RSPO audit Report · RSPO Principles & Criteria Main Assessment Report Report Number CU827593 RSPOPC-SUM-REPORT.F01 JULY2013 Page 3 of 45 Control Union (Malaysia) Sdn. Bhd

RSPO Principles & Criteria Main Assessment Report Report Number CU827593

RSPOPC-SUM-REPORT.F01 JULY2013 Page 1 of 45

Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia.

Tel: +603-3377 1600 / 1700

RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT

MAIN ASSESSMENT

Indonesia Benua Puhun Palm Oil Mill

2013

Report prepared by: Kongpichit Na Nakhonphanom (Lead Assessor)

Certification decision by: Hari Naveen Christopher (Certifier)

Certifying Office

Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa,

Off Jalan Sg Bertih, Teluk Gadong, 41100 Klang, Selangor, Malaysia [email protected]

Tel: +603-3377 1600 / 1700

Control Union Certifications

Control Union Certifications is a member of the Control Union World Group - an

international inspection and certification body. CUC performs assessments and

certification in many agricultural based fields such as FSC, RSPO, and Organic

production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP,

BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic

program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

RSPO Membership Number 8-0025-06-000-00

RSPO Approval Date 12/01/2006

Affiliate Membership http://www.rspo.org/en/member/339

mailto:[email protected]

http://www.rspo.org/en/member/339




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Table of Contents

PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT .............................................................. 4

1.1 COMPANY AND CONTACT DETAILS ....................................................................................................................... 4 1.2 RSPO MEMBERSHIP & CERTIFICATION DETAILS ..................................................................................................... 4 1.3 MAIN ASSESSMENT DETAILS ............................................................................................................................... 4 1.4 ASSESSMENT TYPE ............................................................................................................................................ 4 1.5 LOCATION OF THE PALM OIL MILL ........................................................................................................................ 4 1.6 PALM OIL MILL OUTPUT AND APPROXIMATE TONNAGES CERTIFIED ............................................................................. 4 1.7 GENERAL DESCRIPTION OF SUPPLY BASE ............................................................................................................... 5

1.7.1 Location of the Supply Base................................................................................................................................. 5 1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year ................................................. 5 1.7.3 Percentage of Planted Oil Palm by different Age Ranges ................................................................................... 6 1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill ........................................................ 6

1.8 PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS, IF APPLICABLE TO THIS ASSESSMENT .................................. 6 1.9 LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1) .............................................................................. 6

PART 2: PARTIAL CERTIFICATION ........................................................................................................ 7

2.1 MANAGEMENT STRUCTURE................................................................................................................................. 7 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ..................................................................................................... 7 2.3 SUMMARY OF THE TIME BOUND PLAN .................................................................................................................. 7 2.4 UN-CERTIFIED UNITS OR HOLDINGS...................................................................................................................... 8 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ....................................................................................... 14 2.6 PARTIAL CERTIFICATION AUDIT AGENDA.............................................................................................................. 14

PART 3: AUDIT PROCESS.................................................................................................................... 15

3.1 ABOUT THE CERTIFICATION BODY ....................................................................................................................... 15 3.2 AUDIT TEAM .................................................................................................................................................. 15

3.2.1 Qualifications of the Lead Auditor ............................................................................................................................... 15 3.2.2 QUALIFICATIONS OF THE ASSESSMENT TEAM ................................................................................................... 16

3.2.2 Qualifications of the Assessment Team....................................................................................................................... 16 3.3 AUDIT METHODOLOGY .................................................................................................................................... 17

3.3.1 General Overview .............................................................................................................................................. 17 3.3.2 Assessment agenda for this Audit ..................................................................................................................... 18

PART 4 ASSESSMENT FINDINGS ........................................................................................................ 19

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ................................................................ 19 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA ...................................................................................... 19

Principle 1: Commitment to Transparency .......................................................................................................................... 20 Principle 2: Compliance with Applicable Laws and Regulations .......................................................................................... 20 Principle 3: Commitment to Long-Term Economic and Financial Viability .......................................................................... 23 Principle 4: Use of Appropriate Best Practices by Growers and Millers .............................................................................. 23 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity .................................. 27 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers .......... 30 Principle 7: Responsible Development of New Plantings ..................................................................................................... 34

4.3 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE ............................. 36 4.3.1 Non-Conformities Identified during this Audit ........................................................................................................... 37

4.4 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY ............................................................ 37

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ................................................................................... 39

5.1 POM INCLUDED IN THE SCOPE OF THE AUDIT ...................................................................................................... 39 5.2 CONFIRMATION OF THE COMPANY’S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM

KERNEL OVER A SPECIFIED PERIOD ................................................................................................................................ 39 5.3 SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION ................................................ 39 5.4 MONTHLY RECORDS OF CERTIFIED FFB, CPO AND PK PRODUCED SINCE THE LAST AUDIT .............................................. 39 5.5 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY .......................... 39 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY .......................... 39 5.7 NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT .............................................................................................. 39 5.8 DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS............................................................................... 40 5.9 FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM ...................................... 40




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PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ........... 41

6.1 DATE OF NEXT ASA ......................................................................................................................................... 41 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ........................................................................................................ 41 6.3 SIGNING BY THE CLIENT .................................................................................................................................... 41 6.4 SIGNING BY THE LEAD AUDITOR ......................................................................................................................... 41 6.5 SIGNING BY THE CERTIFIER ................................................................................................................................ 41

PART 7: APPENDICIES ........................................................................................................................ 42

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT ............................................................................................. 42 APPENDIX 2: LIST OF ABBREVIATIONS ............................................................................................................................. 45




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PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT

1.1 Company and Contact Details

Company Name: PT. Prima Mitrajaya Mandiri

Business Address: Gedung Graha Aktiva Suite 1001, Jl. HR Rasuna Said, Kav 03 Blok X-1, Kuningan, Jakarta Selatan, Indonesia

Contact Person: Mr, Chandra Sekaran K.V Nair

Office Telephone: 621-529 20 338

E-Mail: [email protected]

Web Site: www.mpevans.co.uk

Other Certifications Held: OHSAS 1800

1.2 RSPO Membership & Certification Details

RSPO Membership Number: 1-0027-06-000-00

Registered Client Name: MP Evans Group PLC

Certificate Number: C827593CU-RSPO.01.2014

Start Date Of Certificate: PENDING RSPO APPROVAL DATE

End Date Of Certificate: PENDING RSPO APPROVAL DATE

Date Of Original Certification: PENDING RSPO APPROVAL DATE

Scope: Certification of the Palm Oil Mill and Supply Bases

Type Of Certification: Single site

Duration Of Certificate: 5 Years from date of certification

1.3 Main Assessment Details

Dates Of This Audit: 15 – 19 September 2013

Audit Number: Main

1.4 Assessment Type

This is a RSPO Principles &Criteria Compliance assessment of the palm oil mill and its respective supply bases as listed in this report below.

