Roundtable on Sustainable Palm Oil...Table 1: RSPO Certification details of Perdana Palm Oil Mill RSPO Membership No. : 1-0045-07-000-00 Subsidary numbers of each certification unit

Roundtable on Sustainable Palm Oil

Re-Certification Audit Report no.: RA1_82450216045

Re-Certification Assessment against the

RSPO Principles & Criteria Generic 2013 and

RSPO Supply Chain Certification System Nov 2014

PT REA KALTIM

Perdana Palm Oil Mill and Supply Based

Pulau Pinang village, Kembang Janggut Sudistrict Kutai Kartanegera District – East Kalimantan Province

Date of assessment : May 9 – 13, 2016

Report prepared by:

Mhd Fundy Cholis Kurniawan (RSPO Lead Auditor)

Certification Decision by:

Abdul Qohar (Dorector)

Certification Body : PT TUV Rheinland Indonesia.

Menara Karya Building 10th floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2,

Jakarta, Indonesia. 12950 Tel: +62 21 579 44 579 Fax: +62 21 579 44 579

www.tuv.com

TABLE OF CONTENTS

TABLE OF CONTENTS.................................. ........................................................................................................... 2

1.1 National Interpretation / Standard Used ............................................................................................................... 3

1.2 Type of Assessment ............................................................................................................................................. 3

1.3 Certification Details .............................................................................................................................................. 3

1.4 Location and Maps ............................................................................................................................................... 3

Figure 1. Location Map of REA Kaltim concession area in East Kalimantan ............................................................. 4

Figure 2. Perdana POM supply base estate (Perdana, Sentekan and Tepian estate) in East Kalimantan Province 5

1.5 Organisational Information / Contact Person ....................................................................................................... 5

1.6 Description of Supply Base .................................................................................................................................. 5

1.7 Actual production volumes and project outputs. .................................................................................................. 6

1.8 Dates of Plantings and Replanting Cycles ........................................................................................................... 6

1.9 Area of Plantation (Total, Planted and Mature) .................................................................................................... 7

1.10 Progress against Time Bound Plan .................................................................................................................... 7

1.11 Audit against the rules for Partial Certification ................................................................................................... 8

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance .............................................. 9

1.13 Approximate Tonnages Certified of Perdana Palm Oil Mill ................................................................................ 9

The approximate tonnages certified, based on projection year 2016 for company owned estates only (refer to the table above as follows: ............................................................................................................................................... 9

1.14 Recommendation for RSPO Principles and Criteria and Supply Chain Certification ......................................... 9

2.0 ASSESSMENT PROCESS ................................................................................................................................ 10

2.1 Certification Body ............................................................................................................................................... 10

2.2 Qualifications of Lead Assessor and Assessment Team ................................................................................... 10

2.3 Assessment Methodology & Agenda ................................................................................................................. 11

3.0 ASSESSMENT FINDINGS ................................................................................................................................ 17

3.1 Summary of Findings pertaining to RSPO Principles & Criteria ......................................................................... 17

3.2 Identified Previous 4th Surveillance Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions. ............................................................................................................... 40

3.3 Identified Non-conformances against RSPO P&C Requirements, Corrective Actions Taken and Auditors Conclusions.............................................................................................................................................................. 40

3.4 Summary of Findings pertaining to RSPO Group Certification Requirement and Smallholder Principle and Criteria against to the RSPO P&C 2013. ................................................................................................................. 53

3.5 Description of RSPO Supply Chain Management System November 2014. ..................................................... 53

3.4 Identified Non-conformance against to the RSPO Group Certification Requirement and Smallholder Principle and Criteria against to the RSPO P&C 2013. .......................................................................................................... 55

3.5 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions.............................................................................................................................................................. 56

3.5 Noteworthy Positive Components ...................................................................................................................... 57

3.6 Issues Raised during Stakeholder Consultation Meeting .................................................................................. 57

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY ........................ 72

4.1 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client ................................................... 72

APPENDICES .......................................................................................................................................................... 73

Appendix 1: Details of Certificate ............................................................................................................................. 73

Appendix 2: List of Abbreviations ............................................................................................................................. 75

Appendix 3: List of Stakeholders Interviewed and Contacted .................................................................................. 75

Appendix 4: Attendend list of stakeholder consultation meeting .............................................................................. 77

Appendix 5: Observations and Opportunities for Improvement ............................................................................... 83

RSPO Re-Certification Assessment PT REA KALTIM – Perdana Palm Oil Mill

Kutai Kartanegara District, East Kalimantan Provinc e

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1.1 National Interpretation / Standard Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against RSPO Principle and Criteria Generic year 2013 and the RSPO Supply Chain Certification Systems (SCCS) document (November 2014).

1.2 Type of Assessment

The certification assessment audit carried out on 1 (one) mill and 3 (three) company estates to this mill, i.e.: Perdana Palm Oil Mill, Perdana estate, Sentekan estate and Tepian estate, owned by PT REA Kaltim. The date of Re-certification of this unit was May 09 – 13, 2016.

The scope of the Supply Chain Certification System assessment covers the implementation of the Mass Bal-ance supply chain model of Perdana Palm Oil Mill.

1.3 Certification Details The details of RSPO Re-certification of Perdana Palm Oil Mill are as per the table below Table 1: RSPO Certification details of Perdana Palm Oil Mill

RSPO Membership No. : 1-0045-07-000-00

Subsidary numbers of each certification unit : -

RSPO Certificate no. : 824 502 16045

Date of first RSPO certification & validity : Date of certification: 06/06/11; valid until 05/06/2016

Date of certification audit : May 9 – 13, 2016

Date of previous surveillance audit : This is Re-certification

CPO tonnages claimed for 2016 47,742.90 mt

PK tonnages claimed for 2016 10,547.85 mt

1.4 Location and Maps

Table 2: GPS locations for all estates and mills in cluded in Re-certification assessment

Name of Mill / Estate

Location GPS locations

Longitude Latitude

Perdana palm oil mill Pulau Pinang village, Kembang Janggut subdistrict, Kutai Kartanegara district, East Kalimantan Province.

116o9’50.1’’ 0o13’47.1’’

Perdana estate Pulau Pinang village, Kembang Janggut subdistrict, Kutai Kartanegara district, East Kalimantan Province.

116o7’0.8’’ 0o18’7.0’’

Sentekan estate Long Bleh Haloq, Kembang Janggut subdistrict, Kutai Kartanegara district, East Kalimantan Province.

116o10’00.0’’ 0o13’00.0’’

Tepian estate

Kelekat village, Pulau Pinang village, Kembang Janggut subdistrict, Kutai Kartanegara district, East Kalimantan Province.

116o10’00’’ 0o15’00’’



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Figure 1. Location Map of REA Kaltim concession area in East Kalimantan



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Figure 2. Perdana POM supply base estate (Perdana, Sentekan and Tepian estate) in East Kalimantan Province

1.5 Organisational Information / Contact Person

Contacts details of the company presented below:

Company Name PT REA KALTIM (Perdana Palm Oil Mill a nd Supply Base)

Address Kembang Janggut subdistrict and Tabang subdistrict, Kutai Kartanegara district, East Kalimantan Timur province

Contact Person Purwantoro

Telephone +62 8127544166

Email [email protected]

1.6 Description of Supply Base Perdana Palm Oil Mill (POM) is one of several palm oil mills owned by PT R.E.A Holding p.l.c., and is located in Kembang Janggut subdistrcit, Kutai Kartanegara District, East Kalimantan Province. Currently, Perdana POM received FFB supplies from 3 company-owned estates i.e.: Perdana and Sentekan estate also Tepian estate under PT SYB, then also received FFB supplied from other’s company owned estate i.e.: PT Putra Bongan Jaya. Then, Perdana POM also received FFB from Kahad smallholder and from outgrowers. The FFB supplies received from company-owned estates and other’s company estate are as described be-low:



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Table 3: FFB Supply Information for Perdana Palm Oi l Mill year 2015 and 2016

FFB Contributors FFB Supplied 2015 FFB Supplied 2016* Budget

production 2016 Tonnes % Tonnes %

Certified source Mill supply based: Perdana estate 73,948.29 26.86 20,405.54 27.40 78,941.00 Sentekan estate 79,200.86 28.80 20,873.65 28.03 84,318.00 Tepian estate 52,863.91 19.20 15,571.59 20.91 58,801.00 Sub Total 206,013.06 74.86 56,850.78 76.34 222,060.00 Non Certified source Others estate under REA KALTIM group PT Putra Bongan Jaya 78.53 0.04 798.34 1.07 - Sub Total 78.53 0.04 798.34 1.07 - Kahad Smallholder - - 162.76 0.22 18,249.98 PPMD - - - - 37,500.00 Sub Total - - 162.76 0.22 - Independent out grow-ers

71,735.83 25.10 16,662.60 22.37 31,600.00

Sub Total 71,735.83 25.10 16,662.60 22.37 83,188.00 Total 277,827.42 100.00 74,474.48 100.00 309,409.98

Note: *) until April 2016 received by Perdana POM;

1.7 Actual production volumes and project outputs. During the Re-certification to Perdana POM, record of certified sold available in place, as follow:

Table 4: Total and projected CPO and PK production and Certified product sold from Perdana Palm

Oil Mill

Remarks Amount (mt)

CPO (mt) CPO PK Certified tonnage claimed *) - 47,742.90 10,547.85 Total product tonnage sold claimed under RSPO e-Trace - - - Certified tonnage sold claimed under Green palm - 20,000.00 - Certified tonnage purchased - - - Actual Production for 2015 Actual OER and KER for 2015 (%) - 23.51 5.02 Total production for 2015 - 65,317.23 13,946.94 Total Certified production for 2015 **) - 48,433.67 10,341.86 Projection Production for 2016 (mt) OER and KER projection for 2016 (%) - 21.50 4.75 Total FFB process (certified and uncertified) 309,409.98 - - Total FFB certified 222,060.00 - - Total Certified Product - 47,742.90 10,547.85 Total Product (certified and uncertified) - 66,523.15 14,696.97

Note: *) certified tonnage claime based on budget production in 2016 **) total certified only in 2015.

1.8 Dates of Plantings and Replanting Cycles The company follows a replanting cycle of 25 years. Information on the dates of plantings are as per the ta-ble below.



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Table 5: Year of plantings of company estates suppl ying to Perdana Palm Oil Mill Period year 2015.

Year of Plantings Oil palm planted area each estate (ha)

Perdana Sentekan Tepian 2011 – 2015 - - - 2006 – 2010 - - 2,000.50 2001 – 2005 - - 989 1996 – 2000 2,544 4,024 - 1990 – 1995 1,305 - - Total 3,849 4,024 2,989.50

Note: based on hectarage statement 2015

Table 6: Planned and actual oil palm replanting act ivities for company-owned estates supplying to Perdana Palm Oil Mill.

Estate name Total plan

for replanting (ha)

Year (ha) Actual total replanted

(ha) 2015 2016 2017 2018

Perdana - - - - - - Sentekan - - - - - - Tepian - - - - - - Total - - - - - -

During the re-certification process accordance to the budget plan document, management still not plan for replanting process, because the oldest palm oil still production above company requirement.

1.9 Area of Plantation (Total, Planted and Mature)

Table 7: Oil Palm Planted Area Summary, FFB Product ion and Average yield/ha for Perdana Palm Oil Supply Base estates.

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(ton)*

Average yield/ ha (ton/ha)

Perdana 13,744.00

3,849.00 3,849.00 - 75,303.52 19.57 Sentekan 4,024.00 4,024.00 - 80,478.5 20.00 Tepian 4,382.52 2,989.50 2,989.50 - 53,656.29 20.04 Total 18,126.52 10,862.50 10,862.50 - 209,438.31 19.87

Note: based production record in 2015

Table 8: Land used data for Perdana Palm Oil Mill S upply Based

Estate Name Total

area (ha)

Oil Palm Planted Area

(ha)

HCV/ Potential

HCV areas* (ha)

Land used for other purposes (ha)

Housing, Road,other infrastruc-

ture **)

Nursery Un-

cleared Area ***)

Other Land

Perdana 13,744.00

3,849.00 4,777.35

210.00 - 1,816.46

- Sentekan 4,024.00 203.00 - - Tepian 4,382.52 2,989.50 252.00 - - Total 18,126.52 10,862.50 4,777.35 665.00 - 1,816.46 -

Note: *) HCV outside of oil palm planted **) Consist of emplacement/housing, palm oil mill, roads. 1.10 Progress against Time Bound Plan

The company has revised their time bound plan for RSPO certification of other management units as per the schedule below.



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Table 9: Time Bound Plan of the Other Management Un its

Name of Holding Location Time bound

plan for certification

Progress in 2016

PT Sasana Yudha Bakti (SYB)

Buluq Sen, Gunung Sari, Ritan Baru & Tukung Ritan Village, Tabang subdistrict of Kutai Karanegara district. East Kali-mantan Province.

2016 In progress

PT Kutai Mitra Sejahtera (KMS) Senyiur Village, Muara Ancalong subdistrict of Kutai Timur district. East Kalimantan Province

2017

PT Putra Bongan Jaya (PBJ)

Muara Kedang, Muara Gusik & Jambuk Village, Tabang subdis-trict of Kutai Barat district. East Kalimantan Province.

2021

PT Cipta Davia Mandiri (CDM)

Long Nah Village (Muara An-calong subdistrict), Sumber Sari & Sumber Agung Village (Long Mesangat subdistrict) of Kutai Timur district. East Kalimantan Province.

2022

PT Kartanegara Kumala Sakti (KKS) Busang & Telen subdistrict of Kutai Timur district. East Kali-mantan Province.

2022

1.11 Audit against the rules for Partial Certificat ion

Compliance of the PT REA KALTIM against the rules for partial certification according to RSPO certification system year 2013 Generic, clause 4.2.4 was assessed through document checks and interviews and the head office and through findings of concurrent ISO : 9001 checks conducted at other management units of PT REA KALTIM. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

a) The organisation is an RSPO mem-ber.

Yes, PT REA KALTIM is member or RSPO with registered number 1-0045-07-000-00 under REA Holding p.l.c. RSPO Certification system section 4.2.4. PT REA KALTIM has been provided result of the self-assessment for all units entering estate and mill at the time bound.

b) A time-bound plan for achieving cer-tification of all relevant entities;

PT REA KALTIM has a time-bound plan to achieve RSPO certification for all relevant entities.

e) No replacement of primary forest or any area containing HCV since No-vember 2005.

REA is aware that some land clearing was carried out in PT Cipta Davia Mandiri (CDM) prio to conductiong an HCV as-sessment. The group notified the RSPO secretariat of this potential non-compliance with this requirement for partial cer-tification in a letter dated on November 19, 2012 (see Annex 2). REA immediately suspended land clearing in CDM and in late 2012 angaged MEC to conduct an HCV assessment of this concession. REA is committed to following the process outlined in the RSPO HCV compensation mechanism to fully resolve this issue and is participating in the RSPO compen-sation task force.

f) There are no significant land conflicts.

There some land conflict area in Tepian estate under PT SYB, this area was low land inside the company land use rights and planted by communities, this location still under process solving by company and the company showed the process effort, whereas during the re-certification assess-



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Partial Certification Requirements Audit Findings ment this condition raised as a nonconformity.

g) No labour dispute that are not being resolved through an agreed process.

No labour issues were found during this re-certification audit.

h) Legal non-compliance, aif any, are being resolved in accordance with the legal requirements, with refrence to RSPO criteria 2.1 and 2.2

Found legal non-compliance during the re-certification as-sessment process, was planted outside land used rights (HGU) in filed number 030B, 040E, 040F and 040G. This ar-ea was raised as a nonconformity.

1.12 Progress of associated smallholders or outgrow ers towards RSPO compliance

Perdana Palm Oil Mill has commitment to include the smallholder on behalf Kahad Bersatu Smallholder (Koperasi Kahad Bersatu) to get the RSPO certified within in 3 years after the Perdana POM get the RSPO certification. This commitment was mentioned in company management letter number 008/EXT/REA/SUST/V/2016 dated on May 23, 2016. This letter stated that the Kahad Bersatu smallholder will plan to get certification on June 2019.

1.13 Approximate Tonnages Certified of Perdana Palm Oil Mill

The approximate tonnages certified, based on projection year 2016 for company owned estates only (refer to the table above as follows: Crude Palm Oil (CPO) : 47,742.90 tonnes Palm Kernel (PK) : 10,547.85 tonnes

1.14 Recommendation for RSPO Principles and Criteri a and Supply Chain Certification Perdana Palm Oil Mill and supply based has established and maintains an effective system to ensure com-pliance with the RSPO Principles and Criteria. The audit team has confirmed through the audit process that company practices complies with adequately maintains and implements the requirements of RSPO princi-ples and criteria Generic 2013 and Supply Chain Certification System requirements (dated November 2014). TUV Rheinland Indoneisa recommends that Perdana Palm Oil Mill to be approved to get certification of compliance RSPO Certified Sustainable Palm Oil.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body

TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 360 locations in 62 countries on all five continents. TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Project Validations and Verifications. TUV Rheinland Indo-nesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team The assessment team members of this certification assessment audit that were part of the same assess-ment team for the certification audit are as per the table below:

Name Position Qualifications / Experience

Mhd Fundy C Kurniawan

Lead auditor

Education: Master Degree in Natural Reseource and Environmental Management, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Ecologi-cal Risk Assessment (ERA), Internal Quality Audit Training for Quality Management System, IRQA-QMS ISO 9001:2000, IRQA-EMS 14001, High Conservation Value (HCV), RSPO Lead Auditor Course, ISPO Audi-tor Course, SCCS Auditor and ISCC plantation audit. Working experience: Experienced in Environmental Impact Assessment (EIA Assessment), Environmental Health Safety Senior Officer (EHS-Senior Officer) in Wilmar International Plantation, Internal Auditor for Wilmar International Plantation, Auditor for Rountable on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), Timber Le-gality Verification Certification (SVLK) in PT TUV Rheinland Indonesia since June 2012 – present.

Naik Monang Parlindungan

Lingga Auditor

Education: Bachelor of Forestry, Gadjah Mada University. Training attended: ISPO Auditor, Quality Management System (QMS) Auditor/Lead Auditor (ISO 9001:2008) by IRCA, Environmental Manage-ment Systems Auditor/Lead Auditor Conversion Training by IRCA (ISO 14001-2004), Lead Auditor RSPO Training, HCVA Training and RSPO SCCS Training (2016). Working experience: Field Assistant PT Sapta Karya Damai (2008-2013), Auditor in PT Sucofindo (2013-2015), and Auditor in PT TUV Rheinland Indonesia (2015-present).

Ibrohim Prayitno

Auditor

Education: Bachelor degree of Forestry majoring Conservatio, Bogor Agricultural University. Trainings attended: IRQA-QMS ISO 9001:2000, High Conservation Value (HCV) training for Assessors (ALS), ISPO Auditor Course, Sus-tainable Forest Management Training (National Standard – PHPL), Chain of Custody (National Standard). Working experience: Managerial in Forest Mangement Unit, Auditor In-donesian Sustainable Palm Oil (ISPO), Auditor for Sustainable Forest Management Training (National Standard – PHPL), Auditor Chain of Cus-tody (National Standard) for forestry, auditor timber Legality Verification Certification (SVLK) in PT TUV Rheinland Indonesia since October 2013 – present.

Panggading Nainggolan Auditor

Education : Bachelor of Social, Institut Ilmu Sosial dan Ilmu Politik, Ja-karta. Training attended: RSPO in house training by Mutu Agung Lestari, ISPO Training by Komisi ISPO and Awareness QHSE (management system review dan integrated management system concept ISO 9001,



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14001, OHSAS. Working experience: Komisi Nasional Perlindungan Anak – Community Relationship Staff, Divison Staff of Education Program – Common Ground Indonesia, Reporter on Global Informasi Bermutu, Producer on Netwave Multimedia, Producer on Satu Visi Perkasa Produksi, Project Supervisor on Surya Solusi Informasi and Auditor PT TUV Rheinland In-donesia.

