RSPO ANNUAL SURVEILLANCE ASSESSMENT1 PUBLIC …...RSPO ANNUAL SURVEILLANCE ASSESSMENT1 PUBLIC SUMMARY REPORT PT. TÜV NORD Indonesia System Certification Management Has assessed

PT. TÜV NO.RD Indonesia

Audit Report

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RSPO ANNUAL SURVEILLANCE ASSESSMENT1

PUBLIC SUMMARY REPORT

PT. TÜV NORD Indonesia

System Certification Management

Has assessed

PT. TAPIAN NADENGGAN and PT..SATYA KISMA USAHA

<Langga Payung Mill and its Supply Bases>

for Compliance to RSPO Principles and Criteria

for Sustainable Palm Oil Production

Date of assessment:

July 15-19, 2013

Report Number: P&C-F-XXX

Head Office

System Certification Management

Perkantoran Hijau Arkadia Tower F,

7th Fl Suite 706

Jl. Let. Jend. TB Simatupang Kav. 88

Jakarta 12520 – Indonesia

Tel : +6221 7883 7338

Fax : +6221 7883 7336

Laboratory Division

Jl. Jababeka XVII E Blok U No.. 27B

Kawasan Industri Jababeka I Cikarang Bekasi 17530 – Indonesia

Tel : +6221 898 403 18 – 19

Fax : +6221 898 403 20

Branch Office

Intiland Tower 11th

Fl, Suite 1E

Jl. Panglima Sudirman 101-103

Surabaya 60271 - Indonesia

Tel : +6231 53 444 54

Fax : +6231 53 4 44 82

President Director:

Mr. Robert Napitupulu

Email: [email protected]

Website: www.tuv-nord.com or www.tuev-nord.de

mailto:[email protected]

http://www.tuv-nord.com/

http://www.tuev-nord.de/


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List of Contents

1 Scope of Surveillance Assessment Report ........................................................................................................ 4

1.1 Type of Assessment (Mill, Estate and Mill, etc.) ................................................................................... 4

1.2 Location, mill, and or hectare statement ............................................................................................... 4

1.5. Description of Supply Base ................................................................................................................... 6

1.5.1. Description of Plantation (Fruit Sources) ............................................................................ 6

1.5.2 Replanting program ................................................................................................................ 7

Table 5. Replanting program for Each Estate from 2010 to 2019 ................................................. 7

1.6. Progress of Time-bound Plan (for other management units and justifications). ................. 7

1.7. Organizational Information/Contact Person .......................................................................................... 8

2. Assessment Process .......................................................................................................................................... 9

2.1. Assessment Methodology (Program, Site Visits) .................................................................................. 9

2.1.1. General Overview .................................................................................................................. 9

2.1.2 Assessment Agenda ............................................................................................................... 9

2.2. Assessment Team ............................................................................................................................... 10

2.2.1. Lead Assessor: Wieke Savitri ........................................................................................... 10

2.2.2. Assessment Team Members ............................................................................................ 11

2.3. Certification Body ................................................................................................................................ 11

3. Assessment Findings ....................................................................................................................................... 12

3.1. Summary of the Findings by Criteria ................................................................................................... 12

3.2. Identified Non Conformances and Noteworthy positive components. ................................................ 20

3.2.1. Detail of Non Conformity. .................................................................................................. 21

3.2.2. Resume of Audit Results .................................................................................................. 31

3.3. Status of non-conformities (both minor and major) previously identified ............................................ 32

3.4. Issues Raised by Stakeholders ........................................................................................................... 32

4. Certified Organization‟s Acknowledgement of Internal Responsibility ............................................................. 33

4.1. Date of next surveillance visit .............................................................................................................. 33

4.2. Date of closing non-conformities (both major and minor) ................................................................... 33

4.3. Formal Sign-off of Surveillance Assessment Findings ........................................................................ 34


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List of Figures

Figure 1. Maps of Langga Payung Mill and Supply Bases..........................................................................5

List of Tables Table 1-1 Location of the mill and supply bases .................................................................................................................4

Table 1-2. Production volume of CPO and PK to be claimed................................................................................... 6

Table 1-3: Production volumes of FFB and its source.............................................................................................. 6

Table 1-4:. Statistic of supply base................................................................................................................................ . 6

Table 1-5: Replanting program for Each Estate from 2010 to 2019 ................................................................................7

Table 1-6a Time bound plan for mills and estates under PT. Tapian Nadenggan ................................................. .7

Table 1-6bTime bound plan for mills and estates under others companies (SMART Group)................................. 8

Table 2-1 Audit Schedule ........................................................................................................................................... 9

Table 3-1 Summary of Findings by Criteria ......................................................................................................... 13

Table 3-2 Resume of Audit Results ......................................................................................................................... 31

List of Appendices

Appendix 1 List of Abbreviations ........................................................................................................................ 35

Appendix 2 Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver.

November 2011 .................................................................................................................................................. 36


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1 Scope of Surveillance Assessment Report

1.1 Type of Assessment (Mill, Estate and Mill, etc.)

Langga Payung Mill (LPYM) is supplied by three (3) own estates, i.e. Langga Payung Estate (LPYE) and

Paya Baung Estate (PYBE), which are under PT. Tapian Nadenggan (PTTN) and Normark Estate, which is

under PT. Satya Kisma Usaha. PT. Tapian Nadenggan and PT. Satya Kisma Usaha, are subsidiaries of

Sinar Mas Agro Resources and Technology Tbk otherwise known as PT.SMART Tbk Group

The annual surveillance assessment was done as per National Interpretation of RSPO Principle and

Criteria for Sustainable Palm Oil Production - Republic of Indonesia (RSPO Indonesian National

International <INA-NI. ver. May 2008 Standard), as well as RSPO Supply Chain Standard for Mills (module

E: Mass Balance) ver. November 2011.

The scope of this annual surveillance assessment 1 was for Langga Payung Mill (LPYM) and its supply bases, i.e.

Langga Payung Estate (LPYE) and Normark Estate (NMRE). The mill also processes third party FFB, but they

are not included in this assessment.

1.2 Location, mill, and or hectare statement

. The detail of coordinate‟s location can be seen in the table below:.

Table 1-1: Location of the mill and supply bases

Name of Mill and Plantation

Location Coordinates

Longitude (N) Latitude (E)

Langga Payung POM (LPYM)

Ds . Huta Baru Nangka, Halongonan, Padang Lawas Utara, Sumatra Utara

1º 39' 16'' N 99º 53' 13'' E

Langga Payung Estate (LPYE)

Ds . Huta Baru Nangka, Halongonan, Padang Lawas Utara, Sumatra Utara

1º 38' 55'' N

99º 53' 22'' E

Paya Baung Estate (PBNE)

Ds. Huta Baringin, Simangambat, Padang Lawas Utara, Sumatra Utara

1º 37' 12'' N 99º 58' 31'' E

Normark Estate (NRME)

Ds. Normark, Kota Pinang, Labuhanbatu Selatan, Sumatra Utara

1º 50' 57'' N

99º 59' 53'' E


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Figure 1. Maps of Langga Payung Mill and Supply Bases


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1.3. Production volume of all certified products

The production tonnages for CPO and PK for period of certificate and projected output are listed in Table 2.

(These figures exclude any output product from non-certified suppliers).

Table 1-2. Production volume of CPO and PK to be claimed

Name of mill Certification volume 2011

(tonnes)

Actual production 2012 (tonnes)

Projected production 2013 (tonnes)

CPO PK OER CPO PK OER CPO PK OER

Langga Payung Mill

36, 906 9,492 21.82 37.786 9,911 21.93 46,176 11,042 23.00

*Source data: Based on production report 2012, and budget report 2013 1.4. Certification details

PT. SMART RSPO membership number: 1-0019-05-000-00 since 31/01/2005

Langga Payung Mill Unit Certificate number: TNI –RSPO G.1201

Date of previous assessment: 04-08.07.2011

Date of certification approved/ issued: .17.09.2012

1.5. Description of Supply Base

1.5.1. Description of Plantation (Fruit Sources)

Oil palm fruit is sourced from company owned estates and third party. The certified FFB counted from 3 (three)

company owned estates is listed in Table 3.

Table 1-3: Production volumes of FFB and its source

Sources of FFB

Actual Production volume of FFB

in 2012

Projected Production volume of FFB

in 2013

Langga Payung Estate 79,913 90,415

Paya Baung Estate 55,503 67,067

Normark Estate 33,609 43,284

Total FFB own estates 169,025 200,766

FFB purchased 70,611 73,871

Total FFB Processed 239,637 274,671

Table 1-4. Statistic of supply base.

Estates

Area Summary

Planting year Total

(Ha)

Planted

with Oil Palm (Ha)

Mature

(Ha)

Immature

(Ha)

Langga Payung Estate

5,308.53 4,961 4,136 825 1985 – 2013

Paya Baung Estate

2,651.09 2,507 2,507 0 1987 – 2005

Normark Estate 2,195.10 1,928 1,674 254 1995 – 2012

Total 10,154.72 9,396 8,317 1,079

Source : Hectare statement in June 2013


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1.5.2 Replanting program

Table 1-5. Replanting program for Each Estate from 2010 to 2019

Year of

Replanting

Total Area

to be planted (ha)

Langga Payung Estate Paya Baung Estate Normark Estate

2010 305 - 261

2011 698 - -

2012 273 - 254

2013 552 - -

2014 161 228 -

2015 730 262 -

2016 639 304 -

2017 954 523 -

2018 401 389 -

2019 - 780 -

TOTAL 4,713 2,486 515

1.6. Progress of Time-bound Plan (for other management units and justifications).

The company will use the experience obtained in the main assessment to ensure that the other

management units conform to the RSPO principles and criteria. Progress of this plan of time-bound

certification has been verified. There were some changes made from the previous time bound plan due to

technical condition in each management unit. The updated time bound plan is can be seen in Table 6a and

6b.

