Roundtable on Sustainable Palm Oil...The area for both Suayap estate and Umpang estate divided into certified area and non certified area, due to le-gal land status for some part plantation

Roundtable on Sustainable Palm Oil Public Summary Report

Report no.: 82450216052

Refering to SGS report No. GP 7003A/Porject No. ID 5285

Certification assessment against the

RSPO Principles & Criteria Year 2013 and RSPO SCCS year 2014

PT Mitra Mendawai Sejati-Suayap Palm Oil Mill

Central Kalimantan

Date of assessment : 07,09 & 12 December 2015 (SGS Malaysia Sdn. Bhd)

Major Findings Verification : 08 &11 August, 2016(by PT TUV Rheinland Indonesia)

Report prepared by:

Zaenal Abidin (.) (RSPO Lead Auditor Registered under SGS Malaysia Sd n. Bhd)

Dian S Soeminta (RSPO Lead Auditor Registered under PT TUV Rheinlan d Indonesia)

Certification decision by:

Nyoman Susila (Managing Director of TUV Rheinland Indonesia)

Certification Body: PT TUV Rheinland Indonesia

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

Jakarta 12950,Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575

www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT 3

1.1 National Interpretation Used 3

1.2 Type of Assessment 3

1.3 Location and Maps 3

1.4 Description of Supply Base 4

1.5 Dates of Plantings and Replanting Cycles 8

1.6 Other Achievements and Certifications Held 9

1.7 Area of Plantation (Total, Planted and Mature) 9

1.8 Organisational Information / Contact Person 9

1.9 Description of Company History, Socioeconomy & Environment 10

1.10 Time Bound Plan for Other Management Units 10

1.11 Compliance to Rules for Partial Certification 10

1.12 Plan for certification of associated smallholders 12

1.13 Approximate Tonnages Certified 12

1.14 Recommendation for Certification 12

1.15 Date of Certificate Issued and Scope of Certificate 13

2.0 ASSESSMENT PROCESS 14

2.1 Certification Body 14

2.2 Qualifications of Lead Assessor and Assessment Team 14

2.3 Assessment Methodology 16

2.4 Stakeholder Consultation and Stakeholders Contacted 18

2.5 Date of Next Surveillance Visit 18

3.0 ASSESSMENT FINDINGS 18

3.1 Summary of Findings 18

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 41

3.3 Noteworthy Positive Components 53

3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues 54

3.5 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 55

APPENDICES 56

Appendix 1: Details of Certificate 56

Appendix 2: Certification Audit Plan 58

Appendix 3: List of Abbreviations 58

Appendix 4: List of Stakeholders Interviewed and Contacted 58

Appendix 5: Observations and Opportunities for Improvement 58

RSPO Certification Assessment Report

- PT Mitra Mendawai Sejati –Suayap Palm Oil Mill –

Central Kalimantan

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QMF: RSPO-007a-13(Rev.0)

1.0 SCOPE OF CERTIFICATION ASSESSMENT

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

1.2 Type of Assessment

The main certification assessment was carried out on one mill namely Suayap Palm Oil Mill and 2 estates i.e. Suayap Estate and Umpang Estate under PT Mitra Mendawai Sejati (MMS) owned by PT Sawit Sumbermas Sarana. The certification audit was done by SGS Malaysia Sdn. Bhd on 07,09 & 12 December 2015 since the SGS accreditation has been terminated by Acceditation Service International; the certification process was transferred to PT TUV Rheinland Indonesia with open major status.

PT TUV Rheinland Indonesia continues the certification process of PT Mitra Mendawai Sejahtera preceded by Major findings verification audit that was carried out on 07 & 09 August, 2016.

1.3 Location and Maps

Figure 1: Location Map for PT MMS – Suayap Mill

Suayap Mill



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Table 1: GPS locations for all estates and mills in cluded in certification assessment

The area for both Suayap estate and Umpang estate divided into certified area and non certified area, due to le-gal land status for some part plantation area both in Suayap estate and Umpang under finalizing by Indonesia national land agency (BPN). List of certified and non certified estate in PT Mitra Mendawai Sejati as informed below:

Name of mill / estate Location GPS locations

Latitude Longitude Suayap Mill Umpang Village, Arut Selatan

Sub-ditrict, Kotawaringin Bar-at District, Central Kalimantan Province.

2° 15' 54,91" 111° 43' 23,08"

Suayap Estate Umpang Village, Arut Selatan Sub-ditrict, Kotawaringin Bar-at District, Central Kalimantan Province.

2° 15' 36,03" 111° 43' 11,73"

Umpang Estate Umpang Village, Arut Selatan Sub-ditrict, Kotawaringin Bar-at District, Central Kalimantan Province.

2° 14' 06,99" 111° 45' 46,02"



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Figure 2. Location of certified and non certified area in Suayap estate.

Figure 3. Location of certified and non certified area in Umpang estate



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1.4 Description of Supply Base The FFB is sourced from certified area directly managed by PT MMS – Suayap Mill, other certified area under PT Sumber Sawitmas Sarana. The OER rate is 24.90%. The budgeted crop yields from each estate are listed in Table 2 below and projected mill processing data is listed in Table 3. Table 2: FFB Supply Information for Suayap Palm O il Mil Periode year 2015 & Until August 216

FFB Contributors FFB supplied 2015 FFB Supplied 2016*

Tonnes % Tonnes %

Company owned estates:

Suayap Estate 84,965.930 40.43 37,349.000 36.26

Umpang Estate 64,129.388 30.51 35,100.140 34.04

Sub total 149,095.318 70.95 72,449.140 70.27

Other PT Sumber Sawitmas Sara-na certified estate

0 0 0 0

Suayap estate 26,358.930 12.54 12,847.920 12.46

Umpang estate 21,703.372 10.32 14,124.480 13.70

Outgrowers 12,980.670 6.17 3,676,230 3.56

Sub Total 61,042.972 29.09 30,648,630 29.72

Total 210,138.282 100 103,097.770 100

Note* : Starting from September 21, 2016 onward after internal memo no. 005/CEO/SSMS_IM/IX/2016 dated September 26, 2016, Suayap mill will not receive FFB from non certified sources. This will be verified during next surveillance audit.



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Table 3 : Certified tonnages claimed, certified to nnages purchased or sold, total and projected CPO and PK production from PT Mitra Mendawai Sejati

Note: * Projection from September 2016 to August 2017

1.5 Dates of Plantings and Replanting Cycles The PT MMS – Suayap Mill own estates produces palm oil’s fresh fruit bunch that is considered matured when approaching 4 (four) years after planting and productive until the age of 25 years. There is not yet any replant-ing program as all estates has yet reach 20 years of planting age. The age profiles for all the estates are simpli-fied in Table 4 below. Table 4: Age and planting year of company’s estate supplying to Suayap Mill

Name of supply-ing estate

Planting Age (Ha)

Immature year 2012 to

2016

>4 - 14 years year 2007 to

2011

>14 - 25 years year 2001 to

2006

>25 years year < 2000

Suayap Estate - 3.896,00 - -

Umpang Estate 84,42 3.262,98 - -

Total 84,42 7.158,98 - -

PT Mitra Mendawai Sejati implement 25 years planting cycle, since alll plantation in PT MMS area still young, replanting program will be starting on the year 2035.

Amount (MT)

FFB CPO PK

Certified tonnages -

Certified tonnages sold (January to December 2015).

- - -

Certified tonnage sold (January to Agustus 2016).

- - -

Certified FFB tonnages purchased - -

Total FFB Production (January to December 2015)

210,138.290 - -

Total FFB produced for year 2015 from (becom-ne) certified estate

149,095.318 - -

Total mill Production (January to December 2015) - 52,283.548 9,450.081

Total actual RSPO Production for year 2015 from (become) certified estate.

- 37,077.070 6,686.097

Conversion Factor year 2015 (average) - 24.87 4.41

Projection FFB from certified estate for next 1 year

140,412,237 - -

Projected FFB for year next 1 year from all certi-fied sources

212,398.032 - -

Projected conversion rate for next 1 year year September, 2016 to August, 2017

- 24.95% 4.48%

Projected certified product year for next 1 year year September, 2016 to August, 2017

- 52,982.948 9,521.940



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1.6 Other Achievements and Certifications Held

PT MMS – Suayap Mill has gained some management system certificates of ISO 9001:2008, ISO 14001:2004 and OHSAS since October 2011.

1.7 Area of Plantation (Total, Planted and Mature)

Tabel 5. Oil Palm Planted Area Summary, FFB Product ion and Average yield/ha for PT MItra Mendawai Seja ti

Estate NameTotal area

(ha)

Oil Palm Planted a r-

ea (ha)

Mature (Production) area

(ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)*

Average yield/ ha

(certified) Certified Non Certified Certified Non Certified Certified Non Certified

Suayap 5159.30 3,898.15 3,105.53 792.62 0 0 71,181.78 26,528.89 22.92

Umpang 3840.12 3,347.40 2,781.32 566.08 0 0 60,241.14 24,671.97 21.66

TOTAL 8999.42 7245.55 5,886.85 1,358.70 0 0 131,422.92 51,200.86 22.29

* Total FFB Production from Sept 2015 – Augst 2016 Table 6. Land use data for PT Mitra Mendawai Sejati

Estate Name

Total area (ha)

Oil Palm Planted

Area (ha)

HCV/ Poten-tial HCV areas*

(ha)

Land used for other purposes (ha)

Riparian Nursery Cleared Area Other Land

Suayap 5159.30 3,898.15 1,056.29 0 0 0 207.01

Umpang 3840.12 3,347.40 160.05 0 0 0 332.67

TOTAL 8999.42 7245.55 1,216.34 0 0 0 539.68

1.8 Organisational Information / Contact Person

Contacts details of the company are as follows:

Company Name: PT Mitra Mendawai Sejati – Suayap Mil l

RSPO Membership no. 1-0111-07-000-00 under PT Sawit Sumbermas Sarana

Address: Head Office : Jln. H. Udan Said No. 47 Pangkalan Bun Kalimantan Tengah

Indonesia

Mill Address: Umpang Village, Arut Selatan Sub-district, Kotawaringin Barat District, Kalimantan Tengah Province – Indonesia

Contact Person: Irvan Pandjaitan

Telephone: +62 532 21 297

Email: [email protected] .

www.ssms.co.id



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1.9 Description of Company History, Socio-economy & Environment

PT Mitra Mendawai Sejati (PT MMS) is an Indonesia-based company engaged in palm industry. Its business activi-ties include managing palm plantations as well as operating palm oil mills and palm kernel processing plant. The Company's palm plantations, mills and plants are located in Kalimantan Tengah, Indonesia. Its products include crude palm oil, palm kernels and palm kernel oil. PT MMS is a limited liability company incorporated on May 6, 1999 in Pangkalan Bun, Central Kalimantan by Certif-icate No. 4, made before the Notary Eko Soemarno, SH, Notary, in Pangkalan Bun. This plantation began the planting process of in 2005. The total planted area of MMS was 8,921.38 hectares. PT MMS owns palm oil mill (POM) with a processing capacity of approximately 135,000 tons of fresh fruit bunches (FFB) per year. In addition, it also has palm kernel processing plant that has a processing capacity of approximately 22,500 tons PKO per year. PT MMS is subsidiary of PT. Sawit Sumbermas Sarana Tbk. The holdings company manages eleven palm oil plan-tations, four mills, and a palm kernel processing plant.

1.10 Time Bound Plan for Other Management Units The time frame laid out below is considered to be both challenging and realistic.

The audit team is satisfied that the company conforms with the RSPO requirements for partial certification as laid out in Clause 4.2.4 of the RSPO Certification Systems document.

Table 7. Time Bound Plan of PT Sawit Sumbermas Sara na

Plantation Company Location Target Date

PT. Sawit Sumbermas Sarana - Selangkun Mill

Central Kalimantan, Indonesia Certified 12/06/2015

PT. Sawit Sumbermas Sarana - Sulung Mill Central Kalimantan, Indonesia Certified 19/03/2013

PT. Kalimantan Sawit Abadi Central Kalimantan, Indonesia Audited in 2015

PT Mitra Mendawai Sejati Central Kalimantan, Indonesia Audited in 2015

PT. Tanjung Sawit Abadi Central Kalimantan, Indonesia 2017

PT. Sawit Multi Utama Central Kalimantan, Indonesia 2017

PT. Mirza Pratama Putra Central Kalimantan, Indonesia 2019

PT. Menteng Kencana Mas Central Kalimantan, Indonesia 2019

1.11 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of PT Sawit Sumbermas Sarana against the rules for partial certification according to RSPO Certification System clause 4.2.4 was assessed through document review. A summary of findings is as stated below.

Partial Certification Requirements Audit Findings

(a) The parent organization or one of its ma-jority owned and / or managed subsidiaries is is a member of RSPO.

Yes, with RSPO membership number 1-0111-07-000-00

(b-d) A challenging time-bound plan for certi-fying all its relevant entities is submitted to the Certification Body (CB) during the first

See 1.10



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certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills.

Any revision to the time-bound plan or to the circumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted only where the or-ganisation can demonstrate that they are justified

(e) No replacement of primary forest or any area identified as containing High Conserva-tion Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since Janu-ary 1st 2010 must comply with the RSPO New Plantings Procedure

PT Kalimantan Sawit Abadi:

• Document of HCV Identification: Laporan Iden-tifikasi Nilai Konservasi Tinggi by Sonokeling Akreditas Nusantara in 2013.

• Decree of land title (SK HGU) # 40-HGU-BPN-RI-2007 for 2,510.11 ha on 18 September 2007.

• Decree of land title (SK HGU) # 47-HGU-BPN-RI-2007 for 1,932.65 ha on 21 September 2007.

• Year of Planting: 2001, 2003, 2004, 2005, 2006, 2007, 2008, 2009, 2010, 2011, 2012, 2013, 2014, and 2015.

There is no information provided by PT Sawit Sum-bermas Sarana, regarding no replacement of pri-mary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in other subsidiaries under PT Sawit Sumbermas Sarana i.e.:

- PT Tajung Sawit Abadi location in East Bulik & Mentobi Raya, Lamandau District, Central Kali-mantan, has total area 14850.54 ha with plant-ed area 8,901.16 ha, the HCV document has been done on Ocotber 2012. According to as-sessment result there are 1259.79 ha or 8.57% from total area was identified as HCV area.

- PT Sawit Multi Utama has total area 16,299.25 ha with planted area 10,367.88 ha. HCV as-sessment was conducted in year 2014, accord-ing to HCV assessment result there are 1,896.01 Ha was identified as HCV area in PT Sawit Multi Sarana.

PT SSS has new development area in two other subsidiaries, i.e. PT Mirza Pratama Putra located in Bulik, Belantikan Raya and Manthobi Raya, Lamandau District, central Kalimantan with total area 6000 ha and PT Menteng Kencana Mas with total area 16,528 ha. HCV assessment for both companie was done on September 2016 and on progressing to implement RSPO New Planting Procedure.

Further information needed during next audit to en-sure that there is no replacement of identified High Conservation Values (HCVs) area in all uncertified



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unit mentioned above..

(f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Set-tlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

PT Kalimantan Sawit Abadi:

• Procedure of Land Conflict and Legal Resolu-tions (SOP-Lagal.GN-014) Tanggal 14 Juni 2012.