1.5 Location of the Palm Oil Mill

Name Palm Oil Mill

Mill Capacity

Location GPS Reference

(POM) MT/Hour Address Longitude Latitude

Benua Puhun 60 Desa Benua Puhun, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 45' 39,65" E 0 17' 44,84" S

1.6 Palm Oil Mill Output and Approximate Tonnages Certified Figures below are from:

Only from certified supply bases (Y/N). NO

Combining certified with uncertified supply bases (Y/N). YES

If the Mill is receiving FFB from uncertified supply bases outside the audit scope, such uncertified sources is highlighted under the following sections as seen applicable:

a. PART 1, Section 1.7 – General Description of Supply Base, b. PART 2: Partial Certification, Section 2.4 – Uncertified Units or Holdings, c. PART 5: RSPO Supply Chain Certification of this report

Projected Production from the last 12 Months (MT)

Actual Production for this Audit Year 2013 (MT)

Projected 12 Months (MT) Forecast Certified in this Report(January 2014 until December 2014)

mailto:[email protected]

http://www.mpevans.co.uk/




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FFB CPO PK FFB CPO PK FFB CPO PK

NA NA NA NA NA NA 185,000 57,614* 9,910

*Estimated OER of 21.5%.

1.7 General Description of Supply Base

Palm Oil Mill has their 7 supplies base and also buying outside crop from local company. The ratio between their own crop and outside crop is 80% and 20% approximately. All the product e.g. CPO, PK after processing will be sent to their own Bulking Jetty which located about 20 Kilo Meters away. There are 3 storage tanks with capacity of 1 x 3000 and 2 x 5000 Metric Tons. The goods will be load to Barge to delivery to customer. All the transaction will be done from the Bulking station.

1.7.1 Location of the Supply Base

OPP

Oil Palm Plantation

Location GPS reference Area Summary (Ha)

Name Address Longitude Latitude Total Mature

OPP 1 Bukit Jering Estate (PT

PMM)

Desa Bukit Jering, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 37' 36'' E 00 10'17'' S 3,633 1.901

OPP 2 Kaman Hilir Estate (PT

PMM)

Desa Muara Kaman Hilir, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 41' 52'' E 00 11'28'' S 2,175 2.102

OPP 3 Loleng Estate

(PT PMM)

Desa Lebaho Ulak, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 41' 24'' E 00 15'50'' S 3,002 2.309

OPP 4 Benua Puhun Estate (PT

PMM)

Desa Benua Puhun, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 43' 21'' E 00 16'21'' S 2,906 2.645

OPP 5 Muara Wis Estate (PT

PMM)

Desa Lebak Mantan, Kec. Muara Wis, Kab. Kutai Kartanegara

116 28' 16'' E 00 18' 23''S 1,183 595

OPP 6 Rantau Hempang Estate

(PT TJA)

Desa Rantau Hempang, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 42' 16'' E 00 05' 31''S 3,219 1.652

OPP 7 Mahakam

Estate (PT TJA)

Desa Bunga Jadi, Kec. Muara Kaman, Kab. Kutai Kartanegara

116 43' 26'' E 00 06' 38''S 1,569 876

Total 17,687 11,951

1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year

OPP Oil Palm Plantation Estimated FFB/Year (MT) Planting Years Cycle (Years)

OPP 1 Bukit Jering Estate (PT PMM) 17,179 2007 30

OPP 2 Kaman Hilir Estate (PT PMM) 47,089 2007 30

OPP 3 Loleng Estate (PT PMM) 30,556 2007 30

OPP4 Benua Puhun Estate (PT PMM)

22,548 2008 30

OPP5 Muara Wis Estate (PT PMM) 2,103 2010 30

OPP6 Rantau Hempang Estate (PT TJA)

29,874 2007 30

OPP 7 Mahakam Estate (PT TJA) 3,235 2009 30

TOTAL 152,584 - -




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1.7.3 Percentage of Planted Oil Palm by different Age Ranges

OPP Planting Years by 5 year Ranges

1996-2000 2001 -2005 2006 – 2010 2011 – 2015 Total

OPP1 - - 1663 238 1899

OPP 2 - - 1830 272 2102

OPP 3 - - 1905 404 2309

OPP4 - - 2645 - 2645

OPP5 - - 446 149 595

OPP 6 - - 1455 197 1652

OPP 7 - - 647 229 876

Total 10,591 12,080

1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill

N = 0.8√Y, where “Y” is the number of units, with the result always to be rounded “up” to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed

For the Mill, how many units make up the production base?

Owned estates (Y) N = 0.8√Y Smallholders (Z) N = 0.8√Z

7 3 0 7

Explanation as to the selection of estates sampled

Sample estate is based on the area.

1.8 Progress of associated Smallholders or Out-growers, if applicable to this assessment

Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan, if applicable to this assessment

N/A

1.9 Location Map for this Certification Unit (See Appendix 1)




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PART 2: PARTIAL CERTIFICATION

The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure

Section Criteria Yes/No If “Yes” If “No”

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company?

No Section 2 is N/A

Go to 2.1.2

2.1.2 Is the certified operation part of a simple structure of operations owned by one company?

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

- Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

- Go to 2.4 Go to 2.2.2

2.1.5 Is there a time bound plan in place for all subsidiaries, estates and palm oil mills?

Yes Go to 2.3 2.2.3

2.1.6 Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO.

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category

2.2.1 There is no explanation as to the company’s structure and therefore it Is not possible to conduct an effective audit against the rules for partial certification.

- Major

2.2.2 There is no statement of commitment to complying with the spirit of the RSPO for all companies within the company structure.

- Major

2.2.3 There is no time bound plan in place for the certification for all subsidiaries, estates and mills.

- Major

2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

Yes, all subsidiaries, estates and mills are included. Yes

2.3.2 Is the time bound plan challenging? Age of

plantations. Location. Mill

There are no changes to the time bound plan since the last audit. The audit summarizes the status as follows: Indonesia PT Evans Indonesia currently owns 2 mills and several plantations in Indonesia. The mills:

Yes




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development. Infrastructure. Compliance

with applicable law.

1) PKS Pangkatan, Sumatera (RSPO Certified in 2012) 2) PKS Benua Puhun, Kalimantan (Main Assessment

currently in progress 2013) A 3rd mill, PKS Tuing, Sumatera is scheduled to be commissioned in 2014, followed by certification, targeted to occur in 2015.

2.3.3 Have there been any changes since the last audit? Are they justified?

There are no changes to the time bound plan as mentioned above.

Yes

2.3.4 If there have been changes, what circumstances have occurred?

As above (2.3.2 and 2.3.3) Yes

2.3.5 Have there been any stakeholder comments?

No negative stakeholder comments were received during the 30-days consultation period either by CUC or the auditee prior to this main assessment or during the audit.

Yes

2.3.6 Have there been any newly acquired subsidiaries?

Yes. The new acquisition has taken place in Sumatera Selatan, known as PT Evans Lestari in Q4, 2012. See 2.4.3 below.

Yes

2.3.7 Have there been any isolated lapses in the implementation of the plan?

No, the company is on track to meeting its certification commitments as described below in the Time Bound Plan table.

Yes

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?

No, there is no systematic failure. Yes

2.3.9 General statement as to progress made since the last audit?

The audit findings for this main assessment, finds the company is on a realistic time bound plan to have their operations in Indonesia certified as planned and described above.

Yes

2.4 Un-Certified Units or Holdings

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills)

Section Requirement Findings and any action required Compliance

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

Yes. Yes

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing

No replacement and no primary forest sighted during the site visits.

Yes




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High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

2.4.3 Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure.