Table 1-6a. Time bound plan for mills and estates under PT. Tapian Nadenggan:

No Name of Mill Supply Base Company of

Mill Location

Proposed Time

Certification

Revised time bound plan 2013

1 Hanau Mill Hanau Estate Tasik Mas Estate Tanjung Paring Estate Langadang Estate Medang Sari Estate

PT Tapian Nadenggan

Central Kalimantan

2010

2012

2 Semilar Mill Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate

PT Tapian Nadenggan

Central Kalimantan

2012 2013

3 Jak Luay Mill Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKPA Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA

PT Tapian Nadenggan

East Kalimantan

2012 2014


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Table1-6 b.Time bound plan for mills and estates under others companies (SMART Group)

No Name of Mill Supply Base Company of

Mill Location

Proposed Time for

Certification

Revised time bound plan 2013

1 Padang Halaban Mill

Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate

PT SMART Tbk North

Sumatera

2010

2011

2 Batu Ampar Mill

Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate Sungai Panci KKPA

PT SMART Tbk South

Kalimantan

2010

2012

3 Tanah Laut Mill Tanah Laut Estate Kintapura Estate PT SMART Tbk

South Kalimantan

2010

2012

4 Leidong West Mill

Leidong West Utara Estate Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate

PT Leidong West Indonesia

Bangka 2011 2013

5 Gunung Kombeng Mill / Muara Wahau Mill

Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA

PT Kresna Duta Agroindo

East Kalimantan

2012 2013

6 Jelatang Mill Batang Merangin Estate Kubang Ujo Plasma Pamenang Plasma


Jambi 2012 2013

7 Pelakar Mill Pelakar Estate Tiga Serumpun Estate Bukit Bungkul KKPA


Jambi 2012 2013

8 Langling Mill Bangko Inti Estate Bangko Plasma


Jambi 2012 2013

9 Sungai Bengkal Mill

Sungai Bengkal Estate Batang Gading Estate Sungai Bengkal KKPA Batang Gading KKPA Kilis Estate Kilis KKPA

PT Satya Kisma Usaha

Jambi 2012 2013

10 Bukit Kapur Mill Sungai Cantung Estate Bukit Kapur Estate

PT SMART Tbk South Kalimantan

2014 2015

1.7. Organizational Information/Contact Person

Contact Person Mr. Ismu Zulfikar

Position Head of Environment Department

Organization name PT. TAPIAN NADENGGAN

Address BII Plaza Tower 2, 10th Floor

Jl. MH. Thamrin Mo.51

Postal code, city 10350, Jakarta Pusat

Country Indonesia

Telephone Nr +6021-3181388

Fax Nr +6221-3181389

Email [email protected]


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2. Assessment Process

2.1. Assessment Methodology (Program, Site Visits)

2.1.1. General Overview

The assessment was carried out by referring to TÜV NORD Indonesia Certification Procedure, PRSPO-TNI-01

Rev. 1, dated 01.04.2013.

2.1.2 Assessment Agenda

The annual surveillance assessment was conducted on July 15 to 19, 2013 for Langga Payung Mill, Langga

Payung Estate and Normark Estate while Paya Baung was not assessed in this first surveillance assessment,

which led by Ms. Wieke Savitri (WS) as lead auditor, Ms.Karlina Bone (KB) as auditor and was assisted by Mr.

Fahroby Faletehan (FF) as social expert and Mr. Dr. Supijatna (SUP) as Agronomy expert.The audit schedule

available as below.

Table 2-1 Audit Schedule

Date / Time1)

Site / Shift /

Organizational Unit

Auditor

(Abbrev.) P&C Explanation

Day-1 : 15.07.2013 - Traveling from Jakarta to Tapian Nadenggan

Day-2 : 16.07.2013 Normark Estate

08.00 – 09.00

NRME

ALL - Opening Meeting

- NCR previous audit review (evidence verification)

09.00 – 16.00

KB & FF

- 1.1, 1.2, 2.1

- 4.7 – 4.8

- 6.1-6.11

- Requests of info and responses, legal for OHS and Social

- OHSAS & Training

- SIA, Communication, Complaint, Customary, Wages,Trade Union, Anti Child Labor, Discrimination, Sexual Harrasment, Payment to Outgrower, CSR

WS & SUP

- 2.1, 2.2, 2.3, 3

- 4.1 – 4.6

- 5.1 – 5.6

- 8

- Regulation compliance, land-use right, customary right, actual and budgeted production

- GAP, Water Management, IPM, Agrochemicals.

- EIA, HCV, Burning Issues, Waste Mgt,

- Continual Improvement

16.00 -17.00 - Auditor Review

Day-3: 17.07.2013 Langga Payung Estate

08.00 – 09.00

LPYE

ALL - Opening Meeting

- NCR from previous audit (evidence verification)

09.00 – 15.00

KB & FF

- 1.1, 1.2, 2.1

- 4.7 – 4.8

- 6.1-6.11

- Requests of info and responses, Legal for OHS and Social

- OHSAS & Training

- SIA, Communication, Complaint, Customary, Wages,Trade Union, Anti Child Labour/ Discrimination/Sexual Harrasment, Payment to Outgrower, CSR

WS & SUP

- 2.1, 2.2, 2.3, 3

- 4.1 – 4.6

- 5.1 – 5.6

- 8


- GAP, Water Management, IPM, Agrochemicals.

- EIA, HCV, Burning Issues, Waste Mgt,

- Continual Improvement

16.00 -17.00 ALL - Auditor Review

Day-4: 18.07.2013 Langga Payung Mill

08.00 – 09.00

LPYM

ALL - - Opening Meeting

- NCR from previous audit review (evidence verification)

09 WS, KB, FF, SUP

- 4.1, 4.7, 4.8

- 5.3, 5.4 & 5.6

- SCC

- Mill SOP, OHSAS, Training

- Hazardous waste management, Renewable Energy, Water usage

- Supply chain standard


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Date / Time1)

Site / Shift /

Organizational Unit

Auditor

(Abbrev.) P&C Explanation

13.30 – 15.00

ALL

- 1.1, 1.2, 2.1

- 2.1, 2.2, 2.3, 3

- 6.1-6.11, 8

- Request of info and responses


- Continual Improvement SIA, Communication, Complaint, Customary, Wages,Trade Union, Anti Child Labour/ Discrimination/Sexual Harrasment, Payment to Outgrower,

-

15.00 -16.00 ALL - - Auditor Review & Reporting

16.00 – 17.00

ALL - - Closing Meeting

Day-5: 19.07.2013 Travelling back to Jakarta

2.2. Assessment Team

2.2.1. Lead Assessor: Wieke Savitri

Qualification Compliance

Educational Background

Has a bachelor degree from Agriculture Faculty, Bogor Agricultural University Yes

Working Experience

1995-1997: PUPUK Foundation (Perkumpulan Untuk Peningkatan Usaha Kecil,

A Non Government Organization for promoting small scale enterprises supported and financed by GTZ-Germany and Swiss Contact, as Management Consultant. Responsibilities : To arrange projects regarding business management, human resources, marketing and IT to promote small scale enterprises.

1997-2004: PT. Varia Industri Tirta and PT.Tirta Investama.

Bottled water companies under Danone management as Quality Control Manager/ Quality Assurance Manager/ Internal Auditor and Trainer. Responsibilities : deliver training and implementing management systems for ISO 9001, ISO 14001, HACCP, GMP, ISO 22000, 5S, QCC, SPC

1997-2004: Danone-Aqua Foundation as Associate Representative in factory.

Responsibilities: to develop community development programs for people living around factory.

2004- 2005: PT. Tribina Mediartha Sarana. A consulting company, as a Consultant and Trainer. Responsibilities : deliver training and consultancy for companies and organizations for ISO 9001, ISO 14001, SMK3, HACCP, GMP, ISO 22000, 5S, QCC, SPC

2005-2006: PT. Global Certification Indonesia. Certification Body based in UK as Operations Manager. Responsibilities: Running daily operation and reporting to Head Office in UK.

2006-Now: PT. TUV NORD Indonesia as ISO 9001/RSPO/ISPO Lead Auditor. Branch Manager Surabaya Office. Responsibilities : Running daily operation in Branch Office, conduct audit and reporting.

Yes

RSPO Training

Certified RSPO Lead Auditor Training by ProForest-Wild Asia on July 7-11, 2008, Indonesia.

Yes

Other Training

- Internal Auditor Training of Environmental Management System (ISO 14001:1996) EARA - REDECON, 2000, Indonesia.

- Internal training SMK3, Indonesia.

- Workshop for Community-based Environmental Educators by the United Nations of Environmental Program, 2002, Thailand.

- Process based audit ISO 9001;2000 by PSB Certification, 2002, Indonesia.

- ISO 22000 by SAI Global, 2005, Indonesia.

- ISO 9001:2000 Advanced Lead Auditor Training Course, by IQCS International Certification Services, 2006, Indonesia.

- ISO 9001:2008 upgrading training, by TUV NORD Indonesia.

- ISPO training in 2011.

Yes

Experience related to RSPO

RSPO to date (Aug 2010 -May 2013)

- More than 25 x pre-assessments and main assessment of RSPO P&C in Indonesia, (RSPO P&C)

- 1 x NPP assessments in Indonesia

- 3 x RSPO SCC assessments in Indonesia

Yes


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2.2.2. Assessment Team Members

RSPO REQUIREMENT ASSESSOR QUALIFICATIONS COMPLIAN

CE

Fluent in main local languages and English.

Karlina Bone (KB) Fahroby Falatehan (FF) Supijatno (SUP)

Indonesian citizen, fluent both in Bahasa and English Yes

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

(SUP)

He holds a doctorate in Environmental and Natural Resources Management from Bogor Agricultural University (IPB), and has a strong background and experience in Agronomy aspects. He has been working in IPB since 1986 as a lecturer in Agronomy, including Palm Oil Plantation subject.