• Procedure of Employees Grievance Resolution (SOP-PERS.GN-017) tertanggal 01 Agustus 2012

• Land Compensation, for example: Pelepasan Hak atas tanah (release of land rights) for 538,75 ha at Rungun, Lalang, Kelurahan Baru, Kotawaringin Hulu and Rangda Villages, Arut Selatan Sub District Kotawaringin Barat District 2007.

(g) Labour disputes, if any, are being re-solved through a mutually agreed process, in accordance with RSPO criterion 6.3.

No Labor dispute in all uncertified companies, such as PT Tanjung Sawit Abadi; PT Sawit Multi Utama, PT Mirza Pratama Putra and PT Menteng Kencana Mas.

PT Sawit Sumbermas Sarana has establish Proce-dure of Employees Grievance Resolution (SOP-PERS.GN-017) dated 01 Agustus 2012.

(h) Legal non-compliance, if any, are being resolved in accordance with the legal re-quirements, with reference to RSPO criteria 2.1 and 2.2.

PT Kalimantan Sawit Abadi has conduct RSPO P&C assessment on December year 2015. Some nonconformance to legal requirement has been identified and documented on the audit report PT KSA.

While compliances to legal requirement for some subsidiaries such as PT Tanjung Sawit Abadi; PT Sawit Multi Utama, PT Mirza Pratama Putra and PT Menteng Kencana Mas. Will be verified during next surveillance audit.

1.12 Plan for certification of associated smallhold ers The company have scheme smallholders as FFB’s suppliers. The development of scheme smallholders is under management PT Sawit Sumbermas Sarana and will not supply to Suayap mill, before they have RSPO certificate the FFB from smallholder scheme will be transfered to others mill under PT Sawit Sumbermas Sarana. The program for smallholder schme towards RSPO certification will be started in year 2017 as stated on company;s email on October 11, 2016. Currently, the scheme smallholders are still continuing progress for developing area.

1.13 Approximate Tonnages Certified

The approximate tonnages certified, based production for next 1 year September, 2016 to August, 2017 for company owned estates and other incoming FFB from certified sources only are as follows:

Crude Palm Oil (CPO) : 52,982.948 MT Palm Kernel (PK) : 9,521.940 MT

1.14 Recommendation for Certification PT Mitra Mendawai Sejati –Suayap Palm Oil Mill has established and maintains an effective system to ensure compliance with the RSPO principles and criteria. The audit team has confirmed through the audit process that



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the company’s practices complies with, adequately maintains and implements the requirements of RSPO Prin-ciples and Criteria year 2015 Generic Standard and RSPO Supply Chain Certification 2014 Model D. PT TUV Rheinland Indonesia recommends that PT Mitra Mendawai Sejati- Suayap Palm Oil Mill be approved as a producer of RSPO Certified Sustainable Palm Oil.

1.15 Date of Certificate Issued and Scope of Certif icate

The scope of the certificate covers production of palm oil from PT Mitra Mendawai Sejati- Suayap Palm Oil Mill and its supply base, which includes Suayap Estate and Umpang estate The date of certificate issued is October 27th, 2016. Further details of the certificate are as per Appendix 1.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT 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 490 locations in 62 countries on all five continents. PT 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 Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team. SGS Malaysia Sdn Bhd holds copies of educational qualifications, certificates and audit logs for each of the audit team members. SGS has evaluated the qualifications and experience of each audit team member and has registered the following designations for conducting RSPO Assessment. Summary of auditors’ educational background and experience are listed in Table 7 below.

Table 1: Auditors Profile

Evaluation Team Notes

Team Leader Zaenal Abidin has a degree in Forestry and SSC Auditor in SGS ID (Indone-sia), 21 years national experience in forestry sector in Indonesia. Has under-gone the necessary ISO 14001, ISO 9001, RSPO and ISPO Lead Auditor course and involved in a number audits on oil palm plantations and forest cer-tification. His specific qualification for RSPO audit is Health and Safety, Social, Labour and Supply Chain.

Auditor 1 Langlang Tata Buana has a degree in Forestry and SSC Auditor in SGS ID (Indonesia), 5 years national experience in forestry sector in Indonesia. He has undergone the necessary ISO 14001 and RSPO Lead Auditor course and and involved in more than 30 audits of natural resources sustainability scheme scheme in Asia and Pacific. His specific qualification for RSPO audit is envi-ronment and HCV.

Auditor 2 Dwi Yana Hendrata, a Bachelor of Agriculture Science holder and SSC Audi-tor in SGS ID (Indonesia). He has 7 years working experience in oil palm plantation sector in Indonesia. He has undergone ISO 9001 and ISCC and ISPO Lead Auditor training and involved in a number of audits on oil palm plantations in Indonesia. His specific qualification for RSPO audit is Good Ag-riculture Practices and Legal.

Auditor 3 Fourry Meilano has a degree in Forestry and SSC Auditor in SGS ID (Indone-sia), 15 years national experience in forestry sector in Indonesia. He has un-dergone the necessary ISO 14001, ISO 9001, RSPO Lead Auditor Course and and ISCC and involved in a number of audits on oil palm plantations and and forest certification in Indonesia. His specific qualification for RSPO audit is environment and HCV.



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Major findings verification audit team :

Name Position Qualifications / Experience

Dian Susanty Soeminta Lead Auditor

Education: Bachelors Degree in Forestry - Bogor Agriculture Insti-tute. Indonesia, (1990 to 1995). Trainings attended: ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Cus-tody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certifica-tion. Lead auditor for Environmental Management System (EMS) and Quality Management System (QMS) audits. Conducted sus-tainable forest management certification audits on FSC and Indo-nesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rhein-land Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification Sys-tem and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rhein-land RSPO acceditation process and report template.

Ade Sudiana Auditor

Education: Bachelor of Forestry, Faculty of Forestry, Bogor Agri-cultural University Trainings attended: Awarness training of ISO 9001, 14001 and 18001, inhouse training of ISO 19011 and ISPO, Training of Assesor for Sustainabiity Natural Forest Management (SFM) by The Indone¬sian Eco¬la¬belling Insti¬tute (2008), Training of Auditor for Sustainability Forest Management By center for Educa-tional and Training of Forestry, Department of Forestry (2010), Examination of competency for auditor of Sustainability Forest Management by Personal Certification Body-Rhino (2014), Train-ing of Auditor For ISPO (2016) by ISPO Comission Working experience: Consultant and Trainer of : Quality Management System (ISO 9001), Environment Management System (ISO 14001), Safety Management System (SMK3/ OHSAS 18001), ISPO (Indonesian Sustainable Palm Oil), Consultant and trainer in PT FOCUS (2008-2016) ; Auditor of : Sustainability Forest Management (SFM) for Plantation and Natural Forest (2010-now), RSPO (2016-now), Auditor in PT Forestcitra Sejahtera (2008-2016), Au-ditor in PT TUV Rheinland Indonesia (2016-now)

Meidia Pratama Auditor

Education: Bachelor of Social Sciences in Social Anthropology, Faculty of Social and Political Sciences, Padjajaran University. Training attended: Community Development, Public Relation, De-cision Making and Problem Solving, Project Management, Lead-ership, ISO 14001, ISO 26000, ISO 50001, FPIC, ISO 19011



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Working experience: Research Coordinator and Land Conflict Specialist at People Center Advocacy Institute (PERGERAKAN) Indonesia (2004-2006), Project Officer at Studio Drya Media (2006-2008), CSR and Media Relation Assistant Manager at PT Agro Harapan Lestari (2008-2010), Sustainability Specialist at PT SDS Consulting (2011-2012), CSR Coordinator and Sustainability Stategic at PT Jawa Power (2012-2013), Social Specialist at The Forest Trust (2013-2014), Head of Department CSR and External Relation at PT Mitrabara Adiperdana (2015), Associate Freelance Consultant at ICWS (2016), and RSPO Auditor at PT TUV Rhein-land Indonesia (June 2016-present).

2.3 Assessment Methodology The certification assessment was conducted between 7, 8 and 9 December 2015 as per the assessment pro-gram below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rhein-land 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 possible to carry out both field and document assessments of all estates and the mill within the time frame without com-promising the integrity of the assessment in anyway. All 2 estate and 1 mill were visited and the assessment team carried out field and document assessments 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 certification assessment agenda is as explained below.

Date Time Auditor Area / Department / Process / Function

6-12-15 14.50 All Travel to Pangkalan Bun with Kalstar

16.35 All Arrival of auditors at Pangkalan Bun and stay in Pangkalan Bun

7-12-15 08.00 All Opening Meeting

08.30 A, B, D Document review (legal, land title, HGU, laws, timebound plan, replanting pro-gramme, labour, environmental monitoring and measurement, health and safety, SOPs for best agriculture practices and RSPO Supply Chain)

08.30 C Stakeholder consultation with relevant authorities at Kabupaten Kotawaringin Barat

12.00 All Break and Lunch

14.00 All Continue morning agenda

17.00 All End of day 1 audit

8-12-15 08.00 B, D Suayap Estate:

Field work inspection: IPM, spraying, fertiliser, harvesting, riparian/ buffer zone, HCV, boundary, road construction and maintenance, soil and water conservation, waste disposal, line-site, chemical storage, workshop, occupa-tional health and safety, interview with workers, and stakeholder consultation.

08.00 A, C Suayap Mill

• Palm Oil Mill Supply Chain (procedure, record keeping, training, FFB receiving, processing, sales of RSPO products, registration and claims)

• Site & facilities visit (water usage, production area, workshop, chemical room, bulky storage, waste water pond, hazardous waste storage, environmental management and monitoring, interview with workers and OSH).





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Date Time Auditor Area / Department / Process / Function


9-12-15 08.00 B, D Umpang Estate:

Field work inspection: IPM, spraying, fertiliser, harvesting, riparian/ buffer zone, zone, HCV, boundary, road construction and maintenance, soil and water conservation, waste disposal, line-site, chemical storage, workshop, occupa-tional health and safety, interview with workers, and stakeholder consultation.

08.00 A, C Audit to PT KSA – Natai Baru Mill




Team continue audit at PT KSA – Natai Baru Mill on 10-11 Dec 2015

12-12-15 08.00 All Outstanding issues and document review


13.00 All Auditor discussion and report preparation

15.00 All Closing meeting

17.00 All End of audit Note:

• Zaenal Abidin (as Lead Auditor - A) – Health and Safety, Social, Labour and Supply Chain

• Dwi Yana Hendrata (B) – Good Agriculture Practices and Legal

• Fourry Meilano (C) – Environment and HCV

• Langlang Tata Buana (D) – Environment and HCV

Major findings verifircation audit team:

Date Location Activities

08.08.2016 PT SSS meet-ing Room

Traveling from Jakarta to Pangkalan Bun By Trigana Air (9.15 to 10.20) Continue traveling to site. Opening meeting Company’s presentation : Document check End of 1st day verification

09.08.2016 Natai Mill

KSA estate Suayap Mill

Onsite audit verification Natai Mill Onsite audit verification KSA estate Lunch and Break Onsite audit verification Suayap Mill Continue audit verification KSA mill and estate End of 2nd day audit

10.08.2016 Suayap Estate Suayap KCP

Onsite verification PT Mitra Mendawai Estate Main Audit at KCP Suayap Lunch and Break Continue verification audit for PT Mitra Mendawai es-tate Continue RSPO SCCS for KCP Suayap Preparation for Closing meeting Closing meeting & Present findings End of Audit program

11.08.2016 Travel back to Jakarta by Trigana Air or Kalstar



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2.4 Stakeholder Consultation and Stakeholders Conta cted A wide range of stakeholders were contacted 4 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant palm oil sustainability issues. These included environmental in-terest groups, local government agencies and forestry authorities, social groups and workers’ unions etc. Stakeholder consultation took place in the form of meetings and interviews. Meetings with government agen-cies and NGOs were held in their respective premises within and near the estates and PT MMS - Suayap mill. In all the interviews and meetings the purpose of the audit was clarified at the outset followed by an evaluation of the relationship between the stakeholder and the company before discussions proceeded in accordance with relevant RSPO principles, criteria and indicators. See section 3.4 for stakeholder’s details and comments.

2.5 Date of Next Surveillance Visit The next surveillance visit is planned for July 2017.

3.0 ASSESSMENT FINDINGS 3.1 Summary of Findings

As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion for the mills and estates. The results for each indicator from each of the operational areas were evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO indicators in order to support the findings of the assessment team. There is 13 Major Non-conformities and 8 Minor Non-conformities identified during this assessment. Some are-as identified with potential areas for improvement has leaded into none Observation raised. Details for each Non-conformities and observations are given in section 3.2. Major findings raised by SGS, due to certification processed has been transferred to PT TUV Rheinland Indonesia, Following RSPO guidance for certification transferred, PT TUV Rheinland Indonesia conduct major findings verification audit only. Verification for all Ma-jor Non-conformities was conducted after period of 60 days from the assessment date. Minor Non-compliances and Observations will be followed up during the next Annual Surveillance Audit which is scheduled to be con-ducted within the period of twelve months after the RSPO approval of Main Assessment. RSPO P & C

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decis ion making.

Findings: There is a compilation of letters in and out of the estates and mill whereas most were shown to be re-quest of funding for the community or institutions. At present, record of information from stakeholders are managed under CSR department. There is also procedure titled Prosedur Pemberian Informasi Kepada Pihak Luar (SOP-LEGAL.GN-015) that arranges any request for information to be directly aimed through email, letter, telepon, fax, or personally request through the CBI group Headquarters in Pangkalan Bun. Sample of communication checked during assessment is request information from local NGO i.e. Jaringan Pemantau Independen Kehutanan Kalimantan Tengah (JPIK) dated on 10 July 2015 request environmental permit and HCV Assessment report of PT Sawit Mandiri Lestari (PT SML) – another sis-ter company of PT MMS. The letter is appropriate and clear using Bahasa. Records of request and relevant response maintained at SSMS dept. In regards of request from JPIK as above, SSMS dept has response and provide requested documents to JPIK as per letter dated on 22 July 2015. According to the transmittal note, the response has been received by JPIK on 26 July 2015. Records of requests and responses from stakeholder are available at PT.Mitra Mendawai Sejati (PT. MMS) sites, e.g. proposal from village around Suayap Estate. Compliance status: Full Compliance



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Criterion 1.2: Management documents are publicly av ailable, except where this is prevented by commercial confidentiality or where disclosure of i nformation would result in negative envi-ronmental or social outcomes.

Findings: The procedure to provide such documents to the public has been established and documented on SOP-CS.GN-05 (Prosedur Pemberian Informasi Kepada Pihak Luar). According to the procedure, such documents that possible to provided to the public as requested officially. Information includes in public accessible such as:

- Land title - Environmental impact assessment (AMDAL) - Hazardous waste report - Environmental monitoring report - CSR report - Standard Operating Procedure(s) including negotiation procedure - Land title (HGU) - Pollution Prevention and Reduction Plans - Continual improvement plans - Public summary of certification assessment report - Human Rights Policy

The procedure requires that financial statement and other commercial data and information shall be closed under regulation # 14 year 2008. Information related location existence of RTE species might be secret in order to avoid unauthorized trade and hunt of the RTE species. Compliance status: Full Compliance

Criterion 1.3. : Growers and millers commit to eth ical conduct in all business operations and transactions

Findings: The code of ethical conduct and integrity has been established and documented as per April 2015. The policy has been signed by senior management of the company. The policy consists of 5 section cover to all of operation and transaction including bribery etc. The policy has been communicated to all manage-ment level of the organization including estate and mill manager. Compliance status: Full Compliance

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

Findings: PT. MMS has complied with legal requirements. Evidence of compliance e.g. :

• Location permits based on decree of Head of West Kotawaringin regency # 472.480.42/BPN/VI/2003 for 10,000 ha.

