrict – Ketapang District

Rangkung, Randai, Batu Payung 2 and Belaban Villages – Marau Subdistict – Ketapang District


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Type of Information PT. Buana Adhitama (BAT) PT. Kartika Prima Cipta

(KPC) PT. Persada Graha

Mandiri (PGM) PT. Paramitra Internusa

Pratama (PIP) Estate’s Name & Area 1) Sapiri Estate (SPRE) :

2,290.72 ha

2) Bukit Tunggal Estate (BTAE) : 983.06 ha

3) Bukit Dua Estate (BDUE) : 575.72 ha

1) Muara Tawang Estate (MTNE): 2,400 ha

1) Kapuas Hulu Estate (KHLE) : 3,438 ha

1) Belian Estate (BLNE) : 2,698 ha

2) Tengkawang Estate (TNKE) : 152 ha

RSPO Time Bound Plan 2015 2015 2014 2014

Supplied Palm Oil Mill Kuayan Mill Belian Mill Belian Mill Belian Mill

PSM (Perkebunan Sinar Mas)

6a 8 8 8

Region Kalteng 5 Kapuas Hulu Kapuas Hulu Kapuas Hulu

Administrative Location - Tumbang Keminting and Tumbang Tilap Villages –Santuai Subdistrict

- Tanjung Jaringau –Mentaya Hulu Subdistrict

- Tukang Langit, Tumbang Sangai, Rantau Katang, Tumbang Mangkup, Rantau Tampang, Luwuk Kuwan, Tumbang Bajanai and Tumbang Boloi –Antangkalang Subdistrict – Kotawaringin Timur District

- Mantan, Menapar, Mensusai, Suhait, Jongkong Hulu and Kerangas Villages – Suhait Subdistrict

- Marsedan Raya Village – Semitau Subdistrict

- Gudang Hulu, Gudang Hilir and Benuis Villages – Selimbau Subdistrict – Kapuas Hulu District

Sentabai, PB Penai, Baru and Perigi Villages – Silat Hulu Subdistrict – Kapuas Hulu District

- Sentabai – Silat Hilir Subdistrict

- Naga Seberuang and Tua Abang Villages – Semitau Subdistrict – Kapuas Hulu District


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V. TYPOLOGY OF THE MANAGEMENT UNIT

Company Name Description of the Company Conditions

(in terms of physical, biological and social aspects) Typology Status

Agro Lestari Mandiri (AMNL)

The area of PT. AMNL is included in the semi–fragmented category. This is typified by the outer boundaries of its concession which shares a border with less than 50% of surrounding forest areas. Biologically, part of PT. AMNL areas is connected with the conservation area (protected forest). Physically, the erosion potential (TBE) is so high that the area can be classified as physically vulnerable and biologically safe. The combination between the level of fragmentation and location of the management unit has characterised the typology of the management unit, according to environmental/ecological aspects, as biologically safe, physically vulnerable and semi-fragmented. Some of the communities around PT. AMNL still rely on natural resources in the concession area (non-forest land) with low intensity, and is subsistence in nature.

Biologically safe Physically vulnerable Semi-fragmented Low social intensity, subsistence

Bangun Nusa Mandiri (BNM)

The area of PT. BNM falls under the fragmented category, and is characterised by the outer boundaries of the concession that are not related to the surrounding forest areas. Biologically, the area of PT. BNM is not connected with conservation areas. The area also has a very high level of TBE so that the location of the management unit is classified as physically and biologically vulnerable. The combination of the level of fragmentation and location of the management unit has typified the management unit as biologically vulnerable, physically vulnerable and fragmented, according to environmental/ecological aspects. Some of the communities around PT. BNM remain reliant on natural resources in the concession area (forest and non-forest land) with low intensity, and is subsistence in nature.

Biologically vulnerable Physically vulnerable Fragmented Low social intensity, subsistence


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Cahaya Nusa Gemilang (CNG)

The area of PT. CNG is classified as semi-fragmented, characterised by the outer boundaries of its concession which less than 50% border on the surrounding forest areas. Biologically, the area of PT. CNG does not associate with conservation area and physically has no area with TBE so that the management unit can be categorised into physically and biologically safe. The combination between the level of fragmentation and location of the management unit has classified the management unit, according to environmental/ecological aspects, as biologically vulnerable, physically safe and semi-fragmented. Some of the communities around PT. CNG still tap into natural resources outside the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature. Although there are some people whose sources of livelihoods are found in the concession area, the percentage is small (<7%).

Biologically vulnerable Physically safe Semi-fragmented Low social intensity, subsistence

Kencana Graha Permai (KGP)

The area of PT. KGP is classified under the fragmented category, typified by the outer boundaries of its concession that are not related to the surrounding forest land. Biologically, the area of PT. KGP is not connected with conservation area and physically the area has a very high TBE so that the management unit is prone to physical and biological damage. The combination between the level of fragmentation and location of the management unit has characterised the management unit, according to environmental/ecological aspects, as biologically vulnerable, physically vulnerable and fragmented. Some of the communities around PT. KGP still rely on natural resources found in the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature.

Biologically vulnerable Physically vulnerable Fragmented Low social intensity, subsistence


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Buana Adhitama (BAT)

The area of PT. BAT belongs to the semi-fragmented category. The characteristic of the outer boundaries of its concession is less than 50% of the boundaries border on the surrounding forest areas. Biologically, the area of PT. BAT is not related to conservation area and the area has, physically, a very high TBE, making the management unit physically and biologically vulnerable. The combination of the level of fragmentation and location of the management unit has characterised the management unit, according to environmental/ecological aspects, as biologically and physically vulnerable as well as semi-fragmented. Some of the communities around PT. BAT still rely on natural resources found in the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature.

Biologically vulnerable Physically vulnerable Semi-fragmented Low social intensity, subsistence

Kartika Prima Cipta (KPC)

The area of PT. KPC falls under the semi-fragmented category, characterised by the outer boundaries of its concession which less than 50% border on the surrounding forest areas. Biologically, the PT. KPC area is not connected with conservation area and physically it has a very high TBE so that the management unit is physically and biologically vulnerable. The combination between the level of fragmentation and location of the management unit has typified the management unit, according to environmental/ecological aspects, as biologically vulnerable, physically vulnerable and semi-fragmented. Some of the communities around PT. KPC remain dependent on natural resources in the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature.



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Persada Graha Mandiri (PGM)

The area of PT. PGM is classified into fragmented category, typified by the outer boundaries of its concession which is not related to the surrounding forest areas. Biologically, the area of PT. PGM is unrelated to conservation area and physically it has a very high TBE so that the management unit falls under the category of physically safe and biologically vulnerable. The combination of the level of fragmentation and the location of the management unit has, according to environmental/ecological aspects, characterised the management unit as physically safe, biologically vulnerable and fragmented. Some of the community members around PT. PGM still rely on natural resources found in the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature.

Biologically vulnerable Physically safe Fragmented Low social intensity, subsistence

Paramitra Internusa Pratama (PIP)

The area of PT. PIP is included in the semi-fragmented category, characterised by the outer boundaries of its concession which shares a border with less than 50% of surrounding forest areas. Biologically, the area of PT PIP is not connected with conservation area, and physically it has a very high TBE so that the management unit is physically and biologically vulnerable. The combination between the level of fragmentation degree and location of the management unit has typified the management unit, according to environmental/ecological aspects, as biologically vulnerable, physically vulnerable and semi-fragmented. Some of the community members around PT. PIP still rely on natural resources in the concession area (forest and non-forest areas) with low intensity, and is subsistence in nature.



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VI. RESULTS OF THE RISK ASSESMENT

1. HCV AREA MANAGEMENT

1.1 The presence of HCV areas 1.1.1 Accomplishments

FCP and SCEP have been disseminated to the eight companies through socialisation at managerial level (estate manager, chief assistant, SPO officer, RC).