Yes

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

SUP

He has extensive experiences in research, such as in plant water and nutrient requirements, irrigation and fertilizer application, seedling selection and Integrated Pest Management; Several research subjects that had been done, for example: Research of high grow fertilizer effect on growth and production of oil palm,

Yes

KB She has a bachelor degree in Biological Science, in ecology major. Done a research in a nitrification and denitrification in a recirculation water treatment project.

Health and Safety assessment on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

KB

Observed audit in OHSAS Audit as a trainee for Indonesian contractors, such as PT. Inti Indah, PT. Virajaya Riauputra, etc. Other than that, observed as a trainee as well RSPO

P&C for PT. Inti Indo Sawit - Tungkal Ulu (CA), PT. London Sumatra (ASA III), UPOIC (CA stage 1 and stage 2), PT. Sahabat Mewah Makmur (ASA I), etc.

Yes

Workers welfare issues and social assessment experience. (For example with SA8000 or related social or ethical accountability codes);

Economic issues

FF

He has a bachelor degree in Agriculture Social Economy from Bogor Agricultural University (Institut Pertanian Bogor – IPB) and from University of Indonesia (UI), Master of Planning and Public Policy, Faculty of Economics (2003 -

2005). Has been working as a lecturer in Agriculture Social

Economy Department, Bogor Agricultural University. And involved in numerous researches for social economic projects, etc.

Yes

Yes

Environmental and ecological assessmenting. (For example experience with organic agriculture, ISO 14001)

SUP

He qualifies in biodiversity assessment and biodiversity science. Underwent auditor training in oil palm estates and palm oil mill in EMS and RSPO P & C. Member of the team in RSPO assessment of PT. London Sumatra Indonesia Tbk, PT. Perkebunan Nusantara IV, and many more.

Yes

2.3. Certification Body

PT. TÜV NO.RD Indonesia is a subsidiary of the German TÜV NORD Group. Our company is a market

leader in Indonesia for inspection, testing and certification services. Through more than 800 clients, we

offer Not just a high added value service but also the trust and confidence embedded in our issued

certificates/reports. We satisfy No.t only our direct customers but also other stakeholders, like

regulators and interested society including NGOs, through our competent auditors, inspectors and analysts.

PT. TÜV NORD Indonesia, under its HQ in Germany, is a member of International Accreditation Forum

(IAF) and accredited by DAR–German and by the Indonesian Accreditation Committee (KAN). Services

provided by the Strategic Business Unit Systems Certifications are: Food Safety Management System ISO

22000, Information Security Management System ISO 27001, Social Accountability SA 8000, Food

Hygiene HACCP, Medical Device Directive MDD, ISO 13485, Occupational Health and Safety OHSAS

18001, Product Certification: GS-Mark, CE-Mark, SNI Mark, Inspection for ISPS Code, Clean Development

Mechanism (CDM) Validation & Verification, British Retail Consortium, BRC Issue 5 and ISCC.

.


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3. Assessment Findings

3.1. Summary of the Findings by Criteria

Objective evidences were obtained separately for each of the indicators for mills and estates in the annual

surveillance assessment. The results for each indicator from the different operational areas were

aggregated to assess the overall conformances of the company‟s operations to each criterion. A statement

is made for each indicator on the finding. A summary of the Non-Conformities is given in Section 3.2.1

During the annual surveillance assessment 1, 3 (three) major non-conformities and 6 (six) minor non-

conformities have been raised against RSPO Principals and criteria, whilst 1 (one) major non-conformities

have been raised against RSPO Supply Chain Standard –module E (mass balance).

PTTN and its supply bases have prepared a Corrective Active Plan which each date for implementation

has been accepted by PT. TÜV NORD Indonesia. Thus, PTTN and its supply bases are still

recommended to extend the certification of RSPO Principal and Criteria which valid until

The following is a summary of the findings for compliance with the RSPO Principles & Criteria for

Indonesian National International <INA-NI ver. May 2008 Standard). While a summary of the findings for

compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011 is attached in

Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass

Balance) ver. November 2011

.


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Table 3-1 Summary of Findings by Criteria

FINDINGS/COMMENTS

Criterion 1.1 (C.1.1)

Provide adequate information to other stakeholders on environmental social and legal issues relevant with RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision-making

PTTN has a procedure for communicating with stakeholders as decribed in “SOP Komunikasi dan Konsultasi dengan Stakeholder No. PT.TN-LPYM/RSPO-SOP/03 dated on 01.07.2010 All the heads in the mill / estates are required to provide adequate information as required by the RSPO criteria. There was no specific form, but PTTN provide information boxes placed in front of estate/ mill office and checked regularly every week. Stakeholders aspiration, especially for asking donation will be considerate to perform CSR program. Mechanisme to perform the CSR was conducted through the SOP No. 014/SOP.CSR/05/2011, dated 1 July 2011. The requests and responses for information are recorded in the „ Buku Komunikasi Konsultasi dan Tanggapan. (1.1.1). The response(s) are within one

week after the request had been received whether they are approved or not. (1.1.2). The records of requests / responses will be kept for 5 (five) years as stated in “SOP Pengendalian dan Masa Simpan Dokumen No.PT.TN-LPYM/RSPO-SOP/04 dated on 01.07.2010. The example of data request was the plantation assessment by the Department of Plantation and Forestry Labuhanbatu Selatan Regency on 10.01.2013.Compliance Status : Full.


Management documents are publicly available, except where these are prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes

All management documents on legal, environmental, health safety and social issues are publicly available upon request. The legal documents are :

Izin Lokasi (Site Permit),

Izin Usaha Perkebunan (Plantation Operation Permit)

HGU (Land Use Title)

In accordance with environmental issue, PTTN has prepared Environmental and Social Impact Assessment (AMDAL

/ UKL-UPL) and Environmental Management And Monitoring Reports (Laporan RKL-RPL), for Semester 2 in 2010.

Since PTTN is a labour-intensive company, it is required to comply with the mandatory SMK3 (Occupational Health

and Safety Management System). Progress on the Health and Safety Program (K3 program) is reported regularly to

the Ministry of Labour of Republic of Indonesia (1.2.1). All the records are properly kept for the proper periods as

stated in ““SOP Pengendalian dan Masa Simpan Dokumen No.PT.TN-LPYM/RSPO-SOP/04 dated on 01.07. e.g.,

safety, health and environment and social records 5 years and legal records indefinitely (1.2.2), and are available on

request. Notwithstanding this, environmental and social data are presented during the yearly public consultation with

stakeholders as part of its CSR program. Compliance Status : Full.


There is compliance with all applicable local, national and ratified international laws and regulations

PTTN keeps copies of all the legislations / regulations applicable to it from the applicable regulation list in “SOP Evaluasi Pemenuhan peraturan dan Persyaratan Lain (P. TN-LPYM/RSPO-SOP/06 dated on 01.07.2010. Evaluation is done regulary every six month by RSPO Officers in each unit which has to keep track of its (PTTN‟s) legal requirements and make sure that they are complied with. Since PTTN has SM-K3 certification by Ministry of Labor of Republic Indonesia, the RSPO Officer has to make sure that the responsible personnel – engineers, boiler men, electricians, have the necessary qualifications, and the equipments – boilers and diesel generators – have the necessary certifications and the permits are still valid. The evidence of evaluation is recorded in “Form evaluasi kepatuhan kepada Peraturan, Perundangan dan Persyaratan lainnya (02/ENVD-EK-LH/X/2010)”, the last evaluation was done on 24.01.2011. All the documents were checked and found to be in legal compliance, some outstanding status usually in regency level (Kabupaten) regulation due to the new developing government in the past years which transformed from Kabupaten Tapanuli Selatan and separated into Kabupaten Padang Lawas Utara and Kabupaten Labuhanbatu Selatan. However, PTTN has determination to fulfill the regulation which need time to be processed by the local government. Compliance Status : Full


The right to use the land can be demonstrated and is not legitimately contested by local communities with demonstrable rights

Documents that showing legal ownership or lease had been verified, i.e. as listed below:

Land UseTitle Number (HGU)

Location Valid from Valid until

23/HGU/DA/82 Desa Batang Nadenggan 18/12/1992 31/12/2072

23/HGU/DA/82/A/68 Desa Sihopuk Baru 24/12/1992 31/12/2037

14/HGU/1989 Desa Huta Baringin dan Desa Ujung Batu Julu

30/08/1999 31/12/2024

5/HGU/BPN/2005 Desa Perkebunan Normark 25/02/2005 31/12/2029

Currently, there are no claims on PTTN-Langga Payung Mill by anybody. SMART Tbk took over the land from established company PT. Tapian Nadenggan in 1989, and not directly from the local community. The mill / estate managers have ensured proper registration of their HGU certificates in register. (2.2.1). The boundaries of PTTN land were easily identified as the boundaries are demarcated by T-0 pillars, their identification numbers corresponding with points in the maps in HGU (Land Use Title) (2.2.2). There is a mechanism to monitor the boundary stones periodically. There are procedures for resolving any conflict over land which are “Pedoman Teknis Persiapan Lahan SMART No.

SOP/NP/SMART/XII/MCAR001, Chapter XII,. Penanganan Keluhan dan Ketidakpuasan” dated on 1 July 2010 and “SOP Penanganan Keluh Kesah dan Ketidakpuasan No. PT. TN-LPYM/RSPO-SOP/02, (2.2.3). Compliance Status : Full.


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

It was confirmed during surveillance assessment as well as during interview with stakeholders that there was no customary right of other users.


There is an implemented management plan that aims to achieve long term economic and financial viability

PTTN has long term projection (2010 – 2020) for its crop, including key performance data for its mill and estates as

part of its long term economic planning under all corporate entities of SMART Tbk Group, including mill allocation,

production of FFB (tonnage) FFB/ ha (yield); OER, by predicting inflation rate; exchange rate; interest rate; portion

cash; dividend; non deductible expensive; working hours; turnover; % allowance for doubtful accounts, age of asset;

price of FFB purchase. During the projection period the mill capacity is 60 FFB/ hour and there are no plans to

increase the mill capacity or extend to increase planted area as seen in Profitability Report below.