• Location permits based on decree of Head of West Kotawaringin regency #228.480.42/BPN/III/2004 for 7,500 ha.

• Location permits based on decree of Head of West Kotawaringin regency #229.480.42/BPN/III/2004 for 10,500 ha.

• Plantation permits based on decree of Head of West Kotawaringin regency # EKBANG/525.60.26/132/V/2004 for 10,000 ha palm oil plantations and 30 ton per hour palm oil mills.

• Plantation permits based on decree of Head of West Kotawaringin regency # 525/242/EK for 8,921.38 ha palm oil plantations and 60 ton per hour palm oil mills.

• Machineries permits, e.g. : - Back Pressure Vessel permit # 94.DTT.HIPK.K3.XII.2011 - Turbine permit # 96.DTT.HIPK.K3. I.2011



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- Pressure Vessel permit # 98.DTT.HIPK.K3.XII.2012 - Electricity installation permit # 97.DTT.HIPK.K3.I.2012 - Steam boiler permit # KU.1524.DTT.HIPK.K3.IX.2011 - Sterilizer 2 permit # 93.DTT.HIPK.K3.XII.2011 - Sterilizer I permit # BU.95.DTT.HIPK.K3.IX.2011

However, during the document review found that the genset permits has expired. Documented information regarding legal requirement is available and Ms. Debi is the person who in charge to update and monitored the implementation on legal requirement. Documented legal require-ment available on Identification and evaluation on legal requirements (Identifikasi dan Evaluasi Pera-turan Perundang – undangan), latest updated on 06 December 2015 The company conducting internal audit to monitored the implementation on legal requirement. Records on internal audit available on Identification and evaluation on legal requirements (Identifikasi dan Eval-uasi Peraturan Perundang – undangan), lates updated on 06 December 2015. Based on the docu-ment, all legal requirements are well implement. The incharge person will be monitored the updating for legal requirement twice a year by searching on the internet, information for authorities and stakeholder. Compliance status: Non Compliance Major CAR # 1

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

Findings: PT. MMS already have HGU, based on :

• HGU Decree # 35/2007 with certificate # 45 for 5.992,07 ha • HGU Decree # 36/2007 with certificate # 46 for 2.999,31 h

The company has established and documented the procedure for maintaining the legal boundaries. The procedure available on SOP Maintenance of plantation legal boundaries (SOP Pemeliharaan patok legal tata batas perkebunan) #SOP – EHS.GN – 035. During site examination to the location of legal boundaries (“patok HGU”), observed that such boundary pole is not available on site i.e: boundary pole at B13 of Suayap Estate (S 2°13’24.26” ; E111°41’10.20”). The company has given a fair compensation to the previous owner based on their agreement. Records of land compensation available at the leal department – head office, e.g.: Records of land conflict reso-lution is available on Statement on Release of Land Rights (Surat Pernyataan Pelepasan Hak atas Tanah), e.g.: Statement on Release of Land Rights document on 2008 PT. Mitra Mendawai Sejati VII C for 82.61 ha with 10 owner at Umpan Village, Arut Selatan Sub District, West Kotawaringin Diistrict with compensation 123,356,750. There were no conflicts at PT. MMS. PT. MMS already released the land (as explained above). No dis-pute at PT. MMS during the assessment. However the company has a documented participatory maps with scale 1 : 80,000 During assessment based on interview, field visit and document checks, no evidence that palm oil op-erations have instigated violence. Compliance status: Full Compliance Major CAR # 2

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

Findings: Map of appropriate scale showing extent of recognized legal, customary or user rights (C 2.2, 7.5 and 7.6), are developed through participatory mapping involving affected parties (including neighboring communities where applicable, and relevant authorities). Copies of negotiated agreements detailing the process of free, prior and informed consent (FPIC) (C 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence that a plan has been developed through consultation and discussion with all affected

groups in the communities, and that information has been provided to all affected groups, including



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information on the steps that shall be taken to involve them in decision making; b) Evidence that the company has respected communities’ decisions to give or withhold their consent

to the operation at the time that this decision was taken; c) Evidence that the legal, economic, environmental and social implications for permitting operations

on their land have been understood and accepted by affected communities, including the implica-tions for the legal status of their land at the expiry of the company’s title, concession or lease on the land.

Copies of negotiation agreement with FPIC process are available at Statement on Release of Land Rights (Surat Pernyataan Pelepasan Hak atas Tanah), e.g.: Statement on Release of Land Rights doc-ument on 2008 PT. Mitra Mendawai Sejati VII C for 82.61 ha with 10 owner at Umpan village, South Arut Sub District, West Kotawaringin District with compensation 123,356,750 IDR. Relevant information using bahasa that understood by people in Kaliamantan are available. Communities are represented through institutions or representatives of their own choosing, including legal counsel, evidence of it e.g. Statement on Release of Land Rights (Surat Pernyataan Pelepasan Hak atas Tanah), for examples: Pelepasan hak atas tanah atas nama Ardiansyah for 2.28 ha. Compliance status: Full Compliance

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

Findings: The company has a business management plan, the document available budget recapitulations, e.g.: for 2015 the company budget for : • Mature area : 8,388.19 ha • Production : 226,824 MT FFB • Cost : 113.59 IDR/ K FFB Not applicable, due to no replanting activities for next 5 years where the oldest palm were planted on 2005. Compliance status: Full Compliance

Criterion 4.1: Operating procedures are appropriate ly documented and consistently implement-ed and monitored.

Findings: PT. MMS has procedures for plantation management covering land clearing, maintenance, harvesting and FFB transportation, In SOP upkeep not available SOP maintenance of roads to Ensure smooth transport FFB. Procedures for Estate as follows:

1. Pembukaan lahan (Land Clearing) No. SOP – SPD.GN – 03 2. Penanaman Kelapa Sawit (Planting oil palm) No.SOP - KBN.GN - 001 3. Pembibitan Kalapa Sawit (Nursery of oil palm) No.SOP - KBN.GN - 002 4. Pemupukan Kelapa Sawit (Fertilization of oil palm) No.SOP - KBN.GN - 003 5. Pengendalian gulma kelapa sawit (Weed control of oil palm) No.SOP - KBN.GN. - 004 6. Pengelolaan air (Water Management) No.SOP - KBN.GN. - 005 7. Panen Kelapa Sawit (Harvesting oil palm) No.SOP - KBN.GN - 006 8. Pengendalian Hama dan Penyakit (Pest and disease of oil palm) No.SOP - KBN.GN - 007 9. Administrasi Kelapa Sawit (Administration of oil palm) No.SOP - KBN.GN - 008 10. Peremajaan (Replanting) No.SOP - KBN.GN - 009 11. Pekerjaan GIS (Working GIS) No.SOP - KBN.GN - 010 12. Input and Update Data EPMS-FIELD Operation No.SOP - KBN.GN – 011 13. Pengiriman TBS dari Estate ke PKS (Delivery FFB from estate to Mill) No.SOP - KBN.GN - 012

Procedures for Mill as follows: 1. Power Supply No.SOP – PKS.GN – 001 2. Pengoperasian Boiler (Boiler operation) No.SOP – PKS.GN – 002 3. Penerimaan TBS (FFB received) No.SOP – PKS.GN – 003



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4. Processing TBS (FFB processing) No.SOP – PKS.GN – 004 5. Processing IKS (PK processing) No.SOP – PKS.GN – 005 6. Processing CPO (CPO processing) No.SOP – PKS.GN – 006 7. Pengelolaan Limbah (Waste management) No.SOP – PKS.GN – 007 8. Water Treatment No.SOP – PKS.GN – 008 9. Analisa Limbah Cair (Analysis of liquid waste) No.SOP – PKS.GN – 009 10. Analisa Mutu TBS (analysis of FFB quality) No.SOP – PKS.GN – 010 11. Pengontrolan Oil Losses (Control of oil losses) No.SOP – PKS.GN – 011 12. Pengontrolan Kernel Losses (Control of kernel losses) No.SOP – PKS.GN – 012 13. Penentuan Hasil Produksi Palm Product (Determination of production palm) No.SOP –

PKS.GN – 013 14. Analisa Mutu Palm Produk (Analysis of production palm quality) No.SOP – PKS.GN – 014 15. Maintenance No.SOP – PKS.GN – 016 16. Pengiriman Palm Product (Dispatch of palm product) No.SOP – PKS.GN – 017 17. Administrasi PKS (Mill administration) No.SOP – PKS.GN – 018 18. Cyclone No. SOP – PKS.GN – 019 19. Supply Chain No.SOP – PKS.GN – 020

Pencucian Storage Tank (Storage tank cleaning) No.SOP – PKS.GN – 021. List of SOPs are available and for plantation SOPs effective from January 2015. All SOPs written in Bahasa and readable by all level workers. Training regarding SOPs are conducted to the direct work-ers by Assistant and mandore level. Records of training are available, e.g. :

• Minutes of Meeting of Manuring socialization to the 12 manuring workers at 04 Nov 2015. • Minutes of Meeting of Spraying socialization to the 5 spraying workers at 03 Nov 2015. • Minutes of Meeting of Harvesting socialization to the 33 harvester at 19 Sept 2015.

To control the implementation of SOPs, the PT. MMS conducted internal audit. Internal audit conduct-ed once a years, last internal audit conducted at 17 Nov 2015 by Suprastyo as a Lead auditor, with Nopriandi, Agus Darmanto, Wahyu Listyaningrum as a team members. Based on the internal audit re-ports there were 9 non comformity. Records of monitoring and action taken are available at Matrik NCR Audit Internal EHS. Based on the reports of Matrik NCR Audit Internal Peiode II – 2014 there were 90 NCR with the action taken. PT MMS has procedure FFB received both of the inti and out growers No.SOP-PKS.GN-003. Records on origins of out growers are available in the daily receipt of fresh fruit bunch (FFB). The list of all thrd-party sourced FFB is detailed in Data Penerimaan TBS Pihak kee-III for PKS Suayap. Detailed on daily basis per month e.g. MUA HHY, MUA KUR, MUA TKJ, MUA MJD, MUA ASM, PT UMEJKAH SARI, MUA YMW, PT GM, MUA RUS, etc. furthermore, daily and summary record is de-tailed in the Data Penerimaan TBS Phak Ke III PKS Suayap e.g. MUA HHY 94,850 ton, PT GM 17,43 ton, and MUA YMW 2,6 ton. Compliance status:Full Compliance

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

Findings: SOP for manuring is available with SOP # SOP – KBN.GN – 003. The SOP explain the manuring activ-ities, including the type of fertilizers and the suitable conditions for manurin activities, where base on the SOPs the manuring activities conducted during the rainfalls between 60 – 300 mm/month. Observed to records of fertilizers applications, there were application of MOP, RP and HGFB during July, August, and Sept. Based on the monitorin of rainfall on those month the rainfalls are less than 60 mm/month. No fertilizers applications during the field visit. However based on the interview, the manuring workers have a good understanding according to the fertilizers applications. Records available at programs and realization oil palm fertilizers application 2015. Procedure for soil sampling unit R&D departement (SOP-RND.GN-031), and for foliar sampling availa-ble on Procedure leaf sampling unit for fertilizers recomendation (SOP-RND.GN-002). Records of fertilizers input are available and maintained. Records available at programs and realization oil palm fertilizers application (rencana dan realisasi aplikasi pemupukan kelapa sawit) 2015, e.g.: Suayap Estate on 2015 already applied 4,519,340 kg fertilizers whis is 80.66% achievement for their plan. Periodic tissue and soil sampling are conducted by the company. Records for tissue and soil sampling



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analysis are available, e.g.: • Certificate analysis #111/LAB.02/INT/VII/2015 for soil analysis at Suayap Estate • Certificate analysis #222/LAB.01/INT/VI/2015 for foliar analysis at Suayap Estate. During the field visit, the company uses the EFB as a mulching on the plantation areas. Records of EFB application available on EFB application reports (Laporan jangkos), e.g.:at block 1 Umpang Estate on April 2015 EFB applied on 1.99 ha. Compliance status: Full Compliance

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

Findings: The company has a soil map with scale 1:90,000. Based on the soil maps, the soil type of the company areas are : • Dysrtopepts Tropudults Paleudults • Paleudults Tropudults Tropaquents • Tropudults Dystropepts • Tropudults Paleudults Tropohumults The company has a strategic on planting the oil palm on the slopes areas, where :

• Contour terrace for areas with slope 15% – 25% • Individual terrace and pit for areas with slope 25% - 40%.

The company has a road maintenance programs. The road maintenance programs available at budget recapitulations 2015. Road maintenance programs are included main road, collection road and bound-aries roads. No peat soil at the company areas. Base on this condition, company has not obligation to fulfill monitor-ing of subsidence of peat soils. Compliance status: Full Compliance

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

Findings:

Water management plans is not available. This is raised as Minor CAR # 03

The riparian of the rivers are maintained. For the first period there the company will set up 1 row of palm oil will be protect as a buffer zone, which are no chemicals activities at the areas and at the re-planting period the riparian will be kept and no plantations activities at the areas.

SOP for Riparian Management (Lake/Reservoir or Spring Other) (SOP-EHS.GN-027) has been estab-lished.

PT.MMS has marked riparian zone to restrict chemical applications such as spraying and fertilizing.

Company conduct appropriate treatment of mill effluent to required levels and regular monitoring of dis-charge quality, especially BOD in compliance with national regulations, as observed on Laporan Hasil Pengujian AAS.LHP.VI.2015.0448 sampled 16 Juni 2015 with BOD 1083 which is below the limit of 5000 mg/L. Similar monitoring conducted on 8 September 2015 reported in AAS.LHP.X.2015.0827 with BOD 1801.3 still below the threshold level of 5000 mg/L.

Monitoring of water usage in mills can bee observed on Suayap Mill data: September 2015 in Laporan Bulanan Laboratorium 1.92 m3/ton TBS. November 1.82 M3/ton TBS.

Compliance status: Non Compliance Minor CAR # 03

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



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Findings: PT. MMS has a monthly report of plant pests and diseases (P&D) and pollination (01/LAP-BUL HPT/MMS-SYE/6/2015. The document contained a census report for pest caterpillar, Oryctes, termites and rot diseases spear base with a mild attack rate, so there is no control in the next month. PT. MMS - Suayap Estate has reported observations and pest control according to recapitulation and control pests and rodents tirathaba # F-RND.GN.029.R0. However during the document review Laporan bulanan HPT at Suayap Estate on June 2015 shows that rat attacked for most of afdeling Alfa are more than 5%. Intervention activities started on July 2015 – Oct 2015 using prorodent. However based on the last intervention activities shows that the bait eaten more than 20% and no bait placement and census conducted for control this conditions. Suayap estate (SYE) this is raised as noncomfirmity, Major CAR # 04 The company conducting training regarding IPM activity regularly. Rocords of training available at the learning institute department. Compliance status: Non Compliance Major CAR # 04

Criterion 4.6: Agrochemicals are used in a way that does not endanger health or the environ-ment. There is no prophylactic use of pesticides, e xcept in specific situations identified in na-tional Best Practice guidelines. Where agrochemical s are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternativ es, and this is documented.