2.3 Assessment Methodology & Agenda The Re-certification audit assessment combined with supply chain certification assessment was conducted from May 09 – 13, 2016 as per the assessment program below. Public consultation of Perdana POM and supply based carried out on May 10, 2016, attendant by 54 person from all related stakeholders around of Perdana POM. This public consultation carried out with Cakra POM together, because both of two mill are similar stakeholders. The assessment was carried out in accordance with TUV Rheinland Indonesia RSPO audit procedure as well as the RSPO Certification Systems document and RSPO Supply Chain Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was pos-sible to carry out both field and document assessments of all estates and the mill within the time frame with-out compromising the integrity of the assessment in anyway. Three estate and one mill were visited and the assessment team carried out field and document assess-ments of compliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Document checks to verify closure of major non-conformances was conducted and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certifications assessment agenda is as explained below.

Re-certification Assessment Agenda

Date / Time (1) Organizational Unit and

Processes Auditor / Abbrev.

Interviewee Procedure – RSPO P&C, RSPO

SCCS Requirement and Smallholder P&C

Monday May 9, 2016

05.00 – 08.15 Flight from CGK to BPN MK, MN, PN, IP - GA560 (05.00 WIB – 08.15 WITA)

10.00 – 10.30 Opening meeting in Samarinda Office

MK, MN, PN, IP

Top management and related PIC

10.35 – 15.30

Public consultation to gov-ernment official:

- DISBUN - DISNAKERTRANS - BLH - BPN WILAYAH - DISHUT - BKSDA - DISTAMBEN - BAPPEDA/DINAS - TATARUANG

MN, IP Government officer

10.35 – 15.30

Document check: - Legal use rights - Land compensation - Related document if

needed and available

MK, PN Top management and related PIC

15.40 - ....... Travelling to Estate location MK, MN, PN, IP -

Tuesday May 10, 2016



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07.30 – 08.00 - Opening meeting - preparing public consultation

MK, MN, PN, IP

Top management and related PIC

09.00 – 12.00

Stakeholder consultation - Local government - Local community - NGO’s - Union Labour - Contractor/third party - Others stakeholder relat-

ed

MK, MN, PN, IP

Related stake-holders

Please provide location for stakeholder consultation

Kahad Small-holder

14.00 – 17.30 WITA

Document check: - Group legality entity - Law and regulation com-

pliance - Legal land right use - Water management - IPM - OSH - Zero Burning - Emission reduction plan - Responsible of new

planting - Commitment to continu-

ous improvement

MN

Group Certification Section: E1 Section 3 Guidance for compli-ance with the RSPO P & C 2013: Principle and criteria: 2.1; 2.2 4.3; 4.5; 4.7 5.5; 5.6 7.4; 7.8 8

Document check: - Internal control system –

policy and management - Transparency - Publically available doc-

ument - Code of ethical conduct - Law and regulation com-

pliance - Legal land right use

doesn’t diminish legal, customary rights

- Training - Responsible considera-

tion employees and indi-vidual and communities

- Responsible develop-ment of new planting

- Commitment to continu-ous improvement

PN

Group Certification Section: E2 Section 3 Guidance for compli-ance with the RSPO P & C 2013: Principle and criteria: 1.1; 1.2; 1.3 2.1; 2.3 4.8 6.1 to 6.13 7.1; 7.5; 7.6 8

Document check: - Internal control system –

Operations - Soil fertility maintenance - Erosion control - Environmental responsi-

bility - HCV - Responsible of new


ous improvement

IP

Group Certification Section: E3.1 Section 3 Guidance for compli-ance with the RSPO P & C 2013: Principle and criteria: 4.2; 4.3 5.1; 5.2 7.2; 7.7 8

Document chekck: - Internal control system –

FFB certified trading MK

Group Certification Section: E3.2



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mechanism - Legal land right use - Long term economic and

financial viability - Procedure implementa-

tion and evaluation - Pesticide use - Waste management - Fossil efficiency - Responsible of new


ous improvement

Section 3 Guidance for compli-ance with the RSPO P & C 2013: Principle and criteria: 2.2 3.1 4.1; 4.6 5.3; 5.4 7.3 8

12.00 – 13.30 Break, pray and travelling to estate

MK, MN, PN, IP

17.30 - End of audit 2nd day Wednesday May 11, 2016

Perdana, Sentekan dan Tepian Estate 07.30 – 12.00

Document check: - Transperancy - Law and regulation - Land dispute and land

conflict - Training - Social and workers

walfare - CSR - New planting after

November 2005 - Continuous improvement

PN Estate Manager and related PIC

RSPO Principle and Criteria: 1.1 to 1.3 2.1; 2.3 4.8 6.1 – 6.13 7.1; 7.2; 7.3 8

Document check: - Law and regulation - Legal land - Long term economic - Soil fertility - Third party FFB source - Soil fertility - Erossion control - High conservation value - Waste management - New planting after


MK Estate Manager and related PIC

RSPO Principle and Criteria: 2.1; 2.2 3 4.1.4; 4.2; 4.3; 5.2; 5.3 7.4; 7.5; 7.8 8

Document check: - Law and regulation com-

pliance - Procedure evaluation and

implementation - Water management - OSH - Energy used and renewa-

ble energy - Plans to reduce pollution

and emission and GHG - Continuous improvement

MN

RSPO Principle and Criteria: 2.1 4.1; 4.4; 4.7 5.4; 5.6 8

Document check: - Law and regulation - Pesticides used record

and implementation - Integrated Pest

Management - Environmental manage-

IP Estate Manager and related PIC

RSPO Principle and Criteria: 2.1 4.5; 4.6 5.1; 5.5 7.6; 7.7 8



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ment - Zero burning activity - New planting if any - Continuous improvement

12.00 – 13.30 Break and pray 17.30 - End of audit 3rd day

Thursday May 12, 2016

Field visit: - Transperancy - Law and regulation - Land dispute and land

conflict - Training - Social and workers

walfare - CSR - New planting after


PN Estate Manager and related PIC

RSPO Principle and Criteria: 1.1 to 1.3 2.1; 2.3 4.8 6.1 – 6.13 7.1; 7.2; 7.3 8

Field visit: - Law and regulation - Legal land - Long term economic - Soil fertility - Third party FFB source - Soil fertility - Erossion control - High conservation value - Waste management - New planting after


MK Estate Manager and related PIC

RSPO Principle and Criteria: 2.1; 2.2 3 4.1.4; 4.2; 4.3; 5.2; 5.3 7.4; 7.5; 7.8 8

Field visit: - Law and regulation com-

pliance - Procedure evaluation and

implementation - Water management - OSH - Energy used and renewa-



MN

RSPO Principle and Criteria: 2.1 4.1; 4.4; 4.7 5.4; 5.6 8

Field visit: - Law and regulation - Pesticides used record

and implementation - Integrated Pest

Management - Environmental manage-

ment - Zero burning activity - New planting if any - Continuous improvement

IP Estate Manager and related PIC

RSPO Principle and Criteria: 2.1 4.5; 4.6 5.1; 5.5 7.6; 7.7 8

12.00 – 13.30 Break and pray 17.30 - End of audit 4rd day

Friday May 13, 2016 Perdana Palm

Oil Mill Document check:

- Long term economic MK Principle and criteria:

3



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08.00 – 12.00 - Supply Chain Certification System, (SCCS)

RSPO SCCS Module E/MB

Document check and plan tour:

- Law and regulation com-pliance

- Land conflict if any - Social and workers wal-

fare - CSR - Continuous improvement

PN

Principle and criteria: 2.1; 2.3 6.1 to 6.13 8



- Procedure implementation and evaluation

- OSH - Water management - Energy used and renewa-



MN

Principle and criteria: 2.1 4.1; 4.4; 4.7 5.4; 5.6 8



- Training - Waste management - Environmental manage-

ment - Zero burning activity

IP

Principle and criteria: 2.1 4.8 5.1; 5.3; 5.5 8

12.00 – 13.30 Break and pray

13.35 – 14.00 Internal meeting prepare closing meeting

14.05 – 15.00 Closing meeting

15.15 - ……... Travelling to Balikpapan and overnight in Balikpapan

Saturday May 14, 2016

06.30 – 07.40 Flight BPN – CGK MK, MN, PN, IP

GA561 (06.30 WITA – 07.40 WIB)

2.4 Stakeholder Consultation and Stakeholders Conta cted

The stakeholder consultation involved both external and internal stakeholders. External stakeholders were notified to make comments on the certification assessment by placing an invitation to comment on the RSPO website. Stakeholders included those immediately linked with the operation of the company such employees, outgrowers, the local government, NGO’s, trade and labour unions and local communities. Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held to seek their views on the performance of the company with respect to the sustainability practic-es outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could be made. Meetings with local communities were held at their respective premises within and near the compa-ny’s area. A stakeholder consultation meeting was also held in Kembang Janggut subdistrict meeting room on May 10, 2016. Letters inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were made to arrange the meetings. In



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all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company be-fore discussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in North Sumatera province. In all interviews and meeting, the assessment team did not restrict dis-cussion of both the positive and negative aspects of operations conducted by Perdana Palm Oil mill and its supply estates. The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of 54 attendees. This was followed by site inspections, including visits to the local com-munities, interviews with land claimants and contractors, and inspections of worker amenities and infrastruc-ture. All stakeholder issues raised were recorded and forwarded to the management for their written re-sponsed and this is summarised in Section 3.4.The list of stakeholders that attended the stakeholder con-sultation meeting and stakeholders interviewed during the assessment is included as Appendix 4.

2.5 Date of Next Surveillance Visit The next surveillance visit will planned in March 2017.



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings pertaining to RSPO Principl es & Criteria

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria Generic 2013 and RSPO Supply Chain Certification System November 2014. During the certification assessment, found 27 nonconformity, consist of 15 non-conformities were assigned against Major Compliance indicators while 12 non conformities was assigned against a Minor Compliance Indi-cator. Further explanation of the non-conformities raised and corrective actions taken by the company are pro-vided in Section 3.2 & 3.3. The observations & opportunities for improvement are listed in Appendix 5.

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on en-vironmental, social and legal issues relevant to RS PO Criteria, in appropriate languages & forms to al -low for effective participation in decision making.

Findings: The company conducted dissemination to relevant stakeholders related the RSPO principles and criteria, grievance and communication mechanism. It took placed in Bukit Layang, Kelekat, Perdana, Gunung Sari, Pulau Pinang village office, on June 6, 2016. For contractors have also been brief the company's policy re-garding the RSPO principles and criteria on the date on May 23, 2016 and also for Cooperative Etam and Kahad dated May 31, 2016. Company has records of requests for information and responses. The Company has a list of stakeholders, ie: Agencies provinces (Office, District, Sub-district Police (POLDA, POLRES, POLSEK), Army (KODAM, KOREM, KORAMIL) VILLAGE (Muai, Perdana, Kelekat, Bukit Layang, Long Bleh Aloq, Long Bleh Modang, Kembang Janggut, Tuana Tuha ), KUD PLASMA, Educational institutions, NGOs, Health Services, Financial Institutions- BANK,contractors,suppliers, Gender committees, Employees' cooperative, SP KAHUTINDO (La-bour Union). Stakeholder list updated once a year by the sustainability officer. But, the company couldn’t showed the record of RSPO mechanisme for third party/stakeholders involve also information related to rights and obligation of the third party/stakeholders. This is raised as a nonconformity (NCR RSPO00267). Some records of requests for information and responses, such as: - Letter No. 09.2008 / 350 / KD-TT / KN / IV / 2016 from Tuana Tuha Village Head April 28, 2016 to head of

the company concerning aid of heavy equipment for grading road Tuana Tuha village to Pedamaran vil-lage. Management responses May 9, 2016 for grading and repairing the village mainroad by providing heavy equipment.

- Letter No. 01 / LAD / DESA-PP / 2016 of customary institutions Pulau Pinang dated February 11, 2016 to the leading companies regarding applications for assistance and for the construction of customs hall, there has been no written response from management and this is not in accordance with the procedures of the company. This is raised as a nonconformity (NCR RSPO00268) .

Compliance status: Non Compliance NCR RSPO 00267 The company couldn’t showed the record of RSPO mechanisme for third party/stakeholders involve also in-formation related to rights and obligation of the third party/stakeholders. NCR RPSO 00268 The company couldn’t showed the evidence of incoming response letter from Pulau Pinang customary institu-tions letter No.01/LAD/DESA-PP/2016.



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Criterion 1.2: Management documents are publicly av ailable, except where this is prevented by com-mercial confidentiality or where disclosure of info rmation would result in negative environmental or social outcomes.

Findings: The company has some documents were made publicly , available in the mill and estate offices ie :

- Land titles/user rights - Safety and health plan - Pollution prevention plans - Details of complaints and grievances - Negotiation procedures - Continuous improvement plan

These documents are classified as: Publicly available, confidential and Publicly available on request. All these documents were sighted in the Perdana Grouping Mill and Estates offices. All requests for documents through the estate or mill offices will have to go through the mill or estate managers. They will make the decision as to whether the information can be shared to or viewed by the person requesting the information or document. However the company could not show the social impact assessment and social impact management plan documents. This is raised as a nonconformity (NCR RSPO00269) . Compliance status: Non Compliance NCR RSPO00269 The company couldn’t showed the social impact assessment and social impact management plan documents.

Criterion 1.3: Growers and miller commit to ethical conduct in all business operations and transac-tions.

Findings: REA Group’s has a document of “Business Ethics Policy” No. 001/BOD_REA/P/II/2015 dated on March 01 2015 was available and well displayed on the mill notice boards. Policy has covered the following about:

1. Compliance with the local and international law and regulations. 2. Transparency with all non-confidential information deemed necessary by senior management to enable

informed and objective decision making. 3. All financial transaction will be recorded to evidence of any payment. 4. No political donations. 5. No bribery. 6. No facilitation payment. 7. Gift only be given to business partner with approval fromsenior management and where deemed to be

appropriate. 8. Personal Business

Sentekan Estate already communicate the code of ethical conduct on June 01, 2016, while in Tepian Estate on May 26, 2016, Perdana Mill June 02, 2016, at Perdana Estate with Sub contractor May 26, 2016 at office group. But, not all workers level in mill and estate has been get code of ethical conduct briefing. This is raised as a nonconformity (NCR RSPO00270) . Compliance status: Non Compliance NCR RSPO00270 There is no record that all workers level in the mill and estate has been get code of ethical conduct briefing by the company.



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Criterion 2.1: There is compliance with all applica ble local, national and ratified international laws and regulations.

Findings: Perdana POM and supply based has a record of list and regulation document with document number REA.F013.1/1.1/25042011 about recapitulation of identification and regulation evaluation Rev.00 updated on January 2016. On this document, already mentioned regulation and law should to fulfill by company. Perdana POM and supplybased also has record of regulation compliance, example: 1. Record of business plantation permit (SPUP) No.532/Menhutbun-VII/200 for PT REA KALTIM Planta-

tions, for land use rights number 47/HGU/BPN/95; 154/HGU/BPN/97 and 48/HGU/BPN99, with total land covered was 30,106Ha for palm oil development and for palm oil mill facilities with tonnage capcity about 60 tonnes FFB/hours. This licensed issued on Jakarta dated on May 15, 2000.

2. Agreement letter Head of Kutai Kartanegara district number 525.26/004/IUP-P/BID.I/XII/2015/BP2T about extention of palm oil mill capacity process of PT REA Kaltim Plantations from 60 tonnage FFB/hours to 90 tonnage FFB/hours. Issued on December 02, 2015 in Tenggarong.

3. Plantation business permit for palm oil cultivation (IUP-B) for PT Sasana Yudha Bhakti (Tepian Estate). The license explanation about license for palm oil plantation development covered area total 6,000 Ha lo-cated at Kelekat village, Pulau Pinang village, Long Beleh village, Haloq, Kembang Janggung subdistrict. Valid for 30 years, issued in Tenggarong on October 24, 2005.

4. Land application license number 660.1/006/B.II.4/Bppdld/III/2008 decree of Head of Kutai Kartanegara district for land application in Perdana estate, with field application number 31 A,B,C,D; 32 A,B,C,D; 38 A,B,C,D,E,F and for land control in 37. With total hectarage application about 215Ha. This license valid from the dates issued on March 4, 2008 in Tenggarong with obligation should evaluated minum every twice in once years (every semester).

But, on the other hand, found some noncompliance againts to the national law and regulation, such as:

1. Found in list of law regulation, still not include some of regulation should in the list and fulfill by com-pany, i.e.: regulation about noisy in working area, presidential decree number 32/1990; ministry de-cree number 28/2003; 29/2003; 189/1989 and other.

2. Based on field assessment in Tepian and Sentekan estate during hazardous store verification, found indication some of hazardous waste kept more than 90 days in the hazardous store, this is noncom-pliance with hazardous licensed of the company.

3. Based on hazardous manifest document verification on March 15, 2016, the transport unit number KT 8010 MC (for second oil transport used) and KT 8607 BJ (for chemical waste transport used), the transport document licensed was not valid since December 4, 2015.

4. Evaluation of regulation compliance number 186/Men/1999 about emergency response team for fire-fighting.

5. Found the crane operator, wheel loader operator, tractor operator and truck operator didn’t has li-censed as a required in Ministry decree number Permenakertrans 09/2010.

6. First aid box in working area available in place, but the containt of first aid box not compliance with regulation number Permenaker 15/2008.

7. Welder operator in mill and estate not qulified, becused couldn’t showed the certifice of qualification as a required in regulation number Permenkartrans 02/1982.

8. OHS committee reporting for quarter I year 2016 doesn’t carried out by company, as required in regu-lation number Permenaker 04/1987.

All explanation above about regulation non compliance, has been raised as a nonconformity (NCR RSPO00271). Perdana mill and supply base has established the procedure about regulation and requirement doucment number REA.EP.013 issued on January 16, 2008 Rev04. This document explained about: “Person in charge for law and regulation identification:

a. Environment asst: communicate the law and regulation to related department to implementation; b. Management representative: set the law and regulation shoul be comply by company, and set

the not valid law and regulation; c. Department head: identification, recommendation, understanding and implementation all of relat-

ed regulation requirement in related departemet and/or their activity.” Procedure also mentioned how to identification, collect all of related law and regulation through internet, con-sultation with related official government or related/others source. Generally, the procedure has set the identi-fication, communication, updated law and regulation, person in charge, law and regulation distribution and



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others. This document (list and regulation) has been distributed to all related department and levels of management by evidenced of receipt of accepatence of document. While in for 2016, still on progress to distributed, only for 2015 already 100% distributed by Environmental Department. The Perdana POM and supply based, has a mechanism to ensuring the level of compliance of law and regu-lation, through the procedur number REA.EP.013 issued on Jan 16, 2008 Rev04. This procedure has men-tioned, in every 6 month, Environmental Asst should to evaluation of law and regulaton compliance periodical-ly, then the result of evaluation should put in REA.F013.3 (form result of evaluation of law and regulation compliance) and for the law and regulation still not comply in 100% should make the correction and corrective action in REA.EP.007. But, the company couldn’t showed the result of evaluation record and correction and corrective action for law and regulation was not comply in 100%. This is raised as a nonconformity (NCR RSPO00272) . The Perdana POM and supply based has mechanism for updating law and regulation, person in charge, tracking and changes and communicate the law and regulation in procedure number REA.EP.013 issued on Jan 16, 2008 Rev04. This document has mentioned updating and identification will carry out in once year (pe-riodically) through the internet, website, consutation with related official government and other source. Were the person in charge to do this is Environment Asst and Manager representative, and every deprtement Head, then distribute the list law and regulation document list as a responsibility for Environment Asst. This was im-plemented by company, by the evidenced i.e.: available of list law and regulation, copying of list of law and regulation, updating list of law and regulation in every year example for 2015 and 2016, and others. Compliance status: Non Compliance NCR RSPO00271 Found some evidences that the Perdana oil mill and supply based not compliance with law and regulation. NCR RSPO00272 The company couldn’t showed the result of evaluation record and correction and corrective action for law and regulation was not comply in 100%.

Criterion 2.2: The right to use the land can be dem onstrated, and is not legitimately contested by loc al communities with demonstrable rights.