Indicator 2010 2011 2012 2013 2014 2015

Mature plantation (Ha) 7,163 6,465 6,497 6,643 6,528 6,088

Mill capacity (ton FFB/ hour) 60 60 60 60 60 60

Total FFB processed (ton) 255,780 227,156 239,637 274,637 209,142 222,738

Total CPO production (ton) 55,823 51,072 52,551 63,166 48,103 51,230

Total PK production (ton) 14,357 12,998 13,720 15,105 11,503 12,251

Indicator 2016 2017 2018 2019 2020

Mature plantation (Ha) 5,534 5,049 5,201 5,897 6,688

Mill capacity (ton FFB/ hour) 60 60 60 60 60

FFB processed (ton) 219,151 217,922 214,222 229,746 244,940

Total CPO production (ton) 50,405 50,122 49,271 52,842 56,336

Total PK production (ton) 12,053 11,986 11,782 12,636 13,472

PTTN also provide replanting program for its supplybbases as shown in Table 5. During annual surveillance

assessment auditor verify and visit the replanting area. In Normark Estate the last replanting conducted in 2012

covering an area of 222.8 ha in Block B30, while in Langga Payung Estate in 2013 land clearing has been done

(using mechanical method by landings and chipping palms) in replanted areas located in the Division 2 Blocks of 25

and 6. 123 ha has been planted of the total replanting 522 ha, the rest will be continued if rainfall is sufficient for

planting. Seedlings for replanting purposes is already available. Compliance Status : Full.

.


Operating Procedures are appropriately documented and consistently implemented and monitored

PTTN has Standard Operating Procedures with the best practices for its mill and estates operations. The mill have

been certified to QMS ISO 9001 and HSE management SMK3 by the Ministry of Labour of Indonesia. Most of the

Standard Operation Procedures are incorporated in the SM-K3 management The following procedures applicable and

implemented within sustainable palm oil,

a. SOP for Oil Palm (containing aspects from nursery, land preparation, planting, upkeep, harvesting, waste

management, HCV, emergency preparedness and response, and environmental monitoring).

b. SOP for Palm Oil Mill (containing stages of process, boiler, power generation, water treatment, land application,

electrical system, quality (inc monitoring of CPO parameters), dispatch and laboratory).

c. Manual and SOP for Environment Management System, Health & Safety and SPO (containing application of

pesticides, use of PPE , emergency preparadness) .

However, not all the procedures established are adequate or properly implemented.

It was found that quality inspection was conducted inconsistenly after harvesting, loose fruit were found scattered >

20 pieces in palm circles and in harvesting point areas in Langga Payung Estate. A Minor non-compliance was

issued. ( NCR-TN-01).

A Corrective action has been submitted, being reviewed and accepted. by auditor

Criterion 4.2 (C.4.2) Practices to maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield

SMARTRI, an in-house Research Institute has a laboratory to carry out and made annual fertilizer recommendation

based on oil palm soil testing and analysis which are regularly performed on a 3 years basis, while oil palm leaf

analyses are performed in yearly testing. There are some agronomic practice to improve and maintain soil fertility

implemented in PTTN :

1. Using organic fertilizer 2. Plant Legume Cover Crops


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3. Pruning and frond stacking 4. Weeding,

The application of POME as organic fertilizer in Langga Payung Estate based on land application research by Lembaga Penelitian Universitas Sumatera Utara.. . In addition, the application of EFB in Langga Payung Estate with the dosage 30 t/ha. Compliance Status : Full.

Criterion 4.3 (C.4.3) Practices to minimize and control erosion and degradation of soils

PTTN provide maps of fragile soils and established management strategy to minimise and control erosion and degradation of soils by planting Legume Cover Crops; terracing in undully to steeping area, pruning and frond stacking and have road maintenance program. PTTN established procedure for land preparation for replanting, All managed soils are mineral soils. For examples in Normark Estate the dominant soil type is Typic Dystropepts with sandy clay loam texture with an area of 1,266.57 ha (57.7%) Compliance Status : Full.

Criterion 4.4 (C.4.4) Practices to maintain the quality and availability of surface and ground water

PTTN has an implemented water management plan. . Water management included monitoring of rainfall and all water usage and discharge (water as they enter and leave mills and plantations).Water management system makes use of river as the main water source for palm oil mill . For the needs of the estates obtained from rain water. For processing at the mill, the water supplied from the water artificial reservoirs with length 150 meters, width of 76 meters, a depth of 5 meters which under normal operating conditions with no water supply (without rain) can last 2 months Record of water using per ton FFB is available, there is reduction from 1.24 m3 water/ t FFB in 2008 to 0.89 m3 water/ t FFB in 2012.

To avoid the contamination of river water, PTTN installing HCV area along the river banks. There are several sign boards of HCV 4.1 to warn people for not hunting and fishing and to remind workers for not applying fertilizer and pesticides to its oil palms in the riparian zones – a 50 meter belt along the river banks, the palm inside the limit zone were marked with red cross - and no replanting of oil palm will be done along all river banks. However, during site visit it was found that some local community were washing their motorcycles in spring area which has been identified as HCV that should be protected within diameter 200 m from the spring area. A Major nonconformity was raised (See NCR-TN-02). A corrective action has been submitted, being reviewed and accepted by auditor.

The POME was applied into land instead of discharged into river. The average of regular monitoring result of BOD and pH in 2012 and 2013 were still within allowable range of the permit given as well as the applicable national regulation Decree of Environmental Misnistry No. 28/2003, with maximum BOD of 5000 ppm and pH 6-9. The BOD data are submitted six-monthly in RKL/ RPL to BAPEDALDA (Regional Environmental Monitoring Body).

Even PTTN has monitor rainfall data, however the implementation for rainfall data still not in in accordance with nursery activities. Spraying using mist blowing method for young palms in nursery areas during April – May 2013 was not conducted consistenly based on rainfall data as required by Working Instruction Penyiraman Bibit IK/SMART/MCAR/III/TA-BBT/07-Penyiraman Bibit that stated if rainfall >10 mm it doesn‟t have to be done. A Minor nonconformity was raised (See NCR-TN-03). A corrective action has been submitted, being reviewed and accepted

by auditor.

Criterion 4.5 (C.4.5) Pests, diseases, weeds and invasively-introduced species are effectively managed using appropriate Integrated Pest Management (IPM) Techniques

PTTN has formulated an Integrated Pest Management (IPM), practiced incorporating cultural, biological, mechanical or

physical methods, by :

1. Identification of pests, diseases and weeds before it become an outbreak of maximum level 2. Introducing of beneficial plants for hosts of pests. 3. Introduction Barn Owl (Tyto alba)

4. Planting LCC 5. Frond stacking 6. Minimise use of agrochemicals. Oil Palm Leaf Eater Control includes detection, cencus, examination, treatments, evaluation, monitoring and organisation. Planting beneficial plants, such as Bunga pukul delapan (Turnera subulata) and air mata pengantin (Antigonom leptosus) to harbour predators of the crop pests. The barn owl or Burung hantu (Tyto alba) is protected and encouraged as a natural predator of rats.. Census of Tyto Alba is conducted monthly using PVC stick and

lenses as „”periscope”. The use of pesticides is minimise by only implementing for severe infestation in selected area and not using blanket method. Rodenticides were not use in 2012 and 2013 in Normark Estate.

Monitoring of pesticide toxicity units records was available per estate‟s division, for example: LD 50 for Glyfosat 480 SL and Metil Metsulfuron 20 WDG were calculated based on the total usage of both Glyfosat and Metil Metsulfuron per hectare, multiply by LD 50 for oral and dermal stated by the manufacture, and multiply by the active matter. Compliance Status : Full.

Criterion 4.6 (C.4.6) Agrochemicals are used in a way that does No.t endanger health or the environment. There is No. prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

There is a List of pesticides used and pesticides stocks is listed in the”Balance Stock Agrochemical in 2012 and

2013”., those can be bought for application are in accordance with the Permentan No 1/2001, WHO and Rotterdam

convention, are issued and distributed to Procurement division. Only procurement division can buy and supply the

matter. PTTN has a procedure on how to apply agrochemicals, refers to Peraturan Menteri Pertanian No.

07/Permentan /SR.140/ /2007, or Regulation No. 07/ Permentan /SR.140/ 2/2007 Ministry of Agriculture Republic of

Indonesia.. All the agrochemicals used are registered and approved by Pusat Perizinan dan Investasi Sekertariat


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Jenderal Departemen Pertanian 2008, or Invesation and Permit Center, Agriculture Department, Republic of

Indonesia.

PTTN has established procedure to handling hazardous agrochemicals, provide MSDS, emegecy facilities such as shower water and soap available if emergency situation happened. provide bin for hazardous wastes, sand, and fabric cotton waste as required by SOP/PBNE/LBH (Rev.00, dated 01.07.2011. PTTN also established procedure for handling hazardous agrochemicals spills and only trained persons for pesticide application technique are permitted and instructed for pesticides application in the field as stated in Working instruction regarding handling of hazardous agrochemicals spill (SOP /PBE/LBH (Rev,00, 1 Juli 2010)..

Checks on the records of agrochemicals used found that they complied with the regulation. Usage of paraquat in

2008, 2009, and 2010 is reduced, and little bit increasing in 2012 during land clearing process in Normark Estate and Langga Payung immature plants area. Regular training/ socialization for chemical sprayers was conducted. There was evidence of regular medical check-ups for workers involved in handling hazardous chemicals. PTTN has policy that pregnant and breast-feeding women are prohibited from working with pesticides, and there are records of socialization of the policy to the female workers.

However, during audit it was found that Measuring device for mixing pesticide in Normark Estate was inaccurate, no evidence of verification record had been made. A Major nonconformity was raised (See NCR-TN-04). A corrective action has been submitted, being reviewed and accepted by auditor.