Findings: PT. MMS-Suayap E company has been using type of selective pesticide for pests and weeds of oil palm.

No Trademark Active ingredients Class Unit

Permit

1 Trendy 20 WG @ 250 gram/Bag Metil Metsulfuron III Kg Yes

2 Dejavu 288 EC Floroksipir Metil Hep-til Ester

III Ltr Yes

3 Paraquat Diklorida 276 g/l @ 20 Ltr/Can

Paraquat Diklorida II Ltr Yes

4 Paraquat Diklorida 276 g/l @ 200 Ltr/Can

Paraquat Diklorida II Ltr Yes

5 Metil Metsulfuron @ 250 gram/Bag

Metil Metsulfuron III Kg Yes

6 Regent 50 SC @ 500 ml/Btl Fipronil II Kg Yes

7 Thuricide HP @ 500 gr/Bag Bacillus Thuringensis III Kg Yes

8 Marshal 5 GR @ 1 Kg/Bag Karbosulfan II Ltr Yes

9 Decis 25 EC @ 1 liter/Btl Deltametrin II Ltr Yes

10

Benlox 50 WP @ 250 gr/Bag Binomil IV Kg Yes

However, during audit at R&D, SOP for justification on pesticides used is not available. This is raised as non conformity Major CAR # 05 was given . The Company has recorded use of pesticide, records of LD50 monitoring available on Pestcides toxicity records, e.g. UPE. Trendy (Metil Metsulfuron ) used on Nov 2014 = 3.8 kg) IPM implementation is combining a variety of techniques covering detection or census, mechanical con-trol, use of biological control agents. Chemical control is the last option. The company has a plan on minimizin pesticides use for controlling the pest and diseases, e.g : using dipel on larva phase of oryctes and prorodent (from dirt snakes) for rat control.



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The company used the pesticides that allowed by the government, e.g.: trendy with registration number # RI.01030120072693 The company has carried out limited pesticide training, records of training available at learning institute department. Based on the records the latest training on pesticides handling conducted on 16 Septem-ber 2015 with 42 participants. During the site visit, shows that PT.MMS has kept the pesticides at the permanent storage that equipped with PPE, emergency eye wash and showers and other emergency responds procedure. During the field visit and interview the spraying teams at Umpang Estates shows that spraying activities using a proven method, e.g.: using an appropriate PPE, consider the wind direction in spraying activi-ties. The company not using the aerial agrochemicals. During the field visit and interview the spraying teams at Umpang Estates shows that employee has knowledge and skill on handling pesticides. During the site visit, show that all pesticides containers and hazardous waste are kept the registered hazardous waste storage. During the audit to the polibun central, show there were no systems to monitor the mechanism to en-sure the workers get the specific annual medical check up. Major CAR # 06 was raised. The company has mechanism to check no pregnant and breast feeding workers on pesticides. How-ever the mechanism not effective to ensure that no pregnant and breast feeding workers on pesticides. Major CAR # 07 was raised. Compliance status: Non Compliance Major CAR # 05 Major CAR # 06 Major CAR # 07

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

Findings: The company has a “Kebijakan Lingkungan, K3” signed by MR. Rimbun Situmorang (Presdir) dated 1 May 2011. The policy has been communicated to all employees through morning briefing and the in-formation board. The company has conducted risk assessment for all operations, last updated in Mar 2014. Procedure for risk management, environmental, health and safety (EHS-002) is available. The company has working instruction for working safety on harvesting activities. However the working instruction not clearly describes the position of harvester, e.g. harvester position on palm harvesting near the drainage. This is raised as Major CAR # 08 . PT. MMS has plan and training records related to pesticides. Actual training on 22.12.2014 with total 100 participants (Umpang and Suayap Estate). Simulation of fire fighting in the Suayap mill dated 19.08.2015 (61 participants) The company has Safety Committee (P2K3) approved by Disnakertrans Kotawaringin Barat # KEP-1806.DDT.HIPK-K3.XI.2013 dated 4 Nov 2013. Job descriptions of P2K3 and emergency team are available. Regular Meeting of P2K3 is conducted, last meeting dated 28 March 2014 with agenda: sign board of K3L and socialization of P2K3 team. During the site visit, the emergency responds procedure available in appropriate language and picture. The emergency responds procedure placed in the placed that need it, such as : chemicals storage, and hazardous waste storage. BPJS Kesehatan does not fully cover for all employees and their families (max 5 people), based on reg-istration of BPJS Kesehatan at Umpang Estate, the company only covered max 2 people (worker and his wife). Minor CAR # 09 was raised. The company has used Lost Time Accident metrics for the measurement of occupational injuries Compliance Stats: Non Compliance Major CAR # 08 Minor CAR # 09



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

Findings: Training plan 2015 is available. Some trainings was conducted, for examples: harvestesting training dated 6 Jan 2015 (18 participants), first aider, Ahli K3 Umum, mandatory trainings (Pesawat angkat-angkut, limited pesticide use, fire fighter, K3 electrical) . During the audit to the T&D found that not all training records of spraying workers for limited pesticides handling are available. Minor CAR # 10 was raised Compliance status: Non Compliance Minor CAR # 10

Criterion 5.1: Aspects of plantation and mill manag ement, including replanting, that have environ-mental impacts are identified, and plans to mitigat e the negative impacts and promote the positive ones are made, implemented and monitored, to demons trate continuous improvement.

Findings: Environmental impacts assessment (EIA) document is available and proofed by Head of Regency Ko-tawaringin Barat as letter decree #05 year 2008 dated on 20 February 2008 covered to the total area 10 000 ha as per permit on location site number ekbang/525.26/132/V/2004 dated on 10 May 2004 and CPO mill with the capacity 45 ton FFB per hour. The EIA has follow to all relevant Indonesian regulation such as environmental law # 23 year 1997 and government regulation # 27 year 1999 regarding EIA. The EIA identified all environmental aspects during pre-construction, construction, operation and post-operation. It is including building new roads, putting drainage and irrigation system, management of mill effluent, clearing of remaining natural vegetation, and management pest and diseases. However, the assessment does not cover to the replanting activities. Recommendation was given since replanting would be done on upcoming 2025. The organisation is also implement environmental management system according to ISO 14001:2004. According to the EMS system, the organisation is always update their environmental aspects for every changing of the company operation and activities such as building new road, expansion of The management plan as determined on RKL/RPL documents has been implemented and monitored. The company is also implements Environmental Management System (EMS) to ensure effective measures to mitigate environmental impacts of mostly identified significant environmental aspects. Ac-cording to EMS system procedure, for every changes of the current practices are always initially evalu-ating environmental aspect includes measures to mitigate the significant environmental impact. The regular reports of implementation environmental management plan (RPL) and monitoring report of environmental monitoring plan (RKL) is remains consistently implemented and reported to government authorities for every semester. Verified during surveillance audit the RKL/RPL period report on semes-ter II 2014 and semester I 2015. The responsible management team to the environmental management plan has been established i.e. sustainability team. The environmental management plan (RKL) and monitoring (RPL) are adaptive to operational changes. According to the monitoring reports during period 2014 and 2015 noted that the company is not only implement the environmental management plan as required by RPKL/RPL documents as approved by government authority previously. The additional management plan and monitoring protocol due to the operational changes for instance:

- Implementation and monitoring of land application of POME. - Implementation and monitoring of hazardous waste management.\ - Determination of buffer zone area as high conservation areas

Compliance status: Full Compliance



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Criterion 5.2: The status of rare, threatened or en dangered species (ERTs) and high conserva-tion value habitats, if any, that exist in the plan tation or that could be affected by plantation or mill management, shall be identified and their cons ervation taken into account in management plans and operations.

Findings: High Conservation Value assessment has been performed on last 2013 by Sonokeling Akreditas Nusantara where identified such areas having high conservation values 1.1 ; 1.2 ; 1.3 ; 1.4 ; 4.1 ; 4.2 ; 5 coverered in total 1 361.64 ha distributed within 8 forested areas, 8 hilly areas and 8 water sources. In-formation related ERT species and its habitat have been identified. HCV management plan has been established. However, the implementation of the management plan is not yet started properly such as monitoring RTE species, periodic monitoring on biodiversity, permanent boundaries of such HCV areas etc. During main assessment mentioned that the company goes to contract agreement with Mulawarman University in order to monitoring of HCV including RTE species (as per agreement # 155/LGL/QHSE/SSMS.G-Unmul/XI/2015 dated on 13 November 2015). The monitoring protocol would be established for twice a year and it will be started in upcoming February 2016. Based on the Letter from Director of PT SSS No 004/DIR-SK/SSS-IN/I/2014 dated 3 January 2014, all estate (including Natai Baru estate) shall have specific and trained personnel for HCV. Interview re-vealed that education on HCV is conducted during informal briefing in the morning.. HCV management plan has been established. However, the implementation of the management plan is not yet started properly such as monitoring RTE species, periodic monitoring on biodiversity, permanent boundaries of such HCV areas etc.

During main assessment mentioned that the company goes to contract agreement with Mulawarman University in order to monitoring of HCV including RTE species (as per agreement # 155/LGL/QHSE/SSMS.G-Unmul/XI/2015 dated on 13 November 2015). The monitoring protocol would be established for twice a year and it will be started in upcoming February 2016., Minor CAR # 11 was raised.

For the time being, no HCV set aside with existing rights of local communities

Compliance status: Non Compliance Minor CAR # 11

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

Findings: Documents related waste products and sources pollution were identified on AMDAL/RKL/RPL (EIA) documents. Due the company also implement integrated EMS and OHSAS management system. This included all waste produced from estates and mill’s operation. Hazardous waste collected at authorized hazardous waste temporary disposal before delivered to PT Maju. This 3rd party company is authorized transporter and collector of hazardous waste. This is covered under ISO14001 on the objective, target, and program to reduce waste by utilizing emp-ty fruit bunch, and fiber for boiler fuel. Compliance status: Full Compliance

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

Findings: There is a Energy Management Team which is assigned for each mill with the purpose to improve en-ergy efficiency within the mills of the company. All elements of energy has been monitored and plan is underway to ensure utilization of the team. Use of Shell/ton CPO: 0.56 in 2015, use of fiber/CPO: 0.48 in 2015.



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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: There is no replanting yet so there is no documentation on whether burning activities was conducted. But the company has policy to not prepare land by burning as stated in the SOP Penanggulangan Ke-bakaran di Lahan Perkebunan SOP-EHS.GN-013. Compliance status: Full Compliance

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

Findings: All of gaseous emissions, particulate/soot emissions and effluent has been periodically monitored and re-ported to government agencies per semester. This is identified through document titled Inventarisasi Sumber Emisi (Pembakaran cangkang and fi-ber(Boiler), Pembakaran Solar (Power generator, Kendaraan, alat berat), Limbah Cair (Kolam IPAL)). However, plans to reduce or minimise significant pollutants and GHG emissions have not been developed. Major CAR # 12 was raised. This is implemented as part of the RKL-RPL monitoring documentation every 6 months. Activities produc-ing emission include Boiler (NO2, SO2, NH3, etc), Genset (NO2, SO2, CO, etc), Vehicle (Dump truck, Wheel Loader, Skid Loader). However, The company has not been able to appropriately fill in the Palm GHG calculated which is the RSPO-endorsed tools to assess, monitor, and report GHG emissions. Correspondence has been under-taken with the RSPO to settle this issue. Minor CAR # 13 was raised Compliance status: Non Compliance Major CAR # 12 Minor CAR # 13 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 positive ones are made, implemented and monitored, to demonstrate continuous improvement. Findings: Documented social impact assessment is available. SIA was conducted by PT Sonokeling Akreditasi Nusantara dated On 24-30 July 2012. Social impact assessment survey was conducted at Umpang Vil-lage of Arut Selatan Sub-district. Evidence in the form of attendance list has been provided consisting of affected parties such as villagers, head of village, religious head, and government institution repre-sentative. SIA referred to Rapid Rural Appraisal (RRA) combined with depth interview, focus group dis-cussion and observation. SIA has covered all the potential impact factors, including: • Access and use rights; • Economic livelihoods (e.g. paid employment) and working conditions; • Subsistence activities; • Cultural and religious values; • Health and education facilities; • Other community values, resulting from changes such as improved transport /communication or arrival of substantial migrant labour force. There were records of the participatory assessment such as attendance sheet and questionnaire. The affected parties able to express their views through their own representative institutions (head of village, public figure, religious head, etc) during the identification of impacts review of findings and planning for



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mitigation. PT MMS has established CSR programs 2016 under PT SSS, for examples:

- Culture and social issues: poor, cheap market, MTQ, religious celebration, pesparawi, etc. - Education: education infrastructure, scholarship, internship, etc. - Health: counseling, mass circumcision, toilet revitalization, nutrient supplement, etc. - Infrastructure: road, bridge, religious place, sport facilities, smart house, Posyandu (integrated

health service post) revitalization. - Environmental: planting million tree, conservation area, fire community awareness, Tanjung

Keluang rehabilitation. - Community development: training, equipment aid, and capital aid.

The programs are as a part of plans for avoidance or mitigation of negative impacts and promotion of the positive ones. But the CSR programs are not clear developed in consultation with the affected par-ties and documented. Major CAR # 14 was raised No available evidence that the plans for avoidance or mitigation of negative impacts and promotion of the positive ones have been reviewed a minimum once every two years and the review has included the participation of affected parties. Minor CAR # 15 was raised PT MMS has established scheme smallholder to improve their income and provide business opportuni-ty (plan= 1080 ha). Progress of area development in Nov 2015 was planted 117.78 ha. Compliance status: Non Compliance Major CAR # 14 Minor CAR # 15

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

Findings: The organization has established SOP Komunikasi, Partisipasi dan Konsultasi Lingkungan dan K3 (SOP-EHS.GN-006) rev 02 last revised 10 April 2012 which outlines the procedure of consultation and communication. The procedure has determined open and transparent methods for communication and consultation between the company, local communities and other affected or interested parties. The document specifies the objectives of the document that is to manage, mechanism, communicate, (in-ternal and external), participation, health and safety, and environment (SMK3) so that it can be under-stood by stakeholders effectively. Communication and consultation is conducted by email, guest book, telephone, face-face, letter, fax, suggestion box, bulletin, etc. SOP Komunikasi, Partisipasi dan Konsultasi Lingkungan dan K3 (SOP-EHS.GN-006) stated that the estate manager is responsible to receive and compose complaint expressed by the community and co-ordinating with the Community Development Officer (CDO) in head office of Pangkalan Bun to discuss the respond over the consultation and communication with the affected parties (local community, smallholders and government) regarding environmental and social issues. The affected parties have been made aware and have access to the person in charge. Monthly reports were available and veri-fied. Stakeholder list are available. The list updated in November 2015 listed all relevant stakeholders identi-fied within Indonesia especially Kalimantan Tengah Region covering the relevant government agencies, relevant NGOs (both social and environmental), neighbouring estates, local communities and contrac-tors, women group, that have direct and indirect impact with the plantation operations of the company. All action taken following the communication and consultation with the local communities as well as other relevant stakeholder groups are responded and recorded in the external communication logbook detailing the following:

• Issues raised by the stakeholders; • Details of the action that have been taken following issues raised by the stakeholders; • Date of the action taken; • Appointed responsible person to handle each of the communications.