Findings: Perdana Palm oil mill has three (3) estate as supply base i.e.: Perdana and Sentekan estate under PT Rea Kaltim plantation and Tepian estate under PT SYB. This is because the distance and location reason. Perdana and Sentekan estate, has record of land use rights record, i.e.: based on decree of Head of Land National Agency number 47/GU/BPN/95 about land use rights for PT REA Kaltim Plantations in Kutai District, about 13,774.28 Ha located at Kembang Janggut subdistrict, Kutai district, East Kalimantan Province, for 30 years. This decree letter issued on July 27, 1995 in Jakarta. Next, this land use rights separete in two (2) land certificate, i.e.: 1. Land use certificate number 01/Desa Long Beleh, based on land use rights decree number

47/HGU/BPN/95 valid for 30 years until December 31, 2025, with area about 41,260,000 m2. Issued in Kutai district, on September 6, 1995.

2. Land use certificate number 02/Desa Long Beleh, based on land use rights decree number 47/HGU/BPN/95 valid for 30 years until December 31, 2025, with area about 50,960,000 m2. Issued in Kutai district, on September 6, 1995.

3. Land use certificate number 03/Desa Long Beleh, based on land use rights decree number 47/HGU/BPN/95 valid for 30 days until December 31, 2025, with area about 45,520.000 m2. Issued in Ku-tai district, on September 6, 1995.

While in Tepian estate, the land use rights based on decree of Head of Land National Agency number 13/HGU/BPN/2005 about land use rights for PT REA Kaltim Plantations in Kutai Kartanegara District, about 5,100 Ha on behalf PT Sasana Yudha Bhakti valid for 35 years. This decree letter issued in Jakarta on Feb-ruary 18, 2005. Land use certificate number 01/Desa Kelekat dan Pulau Pinang, based on land use rights decree number 13/HGU/BPN/2005 valid until February 17, 2040, covered area about 4,382.52 Ha. Issued in Kutai district, on July 27, 2010. Based on decree Head of National Land Agency number 2118/14.3/VII/2010 issued on July 16, 2010 in Ja-



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karta about pemberian izin pelepasan sebagian HGU Nomor 01/Desa Kelekat dan Pulau Pinang seluas 727.48Ha on behalf PT Sasana Yudha Bhakti, located at Kutai Kartanagera, East Kalimantan. This estate was under PT SYB management. For Tepian estate, based on EIA document November 2005 (approval number KAKK/20/AMDAL/PERKEBUNAN/05 dated on December 1, 2005) located in other land used (APL) or non forest area (KBNK), accordance to spatial map (RTRWK) of Kutai Kartanagara district for total area 5110 Ha based on land use rights decree number 13/HGU/BPN/2005 dated on February 18, 2005. For Perdana and Sentekan estate, based on EIA document on August 1998 (approval number 39/ANDAL/RKL-RPL/BA/XII/1998 dated on Decmeber 28, 1998) located in other land used for plantation de-velopment. This is based on map of TGHK (Tataguna Hutan Kesepakatan) Ministry Agriculture decree num-ber 24/Kpts/UM/I/1983 dated on Jnauary 15, 1983. This EIA document covered for concession area about 26,698.28Ha. Based on hectarage statement for: 1. Tepian estate; realization of legal land use rights total was about 4382.52Ha consist of:

- Planted area (mature) about 2990Ha - Roads about 253Ha - Building sites about 24Ha - Green belts/conservation about 1118Ha

2. Perdana estate; realization of legal land use rights total was about 4377Ha consist of: - Planted area (mature) about 3849Ha - Roads about 150Ha - Building sites about 50Ha - Mills about 9Ha - Composting site about 5Ha - Green belts/conservation about 315Ha

3. Sentekan estate; realization of legal land use rights total was about 4729Ha consist of: - Planted area (mature) about 4024Ha - Roads about 183Ha - Building sites about 26Ha - Greenbelts/conservation about 496Ha

Found in Tepian estate, planted area field number (030B, 040E, 040F, 040G) based on overlay between land use rights certificate map with planted area was outside the land use rights (HGU). Also, during the onsite visit in Sentekan Estate, in field number 100A division 7, a part of area in this field categorized include in produc-tion forest conversion (HPK) based on Forestry Ministry decree SK Menhut No. 718/2014 about Designation of Forest area of East Kalimantan province. The company will carry out process to get the land use rights of this land, and the company ensure the FFB from this area will not claim as certified. Because the land use rights process will take long time more than 1 year, so the company exclude this area. This raised as a non-conformity (NCR RSPO00273) . Both of three estate has map of boundary pillars location based on map of land use rights certificate with map scale 1:50,000. Estate has work instruction for boundary pillars maintianance document number WI.BPO.SUS.01 issue date on January 01, 2015. This document mentioned the boundary pillars maintenance will carry out in 6 month periodically with radius cleaning process between 1.5 – 2 m from the boundary pillars, then the record of maintenance will put in form. During onsite visit in Sentekan Estate field number 6A, 47B, 100C and 62A to verify the boundary pillars number BPN 23, BPN 555, BPN 100 and BPN 599, there is no found any boundary pillar above s in the field. This is raised as a nonconformity (NCR RSPO00274) . Estate has been carried out the boundary pillars inventarization, but the process was incomplete, were only found 4 boundary pillars found. This inventarization carried out in 2015. Based on inventarizaton document record, carried out by sampling, found only 5 bundary pillars in good condition with only 1 boundary pillars (BPN 185), and the others pillars was additional pillars not issued by BPN. Need verification again to BPN to get the X Y coordinate then the estate should carry out the inventarization. During map verification and field verification, found the indication of land dispute between company and com-munities about 281.04 Ha and conservation area already planted with oil palm by communities, but there is no record or road map conflict (progress to solved, communicate to the community, FPIC process and others) was progress by company, and also there is no record data of name list of community occupied by the com-pany concession area. This is raised as a nonconformity (NCR RSPO00275) . The company has mechanism for conflict resolution with document number REA.BPO.DVA.PKE issue date



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on July 01, 2015 about external grievence handling. This procedure has covered for conflict resolution, with flowchart mechanism was available. But, there is no record this document has been communicate to the all related parties and was acceptance by all related parties. This is raised as a nonconformity (NCR RSPO00276). Then also, the company could not showed the mechanism/procedure for participatory mapping to solve the conflict, whereas the mechanism involvement and acceptence by the affected parties. This is raised as a nonconformity (NCR RSPO00277) . There is no found any record of commitment that the company will not use military/intimidation to solve the problem related land dispute or any conflict. This is raised as a nonconformity (NCR RSPO00278) . Compliance status: Non Compliance NCR RSPO00273 Found in Tepian estate, planted area field number (030B, 040E, 040F, 040G) based on overlay between land use rights certificate map with planted area was outside the land use rights (HGU). Also, during the onsite visit in Sentekan Estate, in field number 100A division 7, a part of area in this field categorized include in produc-tion forest conversion (HPK) based on Forestry Ministry decree SK Menhut No. 718/2014 about Designation of Forest area of East Kalimantan province. NCR RSPO00274 During onsite visit in Sentekan Estate field number 6A, 47B, 100C and 62A to verify the boundary pillars number BPN 23, BPN 555, BPN 100 and BPN 599, there is no found any boundary pillar above s in the field. NCR RSPO00275 During map verification and field verification, found the indication of land dispute between company and communities about 281.04 Ha and conservation area already planted with oil palm by communities, but there is no record or road map conflict (progress to solved, communicate to the community, FPIC process and oth-ers) was progress by company, and also there is no record data of name list of community occupied the com-pany concession area. NCR RSPO00276 There is no record document number REA.BPO.DVA.PKE issue date on July 01, 2015 about external grievence handling has been communicate to the all related parties and was acceptance by all related parties. NCR RSPO00277 The company couldn’t showed the mechanism/procedure for participatory mapping to solve the conflict, whereas the mechanism involvement and acceptence by the affected parties. NCR RSPO00278 There is no found any record of commitment that the company will not use military/intimidation to solve the problem related land dispute or any conflict.

Criterion 2.3: Use of land for oil palm does not di minish the legal rights, or customary rights, of ot her users, without their free, prior and informed conse nt.

Findings: Based on the study SIA document, land was logging area that has been cultivated by the former company. Then in the area of company there was not FPIC process during developing the plantation. Since 1994 PT. REA Kaltim began its business activities in the field of oil palm plantations, and in accordance with the results of the study documents the company obtained the concession without compensation process or land acquisi-tion. SOP Land Acquisition Oil Palm Plantations No. SOP Rev. 0 dated July 01, 2009, in the process of obtaining the land rights need to be conducted openly, accurately and in accordance with applicable regulations. FPIC process adopt in Human Rights Policy No. 002/BOD_REA/P/II/2015 point 9 The REA Kaltim group will en-deavour to ensure that everyone with legal, customary or user right to the land is identified and fully under-stands the positive and negative implications of the proposed oil palm development. REA Kaltim group will respect the right of local communities to withhold consent to oil palm cultivation on land to which they have legal, customary or user rights and will provide fair compesation. In the procedure is also explained that the first thing management conduct socialization in an effort to land



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acquisition, identification of land ownership, land inventory, land measurement, land mapping, administrative, land payment and archiving of documents of land acquisition. Compliance status: Full Compliance

Criterion 3.1: There is an implemented management p lan that aims to achieve long-term economic and financial viability.

Findings: During the Re-certification audit, Perdana POM and supply based showed the budget for three years 2016 – 2019. This document was include the FFB incoming plan, FFB receiving plan, OER and KER plan for oil and kernel production, operational budget, FFB/kg cost production, cost/palm product, financial indicators, projec-tion cost per palm product, and others. For budget 2016, FFB process will estimated 264,642 mt; CPO production 57,598 mt and PK production 12,571 mt, with OER 22% and KER 5%. When for certified FFB process projection will 222,060mt from Perdana, Sentekan and Tepian Estate. For three estate (Perdana, Sentekan and Tepian), the budget was covered about harvesting FFB estimation for 2016, budget production, cost per production per YoP, road maintenance, and others. Projection produc-tion for three estate for 2016, presented below:

1. Perdana Estate: a. FFB production, with hectarage harvested is 3,848 Ha, FFB production total 78,941 tonnage ap-

proximately with yield/Ha about 20.51. 2. Sentekan Estate:

a. FFB production, with hectarage harvested is 4,024 Ha, FFB production total 84,318 tonnage ap-proximately with yield/Ha about 20.95.

3. Tepian Estate: a. FFB production, with hectarage harvested is 2,990 Ha, FFB production total 58,801 tonnage ap-

proximately with yield/Ha about 19.66. Compliance status: Full Compliance

Criterion 4.1: Operating procedures are appropriate ly documented and consistently implemented and monitored.

Findings: The company has a Standard Operating Procedure (SOP) mill and estate operations. The procedure has been cover key process, harvesting, transportation, manuring, IPM, good agriculture practice and supply chain. Based on field and mill visit, the procedure has been available on site and it is documented in an ap-propriate language. Based on interview, the workers has been understood about the procedure for the work which performed by the employee. The company has master list of all procedure. The company has internal audit procedure with document number REA.EP.012 revision 01; effective dated July 22, 2005, revision dated January 16, 2008. The compa-ny was conducted internal audit on 30 November until 2 December 2015. The company has conducted inter-nal training for sustainability auditor on 30-31 March 2015. Internal auditor’s team assigned i.e. Marianus Rangga, Markho Lepa and Arya Windujati. The company has nonconformity, corrective action and preventive action procedure (REA.EP.007 revision 04, effective dated July 22, 2005, revision dated October 27, 2012. In the procedure regulated mechanism to con-trol nonconformity. Both of mill and estate was conducted internal audit. Both of mill and estate has been conduct corrective action and preventive action for each non-conformity which issued by internal auditor. The company has records of corrective action for nonconformity issued and keep well. But, there is no record that procedure already evaluated and implementation was compliance with company mechanism. This is raised as a nonconformity (NCR RSPO00279) . Perdana mill has procedure to handling the third party FFB sourcing. This procedure already set about third party FFB identification and evaluation. Record of third party FFB sourcing identification and evaluation avail-able in place. The Perdana mill also has on going process record of third party FFB sourcing. Thord party FFB supplied record for 2015 and 2016 until April also available in place. Until December 2015, total third party



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supplied FFB to Perdana POM was about 13 outgrowers (third party) from PPMD and about 17 outgrowers from independent smallholders, and 3 from others company not under REA KALTIM, so the total FFB sup-plied to Perdana Mill was about 71,735.83 mt. While in 2016 until April, there are 14 outgrowers (third party) from PPMD, and about 17 outgrowers from independent smallholders, and also 3 from thers company not un-der REA KALTIM, so the total FFB supplied to Perdana Mill was about 17,623.70 mt. During the Re-certification, the company still ongoing process carried out the legality evaluation of third party FFB sourcing, this is an observation to see the process result of third party FFB source in the next audit. Compliance status: Non Compliance NCR RSPO00279 There is no record that procedure already evaluated and implementation was compliance with company mechanism..

Criterion 4.2: Practices maintain soil fertility at , or where possible improve soil fertility to, a le vel that ensures optimal and sustained yield.

Findings: Both of three estate has been established procedure related soil fertility. This procedure explained about ferti-lizing activity, foliar sampling, EFB mulching and others. This procedure already implemented by estate. In Sentekan estate, record of fertilizer application available in place. This application accordance to fertilizer dosage recommendation in 2014, for fertilizer application 2015. Based on fertilizer application record in once year 2015, for every fertilizer type, was:

- Urea, total application was 273,696kg for application total area 2132Ha, then for fertilizer usage per tonne FFB production was 0.003kg/Tonne FFB.

- Rock phospate, total application was 565,418kg for application total area 4330Ha, then for fertilizer usage per tonne FFB production was 0.007kg/Tonne FFB.

- MOP, total application was 645,821kg for application total area 4595Ha, then for fertilizer usage per tonne FFB production was 0.008kg/Tonne FFB.

- DOLOMITE, total application was 73,357kg for application total area 750Ha, then for fertilizer usage per tonne FFB production was 0.001kg/Tonne FFB.

Tepian estate also has record of fertizier usage per tonne FFB production, i.e.: - Urea, total application was 191,800 tonne, with application usage per tonne FFB was 0,10 kg/FFB - Rock phospate, total application was 539,730 tonne with application usage per tonne FFB was 0.04

kg/FFB - MOP, total application was 526,850 tonne with application usage per tonne FFB was 0.04 kg/FFB - DOLOMITE, total application was 22,760 tonne with application usage per tonne FFB was 0.88

kg/FFB. Estate has a document of Agronomy Mannual of Oil Palm for leaf sampling analysis with index number OPC VI.b. Leaf Sampling, and procedure leaf sampling with dated of document on April 10, 2013 issued by ORA (Operational Research and Analys). Both of document has set foliar sampling handling, time for foliar sam-pling were foliar sampling will carry out in every once year periodically. But for soil analysis will carry out every 5 year, were the latest soil analysis was carried out in October 2010. The soil analysis carried out by PARAM AGRICULTURE SOIL SURVEYS. Then, for leaf analysis for fertilizer recommendation 2016, carried out in 2015 by CIRAD (Agriculture Re-search for Development) Franch. The leaf analysis covered for three (3) estate (Perdana, Sentekan and Tepi-an), but no covered for Kahad Smallholder. The latest leaf analysis for Kahad smallholder wasa carried out in 2013. The Sentekan estate has been carried out the nutrient recycling strategy to maintain the soil fertility thorugh the compost from EFB application. In 2015 total area was application about 1968 Ha or 21,109,320 kg EFB compost in the field. In this estate there is no Land application because the distance from the POM it so far. While in Perdana Estate has record of land application implementation based on record LA for 2016, until March, total land application has been application to the palm oil estate was 6,030 m3, with filed number ap-plication was compliance to the LA license. Compliance status: Full Compliance



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Criterion 4.3: Practices minimise and control erosi on and degradation of soils.

Findings: Based on HCV document assessment of PT REA KALTIM in 2015, the slope condition in three estate under Perdana Mill, consist of: - 0 – 5% about 16,966.15 Ha - 5 – 8% about 6,342.75 Ha - 8 – 15% about 7,307.83 Ha - 15 – 25% about 262.75 Ha With soil type was podsolic humic, nitosol haplic, podsolic haplic, podoslic gleic, humic gelysol, organosol hemic and gleisol humic. Based on EIA document December 1998, mentioned the soil type in Perdana and Sentekan estate consist of podsolic candic, podsolic cromic and cambicol. For Tepian Estate, based on EIA document on November 2005, slope condition in Tepian estate consist of 0 – 25%. With soil type taxonomy was Typic Hapludults and Aquic Fluvaquents. Some area in Tepian estate based on filed observation was peatland. But without information related peat depth and map of peat land distribution in estate. This land categorized in fragile soil. This is raised as a non-conformity (NCR RSPO00280) . Based on EIA document, erosion categorized in Tepian estate was low – medium. For the sloping area in Perdana, Sentekan and Tepian estate, company already implemented the terrace sytem and cover crop. Based on filed observation the sloping area was maintain very well by company. Estate also has record of road maintenance, example:

1. In Sentekan esate, Until December 2015, estate has been carried out the: - Main road mainteinance were the budget was 2764 Ha, and road maintainance realization was

1772.8Ha. - Collection road maintenance were the budget was 2764 Ha, and road grading realization was

2302.8Ha. - Foodbridget concrete maintenance were the budget was 1382Ha, and there is no realization, be-

cause bases on onsite visit, the footbridge condition was good. For 2016, the estate also has road maintenance management plant based on YoP. Onsite visit showed the road condistion properly good, only small road was not good condition but still accessi-ble.

2. While for Tepian estate, road maintenance also has been carried out. Example based on record on March 2016, total maintenance about 380 m. Based on filed observation road condition in Tepian es-tate was in good condition.

Based on field assessment in field number 17A and 23B Tepian Estate, found the peatland with YoP 2005. But there is no found the water table, subsidence measurable in this field. Estate also didn’t have map of peat depth level. Drainage condition also showed there is no canal maintenance has been carried out by the es-tate. This is raised as a nonconformity (NCR RSPO00281) . Also based on field assessment in field number above, showed that the canal was not maintained very well. This is raised as a non-conformity (NCR RSPO00282). Compliance status: Non Compliance NCR RSPO00280 The company couldn’t showed the peat land distribution on the concession area. NCR RSPO00281 Based on field assessment in field number 17A and 23B Tepian Estate, found the peat land with YoP 2005. But there is no found the water table, subsidence measurable in this field. Estate also didn’t have map of peat depth level. Drainage condition also showed there is no canal maintenance has been carried out by the estate. NCR RSPO00282 Based on field assessment in field number 17A and 23B, found the canal condition was not maintain very well by the company.



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Criterion 4.4: Practices maintain the quality and a vailability of surface and ground water.

Findings: The company has water management plan that has been stated in Environmental Management Plan and En-vironmental Monitoring Plan (RKL-RPL). In the Environmental Management Plan and Environmental Monitor-ing Plan (RKL-RPL) explained information such as identification of water sources and testing the quality of river water. The company has implemented the plan such as testing the quality of river water. The company cooperation with Research and Standardization of Industry conduct an analysis the quality of river water. Based on certificate of analysis, all of indicator still below of threshold. The company has map of water source and low land map. In the map stated the low land as large as 4.83 ha, swamp as large as 4.65 ha and conservation area as large as 200.70 ha. The company protected the water sources. The company has conducted installation of signboard in the conservation area and has been con-ducted analysis the river water of Nyiruk River. The company has procedure of identification and conservation area management (REAKAP.EP.006 issued date January 1, 2009 revision 0) The company has conduct treatment process of mill effluent. The company has been conduct analysis of liq-uid waste quality in the outlet pond before drained to land application. The company checking and monitoring water discharge quality such BOD, COD, pH, Cu, Cd, Zn, TSS, K. The company conducts analysis of water discharge quality in accordance to national regulation. The company has work instruction of press station (REA.IK.019/1.1/15052008). The work instruction ex-plained that the condition of water dilution 1:1. The company has records of water usage per ton of FFB year 2015 and 2016 (until April) i.e:

Year Total of water usage

(m3) FFB process (ton) Water usage/ton

FFB (m3/ton)

2015 198,880.68 280,333.90 0.70

2016 (until April) 108,770.44 74,715.29 1,45

Compliance status: Full Compliance

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techni ques.