The audit team sighted documents housed in the PT Evans Indonesia head office in Jakarta. Document and interviews confirm the following actions were completed:

NPP Notification: PT Evans Indonesia – PT Teguh Jayaprima Abadi (PT TJA) was done on February 26 to March 25, 2013 with no negative comments.

NPP Notification: PT Evans Indonesia – PT Prima Mitrajaya Mandiri (PT PMM) was done on February 26 to March 25, 2013 with no negative comments.

Status of other land holdings: PT Gunung Palawan Lestari

The company obtained the Izin Lokasi (IL) (Location permit) dated October 27th 2004 from the Bupati Bangka.

Izin Usaha Perkebunan (IUP)(Plantation permit) dated September 20th 2004 from the Bupati Bangka

AMDAL was received on March 28th 2008 from the Bupati Bangka.

The Izin Lokasi (IL) Location permit was subsequently renewed and approved on May 5th 2010 and again on April 8th 2013 from the Bupati Bangka.

The company has plans in place to commission a 3rd palm oil mill in 2014, known as PKS Tuing with a target RSPO certification for 2015.

HCV assessments were carried out in May 2013 by Aksenta. PT Simpang Kiri

There is currently 1 operational estate with 2,654 Ha

HGU: 37/HGU/DA/88 for 1,504 Ha was obtained on April 19th 1988

HGU: 83/HGU/BPN/97 for 1,150 Ha was obtained on July 23rd 1997

There are no current plans to commission a mill for this location as all existing crop is being sold to an external mill not owned by PT. Evans Indonesia.

PT Evans Lestari

Izin Lokasi (IL) Location permit dated October 30th 2012 from the Bupati Musi Rawas for approximately 20,000 Ha was obtained.

Izin Usaha Perkebunan (IUP) (Plantation permit) dated November 21st 2012 from the Bupati Musi Rawas was obtained.

Yes




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AMDAL dated February 14th 2013 from the Bupati Musi Rawas was obtained.

There are no current plans to commission a mill for this location.

HCV assessment by Fakultas Kehutanan Institut Pertanian Bogor was carried out in March 2013.

See also 2.3.6 above Proposed plans for future NPP notifications to take place for 2013/2014:

PT. Evans Lestari

PT. Gunung Pelawan Lestari

Both NPP is forecasted to take place either Q4, 2013 or Q1, 2014

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

No negative stakeholder comments were received during the 30-days consultation period either by CUC or the auditee prior to this main assessment or during the audit. However, the audit team has captured and followed up on 3 issues. Issue #1 In PT. Gunung Pelawan Lestari, no issues were recorded from any intrested parties during the ASA1 audit in PKS Pangkatan in August 2013. However the Koperasi Gunung Muda Sejahtera, not in favour for oil palm cultivation even the compensation process activated. The company is currently engaged in an on-going negotiation with the Koperasi to idenfied solutions. Issue #2 A grievance complaint against the parent company, MP Evans Group PLC, that was published on the RSPO website. The grievance was filed on February 13, 2013 and posted on the RSPO grievance and complaint website. See link: http://www.rspo.org/en/status_of_complaint&cpid=34 The nature of the complaint: Alleged breach of Principle 2. Synopsis of compliant, that the company has:

Carried out illegal logging on 540 Ha.

Planted on land outside the concession area.

Planted on land outside the HGU. The audit team sighted several key correspondences with the regard to this complaint as described below. The member had met with the RSPO on 26th July 2013 and the relevant documents pertaining to these allegations were made available. The member had officially responded to RSPO on several occasions between March 2013 to August 2013, providing clarification concerning their land holdings and steps taken to ensuring compliance with local regulatory requirements. The last

Yes

http://www.rspo.org/en/status_of_complaint&cpid=34




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communication to RSPO, dated August 13th 2013, explains its position and progress made. Background and History Several estates make up this main assessment audit for PKS Benua Puhun. These estates went through the NPP notification under 2 groups:

PT Teguh Jayaprima Abadi (PT TJA) o Rantau Hempang Estate, o Mahakam Estate

PT Prima Mitrajaya Mandiri (PT PMM) o Bukit Jering Estate, o Kaman Hilir Estate, o Loleng Estate, o Benua Puhun Estate, o Muara Wis Estate

Both PT TJA and PT PMM obtained their respective “Izin Lokasi (IL)”, “Izin Usaha Perkebunan (IUP)” and AMDAL as follows: PT TJA

Location permit(Izin Lokasi): Obtained June 27th 2006 for 5,100 Ha’s and September 6th 2007 for 13,550 Ha from the Bupati Kutai Kartanegara

Agriculture Permit(Izin Usaha Perkebunan): Obtained January 16th 2007 and December 4th 2007 from the Bupati Kutai Kartanegara.

AMDAL: Obtained September 24th 2008 and March 16th 2009 from the Bupati Kutai Kartanegara.

PT PMM

Location Permit (Izin Lokasi): Obtained June 26th 2007 for 21,500 Ha’s from the Bupati Kutai Kartanegara.

Location Permit (Izin Usaha Perkebunan): Obtained July 26th 2007 from the Bupati Kutai Kartanegara.

Environmental impact assessment(AMDAL): Obtained September 24th 2008 from the Bupati Kutai Kartanegara.

All these documents had approved concession areas as KBNK (Kawasan Budidaya Non-Kehutanan), meaning Non-Forest Land.

However, in 2011, the Forestry Ministry came out with a new map, zoning forest areas. There was a conflict with the governmental regulations between the local government (Kalimantan Timur Province) and the central government (Forestry Ministry of Republic Indonesia) over different map zoning of forest areas by the respective authorities. Based on survey done by the Forestry authorities in 2011, some of the land area that make-up PT. TJA and PT. PMM are not classified as non-forest area and are now within forest areas or




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Hutan Produksi (HP) as opposed to the IL, IUP and AMDAL listed above. The company was advised by Central Government Forestry Ministry authorities that approximately 1,140 Ha’s are in forest area. The company had followed up the matter with the Forestry Ministry (Kementerian Kehutanan) and were advised that there are several stages in the process before the land is finally classified as forestland. On 6th July 2012, The President of The Republic of Indonesia issued the amendment of The Peraturan Pemerintah no. 10 year 2010, namely Peraturan Pemerintah no. 60 year 2012.

From the flow chart of PP no. 60 of 2012, any company affected by this, differences in map zoning of forest areas, has a limited time to initiate forestland release through a process, starting with an application.