The SOP on HCV (SOP/SMART/BCS-EHSD/SADV/I/001) which was prepared in 2012 by the Sustainability Division is available in the eight companies, but the SOP has not been approved. At the moment, the eight companies use the SOP on Identification and Management of HCV: SOP/NP/SMART/IV/LH001, issued in 2010.

Persons in Charge (PICs) of HCV at estate level are present in the eight companies.

The eight companies have conducted HCV identification.

All identification processes in the eight companies were done by an RSPO-accredited assessment team.

Generally, the HCV identification process in the eight PTs involved local leaders and the surrounding communities.

Public consultation on HCV was held in the eight companies.

In connection with the peer review process, there are seven companies whose HCV identification has been peer reviewed: BNM, AMNL, KGP, PIP, BAT, PGM and CNG. The only company which has not completed the re-assessment peer review yet at this stage is PT. KPC.

Total HCV area for each company is as follows: - PT. BNM 2,761 ha - PT. PGM 1,173 ha - PT. KGP 639 ha - PT. CNG 233 ha - PT. KPC 3,080 ha (Bogor Agriculture University version), previously 7,514 ha

(Flora Fauna Indonesia version) - PT. PIP 2,179 ha - PT. AMNL 4,183 ha - PT. BAT 1,208 ha

1.1.2 Risks

There are different levels of understanding about FCP and SCEP within the companies. PTs that have a good understanding of these two policies at the management level are PT. KPC, PT. AMNL and PT. BAT.

There are activities that have the potential to violate the company’s commitment to protecting and managing the established HCV areas. Efforts have been made to restore areas that were cleared either before or after HCV assessments, but some of the restoration efforts have not been completed.


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Based on TFT’s interpretation of the HCV Toolkit, there are some disadvantages with the HCV identification method in the eight companies: - The primary data sampling of fauna was not performed by means of a

census as mentioned in the 2008 Toolkit for Identification of HCV in Indonesia.

- The primary data sampling of flora was not described in the HCV identification report.

- The identification method for HCV 4.1 was not supported by a ground-checking process.

- The identification method for HCV 4.2 was not supported by proper map overlays of soil, slope and land cover.

- The identification method did not engage relevant partners, such as BKSDA, NGOs, district offices or research institutes.

- The identification method for HCV 5 and 6 only involved individual interviews and was not conducted with a process of building mutual consensus.

The weak points in determining HCV areas include: - In determining HCV 1.2, species which are not included in the Critically

Endangered (CR) category of IUCN Red List are identified as HCV 1.2 by PT. BNM, PT. PGM, PT. CNG, PT. AMNL, PT. PIP, PT. KPC, PT. BAT and PT. KGP (e.g. wild boar, timor deer).

- There are areas which have HCV 3 potential, but they have not been identified as HCV 3 (based on the Table of Rare and Threatened Ecosystems in Kalimantan and RePPProT class identification in the Toolkit for Identification of HCV in Indonesia). For example, o PT. BNM has lowland rainforest (in-depth analysis has not been

conducted) o PT. KGP has lowland rainforest (in-depth analysis has not been

conducted) o PT. KPC has peat ecosystems of less than 3 meters in depth and heat

forest o PT. PGM has peat ecosystems o PT. PIP has peat ecosystems and heat forest

- There are some areas which potentially have high conservation values, but they are not identified as HCV areas. This is the case in all eight companies: o PT. AMNL has a sacred burial site o PT. BNM has lowland forest ecosystems o PT. CNG has areas of high erosion-hazard rating o PT. KGP has lowland forest ecosystems o PT. BAT has riparian zones (Stai River) o PT. KPC has heat forest and peat ecosystems of less than 3 meters deep o PT. PGN has areas of high erosion-hazard rating and peat ecosystems o PT. PIP has peat ecosystems and heat forest

- There is an area, which is potentially not an HCV area, but has been identified as HCV area, i.e. peat land. However, the conditions on the ground show otherwise.

- In PT. PGN there is a habitat categorized as HCV 1.3 for which only riparian


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zones have been allocated for the habitats of 20 RTE (rare, treated or endangered) species of fauna. The riparian zones are insufficient to support the target viability of these RTE, especially for large mammals (e.g. deer, barking deer, pigs, wildcats, etc.)

Although all of the eight PT’s have identified the presence of HCV 1.3 in their concessions, the process of HCV identification is not followed by in-depth viability analysis.

There are two companies that have not performed HCV identification: PT. BNM and PT. CNG.

There are some weaknesses in the HCV maps, such as: - In PT. BNM, the HCV maps which include the different values of HCV have

not been properly overlaid into one consolidated HCV area map, and as such do not include all relevant values.

- Difference between the HCV map and concession map of PT. BNM. - An HCV area is not included in the map of PT. CNG’s working area.

The limitations of the public consultation process include: - The public consultation process in the eight PTs did not take into account

the representation of the parties involved (e.g. NGO, district offices and BKSDA), as required by the 2008 Toolkit for Identification of High Conservation Values in Indonesia.

- In PT. PGM, meeting minutes were not well documented during public consultations.

- Public consultations in PT. KGP and PT. CNG were conducted at the same time, and the results of the consultation were put into one report. The reports should be documented separately for each PT in order to ensure proper documentation has been conducted for each related PT.

The peer review process in PT. KPC has not been completed. This process has been conducted to revise HCV identification.

In PT. PGM, the weakness of the final document on the results of HCV identification is that the document does not incorporate the results of public consultation and peer review.

1.1.3 Conclusions

There are three companies which violated FCP; they are PT. CNG, PT. KPC and PT. BAT.

The methods for HCV identification and public consultation are still ineffective when compared to the 2008 Toolkit for Identification of HCV in Indonesia.

There are some areas, which are presumed to have a high conservation value, but are not identified as HCV areas. At the same time, there are areas which potentially do not have HCV, but have been identified as HCV areas.

There are some errors in the map overlaying process (using HCVA maps). 1.2 Approach to maintaining and improving HCV quality 1.2.1 Accomplishments

At the eight companies, there is a “Zero Tolerance Policy for Endangered Animals” which states that “No one is allowed to keep, hurt, torture, kill or


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even touch protected animals.” This applies to all employees, staff and contractors and was issued on 25 November 2011.

SOPs on the management of HCV areas have been disseminated to employees at the eight companies assessed.

Training courses on the management of HCV were held in PT. KPC, PT. PIP, PT. BAT, PT. PGM and PT. AMNL.

HCV management and monitoring plans for the eight companies have been approved.

The HCV management and monitoring plans have been socialised to all employees in the eight companies.

The HCV management plans for PT. KPC and PT. BAT have been disseminated to the surrounding communities.

Some of the identified HCV areas have been compensated; they are 6.45 ha in PT. BNM, 107.2 ha in PT. PGM, 825.3 ha in PT. KPC and 105.2 ha in PT. PIP, and also in PT. AMNL as well as PT. BAT (total areas unknown).

Management of HCV areas includes such activities as: - Putting up signage identifying HCV areas in PT. BNM, PT. CNG, PT. PGM, PT.

KGP, PT. KPC, PT. PIP, PT. BAT and PT. AMNL, - Marking the boundaries of HCV areas in PT. PGM, PT. KPC, PT. PIP, PT. BAT

and PT. AMNL, - Cleaning and fencing burial sites in PT. KGP and PT. KPC, - Establishing mixed forest nurseries for land rehabilitation in PT. KGP, - Reforestation of HCV areas that had been opened (based on HCV

identification) in PT. KPC, - Socialisation on HCV to the communities around PT. KPC.

GAR/SMART has a policy that the management of HCV areas under its concession (HGU) becomes the company’s responsibility.