Findings: The company has IPM plan that has been stated on monthly program. The IPM programmed including moni-toring and census of pest and controlling of pest. The company has a programmed to develop the beneficial plant, such as Turnera sp, Antigonon sp dan Casia sp. to prevent and implementation for pest and disease control. Chemical products such as herbicides are used by company too. The document that prove the IPM mechanism is implemented are : 1. Pest and Disease Oil Palm Monitoring Form, Estate : Tepian, Block : 52 C, Planted year tanam : 2007,

Division : 004, Dated on : 09.05.2016. 2. Bagworms and Nettle caterpillar census Form, field number : 52 C, Dated on: 07.05.2016 3. Report of Handling Bagworms, Tepian Estate, Period : April-May 2016. Based on the procedure the company should carried out early warning systems protocol at least 2 (twice) in a month, in fact early warning system is carried out if there are pest and disease are spread widely through the threshold. This is raised as nonconformity (NCR RSPO00283) . Tepian Estate has a record of pest census on June. Based on the results of the census records of pests that have been conducted, in April 2015 there is a rat attack rate above 25% and should be controlled by using Ratgone. IPBD estate has a pest census records starting in January to October 2015. Based on the results of the census records of pests that have been conducted, in February 2015 there is a fire caterpillar attack rate above 5 piece / midrib and should be controlled by using Thuriside. IPBS Estate has conducted training on pest officers involved in integrated pest management. Training provid-ed, among other handling of pest, pest monitoring and census, the introduction of other types of pests. Train-ing the last training was conducted in 27 November 2015. But this training did not covered all person in charge for EWS implementation. This is raised as nonconformity (NCR RSPO00284) .



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Compliance status: Non Compliance NCR RSPO00283 The company could not showed the IPM implementation was compliance with company procedure, example found the monitoring result implementation was not compliance with company procedure. NCR RSPO00284 Not all person in charge for EWS monitoring implementation doesn't trained by the company.

Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used t hat are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Ro tterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

Findings: The company is committed that pesticide use does not endanger health or the environment. Example of commitment not used any harmful chemical or prohibited chemical that consist of active ingredient paraquat is reflected on Internal Memo No. 001/Pjs. Mgr OR-IM/XI/2015 dated on November 4, 2015, From: Pjs. Mgr. Operation Research. Other example of using chemical/pesticide properly is In OPC V. Weeding: Weed Con-trol (Manual Weeding/Chemical Weeding) No Indeks: V/06. Based on Appendix of Recommendation for Us-ing of Herbicide, there are categories and classification of herbicide, dose, and kind of activities e.g Methyl metsulfuron is used for mix fern and wild seedling. Based on document Recapitulation Chemical Use Period March 2016 on Sentekan Estate it is proven that chemical are used is based on recommendation for using herbicide such as Amiphosate. REA KALTIM has implemented integrated IPM comprising physical and biological control along with chemical control to minimize the use of chemicals. Example of record pest census is Tepian Estate has record of pest census up to June 2016, (10.05.2016), the result are categorized as heavy is consist of 234.6 ha, medium is consist of 259.20 ha and light is consist of 388.50 ha and total is consist of 882.30 ha. Based on interviewed to worker/sprayer in the field in Sentekan Estate, they know the procedure to handle the chemical herbicide and use the appropriately PPE. Most of sprayer to be interviewed at the time are women, they explained about the procedure of pregnant woman and nursing mother concerning about con-taminating of chemical. The procedure is implemented to not to give assignment to pregnant woman and nursing mother to conduct handling chemical spraying. Field visit to verify in Warehouse consistently done and during warehouse visit, the result of verification that inventory in the chemical store agrees back to the inventory records. Based on mutation and balancing re-cording it is known :

Description/Chemical Amiphosate Basta Amron 20 WG Stock as per Feb 25, 2016 1,583 482.00 0 Received Feb 26, 2016 2,160 0 26.50 Qty 3,743 482.00 26.50 Isuued as per March 25, 2016 667 20.00 2.95 Stock as per March 26, 2016 3,075.5 462.00 23.55

Handling of pesticides in the Field, all the SOPs that there are use of chemical activity on the field, the SOP covering aspects of the K3 and Environment. For example, Internal Memo No Ref : 001/Pjs. Mgr OR-IM/XI/2015 dated on November 4, 2015, From : Pjs. Mgr. Operation Research, Regarding : Spreading. This memo was emphasizes the implementation of using herbicide so as to properly used and based on the WI. It is covered of environmental aspect, such as avoiding of leaking of the chemical content to environment. Pro-hibited of use chemical/herbicide consist of active ingredient Paraquat diclorida. Annual Medical checkup consistently done, especially for pesticide operators. One of that checked is Cholin-esterase (poisoning by organic material / pesticides) and recording of implementation of annual medical checkup has been maintained and documented. Compliance status: Full Compliance



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Criterion 4.7: An occupational health and safety pl an is documented, effectively communicated and implemented.

Findings: The company has policy of occupational, health and safety regarding decree of Director No.004/BOD_REA/P/II/2013 dated March 1, 2015. The company has safety plan for year 2016. In the plan has set targets to be achieved. The company has been conducted risk assessment for all operation. The risk assessment has been covering all the process activity. The company has been conduct evaluation for the ac-tion if any accident had occurred. The company has training plan for safe working practices in the work place. The company conduct training program internal and external. Some things not in accordance found in the field, among others:

• During a visit to estate, found the fire extinguisher does not have the pressure, the location in the temporary storage of hazardous wastes and toxic.

• During a visit to the mill, there is a fire extinguisher that does not have the pressure (Laboratory) and also found the wheel loaders not equipped with fire extinguisher.

• Based on interviews with harvesters and chemical officer, company does not have a mechanism for replacing damaged of PPE that worker in the period between two times a year according to the rules the company so there are the workers buy their own PPE (boots).

• During a visit to the field at the harvesting activity in the block No. 28D Division 2, found the foreman not wearing of PPE such as helmets; and also found that employees were not wearing of PPE re-quired in HIRADC such as boots, helmets, and rubber gloves. It was also found the workers at the chemist activity in the block No.20D Division 1, found the foreman not use PPE such as helmets and masks.

• During a visit to the mill (workshops, pressing, loading ramp), found employees were not wearing the required personal protective equipment (gloves, helmet) and also third parties are not using PPE.

It was raised as nonconformity (NCR RSPO00285) . The company (Rea Kaltim Plantation) has the composition of P2K3 which was approved by the Department of Manpower and Transmigration of Kutai Kertanegara with No. Kep.568 / 1929 / 1.6.2 / XI / 2014 dated Novem-ber 18, 2014. The company (PT Sasana Yudha Bakti) has the composition of P2K3 which was approved by the Department of Manpower and Transmigration of Kutai Kertanegara with No. Kep.568/670/1.6.2/05/2015 dated May 27, 2015. The company has been conduct regularly meeting of P2K3 every 3 month. The last meeting of P2K3 held on January 16, 2016. The company has minutes of meeting P2K3 that have discussing about health and safety and the minutes of meeting kept well. The company has emergency procedures (REA.SP.004 dated March 1, 2013). The company also has proce-dure of reporting and accident investigation (REA.SP.005 dated March 1, 2013). The company already has first aid officer that has first aid certificate from Safety and Health Agency of Samarinda on behalf Markho V Lepa with certificate number P.003/BK3-SMD/IV/2014 dated April 17, 2014 that has been conducted on 16 to 17 April 2014. The company has training record of emergency simulation include first aid simulation. The company has registered the employees (daily permanent workers and staff) for the health insurance and accidents. The company has the recorded evidence a payment of medical expenses if an employee had in-jured at work. For example: evidence of medical claim on behalf of Cornelius Kiang on June 2015 as much as IDR. 1,895,000 that paid by the company. The policy about health insurance stated on company regulation period 2014-2016. The company has evidence of lost time accident metric for each estate. Compliance status: Non Compliance NCR RSPO00285 Some things not in accordance found in the field, among others:



• Based on interviews with harvesters and chemical officer, company does not have a mechanism for replacing damaged of PPE that worker in the period between two times a years’ according to the rules the company so there are the workers buy their own PPE (boots).

• During a visit to the field at the harvesting activity in the block No. 28D Division 2, found the foreman not wearing of PPE such as helmets; and also found that employees were not wearing of PPE re-quired in HIRADC such as boots, helmets, and rubber gloves. It was also found the workers at the



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chemist activity in the block No.20D Division 1, found the foreman not use PPE such as helmets and masks.


Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained.

Findings: The Perdana mill and estates have a comprehensive annual training plan for its staffs and workers. The Training Programme for year 2016 is available and was developed from 2015 training need analysis docu-ment. Trainings evidences in the various form such training record books and it was complete with attend-ance records, training materials, certificate, evaluation result form and photographs of the training. There are several trainings has programmed for staff and workers, e.g. best practice management on spray-ing, first aid, conservation, HRD, RSPO, SCCS and safety. In 2016 the company has conducted some training for employee such as: a. Sosialization of training for implementation of sustainability certification system (RSPO, SCCS) on Feb-

ruary18-20, 2016 b. Fire Handling Training on March 24, 2016. c. Integrated Pest Management April 12, 2016 d. Hiperkes training for paramedics June 08-12, 2016. The company maintain all documentation of training as well by Human Resources Departement including cer-tificate, list of participant and assessment after training. Example, there is 15 participant for sosialization of training for implementation of sustainability certification system (RSPO, SCCS) on February 18, 2016 Compliance status: Full Compliance

Criterion 5.1: Aspects of plantation and mill manag ement, including replanting, that have environmen-tal impacts are identified, and plans to mitigate t he negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings: There is EIA document which is approved by Kepala Badan Lingkung Hidup Daerah Kabupaten Kutai Kertanegara (Head of Environmental Agency, Kartanegara District) No. 660.1/299.B.I.1/BLHD/VI/2011 dated on June 13, 2011 for Mill and Estate (Consist of 30,106 ha). The scope of this EIA are: Pre-Construction of mills, Construction of mill and Operations both of mill and palm oil estate. Management of pests and disease, waste management of mill, replanting and/or expansion of planting areas, water management. There is evidence that company conduct monitoring of environmental aspect based on the Monitoring Proto-col (RKL dan RPL). Based on the monitoring and changing operational that may have environmental impact, and then the Protocol Monitoring should be reviewed. Compliance status: Full Compliance

Criterion 5.2: The status of rare, threatened or en dangered species (ERTs) and high conservation val-ue habitats, if any, that exist in the plantation o r that could be affected by plantation or mill mana ge-ment, shall be identified and their conservation ta ken into account in management plans and opera-tions.

Findings: The HCV assessment has been carried out by external consultant (Bogor Agricultural University HCV Team of Forest Faculty) covered all estate excluding Tepian estate. Registered in ALS with registered/License ALS number:

1. ALS14013MS



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2. ALS15028SA The HCV assessment carried out by 6 assessor with 2 has been ALS registered. Based oin HCV assessment draft 2015, found the RTE species in all estate area, the RTE species consist of:

- Pongo pygmaeus - Hylobates muelleri - Nasalis larvatus - Macaca fasicularis - Presbytis cristata - Macaca nemestrina - Prionailurus bengalensis - Tragulus napu - Aonyx cinereus - Cervus unicolor - Hystrix brachyuran - Helarctos malayanus - And others.

The HCV assessment was performed in consultation with relevant stakeholder, based on attendant list and photograph of focus group discussion for HCV assessment, i.e.:

1. Dated on December 19, 2015 in Long Lalang village, attendant by 6 villagers. 2. Dated on December 21, 2015 in Kembang Janggut village, attendant by 7 villagers. 3. Dated on December 21, 2015 in Kelakat village, attendant by 6 villagers. 4. Dated on December 19, 2015 in Bukit Layang village, attendant by 6 villagers. 5. Dated on December 21, 2015 in Pulau Pinang village, attendant by 4 villagers. 6. Dated on December 19, 2015 in Long Bleh Haloq village, attendant by 4 villagers. 7. Dated on December 19, 2015 in Muai village, attendant by 4 villagers.

The HCV assessment has was carried out accordance to HCV RSPO Indonesia Working Group (HCV-RIWG) 2014. The HCV map identification also available on the estate (central). Based on HCV Assessment draft 2015, found the RTE species, was mentioned above. HCV assessment document also mentioned the HCV management plan with controlling/prohibited about illegal hunting, fishing, collecting activities and other illegal activity will damage the RTE species and habitat. Because the HCV as-sessment still new, during the recertification estate has been carried the RTE species monitoring by record of species flora and fauna monitoring in January, February and March 2016. Based on field assessment in HCV area bordered with palm oil plantation field, showed the clear demarcation between HCV area and palm oil plantation area, also, every HCV area already installed with signboard to remine every person about prohibi-tion carry out all kind activity will damage the HCV area. Based on HCV monitoring records for January, Feb-ruary and March 2016, showed all monitoring already implemented covered information about RTE species condition, HCV area condition, species presence and others. This monitoring carried out in every month. Estate has policy for protect the RTE species with document number 003/BOD_RE/P/II/2015 issued by Board of Directors decree about Environment and Biodoversity Conservation Policy, in point number three (3) was mentioned the RTE species protection by prohibited of illegal hunting, collecting, fishing and others. Tepian estate has carried out the HCV briefing about RTE species, on September 5, 2015 attendant by all workers level about 63 workers from managerial level until sparying, harvesting workers. Estate has record and documented the RTE species monitoring result in every month, example monitoring record for January, February and March has been reported to Conservation Manager. Based on monitoring records showed the information about species condition (information about old species presence also new species presence in the HCV area). But, Estate doesn’t have negotiation agreement with communities to safeguards to protect the HCV area. During the recertification, estate has carried out the HCV briefing to the community, evidenced by briefing at-tendantlist dated on November 26, 2015 in Tukung Ritan village, attendant by 30 villagers and village official local government. But, for Perdana and Sentekan estate still only briefing program for 2016, for 2015 still not available. This is raised as a nonconformity (NCR RSPO00286) . Compliance status: Non Compliance NCR RSPO00286 The estate couldn’t showed the record of negotiation agreement with communities to safeguards to protect the HCV area, and there is no record for HCV brief for community in Perdana and Sentekan estate.



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Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.

Findings: Tepian and Sentekan estate has list of waste source based on estate activity, such as medical acitivity from clinic, fertilizing, workshop, chemical store, office, housing, harvesting. Based on identification record, men-tioned the waste type, classification waste, store, and final disposal. Based on chemical waste handling record, all of chemical waste was handling well, were the chemical waste was disposed to the hazardous waste storage licence. The hazardous waste include the chemical waste has been disposed to the collecting licence based on haz-ardous waste manifest number 001829 (second gloove); 0001830 (second oil filter); 0001785 (medical waste); 0001786 (chemical waste) and others, disposed to the CV Sumber Agung (collectiong hazardous li-cence) dated on March 15, 2016. Tepian estate has managed the waste forim their activity, example medical waste, oli bekas, chemical waste and has been dilevered to the pengumpul berizin. There are available the kind of hazardous waste was disposed to the collecting licence. Example record of: 1. Medical waste delivery minutes of record, example dated on April 29, 2016 disposed to the hazardous

storage licence of Tepian estate. 2. Chemical second container, still kept in chemical store because the hazardous store not enough space,

then the chemical container waste will send to Perdana POM hazarodous storage. But has been indicat-ed that the chemical waste kept more than 90 days accordance to hazardous licence for Tepan estate. Example the latest chemical waste send to POM on 10 February 2016, but during the main assessment May 11, 2016, Tepian estate still not send the chemical waste to the POM. This is already raised as a nonconformity in principle and criteria 2.1 (law and regulation compliance).

3. Based on work instruction number SYB.IK.015.1/1.2/15012013 about handling hazardous waste storage, mentioned in point “F” the oli bekas yang terkumpul ditempat penyimpnan sementara estate maksimal tidak lebih dari 24 jam dan harus diserahkan ketempat pengumpul yang mempunyai izin (POM dan COM)”.

Sentekan estate has record of waste management, include the hazardous waste management. The type of hazardous kept in hazardous store in this estate was second oil, oil filter, cartridge, second paint container, medical waste, second mercury lamp, chemical second container and accu. Compliance status: Full Compliance

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized.

Findings: The company has a program to efficiency used of fossil fuels. The company has been conducted monitoring of implementation the program. The monitoring has been conducted such as cost efficiency of waste usage (fiber and shell) which used as fuels of boiler to reduce the operational cost of generator and electricity usage for operational. The company has been used biogas to efficiency of the use of fossil fuels. The company has conduct feasibility studies before implemented the biogas. Based on biogas report on April 2016, the compa-ny has sent electrical to PLN as much as 285.334 Mwh from January until April 2016. Compliance status: Full Compliance

Criterion 5.5: Use of fire for preparing land or re planting is avoided, except in specific situations as identified in the ASEAN guidelines or other regiona l best practice.

Findings: The company has a land clearing procedure which is stated a zero burning policy. There is a written company commitment regarding the zero burning policy No 005/BOD_REA/P/II/2015 which is signed by President Di-rector. There is no evidence that REA KALTIM has a new land clearing area to new replanting programme. There is no evidence in area REA KALTIM had been burned activity.



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Criterion 5.6: Plans to reduce pollution and emissi ons, including greenhouse gases, are developed, implemented and monitored.

Findings: An assessment of all polluting activities has been conducted, including gaseous emissions, particulate/soot emissions and effluent, following SOP identification of emission source and greenhouse gasses mitigation year 2016. The assessment was conducted once a year as a basic for GHG emission calculation. According to the assessment result, sources and activities generate of pollution are:

• Preparation and estate activity activities i.e. nursery, land clearing, upkeep and harvesting • Energy usage i.e. transportation of FFB from estate to mill, dispatch CPO and Kernel from mill to

port, estate operational, FFB processing and waste management Significant pollutants and greenhouse gas (GHG) emissions has been identified, and plans to reduce or min-imize the significant emission. The plans have been include objectives, targets and timeline for reduction an emission. The company has been conducted treatment for POME and recorded the treatment activity every day. GHG emission for year 2015 was calculated using Palm GHG calculator. Total field emission from owned crop is 1.92 tCO2e and total mill emission is 2.06 tCO2e. Information about GHG emission for year 2015 was submitted to RSPO secretariat on April 20, 2016. Compliance status: Full Compliance Criterion 6.1: Aspects of plantation and mill manag ement including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the posi -tive ones are made, implemented and monitored, to de monstrate continuous improvement. Findings: During the Re-certificatio the company couldn’t showed the SIA document, including meeting evidence, minutes of meeting involving participatory from affected parties, also the SIA management plan and person incharge who responsible for SIA implementation couldn’t showed by the company. This is raised as a non-conformity (NCR RSPO00287) . The company also couldn’t found record that the SIA assessment has been carried out involved the affected parties. This is raised as a nonconformity (NCR RSPO00288) . While during document verification, the company also couldn’t showed the SIA management plan already de-velop accordance to the SIA recommendation. This is raised as a nonconformity (NCR RSPO00289) . The company couldn’t demonstrated SIA document which describe the impacts for smallholder scheme, whereas the company has smallholder. This is raised as a nonconformity (NCR RSPO00290) . Compliance status: Non Compliance NCR RSPO00287 The company couldn’t showed the SIA document, including the meeting evidence, minutes of meeting in-volved the affected parties. NCR RSPO00288 There is no record evidenced that the SIA assessment has been carried out involved the affected parties. NCR RSPO00289 The company couldn’t showed the SIA management plan developed accordance to the SIA recommendation. NCR RSPO00290 The company couldn’t demonstrated SIA document which describe the impacts for smallholder scheme, whereas the company has smallholder.