Stakeholder consultation conducted prior to the audit evidenced no feedback received from the local communities. This is further verified during the audit whereby the stakeholders have received notifica-tion from SGS and they are aware of the audit and that no issues raised against the company’s opera-tions. Some aspirations for local communities have been responded by the company, for examples: aspira-tion from local community (2015) such as request for teacher, clean water, road maintenance, etc. They



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They were responded and followed up on during 2015 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: SOP komunikasi, partisipasi dan konsultasi lingkungan dan K3 (SOP-EHS.GN-006) has ensured ano-nymity of complainants and whistleblowers. The communication and consultation with the community is described as following: • Analyzing the suggestion, advise complaint or even demand of the affected parties which needs

immediate discussion and handle. • Determining company policy over the suggestion, advise, complaint or demand of the affected par-

ties. • Coordinating with the affected parties to compose assembly schedule in order to open communica-

tion and consultation route. • Informing the company policy to the affected parties and discussing it together with the community. • Analyzing and conclusion the discussion materials. It will be then informed to the company man-

agement. • Conducting socialization to follow up the result of discussion with the affected parties. The company has provided Guest Book to stakeholder complaints if the stakeholder s submitted aspira-tion/dispute verbally including the company’s response. Some aspirations for local communities have been responded by the company, for examples: aspira-tion from local community (2015) such as request for teacher, clean water, road maintenance, etc. They They were responded and followed up on during 2015. 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 ena bles indigenous peoples, local communi-ties and other stakeholders to express their views through their own representative institutions. Findings: SOP for land acquisition (SOP-LEGAL.GN-001) dated on 15 June 2012 was available for identifying legal and customary rights and identifying people entitled to compensation. The procedure has de-scribed steps to identify people entitled to compensation as follows:

• Socialization Process • Negotiation Process

The process of identification until land acquisition is conducted by involving several parties such as pub-lic figures, custom figures, custom institution, village government, and National Land Agency. The process of compensation has been recorded. This is shown in the records of compensation and minutes of agreement. During the main assessment there was no conflict at PT. MMS. PT. MMS has already released the land. Record of the compensation was available on Statement on Release of Land Rights (Surat Pernyataan Pelepasan Hak atas Tanah), e.g. : Berkas Pelepasan Hak Atas Tanah PT. MMS, atas na-ma Ardiansyah seluas 2.28 ha. Compliance status: Full Compliance

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

Findings: Minimum wage for oil palm based on decree of Governor of Central Kalimantan Province # 40/2014 dated on 17 Oct 2014 stated that the province minimum wage for 2015 is IDR 2,103,941 or IDR 84.360/day. In 2016, according to decree of Governor of Central Kalimantan Province # 39/2015 dated



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on 14 October 2015 for minimum wage for Kabupaten Kotawaringin Barat is IDR 2,160,435. Actual minimum wage at PT MMS is in line with the regulation such as daily wage for temporary worker (PHL) 2015 is IDR 84,200/day based on present. Permanent temporar worker (PHT) wage is IDR 2,105,000/month according to Decree of Director # 0027/SSS-HRD/SK/I/2015. Some payment slip were verified, e.g: - Heldy Dwi (ISO administration-PHL), contract # 010/MMS-PKS/SPKK/IX/2015 dated on 01 Septem-

ber 2015, IDR 84,200/day, actual payment in November 2015= IDR 5,273,025 - Ponirin Sitorus (Compound-PHL), contract # 011/MMS-PKS/SPKK/IX/2015 dated on 08 Sep 2015,

IDR 84,200/day, actual payment in November 2015= IDR 2,260,770. - Eko Supriyadi (Compound-PHL), contract # 002/MMS-PKS/SPKK/I/2015 dated on 07 Jan 2015,

IDR 84,200/day, actual payment in November 2015= IDR 5,454,399 Interview with the human resource staff revealed that contracts were explained to the new employee or contract worker during the initial recruitment (induction day). The pay and conditions of employment clearly detailed in the employment or service contracts? PP in-cluded Working hours (Article 15), deductions (Article 38), overtime (Article 41), sickness (Article 43 and 48), holiday entitlement (Article 36), maternity leave (Article 33), reasons for dismissal (Article 21-31), and period of notice (Article 17-20). The contract has been prepared in Bahasa Indonesia language understood by the workers, explained carefully to workers by management officials, and signed by both the authorised signatory of the com-pany and employee, for examples: - Heldy Dwi (ISO administration-PHL), contract # 010/MMS-PKS/SPKK/IX/2015 dated on 01 Septem-

ber 2015, IDR 84,200/day, actual payment in November 2015= IDR 5,273,025 - Ponirin Sitorus (Compound-PHL), contract # 011/MMS-PKS/SPKK/IX/2015 dated on 08 Sep 2015,

IDR 84,200/day, actual payment in November 2015= IDR 2,260,770. - Eko Supriyadi (Compound-PHL), contract # 002/MMS-PKS/SPKK/I/2015 dated on 07 Jan 2015,

IDR 84,200/day, actual payment in November 2015= IDR 5,454,399. The pay received by the employee was consistent with the terms of the contract and the law. However the company regulation is not fully met related working hours. PP (Article 15) has stated that working hours are 40 hours/week and overtime will be applied in accordance with relevant regulation however based on interview with workers, there was a worker (Soimah – GA worker) at Suayap Mill has worked more than 40 hours/week but she has not been paid her overtime. Based on information from Head of Administration (KTU) and HR staff stated that the company previously applied premi for GA worker but it has been removed since 2013.Major CAR# 16 was raised. PT MMS has provided adequate medical (clinic) for all employees and their families. Besides that, the company has registered BPJS Ketenagakerjaan (labour insurance) for all employees and BPJS Kesehatan (health insurance) for their families (max 5 people). Some records of BPJS Kesehatan and Ketenagakerjaan were available and verified at at Umpang Estate, Suayap Estate and Suayap Mill. PT MMS has also provided adequate housing, mosque, sport hall, water supplies, school (play group, elementary school, junior high school, and high school-SMK). Observed at Suayap Mill, there were 21 units (126 doors) for workers housing. The company provides school bus for workers’ families to go to market every Sunday. Interview with women group stated the company made demonstrable efforts to monitor and improve workers’ access to adequate, sufficient and affordable food. Compliance status: Non Compliance Major CAR# 16 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 collec-tive bargaining are restricted under law, the emplo yer facilitates parallel means of independent and free association and bargaining for all such pe rsonnel. Findings: A statement of recognizing freedom of association has been issued by Head of HR and GA according to Internal Memo # 0001/CBI-HR/IM/I/2015 dated 02 January 2015. Peraturan Perusahaan (the company regulation) period 2013-2015 has been established and approved by Head of Dinas Tenaga Kerja dan Transmigrasi Kab. Kotawaringi Barat dated on 15 December 2013 valid until 14 December 2015. So that Peraturan Perusahaan has expired. The PP has been signed by both parties (the company and worker representative). PP has been com-municated to employees, for examples: Estate Polibun and Suayap Estate. The company and workers have established LKS Bipartite (Bipartite Cooperation Institution) and it has



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been registered to relevant authority however number of workers representative is not comparable with number of management representative (workers representative = 4 people and Management repre-sentative= 8 people). Besides that LKS Bipartite has not been represented by all estates and mills. Major CAR # 17 was raised. The company and workers have established LKS bipartite (bipartite cooperation institution) approved by SK Head of Dinas Tenaga Kerja dan Transmigrasi Kab. Kotawaringin Barat # KEP.008/DTT/HIP-HI/I/2014 dated on 3 Jan 2014. They has conducted meeting to discuss some labor issues, e.g: • LKS Bipartite meeting at Suayap Mill dated on 04 December 2015 (attended by 19 Participants) to

discuss SOP for grievance. • LKS Bipartite meeting at Head Office dated on 25 April 2014 (attended by 16 participants) : regard-

ing communication of PP, SOP for handling sexual harassment, and employee grievance. Compliance status: Non Compliance Major CAR # 17 Criterion 6.7: Children are not employed or exploit ed. Work by children is acceptable on family farms, under adult supervision, and when not interf ering with education programmes. Children are not exposed to hazardous working conditions. Findings: List of staffs and workers in September 2015 (Umpang, Suayap Estate and Mill) was presented and the youngest worker was born on 6 January 1996 (19 years old): Rahmad A/J (Maintenance-PHL). Compliance status: Full Compliance

Criterion 6.8: Any form of discrimination based on race, caste, national origin, religion, disabil-ity, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.

Findings: President Director has issued policy on manpower in each business unit affiliated with Citra Borneo In-dah Group # 0062/DIR-SK/CBI-IN/VI/2012, dated 18 June 2012. The policy of equal opportunities has been included in the point 1, the company shall treat all the employees regardless gender, tribes, reli-gion, race, and class to work and develop themselves and dedicate themselves in company. Besides that, PP (the company regulation) article 9 also included employees’ recruitment and placement. Race, religion, sex, and marital status of each employee were stated in the list of employees available as document for Human Resource Department. The policy has been socialized to all employees to not differentiate any business relation based on race, religion, sex, or origin. In the employment vacancy distributed by the organization, there is no differentiation between potential employee based on gender, religion, origin, or race. Based on List of employees (September 2015), some employees were from local communities (Suayap Village, Umpang Village etc). The workers were consisted of several ethnics (Java, Sunda, Bugis, Ba-tak, Melayu, etc) and religions (Moslem, Christian, Hindu, etc). The company has established SOP for employee recruitment and selection (SOP-PERS.GN-001 rev 1 dated on 01 June 2013) and SOP for promotion of position and grade (SOP-TND.GN-004 rev 03 dated on 07 Oct 2015. The procedure stated that for each applicant must be checked as follows:

• Staff level: administration, psycho test, technical test, interview and medical test. • Non Staff level (Region Office, Estate, Mill and Workshop): administration, technical test, inter-

view and medical test. • Permanent and Temporary Daily Worker level: administration and medical test.

Some records of recruitment were available and verified, for examples: medical test for Deby D (Staff HO), Rahmad (Maintenance – PHL), and Hardi Wijaya (Asisten Afdeling). The company has implemented promotion for employee based on skills, capabilities, qualities, for the jobs available, for example: Hardi Wijaya (Asisten Afdeling) to Asisten Kepala at Suayap Estate. Pro-motion record was available and verified such as Decree of Director. The company has established SOP Cuti, Ijin, dan Tunjangan Cuti Pekerja (SOP-PERS.GN-015 rev 1 dated on 01 Jan 2015) to describe mechanism of leave submission including reproductive rights for women workers. Besides that, The company regulation (PP period 2013-2015) has also determined policy on leave due to menstruation pain and maternity (Article 33 & 34). Interview with women group at Suayap Mill stated that the company gave leave due to menstruation pain and maternity for woman worker according to SOP and PP.



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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 d eveloped and applied.

Findings: The company has established SOP for Penanganan terhadap keluhan pelecehan seksual (SOP-PERS.GN-015 rev 0 dated Jun 2012) to handle sexual harassment complaint. Besides that, the com-pany has established policy on prevention of sexual harassment signed by President Director # 0062/DIR-SK/CBI-IN/VI/2012, dated 18 June 2012. According to the decree, company commits to im-plement regulation of district minimum wage standard and prohibits and punish entire forms of sexual harassment and criminality to anyone within company environment. This is informed to all personnel of the organization through the information board. Policy to prevent sexual harassment and violation has also been written on the company regulation for period of 2013 – 2015, specifically company regulation article 17 in term of work discipline. Interview with women group at Suayap Mill stated that there was no harassment or abuse in the work place. They knew mechanism of sexual harassment complaint according to the procedure and PP. The company has established SOP Penanganan Keluhan Karyawan (SOP-PERS.GN-017 rev 0 dated 01 August 2012) to determine specific grievance mechanism of the workforce. The procedure was communicated to all levels of the workforce on 25 July 2014. In addition, the company has provided suggestion box in front office (estate, mill and head office). Based on interview result with workers stat-ed that they prefer told to supervisor directly if they had grievance. Then the supervisor recorded and followed up their grievance according to the procedure. Compliance status: Full Compliance

Criterion 6.10: Growers and mills deal fairly and t ransparently with smallholders and other local businesses.

Findings: The company has transparently informed with smallholders regarding current and past prices paid for FFB. Current price for FFB was publicly available on Weighbridge so that the smallholder can know the FFB price. PT MMS have explained FFB pricing, and pricing mechanisms for FFB in Contractual Agreement of Scheme Smallholder signed by both parties (PT MMS and smallholder), for example: Contractual Agreement of Scheme Smalholder between MMS and Kelompok Tani Citra Mua Sejati (Nanga Mua Vil-lage Kec. Arut Utara) dated on 16/01/2013 was consisted of FFB pricing (65% smallholder, 30% opera-tional, 5% management Fee). Contractual Agreement of Scheme Smallholder between MMS and Kelompok Tani Citra Mua Sejati (Nanga Mua Village Kec. Arut Utara) dated on 16/01/2013 was fair, legal and transparent consisting of FFB pricing, and pricing mechanisms for FFB. The agreement has been signed by both parties. The FFB pricing is based on the price determined by West Kotawaringin District Plantation Agency and adjusted with the market condition in Central Kalimantan region and refer to the POM production cost and Agriculture Ministry Regulation Number 17/PERMENTAN/OT.140/2/2010. The Head of Commercial Department determined the FFB purchase price through document of Internal Memo Number referring to the regulation. PT MMS has determined monthly payment of FFB from smallholder according to the agreement. Pay-ment of FFB from smallholder for November 2015 was available. Compliance status: Full Compliance



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Criterion 6.11: Growers and millers contribute to l ocal sustainable development wherever appro-priate.

Findings: PT MMS has made CSR and Plasma programs to demonstrate contributions to local development. Plasma program was made based on the results of consultation with local communities. However the CSR programs are not clear developed in consultation with the affected parties and documented. See Indicator 6.1.3. The company was also routinely paying taxes to government to local development such as: land tax, vehicle tax, income tax. PT MMS has appointed Plasma Manager who has responsibility for managing scheme smallholder to improve smallholder productivity. According to the organizational chart, Plasma Manager is under re-sponsibility of FFB Purchasing Department. Compliance status: Full Compliance

Criterion 6.12: No forms of forced or trafficked la bour are used.

Findings: All workers and employee are formally contracted for work. When working overtime, the workers are supported by Overtime Letter (Surat Perintah Lembur) and paid based on the amount of overtime. There is no evidence of forced or trafficked labour used within the company. In employee payment slip has been included overtime. No contract substitution has occurred. A policy and procedure for special labour (temporary and migrant workers) was available according to SOP for employee recruitment and selection (SOP-PERS.GN-001 rev 1 dated on 01 June 2013). There are 4 migrant workers (COO, Regional Head, Plantation Advisor and Finance Controller) and they have complied with applicable legal, for examples: IMTA, VITAS, etc. Compliance Status: Full Compliance

Criterion 6.13: Growers and millers respect human r ights.