On September 10th 2012, the company proactively made their application based on PP no. 60/2012 for both PT. PMM and PT. TJA for 1,140 Ha. A partial approval for 616 Ha’s was received followed by another revised application dated March 20th 2013 for the remaining area. On September 19th, the RSPO has written back to the member, MP Evans, with recommendations from the Grievance Panel. At the time of this audit, the process for land swap according to PP No. 60 year 2012 is still an on going process. However, the audit team sighted an official document from the Forestry Ministry, dated August 2nd 2013, where approximately 276,240 Ha’s in Kalimantan Timur has been classified as “Perubahan Fungsi Kawasan hutan”. Under this category, there is approximately 199,402 Ha’s or Hutan Produksi (HP) which is forestland, has been converted to HPK (Hutan Produksi Konversi) which is forestland that is allowed to be converted. The concession areas that make-up PT. TJA and PT. PMM fall under this category. The company had subsequently made the necessary application for the entire 1,140 Ha on August 29th 2013; confirmed receipt by the Forestry Ministry on August 30th 2013. The application is a process to help change the status of HPK (Convertible Forest Area) to APL (Areal Pengunaan Lain) or “Area for Other Land Use” for the 1,140 Ha’s and is currently under review. Note: Non-Forest Areas are typically called APL or KBNK. In addition, the audit lead to a meeting with RSPO Indonesia office, Ibu Kusumadewi, who had also reviewed the documents presented by MP Evans Group PLC and believed the latest information favours the company in addressing the recommendations made by the grievance panel. The management will be officially responding to RSPO’s letter dated September 19th 2013 and it is hoped the evidence




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provided, will help close the grievance complaint. Issue #3 Also, in 2012, during the main assessment for PKS Pangkatan, the audit team identified a complaint that involved the minority shareholder partner. The local partner lodged the complaint to RSPO, local authorities and the police. The complaint highlights that the company’s East Kalimantan operations (PT Prima Mitrajaya Mandiri) was planted on forest area, impacting approximately 762 Ha’s. This compliant, closely follows the compliant received by RSPO in February 2013 discussed above. Although the izin (permit) provided did not fall into forest category, MP Evans has taken the 762 ha’s in question out of their application for HGU and is not part of PT Prima Mitrajaya Mandiri (PT. PMM). The Kadastral map of HGU for PT Prima Mitrajaya Mandiri shows the exclusion of the forest areas which are logged over / degraded forests and amounts to about 762 ha’s. Again, this area although included in the Ijin Lokasi map but has been excluded from HGU. Given the latest information and findings in Issue #2, the company’s actions in making the necessary application to the Forestry Ministry dated August 29th 2013, where it is clear that 1,140 Ha’s between PT. TJA and PT. PMM is now categorized as HPK land, will help address both complaints (Issue #2 and Issue #3). In addition, based on sighted correspondences and interviews, the company is in the process of closing the complaint and concerns raised by the minority partner. The audit team concluded that significant progress has been made in resolving and closing this particular grievance complaint and the established process in resolving such matters is working. The progress of this issue will be reviewed during the next surveillance audit in 2014.

2.4.5 Any Labour disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

There are a few open cases currently being dealt between the company and the respective Dinas Ketenagakerjaan (Manpower Department) for the respective operational units. The company has implemented standard operation procedures (SOPs) to handle such matters. A documented process in resolving labour disputes was reviewed. Evidence of complaints lodged, reviewed, and closed by mutual agreement were sighted. Interview with the local labour union and gender committee representative for the Benua Puhun operations, revealed that there was no labour dispute during the audit period with the exception of a few on-going complaints that’s being handled through the established process.

Yes

2.4.6 Any Legal non-compliance is

Yes. See also 2.3 and 2.4 above. Yes




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being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

TIME BOUNDP PLAN FORECAST FOR RSPO CERTIFICATION OF ALL PALM OIL MILLS & SUPPLY BASES

Palm Oil Mill Country Supply Bases (estates,

plantations, associations) Targeted RSPO

Certification Year Current Certification

Status as per this Audit

PKS Pangkatan Indonesia

PT.Pangkatan Indonesia

PT.Bilah Plantindo

PT. Sembada Sennah Maju

2012 Certified, 2012

PKS Benua Pohon Indonesia

PT Teguh Jayaprima Abadi (PT TJA)

Rantau Hempang Estate

Mahakam Estate PT Prima Mitrajaya Mandiri (PT PMM)

Bukit Jering Estate

Kaman Hilir Estate

Loleng Estate

Benua Puhun Estate

Muara Wis Estate

2013

In-Progress (Main assessment to take place in September 2013)

PKS Tuing Indonesia PT. Gunung Palawan Lestari

2015 Pending, mill to be commissioned in 2014

2.5 Summary of the findings for Partial Certification

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension. The company had its first operation certified in 2012 and continues to take a very responsible approach to all of their plantation developments with regards to land, social, and labour issues. Clear procedures have been established and implemented. The processes to handle issues such as land conflicts and dealing with complaints in general are working based on both document audits and field interviews where such concerns are being resolved through a mutually agreed process. The audit team highlights that several key issues were reviewed and the company has taken the necessary positive steps and are currently being handled through clear and transparent procedures as indicated above, the implemented system is working effectively and allows for continuous feedback for improvement and resolutions. In terms of the time bound plan, it is concluded that the company is still within their proposed forecast to complete certification activities for their operations in Indonesia by 2015. The company shall continue to monitor the status of these on-going situations regularly and the certification body will review the outcome during the next annual surveillance assessment, which is forecasted to take place in Q3, 2014.

2.6 Partial Certification Audit Agenda

Date Location Agenda August 27th 2013 PKS Pangkatan,

Sumatera - Document review and field interviews

September 16th to 18th, 2013 PKS Benua Puhun, - Document review and field interviews




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Kalimantan

September 19th, 2013 Jakarta, Indonesia - Document review (PT Evan’s Office) - Interviews with RSPO (RILO) Indonesia representative

PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group – an international inspection and certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

3.2 Audit Team

Lead auditor: Mr. Kongpichit Na Nakhonphanom

Team member 1: Mohd Rizal Kassim

Team member 2: Muhd Jamalul arif

Team member 3: Selvanathan Grapesigam

3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences;

Bachelor Degree of Arts Major Business English and Post graduate Agricultural production

At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science);

Auditor of Agricultural production according to the international standard Organic EU, USDA/NOP, JAS,

Korean Organic, GlobalG.A.P. GMP/FSA. More than 7 different companies for RSPO audit since year 2009.

Training in the practical application of the RSPO criteria, and RSPO certification systems;

Internal training for RSPO P&C, SCC criteria and certification systems

Successfully completion of an ISO 9000:19011 lead auditors course;

Successful complete the ISO9000:19001 lead auditor course since year 2006

Training in the practical application of RSPO certification systems.

Successful RSPO lead auditor course endorsed by RSPO

A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organizations.

7 different organization audit with more than 30 days in Malaysia and Indonesia since year 2009

RSPO endorsed lead auditors course. Successful passed the course

Signed code of conduct. Yes

General knowledge of:

RSPO P&C standards. Yes

CUC organizational structure. Yes

CUC quality systems. Yes

Lead auditor role. Yes

Report writing. Yes




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Stakeholder consultation. Yes

Certification decision process. Yes

RSPO SCCS program manual. Yes

CUC filing systems. Yes

Correct use of RSPO trademarks. Yes

History and objectives of RSPO. Yes

CV available. Yes

Completion of CUC RSPO lead auditor training. Yes

3.2.2 Qualifications of the Assessment Team

3.2.2 Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications

Fluent in main local languages and English.

Jamal Fluent in both English and Bahasa Malaysia

Rizal Fluent in both English and Bahasa Malaysia

Selvanathan Grapragasem Fluent in both English and Bahasa Malaysia

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

Jamal Undergraduate in plantation background. Involved in RSPO auditing since 2010 and experience in similar auditing field in GMP B2 and Global Gap. Fluent in local languages.

Rizal Have safety background. Training in Chemical handling. Fluent in local languages.

Selvanathan Grapragasem SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation.

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


Selvanathan Grapragasem SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation.