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Criterion 6.2: There are open and transparent metho ds for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

Findings: Company has SOP Communication No. REA EP.002 issued July 22, 2005. Main purpose to build and im-prove the understanding of cooperation and active participation of all employees. Receiving complaint or in-put, consider and provide feedback that is timely, accurate and useful to the communications received from internal and external stakeholders. The Company has a list of stakeholders, ie: Agencies provinces (Office, District, Sub-district Police (Polda, POLRES, POLSEK), Army (KODAM, KOREM, KORAMIL) VILLAGE (Muai, Perdana, Kelekat, Bukit Layang, Long Bleh Aloq, Long Bleh Modang, Kembang Janggut, Tuana Tuha ), KUD PLASMA, Educational institutions, NGOs, Health Services, Financial Institutions BANK,contractors,suppliers, Gender committees, Employees' cooperative, SP KAHUTINDO (Labour Union). Company has record of incoming letter response from stakeholder, example letter No. 09.2008 / 350 / KD-TT / KN / IV / 2016 from Tuana Tuha Village Head April 28, 2016 to head of the company concerning aid of heavy equipment for grading road Tuana Tuha village to Pedamaran village. Management responses May 9, 2016 for grading and repairing the village mainroad by providing heavy equipment. Compliance status: Full Compliance

Criterion 6.3: There is a mutually agreed and docum ented system for dealing with complaints and grievances, which is implemented and accepted by al l parties.

Findings: The Company has a mechanism of confidentiality and anonymity in the handling of complaints, in SOP No. REA.EP.002 tanggal 22 Juli 2005 In point 6.3.3 Communication with other external stakeholders, mentioned:

- Anyone who receives a complaint or a request for environmental information from (internal-external) interested parties should forward it to the General Affairs manager.

- GA Staff section records all complaints and requests for information in the list of communications from (internal-external) interested parties.

According to the human rights policy No. 002/BOD_REA/P/II/2015 which guarantees the confidentiality / ano-nymity following the reporting as well as external and internal complaints handling. REA Group will protect the anonymity of complaints, whistleblowers and individuals who chose to assist the company in enforcing its pol-icies and management has chosen the officer responsible for handling complaints from outsiders is a public relations officer / DVA. During audit process, there is no records related complain from internal or grievance from stakeholders. Compliance status: Full Compliance Criterion 6.4: Any negotiations concerning compensa tion for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through t heir own representative institutions. Findings: SOP Oil Palm Plantation Land Acquisition No. Rev 0 of 2009 SOP SOP was prepared from the process of socialization, identification of land ownership, land inventory, land measurement, land mapping, creation of land administration, land payment and archiving of documents of land acquisition. Company conducted socialization/dissemination June 26, 2016 to surrounding villages. Related to aspects of gender rights, land rights both migrant communities and indigenous peoples are cov-ered by National Law (UU Pokok Agraria No. 5/1960) as legal considerations in procedure and it stated in Companies Human Right Policy. Procedure on land compensation is in place and it details the Free Prior Informed Consent (FPIC) process. The process of handling Land Claim is documented with maps together with negotiation letter and with the amount agreed (Proses Penanganan Klaim Lahan). Company has SOP of Land Acquisition showing flow chart to make a negotiation to resolve any land conflict. All persons involved have received compensation agreed upon signing the agreement with the company.



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Criterion 6.5: Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are suffici ent to provide decent living wages.

Findings: The Company has adjusted the minimum wage payment for employees in 2016 with Memorandum from Man-aging Director No. REA/085/DIR-SK/II/2016 in accordance with the East Borneo Governor's No. 561/K.803/2015 on Minimum Wage of East Kutai District 2016, IDR 2,035,000. Staff and workers receive sal-ary payment receipts (monthly pay slips) in a timely manner. According to interviews with workers Hardian-syah (Permanent Daily worker), he earn IDR. 92,000 / day. The company has Company Regulation 2014-2016 that regulate the rights and obligations of employ-ees/workers signed by the management approved by East Kutai Social, Labour and Transmigration Office Ju-ly 16, 2014. It contained working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc and company already communicated on June 12, 2016 and has been dis-played at office at Estates and Mill. The company also has daily paid worker/KHL (contract base), however company has not provide evidence re-lated national medical insurance (BPJS Kesehatan) for daily paid worker. It raised non conformity for this condition (NCR RSPO00291) . All units (Mill and Estates) has adequate facilities for the welfare of workers. This can be proved, on the re-sults of interviews with union, water supplies gained from wells in the housing and other facilities has provid-ed by the company. Medical facilities also available in all units. In other condition at mill auditors find some of workers had not receiving housing facilities, they were staying at the house co-workers who are married, it is an unethical thing. Companies should provide house facilities for employees who do not have homes. It raised non conformity for this condition (NCR RS PO00292). Compliance status: Non Compliance NCR RSPO00291 There is no record evidenced that all workers level already provide medical insurance by company. NCR RSPO00292 Not all workers in Perdana mill already has housing facilities as a required in RSPO principle and criteria. Criterion 6.6: The employer respects the right of a ll personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer f acilitates parallel means of independent and free association and bargaining for all such personnel. Findings: There is a published statement in local languages recognising freedom of association shall be available. It is stated on Sampoerna Agro Policy issued on July 21, 2015 section 4. The policy has been publish in all public area, such as meeting room, loading ramp, sport hall and housing area. A workers union has been estab-lished, it is called “Serikat Pekerja KAHUTINDO”. Registration apporval from local Labour Office East Kutai. It was sight letter of registration No. 003/DPC F-SPK/SK/IV/2016. Labour Union internal meeting minutes dated May 8, 2016 that took place in the central meeting room, with a discussion agenda, - Socialization of the Labour Union (SP) Kahutindo 2016 – 2019 period has been recorded in Labour Offi-

cial Government No. Kep.003 / DPC F / SPK / SK / IV / 2016 - The registration fee Labour Union (SP) new members will be charged IDR 30,000 / person - The contirbution that will be charged to each member IDR 30,000 / month Compliance status: Full Compliance



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Criterion 6.7: Children are not employed or exploit ed. Work by children is acceptable on family farms, under adult supervision, and when not interfering w ith education programmes. Children are not ex-posed to hazardous working conditions. Findings: Policy for minimum age requirement policy is available in Human Rights Policy based on Decree of The Board of Directors, No. 002/BOD_REA/P/II/2015, signed by Mark Parry, President Director, REA Group dated - 01 March 2015. The Child Employment Policy explicitly prohibits under-aged children from working in the company. All mill and estate adhere to this policy. Field audits and employee data verified that there are no worker below ages of 18 working in the mill or estates. During field assessment there is no found that children workers under company. Compliance status: Full Compliance

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disability, gen-der, sexual orientation, union membership, politica l affiliation, or age, is prohibited.

Findings: Policy for equal opportunities policy is available in Human Rights Policy based on Decree of The Board of Di-rectors, No. 002/BOD_REA/P/II/2015, signed by Mark Parry, President Director, REA Group dated - 01 March 2015. It stipulates that the REA Group actively promotes diversity in the workplace and does not tolerate dis-crimination based on differences in age, disability, ethnicity, gender, marital status, political persuasion, race, religion or sexual orientation in recruitment, dismissal or promotion. The Equal Opportunity Policy is clearly displayed in the office and on the notice boards around the estates and mill. Both local and foreign workers enjoy the same scale of pay and provided with equal housing and work facilities. This was confirmed through interview with workers from both the mill and estates and also through employee data verification. Promotion request to increase the status of employee / Promotion No. 170 / POM / XI / 2014 dated November 21, 2014 on behalf Hardiansyah from daily woker to Monthly worker grade B3 there. There is a form of per-formance review dated 11.24.2014. Management Decree No. 58 / RKP / SPK / HRD / CEN / II / 2016 is set to be fixed Monthly Employee grade B3, dated February 1, 2015. Compliance status: Full Compliance

Criterion 6.9: A policy to prevent sexual harassmen t and all other forms of violence against women and to protect their reproductive rights is develop ed and applied.

Findings: The company established a policy to prevent sexual and all other forms of harassment and Policy to prevent sexual and all other forms of harassment and violence is available in Human Rights Policy based on Decree of The Board of Directors, No. 002/BOD_REA/P/II/2015, signed by Mark Parry, President Director, REA Group dated 01 March 2015. It stipulates that all employees have the right to work in environment that is free from harassment of any kind, including harassment based on age, disability, ethnicity, gender, marital status, political persuasion, race, religion or sexual orientation. The gender committee structure in Perdana Mill is available. Latest meeting was held on 13th June 2014. The latest gender committee meeting at Sentekan estate was conducted on 19th September 2014. Board gender committee of REA Group period 2016-2019 Chairman: Wardiana, 1st Vice Chairman: Catur Karya, 2nd Vice Chairman: Meidy Syamsudin. Socialization in Mill conducted in dated February 20, 2016 in the Mill meeting room followed by all employees were present. Gender committee work program, ie:

- March: The establishment of a new board REA KALTIM, Socialization of Law elimination of domestic violence

- June: Socialization Policy Equality at work place - September: Training, gender perspective in the scope of work for board of gender committee. - December: Socialization of child protection laws

Evidence of implementation such as:



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Permit letter for leave, Sumiyati, (central employee) related maternity leave starting on March 7 to June 4, 2016 the approval of the from management date of March 5, 2016. Compliance status: Full Compliance

Criterion 6.10: Growers and mills deal fairly and t ransparently with smallholders and other local busi -nesses.

Findings: The company has FFB prices documents of East Kutai District, established by the local government / De-partment of Plantation for April and May 2016, as follows: April 2016 May 2016

Planted Year

Price (IDR)/kg Planted

Year Price (IDR)/kg

3 1,222.06 3 1,398.16 4 1,247.55 4 1,417.89 5 1,274.21 5 1,448.64 6 1,307.11 6 1,486.01 7 1,319.96 7 1,500.46 8 1,351.65 8 1,536.50 9 1, 382.51 9 1,571.46

>10 1, 393.79 >10 1,548.39 The pricing mechanism agreed upon in accordance with the decision of the team determine the price at its monthly meeting Disbun However, when the audit activities the Mill has not receive FFB from smallholder or other third parties. Exam-ple of contrct with local bussiness. Contract No. 011 / SPK / PDN / II / 2016 between the company and PT Naldi Setyawan dated January 26, 2016. Types of job FFB transport from the field (Estate) to the Perdana Mill, in chapter 7 declared monthly payment is made when the work has been completed according to the payment procedure. Contract period from December 26, 2015 to March 31, 2017. Contract was stamped and signed by both parties. Evidence payment receipt on FFB transport on March and April 2016. Compliance status: Full Compliance

Criterion 6.11: Growers and millers contribute to l ocal sustainable development wherever appropriate.

Findings: The company has several recordingsrelated contribution to local development, such as: 1. Construction of water facilities in the village of Long Bleh Modang dated February 11, 2016. 2. Material support to repair water lines and installation of water pumps at Pulau Pinang village dated Janu-

ary 26, 2016 3. Heavy equipment support for smoothing the main road in Pulau Pinang village on January 2016 4. Uniform supplies for outstanding students in the Kelakat village dated July 31 2015. For smallholder company has training and advisory program for increasing the FFB production conducted on April 19, 2016, however almost a year the smallholder does not send the FFB to Perdana Mill related to prob-lem in internal cooperative (Kahat) between management with member. Interview with local leader and village head at stakeholder consultation they confirm the contributions to their villages. Compliance status: Full Compliance



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Criterion 6.12: No Form of forced or trafficked lab our are used.

Findings: The company has policy related to force labour, with document No. 002/BOD_REA/P/II/2015 about human rights policy. This policy in Section 2 mentioned the commitment do not any force labour and trafficked labour. There is no Migrant worker existing in company, however some managerial personel level (Director and Man-ager) are from other country such Great Britain. Company could not show the contract document because those documents are confidential and not accessible to the public. They acquire all facilities in accordance with their positions. There is no special procedure or policy related to migrant profesional. Also they already compliance to Indonesian legal administration for foreigner. During the workers interview there is no indication and issue raised by workers (in low level) abut forced labour. They feel freely to work, to overtime in the com-pany. Compliance status: Full Compliance

Criterion 6.13: Growers and millers respect human r ights

Findings: Decree No. 002 / BOD-REA / P / II / 2015 on Human Rights Policy REA Kaltim Group recognize their obliga-tion to respect and support human rights are internationally recognized and stated in the Bill of Human Rights and the ILO convention on principles and Rights at work. In this policy, the management appreciate and support human rights such as: 1. Enforce its policy not to employ anyone underage. 2. No forced or trafficked labour 3. No harassment, including harassment based on age, disability, ethnicity, gender, marital status, political

persuasion, race, religion or sexual orientation. 4. No violence, the REA groups does not condone the use of violence by security personnel and will not use

mercenaries and para militaries in its operations. 5. Freedom of association, respects the right of employees and contract workers to form or join trade unions

and bargain collectively. 6. Equal opportunities 7. Protection of reproductive rights 8. Pay and conditions in line with regulations 9. FPIC, REA Group will respect the right of local communities to withhold consent to oil palm cultivation on

land to which they have legal, customary or user rights. 10. Respect for land use rights 11. Conflict resolution In Perdana Mill and Estates, all policies have been communicated during morning roll calls to all workers. All policies are displayed in estate, office, worker’s quarters and notice boards surrounding the estate area. At Sentekan Estate conducted June 01, 2016, Tepian Estate May 26, 2016, Perdana Mill June 02, 2016, at Perdana Estate with Sub contractor 26 Mei 2016 di group Office. Compliance status: Full Compliance Criterion 7.1: A comprehensive and participatory in dependent social and environmental impact as-sessment is undertaken prior to establishing new pl antings or operations, or expanding existing ones, and the results incorporated into planning, managem ent and operations. Findings: During re-certification assessment, there is no new planting activity planned or already done by company. But found planting since November 2005, this is will explained in criteria 7.3. But during the document verification the company couldn’t showed the SIA document. Then this is raised as NC under criteria 6.1



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Compliance status: Not Applicable

Criterion 7.2: Soil surveys and topographic informa tion are used for site planning in the establishmen t of new plantings, and the results are incorporated into plans and operations.

Findings: There is now new planting done by company. But, the company has record that they have planted area since November 2005. Based on HCV and EIA document, both of this document already explained clearly the soil and topography information. The soil condition in three estate under Perdana mill categorized medium erosion potential with flat condition in generally. Compliance status: Not Applicable

Criterion 7.3: New plantings since November 2005, h ave not replaced primary forest or any area re-quired to maintain or enhance one or more High Cons ervation Values.

Findings: In Tepian estate, there are has a planting activity since November 2005, i.e.:

- YoP 2005 about 989 Ha - Yop 2006 about 299 Ha - Yop 2007 about 1312 Ha - YoP 2008 about 390 Ha

Based on EIA document on November 2005, pages II-32, about land used in concession area in PT SYB (Te-pian estate), based on field visit in 2004 was:

1. Community palm oil plantation about 34.75Ha (0.68%) 2. Agroforestry about 4.09Ha (0.08%) 3. Crop estate about 18.40Ha (0.36%) 4. Land clearing about 10.73Ha (0.21%) 5. Shrubs about 29.13Ha (0.57%) 6. Thicket about 1320.42Ha (25.84%) 7. Secondary forest about 3551.96Ha (69.51%) 8. Low land about 140.52Ha (2.75%).

Whereas confirmed to the company, the planted area since November 2005, was not from primary forest or HCV replacement. This are came from land bank inside the company land used rights (HGU). During the audit also showed that the land clearing process was not in burning process, but used heavy equipment (manual land clearing). On the other hand, for Perdana and Sentekan estate, based on hectarage statement for 2016, the youth planted in both of estate was in 1999, and the oldest was in 1994. There is no planted since November 2005 in both of estate. Compliance status: Full Compliance

Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

Findings: During the field visit on planting area since November 2005, there is no sloping condition. But, the company already maintain the cover crop to minimize the soil erosion. Compliance status: Not Applicable Criterion 7.5: No new plantings are established on local peoples’ land without their free, prior and i n-formed consent, dealt with through a documented sys tem that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institu-tions.



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Findings: Planting since November 2005 in Tepian estate came from land bank inside the land use rights (HGU) of the company. During stakeholder consultation, there is no issue riased by stakeholder that new planting and planting process done by company reduced the local communities land/customary rights. As mentioned in cri-teria 7.3 all of planted since November 2005 came from not primary forest, but dominated by secondary forest inside the land use rights. This area located in Tepian estate, under PT SYB land use rights/concession area. Compliance status: Not Applicable

Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed c onsent and negotiated agreement

Findings: Planting since November 2005 in Tepian estate, located inside in the company land use rights (HGU) not came from compensation or acquisition from local people land or others communties land or customary rights. Compliance status: Not Applicable

Criterion 7.7: Use of fire in the preparation of ne w plantings is avoided other than in specific situa -tions, as identified in the ASEAN guidelines or oth er regional best practice.

Findings: Planting since November 2005 in Tepian estate was carried out by manual land clearing, not used the fire. Based on field assessment there is no indication that land has been burned by the company. Also from stakeholder information during public consultation there is no information raised by the stakeholder about this. Compliance status: Not Applicable

Criterion 7.8: New plantation developments are desi gned to minimise net greenhouse gas emissions.

Findings: There is no new planting activity replace the primary forest. Planting since November 2005 in Tepian estate not came from primary forest, this is from company land bank (inside the land use rights). Compliance status: Not Applicable

Criterion 8.1: Growers and millers regularly monito r and review their activities and develop and im-plement action plans that allow demonstrable contin uous improvement in key operations.

Findings: The Company has an internal audit for the evaluation and improvement of the best practice activities in the field accordance to the company procedure and/or work instructions. Company also has effort to keep the soil erosion through the cover crop implementation to minimize the run-off. For environmental management the company already done reported the environmental management and monitoring implementation to the related official government every six month periodically. The report showed the result of measurement of environmental parameters, such as water surface quality, land application measurement, air pollution and ambient, waste water/POME measurement. Based on certificate result of measurement all of parameters still under below standard. The, company also commit to maintain and keep the HCV area, through the periodically monitoring by securi-ty to ensure the HCV area still safe. And the HCV area of this company based on field assessment main-tained very well. But, Company couldn’t showed the evidenced of the continuous improvement are imple-mented such as procedure implementation evaluation, social impact assessment monitoring plan and others



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related with company activity. This is raised as a nonconformity (NCR RSPO00293) . Compliance status: Non Compliance NCR RSPO00293 Company couldn’t showed the evidenced of the continuous improvement are implemented such as procedure implementation evaluation, social impact assessment monitoring plan and others related with company activi-ty.

3.2 Identified Previous 4th Surveillance Non-confor mances against RSPO P & C Requirements, Correc-tive Actions Taken and Auditors Conclusions.

Criteria 5.3.3 A waste management and disposal plan to avoid or reduce pollution shall be document-ed and implemented. Findings: Domestic waste at the Perdana mill not adequately disposed. Although disposal were available, there were wastes/rubbish found outside the bins in several locations. Correction: Domestic waste ate the Perdana Mill will be suitably tidied up and a schedule has been prepared for disposal of domestic waste. Verification Result: During re-certification Perdana mill has show the commitment to manage the domestic waste properly, with provide the recycle bin in each house, and also domestic waste was disposed responsible through the land fill system. And there is no found any rubbish was disposed not responsible in the housing in mill and estate. Auditor Conclusions: Closed

3.3 Identified Non-conformances against RSPO P&C Re quirements, Corrective Actions Taken and Audi-tors Conclusions

During the re-certification assessment, found 27 nonconformity, consist of 15 non-conformities were assigned against Major Compliance indicators while 12 non conformities was assigned against a Minor Compliance Indi-cator. For the major non-conformances, the company has taken the necessary corrective action to close most of these non-conformances, and this was verified by the audit team through checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criteria 1.1.1 (Minor) There shall be evidence that growers and millers provide adequate information on (environmental, social and/or legal) issues rele vant to RSPO Criteria to relevant stakeholders for ef-fective participation in decision making.

NCR RSPO 00267 The company could not showed the record of RSPO mechanism for third party/stakeholders involve also in-formation related to rights and obligation of the third party/stakeholders.