1.2.2 Risks

In all eight companies surveyed, the “Zero Tolerance Policy” has not been socialised to the grass roots level (field workers in the operations).

In all eight PTs, there is a lack of understanding of HCV identification and management on the part of estate management (PICs at estate level).

The management and monitoring plan of HCV has the following weak points: - The management plan is not consistent with the management and

monitoring plan in terms of the type and volume of HCV, for example PT. PGM’s.

- The HCV management and monitoring plan has not been socialised to the surrounding communities in PT. BNM, PT. KGP, PT. CNG, PT. AMNL and PT. PIP.

- There has been no effort to involve the community and other stakeholders such as NGOs in HCV management for any of the eight companies.

Activities in HCV management that have been conducted to date have yet to be consistent with the HCV management plan for PT. BNM, PT. PGM, PT. CNG, PT. KGP, PT. KPC and PT. PIP, for example: - There has been no activity in marking the boundaries of HCV areas


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- The width of riparian areas does not comply with the provision - There has been no reforestation on HCV areas that have been degraded - There is a disturbance in an area which has been determined to be an HCV

area, and there have been no actions taken or monitoring conducted to handle this disturbance (disturbances in riparian zones of the Jentu River in PT. PIP).

There is land clearing on HCV areas for extraction of laterite soil in PT. KPC, which can affect the quality of the HCV area.

Although there are PICs for HCV management at estate level in each of the eight companies, these managers are not dedicated full time to HCV management (with the exception of PT. AMNL and PT. BAT).

1.2.3 Conclusions

There have been some efforts made to maintain or improve high conservation value, but stakeholder engagement with the communities and the relevant agencies remains low.

There is land clearing on HCV area for extraction of laterite soil, which can threaten the presence and the quality of the high conservation value.

1.3 Evaluation of the effectiveness of HCV management 1.3.1 Accomplishments

HCV management and monitoring plans for the eight companies assessed have been legalised.

HCV monitoring activities have been conducted in PT. PGM, PT. AMNL, PT. BAT, PT. PIP and PT. KPC; while for the other three companies (PT. BNM, PT. CNG and PT. KGP) activities in HCV monitoring have not been carried out yet.

The examples of HCV monitoring activities include: - Monitoring the presence of wildlife (species, number and location) by the

method of encountering. - Monitoring the quality of the river water. - Monitoring erosion.

Based on these monitoring activities PT. PGM has made recommendations for improvement based on their findings.

1.3.2 Risks

The drawbacks of the HCV management and monitoring plan include: - The HCV management and monitoring plan is not supported by an

accompanying budget in PT BNM, PT CNG, PT KGP or PT BAT. - There is no monitoring effort for the viability of conservation targets and

the status of threats to the conservation targets in the eight companies.

There are no HCV monitoring activities in PT. BNM, PT. KGP and PT. CNG.

The weak spots in the activities and the results of monitoring that has been carried out include: - For PT. PGM, activities in HCV monitoring are not consistent with the HCV

monitoring plan.


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- There is no monitoring report on HCV 5 and 6 that has been identified. - There is no monitoring effort for the viability of conservation targets and

the status of threats to all the conservation targets that have been determined.

- There is no map indicating locations of wildlife encounters which is created based on the result of HCV monitoring.

- The result of HCV monitoring has not been used as a reference to improve the management efforts in the future.

- HCV monitoring results have not been available to the public.

1.3.3 Conclusions

Some of the companies have performed HCV monitoring, but the results remain unavailable for the public.

There has not been in-depth analysis on the monitoring results in order to establish a point of reference to improve future management efforts.

It remains unknown as to whether there is a decrease, increase or consistency in the viability and threat status of conservation targets.

Risk

Low Risk : -

Medium Risk : 4 PTs

High Risk : 4 PTs

1. PT. Agro Lestari Mandiri (AMNL) : Medium Risk 2. PT. Bangun Nusa Mandiri (BNM) : High Risk 3. PT. Cahaya Nusa Gemilang (CNG) : High Risk 4. PT. Kencana Graha Permai (KGP) : High Risk 5. PT. Buana Adhitama (BAT) : High Risk 6. PT. Kartika Prima Cipta (KPC) : Medium Risk 7. PT. Persada Graha Mandiri (PGM) : Medium Risk 8. PT. Paramitra Internusa Pratama (PIP) : Medium

Risk

Recommendations 1. Identifying and determining HCV and HCVA

Complete/improve the method for sampling of data on flora, fauna, environmental services and the social, economic and cultural aspects according to the rules specified in the 2008 HCV Toolkit for Indonesia, and use the improved methods when collecting the data.

Ensure public consultation is carried out by taking into account the presence of representatives of the relevant parties in accordance with what the 2008 HCV Toolkit stipulates.

Involve relevant stakeholders in the HCV identification process (agencies, NGOs, research institutions, villages).

Ensure areas with high conservation value are established as HCV areas.

2. HCV management

Ensure that all HCV areas under the companies’ concessions shall be managed by the companies.

The companies shall provide adequate and well-trained staff to manage and monitor HCV in the estate.


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Involve the communities and the parties (related agencies) in managing HCV areas.

Prevent and deal with any disturbances that threaten the presence and the quality of HCV, and restore the HCV areas that are already being cleared.

Communicate the plan and the results of HCV management to the related parties, such as agencies, NGOs and communities.

3. HCV monitoring

To regularly monitor and complete the analyses of monitoring data until the viability and the threat status of the conservation target have been established.

Incorporate monitoring results into HCV management plans as recommendations for improvement.

Make the results of HCV monitoring are publicly available.

2. PEAT LAND MANAGEMENT

2.1 The presence of peat land 2.1.1 Accomplishments

Note: TFT has limited access to information regarding peat land. Data or documents that were accessed during the assessment include the following: - Environmental Impact Assessment (EIA) in all 8 PTs - HCV identification reports in all 8 PTs - Area statement which includes the total land area and location of peat land

in PT. BNM, PT. CNG, PT. KGP, PT. KPC, PT. PGM and PT. PIP. However, in PT. AMNL and PT. BAT, TFT had no access to the data.

- Soil maps in PT. BNM, PT. KGP and PT. CNG. In these three PTs there is no peat land.

Some data that cannot be accessed includes the following: - Peat land maps which include the total land area, maturity level and depth

cannot be accessed in five PTs (PT. BAT, PT. KPC, PT. PGM, PT. BIP and PT. AMNL).

- Plantation maps regarding the planted year of oil palm cannot be accessed in five PTs (PT. BAT, PT. KPC, PT. PGM, PT. BIP and PT. AMNL).

Based on field visits, the following observations were made: - Peat land can be found in PT. KPC, PT. PIP, PT. PGM PT. BAT and PT. AMNL. - There are three companies which do not have peat land: PT. BNM, PT. CNG

and PT. KGP.

The FCP, SCEP and the Zero Burning Policy have been socialised to estate management (estate manager, SPO Officer, RC) in all eight companies being assessed.

The SOP on the identification of peat land is still a draft. For the time being, the guidelines in use are technical guidelines for land preparation with document number SOP/NP/SMART/IV/LH001 on HCV identification and management, as well as document number SOP/NP/SMART/II/PMNP002 dated 1 July 2010 on field survey and land evaluation.


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Based on the field observation, it was found that PT. PGM cleared the peat land and planted it with oil palm in 2011.

2.1.2 Risks

There was no information on the identification of or the depth of peat land in five PTs (PT. KPC, PT. PGM, PT. PIP, PT. BAT and PT. AMNL).

There has been no identification of potential threats that can diminish the quality and disturb the presence of peat land in PT. PGM, PT. PIP, PT. KPC and PT. AMNL.