Criterion 4.7 (C.4.7) An occupational health and safety plan is documented, effectively communicated and implemented.

PTTN has established a safety, health and environment policy and certified SMK3. The organisation structure of

Panitia Pembina Keselamatan dan Kesehatan Kerja (P2K3), or Guiding Committee on Occupational Health and

Safety, has been established. Explanation and communication of the policy is the responsibility of the safety engineer

(SM-P2K3) who daily monitors and inspects all facilities in the mill and estates for emergencies. There are regular

monthly meetings between the management and workers on health and safety issues. All the permanent employees

and contract workers are insured under JAMSOSTEK A record of JAMSOSTEK payment installment was sighted. All

employees, especially those in high risk work, undergo an annual health examination with the results submitted to

Dinas Tenaga Kerja – Balai Hiperkes Dan Keselamatan Kerja Provinsi Sumatera Utara (Department of Labor,

Province of North Sumatra). PTTN provide 3 company clinics and 1 central clinic and there are 2 company

physicians, nurses and midwives to serve the employees and their dependents in estates.

The physicians visit the clinic twice a week, during their absence, the nurses conduct daily operation and it strongly recommended to prohibid the nurse to give prescription to the patiens especially usage of antibiotic and prescription only medicine.

All the operations have been risk assessed for obtaining SMK3 certification. The P2K3 team identified and analysed the risks for all routine and non-routine activities in Langga Payung POM, Langga Payung Estate, Paya Baung Estate and Normark Estate. The P2K3 team responsible to assured that all P2K3 and K3 equipment, such as fire extinguishers, PPE, hydrants, P3K tool kits (medical box) are available on worksites by regular checking in the mill and estates.

PTTN has developed procedures for accidents and emergency preparadness The effectiveness of this procedure is

tested every year. Workers in hazardous areas are provided training to minimize their risk in an annual training

program on safety and health issues including training for K3 regulations and legislations of the Republic of Indonesia,

first aid training and emergency drills. Records of work accidents were compiled by the company physician every

month, the records are kept 5 years and regularly submitted to DISNAKER, the Regional Labor Department, and

JAMSOSTEK for insurance claims.

It was found that some contractor workers did not wear appropriate Personal Protection Equipments such as safety helmets and safety shoes during loading FFBs to the truck. A Minor nonconformity was raised (See NCR-TN-05). A corrective action has been submitted, being reviewed and accepted by auditor.

Criterion 4.8 (C.4.8) All staff, workers, smallholders and contractors are appropriately trained.

Mill / estate managers have identified the training needs in each section / department to organize an annual training

program. The training program in 2010 - 2011 include RSPO P & C, SMK3, MSDS, First aid, PPE, Waste handling,

SOP for mill and estates, emergency preparedness, training for nurses and midwives. The training also covers

contractors and smallholders (independent farmers).. Compliance Status : Full

Criterion 5.1 (C.5.1) Environment aspects of plantation and mill management, including replanting, that have environmental

impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

PTTN has developed criteria to determinate methods to replanting oil palms in Impact of plantation and mill which is identified in AMDAL Document, AMDAL/RKL/RPL of Oil Palm Plantation and Palm Oil Mill. There is replanting program for all 3 estates. Any adverse impacts identified will be studied for mitigation. Assessment is also being carried out on the environmental management and monitoring (RKL/RPL).. Six-monthly reports of RKL/RPL are submitted to BAPEDALDA (local environmental controlling body). POME (palm oil mill effluent) has been permitted to be used as land application after the research conducted by University of North Sumatera. Compliance Status : Full.


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Criterion 5.2 (C.5.2) The status of rare, threatened or endangered species and High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their

conservation taken into account in management plans and operations.

PTTN had a HCV assessment done by independent Consultant, which has identified HCV area that cover of total area 785.40 ha. The HCV‟s areas are recognized with HCV‟s 1.1, 1.2 and 4.1. Identification of HCV‟s was recorded in” List of Protected Species”of operating procedure SOP/PBNE/KPHCV. Some sites of Bunga bangkai (Amorphopalus sp) were found and protected The HCV‟s area was identified with sufficient signboards and monitored as required in SOP Identifikasi dan manajemen HCV/ NKT SOP/NP/SMART/IV/LH001 dated on 1 July 2010

Monthly HCV report conducted by trained officers including monitoring of HCV sign boards and protected species,

however, there was no evidence that weekly patrol to avoid violation in HCV area at Normark Estate had been done

as required by procedure Identifikasi dan manajemen HCV/ NKT SOP/NP/SMART/IV/LH001 dated on 1 July 2010.

A Minor nonconformity was raised (See NCR-TN-06). A corrective action has been submitted, being reviewed and

accepted by auditor.

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

PTTN has identified all waste and pollutions sources in the mill and estates and listed them in accordance with its

related procedure. The records of actual wastes in the mill and estates are documented properly (5.3.1). Suitable

methods have been established to minimize the production of wastes and to minimize their environmental impacts.

EFB is used as mulch for young palms in the field near mill in Langga Payung Estate Division II, IV, V and VI with the

dosage 30 t/ha, liquid wastes treated as in Instalasi Pengolah Air Limbah /IPAL (waste water treatment) to reduce

their BOD and COD, with their pH monitored to the requisite standards. Analyses of POME for BOD, COD and pH

are done regularly to ensure the parameters meet the standards, the last report in Semester II 2012 ( 5.3.2 and 5.3.4)

showing compliance. POME is used as land application in the field near mill in Langga Payung Estate. The hazardous

wastes were collected by licensed contractor and the records of hazardous waste manifest were well maintained.

PTTN has a plan to return the waste container to the vendor and the mutual agreement has been signed. (5.3.3).

However, domestic waste was still not managed properly, handling of domestic waste was not conducted in

appropriate manner, during audit it was found a lot of domestic waste found next to Division Office IV, V, VI. The

employee‟s housing in this area were not equipped with proper garbage containers.Hazardous waste from domestic

use had not been identified yet and no facility provided. A Minor nonconformity was raised (See NCR-TN-07).

A corrective action has been submitted, being reviewed and accepted by auditor.


Efficiency of energy use and use of renewable energy is maximized.

PTTN has a renewable energy program in which it continually strives to improve energy efficiency and use more renewable vis-à-vis fossil fuels. The generator set is only used as backup to generate electricity when the main turbine

is down. Regular maintenance of mill engines ( e.g. : boiler, sterilizer, BPV, Steam separator, Motor Compressor, turbine) and motor vehicles also contribute to increase energy efficiency rate. Monthly usages of fiber and shell for renewable energy were recorded in a form of energy mass balance for operational of steam turbine. Monthly usages of fossil fuel also recorded. Compliance Status : Full.

Criterion 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.

The use of fire with any reason is strictly prohibited, such as activities in land preparation of new developments and replanting. PTTN has a zero burning policy, in mill and all estates were well implemented. The wastes that are generated by mill and plantations activities are treated properly. A notable achievement has been the elimination of fire for disposal of garden waste and packaging materials at housing. The company has installed fire protection systems and

training for preparedness in fighting fire at all estates and other infrastructure. Compliance Status : Full

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

PTTN has identified pollution and emission sources, which comes mainly from boilers, generator sets and motor

vehicles (5.6.1). Monitoring of their exhaust emissions is done regularly by independent laboratory , and the results

were six- monthly reported to Environmental Department Agency in a form of RKL-RPL (Environment Management and Monitoring) Semester Report

Since the palm oil mill is not one of the industries mentioned in Environmental Ministry Decree (KepmenLH) No. 13/1995 section 2 article 1, thus it is not an obligatory to install smoke density monitoring and recorder control equipment. But the mill is obliged to monitor the emission parameters in accordance with the regulations twice a year as per Environmental Ministry Regulation (PermenLH) No. 7/2007 section 6b.

The parameters tested for boiler are SO2, NO.2, H2S, particulate, etc. as per the Ministry of Environment Indonesia regulation “Peraturan Menteri Lingkungan Hidup No. 07/2007”. The average of 2 (two) times measurements in 2012 showed that all parameters were under controlled.

For Genset emission was tested against KepmenLH No. Kep-13/MENLH/3/1995, where the average result in 2012 was comply with the standards

Ambience air quality monitoring result showed no parameters above standard as per Government Regulation (Peraturan Pemerintah RI/PP RI) No. 41/1999.


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PTTN has a pollution and emission reduction program in which is prohibited the burning of EFB and domestic wastes in the mill, estates and housing complex; (5.6.3). A procedure to treat POME has been established and the records of monitoring POME are kept properly and were sighted. Compliance Status : Full.

Criterion 6.1 Aspects of plantation and mill management 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.

PTTN has a method to monitor social information from the locals and its employees. The information is assessed and

the results reported to the Environment Manager and concerned parties, such as the environmental impact-controlling

agency, as a part of RKL/ RPL. The RKL/ RPL report covered the classification of the activities into negative and

positive impact. The positive impact such as labour vacancy, cover crop planting, planting of main crops, maintenance

of immature and mature crops. The negative impact arising from land clearing issues, and potential land conflict. A

social impact also assessed the impact of facilty‟s activities on the local communities. Interviews with the

stakeholders indicated that the practice has resulted in improved relationships with the local communities.

Compliance Status : Full.

Criterion 6.2

There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties

PTTN has an effective communication and consultation procedure with smallholders and its local communities. It has

also drawn up an external communication procedure. Consultation with stakeholders is done at least yearly, and the

last minutes of the meeting in June.2011 at Langga Payung Mill Office were sighted. Adjacent estate officers are

responsible for communication with the respective parties on estate activities, while the Environment and CSR

Department assumes overall responsibility for communication and consultation with stakeholders and to ensure that

community programs are run effectively. A list of PTTN stakeholders includes the local communities, NGOs, labour

union, contractors and local government. Compliance Status : Full.

Criterion 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.