Correction : Carry out the communication (brifing/socialization) to the all relevant stakeholders such as supplier, communi-ties, buyer, related government to RSPO implementation and communication handling such as infromation request handling and others. The company already submit the evidenced of the hand over process of handling complaint mechanism and information request mechnism to the all relevant stakeholder, RSPO mechanism implementation document,



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briefing photograph process about external handling complaint mechanism to Kelekat, Perdana, Pulau Pinang, Gunung Sari, Bukit Layang village, dated on June 6, 2016. Corrective Action taken : Ensure the all relevant stakeholders know the mechnism of the RSPO implementation, and periodically up-date about the information request handling implemented properly. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 1.1.2 (Major) Records of requests for info rmation and responses shall be maintained.

NCR RPSO 00268 The company couldn’t showed the evidence of incoming response letter from Pulau Pinang Customary Bod-ies letter No.01/LAD/DESA-PP/2016.

Correction : Carried out the problem analysis as a base line to mechanism response to the Customary Pulau Pinang (Lembaga Adat Pulau Pinang) about handling compliant mechanism. Corrective Action taken : Carried out communication about external compliant, communication and consultation mechanism and trans-parency also, then information request mechanism to all relevant stakeholders affected. Verification result: The company submitted the minutes of meeting with Pulau Pinang Customary Bodies dated on May 23, 2016. The record evidence explained that the ComDev Departement of the Company has been coordination about the proposal from the Customary Bodies and also team building development to help the process as a mentioned in the proposal. Auditor Conclusions : Closed Date of closure: June 12, 2016

Criteria 1.2.1 (Major) Publicly available documents shall include, but are not necessarily limited to: as a required in RSPO Principle and Criteria.

NCR RSPO00269 The company couldn’t showed the social impact assessment and social impact management plan documents. Correction : Developed the SIA management plan and program accordance to the SIA assessment report. Corrective Action taken : Periodically monitoring and evaluated the SIA management plan implementation. Verification result: The company submitted the SIA management plan. This document already mentioned and explained the im-pact will affected by the related parties including the positive and negative impact, communities response and mitigation plan, also time table to implementation. This document covered all activity in the company such as replanting plan process communication, land compensation, stakeholder communication and consultation, nursery, land clearing, planting activity, maintaining, FFB harvesting and transportation, employment process, smallholder development, and others activity also already mentioned. This SIA management plant signed by ComDev Manager, ComDev Asst Manager dated on June 16, 2016. Auditor Conclusions : Closed Date of closure: July 12, 2016



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Criteria 1.3.1 (Minor) There shall be a written pol icy committing to a code of ethical conduct and int eg-rity in all operations and transactions, which shal l be documented and communicated to all levels of the workforce and operations.

NCR RSPO00270 There is no record that all workers level in the mill and estate has been get code of ethical conduct briefing by the company. Correction : Make the information letter to all operational units to communicate the code of ethical conduct to all employee level and others related stakeholder. The company submitted the communication letter No.002/SE/SUST_REA/V/2016 on May 25, 2016. This let-ter addressed to the all operational units under company. The document will communicate by company in-clude:

- Code of ethical conduct document No.001/BOD_REA/P/II/2015 - Human rights policy document No.002/BOD_REA/P/II/2015 - Environmental and Biodiversity Conservation document No.003/BOD_REA/P/II/2015 - Health and Safety policy document No.004/BOD_REA/P/II/2015 - Responsible development policy document No.005/BOD_REA/P/II/2015

The company also submitted the evidenced of attendant list brief, such as code of ethical conduct brief to the outsource/third parties carried out on Monday May 23, 2016; company policies brief to all level workers on Wednesday May 25, 2016; this brief attendant by all workers in estate and mill. Corrective Action taken :

- Ensure the code of ethical conduct will include in the contract document. - Ensure the code of ethical conduct and others company policy has been understood well by related

stakehoders and all of employee level, and periodically update. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 2.1.1 (Major) Evidence of compliance with relevant legal requirements shall be available.

NCR RSPO00271 Found some evidences that the Perdana oil mill and supply based not compliance with law and regulation. Correction : Carried out the:

- Law and regulation update - Hazardous waste disposed to the authorized collector in the Tepian and Sentekan estate - Coordination with the CB Sumber Agung to ensure the licence process already fulfil compliance - Law and regulation evaluation related estate and mill activity - Operator identification to follow the competency test and develop the training program periodically. - Complete the first aid needed accordance to the requirement regulation - Develop the training program for welder. - OHS committee meeting and reported periodically

Corrective Action taken :

- Will revise the procedure of law and regulation compliance and evaluation. - Ensure the hazardous retention time will control - Third party legality evaluation control - Periodically update and evaluation of law and regulation - Ensure and carry out the law and regulation update periodically - Ensure the all heavy equipment operator include welder operator in mill and estate will have license - Carry out the periodically monitoring for first aid - Ensure and update the OHS committee meeting record and reporting periodically.



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Verification result: The company submitted the evidence of:

- Recapitulation record of law and regulation identification and evaluation period for January – June 2016, dated on May 25, 2016 Rev00. This document already completed with law and regulation should be fulfill by the company.

- Record of hazardous delivery slip from Sentekan and Tepian estate to the Cakra palm oil mill haz-ardous license store with ticket number 584036 dated on May 24, 2016 from Sentekan estate and ticket number 584270 dated on May 25, 2016 from Tepian estate.

- Decree letter of Directorate General of Land Transportation No. SK.2328/AJ309/DJPD/2013/640720298BB about transportation for hazardous waste, this license valid until May 13, 2018, coverd for transport vehicle number KT8010MC and KT 8607 BJ.

- Approval record of training request for heavy equipment operator consist of 12 operator will attendant the training on June 2016.

- Record list of medicine will be available in first aid box accordance to the regulation and first aid box photograph.

- Approval record of training request for welder operator consist of three person will attendant the train-ing on July 26 – 28, 2016.

- OHS committee minutes of meeting dated on May 21, 2016 explained about meeting agenda, issue will raised and person in charge. This meeting attendant by 41 person and reported to the related of-ficial government evidenced by letter number 014/SO-REA/V/2016 for first quarter (January – March 2016).

Auditor Conclusions : Closed Date of closure: July 12, 2016

Criteria 2.1.3 (Minor) A mechanism for ensuring com pliance shall be implemented.

NCR RSPO00272 The company couldn’t showed the result of evaluation record and correction and corrective action for law and regulation was not comply in 100%. Correction : Complete evaluation to all al and regualtion should fulfill by company. The company submitted the recaputulation record of law and regulation identification and evaluation period for January – June 2016, dated on May 25, 2016 Rev00. This document already complete with law and regu-lation should be fulfill by the company. Corrective Action taken : Carry out the periodically monitoring to all law and regulation by the related person in charge. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 2.2.1 (Major) Documents showing legal owne rship or lease, history of land tenure and the ac-tual legal use of the land shall be available.

NCR RSPO00273 Found in Tepian estate, planted area field number (030B, 040E, 040F, 040G) based on overlay between land use rights certificate map with planted area was outside the land use rights (HGU). Also, during the onsite visit in Sentekan Estate, in field number 100A division 7, a part of area in this field categorized include in produc-tion forest conversion (HPK) based on Forestry Ministry decree SK Menhut No. 718/2014 about Designation of Forest area of East Kalimantan province. Correction :

- The company will exclude this area from the audit scope, hectarge statement and claimed to certified area and product, and also will provide the special mechanism FFB handling from this area.

- Others related evidenced about overlapping area with Forestry Ministry decree SK Menhut No.



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718/2014 about Designation of Forest area of East Kalimantan province, such as map, application letter to the official government and others.

- Exlcude the overlapping area from the audit scope. Corrective Action taken :

- Ensure the identify mechanism will include in the FFB mill receiving process system. - Ensure the land use righst will process to get clarification from the Ministry through the submit clarifi-

cation letter because based on land use right explanation “Panitia B” mentioned that the Rea Kaltim concession area was non forest area. And ensure the other area will cleared.

- Ensure the filling system related legal land maintained properly. Verification result:

- The company submitted letter number 012/SMD-BA/VI/2016 dated on June 1, 2016, this letter ex-plained about total area outside the land use rights (HGU) about 122.65 Ha with planted area about 109.16 Ha.

- Letter number 008/Ext/REA/SUST/V/2016 dated on May 23, 2016. This letter explained about scope audit statement for RSPO re-certification. The company mentioned that planted area outside the land use rights (HGU) exclude from the scope audit (field number 030B, 040E, )40F and 040G).


Criteria 2.2.2 (Minor) Legal boundaries shall be cl early demarcated and visibly maintained.

NCR RSPO00274 During onsite visit in Sentekan Estate field number 6A, 47B, 100C and 62A to verify the boundary pillars number BPN 23, BPN 555, BPN 100 and BPN 599, there is no found any boundary pillar above s in the field. Correction :

- Carry out the boundary pillars verification based on field survey. - Develop the proposal program for boundary pillars monitoring.

The company submitted the proposal of boundary pillars installment and monitoring dated on June 02, 2016. Report of boundary pillars monitoring for 2016. On this report already showed the result of boundary pillars, monitoring boundary pillars photograph and others. Then, minutes of meeting of boundary pillars verification dated on June 2, 2016. Corrective Action: Ensure the boundary pillars monitoring, maintenance and evaluate periodically. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 2.2.3 (Minor) Where there are or have been disputes, additional proof of legal acquisition of ti-tle and evidence that fair compensation has been ma de to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC). NCR RSPO00275 During map verification and field verification, found the indication of land dispute between company and communities about 281.04 Ha and conservation area already planted with oil palm by communities, but there is no record or road map conflict (progress to solved, communicate to the community, FPIC process and oth-ers) was progress by company, and also there is no record data of name list of community occupied the com-pany concession area. Correction : Early, there was identified 4 location dispute area potential as miss-coordination during maaping process. So the correction developed by the company was:

- Carry out the potential dispute area identification



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- Developed the conflict resolution, through the communication with the communities already conduct activity on that area.

- Carry out the internal communication and coordination and ensure that all license area of the compa-ny maintain and manage properly, and for potential land conflict will identified early and develop the solving program.

The company submitted the: - Record of explanation for on-site visit in Tepian estate, i.e.: on-site visit location No.1; this area

based on document verification and remeasurement by the company was include in company land use rights (HGU), there was miss communication during during land clearing process. And this is not planted by communities. On-site visit location No.2; this area was inside in company concession ar-ea, but planted by communities because the company assume this area not feasible for planted, then this area planted by communities. On-site visit location No.3 and 4; this was company concession area but planted by communities, the company will identified who was planted on that area through the conflict resolution mechanism.

- Minutes of meeting, identification map, statement letter also provided by the company. All this docu-ment explained the result of the land conflict resolution especially for company concession area was planted by communities.


- Continue the land conflict identification inside the company concession area - Continue developing the land conflict handling accordance to the law and regulation - Monitoring and evaluation periodically through the identification control system for potential land con-

flict will happen (internal communication). - Documented all conflict handling completion

Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 2.2.4 (Major) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Crite ria 6.3 and 6.4) are implemented and accepted by the parties involved. NCR RSPO00276 There is no record document number REA.BPO.DVA.PKE issue date on July 01, 2015 about external grievence handling has been communicate to the all related parties and was acceptance by all related parties. Correction :

- Make information letter to the all related stakeholders and communities - Carry out the mechanism of FGD, pamphlet, suggestion box brief to the all related stakeholders. - Ensure the mechanism for handling compliant will understood and accepted by the affected parties.


- Ensure that all documents related the external communication and compliant handling process and result documented

- Periodically brief to ensure the update of compliant handling process and handling mechanism to all related stakeholders.

Verification result: The company submitted:

- The evidenced external handling communication brief dated on June 16, 2016 by attendant list con-ducted in village office, attendant by 8 person.

- Statement letter of understanding and acceptance of compliant mechanism handling for Bukit Lawang and Pulau Pinang village dated on June 14 and 15, 2016.

- Minutes of meeting for external complaint mechanism handling handover to all related parties on June 6, 2016.

- Photograph brief for all village such as Kelekat, Perdana, Pulau Pinang, Gunung Sari, Bukit Layang village.

Auditor Conclusions : Closed



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Date of closure: July 12, 2016

Criteria 2.2.5 (Minor) For any conflict or dispute over the land, the extent of the disputed area shal l be mapped out in a participatory way with involvement of affected parties (including neighbouring com-munities w here applicable). NCR RSPO00277 The company couldn’t showed the mechanism/procedure for participatory mapping to solve the conflict, whereas the mechanism involvement and acceptence by the affected parties. Correction : Revised procedure about external communication handling (land conflict also inside this procedure) whereas in conflict resolution will involve the affected parties. The company submitted the new revised procedure about external complaint handling document number REA.BPO.DVA.PKE effective date on July 1, 2015 Rev00. This procedure explained about conflict resolution with involve the affected parties and time line for external complaint handling, with maximum 50 work days. Corrective Action taken : Ensure the effectivity mechanism about land conflict resolution will be base on procedure. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 2.2.6 (Major) To avoid escalation of confl ict, there shall be no evidence that palm oil opera -tions have instigated violence in maintaining peace and order in their current and planned operations. NCR RSPO00278 There is no found any record of commitment that the company will not use military/intimidation to solve the problem related land dispute or any conflict. Correction : Showed the human rights policy to compliance and relevant with law and regulation. Corrective Action taken : Ensure the access and policy communication will showed properly. Verification result: The company submitted decree of the board of directors number 002/BOD_REA/P/II/2015 about human rights policy. In point No.4 the company showed and mentioned the commitment to does not use para militer to solve the conflict. Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 4.1.2 (Minor) A mechanism to check consist ent implementation of procedures shall be in place. NCR RSPO00279 There is no record that procedure already evaluated and implementation was compliance with company mechanism. Correction : Carry out evaluation of all activity in mill and estate to ensure that implementation meet the procedure. The company sumbit result of procedure evaluation implementation in estate for 2016. Corrective Action taken : Documented all activity of the mill and estate and carry out measurement analysis to compare with company procedure, whether compliance or not.



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Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 4.3.1 (Major) Maps of any fragile soils sh all be available.

NCR RSPO00280 The company couldn’t showed the peat land distribution on the concession area. Correction : Carry out the soil analysis and peat land depth analysis accordance to the PARAM soil survey. Corrective Action taken : Ensure the peat land soil survey anlysis accordance to the PARAM soil survey. Verification result: The company submitted result of soil analysis accordance to the PARAM soil survey, with result was:

- Sentekan estate: found peat land indication about 405.4 Ha with depth about 50 – 150 cm. - Tepian estate: found peat land indication about 1219.6 Ha with depth about 50 – 300 cm.

Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 4.3.4 (Major) Subsidence of peat soils sha ll be minimised and monitored. A documented water and ground cover management programme shall be in p lace. NCR RSPO00281 Based on field assessment in field number 17A and 23B Tepian Estate, found the peat land with YoP 2005. But there is no found the water table, subsidence measurable in this field. Estate also didn’t have map of peat depth level. Drainage condition also showed there is no canal maintenance has been carried out by the estate. Correction :

- Submitted the evidenced such as photograph and water level measurement management report - Carry out the peat land subsidence level measurement with sampling method

Corrective Action taken : Develop work instruction for water level and subsidence level measurement, and also ensure the monitoring effectivity periodically of work instruction implementation. Verification result: The company submitted evidences:

- Map of peat land in Sentekan estate, and sampling point for water level and subsidence level meas-urement.

- Result of water level management for Sentekan estate in field number 52A, 57B, 58A, 93A, and 97C. The measurement carried out every month.

- Plan for soil survey in Tepian and Sentekan esate for peat land analysis. This soil survey will imple-ment on June 13 – 16, 2016 (first step) and July 25 – 30, 2016 (second step).

- Sampling point for subsidence level in Tepian estate (17A, 23A, 23B, 24A and 24B) and Senetekan estate (52A, 57B, 58A, 93A and 97C), and photograph subsidence level installment.

- Work instruction for subsidence level measurement. This work instruction without any identification document number. This document explained, subsidence level will check every 6 month (April and October). Then, this document also mentioned about field number with peat land condition shloud measurement the water level and subsidence level.

Auditor Conclusions : Closed



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Criteria 4.3.5 (Minor) Drainability assessments sha ll be required prior to replanting on peat to deter -mine the long-term viability of the necessary drain age for oil palm growing. NCR RSPO00282 Based on field assessment in field number 17A and 23B, found the canal condition was not maintain very well by the company. Correction : Carry out the canal washing and complete with activity documentation such as photograph. The company submitted the canal identification map for 2016, and plan for maintain. Corrective Action taken : Develop the canal washing program and documented periodically and ensure all canal in peat land area will maintain well periodically. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.

Criteria 4.5.1 (Major) Implementation of Integrated Pest Management (IPM) plans shall be monitored.

NCR RSPO00283 The company couldn’t showed the IPM implementation was compliance with company procedure, example found the monitoring result implementation was not compliance with company procedure. Correction :

- Carry out the IPM as required in the procedure - Carry out the IPM implementation and documented the implementation.

Corrective Action taken : Ensure the IPM procedure will implemented well and compliance with company procedure and person in-charge for this activity will trained by the company. Verification result: The company submitted the evidenced for IPM monitoring implementation for Perdana, Sentekan and Tepian estate, follow are:

- Recapitulation of EWS implementation in May 2016, for three estate. - Map of attacked level for three estate in 2016. - Based on recapitulation resuld and map of attacked level, found that level attack was medium until

low. For this condition company not carry out the chemical activity, the company still used the organ-ic/benefial plant to control the level attack.

- Agronomy Manual of Oil Palm; Pest and Diseases (Rat Inspection and Control), issued n March 10, 2010, Rev 01. This document was covered about the timeline for EWS, handling for each level attack and biological control.


Criteria 4.5.2 (Minor) Training of those involved i n IPM implementation shall be demonstrated.

NCR RSPO00284 Not all person in charge for EWS monitoring implementation doesn't trained by the company. Correction :



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Carry out training for person in charge in IPM implementation. The company submitted the record of IPM brief and training, i.e.:

- Attendant list training in Tepian estate, conducted on March 4, 2016, attendant by 19 person - Attendant list training in Sentekan estate, conducted on March 17, 2016, attendant by 29 person - Attendant list training in Perdana estate, conducted on April 21, 2016, attendant by 16 person

Corrective Action taken : Monitoring and evaluation of person in charge understanding of IPM procedure periodically. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 4.7.3 (Major) All workers involved in the operation shall be adequately trained in safe worki ng practices (see Criterion 4.8). Adequate and appropr iate protective equipment shall be available to all workers at the place of work to cover all potential ly hazardous operations, such as pesticide applica-tion, machine operations, and land preparation, har vesting and, if it is used, burning. NCR RSPO00285 Some things not in accordance found in the field, among others:



• Based on interviews with harvesters and chemical officer, company does not have a mechanism for replacing damaged of PPE that worker in the period between two times a years’ according to the rules the company so there are the workers buy their own PPE (boots).

• During a visit to the field at the harvesting activity in the block No. 28D Division 2, found the foreman not wearing of PPE such as helmets; and also found that employees were not wearing of PPE re-quired in HIRADC such as boots, helmets, and rubber gloves. It was also found the workers at the chemist activity in the block No.20D Division 1, found the foreman not use PPE such as helmets and masks.


Correction :

- Replace the fire extinguisher with new fire extingusiher with good pressure in storage and laboratory and make card control monitoring for fire extinguisher.

- PPE procurement for harvesting and complete with documentation. - Carry out the PPE briefing to all level workers.

Corrective Action taken : Ensure the fire extinguisher condition in all units/location in good condition and control periodically also PPE monitoring control in work location through the safety inspection in work area. Especially for PPE procure-ment, the company will ensure the PPE condition based on safety inspection, so there is no workers buy the PPE by it self. Verification result: The company submitted the evidenced:

- Attendant list of PPE brief to harvesters carried out on May 3, 2016, attendant by 8 person and com-plete with photograph.

- PPE delivery slip to harvester with SIV number 00151 dated on May 12, 2016, this document men-tioned the PPE type was distribute to workers such as helmet, google, mask and glove.