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

Rizal Have safety background. Training in Chemical handling. Fluent in local languages.

Selvanathan Grapragasem SA 8000 advanced auditor, QMS, EMS &

OHSAS Lead Auditor, Working experience in oil palm plantation.

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







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Environmental and ecological auditing. (For example experience with organic agriculture, ISO 14001 or environmental management systems).




Economic issues. Rizal Quality, environment and OHSAS Lead auditor. Working experience in various industries. Auditing since 2007.



3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO standard as endorsed for the country in which the audit took place and recorded their findings. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security.

Field inspections. Herbicide application programs. Harvesting sites and efficiency. Fertilizing operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labor. First aid. Awareness.

Re-planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.

Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management.

Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.

Documentation review. Palm Oil Mill audits include:

Mill and workshop inspections. Documentation. Worker interviews.

Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s applicable.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts.

Compliance against the RSPO SCCS certification scheme.




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Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above.

3.3.2 Assessment agenda for this Audit

Date Location Auditor Main activities

16/09/2013 Training Centre

All auditor

08.00 Opening meeting Chaired by the audit team leader

Introduction by team leader

Presentation by respective managers

Presentation of Palm Oil Mill source of FFB by respective managers

Benua Puhun

Palm oil mill

All auditor Supply Chain Certification Assessment of the POM (RSPO SCCS) Mill inspection

Workshops

Stores

POM application

Document review

17/09/2013 Loleng Estate

All auditor Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

18/09/2013 Rantau Hampang

Estate

All auditor Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

19/09/2013 Bukit Jering Estate

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities Environmental

PT Evan Indonesia

Hari Naveen

Christopher

Verification of the partial certification




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20/09/2013 Training Centere

Training Centre

Preparation for closing meeting Additional field visits and meetings with managers as necessary Closing meeting Chaired by the audit team leader

Welcome and introduction by the team leader

Presentation of findings by the audit team

Questions and answers

Final summary by team leader End of assessment

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The mill and supply base are as per the above table 1.5 and 1.7.1 was assessed at field, office, facilities, store and document review carried out in accordance to the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for the individual estates and mill. Interviews with Estate Managers, Mill Manager, committee and members of workers union took place in both formal and informal environments and worker interviews were conducted in all estates and in the mill. Subsequent to the stakeholders’ interview, the surrounding communities were visited so as to capture more feedback from the stakeholders. There were no complaints received during the 30-day stakeholder announcement or during the field assessment and during interview with the external stakeholders. Up to the time of writing this report, during the closing meeting, there were neither feedbacks nor comments received from the other external stakeholders and community leaders. Under partial certification rules, it is found that all its subsidiaries have been certified and further clarification is specified in table 2 onwards. The mill is fully verified for RSPO SCCS system verification and it is found to be in full compliance. See table 5.

It is therefore the recommendation of the lead assessor that:

A certificate of compliance is maintained. Signed:

Name: Kongpichit Na Nakhonphanom Date: 19 September 2013

4.2 Summary of the findings by Principles and Criteria

Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits

Identified Non-Conformities and noteworthy Positive and Negative Observations.

The RSPO require that this report contains findings by each principle and some example criteria. Please see table below.




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Principle 1: Commitment to Transparency

Criterion by Audit Summary

Request made by stakeholder were responded to and all these are well documented. Relevant documents are made publically available. The mill and estates have demonstrated full with principal 1.

Main Assessment

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

Findings: Records of information request are available and updates regularly. Request and response information recorded in log book information. At the Loleng Estate, there are 18 request from the stakeholder starting from the 2011 until 2013.In the Bukit Jering estate there are 15 request has been recorded since 2011 until 2013. All record is recorded well with complete information such as name of the requester, date of action. All the request is taken well with complete date of action.

Main Assessment

1.2 Criterion: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

Findings: All the management documents which related to national law are available publicly for all stakeholder on request except confidential document and following document available for stakeholder:

Company Policy

CSR Document

AMDAL Document

RKL/RPL Report

List of workers

Company law & regulations

HCV Area

EIA

Training Record

Management Review

Continuous Improvement

Organization Structure

Safety and Health Program plan.

Gender Committee programme

Stakeholder list. Estate and mill have list of the all legal permits require under Legal Document Register. There more than 10 main sub legal requirement need to follow either from the local laws and international laws. Safety and health plan with specifically identified training requirement and training conducted is recorded and available on the request.Documented continues improvement plan has been identified for environment, social,OSH and waste management.

Principle 2: Compliance with Applicable Laws and Regulations

Criterion by Audit Summary

Mill and estate has comprehensive system for ensuring all estates and mill managers are up to date with applicable laws and they have an internal monitoring system, to ensure compliance. The boundary stone is inspected in




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the field confirmed that these have been maintained. The company has procedure to handling any land dispute and compensation. Land purchased from land owner are handled via free prior informed consent (FPIC) process.

Main Assessment

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

Findings: Standard operation procedure to comply with the current regulation or law is sighted for mill and estate. Ref (Document implementasi undang undang, peraturan yang berlaku).Each estate have file that contain to the law related eg: Land, Forestry, Environmental,Water,Pollution. Sample of the list applicable law need to follow by mill and estate:

Pemenuhan peraturan dan perundangan lingkungan Hidup date on 2013.(Enviromental Law)

Undang undang dan Peraturan Keselamatan dan Kesehatan Pekerja.(Safety and Health Law)

Pemenuhan peraturan dan perundangan Agrarian(Law

Pemenuhan peraturan dan perundangn Ketenagakerjaan(Employee act)

Pemenuhan Peraturan perundangan Kepres PP and Perda,

Pemenuhan peraturan dan perundangan Pekebunan,Kehutanan dan Pertanahan,(Land,agriculture,and Forest law)

Person who are responsible for the ensure, comply to the current regulation is Legal Manager who are based in the Jakarta. He will coordinated with mill and estate manager for ensure complying with the law requirement.

Main Assessment

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

Findings: Mill and estate are progress to apply Hak guna Usaha (Land title).Process are started since 2010.Regional autonomy in this region, anything to do with agriculture has to ask for permission from the authority. Law from president of Indonesia. List of the temporary permission as follow:

Agriculture Permit (Izin usaha perkebunan) in the Loleng Estate

ref(503/50/sk/Dis-bun Kukar/VII/2007.

-Location permit(Izin lokasi)ref(47/DPN-K/IL-46/VI 2007

-Location permit(Izin Lokasi) 5.100Ha ref(33/DPN/K/IL/31/VI2006

-Location permit(Izin Lokasi) 6000HaRef:64/DPN.K/IL 62/2006.

Agriculture permit(Izin Usaha perkebunan )IUP in Rantau Hempang

-Ref:5034/43/SK DISBUN KUKAR/2007 6000ha and 5100Ha




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-Ref:503/44/SK DISBUN KUKAR III/2007.6300Ha

-Revisi Izin Perkebunan-503/53/SK DISBUN VII/2007.

During the site visit, sighted that boundary stone is visible and well

maintained.