PTTN has a complaints, grievance and dispute procedure as stated in “SOP Penanganan Keluh Kesah dan

Ketidakpuasan No. PT. TN-LPYM/RSPO-SOP/02, Internal complaints and grievances are also resolved according the

Mutual Working Agreement (Perjanjian Kerja Bersama). These procedures have been communicated to all

stakeholders at each mill / estates. It was noted that the responses from stakeholders have been positive. During

visits to stakeholders, the audit team confirmed that there were no serious complaints, grievances and disputes at the

moment. Local communities and stakeholders obey and respect the company legal rights, reciprocated by the

company‟s respect for their traditional rights. Compliance Status : Full.

Criterion 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stake-holders to express their views through their own representative institutions.

PTTN has developed “Pedoman Teknis Persiapan Lahan SMART No. SOP/NP/SMART/XII/MCAR001 dated on

01.07.2010, Chapter XII to resolve land conflict. In this certification assessment, the audit team studied the whole

compensation mechanism, and found it satisfactory with no legal action being taken by any party. The mechanism

has been communicated to the stakeholders. Checks on the records and interviews with the local communities

confirmed that there is no current claim on any land. Based on HCV studies and ANDAL report there is no customary

rights of local community. Interviews with the Chief of Local Community confirmed that they have no customary rights

disputes. Compliance Status : Full.

Criterion 6.5

Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

A policy on pay and working conditions in PTTN was established in Perjanjian Kerja Bersama or Mutual Working

Agreement that dealt with BKS-PPSS (Badan Kerja Sama Perusahaan Perkebunan Sumatera). The salary scales and

conditions of work are described in detail for all the positions of employment. PTTN follows all the legislations on

working days, working time, salary levels, regional minimum pay and employee insurance. HRD staff inform the

workers before-hand of their salary adjustments if any. The policy about wages is also socialized in agreements with

contractors (6.5.1.and 6.5.4). Records were sighted that the pay complied with the regional minimum salary for North

Sumatra in January 2013. Employees also provided with rice allowance, for head of family is 15 kg plus 9 kg for wife

and 7.5 kg for each children (maximum 3 children). All PTTN permanent employees are insured under JAMSOSTEK.

All workers, if heads of families, are provided with a housing unit type G2 (48 m2), equipped with electricty and piped

clean water for washing and bath, and the test analysis of potable water using reverse osmosis method fulfill the

requirements of potable water standard by PerMenkes/416/1990. There are 3 company clinics in housing site and one

central clinic where sick employees / dependents get free treatment. The more serious cases are referred to the

regional hospital. There are nearby state schools ( 1 kindergarten, 4 elementary schools, and 1 junior high school

which have been donated by PTTN as part of its CSR program (6.5.3).

However, for employees of contractos there was no mechanism to ensure that contractors abide by labor laws as it is

written in the working contract. For example: At clause inside SPK no. NRME/MDNO/01/13/010 – ATBS dated Jan 2,

2013 regarding Jamsostek and tax, contractor is obliged to provide Jamsostek to workers, but PTTN have not been

verified this yet. A Minor nonconformity was raissed. (See NCR-TN-08). A corrective action has been submitted,

being reviewed and accepted by auditor.


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Criterion 6.6

The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

PTTN has an agreement with the workers and management staff to allow them to establish a labour union in

accordance with national legislation UU No. 13/ 2003. However, only non-staff employees can be Union officers to

obviate any conflict of interest. The Union and management of PTTN negotiate the Perjanjian Kerja Bersama, or

Mutual Working Agreement regularly. Union Worker also provided with the facility of room/ building and furniture.

The minutes of some meetings were checked and the meetings found to be conducted irregularly with no specific

regular working program. Compliance Status : Comply with Observation For Improvement.

Criterion 6.7

Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programs. Children are not exposed to hazardous working conditions.

PTTN has a policy on child and female workers as stated in “Peraturan Perusahaan PT. Smart SE Larangan

Mempekerjakan Anak di Bawah Umur No. 002/SE-HRDV/03/09” dated on 13.01.2009 and socialized in agreements

with suppliers / contractors (6.7.1). No one under 18 years of age is to be employed. Records of personal data of

employees - age, marital status, position and rank, location of work, date of commencing employment - are kept.

Checking the records of the last recruitment and interviews with employees confirmed that no one under 18 years old

has been employed - in compliance with Indonesian national legislation UU RI No. 13 Tahun 2003, article 68 . (6.7.2).


Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual

orientation, union membership, political affiliation, or age, is prohibited.

A policy on equal rights regardless of race, caste, national origin, religion has been established as stated in “Peraturan Perusahaan PT. Smart Tbk pasal 5, SE No.146/CEO1-SE/04/2010” dated on 13.04.2010 and also socialized in agreements with suppliers/ contractors. PTTN is an equal opportunity employer, with promotion mainly based on merit. Compliance Status : Full.

Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

PTTN has established a policy on prevention of sexual harassment and protection of reproductive rights of its female workers as stated in “Peratutan Perusahaan pasal 5 ayat 3, SE No.145/CEO1-SE/04/2010 dated on 13 April 2010 Perihal Sosialisasi Masalah Sexual Harassment“. The policy was socialized to the workers and contractors. There is gender committee established to resolve if sexual harassment occurs. Interviews with female workers confirmed that they really understood the policy about sexual harassment and the reproductive rights. Compliance Status : Full

Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses.

PTTN commited to establish fair, legal and transparent agreements with its suppliers / contractors and independent smallholders/ outgrowers. There are transactions and purchase contracts with contractors and local companies on sale and purchase of FFB, FFB transport and service, maintenance and repair of mill equipment. The price for FFB is determined by the Head of Regional Plantation Section, Agriculture Department of Province North Sumatra via a mechanism based on the CPO price, kernel price (index K) from all palm oil producers and palm oil estates in North Sumatra. Interviews with some contractors confirmed that they understood the terms of their contracts well and thought them fair, legal and transparent andfound no grievance about the price. Payment to contractors and independent smallholders have always been on time as evidenced by their lack of complaints.

However, there was inconsistency regarding FFB grading from outgrowers as stated in SOP Pembelian TBS luar PTTN-LPYM/RSPO/08 was not in accordance with FFB outgrowers standard issued by COO1, according to COO1 the FFB rejected if unriped, overriped, small bunch, empty bunch, and rubbish, fine will be charged only for long stick bunch which is 2 kg/ bunch, while according the SOP the FFB rejected if unriped, small bunch, empty bunch, hard bunch, parthenocopy, the fine will be charged for over ripe loose fruit, rubbish and long stick bunch.

During July 2013 fine were charged for FFB mixed by rubbish for 50 kgs and 100 kgs, no specific criteria to determine

how to measure the rubbish, and fine also charged for wet bunch which was not stated in the grading standard. A

Minor non conformity was raised. (See NCR-TN-09). A corrective action has been submitted, being reviewed and

accepted by auditor.

Criterion 6.11 Grower and mills contribute to local sustainable development wherever appropriate.

PTTN is committed to support sustainable development of the local communities through its Corporate Social Responsibility programs which are presented in its Stakeholder meeting, the last stakeholder meeting was conducted in June 2013. Identification of projects is based on community needs, the priorities of each mill / estates and the

budget available.

Criterion7.0

No new planting planned on any estate included in the scope of this assessment.

Principle 7 is not applicable to this assessment, since no new planting.


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Criterion 8.1 Growers and mills regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

PTTN has committed to a process of continuous improvement by adopting the RSPO P & C and getting certified QMS

ISO 9001 for and SMK3 for Langga Payung POM. An internal audit and management review is done at least yearly to

evaluate the systems. Action plans have been developed for the next one to three years for continual improvement in

key operations through quality objectives for the mill and also can be implemented in estates, such as reducing fossil

fuel consumption, reducing usage of agrochemicals especially paraquat, and has plan to return waste container to the

vendor. For 2012- 2013 the continual improvement were :

- POME application using piping system between flatbeds. Benefit : The foreman of land application can control the

POME discharged from flatbed to flatbed by connect and disconnect pipes without fear of leakage in the last

flatbed.

- Modified wings on Empty Bunch Spreader. Benefit: to prevent EFB enter between tires while EBS is charging or

while EBS is running; to prevent surface friction and saves EBS tires.


3.2. Identified Non Conformances and Noteworthy positive components.

This section gives an over view of new or revised non-conformities raised during this assessment and of

action taken to close out non-conformities rose during the previous assessments.


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3.2.1. Detail of Non Conformity.

Non ConformityReport – TN –01

Pre-Audit Surveillance Audit No.1 Re-Audit ID No. :

Certification Audit Re-certification Audit Date : July 15 -19 2013

Company : PT. TAPIAN NADENGGAN

Mgt. Rep. : Mr.

Lead Auditor : WIEKE SAVITRI Auditor(s) : KARLINA BONE

Standard(s) : RSPO P&C INA-NI Exper(s) : SUPJATNO; FAHROBY FALETEHAN

Date of issued : JULY 18, 2013 Discussed with : MANAGER & STAFF

Location : LANGGA PAYUNG MILL, LANGGA PAYUNG ESTATE & NORMARK ESTATE

RSPO Criterion 4.1 MN

Operating procedures are appropriately documented and consistently implemented and monitored.

Quality inspection was conducted inconsistenly after harvesting, loose fruit were found scattered > 20 pieces in palm circles and in harvesting point areas in Langga Payung Estate.

Classification Major Minor Minor

(Management Representative) (Lead Auditor) (Auditor(s))

Correction of nonconformity (by company): Date of correction :

(Mng. Rep.)

Cause of nonconformity (by company):

Corrective action planned (by company): Deadline for implementation :

1. Penegasan kembali kualitas Inpeksi Panen Detil kepada Asisten dan

Supervisi.

2. Crosscheck hasil IPD oleh Askep dan atau Estate Manager.

(Mng. Rep.)

Follow-Up and Closure of Nonconformance :

Non-Conformity Result of corrective action implemented by the organization

will be verified in ____________________________audit.