Findings: . PT MMS has established a policy to respect human rights that has been documented and communicat-ed to all levels of the workforce and operations including contracted third parties. The policy is titled Kebijakan social dan keberperanan komunitas point 6 stated the company policy to respect human rights. Compliance Status: Full Compliance Criterion 7.1: A comprehensive and participatory in dependent social and environmental impact assessment is undertaken prior to establishi ng new plantings or operations, or expand-ing existing ones, and the results incorporated int o planning, management and operations. Findings: Hectare statement of MMS showed that both estates are still conducting planting activities after January 2010. PT Mitra Mendawai Sejati supplied by Suayap Estate and Umpang Estate for Suayap Mill. The company itself becomes RSPO member on 18 April 2007 but has not yet had any of its mills certi-fied until 2013 for PT SSS. The data showed that Umpang Estate had conducted planting in 2010 (19.9 ha), 2011 (12.76 ha), and 2012 (26.95 ha). While for Suayap Estate, new planting is conducted in 2011 (13.73 ha). None of the new planting stated above are brought forward as NPP for RSPO. The only



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NPP submitted to RSPO was for Batu Kotam Estate amounting to 1,774.9 ha which is excluded from the current scope of main assessment. It is the obligation of any palm oil company to develop social and environment impact assessment (AMDAL) during the legal process of oil palm mill and estate development. This has also been conduct-ed for PT MMS. The result of the SEIA is then incorporated into the social and environment manage-ment and monitoring plan (Rencana Pengelolaan Lingkungan & Rencana Pemantauan Lingkungan PT Mitra Mendawai Sejati 2007. There is also an update specifically on Social Impact Assessment which was conducted in 2013 by PT Sonokeling Akreditas Nusantara for all three companies and has been documented on three separate SIA reports. The consultant conducting the SEIA was from CV Mercy (PT MMS) where its member is accredited based on the regulation in Indonesia (Sertifikat AMDAL A, B, dan C). Impact assessment was conducted on the basis of positive and negative impact from external as well as internal of the company. The reports also include strategic recommendation on how to mitigate the negative impact as well as how to enhance the positive impact. Every SEIA has to involve stakeholder for it to be approved by the government. Compliance status: Full Compliance

Criterion 7.2: Soil surveys and topographic informa tion are used for site planning in the estab-lishment of new plantings, and the results are inco rporated into plans and operations.

Findings: The company has provided soil suitability map after the closing meeting. The company has shown records of soil survey where the survey was conducted by Bogor Soil Survey Team in cooperation with the company in 1999 on Rungun – Lalang-Rangda-Natai Raya with the total area of 14,730 ha. Information obtained includes soil type, as well as topography. Compliance status: Full Compliance

Criterion 7.3: New plantings since November 2005, h ave not replaced primary forest or any area required to maintain or enhance one or more High Co nservation Values.

Findings: There are planting conducted after November 2005 without prior and adequate HCV Assessment. The guidance of the 2013 P&C standard stated that such case warrants exclusion from the RSPO certifica-tion programme until an adequate HCV compensation plan has been developed and accepted by the RSPO. Interview and review of the correspondence as well as report on HCV, LUCA, as well as com-pensation program showed that the company (MMS and KSA) had submitted the self liability assess-ment as well as Land Use Change Analysis reports. Despite considerable efforts from the company, the the compensation plan has not yet been approved by RSPO. This is due to the long process of ap-proval with back and forth process. The audit team nevertheless, saw the eagerness and high effort of the company to finish the compensation process as soon as possible through its conservation program at one of the conservation area near the company area (Tanjung Keluang). Major CAR # 18 was raised See 7.3.1 as above Nevertheless, land use change analysis documentation has been conducted and prepared by a con-sultant to comply with this requirement. Land clearing and preparation as well as planting commencement is recorded monthly and is available for review during the audit. Action plan has not been developed that describes operational actions consequent to the findings of the the HCV assessment, and that references the grower’s relevant operational procedures. Nevertheless, the HCV Assessment document has recommended several actions to be conducted by the company to ensure protection and maintenance of the HCV area. This is further supported by the hiring of a con-sultant to research the values of all HCV found in the CBI group area to further develop action plan that can be implemented in the field. While the definitive action plan may not exist, there are signs and maps for each HCV within the estates showing that the staff in the field understood where the HCVs are are and does not disturb them. This is considered as HCV 5 but there does not seem to be any HCV 5 within the MMS area Compliance status: Non Compliance Major CAR # 18 was raised



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

Findings: The maps are available and provided to the audit team during the audit. The company has SOP titled Prosedur Pengelolaan Lahan Marginal Departemen R&D (SOP-RND.GN-RND.GN-030) as procedure to manage marginal land. There is evidence that there exists a plan to pro-tect such soil without incurring adverse impacts. Compliance status: Full Compliance Criterion 7.5: No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a document ed system that enables indigenous peo-ples, local communities and other stakeholders to e xpress their views through their own repre-sentative institutions. Findings: This is confirmed through interview with several randomly sampled villagers with lands being managed under the smallholder scheme of the company. All stated that there is no doubt in their mind when they decided to say ‘yes’ to the operation that the cooperation with the company would result in mutual benefit. Compliance status:. Full Compliance

Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquish-ment of rights, subject to their free, prior and in formed consent and negotiated agreement

Findings: Aside from AMDAL, there is HCV Assessment as well as social impact assessment conducted by third party. There is no HCV 6 which is for customary rights within the area of the company. Evidence shall be available that the affected communities and rights holders have access to information and advice that is independent of the project proponent, concerning the legal, economic, environmental and social implications of the proposed operations on their lands. Compliance status: Full Compliance

Criterion 7.7: Use of fire in the preparation of ne w plantings is avoided other than in specific situations, as identified in the ASEAN guidelines o r other regional best practice.

Findings: See Cr.5.5. Compliance status: Full Compliance

Criterion 7.8: New plantation developments are desi gned to minimise net greenhouse gas emis-sions.

Findings: The carbon stock of the proposed development area and major potential sources of emissions that may result directly from the development has not been identified and estimated. This related to effort of minimizing GHG emission on the proposed development area as applicable. Major CAR # 19 was raised. Interview with the PIC for green house gasses issue revealed that there is not yet any plan to minimize net GHG emissions which takes into account avoidance of land areas with HCS and or sequestration options. This related to effort of minimizing GHG emission on the proposed development area as applicable. Minor CAR # 20 was raised.



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Compliance status: Non Compliance Major CAR # 19 Minor CAR # 20

Criterion 8.1: Growers and millers regularly monito r and review their activities and develop and implement action plans that allow demonstrable cont inuous improvement in key operations.

Findings: Throughout the pre-assessment, the audit team observed the followings:

a) The Company does not have policies, procedures and programs to reduce the use of para-quat.

b) Environmental impacts have all been below the limit c) Waste reduction is implemented although needs to be consistent with the implementation as

the system is already in place (See 5.3.2). d) Innovation program includes efficient usage of fertilizer through application of filter in the ferti-

lizer applicant. e) Interview with the PIC on GHG issue revealed that the action plan on continual improvement

for GHG emission reduction has not yet been developed. Major CAR # 21 was raised Compliance status: Non Compliance Major CAR # 21

RSPO SCCS; Module D During certification audit by SGS company select Mass Balance (MB) Model with module E requirement. How-ever at the transfer certification process, the company changes the SCCS to IP model with Module D. Major verification , company’s compliance to Model D was verified and findings for modul E raised during certification nomore relevant.



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D.1. Definition

Findings: Suayap palm oil plan to implement RSPO SCCS IP model with modul D requirement. Starting from September 21, 2016 onward as ststed on internal memo no. 005/CEO/SSMS_IM/IX/2016 dated September 26, 2016 signed by PT SSS CEO, company decide will not process non RSPO certified FFB both from their owned supply base and others parties. This will be verified during next surveillance audit. Suayap Palm Oil mill supply by their owned estate i.e. Suayap estate and Umpang estate, they also plan to receive certified FFb from others company’s owned estate i.e. Sulung estate which already certified under Sulung Palm Oil mill. Company has established a system to distingusihing between certified FFB and non certified FFB from non certified area. Since plantation area until FFB transportation to the mill. AS de-fined by internal memo from company’s management all non certified FFB will not entering Suayap palm oil mill. Compliance status: Full Compliance.

D.2. Explantaion

Findings:

Following company’s planning to implement IP model, management decide only recive cer-tified FFB from certieid estate/area. Following company’s commitment to implement IP model, internal memo no. 005/CEO/SSMS_IM/IX/2016 dated September 26, 2016 signed by PT SSS CEO, company only receive certified FFB from certified area. As infomed on the table 4 above, Projection certified FFB will be produced for next 1 year is 140,412. 237 tonnes with OER 24.95% and KER 4.48%, projection for CSPO will be 52,961.600 Mt and CSPOk will be 9,513.844 Mt. Suayap palm oil mill has registrated their mill to RSPO Etrace PKS with registration number RSPO-PO 1000003276.


D.3. Documented procedure

Findings: Suayap mill established SOP Supply Chain IP scheme i.e. SOP-PKS.SY-001 rev.00 dated Au-gust 01, 2016. The SOP has been cover mechanism for;

• Harvesting from certified estate. • FFB transport to Suayap Mill • FFB processing • Delivery product

The SOP still not clearly explain mechanism for receiving FFB from other certified sourced, es-pecially from other certified estate outside company’s area. The role of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements has been determined as stated on decree letter no. 002/SK/Eng-UP/SSS-IN/VII/2016 regarding Assignment responsible person for RSPO SCCS implementation. That KTU Suayap Mill i.e. Mr. Mukhamad Sugiarto as coordinator for RSPO SCCS implementation in Suayap Palm Oil Mill with responsibility such as: Ensuring that RSPO P&C and SCCS were determined, implemented according to the require-



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ment. Represent the management during audit by certification body, to promote the awareness of RSPO requirement for the entire mill staffs, to monitor and controll process performance. To conduct correction and corrective action. The job description for each operator has been explained on the SOP such as weighbridge op-erator, however no job description for security who conduct first checking for all incoming FFB truck. Job description for weighbridge operator also available on the mill. This israised as obser-vation. To ensure workers understanding about production process for certified product, the company conducted training and sociaization about new company supply chain scheme, the training was done on August 02, 2016 as obsereved 2 Agustus 2016 seperti yang terlihat dalam dokumen berita acara sosialisasi Srom training records such as list of partipant, photograph, the training was attended by 24 particpants, such as weighbridge operator, laboratory administration, securi-ty etc.. From interviewed result such as security and weighbridge staff they are able to demonstrate awareness of the site’s procedures for the implementation company system for receiving IP model. . Compliance status: Compliance with observation.



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D.4. Purchasing and Good in

Findings: On the procedure SOP-PKS.Sy-001 section 6.4. Regarding FFB receiving explain that all FFB should be acompanied by “Surat pengiriman Buah” (delivery note) and only FFB from mill suplly based, the mill has not specify mechanism for incoming FFB from other certified area, This is company’s improvement to be checked during next surveillance audit. All FFb from mill’s supply based has identification and code i.e. estate name/company’s name; afdeling afdeling number e.g. PT.SSS, SLE,AFD OB, All FFB transporter has been listed specifically, at the audit time there were 17 FFB tranporters both company’s truct and outsourced. Transporter list has inform delivery note number, company’s name, estate name, driver name, delivery date, block number and planted year inlcuding FFB quantity. FFB quantity and qaulity were recorded on daily based by weighbridge administration. Before sent to Hopper Loading ramp, grader will check again FFB quality. The company has eatablish SOP to inform the CB immediately if there is a projected overpro-duction of certified tonnage. Compliance status: Full Compliance.

D.5. Records Keeping

Findings: The mill has not define that balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO and PK on a three-monthly basis. At the audit time the balance only available star-ing from August 4, 2016. Compliance status: Compliance with observation

D.6. Processing

Findings: To prevent contamination between certified and non certified FFB, during verification audit management decided since August 4, 2016 no certified FFB come to Suayap mill, all non certi-fied FFB will be transfered and processed in other pakm oil mill under PT SSS including FFB from their smallholder and outgrower. It was observed diring vield verification and incomng FFB records since August 4, 2016 all FFB come from certified estate. However since company rear-range their FFB suply again the managament revised the decision that all non certified FFB will not entering Suayap Palm Oil Mill Starting from September 21, according to decision letter no. no. 005/CEO/SSMS_IM/IX/2016 dated September 26, 2016. To ensure that there is no contam-ination between certified material and non certified material processed in the mill and all mill equipment including the tank and pipes, Suayap mill cleaned the tank and processing equip-ment including the pipes e.g. all (3) CPO storage tanks as recoded on report of cleaning tanks records for tank no. 3 dated September 21, 2016 and October 06, 2016, while for tanki no 1 was was done on August 25, 2016 as stated on minutes of cleaning tank & the cleaning for tank no. 2 were done on September 19, 2016. The actual implementation of IP product processing will be verified during next surveillance audit. Compliance status: Compliance with informaion.



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3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions

A total of 21 nonconformances were identified during the main certification assessment. These consisted of 13 major non-conformities and 8 minor non-conformities. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances this was verified by the audit team through an on-site verification audit conducted on August 06 to 09, 2016 as well as checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, 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:

Criterion 2.1.1 (Major) : Evidence of compliance with relevant legal requirements shall be avail-able Non-conformance No.1-2015 (Major non-conformity): Not all legal requirements are complied by the company, During the document review found that the generator permits has expired. Correction : The company carries out certification, renewal certification and checkup for all the tools that expired and not been licensed with used the appointed PJK3 to the entire all equipment/tool at mill. Corrective Action: The company will create/develop of database regarding certification of equipment/tool, develop of pro-gramme and monitoring of equipment/tool certification for all units based on database was developed. Auditor Conclusions: Closed Date of closure : March 16, 2016. Verification result: All generator permits has been renewed. It was sight minutes of re verification by external consultant PJK3 PT expo Jaya Mandiri on February 21, 2016; i.e. - Motor Diesel Genset CAT 00000PG4C00302 - Motor Diesel Genset CAT - Motor Diesel Genzet DLV 00000LMPN03940 the license certificate has been renew e.g. Keputusan Kepala Dinas tenaga Kerja dan Trans-migrasiKabupaten Kotawaringin Barat No. 309 DTT.HIP.K3.III2016 Valid from March 15, 2016 for 1 year. No. 310 DTT.HIP.K3.III2016 Valid from March 15, 2016 for 1 year; No. 311 DTT.HIP.K3.III2016 Valid from March 15, 2016 for 1 year. The is a list of mill equipment available and monitoring of equipments in Natai Baru mill and Suayap mill including information about machine number, license number, license status and license validity Checked for other mill equipment No. 304 DTT.HIP.K3.III2016 for wheel loader , March 15, 2016 valid until 2 years ahead.

Criterion 2.2.2. (Minor ): Legal boundaries shall be clearly demarcated and vi sibly maintained

Non-conformance No.2-2015 (Minor non-conformity): Legal boundaries not always clearly demarcated and visibility maintained. Correction: Conduct regular maintenance for all legal boundary to make clerly demarcated and visible . HGU boundary stone map has been established indicated all existing HGU boundary stone.



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Corrective Action: Regular monitoring for implementation of HGU boundary maintenance, monitoring program will be con-ducted together with internal audit program. Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 4.4.1 (Minor )An implemented water management plan shall be in place.