Company have handling land dispute according to the Free prior inform

concern (FPIC).Is based on the Standard operation procedure for handling

land compensation.(ref:SPO.LLE) 2009.Evidence of the land compensation

sighted is based on the FPIC. Sample as follow:

1)Rantau Hempang Estate:

Name Ha Date

Usman Malik 2.14 Ha 6 Oct 2012

Haidir 1.16 Ha 30 July 2012

Nonsi 3.54 Ha April 2012

Muhammad Facrijal 1.26 Ha April 2012

Bustami 1.19 Ha June 2012

2)Bukit jering Estate

Name Ha Date

Asdi 2.14 Ha 14 January 2013

Ablal 1.26 Ha 14 January 2013

Banali 8.72 Ha 25.October 2012

Hj Rusli 3.99 Ha 11 October 2012

Muji 1.28 Ha 11 October 2012

3)Loleng Estate

Name Ha Date

Ihwan 0.77 20 April 2012

Rusli 2.47 Ha 12 Mac 2012

Tatus Bandung 8.49 Ha 09.Mac 2012

Ahmad 5.45 Ha 20 January 2012

Ardianshah 0.33 Ha 20 January 2012

Main Assessment

2.3 Criterion: 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.

Findings: There isn’t any legal or customary right issue has been addressed. However a procedure on land compensation is in place which detailed the free prior and informed consent [FPIC] process. The certification unit has flow chart to make a negotiation to resolve any land conflict




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Principle 3: Commitment to Long-Term Economic and Financial Viability

Criterion by Audit

Summary

A documented operational plan and budget covered operational strategies to meet the plan and budget have been prepared by the estates and mill. Replanting programs is will done one the next 30 years due, estate is planting on 2008 and 2009.

Main Assessment

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

Findings: Budget for production plan for processed FFB for 3 year onward(2013-2016)available. The budget includes POM processing and maintenance cost, vehicle/machinery expenditure summary report, running cost observed as below: FFB Process

2013 :98099mt

2014 :144946mt

2015 :195424mt

2016: 223420mt. CPO Production:

2013 :21089mt

2014 :31163mt

2015: 42016mt

2016: 52504mt. Projection for working plan where budget include all estate in the complex. The plan has details about agricultural assumptions, financial assumption, cash flow, loans cash flow chart, incoming statement etc. Details of the estate such as Hectare, production cost, yield projection and deprecation. Replanting program will be done next 30 years due to the just starting 2008 and 2009.

Principle 4: Use of Appropriate Best Practices by Growers and Millers

Criterion by Audit

Summary

The company has established the relevant SOPS for all stages of the operations in the estates and mill and there is evidence that these have been implemented. Risk assessment is conducted and necessary attention to OSH given. Training is conducted for all workers and contractor.

Main Assessment

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

Findings: Standard operation procedure to cover daily activity in Mill and Estate. SOP in the mill starting from receiving until dispatch. For the estate Starting from the land clearing until the dispatching to the Mill. Either than daily activity, SOP for covering safety and Health and environmental is available. All record is available that can be access in the daily reporting system. In the mill sample of the water testing that carried out every 3 month.

Main Assessment

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




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Findings: Soil and foliar analysis is carried out by third party labotary, Central Plantation services. Soil and foliar analysis is carried every year. Each block approximately 5 sample taken to determine nutrient for fertilizer recommendation every year. Report of the foliar analysis date on the 28.-09.2012.Recomendation using parameter, Parameter NPK, Mg, Ca, B (ppm), Cu (ppm) and Zink (ppm). Only foliar analysis is carried out for fertilizer recommendation. The record of fertilizer application “Rekap Pemupukan” Loleng Estate 2013 shown the real record of fertilizer application according to the recommendation received from agronomist. The report also separated into each division and what kind of fertilizer to be used. The fertilizer used are Urea, RP, TSP, MOP, BORATE, Dolomite, ZnS04, CuS04 The recommendation and actual usage are shown on the summary of the report in percentage followed.

Main Assessment

4.3 Criterion: Practices minimise and control erosion and degradation of soils.

Findings: Based on the soil survey report by the PT earth line year 2009.Report is sated that various type of soil area in the estate such as Flat,Undulating,Rolling,Hilly steep and very steep. From the total 13977.69 Ha 41.36% is flat area,undulating 51.45% rolling 7.09% and hilly 0.09%.Road maintenance programme is available. Actual realization of the road maintenance Programme is updated once the work is completed and recorded every month.

Main Assessment

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




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Findings: There are no river is sighted at the estate, Water for domestic used from underground water. Each source area keep maintained 5 meter radius as buffer zone.No chemical activity is carried out at the source of the water.Water analysis’s for the underground water is carried annually. Water managements plan has been establish in 20 Mac 2013.Water management plan is about managing river water for Factory used. Water has been tested according to the requirement of the Government. Water from the quarters used has is come from underground water with license (Surat izin pengambilan/Pemafaat air Bawah Tanah)ref(540/19/SIPA-ABT/MB-PABAT/XI/2012.Date on 12 November 2012.Monitoring of the BOD in the mill is carried out every 3 month.Result of the Sungai Mahakam as follow: BOD:3.73 ppm COD:14.97 ppm DO: 4.75 ppm. Monitoring of the water used per tonne FFB in the mill as follow: for 2013

January :1.01/FFB

February :0.99/FFB

Mac : 1.02/FFB

April :1.07/FFB

May : 1.29/FFB

June :1.15/FFB

July :1.17.FFB

August :1.19/FFB

Main Assessment

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

Findings: Implementation of the integrated pest management sighted at the SOP PMM/SOP/AGRO-07.Benificial plant such as Cassia cobanesis and Tunera has been planted, there are no major attack by pest sighted.Cencus of the rat attack done by monthly. All result show that below the outbreak limits. As well for bagworms and caterpillar census carried out periodically.IPM Training is include in the training programed for every year. Last training on July 2013 including 16 workers. Monitoring of the rat attack is below 5% with I below outbreaks. Based on the procedure when over than 5% chemical will be applied. Record of the application of the Chemical sighted with complete active ingredient.

Main Assessment

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




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Findings: List of the chemical used is available and comply with local requirement. Record is available such active ingredients, area treated,a.i per hectare, cost and operator name. Monitoring of liter Ha done monthly. All chemical are available including chemical usage quantity and hectare application. All document and record is complete from stock chemical arrive until record of area treated in the field. Application of chemical is according to SOP by workers. It was verified with the genuine documentation and verbal interview with the workers. All chemical containers is used back in the filed for same activities. Balance of the container was used triple rinse method. After that will collected by the authorized buyer. During interview with workers in the filed most are them are understand the content of SOP. During the inspection the store seen in proper condition that complete with bund, good ventilation, sufficient spillage kit such as saw dust, rags mop, bilingual(English/Indonesia)MSDS and CSDS in place at suitable locations. Reducing of the type 1 and type,2 Chemical is reduce for 2013.Sighted august 2013.record used of the paraquat nearly zero. Medical record for workers that handling chemical is done every year.record sighted all workers is fit no works. There are no evidence sighted that there are has been effected by the chemical used. There no pregnant workers that working as chemical operator.

Main Assessment

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

Findings: Safety health policy date on 2 January 2011 implementation to the company group.Mill and estate manager is person who is responsible for the implementation of the Safety and health in work place. OSH meeting is carried out every month. Issue discussed in meeting such review of accident record, management programmed for OSH, risk analysis review, pending issue and others. Minutes of the meeting is well maintained. All workers are covered with Jamsostek insurance. Deduction is made by workers pay.as example in the Loleng is 607 workers is covered and deduct in their paying salary. All activities in mill and estates has been analyses what, where level risk, hazards risk assessment, action plan and target to complete. HIRARC will review every month on safety meeting. No major accident is recorded in the either mill or estate. Training for OSH is conducted date on 21 November 2012.