Based on the overlay of the following two maps: i) the Regional Physical Planning Programme for Transmigration (RePPProT) map; and ii) the planting map, there is an indication that PT. KPC has planted on peat land in 2011.

2.1.3 Conclusions

TFT could not conclude whether there has been a violation to FCP particularly in terms of peat land conservation because of limited access to information.

Although there are indications of land clearing on peat land in PT. KPC, there is a strong indication that the management conducts efforts to protect peat land based on the overlay of RePPProT map together with the planting map for 2011, when the FCP was launched.

2.2 Approach to maintaining and improving the quality of peat land 2.2.1 Accomplishments

There is no activity in peat land management at PT. BAT while at four other companies activity in peat land management was found. The companies are PT. PIP, PT. KPC, PT. PGM and PT. AMNL.

In the four companies mentioned above, the Zero Burning Policy applies based on the Circular No.: 071/SMD OPS/IX/2007 dated 4 September 2007 on the prohibition of land clearing by burning.

In the four companies above, there is a work instruction on drainage work with the number K/SMART/MCAR/I/TA-PPA/01-Drainage dated 26 March 2012.

These four companies have peat management plans in place, which include the protection of natural hydrology systems, such as by putting barriers into the trenches to control the water table of the peat land.

There are persons in charge of the management of peat land at regional level.

Training on the management of peat land was held for the PICs at regional level in PT. PGM, PT. PIP and PT. KPC, in collaboration with WWF and Sebangau National Park.

There are firefighting and emergency response teams in the four companies that have peat land.

The management efforts that have been made in the four companies include: - Installation of piezometer and taking measurements (of the water table)

using the device. - Construction and maintenance of channels and water gates (sluices) and

collection drains. - Measurement of water levels.


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- Installation of signboards informing the prohibition of burning the peat land.

2.2.2 Risks

Currently peat land management refers to several procedures and work instructions. There is no specific SOP either for peat land management which includes management and monitoring in: i) planted areas and ii) peat conservation areas in PT. PGM, PT. KPC, PT. PIP, PT. AMNL and PT. BAT.

There has been no specific training on peat land management in PT. AMNL, PT. PGM, PT. PIP or PT. KPC for every PIC in the field (estate level).

For peat ecosystems which are connected to plantation areas: - There is no clear management of water levels on peat land that are not

cleared in order to protect the function of water on the peat land located in PT. KPG, PT. PGM, PT. PIP, or PT. AMNL.

- There is no documentation on the management and monitoring efforts of peat ecosystems in PT. KPG, PT. PGM, PT. PIP, PT. BAT or PT. AMNL.

2.2.3 Conclusions

There have been attempts to manage the peat land in PT. KPG, PT. PGM, PT. PIP, or PT. AMNL.

The management efforts are focused on the peat land that has been planted, which is not enough to protect the functions of peat ecosystems that are connected to plantation areas.

The involvement of communities and other stakeholders in peat ecosystem management remains low.

2.3 Evaluation of the effectiveness of peat land management 2.3.1 Accomplishments

There is a monitoring plan and a related budget.

Water levels and water table measurements have been taken regularly in PT. PGM, PT. PIP, PT. KPC and PT. AMNL in the areas that have been planted with oil palm trees.

2.3.2 Risks

There has been no monitoring of the viability of the peat ecosystem (including subsidence, biodiversity, etc.) and the status of threats to the ecosystem in PT. PGM, PT. KPC, PT. PIP, PT. BAT or PT. AMNL.

Subsidence observations to determine the impact of oil palm cultivation on peat land has not been made in PT. PGM, PT. KPC, PT. PIP or PT. AMNL.

2.3.3 Conclusions

It remains unknown as to whether the viability of peat ecosystems which connect to the plantation areas show a declining or consistent trend.

Risk

1. PT. Agro Lestari Mandiri (AMNL) : Low Risk; limited


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Low Risk : 5 PTs *

Medium Risk : -

High Risk : -

* Limited conclusion There is no peat land in the three other companies

2. PT. Bangun Nusa Mandiri (BNM) : No risk 3. PT. Cahaya Nusa Gemilang (CNG) : No risk 4. PT. Kencana Graha Permai (KGP) : No risk 5. PT. Buana Adhitama (BAT) : Low Risk; limited 6. PT. Kartika Prima Cipta (KPC) : Low Risk; limited 7. PT. Persada Graha Mandiri (PGM) : Low Risk;

limited 8. PT. Paramitra Internusa Pratama (PIP) : Low Risk;

limited

Recommendations 1. Identification and mapping

The peat SOPs need to be carefully reviewed. Advice should be sought from a peat expert.

The map created from the identification of peat land must be accompanied by information on the total land area, maturity level and depth.

2. Peat land management

Involving the community in peat management planning where the community plays a role in maintaining the integrity of the area.

Communicating the management plan with relevant stakeholders (community members, relevant agencies, NGOs, etc.)

Specific training for peat land management and monitoring shall be conducted. 3. Peat land monitoring

Complete the analyses of monitoring data until peat ecosystem viability and threats are established.

Incorporate monitoring results into HCV management plan as recommendations for improvement.

Conduct monitoring in areas of peat ecosystems that share a border with plantation estates.

4. Make a report on the management and monitoring of peat land.

3. HCS MANAGEMENT

3.1 The presence of HCS areas 3.1.1 Accomplishments

Draft maps of HCS areas have been prepared based on the patch analyses in the eight companies assessed.

Below are the potential areas of HCS according to the draft map: - PT. BNM = 4,232 ha - PT. PGM = 4,689 ha - PT. KGP = 373 ha - PT. CNG = 244.50 ha - PT. AMNL = 3,865 ha - PT. BAT = 5,845 ha - PT. PIP = 5,800 ha - PT. KPC = 5,981 ha


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A working area map containing a list of HCS areas for field operational guidance is available in PT. PGM.

Below are the total areas of HCS for which land compensation had been paid: - PT. PGM = 88.63 ha - PT. KPC = 109 ha - PT. PIP = 243 ha

3.1.2 Risks

There was land clearing on potential HCS areas after 2011 in PT. BNM, PT. KGP and PT. AMNL (for example, at BT and HK1 areas).

Some HCS areas in PT. BNM, PT. CNG and PT. KGP were disturbed (wood collection and illegal farming by members of local communities).

Note: HCS programme is currently being implemented as a pilot project in PT. KPC.

3.1.3 Conclusions

There are violations to the policy for conservation of HCS areas/FCP in PT. BNM, PT. KGP and PT. AMNL.

Potential HCS areas have been identified on a map through strata interpretation.

Since the HCS programme is currently being implemented as a pilot project in PT. KPC, the definitive establishment of HCS area in other companies will be completed after the pilot project is completed.

3.2 Approach to maintaining and improving the quality of HCS area 3.2.1 Accomplishments

The eight companies in this study have received Circular Letter No. 071/SMD OPS/IX/2007 on Prohibition of Land Clearing Burning, signed by the President Director of PT SMART Tbk. This letter was issued on 4 September 2007.

“Procedures for slowing down bull dozers to check the type of vegetation while the “GO” zone maps are updated” is also available.

Note: The HCS programme currently remains a pilot project implemented in PT. KPC.

PICs of HCS have been available in the following companies: PT. PGM, PT. BAT, PT. PIP and PT. KPC.

Socialisation on HCS has been carried out in PT. BAT.

HCS training has been conducted by TFT with trainees from PT. PGM, PT. AMNL, PT. KPC, PT. PIP and PT. BNM on 25-26 January 2013.

Some maps of working area have been overlaid with maps of HCS areas in PT. PGM, PT. AMNL, PT. BAT, PT. PIP and PT. KPC.

Field personnel are familiar with the locations of HCS areas in PT. AMNL, PT. BAT, PT. PIP and PT. KPC.