Non-conformance No.03 -2015 (Minor non-conformity) : No evidence of water management plans. Correction : Create of water management plan Corrective Action :

• Implementation and monitor of water management plan • To ensure all activities was complied with RSPO P&C standard

Date of closed : Next surveillance audit Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit

Criterion 4.5.1 (Major) Implementation of Integrat ed Pest Management (IPM) plans shall be mon-itored.

Non-conformance NO.04-2015 (Major non-conformity) : Implementation of IPM not always monitored, during the document review Laporan bulanan HPT at Suayap Estate on June 2015 shows that rat attacked for most of block at afdeling Alfa are more than 5%. Intervention activities started on July 2015 – Oct 2015 using prorodent. However based on the last intervention activities shows that the bait eaten more than 20% and no bait placement and census conducted for control this conditions. (SYE). Correction: Refresh training for all IPM field conductors. Corrective Action: Ensuring all operators has good understanding about their job; though regular refresh training for standard operation procedure. Auditor Conclusions: Closed Date of closure: June 16, 2016 Verification Audit: From monitoring result on February 2016 pest attack level was below 5% and company conduct pest control and the evidence of pest controlled were observed. There is training records for IPM refresh training for all IPM filed conducted such as list of participant, and photograps.



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Criterion 4.6.1 (Major ) : Justification of all pe sticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where av ailable Non-conformance No. 05 -2015 (Major non-conformity ): The company cannot ensure the justification of all pesticides used can be demonstrated. During as-sessment at R&D, SOP for justification on pesticides used is not vailable. Correction : Revision of the procedure of making experiment and research (SOP-RnD.GN-001, revision 1, dated February 1, 2016) for pesticides selection flow (determination of the type of pesticide used, trial, use and evaluation), include develop of their evaluation monitoring format. Corrective Action:

• Ensuring all kind of new pesticides to be used has compliance with procedure (SOP-RnD.GN-001) before pesticide recommendation issue.

• Develop database of kind pesticide has used. Auditor Conclusions : Closed Date of closed : February 17, 2016 (document) & 24 March 2016 (field) Verification Results : The company have been revised the procedure of making experiment and research (SOP-RND.GN-001, revision 1, dated February 1, 2016) where in the procedure already explain the flow of experiment and research until selection of pesticides. Based on the result of interview with head of R&D division that the company has not been used new pesticide so that procedure has not been implemented. R&D division has issued list of pesticide that can be used year 2016 (since 11 January 2016) are Virus Sn, Cordyceps, Decis 25EC, Matador 25EC, Betathrin 100 EC, Opera 100EC, Capture 100EC, Dipel SC, Dipel WP, Thuricide HP, Orthene 75SP, Starthene 75WG, Manthene 75SP, Manuver 400SL, Fol-tus 400SL, Regent 50SC, Garnet 50SC, Penalty 50SC, Marshall 200EC, Marshal 5GR, Prorodent PL, Sime Ebor Baits 0.05BB, Racumin 0.0375BB, Bentox 50WP, Antracol 70WP, Explore 250EC, Roundup 486SL, Supremo 480SL, Kleenup 480SL, Posat 480SL, Jurassic 480SL, Starane 480EC, Dejavu 288EC, Basta 150SL, Inteam 150SL, Garlon 670EC, Starlon 665EC, Ally 20WP, Trendy 20WP, Gra-moxone 276SL (limited pesticide so that shall compliance to Minister of Agriculture decree No.949/Kpts/TP.270/12/98 & principle of RSPO and ISPO if used) and Supretox 276SL (limited pesti-cide so that shall compliance to Minister of Agriculture decree No.949/Kpts/TP.270/12/98 & principle of RSPO and ISPO if used).

Criterion 4.6.11 (Major ): Specific annual medical surveillance for pesticide operators and doc-umented action to treat related health conditions s hall be demonstrated.

Non-conformance No.06 -2015 (Major non-conformity) : Specific annual medicals check up was not ensure conducted annually by the company. During the assessment to the polibun central, show there were no systems to monitor the mechanism to ensure the workers get the specific annual medical check up. Correction :

• Employee medical checkup procedure will be revised and addition the form of employee medi-cal checkup status

• Carry out medical check up to employee • Implementation the medical checkup monitoring with use the monitoring form

Corrective Action:

• Make the medical checkup programmed during one year Auditor Conclusions : Closed Date of closed : February 17, 2016 (document) & 24 March 2016 (field)



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Verification Results :

The company has submitted evidence of improvements such as:

• Employee medical checkup procedure (SOP-Poli.GN-001revision 1, dated February 12, 2016). In the procedure already explain the schedule of medical regularly conducted once a year for non-chemist employees and every six month for chemist employee

• List monitoring of employee medical checkup

• Schedule of employee medical checkup year 2016 for specific parameter are March & September 2016 (cholinesterase) and December 2016 (audiometry & spirometry)

• Schedule of employee medical checkup year 2016 for general parameter are 2-7 March 2016 (Suayap estate), 9-14 March 2016 (Umpang estate), and 8-13 March 2016 (Suayap POM).

• The results of medical check-up for specific parameter (spirometry and audiometry) to employees amount of 25 persons in Suayap POM (letter no.014/SK/SSS-CP/III/2016) dated on 1-4 February 2016.

• Statement letter about the results of medical check-up for cholinesterase (specific parameter) on 4 March 2016 to maintenance workers (spraying and fertilizing) at Suayap estate amount of 91 persons are all normal (100%).

• Statement letter about the results of medical check-up for cholinesterase (specific parameter) on 25 February 2016 to maintenance workers (spraying and fertilizing) at Umpang estate amount of 129 per-sons are all normal (100%).

Criterion 4.6.12 (Major): No work with pesticides shall be undertaken by pregnant or breast-feeding women Non-conformance No. 07 (Major non-conformity): The company cannot ensure no workers with pesticides for confirmed pregnant and breast feeding wom-en. The mechanism not effective to ensure that no pregnant and breast feeding workers on pesticides. Correction : • Revision of employee health examination procedure and adding mechanism regarding exam or moni-

toring of pregnant and breast-feed women

• Create of manual filling information on pregnancy monitoring form for non-clinic (F-POLI.GN-022) as a guide for mandor/foreman/supervisor.

Corrective Action: • Carry out monitoring/inspection regularly regarding implementation of employee health examination

procedure Auditor Conclusions : Closed

Date of closed : February 17, 2016 (document) & 24 March 2016 (field) Verification Results :

The company has submitted evidence of improvements such as:

• Employee medical checkup procedure (SOP-Poli.GN-001), revision 1, dated February 12, 2016. In the procedure already explain that the pregnant women conducted regularly monitoring conducted every month by foreman and medical personnel and if founded the employee on pregnant and breast-feed will be issued a letter of recommendation to work in the non-chemist activities

• Monitoring form for pregnant and breast-feed where the results of monitoring that there is 1 (one) worker pregnant in Suayap estate per February 2016 and 2 (two) workers breast-feed in Suayap and



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Umpang estate.

Criterion 4.7.2 (Major): All operations where healt h and safety is an issues shall be risk as-sessed and procedures and actions shall be document ed and implemented to address the iden-tified issues. All precautions attached to product s shall be properly observed and applied to workers. Non-conformance No.08 -2015 (Major non-conformity): Not All operations have conducted the risk assessments. The company has working instruction for working safety on harvesting activities. However the working instruction not clearly describes the posi-tion of harvester, e.g. harvester position on palm harvesting near the drainage. Correction : • Revised the work instruction about health and safety harvesting involved working unit

• Socialization of new working instruction to employee in all units

• Inspection of harvesting activities regularly Corrective Action: Ensure all activities has carried out risk assessment and their procedure available Auditor Conclusions : Closed

Date of closed : February 17, 2016 (document) & 24 March 2016 (field) Verification Results :

The company has submitted evidence of improvements such as: • Revised work instruction about health and safety on harvesting (WI-KBN.GN-006, revision 00, dated

February 15, 2016). In the work instruction already explained about harvesting system from harvesting preparation until safety harvesting process.

• Minutes of socialization of harvesting work instruction.

The results of verification on field (block D16) are work instruction of harvesting (WI-KBN.GN-006) was available in Umpang estate office where on section 6.2.21 to 6.2.26 has explained that the spacing/range harvesting between harvester with oil palm tree is 2-2.5 m on mature (above 3 year) areas. If harvester position on palm harvesting near the drainage that harvester stand up on “tapak kuda” or safety loca-tion/position for stand up if “tapak kuda” not available. Based on interview that harvester has understood about mechanism it.

Criterion 4.7.6 (Minor): All workers shall be provided with medical care and covered by accident insurance Non-conformance No. 09 -2015 (Minor non-conformity) : The company cannot ensure that all workers and they families were provided with medical care, and covered by accident insurance. BPJS Kesehatan does not fully cover for all employees and their fami-lies (max 5 people), based on registration of BPJS Kesehatan at Umpang Estate, the company only covered max 2 people (worker and his wife). Correction : Identify of employee has registered or registered

Corrective Action : To ensure all employees has registered on BPJS Kesehatan. Date of closed : Next surveillance audit Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to



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be verified at next audit

Criterion 4.8.2 (Minor ): Records of training for each employee shall be maintained

Non-conformance No. 10 -2015 (Minor non-conformity ): Not all of training records for each employee are maintained. During the assessment to the T&D found that not all training records of spraying workers for limited pesticides handling are available. Correction : Conducting training to all spraying employees regarding handling of limited pesticides

Corrective Action : • Up-grade of spraying employee status by gradually • Create of personil certification training matrix Date of closed : Next surveillance audit Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to be verified at next audit Criterion 5.2.4 (Minor): Where a management plan has been created t here shall be ongoing moni-toring : • The status of HCV and RTE species that are affected by plantation or mill operations shall be

documented and reported

• Outcomes of monitoring shall be fed-back into the m anagement plan Non-conformance No. 11 -2015 (Minor non-conformit y): There are no documented ongoing monitoring of the status of HCV and RTE species that are affected by plantation or mill operations HCV management plan has been established. However, the implementation of the management plan is not yet started properly such as monitoring RTE species, periodic monitoring on biodiversity, permanent boundaries of such HCV areas etc. During main assessment mentioned that the company goes to contract agreement with Mulawarman University in order to monitoring of HCV including RTE species (as per agreement # 155/LGL/QHSE/SSMS.G-Unmul/XI/2015 dated on 13 November 2015). The monitoring protocol would be established for twice a year and it will started in upcoming February 2016. Correction : Finalization of biodiversity monitoring report because monitoring of the status of HCV and RTE species has conducted

Corrective Action: • Create of annual biodiversity monitoring plan • Conduct monitoring accordance with plan Date of closed : 08 August 2016 (field) Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to be verified at next audit



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Criterion 5.6.2 (Major): Significant pollutants and GHG emissions s hall be identified and plans to reduce or minimise them implemented

Non-conformance No. 12 -2015 (Major non-conformit y): Plans to reduce or minimise significant pollutants and greenhouse gas (GHG) emissions have not been developed. Plans to reduce or minimise significant pollutants and greenhouse gas (GHG) emissions have not been developed. Correction : Develop the program to reduce GHG emission for estate and mill Corrective Action: To ensure all requirement has included in internal audit and was implemented Auditor Conclusions : Closed

Date of closed : February 17, 2016 (document) & 8 A ugust 2016 (field) Verification Results :

The company has submitted evidence of improvements such as objective target program about environ-mental and health and safety. In the objective target program stated the objective, target, activity program, person in charge and due date to reduce the significant pollution and emission GHG.

Plan/program to reduce or minimize significant pollutant and GHG emission in :

• POM : planting conservation trees around POM and optimize of renewable energy (fiber & shell)

• Estate : applied of land application, optimize of diesel motor (genzet), optimize of IPM program, plant-ing conservation trees and revision of off electric schedule.

Criterion 5.6.3 (Minor): A monitoring system shall be in place with regular reporting on pro-gress for these significant pollutants and emission s from estate and mill operations using ap-propriate tools Non-conformance No.13 -2015 (Minor non-conformity) : Monitoring system and reporting has not been fully in place for these significant pollutants and emis-sions. The company has not been able to appropriately fill in the Palm GHG calculated which is the RSPO-endorsed tools to assess, monitor, and report GHG emissions. This is due to an error as point out by the staff responsible for the GHG calculation. Correspondence has been undertaken with the RSPO to settle this issue but RSPO has not yet provide solution that can solve the issue. Correction : • The company download Palm GHG software version 2.1.1 and their manual • The company fill in data to Palm GHG calculate • Create of reduction of GHG emission on estate and mill

Corrective Action: Implementation and monitoring reduction of GHG emission Date of closed : 07 August 2016 (field) Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to be verified at next audit



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Criterion 6.1.3 (Major): Plans for avoidance or mitigation of negat ive impacts and promotion of the positive ones and monitoring of impacts identif ied shall be developed in consultation with the effected parties, documented and timetabled, in cluding responsibilities for implementation. Non-conformance No. 14 -2015 (Major non-conformity ): Lack of evidence that plans for avoidance or mitigation of negative impacts and promotion of the posi-tive ones is developed in consultation with the affected parties. PT MMS has established CSR programs 2016 under PT SSS. The programs are as a part of plans for avoidance or mitigation of negative impacts and promotion of the positive ones. But the CSR programs are not clear developed in consultation with the affected parties and documented. Correction : • Creating baseline of CSR Program based on consultation with the affected parties

• Record of consultation process documented Corrective Action: • Implementation, monitoring and evaluation of CSR program

• Revision and evaluation of CSR program will be consultation with the affected parties Auditor Conclusions : Closed

Date of closed : February 17, 2016 (document) & 08 August 2016 (field) Verification Results : The company has been able to develop some improvement efforts related to the mechanism of the development of public participation into the formulation of social sustainable programs. Efforts this company started in the 2016 to develop mechanism as follows: Stage 1: Baseline study conducted and done by collecting data of the village, such as village profile and planning of the village development (musyawarah perencanaan dan pembangunan desa), planning of the village medium term development (rencana pembangunan jangka menengah). The method used in the gathering or collection of secondary data is the desktop study. Secondary data analyzed to obtain a preliminary overview of affected communities. Stage 2: Secondary data as the result of baseline study became the basis for carrying of identification study for community needs. Identification of community needs conducted by participation and consultation method with affected communities. Step 3: The identification result of community needs and then accelerated by data analysis done in the first stage. Step 4: The result of acceleration between stage 1, stage 2, and stage 3 convert into matrix of corporate social responsibilities program. Corporate social responsibility program are communicated and consult with affected communities. Communication and consultation is conducted to obtain community feedback from affected communities upon corporate social responsibility programs to be implemented in the affected communities. Stages in the development of corporate social responsibility programs will begin to be implemented in November 2016. In more detail the implementation of these stages can be seen in the explanation Mill Natai Baru Mill Suayap, Estate Natai Baru and Estate Suayap. Mill Suayap and Suayap Estate At this time, the company still doing baseline study in the Umpang Village. Village that directly affected by company activities (Mill Suayap and Estate Suayap) is Umpang Village. Company still implement of CSR programs in the Umpang Village, and also still doing process of reviewing data of village profile for for baseline study, identification of community needs, planning of the village development (musyawarah (musyawarah perencanaan dan pembangunan desa), planning of the village medium term