Main Assessment

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

Findings: Training Programme is developed annually to all mill workers. For year 2013, 15 training was programme including all related work in the mill. Training such as safety and health, HCV, operation activities and administration. Each worker has the “Employee Training List Form” which contains all training was attended by them. The form is maintained in workers file include date, location and trainer name.




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Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

Criterion by Audit

Summary

Mill and estate has DPPL-Dokumen Pengelolaan and Pemantauan Lingkungan (Environmental and Social impact assessment),monitoring and management of environmental impact were carried out based on per semester and reported to the local authority regularly. The management, monitoring and mitigation action HCV areas are derived from HCV assessment findings. The sources of pollution and emissions were identified and analyses of measurement were conducted regularly.

Main Assessment

5.1 Criterion: 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.

Findings: Environmental impact assessment report date on 26 June 2012 sighted. Analysis including all the operation works. RKL (Environmental management plan)and RPL(Environmental monitoring plan) is conducted every semester. Last conducted for period January to June 2013.Amdal is commissioned on 2009 by CV.AGRONUSA and was approving by the local authority. List of the impact to the environmental has been summarized based on the AMDAL report. Summary of the list of impact also consist source of the impact top environment, Monitoring of the impact to environment is carried every 6 month that require by the government .last conducted is for period January 0 June 2013 and report is on 20 August 2013.Monitoring report contains daily activity, and list of the environmental impact .eg: soil erosion. Schedule waste management, water analysis, air quality. For social improvement also include in the report eg: monitoring of the smallholder that in the plantation area.

Main Assessment

5.2 Criterion: 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.




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Findings: HCV assessment has been conducted date on the 24 August 2011 until 26 August 2011 by Environmental Consulting a team of five ecological and social expert on all six HCVs. Summary of the HCV as follow: HCV 1.There identified that one critical endangered species available in the area.is is Shorea Foxworthy.(Balau Bukit),available on the Block 040. The company management has gazetted this area as protected area and sign board has been erected. The management plan has include monitoring plan to track and monitor endangered species. The HCV assessment above also includes the management recommendations and monitoring actions for HCV detected. Proper monitoring is documented in file name “Monitoring report of ERT in conservation area Rantau hampang” where contains identification and action plan taken. Monitoring is carried out once a year. From the monitoring and action plan report, estate will issue “Report and Review Action Plan for HCV” to reviewed and to measures the ERT population. Action plan is taken accordingly with the local laws and independent consultant recommendations. Sample HCV 1.3(Conservation jungle for ERT) is proper signage such as no hunting and no trespassing. Sighted during site visit proper signed and poster at the HCV area. Mr Pril Max is appointed person to monitor and reporting activities of the HCV and ERT.

Main Assessment

5.3 Criterion:

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




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Findings:

Mill has identified relevant waste from the operation and also was recognized

sources of the waste to reduce and further handling method to be taken. The

idenfication resources are divided by operation place starting from the mill

office to POME site. Pollution sources identified and documented such as

used oil. Filter and battery etc. Record of all schedule waste reviewed. The

schedule waste collection is centralized at the mill, and collected by

authorized collector, PT Maju Asri Jaya Utama.

Estate is well implemented recycle program in the estate by do the

segregation in the land fill for organic and inorganic waste. Schedule waste is

collected by authorized by government. Schedule waste generated is used oil,

use battery, bulb, oil filter and rags. All is recorded well in the recorded book.

Date of generate and date of collected.

Empty container after triple rinse is used back as chemical mixing in the field.

Balance of that will be puncture and collected as schedule waste. Inventory

record is available. Practice observed was in line with the plan and

instruction. Relevant documentation of the agrochemical us well establish

maintained and implemented.

Palm oil mil effluent water is regularly moniroted by monthly using parameter

pH,Zinc,Cooper,Cadmium,Lead,oil and grease. COD &BOD,last certificate

analysis is June 2012 Certificate no. 53164/CCEKAF that has been conducted

by the Succifido Lab it was not exceed the limit as per requirement.

Detailed records were available on the waste management. All the identified

schedule waste is managed and monitored with proper record and there is

one designated staff taking care of the issue.

Main Assessment

5.5 Criterion: 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.

Findings: No burning policy is applied for replating,it was sighted at the company policy.no replanting yet due land is develop in 2008-2009.Emergency response for land burning are available (Pencegahan dan penanggulan kebakaran lahan date on 1 January 2013)There have been reported that Land burning that happen in 23 August 2013.Investigation was be conducted to find souce,it was because of the hot weather total area that demolish is +- 3 Ha at the Bukit Jering Estate.

Main Assessment

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




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Findings: Mill has identified relevant waste from the operation and also recognize source of the waste to reduce and further handing method to be taken.The identification resources are divided by each operation place starting from the mill office to POME site. Monitoring of the pollution has been conducted very 3 month.Last conduted in in 15 July 2013,result are follow: Sulphur 3.77mg/Nm.Nitrogent oksida :1694mg/NM.Hidrogent sulfide:0.0005mg/Nm. Estate has identified relevant waste from the operation and also was recognized source of the waste to reduce and further handling method to be taken. The identification resources are divided by area. Sample of waste identified such as spillage at oil and chemical store, printer toner cartridge, rags, used battery and household waste. The monitoring of pollution is captured in work type such as machinery operation, transportation, power generator (genset). In the work area, pollution identified at the warehouse (diesel tank, fertilizer store and chemical store). Waste management is available include sources of waste in order to avoid or reduce pollution. Sample as to place “gas capture” in boiler flair to reduce dust emission to environment. Emission from boiler also is analyzed using parameter So2, No2, HCI, CI2, NII3 and HF.

Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers

Criterion by Audit

Summary

A social impact Assesment was conducted by indepedendent consultant and the findings are acted upon by developing management and monitoring plans. Housing and other facilities for workers are provided by the company and these has being upgrades via continual improvement programme. Procedure for complains and grievance are in place and all complaints and grievances are handled adhering to the these procedure

Main Assessment

6.1 Criterion: 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.




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Findings: Sighted Social impact assessment done by RSPO Certified company Asenta.Ms Miranty Magestary done in June 2012 and final report is generated on October 2012.Positive impact and negative impact derived for community development activity. Positive impact and negative impact derived from the report ex:

Land becomes more productive.

Road are assessable

New income source and work opportunity.

Land compensation money is used as community development.

Land compensation not participant enough

No enough participant from the government

Coal mining affectd as the HGU is in mining area. All action to eliminate the negative impact has been conducted and reviewes,sighted monitoring &implementation SIA report date on,1.09.2013.Monitoring by meeting back with local community on the impact of the company action.

Main Assessment

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

Findings: Establish procedure for Communication procedure sighted on the

PMM/SOP/Umum-02 Transparansi Informasi dated 2.1.2011

PMM/SOP/Umum-05 Complain Internal & External dated 2.1.2011

PMM/SOP/Umum-20 Communication & Consultation dated 1.9.2013

This was including communication between against women, village head, governmental officer and NGO and disinterested parties. To include also consultation processes. List of the stakeholder from nearby villages ’all together 3 villages ex: Village Benua Puhun [Mr Ardinansyah]; Lebaho Ulak [ Mr Mukrani] and Loleng [Mr Fakrozzi] with their contact detail sighted. List of stakeholder will be updates every year by mill and estate manager.