PT. KPC has made efforts to manage HCS areas by erecting signage at Block I-31. 3.2.2 Risks

PICs of managing and monitoring HCS areas are not available in PT. BNM, PT.


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CNG, PT. KGP and PT. AMNL.

HCS area boundaries have not been delineated in any of the eight companies.

No map of working areas is overlaid with maps of HCS areas in PT. BNM, PT. KGP and PT. CNG.

Progress of the HCS pilot project in PT. KPC (in collaboration with TFT): - SOPs on HCS management are not available - The company has not prepared an HCS management plan - It appears that local community has not been engaged in HCS management - SOPs on land clearing in relation to HCS are not available - Not all communities have been compensated for HCS areas (due to refusal

from the communities to release their land)

3.2.3 Conclusions

Note: HCS is currently a pilot project in PT. KPC. Hence, the mechanisms for protection and management of HCS area will subsequently be set up in reference to the results of the pilot project.

3.3 Evaluation of the effectiveness of HCS area management 3.3.1 Accomplishments

Note: HCS is currently a pilot project implemented in PT. KPC. 3.3.2 Risks

The mechanism for HCS monitoring has yet to be available in any of the PTs.

There is no support from government, local communities and/or relevant industries to conserve HCS areas

3.3.3 Conclusions

Note: The HCS programme is being implemented as a pilot project in PT. KPC. Hence, HCS area management across all new planting areas will be established upon completion of the pilot project.

Given that the preparation of procedures for protecting and managing HCS areas is not complete, there are certain risks as the prevailing guideline is the “Procedures for slowing down bull dozers to check the type of vegetation while the ‘GO’ zone maps are updated”. Land clearing that still occurs in areas identified as having HCS potential (BT, HK) in PT. BNM, PT. KGP and PT. AMNL may represent one of the risks.

Low Risk : -

Medium Risk : -

High Risk : 8 PTs

1. PT. Agro Lestari Mandiri (AMNL) : High Risk 2. PT. Bangun Nusa Mandiri (BNM) : High Risk 3. PT. Cahaya Nusa Gemilang (CNG) : High Risk 4. PT. Kencana Graha Permai (KGP) : High Risk 5. PT. Buana Adhitama (BAT) : High Risk 6. PT. Kartika Prima Cipta (KPC) : High Risk 7. PT. Persada Graha Mandiri (PGM) : High Risk 8. PT. Paramitra Internusa Pratama (PIP) : High Risk

Recommendations


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1. Complete the Pilot Project in PT. KPC. After the pilot project is complete, the results shall be applied in the other seven PTs.

2. The companies shall provide adequate and well-trained staff to manage and monitor HCS in the estate.

3. Ensure that temporary procedures on HCS protection are disseminated and explained to the persons in charge and the relevant staff on the ground.

4. Ensure that all procedures are implemented on the ground under tight supervision.

4. FPIC IMPLEMENTATION

4.1 Land acquisition process 4.1.1 Accomplishments

Commitment to FPIC implementation has been included in the SCEP of PT. SMART Tbk. This policy has been disseminated to the eight PTs at the management level (Estate Manager, Chief Assistant, SPO Officers, D&L and Facilitator).

SCEP documentation is available at the head office and at estate level in the eight PTs.

Socialisation and training on FPIC was conducted in PT. BAT in May 2013. As for the seven other companies, socialisation and training on FPIC were conducted twice; the first batch was in 2011 delivered by LINKS to the field staff and the second batch was an FPIC refresher delivered by TFT and LINKS on 16-17 September 2013, which was followed by preparation of a Follow-Up Work Plan (RKTL) for PSM 7 and PSM 8.

FPIC SOPs have been completed and are pending approval from the Directors of PT. SMART.

SOPs on Land Compensation are available in each of the eight PTs, i.e. SOP/NP/SMART/VII/D&L0002 regulating mechanisms for socialisation, identification of communal/individual land and mapping of land that will be relinquished/compensated.

SOPs on communication and consultation are available in each of the eight PTs, i.e. SOP/NP/SMART/XIV/MCAR 003 regulating mechanisms for communication and consultation with local community and other stakeholders.

Field Operations Teams responsible for implementing SOPs on Land Compensation and on Communication and Consultation are in place in the eight companies, and consist of a Unit Head, Documents and Licenses, GIS and PNMP.

The Field Operations Teams understand the FPIC concept and the stages of its implementation.

Management in the eight companies have conducted socialisation regarding palm oil estate development during the initial phase of estate development.

Local communities in the surrounding areas of the eight companies stated in interviews that they understand the possible impacts of estate development.

According to interviews with local communities in the surrounding areas of PT. KGP and PT. CNG, the communities signed an agreement with the companies


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concerning estate development. However, information regarding such agreements was not available in the six other companies.

The surrounding communities in the eight PTs expressed during interviews that they understand the procedures for land release. They received the information from the Document and Licenses staff and during the socialisation at the beginning of estate development.

Three companies, i.e. PT. KGP, PT. CNG and PT. BNM, use socio-economic and cultural data in reference to the Environmental Impact Assessment (EIA) documents; whereas for five other companies, the Social Impact Assessment (SIA) Report is used in addition to the EIA documents.

According to interviews with the surrounding communities, the amount of land compensation depends on the negotiations between landowners and D&L staff.

Representatives of the eight companies claimed that the standard amount of compensation that has been set by management is applied.

According to interviews with community members releasing their land, full compensation has been given for the released land. This applies to local communities from the surrounding areas of the eight PTs.

All eight companies have recorded contact person details from each surrounding village (including name, address, phone number and job title).

Identification and inventory of land ownership in eight companies were completed for the released/compensated land.

Agreement on land compensation in seven companies is made individually for each landowner. Requirements for land compensation included the following documents: Statement of Land Relinquishment, Statement on Land Location and Land Parcel Map. It is only in PT. BAT that a signed copy of the agreement document was held by each relevant party (the Company, the village/sub-village governments and the land owner).

Land parcel maps which show the boundaries between individuals who have been compensated for their land, forest areas and land owned by other individuals are available in the eight PTs.

Interviews in the eight companies imply that land release process is free of any intimidation or undue pressure.

In general, local communities from the surrounding villages prefer negotiating land compensation by themselves rather than using a third party, which is not common.

There is a village team responsible for land release, appointed by the community under mutual agreement, in PT. AMNL and PT. BAT.

Documentation and interviews with the surrounding communities in the eight PTs imply that there is no indication of force, pressure or violent intimidation during land release process. A Monument of Consensus was built to symbolise mutual agreement between local communities and the management?? of PT. CNG and PT. KGP.

In PT. AMNL, local communities are more open to oil palm plantation development and they accept the idea of conservation areas relative to the other PTs.


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4.1.2 Risks

Despite information regarding traditional ownership of communal/forest land, EIA and SIA documents in the eight companies do not explain/include data on the presence of indigenous people along with the ownership of customary/communal land within the concession area.

SOPs on land release are distributed (but not explained) to the PICs in the eight companies.

Land Compensation teams in the eight companies have not fully understood how to fulfil the community’s right to FPIC in the land compensation process.

Documentation of socialisation in the eight PTs during the early stages of estate development is incomplete.

During the FPIC refresher course, the action plan for FPIC implementation was developed for seven companies (excluding PT AMNL) in PSM 7 and PSM 8 (Perkebunan Sinarmas). However, the action plan has not been implemented and is pending completion of the FPIC SOPs.

Identification/research studies have not been completed in the eight companies regarding ownership of communal/customary land/forest, customary institutions and the existing socio-economic groups at the village level.

Data collected from the Social Impact Assessment (SIA) and Environmental Impact Assessment (EIA) in the eight PTs does not include data regarding the presence of informal institutions (such as community groups). Comprehensive identification/mapping of ownership/possession/utilisation of land and natural/forest resources has not been carried out in any of the villages surrounding the eight PTs.