Corrective action verified and accepted Effective

Implementation verified by submitted documents Not Effective

Implementation verified in a re-audit

Lead Auditor or Auditor, Date Lead Auditor or Auditor, Date


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Non ConformityReport – TN – 02




Mgt. Rep. : Mr.





RSPO Criterion 4.4 MJ1

Practices maintain the quality and availability of surface and ground water

Protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting.

During site visit it was found that some local community were washing their motorcycles in spring area which has been identified as HCV that should be protected within diameter 200 m from the spring area.




(Mng. Rep.)



1. Sosialisasi kepada masyarakat sekitar.

2. Memasang amaran.

(Mng. Rep.)









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Mgt. Rep. : Mr.





RSPO Criterion 4.4 MN1

Practices maintain the quality and availability of surface and ground water

Spraying using mist blowing method for young palms in nursery areas during April – May 2013 was not conducted consistenly based on rainfall data as required by Working Instruction Penyiraman Bibit IK/SMART/MCAR/III/TA-BBT/07-Penyiraman Bibit that stated if rainfall >10 mm it doesn‟t have to be done,




(Mng. Rep.)



1.Sosialisasi IK Penyiraman Bibitan kepada Mandor Bibitan dan Petugas Pompa Air

2.Penertiban administrasi pencatatan curah hujan berpatokan Umbrometer Bibitan.

(Mng. Rep.)









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Mgt. Rep. : Mr.





RSPO Criterion 4.6 MN

Documentary evidence that usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions

Measuring device for mixing pesticide in Normark Estate was inaccurate, no evidence of verification record had been made.




(Mng. Rep.)



1. EM NRME membuat surat instruksi kepada Asisten Divisi agar

menggunakan gelas ukur untuk ketepatan dosis.

2. Mengganti semua takaran yang tidak standar dengan gelas ukur.

(Mng. Rep.)









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Mgt. Rep. : Mr.






An occupational health and safety plan is documented, effectively communicated and and implemented.

It was found that some contractor workers did not wear appropriate Personal Protection Equipments such as safety helmets and safety shoes during loading FFBs to the truck.




(Mng. Rep.)



1. SEM LPYE membuat surat teguran kepada pihak kontraktor PT UTM agar mentaati penggunaan APD.

2. Asisten Transport PT UTM melakukan sosialisasi ulang pengggunaan APD kepada Tukang Muat TBS.

3. Memastikan bahwa semua Tukang Muat TBS telah menerima APD dari Perusahaan.

(Mng. Rep.)









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Mgt. Rep. : Mr.






The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill

Companies are to appoint dedicated and trained officers to monitor any plans and activities as above.

Monthly HCV report conducted by trained officers including monitoring of HCV sign boards and protected species, however, there was no evidence that weekly patrol to avoid violation in HCV area at Normark Estate had been done as required by procedure Identifikasi dan manajemen HCV/ NKT SOP/NP/SMART/IV/LH001 dated on 1 July 2010 .




(Mng. Rep.)



1. Membuat memo dari EM NRME yang menegaskan kembali tugas dan tanggung

jawab petugas patroli HCV yang berisi pemantauan kawasan HCV bebas dari

perambahan, perburuan dan bebas dari bahaya kebakaran.

2. Membuat buku pemantauan hasil patroli yang wajib diisi oleh petugas patroli

3. Hasil pemantauan tim patroli dan hasil pemantauan rutin direkap oleh HCV Officer setiap

minggu sekali.

(Mng. Rep.)









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Mgt. Rep. : Mr.





RSPO Criterion 5.3 MJ2

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

Estates and mills waste management and disposal are implemented to avoid or reduce pollution.

1. Handling of domestic waste was not conducted in appropriate manner, a lot of domestic waste found next to

Division Office IV, V, VI. 2. The employee‟s housing in this area were not equipped with proper garbage containers. 3. Hazardous waste from domestic use had not been identified yet and no facility provided.




(Mng. Rep.)



1.Membuat Program Pengelolaan Limbah Domestik.

2.Melakukan sosialisasi program.

3.Menyediakan sarana bak sampah setiap 4 pintu disediakan 1 bak sampah.

(Mng. Rep.)









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Mgt. Rep. : Mr.






Agreements entered into with contractors are to specify that contractors abide by labor law

No mechanism to ensure that contractors abide by labor laws as it is written in the working contract. For example: At clause inside SPK no. NRME/MDNO/01/13/010 – ATBS dated Jan 2, 2013 regarding Jamsostek and tax, contractor is obliged to provide Jamsostek to workers, but PTTN have not been verified this yet.




(Mng. Rep.)



1.Melakukan Evaluasi kepada Kontraktor.

2.Melakukan Inspeksi kepada Kontraktor.

3.Membuat Surat Teguran kepada kontraktor.

(Mng. Rep.)









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Mgt. Rep. : Mr.






Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and tranparent

FFB grading from outgrowers as stated in SOP Pembelian TBS luar PTTN-LPYM/RSPO/08 was not in accordance with FFB outgrowers standard issued by COO1, according to COO1 the FFB rejected if unriped,

overriped, small bunch, empty bunch, and rubbish, fine will be charged only for long stick bunch which is 2 kg/ bunch, while according the SOP the FFB rejected if unriped, small bunch, empty bunch, hard bunch, parthenocopy, the fine will be charged for over ripe loose fruit, rubbish and long stick bunch.

During July 2013 fine were charged for FFB mixed by rubbish for 50 kgs and 100 kgs, no specific criteria to determine how to measure the rubbish, and fine also charged for wet bunch which was not stated in the grading standard.




(Mng. Rep.)



1.Revisi Form grading di SOP PenerimaanTBS Luar.

2.Revisi Standar Grading menyesuaikan kriteria grading yang ada di Form.

(Mng. Rep.)









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Non ConformityReport – TN_SCC_01

Pre-Audit Surveillance Audit No. 1 Re-Audit ID No. :

Certification Audit Re-certification Audit Extension Audit Date : July 16-19, 2013


Mgt. Rep. : Mr. H. Mulyanto


Standard(s) : RSPO SCC ver. Nov 2011 Expert(s) : SUPIJATNO, FAROBY FALATEHAN

Date of issued : JULY19, 2013 Discussed with : SUST. DEPT

Location : LPYM

RSPO – Criterion : 2.1

2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received.

Description of Finding/Objective Evident:

2.1 According to SOP no doc. PTTN-LPYM/SOP/01 Rev 0, all received FFB from certified estate will be stamped with “mass balance”. But in the real implementation, no stamp of mass balance available.

Classification Major



(Mng. Rep.)



1.Revisi SOP Indentifikasi dan Kemamputelusuran

2.Surat pernyataan belum pernah Trading RSPO dan Customer belum RSPO

3.Certified Pembuatan Stempel "Mass Balance"

(Mng. Rep.)









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i. Resume of Audit Results

Table 3-2 Resume of Audit Results

Indonesian National Interpretation of RSPO Principles and Criteria

P&C 1.1 1.2 2.1 2.2 2.3 3.1 4.1 4.2 4.3 4.4 4.4 4.5 4.6 4.7 4.8 5.1 5.2 5.3 5.4 5.5 5.6 6.1 6.2 6.3 6.4 6.5 6.7 6.8 6.9 6.10 6.11 7 8.1

Status

1 1 1 1 1 1 2 1 1 3 2 1 3 2 1 1 2 3 1 1 1 1 1 1 1 2 1 1 1 2 1 NA 1

#NC 0 0 0 0 0 0 1 0 0 1 1 0 1 1 0 0 1 1 0 0 0 0 0 0 0 1 0 0 0 1 0 - 0

RSPO Supply Chain Certification Standard: Module E – Mass Balance

SCC 1.1 a 1.1 b 1.2 2.1 2.2 3.1 3.2 3.3 a 3.3 b 3.3 c 3.4 4.1 5.1 6.1

Status

1 1 1 3 1 1 1 1 1 1 1 1 1 1

#NC 0 0 0 1 0 0 0 0 0 0 0 0 00 0

NO.TE: Audited: “1” Conforming; “2” Minor Non-Conformity; “3” Major Non-Conformity; “NA” Not applicable, “#NC” : Number of Non-Conformities found

AUDIT OUTCOME

P&C audit, 3 Non-Conformities MAJOR

6 Non-Conformities MINOR

SCC audit

3.3module E 1 Non-Conformities MAJOR


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b. Status of non-conformities (both minor and major) previously identified

NCR from Certification Assessment :

1. In Standard Operating Procedure for replanting doesn‟t explain the timetable to plant legume cover crops. (P & C 4.1MJ). The effectiveness of corrective action has been verified by auditor. Closed.

2. It was found during the field visit that the replanting area in Division 1 (LPYE11B21) with slopes of 16-40% was not appropriately covered with Mucuna bracteata.(P &C 4.3 MN). The effectiveness of corrective action has been verified by auditor. Closed.

3. None of harvesting workers wear safety helmet in Langga Payung Estate, Paya Baung Estate and Normark Estate because the company doesn‟t provide it for workers. The risk assessment and related SOP do not emphasize the need to wear appropriate PPE against the risk of being hit by harvested FFB fallen from palms. (P & C 4.7 MN). The effectiveness of corrective action has been verified by auditor. Closed.

4. There was not clear which operating working instruction (WI) implemented in weeding, spraying and harvesting process, as there were two IK available: IK-12, IK-20, IK-21 (Rev 00, dated 02.07.2011) or IKPBNE/01, 02, 04 (Rev.00, dated 01.07 2011. (P & C 4.1 MJ). The effectiveness of corrective action has been verified by auditor. Closed.

5. There was no record or evidence that clinical weighing scale and stethoscope in Paya Baung clinic are in good condition.(P & C 4.7 MN). The effectiveness of corrective action has been verified by auditor. Closed.

6. There was no working instruction for nurses to prescribe medicine for patients, especially antibiotic.(P &C 4.7 MN). The effectiveness of corrective action has been verified by auditor. Closed.