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development (rencana pembangunan jangka menengah). Before conducted baseline study, the company has did social activities in Umpang Village. The evidences submitted by the company concerning the efforts to improve corporate social responsibility program of PT. Pt. Mitra Mendawai Sejati (Mill Suayap and Estate Suayap) are as follows:

1. Timeframe of baseline study in the Natai Baru village of PT.Mitra Mendawai Sejati, dated January 31, 2016.

2. Minutes of Meeting Focus Group Discussion about CSR PT. Mitra Mendawai Sejahtera (MMS), dated 22 April 2016

3. Minutes of Meeting Focus Group Discussion about CSR PT. Mitra Mendawai Sejahtera (MMS) in Umpang Village, dated 22 April 2016

4. Attendance list of CSR Program Socialization in Umpang Vilage, dated 21 April 2016 5. Matrix of Accelerated of CSR program with planning of the village medium term development,

year 2016 Criterion 6.1.4 (Minor indicator ): The plans shall be reviewed as a minimum once ev ery two years and updated as necessary in those cases where the review has concluded that changes should be made to current practices. There shall b e evidence that the review included the par-ticipation of affected parties Non-conformance No. 15 -2015 (Minor non-conformity ): No available evidence that the plans for avoidance or mitigation of negative impacts and promotion of the positive ones have been reviewed a minimum once every two years and the review has included the participation of affected parties. No available evidence that CSR programs report has reviewed periodically and included the participa-tion of affected parties. Correction : Reviewing the plan for avoidance or mitigation of negative impact and promotion of the positive impact and involving affected parties Corrective Action: • To create base line of CSR program and it reviewed by periodicly • To ensure next time shall review of social management and monitoring plan every two year (mini-

mum) and involve affected parties Date of closed : Next surveillance audit Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to be verified at next audit Criterion 6.5.2 (Major indicator ): Labour laws, union agreements or direct contract s of em-ployment detailing payments and conditions of emplo yment (e.g working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) shall be available in the languages understood by the workers or explained carefully to them by a management official Non-conformance No. 16 -2015 (Major non-conformity ): The company regulation is not fully met related working hours. PP (Article 15) has stated that working hours are 40 hours/week and overtime will be applied in accord-ance with relevant regulation however based on interview with workers, there was a worker (Soimah – GA worker) at Suayap Mill has worked more than 40 hours/week but she has not been paid her over-time. Based on information from Head of Administration (KTU) stated that the company previously ap-plied premi for GA worker but it has been removed. Correction: Issued Internal Memo ragerding overtime mechanism and communicated to all workers. Corrective Action:



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Control and monitor the implementation of Internal memo regularly or during internal audit. Auditor Conclusions: Closed Verification result: It was observed during verification audit all overtime has been paid according to the regulation such as payment slip for woker e.g. boiler operator, genset operator Suayap mill for June, and July 2016 . However the total hours per week was over than 13 hours a week or 3 hours a day, this is still not complies with Kepmenaker no. 102 year 2014. This is will be verify during next surveillance audit.

Criterion 6.6.1 (Major indicator): A published statement in local l anguages recognising freedom of association shall be available Non-conformance No. 17-2015 (Major non-conformity): The company regulation (Peraturan Perusahaan) which describes the right to freedom of association and collective bargaining is expired. Peraturan Perusahaan (the company regulation) period 2013-2015 has been established and approved by Head of Dinas Tenaga Kerja dan Transmigrasi Kab. Kotawaringi Barat dated on 15 December 2013 valid until 14 December 2015. So that Peraturan Perusahaan has expired. The company and workers have established LKS Bipartite (Bipartite Cooperation Institution) and it has been registered to relevant authority however number of workers representative is not comparable with number of management representative (workers representative = 4 people and Management repre-sentative= 8 people). Besides that LKS Bipartite has not been represented by all estates and mills. Correction Follow up to Department of Manpower and Transmigration related with renewal of company regulation period 206 -2018

Corrective Action Socialization of LKS Bipartite to employee Auditor Conclusions : Closed Date of closure: August 08, 2016. Verification Audit Result The renewal license of LKS Bipartite and Company Regulation in both company has been done. Socialization related LKS Bipartite and company regulation also has been done in PT. Kalimantan Sawit Abadi dan PT. Mitra Mendawai Sejati. For more detail explanation can be seen below. Mill Suayap and Suayap Estate LKS Bipartite of PT. Mitra Mendawai Sejati was ratified by Department of Manpower and Transmigration, District Kotawaringin Barat, Central Kalimantan Province, Number : KEP-137/DTT/HIPK-HI/II/2016. The ratification is dated since February 15, 2016 and valid until February 15, 2018. LKS Bipartite of PT. Mitra Mendawai Sejati . The LKS Bipartite of PT. MMS has composition consist of 6 members employee representatives and of 6 members management representatives. Regarding the composition of LKS Bipartite PT. MMS can be seen in the following table :

No Nama Jabatan Keterangan

1 Hendri Cahyono Chairman Management Representative 2 Saifuddin Vice

Chairman Employee Representative

3 Sulistio Purnomo Secretary Management Representative 4 Hardi Wijaya Vice

Secretary Employee Representative

5 Agung Wahyu Wijaya

Member Management Representative

6 Ahmad Solechan

Member Employee Representative

7 Marado Julianto Member Management Representative



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Sihotang 8 Machriadi Agus Member Employee Representative 9 Maras Y. Kunum Member Management Representative 10 Dhenny Tunggal

Prayugo Member Employee Representative

11 Achmad S Member Management Representative 12 Bambang

Suprayitno Member Employee Representative

Company regulations of PT. Mitra Mendawai Sejati (MMS) has been ratified with the Number: KEP-138/DTT/HIPK-HI/II/2016 by the Department of Manpower and Transmigration, District Kotawaringin Barat, Central Kalimantan Province. The ratification is dated since February 15, 2016 and valid until February 15, 2018. This company regulation consist of 12 chapter and 59 articles. Socialization has been carried out on March 14, 2016 in the meeting room of Natai Baru Estate, and the substance of socialization as follows: 1. Socialization of LKS Bipartite endorsed by Head of Department Manpower and Transmigration,

District Kotawaringin Barat. 2. Tasks of Board LKS Bipartite Mitra Mendawai Sejati (MMS) a. Conducting periodic meeting and/or at any time if necessary b. Communicate the policy aspiration of employer, worker, labors and or union/labor to prevent

industrial problems in the company. c. Delivering advice, consideration and opinion to employee, workers/laborers and or union/labor

bundle in the establishment of company policy. d. Supporting and the encouraging discipline, serenity and excitement of working and tranquility

effort. e. Increase the participation of workers and develop and promote the company]

Criterion 7.3.1 (Major indicator ): There shall be evidence that no new plantings hav e replaced primary forest, or any area required to maintain or enhance one or more HCVs since November 2005. New plantings shall be planned and managed t o best ensure the HCVs identified are maintained and/or enhanced Non-conformance No. 18 -2015 (Major non-conformity) : There is no evidence that no new plantings have replaced primary forest, or any area required to main-tain or enhance one or more High Conservation Values (HCVs), since November 2005. There are planting conducted after November 2005 without prior and adequate HCV Assessment. The guidance of the 2013 P&C standard stated that such case warrants exclusion from the RSPO certifica-tion programme until an adequate HCV compensation plan has been developed and accepted by the RSPO. Interview and review of the correspondence as well as report on HCV, LUCA, as well as com-pensation program showed that the company (MMS and KSA) had submitted the self liability assess-ment as well as Land Use Change Analysis reports. Despite considerable efforts from the company, the the compensation plan has not yet been approved by RSPO. This is due to the long process of ap-proval with back and forth process. The audit team nevertheless, saw the eagerness and high effort of the company to finish the compensation process as soon as possible through its conservation program at one of the conservation area near the company area (Tanjung Keluang). Correction : • Intensive coordination with the RSPO to completion immediately review LUCA PT MMS, PT KSA and

PT SSS

• Coordination something that needs to be clarified by the consultants LUCA (Aksenta)

• Preparation of the compensation plan based on the results LUCA that have been pass Corrective Action: Communication to RSPO secretariat relate of compensation and remediation process by intent. Auditor Conclusions : Closed

Date of closed : 04 May 2016



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Verification Results :

During verification on February 17, 2016 (document) & 24 March 2016 (field) LUC analysis and compen-sation plan has not approved/passed/endorsed by compensation panel (RSPO secretariat) or still in-process so that this is indicator raised was non-conformity. The company has submitted LUC analysis document on behalf PT SSS to RSPO secretariat on 20 September 2014. Email from RSPO compensa-tion on 16 February 2016 that the company will have to complete the compensation process by getting compensation plan endorsed during the three months. The next, there is action that need to be taken i.e submit the clarifications requested for the LUCCA reviews (refer to email dated on 10 Feb 2016). The company has submitted clarification requested for the LUCCA reviews to RSPO secretariat or RSPO compensation on 14 February 2016 and submit clarification evidence to RSPO secretariat & reviewer on 18 April 2016 appropriate the result of clarification from reviewer.

Based on email on 4 May 2016 that LUC analysis document on behalf PT SSS has passed and next step is the company to submit the compensation concept/plan. Refer condition it that the company has efforts to fulfil requirements from RSPO but the company have not power push-in process.\ Criterion 7.8.1 (Major indicator): The carbon stock of the proposed development area and major potential sources of emissions that may result dire ctly from the development shall be identified and estimated Non-conformance No. 19-2015 (Major non-conformity) : The carbon stock of the proposed development area and major potential sources of emissions that may result directly from the development has not been identified and estimated. This related to effort of minimizing GHG emission on the proposed development area as applicable. The carbon stock of the proposed development area and major potential sources of emissions that may result directly from the development has not been identified and estimated. Correction : Finalization of GHG Calculator and the determination of emission reduction program Corrective Action: Ensure GHG calculation complied each end year and monitoring of emission reduction on a regular basis Auditor Conclusions : Closed

Date of closed : February 17, 2016 (document) & Au gust 08, 2016 Verification Results : The company has submitted evidence of improvements such as objective target program about envi-ronmental and health and safety. In the objective target program stated the objective, target, activity program, person in charge and due date to reduce the significant pollution and emission GHG. Criterion 7.8.2 (Minor indicator ) There shall be a plan to minimis e net GHG emissions which takes into account avoidance of land areas with hig h carbon stocks and/or sequestration op-tions Non-conformance No. 20 -2015 (Minor non-conformity ): There is not yet any plan to minimize net GHG emissions which takes into account avoidance of land areas with HCS and or sequestration options. This related to effort of minimizing GHG emission on the proposed development area as applicable. Interview with the PIC for green house gasses issue revealed that there is not yet any plan to minimize net GHG emissions which takes into account avoidance of land areas with HCS and or sequestration options. Correction : Finalization fill in data to GHG calculator and create of reduction of GHG emiision program include on avoidance of land areas with HCS and or sequestration options



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Corrective Action : • Implementation and monitoring reduction of GHG emission • To enssure fill in data by completely and conducting by periodicly

Date of closure : Next surveillance audit

Auditor Conclusions : Evidence of corrective action plan accepted. Effect iveness of implementation to be verified at next audit Criterion 8.1.1 (Major indicator ): The action plan for continual improvement shall b e imple-mented, based on a consideration of the main social and environmental impacts and opportuni-ties of the grower/mill and shall include a range o f indicators covered by these Principle and Criteria Non-conformance No. 21 -2015 (Major non-conformity ): The action plan for continual improvement has not been developed Throughout the audit, the audit team observed the followings: a) The Company does not have policies, procedures and programs to reduce the use of paraquat. b) Environmental impacts have all been below the limit c) Waste reduction is implemented although needs to be consistent with the implementation as the

system is already in place (See 5.3.2). d) Innovation program includes efficient usage of fertilizer through application of filter in the fertilizer

applicant. e) Interview with the PIC on GHG issue revealed that the action plan on continual improvement for

GHG emission reduction has not yet been developed. Correction:

a. Company defines policy to reduce paraquate and established program for paraquate consumption. b. Company establish program to manage environmental impact to ensure that all parameter level

comply to the requirement. C. Finalization of GHG Calculator and the determination of emission reduction program Corrective Action: Ensure GHG calculation complied each end year, implementation of emission reduction program and monitoring of emission reduction on a regular basis. Auditor Conclusions: Closed with observation Policy and program to reduce paraquate consumption has been established for year 2016. Implemen-tation will be verified during next surveillance audit. The company has submitted evidence of improvements such as objective target program about envi-ronmental and health and safety. In the objective target program stated the objective, target, activity program, person in charge and due date to reduce the significant pollution and emission GHG

3.3 Noteworthy Positive Components No information from SGS report.



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3.4 Issues Raised by Stakeholders and Findings Pert aining to Issues A) Issues Raised during Stakeholder Consultation Me eting

Stakeholder Type of

Stakeholder Issues raised

Comments/Action Taken

Women group Internal Stakeholders Women support PT MMS. The company has provided facilities for their children during their parents work, for examples: crèche, play group, elementary school, and junior high school for employees’ families. So that their parents can be concentra-tion in their duties.

Not applicable as no issue raised

Harvesters, sprayers, manurers, Mandores, staff, etc

Internal Stakeholders The stakeholders are happy with the company has complied with employment regulation: wage, health insurance, hous-ing facilities, etc.

Not applicable as no issue raised

Forestry Bureau of Kota Waringin Barat – Dinas Kehutanan Kota Waringin Barat

Government Such of plantation area located at production forest according to land use SK # 529 year 2012. However, palm oil was established before 2012 and they refer to another land use i.e. Perda # 08 year 2003 where according to this land use plantation located at non dedicated forest (Areal Penggunaan Lain – APL).

The company has HGU for all palm oil plantation where the HGU issued by government (BPN) as accordance to multi stakeholder process including Forestry Bureau. At the time of HGU, the status of land use was refer to Perda # 08 year 2003 where according to this land use plantation located at non dedi-cated forest (Areal Penggunaan Lain – APL). It was also confirmed during stakeholder meeting with BPN Kota Waringin Barat.

Badan Pertanahanan Nasional – BPN Kota Waringin Barat

Government The company shall report to BPN regarding all HGU areas which is not planted by palm oil due to HCV concern. Because when indicated unplanted within HGU area this must be return to government. However, BPN agree that for unplanted HCV area no need to returned to government and support the company to manage this area properly.

The company will report to BPN related unplanted palm oil within HGU areas for the purpose of HCV concern.



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3.5 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 as-sessment findings and report content. Signed on behalf of PT Mitra Mendawai Sejati Irvan Pandjaitan Head of Sustainability Date : October 11, 2016

Signed on behalf of PT TUV Rheinland Indonesia Dian S Soeminta Lead Auditor Date: October 10, 2016



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APPENDICES

Appendix 1: Details of Certificate



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Appendix 2: Certification Audit Plan No specific informed on SGS report.

Appendix 3: List of Abbreviations AMDAL Analisis Dampak Lingkungan & Sosial

(Social & Environmental Impacts Assessment) CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value IPM Integrated Pest Management LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organization OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 4: List of Stakeholders Interviewed and Co ntacted

No. specific informed on SGS report.

Appendix 5: Observations and Opportunities for Impr ovement

1. No. specific informed don SGS report

2. The actual implementation of IP product processing will be verified during next surveillance audit.