In seven PTs (all except PT. AMNL), not all of the owners of land parcels signed land release maps. Land release maps were only signed by landowners, village and sub-district officials as well as company representatives.

PT. AMNL is the only PT for which the local communities understand the relevant regulations that can impact the relationship the communities have with the company (e.g. HGU, partnership, plasma, etc.). The local communities in the other seven PTs have less of an understanding of how the regulations can impact their relationship with the company.

Documentation regarding the land compensation process is not comprehensive in any of the eight companies; only documents on the final process of land release are available, including Statement of Land Release, Statement on Land Location and Land Parcel Maps.

Interviews with local communities around PT. CNG and PT. KGP imply that their representatives who signed the agreement for estate development, as well as company representatives, did not disseminate the relevant information widely.

Unlike in PT. BAT and PT. AMNL, the six other PTs do not provide a copy of signed documents upon payment of land compensation to land owners; the signed documents are kept only by the companies.

4.1.3 Conclusions

Necessary policies regarding FPIC have been formulated despite the lack of supporting documents (SOP on Land Compensation, SOP on Grievance


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Handling, SOP on Communication and Consultation) to fulfil the community’s right to FPIC. The company has developed a draft of the SOP on FPIC to ensure that they comply with community rights to FPIC. However, this SOP has not yet been signed by management.

The implementation of land compensation has not been completed in a way that fulfils the community’s right to FPIC in any of the eight companies.

In general, documentation of the estate development process in all of the eight companies was incomplete (e.g. meeting minutes, list of attendees, etc.).

The Operational Teams for land acquisition do not possess sufficient capacity to implement the principles of FPIC in any of the eight companies.

The communities surrounding PT. AMNL are more open to oil palm plantation development and the idea of conservation areas (relative to the communities in other PTs).

4.2 Grievance Handling 4.2.1 Accomplishments

SCEP documents are available in all eight companies, specifically the documents regarding the responsible Handling of Grievances.

The SOPs on the Handling of Grievances and Complaints, i.e. SOP/NP/SMART/XII/MCAR.001 dated 01/07/2010, are available in the eight PTs.

The SOPs on the Handling of Grievances and Complaints are being revised in the eight companies.

The handling of grievances at estate level within the eight companies is the responsibility of the respective estate manager.

In doing his/her job in handling of grievances, an estate manager will be assisted by an estate assistant, documents and Licenses (D&L) staff, a facilitator and other field officers.

If the estate managers in the eight companies are incapable of handling the grievances, his/her superior will assume the responsibility.

In general, PICs in the eight companies have understood procedures on grievance handling.

Grievances have been recorded by the eight companies.

Grievances are solved through deliberative consensus in the eight companies.

In general, grievances are handled by representatives of the eight companies. 4.2.2 Risks

There has been no socialisation on mechanisms for handling grievances, to local communities in the surrounding areas of the eight PTs.

Documentation on the handling of grievances is considered less informative (due to unclear explanations on the process and very limited information therein).

There is no separation of documentation to record public demands, grievances and land claims in any of the eight companies.

4.2.3 Conclusions

In general, all grievances have been handled by the eight companies through


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deliberative consensus.

Despite the fact that local communities around the eight companies can file a complaint, they do not clearly understand the company’s internal process for handling grievances.

The handling of grievances in the eight companies has been well-implemented due to the quick response and follow-up. However, documentation on the handling of the grievance process is incomplete; instead, only a monthly progress report on this matter is submitted to the head office in Jakarta.

Risk

Low Risk : 1 PT

Medium Risk : 7 PTs

High Risk : -

1. PT. Agro Lestari Mandiri (AMNL) : Low Risk 2. PT. Bangun Nusa Mandiri (BNM) : Medium Risk 3. PT. Cahaya Nusa Gemilang (CNG) : Medium Risk 4. PT. Kencana Graha Permai (KGP) : Medium Risk 5. PT. Buana Adhitama (BAT) : Medium Risk 6. PT. Kartika Prima Cipta (KPC) : Medium Risk 7. PT. Persada Graha Mandiri (PGM) : Medium Risk 8. PT. Paramitra Internusa Pratama (PIP) : Medium

Risk

Recommendations Land Acquisition Process: To fulfil the community’s right to FPIC, the companies are required to do the following: 1. Complete and implement the SOP on FPIC including participatory mapping guidelines,

and also to strengthen the existing SOP on land acquisition. 2. Identify/conduct research studies on communal/customary land ownership systems,

customary institutions, socio-economic groups as well as land and natural resource utilization in the village within the estate and the surrounding areas using participatory methods.

3. Provide clear explanations to the relevant PIC about all SOPs related to land acquisition.

4. Increase the understanding at the operational level in order to effectively implement FPIC in particular.

5. Implement the action plan according to the existing procedures for FPIC. 6. Conduct documentation training for all activities carried out by the Land Compensation

Team. 7. Ensure authorised signatures are provided by the owners of border land/land parcel

who released their land and received compensation for the land. 8. Conduct regular socialisation on plantation regulations related to community issues

(including plasma schemes, HGU, etc.) for all affected communities within the estate and the surrounding areas.

9. Create complete documentation of all phases in the land compensation process, from the initial socialisation, negotiation and identification to land inventory.

10. Conduct socialisation for community representatives on any agreements made between the companies and local communities.

11. Provide a copy of land compensation documents to community members as mentioned in the SOP on Land Compensation.

Handling of Grievances


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1. Immediately complete the revision of the SOP for the Handling of Grievances and Complaints.

2. Conduct socialisation regarding the SOP on the Handling of Grievances and Complaints for relevant stakeholders.

3. Conduct more detailed documentation on the handling of grievances for each case. 4. Separate the records/documentation on public demands, land claims and grievances.

5. CONFLICT MANAGEMENT

5.1 Conflict management 5.1.1 Accomplishments

SCEP documents are available in the eight companies.

The SOP on Resolution of Land Conflicts i.e. SOP/SPO/SMART/LH-04, the SOP on Communication and Consultation i.e. SOP/NP/SMART/XIV/MCAR 003 and the SOP on Handling of Grievances and Complaints i.e. SOP/NP/SMART/XII/MCAR 001 dated 01/07/2010 are available in the eight companies.

The SOP on Resolution of Social Conflicts is available (as a revision to the SOP on the Resolution of Land Conflict) and is awaiting approval from the President Director of PT. SMART.

The PICs of conflict resolution in the eight PTs are the management boards, including the Regional Controller (RC), Manager and Chief Assistant.

Conflict mitigation in the eight companies is carried out through a CSR programme, stakeholder engagement, employment of local community members and direct handling of grievances; a village team is also assigned in PT. AMNL.

The results of interviews with the management of the eight companies show that the management is in charge of conflict resolution due to the financial implications pertaining to the conflict.

The handling of conflicts in the eight PTs refers to the procedures for grievance handling as written on the Monthly Grievance Report Table. However conflict mitigation should be handled as a separate procedure (SOP on Social Conflict Resolution).

Based on the results of interviews with local communities (respondents) around the eight companies, as well as based on the Monthly Grievance Report Table, the non-litigative approach is given the highest priority among the efforts toward conflict resolution.

According to the results of interviews with local communities and management of the PTs, and based on a review of the Monthly Grievance Report Table, there is no indication of land conflict with widespread impact in the following five companies: PT. BAT, PT. AMNL, PT. PIP, PT. CNG and PT. KGP.

5.1.2 Risks

None of the eight companies have completed conflict identification/mapping.

None of the eight companies have a documented strategic plan for handling conflicts.


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None of the eight companies have conducted monitoring and evaluation of conflict resolution.