7. Medical waste from Payabaung clinic, periode April-June was kept not in appropriate manner, such as no labelled of waste, and not kept in appropriate place. (P & C 4.7 MN). The effectiveness of corrective action has been verified by auditor. Closed.

8. Working instruction regarding handlling of hazardous agrochemicals spill (SOP /PBE/LBH (Rev,00, 1 Juli 2010) was not found in Agrochemical Warehouse of Payabaung Estate. Symbol of hazardous chemicals was not in apropriate manner and the person in charge who handle agrochemicals found has not enough competence in his job, i.e MSDS, symbol, and working instruction.(P & C 4.6 MJ). The effectiveness of corrective action has been verified by auditor. Closed.

9. MSDS of Rollixone in Agrochemical Warehouse at Payabaung Estate, and also for other MSDS, indicated that there must be shower water and soap available if emergency situation happened. The shower water was available, but it didn‟t work and there was no soap available in place. The facility doesn‟t provide bin for hazardous wastes, sand, and fabric cotton waste as required by SOP/PBNE/LBH (Rev.00, dated 01.07.2011.( P & C 4.6 MJ). The effectiveness of corrective action has been verified by auditor. Closed.

10. One of the operators was not wearing appropriate safety shoes as required in IK12 rev00, dated 02.07.2010 while uprooting woody growths (Dongkel Anak Kayu) in Block 26. (P & C 4.7 MN). The effectiveness of corrective action has been verified by auditor. Closed.

c. Issues Raised by Stakeholders

During annual surveillance assessment 1 the Assesor team did not conduct Public consultation with stakeholders in certain time and place but by interviewing in personal with employees, contractors, labour union, gender representative, or village chiefs near the plantation and reviewed againts previous minute meeting of Stakeholders conducted by PTTN. Subjects discussed during the interview with stakeholders were:

1. Knowledge of RSPO;

2. Benefits of the existence of palm oil plantation on the community;

3. Problems experienced related to the presence / activities of the plantation;

4. The solution to address the problems that occur.

The results of interview with stakeholders are as follows:

1. In general, mostly stakeholders were briefed on issues regarding RSPO, though their understandings were observed to be variable. Participants who were relatively more aware of RSPO were mainly participants living close to plantations, such as labor union, the village chief, and thecommunity leader. They knew this RSPO information from the management/ staff during the socialization of RSPO.

2. Mosty the stakeholders interviewed stated that the existence of oil palm plantation has provided benefits to society. The perceived benefits include:

a. Provision of employment, both directly related to maintenance activities and the cultivation of oil palm. Indirectly through partnership such as procurement of equipment, workmanship


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maintenance of facilities (roads, bridges, building / office). It is also recognized by the representatives of the Social Service and the local Labor.

b. Improved local economy, especially felt by contractor who supply FFB or other services. Indicators of economic improvement, among others, the condition of the residential houses, ownership of motor vehicles, both motorcycles and cars. Currently almost all owners of plasmas have motorcycles, and quite a number of them own cars. Another indicator is many children can afford to attend school.

c. Improving the economic prosperity and status of the community.

d. Corporate Social Responsibility (CSR) Program

Improvement of road infrastructure.

Improvement of the health service.

Improvement of education.

Contributions for celebrating the national and religious festivals or other grand activities. The company provides assistance in cash or in kind for religious activities (Eid al-Fitr, Eid al-Adha) and national holidays (Independence Day). Assistance is generally provided based on public requests through proposals.

3. Problems experienced related to the presence / activities of the plantation

There was no significant issue raised during interviews with stakeholders.

4. Certified Organization’s Acknowledgement of Internal Responsibility

a. Date of next surveillance visit

The next surveillance assessment will be conducted within 12 month, approximately in July 2014.

b. Date of closing non-conformities (both major and minor)

All the minor and major nonconformities have been closed, but the effectiveness will be verified in the next surveillance audit.


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c. Formal Sign-off of Surveillance Assessment Findings

I the undersigned, being the legal representative of the inspected company, agree with the contents of this

report and accept the liability in execution of the instructions given in the report.

Signed for and on behalf of

PT.TAPIAN NADENGGAN AND PT.SATYA KISMA USAHA,

subsidiaries of PT. SMART, Tbk.

Jakarta – October 28, 2013

Head of Sustainability Department

(Mr. Ismu Zulfikar)

Signed for and on behalf of PT. TÜV NORD Indonesia – System Certification Management

Jakarta – Octoeber 28, 2013

Lead Auditor

(Wieke Savitri)


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Appendix 1 List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

(Environmental Impact Assessment)

OER Oil Extraction Rate

BOD Biological Oxygen Demand OHS Occupational Health and Safety

BPN Badan Pertanahan Nasional (National Land Body)

OHSAS Occupational Health and Safety Assessment Scheme

CPO Crude Palm Oil P&C Principle and Criteria

CSR Corporate Social Responsibility PK Palm Kernel

EFB Empty Fruit Bunch PKB Perjanjian Kerja Bersama (Collective Agreement)

EMS Environmental Management System POM Palm Oil Mill

FFB Fresh Fruit Bunch POME Palm Oil Mill Effluent

GPS Global Positioning System PPE Personal Protective Equipment

HCV High Conservation Value PT Perseroan Terbatas (Limited Company)

HGU Hak Guna Usaha (Land Right/ Land Use Title) PTTN PT. Tapian Nadenggan

HIRA Hazard identification and risk assessment R&D Research and Development

IPM Integrated Pest Management RKL Rencana Pengelolaan Lingkungan Hidup

(Environmental Management Plan)

IUP Ijin Usaha Perkebunan (Land use permit) RPL Rencana Pemantauan Lingkungan Hidup

(Environmental Monitoring Plan)

Jamsostek Jaminan Sosial Tenaga Kerja (Social Insurance for Employees)

RSPO Roundtable on Sustainable Palm Oil

Kapospol Kepala Pos Polisi (Head of Police Station) RSPO NI

Roundtable on Sustainable Palm Oil National Interpretation

MOU Memorandum of Understanding SA8000 Social Accountability 8000

K3 Kesehatan dan Keselamatan Kerja

(Occupational Health and Safety)

SIA Social Impact Assessment

KER Kernel Extraction Rate SOP Standard Operating Procedure

KUD Koperasi Unit Desa (Village Cooperatives) UKL Upaya Pengelolaan Lingkungan Hidup

(Environmental Management Effort)

MSDS Material Safety Data Sheet UPL Upaya Pemantauan Lingkungan Hidup

(Environmental Monitoring Effort)

NC Non Conformity SEL Studi Evaluasi Lingkungan

Evaluation of Environmental Study


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Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011

STANDARD SG MB RESULT

1. DOCUMENTED PROCEDURES

1.1 The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

a. Complete and up to date procedures covering the implementation of all the elements in these requirements

√ √ The SOP “PT TN-LPYM/SOP/01 Identifikasi dan Mampu Telusur is

available on site.

b. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

√ √

The Mill Manager, Mr. Siswo Wardono, was appointed to be a

person who is responsible over SCC requirement‟s

implementation.

1.2

The facility shall have documented procedures for receiving and processing certified and No.n-certified FFBs.

√ √

SOP “PT TN-LPYM/SOP/01 Weighbridge officer will be responsible

to administratively documenting the delivery order from estates to

mill.

2. PURCHASING AND GOODS IN

2.1 The facility shall verify and document the volumes of certified and No.n-certified FFBs received.

√ √

Verification will be in a form of stamp “MASS BALANCE”. But in real implementation, no stamp of mass balance availabe.

A corrective action has been submitted, verified and accepted by auditor.

2.2 The facility shall inform the CB immediately if there is a projected overproduction.

√ √

Once there is a projected overproduction PTTN has a mechanism to inform CB. The projected overproduction number will be informed directly via email to related CB‟s sales person carbon copied (cc.) to related auditor(s) and CB System Certification Manager. The projected overproduction Notification will be attached with the evidence needed to prove the ability of PTTN to achieve an overproduction.

3. RECORD KEEPING

3.1

The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

√ √ SOP “PT TN-LPYM/SOP/01 The records is maintained by weighbridge officer daily, monthly, as well as quarterly (3 monthly). All production data are recorded to an SAP, Systems Application Programming..


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3.2 Retention times for all records and reports shall be at least five (5) years.

√ √ As SOP “PT TN-LPYM/SOP/01 , the records will be kept for 10 years.

3.3

a. The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

√ √ As per SOP “PT TN-LPYM/SOP/01 . Can be trace down in CPO Production Report 3 Monthly Basis

b. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

x √ As per SOP “PT TN-LPYM/SOP/01

c. The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

x √ No. transaction has been made, will be verified in the next surveillance audit in 2014.

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase

√ √ Actual implementation could only be verified if any transaction has been made in the next surveillance audit.

4. SALES AND GOOD OUT

4.1

The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated) d) The quantity of the products delivered; e) Reference to related transport documentation.

√ √ As per SOP “PT TN-LPYM/SOP/01

5. PROCESSING

5.1

The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from No.n-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100 % segregated material to be reached. The systems should guarantee the minimum standard of 95 % segregated physical material9; up to 5 % contamination is allowed.

√ x N/A for Mass Balance


Audit Report

Form Title

Revision No..

Effective Date

Page

: FRSPO-TNI-05

: 1

: 04.01.2011

: 38 of 38


5.2

The facility shall provide documented proof that the RSPO certified palm oil can be traced backto only certified segregated material.


5.3

In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does No.t need to be separately certified. The mill has to ensure that: ·The crush operator conforms to these requirements for segregation·The crush is covered through a signed and enforceable agreement


6. TRAINING

6.1

The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

√ √

Procedure for training is described in

SOP Training Human Resources

7. CLAIMS

7.1

The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.

√ √

A procedure/mechanism of claim as per RSPO Rules for communication and claims are stated in the procedure of supply chain SOP “PT TN-LPYM/SOP/01 recited from RSPO Rules for Communication and Claims. The implementation will be further verified during the next surveillance audit, after the certification is approved