- Record of internal delivery note for fire extinguisher replacement dated on April 15, 2016 in Perdana estate.

- Record of PPE shoes, glove received list in Perdana mill, all department/work unit already received PPE shoes, complete with workers signed.




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Criteria 5.2.5 (Minor) Where HCV set-asides with existing rights of local communities have been identified, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. NCR RSPO00286 The estate couldn’t showed the record of negotiation agreement with communities to safeguards to protect the HCV area, and there is no record for HCV brief for community in Perdana and Sentekan estate. Correction :

- Carry out the conservation area/HCV brief related HCV area set-asides with exixting rights local communities.

- Brochure installment about HCV protection and communicate to the all related stakeholders, include the local communities.

Corrective Action taken : Ensure the HCV brief to all stakeholders implemented and periodically monitoring also commitment develop-ment for all stakeholders. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 6.1.1 (Major) A social impact assessment ( SIA) including records of meetings shall be docu-mented. NCR RSPO00287 The company couldn’t showed the SIA document, including the meeting evidence, minutes of meeting in-volved the affected parties. Correction : Compile the SIA document by internal team of PT REAKAP and PT SYB to replace the old document by ex-ternal consultant was not relevant with involve the affected parties and all related stakeholders (participatory mapping). Corrective Action taken : Develop the SIA management and mitigation plan with participatory mapping method by internal and external stakeholders. Verification result: The company submitted the:

- SIA assessment document for PT REA and PT SYB on June 2016. This document compiled by inter-nal. Based on methodology used in this document, was describe involved the affected parties, through the field assessment, indepth interview, FGD, stakeholders mapping, and others.

- Minutes of meeting for public consultation for SIA management plan development carried out on May 18 – 31, 2016 and attendant by 50 person from related stakeholders (internal and external).

Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 6.1.2 (Major) There shall be evidence that the assessment has been done with the participatio n of affected parties. NCR RSPO00288 There is no record evidenced that the SIA assessment has been carried out involved the affected parties. Correction : Compile the SIA document by internal team of PT REAKAP and PT SYB to replace the old document by ex-ternal consultant was not relevant with involve the affected parties and all related stakeholders (participatory



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mapping). Corrective Action taken : Develop the SIA management and mitigation plan with participatory mapping method by internal and external stakeholders. Verification result: The company submitted the SIA document assessment for PT REA KALTIM and PT SYB, when this SIA ssessment report on June 2016. This SIA assessment was developed with stakeholder consultation with the affected parties, evidenced by the stakeholder consultations attendant list on March 12, 2016. Based on SIA assessment method, the SIA developed under stakeholders mapping, field observation, indepth interview, fo-cus group discussion, document review and others as a mentioned in SIA document assessment report on page number 2-7. The SIA assessment report also completed with SIA management plan coverd internal and external consulta-tion stakeholder, with evidenced was attendant list and photograph. Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 6.1.3 (Major) Plans for avoidance or mitig ation of negative impacts and promotion of the posi -tive ones, and monitoring of impacts identified, sh all be developed in consultation with the affected parties, documented and timetabled, including respo nsibilities for implementation. NCR RSPO00289 The company couldn’t showed the SIA management plan developed accordance to the SIA recommendation. Correction : Developd the SIA management plant based on SIA assessment with involve the affected parties and stake-holders mapping and participatory mapping method for internal and external stakeholders. Corrective Action taken : Carried out the SIA monitoring and evaluation program periodically and ensure the SIA management plan ef-fectiveness. Verification result: The company submitted the SIA management plan and mitigation for PT REA KALTIM and PT SYB. The SIA management plan and mitigation was developerd under SIA assessment report. This document signed by ComDev Departement Manager and complete with impact source, negative and posistive impact, location, mitigation pland and time line for implementation. Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 6.1.5 (Minor) Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). NCR RSPO00290 The company couldn’t demonstrated SIA document which describe the impacts for smallholder scheme, whereas the company has smallholder. Correction : Developed the SIA assessment report for PT REA KALTIM and PT SYB by qualified internal assessors to change the SIA assessment report developed by external consultant, and ensure the smallholder develop-ment covered on the new SIA assessment report.



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Corrective Action taken : Carry out the SIA monitoring and evaluation program periodically. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit. Criteria 6.5.2 (Major) Labour laws, union agreement s or direct contracts of employment detailing pay-ments and conditions of employment (e.g. working ho urs, deductions, overtime, sickness, holiday en-titlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the l an-guages understood by the workers or explained caref ully to them by a management official. NCR RSPO00291 There is no record evidenced that all workers level already provide medical insurance by company. Correction :

- Carried out the BPJS registered for all daily workers (KHL) to ensure all the daily workers (KHL) will get the work insurance as a required in national regulation.

- Ensure in workers agreement all the daily workers get the workers insurance. Corrective Action taken : Ensure the company policy and commitment for daily workers (KHL) available and implemented as required in regulation. Verification result: The company submitted the FM/KC/01/01/001 Rev1, this document explained about work insurance (BPJS) for daily workers registered. Company also submitted the payment slip of dailiy workers insureance (BPJS) for July 2016, about 1,592 workers are registered in BPJS. And also work agreement number 9878/HRD/SPK/CEN/VI/2016 dated on June 07, 2016 in section number 6, explained about workers insur-ance and medical insurance for daily workers (KHL). Auditor Conclusions : Closed Date of closure: July 12, 2016 Criteria 6.5.3 (Minor) Growers and millers shall pr ovide adequate housing, water supplies, medical, educational and welfare amenities to national stand ards or above, where no such public facilities are available or accessible. NCR RSPO00292 Not all workers in Perdana mill already has housing facilities as a required in RSPO principle and criteria. Correction :

- Carry out the workers inventarization and compare with housing number available. - Develop housing program for all level workers accordance to the budget company condition. - Issued letter (intern memo) from mill manager related to the single workers not allowed in one hous-

ing with merried workers. Corrective Action taken :

- Ensure company policy related the workers facilities especially housing and added in the work agreement and ensure update.

- Ensure there is no any single workers live together in one house with merried workers. Auditor Conclusions: Evidence of correction/correct ive action will be verified during next audit.



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Criteria 8.1 (Major) The action plan for continual improvement shall be implemented, based on a con-sideration of the main social and environmental imp acts and opportunities of the grower/mill, and shall include a range of Indicators covered by thes e Principles and Criteria. NCR RSPO00293 Company couldn’t showed the evidenced of the continuous improvement are implemented such as procedure implementation evaluation, social impact assessment monitoring plan and others related with company activi-ty. Correction :

- Carry out the procedure implementation evaluation periodically to ensure that all unit implement the company procedure properly.

- Ensure the environmental impact are measurable in environmental monitoring and management plan document (RKL-RPL).

- For social impact will occur, the company will carry out evaluation for positive and negative impact and will maximize the positive impact, and will minimze and reduce the negative impact. This activity will do together with environmental management and monitoring report (RKL-RPL) reporting.

Corrective Action taken : Ensure the impact monitoring and evaluation will follow up periodically and continuous improve. Verification result:

- The company submitted the result of procedure implementation evaluation report for all estate for pe-riod of August 27 – 29 and September 26 – 10 October 2015. On this report explained about all pro-cedure implementation evaluation through the scoring system as set by the company. Complete with photograph evidenced of implementation. Also for Perdana mill, they are available of procedure im-plementation evaluation by the internal audit report and CAR’s form for nonconformity procedure im-plementation, example CAR’s form No. 03/Operation CAR-s-QC/POM/II/2016.

- The company also submitted the RKL-RPL report for Semester I in 2016 has been sent to related of-ficial government. On the report already explained about the social impact management and monitor-ing plan as a required in RKL-RPL matrix document.

- Then, company also submitted the SIA management plan and mitigation plan, whereas in the man-agement plan already explained and mentioned clearly target, objective, time line and location for monitoring.


3.4 Summary of Findings pertaining to RSPO Group Ce rtification Requirement and Smallholder Princi-

ple and Criteria against to the RSPO P&C 2013. During the re-certification assessment, a total nonconformance against to RSPO Principle and Criteria Group Certification Standard for Smallholder were identified. All of principle and criteria for Group Certifi-cation found was not compliance by the Group Certification Requirement and Smallholder Principle and Criteria 2013. Based on on-site visit and document verification there is no any activity, no document showed by Group Manager and Smallholder to fulfill all the requirement. All principle and criteria under Group Certification Requirement and RSPO Principle and Criteria 2013 againts to the Kahad Smallholder was raised as a nonconformity .

3.5 Description of RSPO Supply Chain Management Sys tem November 2014.

E.1 Definition

Findings: Perdana Palm Oil Mill will implemented the RSPO SCCS Modul E (Mass Balance). This system will allow the



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palm oil mill to receive certified and uncertified FFB in one time and/or produce the certified and uncertified product in the same time, and keep in the product storage tank together, but shall be control under mass bal-ance system, to ensure the certified raw material until certified product still treace and recorded, and only cer-tified product can be claime as a certified product. Based on informatipn production records for 2015 and 2016 until April, the Perdana mill has record of FFB certified and uncertified received, whereas the certified source came from owned estate (Perdana, Sentekan and Tepian estate), while uncertified source came from Kahad smallholder and outgrowers. In 2015 (January – December) Perdama palm oil mill received the certified rawmaterial was about 206,014.06 mt, and uncerti-fied raw material about 71,735.83 mt. Then, produced the certified product (CPO and PK) was about 44,878.76 mt CPO and 10,321.30 mt PK, with conversion factor OER about 22.50% and KER about 4.7%. Next, until April 2016, Perdama palm oil mill received the certified raw material about 56,850.78 mt and un-certified raw material about 17,623.70 mt. Until April 2016, Perdama palm oil mill produced certified product about 13,418.48 mt for CPO and 2,028.32 mt for PK, with conversion factor OER about 23.53% and KER about 4.75%. Until during the re-certification process, Perdama palm mill didn’t claimed any certified product sold under RSPO IT platform (E-trace). Compliance status : Full Compliance

E.2 Explanation

Findings: Perdana Palm Oil Mill has record of estimated certifed products production (CPO and PK) that could poten-tially be produced from owned estate under Perdana supply based/audit scope i.e.: Perdana, Sentekan and Tepian estate. Also, this estimation was include in long term production budget. The estimated certified pro-duction will presented on the public summary in Table 4. Perdana Palm Oil Mill during the re-certification assessment, already registered in RSPO IT Platform (e-Trace) system with registered number 1-0045-07-000-00 But, during the re-certification audit, Perdana Palm Oil Mill couldn’t access the RSPO it platform (e-Trace), then palm oil mill could not showed the e-Trace registered number as evidenced that they already registered, because the last CB does not activated and update the e-Trace. This is raised as a nonconformity (NCR RSPO00294). Compliance status : Non Compliance NCR RSPO00294 The company could not showed the RSPO IT platform (e-Trace) number and sales process with e-Trace used.

E.3 Documented Procedures

Findings: Perdana Palm Oil Mill has established the procedure for RSPO SCCS MB implementation, with document number RE.BPO.SUST.PMB issue date on April 1, 2016, effective dated on May 1, 2016. This procsedure al-ready exaplained about how the RSPO SCCS implementation in Perdana Palm Oil Mill, i.e.:

- The objective, scope, definition of RSPO SCCS MB, book and claim, mass balance report and re-cording.

- Person in charge and responsible for RSPO SCCS MB implementation from the mill manager, asst mill manager, weighing operator, transport department, dispatch operator, production clerk, sales marketing and others related.

- Handling process for receiving certified and uncertified raw material, were from weighing slip has been identified through the mill computer system, were the computer system has been set and data registered from owned estate (Perdana, Sentekan and Tepian). And if the FFB come from this three estate, the system will outomatically identified as a certified FFB. Example in weighing slip on May 12, 2016 ticket number 416831 from Sentekan estate, already showed information wrote on the weighing slip “FFB ISCC and RSPO”. This categorized as certified FFB. While for uncertified FFB, on the weighing slip will write “FFB non Certified”. Example in weighing slip on May 13, 2016 ticket



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number 416929 from Koperasi Pinang Berjaya. Generally Perdana Palm Oil Mill has established properly the system and ensure the handling for certified and uncertified raw material and product implemented well.

- For sales activity especially for certified product CPO and PK, the sales should use the RSPO IT Platform (e-Trace) and/or green palm mechanism, the group Sustainability Manager should deliv-er/send the purchase invoice (PI) to the sales marketing department and this department should rec-ord the quantity or ammount of green palm certified sold, as a mentioned/showed in purchase in-voice.

- Procedure also mentioned that the sales marketing department should carry out the three month evaluation to ensure the certified stock condition.

Perdana Palm Oil Mill already established the procedure for receiving and processing fo certified and uncerti-fied raw material through the document number RE.BPO.SUST.PMB issued date on April 1, 2016, effectice date on May 1, 2016. During the re-certification Compliance status : Full Compliance

E.4 Purchasing and goods in

Findings: Perdana palm oil mill has record of FFB incoming and FFB process in 2015 and April 2016. Based production record, Perdana mill has separetly in mass balance record between FFB owned estate and outgrowers. Be-cause Perdana mill will implement RSPO SCCS MB, so the mill not necessary separetly in mill process be-tween certified and uncertified raw material and product, but mill shall control in mass balance record. Only FFB come from Perdana, Sentekan and Tepian estate will claim as a certified FFB source under Perdana mill audit scope. And for this, Perdana mill has verify and identify also record the FFB produced and incoming from owned estate. Perdana palm oil mill has mechanism to infor the CB if any over production projected through the email. But during the re-certification assessment, Perdana mill not produced above the limit volume as a mentioned in last certificate. Compliance status : Full Compliance

E.5 Record keeping

Findings: Based on mass balance record for 2015 and April 2016, showed in 2015, Perdana palm oil mill delivered cer-tified CPO to the company bulking in Samarinda about 11,428.84 mt, and uncertified CPO about 15,254.74 mt. Then until April 2016, Perdana palm oil mill delivered the certified CPO to the Bulking in Samarinda about 3,691.33 mt and uncertified CPO about 3,882.66 mt. Perdana palm oil mill not carried out sales activity. The sales activity carried out by Marketing departement. Perdana palm oil mill under Marketing department in 2015 sold the certified product (CPO) under green plam mechanism, evidenced by Payment request notification No. PI00014943, Match Refference 11797; Trading year 2015, dated on June 1, 2015, to the Unilever Supply Chain Company AG about 20,000 mt. But, during the mass balance record document verification, did not found that the dispacth activity above has been re-duce the certified stock in 2015. This is raised as a nonconformity (NCR RSPO00295) . Compliance status: Non Compliance NCR RSPO00295 Found the dispatch certified product activity in 2015 about 20,000 mt to the Unilever based on payment re-quest slip document as mentioned above, but this activity did not reduce the certified product stock in 2015.

3.4 Identified Non-conformance against to the RSPO Group Certification Requirement and Smallholder

Principle and Criteria against to the RSPO P&C 2013 . During re-certification process, found that the Kahad smallholder was include in last certification assessment under different certification body. But, based on re-certification process, there is no activity, documentation



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and others production activity record maintained and kept properly by smallholder manager and by small-holder members. Then, this condition raised as nonconformity against to the RSPO Group Certification Re-quirement and Smallholder Principle and Criteria 2013 on March 7, 2016. To close this nonconformity, the company submitted letter No. 008/EXT/REA/SUST/V/2016 dated on May 23, 2016. This letter explained about Management commitment that the Kahad Smallholder excluded during re-certification process, and will include on next surveillance certification process in timebond plan (will carry out on June 2019), then for planted area outside the legal land use rights (HGU) field number 030B, 040E, 040F and 040G also exclud-ed from re-certification process.

3.5 Identified Non-conformances against RSPO SCCS R equirements, Corrective Actions Taken and Audi-

tors Conclusions. During the certification assessment audit, there are found 2 major non-conformities found regarding RSPO SCCS requirement as explained on thefollowing summary of identified non-conformances, corrective actions taken and auditor conclusions.

E.2 Explanation

NCR RSPO00294 The company could not showed the RSPO IT platform (e-Trace) number and sales process with e-Trace used. Correction: Carry out transaction tracking through the book and claim in the e-Trace system. Corrective Action taken: Ensure all sales activity will use and update via RSPO IT Paltform (e-Trace) system. Verification result: Perdana palm oil mill submitted the evidenced of mass balance record tracking from 2012 untl 2016 April. This mass balane record was covered the tracking system recorded to ensure every sales activity will record into this template system. Auditor Conclusions : Closed Date of closure: July 12, 2016

E.5 Record keeping

NCR RSPO00295 Found the dispatch certified product activity in 2015 about 20,000 mt to the Unilever based on payment re-quest slip document as mentioned above, but this activity did not reduce the certified product stock in 2015. Correction: Revise the mass balance system through reduction process for certified product stock as impact of certified CPO dispatch in 2015. Corrective Action taken: Ensure every dispatch process will be based on RSPO IT platform (e-Trace), and will monitore periodically. Verification result: Perdana palm oil mill submitted the evidenced of mass balance record tracking from 2012 untl 2016 April. This mass balane record was covered the tracking system recorded to ensure every sales activity will record into this template system, and also the current data until April 2016 showed was compliance with updated da-ta. Auditor Conclusions : Closed



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3.5 Noteworthy Positive Components

-

3.6 Issues Raised during Stakeholder Consultation M eeting

Below is a summary of issues raised by stakeholders interviewed during stakeholder consultation meeting:

No. Stakeholders Issue Raised Management Re-sponse

Audit Verification

1. Sub District Head of Kembang Janggut Districts

a. The waste stream from satria estate has been brought

b. There are 4,000 Ha

of land surrounding communities that has been entranced.

a. Verification has been done by the people, facilitated by village officials linked and preventive and improvement actions has been done. Pollution is not proved.

b. Those thing has been known and become a concern of the official government authority (Pemda&Disbunhut) on settlement process and proposal to the related ministries.

Under Cakra POM



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Audit Verification

2. Mr. Sirah Judi Kelekat Village

What is RSPO? a. We are directly

adjacent to the development of ”kebun inti” and ”plasma”.

b. Problems are

include: labor, work field, the mutation of population movements whether those things has a direct impact.

c. How will the

community garden can get a high score? Do they need to have a certificate?

a. PT Rea Kaltim has

developed the Smallholderplantations (Kahad & Etam) PPMD programly for accomodate the independent farmers and socialization and training has been carried out by SNV for the independent farmer around PT REA.

b. Based on the data from PT Rea Kaltim HRD, that the local workers absorption including the villages around company reaching up 20%. If there is a termination of employment (local workers) this is caused by a few factors behind, like a local workers case that has done a violations of disciplinary, crime action and has been scouted based on the existing rules before the termination of employment if it necessary.

c. An incentive socialization for the public especially smallholder, in this case the administratiors and members of cooperative related to the RSPO mechanism and also the benefits that have been done and

During the re-certification assessment, Kahad Smallholder was exclude from the audit scope, because they doesn’t have any record/document activity, and the group certification not run properly, but still under company managemet. And the company commit the smallholder will include in certification assessment audit after three years from certificate accapt by company estate. During the re-certification process, this case already confirmed to the company management, then company management still under process to developed a good relationship to handle this condition. During the re-certification process, there is no evidenced can proved by company about this activity, because there is no any record could not proved.