None of the eight companies consistently refer to the SOP on the Resolution of Land Conflicts for resolving their conflicts.

In all of the eight PTs, land conflicts, grievances and public demands are filed using the same form. However according to the SOPs they should be categorized separately.

Based on the results of interviews with local communities, they demand land for transmigration areas in PT. BAT’s concession area.

The result of interviews with the management of PT. PGM indicates that local communities of Kampung Baru-Nanga Silat reject estate development.

In PT. BNM in particular, the company brought a land conflict case with the community of Kampang Silat Ulu to court, and the Supreme Court decided that PT. BNM won the case. This is a risk because of the fact that the case went to court rather than using a non-litigative approach to resolve the conflict.Interviews with local communities from Kampung Silat Ulu demonstrate that some members of the community reject the development of oil palm plantation estates.

Some local communities around PT. KPC also reject plantation estate development. In addition, there are potential conflicts with the people of Mensusai Village, Kerangas Villages and Kenabak Hulu Subvillage.

5.1.3 Conclusions

Conflict is still not handled systematically, and therefore fails to comply with the policy for the responsible resolution of conflicts.

Risk

Low Risk : -

Medium Risk : 4 PTs

High Risk : 4 PTs

1. PT. Agro Lestari Mandiri (AMNL) : Medium Risk 2. PT. Bangun Nusa Mandiri (BNM) : High Risk 3. PT. Cahaya Nusa Gemilang (CNG) : Medium Risk 4. PT. Kencana Graha Permai (KGP) : Medium Risk 5. PT. Buana Adhitama (BAT) : High Risk 6. PT. Kartika Prima Cipta (KPC) : High Risk 7. PT. Persada Graha Mandiri (PGM) : High Risk 8. PT. Paramitra Internusa Pratama (PIP) : Medium

Risk

Recommendations 1. Develop the mechanisms for conflict mitigation. 2. Conflict resolution efforts should consist of the following stages:

a. Conflict Identification/Mapping b. Conflict Analysis c. Preparation of Work Plan for Conflict Resolution d. Implementation of Conflict Management e. Monitoring, Evaluation and Reporting

3. The SOP on the Resolution of Social Conflicts needs to be immediately approved, disseminated and implemented on the ground.


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4. Conduct integrated conflict resolution with collaboration from relevant stakeholders. 5. Train relevant managers and operational staff on knowledge/skills related to conflict

resolution.

6. LEGAL ASPECTS OF ESTATE OPERATIONS

6.1 Legal aspects of company establishment, legal aspects of plantation business and legal

aspects of the operations 6.1.1 Accomplishments

The SOPs on Compliance on Rules and Other Regulations are available in the eight PTs.

Amendments to regulations for the eight PTs are made by Corporate Legal and Central D&L (Document and License) Divisions in the Head Office.

Proof of legal compliance for the company’s establishment is available in the eight assessed companies, including Deed of Establishment and the legalisation, Certificate of Domicile, Large Scale Plantation Business Permit (SIUP), Taxpayer Registration Number (NPWP) and Company Registration Number (TDP).

Proof of legal aspects of the plantation business for these companies is as follows:


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Receipt of payment for the Reforestation Fund/Forest Resources Rent Provision is available in PT. AMNL, PT. BNM, PT. CNG, PT. KGP, PT. KPC, PT. PGM and PT. PIP.

Monitoring of legal compliance in the eight companies is carried out in the Head Office in Jakarta by the Central D&L division.

Plasma estate has been developed in all companies: PT. PGM (845 ha), PT. CNG (+/- 400 ha), PT. KGP (+/- 800ha), PT. KPC (541 ha), PT. PIP (581 ha), PT. AMNL (+/- 2,500 ha), PT. BNM (+/- 550 ha) and PT. BAT (+/- 450 ha).

PT. AMNL keeps a receipt of the payment for Reforestation Fund/Forest Resources Rent Provision for an IPK area of 36 ha.

6.1.2 Risks

Proof of land clearing and planting prior to the issuance of EIA reports was found in

Company Name

Location Permit & Its Extension

EIA & Decree on

Environmental Feasibility

Plantation Business License

(IUP)

Timber Utilisation

Permit (IPK)

Forest Area Relinquishment

Permit (IPKH)

Land Use Title

(HGU)

PT. BNM 2004 – 2013 2009 2001, 2012

2012 Area for Other Uses (APL)

Not obtained

yet

PT. PGM 2007 – 2012 2006 2007, 2010, 2012

2011 (8,855.12

m3)

APL Pre-Committee

B

PT. KGP 2005 – 2009 2008 2005, 2012

2012 APL HGU No. 75 for an area of

4,731.77 ha

HGU No. 76 for an area of

4,601.03 ha

PT. CNG 2004 – 2009 2010 2004, 2012

Not available

APL HGU No. 77 for an area of

174.62 ha HGU No. 78 for an area of

2,732.19 ha

PT. KPC 2007 – 2009 2006 2007, 2010, 2012

2011 APL Not obtained

yet

PT. PIP 2007 – 2012 2006 2007, 2010, 2012

2011 APL Pre-Committee

B

PT. AMNL 2007 – 2013 2007 2005, 2012

2012 APL Not obtained

yet

PT. BAT 2004 – 2008 2005 2007 Not available

Registration process

Not obtained

yet


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PT. BNM (e.g. in 2008), PT. KGP (e.g. in 2007) and PT. CNG (e.g. in 2007). This is based on the decision letter from the head of the regency of Ketapang (No. 247, 2001) regarding the requirements of the business license for the plantations, the regency determined that the environmental impact assessment (EIA) can be conducted after the HGU (Hak Guna Usaha, or land use permit) is issued.

In PT. BAT, proof of land clearing and planting was found within Production Forest prior to the issuance of the Forest Area Relinquishment Permit. The clearing and planting activity was based on the location permit issued in 2004 which indicates that the areas to clear lie within the Production Site (KPP)/Settlement and Other Uses Area (KPPL), and thus the Forest Land Release Permit was considered unnecessary.

Planting and excavating laterite soil on Local Conservation Areas (e.g. in rivers and lake sides) was found in all eight PTs. This happened before the areas were identified as HCV areas.

In PT. CNG, neither an Environmental Management Plan (RKL) nor an Environmental Monitoring Plan (RPL) were found for the second half of 2012.

There are several versions of concession area maps in PT BNM, with each map showing different borders. This occurred because the location permit was renewed several times, and as a result there were changes to the land area.

Oil palm planting was found outside of PT. BNM’s concession area. The area that has been planted outside of PT. BNM’s concession area belongs to the community which released its land to the company. The land is still in the process of being released to the company, however the company has already begun planting (the process of legally obtaining the land can be continued after PT. BNM obtains a plantation assessment from the government, and they must obtain a Grade B on the plantation development process).

The block of PT. CNG marked by BPN’s (the National Land Agency) Pole No. 75 extends beyond the boundaries of the HGU area, and hence overlaps with the area of PT. KGP. PT. CNG and PT. KGP are under the same parent company.

6.1.3 Conclusions

The eight assessed companies have made efforts to meet the requirements for legal compliance and monitoring.

However, the following violations occurred in the past: - Oil palm plantation and excavation of laterite soil was found on Local

Conservation Areas, i.e. lake sides and riparian zones, which violates Presidential Decree No. 32/1990 on the Management of Conservation Areas in all eight PTs. Based on the recommendations of the IVEX Report and historical assessment, five PTs must conduct a remediation program (PT. PGM, PT. AMNL, PT. KGP, PT. BAT and PT. PIP).

There are several versions of concession area maps in PT. BNM, with each version showing different borders. Violations of legal aspects also occur, as oil palm was planted beyond the designated area under the location permit of PT. BNM. This happened because there was a change to the land use area permit, and the permit is still being processed by the government.

PT. CNG fails to adhere to the reporting requirements on environmental


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management and monitoring.

6.2 Recognising and Respecting Workers’ Rights 6.2.1 Accomplishments

SCEP documents are available at the estate level and have been disseminated to estate management in all eight PTs (the Manager, Chief Assistant, SPO Officer and RC).

Freedom of association in a labour/trade unions in PT. AMNL, PT. BAT, PT. PIP and PT. KPC is guaranteed through a Director’s Circular to all unit heads and employees, on “freedom of association”, dated 3 January 2011 which states the company respects rules and regulations applicable in Law No. 21/2001, including freedom of association with labourer/worker’s organisations, as it is a fundamental right for all the workers.

As for the policies related to sexual harassment as required by the Women’s Commission, a relevant organisational structure was approved on 4 July 2013 for PT. AMNL, PT. BAT and PT. PIP.

Procedures for manpower issues are available in the eight companies and they refer to the Human Resource Policy.

The company and its employees are bound by the stipulations in the employment contract.

The eight companies provide the following benefits to their employees : - Salary - Bonuses - Subsistence allowance - Social Security (Jamsostek) - Medical reimbursement (for outpatient care in estate healthcare unit and

referral to public healthcare unit or Regional Public Hospital Class II) - A 12-day leave - THR (Religious Holiday Allowance) - Permanent accommodations - Worship house

No evidence of discrimination against employee groups in the working environment of the eight PTs was found.

No evidence of employment of minors in any of the eight companies was found.

The Employment Agreement (SPK) includes matters related to Social Security, Age Restriction and Taxation System which applies in PT. AMNL, PT. BAT and PT. PIP

In PT. PIP, the SPK for Contractors has specified the provision of necessary personal protective equipment.

Company Regulations regarding employment are available in PT. PGM (2011-2013), PT. KGP (2011-2013) and PT. BAT (2012-2014). The date ranges refer to government approval period.

The company uses a recruitment system that prevents hiring workers under 18 years old by preventing them from getting registered in the Company’s Personnel Administration System (SAP). This age restriction is mentioned in the Company Regulations.

The eight PTs set wages in accordance with the provisions on regional minimum


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wages (UMR).

Training needs analysis is conducted in PT. BAT, PT. PIP and PT. KPC.

The company facilitates strengthening of employees competency through training, including: - HCV identification and monitoring, and wild animal control in PT. BNM, PT.

KGP, PT. CNG and PT. BAT. - Training on the Operations and Maintenance of Excavators, Bulldozers and

Graders in PT. PGM. - Training on Project System Trainers in PT. PGM. - Training on Endangered Wild Animal Control in Semitau Region, Kapuas Hulu,

of PT. PGM. - Training on HCV identification and management in PT. PGM. - Restricted Pesticides training in PT. PGM. - Lifting and Transport Device Operating Permit (SIO) training in PT. PGM.

Labour Union is present in PT. KGP, PT. AMNL, PT. BAT and PT. PIP.

In PT. AMNL, PT. BAT and PT. PIP, the company allows Labour Union executives to conduct activities related to the Union’s needs.

Meetings between Union members and management are held routinely in PT. AMNL, PT. BAT and PT. PIP.

6.2.2 Risks

Employees in PT. BNM, PT. KGP, PT. CNG, PT. PGM and PT. KPC do not have copy of their employment contract.

Employee Cooperatives have yet to be established in those assessed companies (according to ISPO).

Copy of Collective Labour Agreement (PKB) which is approved by the Manpower Agency (Disnakertrans) is not available in PT. PGM, PT. KGP, PT. AMNL, PT. PIP and PT. KPC.

Documentation of regular meetings between Union representatives and representatives of PT. PGM, PT. KGP, PT. AMNL and PT. BAT is not available.

Employment Agreements for Second Parties (Contractors) in PT. AMNL and PT. BAT do not mention the Occupational Health and Safety (K3) requirements and wages system according to the UMR.

6.2.3 Conclusions

The Company has a system in place to ensure compliance of the legal aspects of employment issues.

Violations to ILO Declaration on Fundamental Principles and Rights at Work (June 1988) were not found during field assessment.

Some issues that need to be addressed are the lack of Collective Labour Agreement documents, lack of copy of Employment Contract, lack of Employee Cooperatives, lack of documentation on regular meetings between Union representatives and company representatives and the lack of requirements for employment in the Employment Agreement.

Risk 1. PT. Agro Lestari Mandiri (AMNL) : Medium


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Low Risk : -

Medium Risk : 7 PTs

High Risk : 1 PTs

Risk 2. PT. Bangun Nusa Mandiri (BNM) : High Risk 3. PT. Cahaya Nusa Gemilang (CNG) : Medium

Risk 4. PT. Kencana Graha Permai (KGP) : Medium

Risk 5. PT. Buana Adhitama (BAT) : Medium Risk 6. PT. Kartika Prima Cipta (KPC) : Medium Risk 7. PT. Persada Graha Mandiri (PGM) : Medium

Risk 8. PT. Paramitra Internusa Pratama (PIP) :

Medium Risk

Recommendations

1. Develop mechanisms for monitoring and preventing land clearing prior to the issuance of the necessary permits, as well as avoiding oil palm planting on conservation areas.

2. Restore/perform enrichment for oil palm plantation located in conservation areas and other conservation areas that have been planted.

3. Cease land clearing on land categorized as ‘production forest areas’ before the company gets forest land release permit.

4. Conduct an investigation into plantation areas, which lie outside the designated location

permit, as well as planning legal actions to resolve the issue. Conduct map and field

analyses regarding the overlapping boundaries of HGU areas including updates on all

information related to the boundaries based on legal documentation which has been

produced by the companies (e.g. HCV, EIA, etc.).

5. Ensure environmental management and monitoring plans in all the companies are

updated and reported to the relevant agencies.

6. Prepare a collective bargaining agreement (PKB), which is mutually agreed by the Union

and the Company.

7. Provide all employees with a signed copy of their respective employment contract. 8. Promote and facilitate the efforts to establish an Employee Cooperatives. 9. Prepare meeting minutes for all regular meetings between the Union and the

management. 10. Complete an employment contract (SPK) with the necessary requirements, including

Occupational Health and Safety (K3), wages system, age restriction for workers, etc. 11. Monitor the handling process of HGU

CONFIDENTIAL – NOT FOR CIRCULATION PT.Kartika Prima Cipta

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APPENDIX 1: TEAM AND SCHEDULE FOR RISK ASSESSMENT

EXECUTIVE TEAM Field Coordinator Kasraji

Team #1 1) Samsul Ulum (HCV,HCS) 2) Aria Gumilang (Legal, Peat) 3) Untung Karnanto (Social)

Team #2

1) Kasraji (HCV, HCS) 2) Bahrun (Legal, Peat) 3) Daryatun Ridwan (Social)

Technical Support/Supervision 1) Aris Priyambodo 2) Agung Wiyono

RISK ASSESSMENT SCHEDULE

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22

No Activity1 Desk Audit for legal aspek on HQ 2 team

2 Traveling to PT KPC 2 team

Risk Assessment PT KPC 2 team

3 Risk Assessment PT PIP

4 Risk Assessment PT.PGM

5 Traveling to PT.BAT

Risk Assessment to PT BAT

6 Traveling to PT.BNM

Risk Assessment to PT BNM

7 Traveling to PT.CNG

Risk Assessment to PT CNG

8 Risk Assessment to PT KGP

9 Traveling to PT.ALM

Risk Assessment to PT ALM

10 Closing meeting at Ketapang Office

Tim 1

Tim 2

Schedule of GAR Risk Assessment

Date

Week Dec- WI Dec- W2 Dec- W3