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Audit Verification

d. There is no sort of

RSPO socialization to our village (Kelekat Village). There is a factory in Kelekat Village.

e. Palm mill needs a

lot of water for their operation. Water source come from Belayan river. The waste stream are discharge into Belayan river. Please explain about the dumping of waste into the river that has been conducted by the factory. How about the mechanism of waste disposal into the river?

f. Whether the river

water that has been mixed with the liquid waste that has discarded back to the Sei Belayan frim COM are save for being use by

will be incentive periodically.

d. Paralel with point c explanation that the socializationfor public around especially independent/cooperative farmer have been daone by SNV on 2014 and the middle of 2016. Besides, Ds Klekat publics also a part of REA employees that have earned RSPO socialization.

e. An information related to wastewater discharges into Belayan River are not true, the wastewater were applied through the application land with the using permit of Regent. The issue of leaks in waste ponds that has went into the trench and carried by to the Belayan river. On this case, PT Rea Kaltim has been doing the corrective and preventive actions in order to resolve those matter. Those issue has been verrified by BLHD, public and PT Rea Kaltim on April, 20th 2016 with the result that all of the allegations that have been submitted by the public is not true.

f. That is not true if COM was disposing the wastewater into Belayan river. The entire wastewater of CKM has been applied to the block, based on the using permit and the

During the re-certification process, there is no evidenced can proved by company about this activity, because there is no any record could not proved. Under Cakra POM Under Cakrea POM



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Audit Verification

communities around the river?

g. Is that true the

clean water supplies will be stopped by PT REA?

h. Comdev

department program is expected to be better planned and programmed, because there are a few ride helps to the program from village/ government, so there is a overlapping program.

waste water testing has been done periodically.

g. PT Rea Kaltim still continuing the water supply program, but in their regular management are expected that the villager can do it by self-managed.

h. Basically, Comdev program were arranged beased on the communication and coordination with the local village officials. But, as a form of repairing, companies have conducted SIA studies and also in establishing the comdev program through stakeholders participant are be adapted with the needs and conditions of the company.

During re-certification the management not stopped this program, but company has side program to developed the community to maintain their water supplies. This already confirmed related to this case, this is was missunderstanding, because the company already communicated to the government about CSR program.

3. - On 4-5 years ago, RSPO has been done a socialization. There is Cakra factory on Kelekat Village. REA Kaltim existence: a. So far, on TBS

purchasing it refers to the decision of ”Dinas Perkebunan” but there are a few things that we need to say, where our expectations are with the existence of the factory it will give a priority of the local workers especially on Kelekat Village.

b. Eight months ago that has been a big work terminations (19 people from

a. Labor recruitment,

especially local labor have been done by PT Rea Kaltim. Based on the data, untill June 2016 that the labor who works on Cakra Oil Mill from Klekat village are 22 people or 11.6% form the total labor, not included those who works on the estate.

b. The background of workers termination can be explain as follows, related to

Under Cakra POM Under Cakra POM



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Audit Verification

Kelekat Village) which occured at the factory from Kelekat villager.

c. The liquid waste

that has been dumped has contaminates 3 rivers.

d. The comoany has

been providing clean water facilities for Kelekat Village. Those aid are really helpful the villager.

e. As the information we have, clean water facilities from the company to the villager will be abolished. On this occasion, we are begging for clean

the efficiency that has been done by COM, from three shifts to two shifts, so there are an excess labor in some parts and it makes some of the labor are being transferred to PM, but these employees felt objected and their asked to be dismissed in accordance with applicable regulations, thats why the company have to make a worik termination by giving severance in accordance with the provisions of Law number 13 of 2003.

c. The river in question are Loa Tegok river; Bongkal river; Berasau river. PT Rea Kaltim did not throw away their operational waste into the river. The factory wasted has been recycled first on IPAL before being used for liquid fertilizer on estate application land based on the using permit of COM liquid waste.

d. The company hope that Kelekat villager can take care and also maintain all of the facilities.

e. The context are for the water facilities operational it can be done by the self-managed communities. In this case, company had already help for the

Under Cakra POM The company already has program to do this, but financial reason, the company hold this program for several time. During re-certification process, the company already commitment to help the community about clean water supplies.



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Audit Verification

water supplies should not be removed.

f. There are several programs that has been created by the company for the village program and government.

g. Related to third

party FFB that has been sold to the factory. Now, there is no clear gradation has done by the manufacturer.

network development and water facilities.

f. Basically, the comdev program has been compiled based on the communication and coorddination with the local village officials. But, as an improvements, company has already done SIA studies and as well as in establishing the comdev program through stakeholders participant are tailored to the needs and conditions of the company.

g. The implementation of the grading has been conducted in accordance based on the rules and procedures including the socialization of FFB grading mechanism. And this thing will be done transparency, periodically and involving the relevant agencies.

The company already has program to maintained the community development through the Comdev department. The companies procedure has done communicate to the third party FFB source about grading process mechanism.



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Audit Verification

4. Mr. Limbong (Long beohalok Village)

a. The issue of FFB grading, especially personnel that doesn’t look professional gradation.

b. Now, for sending

fruits to the factory it will take a long time. How about the solutions?

c. We realized that we have been gardening on the regional areas.

d. There are

complaints related to the TBS pricing by the government.

a. Grading personel has been given the training of a way to sorting TBS and grading standard has been communicated to the related side.

b. The queue is conditional, if there is a delivery/CPO loading.

c. Those subject has been known and become a concern of the official government authority (Pemda and Disbunhut) on the settlement and proposals process to the related ministry.

d. PT Rea Kaltim has obey to the TBS pricing by Official Government.

This issued will be communicate to the communities as a third party FFB’s supplies such as grading process, and others. For FFB third party pricing was compliance with FFB pricing regulation issued by Official Government.

5. Perdana Head Village

Related to PPMD problems on Perdana Village around 1000, but there’s only around 161 Ha.

PPMD land area, 1.561 ha is for the whole cooperative participant PPMD & independent smallholders.

The company developed PPMD (smallholder) by the company for communities.

6. Kepala Desa Long Ble modang

Related to TBS criteria Where will the result of grading and TBS that has been grading discarded?

TBS unexpected sorting result with standard are still be treated, this things has already been agreed between the cooperative/ farmers and the company in SPK buy and sell of TBS. However, socialization and communication will be improved.

Under Cakra POM

7. - a. Biogas problem

a. The company has already developing the electricity program to the villages through biogas technology that covered Kembang Janggut district and Tabang, Kenohan.

The company developed elctricity for communities by the Biogas development.



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Audit Verification

b. Clean Water c. POM waste d. The nursery

seeding that has been done by REA Kaltim on the riverbank has been planted with oil palm.

e. There is a hoarding

of cake waste. The waste has been discarded on swamp.

b. Clean water program become a concern of PT Rea Kaltim has been adapted with the situation and the community needs condition.

c. POM has managed the waste based on the statutory provisions applicable. The whole liquid waste has been applied through the land application with a using permit from Regent. Those leaks in sewage pond and get into trench and been brought to the Belayan river issue. In this case, PT Rea Klatim has done the corrective action and prevention for resolving those problems.

d. Those issue has been verified together with BLHD, people and PT Rea Kaltim on April, 20th 2016 with a result that the whole supposition that has been delivered by the people are not true.

e. The area in question is an ex nursery area of PT REA which in Long Seng which was a dock permit of PT REA which is currently has not being used for now because PT REA using Pulau Pinang dock, so that area are being planted for avoiding the claims from communities, besides those area already been excluded from the

The company already provided clean water to the community. Based on Environmental Official Government checking there is no environmental pollution by the company proved. Beacause the company used land application for POME management, and did not disposal to the environmental. There is no evidenced that the company planted inside the river bank. Under Cakra POM



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Audit Verification

f. How about the

transparency related to the existing conservation area on REA Kaltim?

g. There are tree

plantings on the riverbank of 100 Ha approximately.

h. Labor: can provide

information to the community. The influx of employees from outside the village who don’t giving a report to the village. (Lestari garden)

i. Please, PT REA made a complaint box. How will the mechanism related to the complaint.

RSPO certification scope.

f. Land application (organic fertilizer) on HGU company area (not in lower area) which in rainy season the runoff from cake application has been flowed to the public land (which are actually is the company land and in the HGU. The process and stages of handling issues has been done together with the people and already finish.

g. PT Rea Kaltim has already done the socialization to the stakeholders related to the HCV existence in the company.

h. It will be follow up in accordance with the HCV developing program.

i. It will be follow up by the HRD for the next process.

j. It will be follow up by HRD & DVA. Where it become the first stage of PT REA Kaltim that has already done the socialization of external complaints handling procedures to some stakeholders and will be followup to the whole affected village.

The company already commit about conservation area to maintained with communities together, but, the community hope this area will be able to planted. During the re-certification process, the company showed the evidence of the HCV communication to related stakeholders. Under Cakra POM Under Cakra POM Under Cakra POM

8. Sypatoni, Member of BPD Perdana Village

PT REA Kaltim has to keep a good relation with the villager.

All this time, PT REA has been done a lot of programs in order to fostering a good

During re-certification process the company already maintained good relationship with



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Audit Verification

relations with the stakeholders.

communities.

9. Haridin, Long Beleh Modang Village

For 5 years, we already had a help from PT REA KALTIM through the CSR which are the clean water and genset.

It has been maintained with the CSR/ Comdev developing program through the involvement of affected communities.

Under Cakra POM

10. Sirajuddin, public figure of Kelakat Village

a. For recorded the communities FFB source

b. Local wokers

priority c. Helping of palm oil

seeds that has ready for planting whether personal or in group

d. Optimizing the

communities lands e. Increasing the

participation of companies on education program

f. More care to the

a. The company already had a FFB communities (third party) data collection procedures that will sel their FFB to the REA factory through cooperative/ partnership contract.

b. Local absorbtion data untill June 2016, with a percentage of 20%. Will be follow up by an announcements reception of local workers tailored to the needs and skill levels.

c. The company already had a seed aid program to the local farmers through the PPMD program.

d. The companny has developing PPMD program and also a TBS sell and buy cooperation based on the applicable provision.

e. The company has developing the educational helping program for the poor family (Rp 5.4 million/year start from 2015). Besides, the company has a school and instructor facilities around company and can also send their children to the company school.

f. The company has

The company already recorded the FFB third party (communities FFB supplied) to the Perdana palm oil mill, and the company also has effort to fulfill the regulation related local workers.



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Audit Verification

environment and citizens healthy

made a commitment in order tp developing the garden and factory based on the sustainability principle.

11. Kiham, kelakat head of customs

My heathlands including to the conservation area and has already measured, but untill now it still not finished.

This time, those problem is in verification process by the Legal Dept.

During the re-certification the company stil under process to solved this.

12. Masun, PJ.Tuana Tuha head of customs

a. The lack of road maintenance that has been used by PT REA KALTIM for houling CPO operation, while they still used the PU/ public road.

b. The aid for village

road maintenance on 2015.

c. The aid for

traditional event on 2015.

d. The aid carts for women empowerment, there are 10 pieces on 2014 and 4 pieces on 2015.

e. The scholarship for poor family as much as Rp 5.400.000,00 each year started from 2015.

a. The road maintenance program has actually been done by PT Rea Kaltim, such as the heavy equipment alocation on the road to Pandamaran dock and also the road maintenance has been imposed to the CPO contractor that has been cooperate with PT REA, those things has been deal by the contractor and PT REA.

b. It will be evaluated periodically.

c. It will be evaluated

periodically.

d. It will be evaluated periodically.

e. It will be evaluated periodically.

Under Cakra POM

13. Bakhtiar, Muai Village

a. PT REA KALTIM are no longer doing the ”sunatan masal (khitan)” for the communities.

b. Slow responds for donation

a. Comdev program will be prioritized on developing and empowerment program.

b. The mechanism of delivery an

During re-certification program, this problem already confirmed to the company, this is beacuse financial reason, but if the financial condition



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Audit Verification

c. The public road is

less attention, so many rivers are closed.

d. The recruitment of

workers are never been stated pulicly.

e. There are never

been held a training for communities/ workers as a prospective employees.

f. For those who already work, our communities are really hard for getting a better achievement, meanwhile their service are already much.

g. Communities reseidential areas to the factory had a radius around 2 KM, so it will cause an epidemics of baterial: - the flies - the mosquitos

h. PT Rea Kaltim never did a fogging to the communities residential.

information respons and/ or complaint that has been assigned by the company and will be socialized to the community.

c. It is not being a company responsibility for river improvement in village.

d. It will be follow up by giving a reception announcement of local workers tailored to the needs and skill levels.

e. The company has a training program for the employees candidate including the local workers on probational period.

f. The company already had an evaluation and appraisal systems.

g. The hiperkes

company program has been run by the whole factory in PT Rea Kaltim

h. It is already done

the fogging program routinely in once per 6 month.

properly, the company will continue all CSR program.

14. Masrani, Long Bleh Haloq Village

a. Lack of transparency to the communities/ village.

b. Lack of

coordination with the villager, they always make their

a. The policy socialization has already done, a relevant mechanism with communities.

b. The policy socialization has already done, a relevant mechanism with communities.

c. Company has

During the re-certification process, the company already procedure for transparency process to the community, and the company also has CSR program for communities.



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Audit Verification

own decisions. c. About CSR, there it

is, but it is unsatisfying the communities.

d. With the existence of PT REA, people’s economic are increased.

already create and implementing the Comdev program according to the needs and conditions of the company.

d. It will be maintained and improved.

15. BKSDA Kaltim There is a plant of conservation training cooperate with the BKSDA

Conservation training has already done by BKSDA to the communities.

The company already proved the conservation training from BKSDA (official government).

16. BAPPEDA Kab. Kutai Kartanegara

a. Administratively, PT REA KALTIM is located on Kembang Janggut, Kutai Kartanegara.

b. Based on Perda No. 9 2013 about ”RTRW Kutai Kartanegara”, PT REA KALTIM areal is located on plantation designation and the half of it location are including the HPK areal.

The whole area of PT REA KALTIM are located in the clear & clean region including SK of area release.

During the re-certification process, this confirmed to the related official government, the problem because forest designation decree from related official government, but based on land use right lincese the company area was in other land use area.

17. DISNAKER Kab. Kutai Kartanegara

Mr. Wahianto as a HI staff on DISNAKER give a few information. - There are several

cases of work terminations on 2015

- Some of the workers said to the HI and PHI (Mr. Abdurrahman) because of this case, their severance are not appropiate.

Disnaker had given a written sugestion related to that case.

For the worker termination problem, Mr. Abdurrahman Ingan and friends, are the work termination caused by the espiration of the workers agreement, but Mr. Abdurrahman Ingan was asking for his severance payment so this work termination was being submitted through the mediation on DISNAKERTRANS Tenggarong and now it has already done with Mr. Abdurahman and friends rights were being paid in accordance with the recommendation of

During the re-certification process, the company already paid all of workers accordance to the regulation.



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Audit Verification

DISNAKERTRANS Tenggarong.

18. BLHD Kab. Kutai Kartanegara

a. PT REA KALTIM obey the administration

b. PT REA KALTIM always accepted the socialization from BLHD

c. There has been a good communication between BLHD and PT REA KALTIM

d. PT REA KALTIM has done the reporting realted to the environment routinely.

e. On 2015-2016 periods, there are no reports about PT REA KALTIM related to the environment problems.

Environmental issued that has been occured on 2013, such as: a. Information that

has been accepted by BLHD said that COM has been dumping the waste directly to the environment. Based on that information, BLHD made a visit to PT REA KALTIM. The result of their visited that the information are not true.

b. PT REA KALTIM has been late for making a manifest LB3 sheet report on 2013.

a. It will be maintained and improved

b. The cooperation will

be improved c. It will be improved d. it will be maintained

and improved e. The active

communication will be improved and maintained.

a. PT Rea Kaltim was

consistent with the water waste management according to the provisions the existence laws and also improving the communication and coordination with the related sides.

b. It will be maintained and improved

The company already good communication and good relationship to the official government.

19. Aidil Adha, Kepala adat LBM, Long Mahli RT 1, Desa Long Bleh Modong

a. Tanah Ulayat de-mand, has not fin-ished since 2012-2014

b. The streams of the river are closed and has been

a. It has been followed up and confirmed to the related communities.

b. There is no related issues.

The company already program and effort to solve this problem, and for electricity, the company already developed the electricity line for 3



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Audit Verification

channeled directly to the communities land

c. There is no elec-tricity in our village

d. There is no clean

water

c. The realitation of

electricity program through biogas that has been covered up 3 districts (kembang janggut, tabang & kenohan), related to the electricity conection process and it become the responsibility of Government Electricity Official.

d. It will be reviewed further according with the needs.

village, this maximum installment based on biogas production.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content.

Signed on behalf of PT REA KALTIM …………………………………………. Purwantoro Head of Sustainability Date: October 3, 2016

Signed on behalf of TUV Rheinland Indonesia ……………………………………… Mhd Fundy C Kurniawan Lead Auditor Date: October 3, 2016



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APPENDICES

Appendix 1: Details of Certificate



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Appendix 2: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment)

BPN Land used Agendy (Badan Pertanahan nasional) CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSPO Certified Sustainable Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches GHG Green Houses Gases HCV High Conservation Value HGU Hak Guna Usaha (Land Use Rights) HIRARC Hazard Identification, Risk Assessment and Risk Control HPL Land Manage Right (Hak Pengelolaan Lahan) IPM Integrated Pest Management IK Instruksi Kerja (Work Instruction) LTA Lost Time Accident MSDS Material Safety Data Sheets MB Mass Balance NGO Non-Government Organization NIB Building Identification Number (Nomor Indentifikasi Bangunan) OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment PPKS Pusat Penelitian Kepala Sawit (Oil Palm Research Institute) RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SMK3 Sistem Manajamen Kesehatan dan Keselamatan Kerja

(Occupational Safety & Health Management System) SOP Standard Operating Procedure SPBUN Serikat Pekerja Perkebunan (Estate Workers Union) UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pemantauan Lingkungan (Environmental Monitoring Efforts)

Appendix 3: List of Stakeholders Interviewed and Co ntacted

No. Name of

Stakeholder

Institution - Address Remark

Stakeholders Interviewed On-Site 1. Agus Assistant Division 2 Perdana estate

2. Mujirin Harvesting Foreman Dvision 2 Perdana Estate

3. Kasman Harvester Division 2 Perdana Estate

Block 28D

4. Hendri Harvester Division 2 Perdana Estate

Block 28D

5. Muslim Harvester Division 2 Perdana Estate

Block 28D

6. Abu Bakar Harvester Division 2 Perdana Estate

Block 28D



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7. Mursalaim Harvester Division 2 Perdana Estate

Block 28D

8. Muhadi Spraying Foreman Division 1 Perdana Estate

9. Siti Arfiah Sprayer Division 1 Perdana Estate Block 20D 10. Rahmati Yati Sprayer Division 1 Perdana Estate Block 20D 11. Theresia Leni Sprayer Division 1 Perdana Estate Block 20D 12. Hartati Sprayer Division 1 Perdana Estate Block 20D 13. Netty Sprayer Division 1 Perdana Estate Block 20D 14. Hardiah Sprayer Division 1 Perdana Estate Block 20D 15. Nurliah Sprayer Division 1 Perdana Estate Block 20D 16. Najamudin Welder 17. Fitri Assistant of Laboratory 18. Pendi Dumptruck driver 19. Abed Nego Mill worker Press station 20. Haryono Mill worker Press station 21. Saudi Mill worker Boiler station

22. Jastani Kutem Sekretaris Koperasi Kahat Desa Pulau Pinang

Cooperative is in transition to-wards improvements in internal management

23. Pelipus Bendahara Cooperative is in transition to-wards improvements in internal management

24. Iskandar Anggota Koperasi Cooperative is in transition to-wards improvements in internal management

25. Najaruddin Staf Kantor Desa Perdana Smallholder partnership that has not exist until now

26. Ardiansyah Ketua BPD Desa Perdana Smallholder partnership that has not exist until now

27. Ali syafaat Tokoh Masyarakat Desa Perdana Smallholder partnership that has not exist until now

28. Lukas Ketua BPD Desa Bukit Layang Smallholder or other partnership

29. Duru Kaur Pembangunan Desa Bukit Layang

Smallholder or other partnership

30. Bosyan Manalu Wakil Ketua BPD Desa Bukit Layang

Smallholder or other partnership

31. Kristoforus Tani Sekretaris PUK SP KAHUTINDO Freedom of Union activity and no intervention from the manage-ment.

32. Adriana Kila Manajer Community and Develop-ment

33. Catur karya Human Resource Departement Workers Welfare 34. Winetou Manager Sustainabilty RSPO implementation.



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Appendix 4: Attendend list of stakeholder consultat ion meeting



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Appendix 5: Observations and Opportunities for Impr ovement

No. Observations / Opportunities for Improvement Crit eria 1. -

2. -