Main Assessment

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

Findings: Procedure PTMM/SOP Umum 05 for external and internal complain refered. Internal and external complain log book were prepared under SHE/6.3.BPM 4 there are 8 complain logged. Last entry is on the 11.09.2013 were complain from the workers ear plugs is not usable. Other complain basically for housing and facilities damage.

Main Assessment

6.4 Criterion: 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 stakeholders to express their views through their own representative institutions.




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Findings: Procedure land compensation,(PMM/SOP/Umum)19-date 1.1.2011.Responsible party is the Humas(Industrial Realation)Dept.Record of the land compensation is sighted ex : Loleng estate: Case of Hassan

Surat Keterangan dated 19.9.2011 # LLE 01

Acara Pengukuran Tanah for blok R 28/29 for 6.31 ha dated 17.9.211

Sighted Data Grid Desa

Sighted Map GPS Sept 2011

Sighted Cash/Bank Payment Voucher dated 19.09.2011 ref 0006453 for Rp 63100000

Sighted picture taken when receive the payment attached together with his KTP #6402083112600005.

Main Assessment

6.5 Criterion: 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.

Findings: Payment of the wages and salary, is based on the minimun salary by the governor decision letter that indicated RP1908145,minimun wage. Sighted for permanent worker,Mr Yunus iwan Budianto,ex :

April Gross total Rp 42245.95 deducted for Jamsostek Tax electric unpaid leave Rp 242647.Nett Salary Rp 39819.48.

Collective agreement between management with worker union for period 2014 to 2015 sign by the management. Right and duties of the workers; The worker contract include every details of the worker, housing contract, and acknowledge of the first training consisted of OHS, PPE usage, SOP for emergency. The company provide housing for both staff and workers. All of them have free water and 24 hour electricity. There are Masjid, crèche, clinic, school bus for children to go to school. Work agreement with Ardianshah for fertilizing job. The contractor must provide insurance to their worker as per Indonesian law clause sighted, apart from to follow labour law “Undang Undang Ketenagakerjaan”. Also sighted that based on the contract for both workers that total working day is from Monday to Saturday. However company has asked workers to take leave either Friday or Saturday and this leave has been treated as unpaid leave. It is noticed that as per normal OT calculation; 40hrs * 52 weeks / 12 months [ 173 ] and give an amount of Rp 11029; is still be used to calculate OT for workers who were asked to take leave; instead of 35hrs * 52 weeks / 12 months [ 151 ] and give an amount of Rp 12636. Therefore, it has been raised as minor non-conformity.

Main Assessment

6.6 Criterion: 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.

Findings: Policy for freedom of association sighted date on 2.01.2011 was displayed and communicated. Minute of meeting between management and worker union represented as Lembag kerjasama serikat.Last meeting conducted on 22.08.2013 19 person was attended ,several issue has been addressed.




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Main Assessment

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

Findings: SOP for age restriction sighted PI/Sop/Umum-23 dated 30.7.2012. Requirement of the staff and employee recruitment minimum age is 18 yrs. old.

Main Assessment

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

Findings: Policy for equal opportunities sighted dated 2.1.2011. Displayed and communicated

Main Assessment

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

Findings: Policy for sexual harassment sighted dated 2.1.2011. Displayed and communicated. Gender committee established to implement the sexual harassment policy Interviewed Gender Committee Head is Ms Ismawati and noticed that meetings and trainings conducted. Last minutes of meeting dated 11.9.2013; seen agenda on Sex Education; Pregnancy & Breastfeeding. A SOP derived ref to SOP/Umum-04 for Gender CommitteeSOP/Umum-06 explaining procedures of sexual harassment by identifying type of harassment & report to Gender committee within 24 hours & an investigation will be conducted by management team & if found guilty, discipline action will be taken& SOP/Umum-09 for Reproductive rights

Main Assessment

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

Findings: FFB collected and send to mill, no prices displayed. However, The pricing mechanism is based on government memo who determine the price on weekly basis. Working agreement understanding both parties. Payment sighted, request for payment date on 01.07.2013 for works that conducted. Payment is in the timely manner.

Main Assessment

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




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Findings: PMM/SOP/Umum-12 for Community Development is established dated 2.5.2011CSR seen carried and as a monthly activity. Till July there were Rp 52557952 supported to the local activities. Ex:

1. Education aid: Rp 200000 for Secretaries Desa 2. Flood Disaster Relief Fund – Rp 94600; etc

Apart from

1. Bus transporting children to school from all estate and mill. 2. Mosque and provided 3. Facilities such as badminton court, volleyball court, futsal etc is

provided.

Budget for CSR year 2013-2014 sighted. Budgeted for Rp 22,000,000 for this Mill unit

Principle 7: Responsible Development of New Plantings

Criterion by Audit

Summary

Oil palm plantings are from the land purchased from the local communities. These lands have been previously planted with other crops such as rubber, cash crops and shrub land. Hence there were no new plantings involving forest land. There were no forest areas that have been converted since November 2005 in PT PMM & PT TJA. The company has carried out HCV assessments internally and by CV Agronusa consultant before planting. HCV maps are available. Management plans and monitoring plans were developed based on the HCV consultants’ recommendations and these were inspected during the document review. The management plan of HCV updated every year and monioting of HCV is conducted by monthly, Also refer to HCVs described in criterion 5.2

Main Assessment

7.1

Criterion: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

The company has prepared social and environmental impact assessments

which include both positive and negative social and environmental impacts.

The plans have been prepared with participation of affected parties. As a

result of the assessments, management plans and operational procedures

have been prepared.

Main Assessment

7.2

Criterion: Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

New land is surveyed to determine the suitability of soils, topography,

climate, water tables and drainage potentials for the growing of oil palm. The

SOP’s for the soil and land type and being implemented. A general soil survey

in the whole areas, to identify major soil properties and its limitations to oil

palm growth, to identify fragile soil and any limitations of the land. A general

soil map, slope classes map and elevation map, to provide a general

recommendation for soil and water management practices to overcome soil

limitations are available. The conclusion of the survey report is that the result

of the survey reveals that the soils have no major limitation to oil palm

growth.




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Main Assessment

7.3

Criterion: New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

Findings: HCV assessment has been carried out by Environmental consulting date on 24 August 2011 until 26 August 2011.Based on the result of HCV assessment. Total HCV area in the PT TJA and PT MMM as follow: PT TJA : 441 Ha. PT MMM: 1441 Ha. All record of process in land clearing is well recorded and available during audit

Main Assessment

7.4

Criterion: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided. The company has prepared soil maps which include fragile soils, excessive gradients

and peat soils. SOP’s are in place to protect fragile and marginal soils. Terracing

implemented above 6° as per the topographic map. Field inspection confirmed on the

implementations.

Main Assessment

7.5

Criterion: No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

AMDAL report 2007 is available and Dokumen Pengelolaan dan pemantauan Lingkungan – DPPL (Environmental and social Impact Assessment) are implemented. In addition, Laporan Penilaian Dampak Sosial (social impact assessment) indicating positive and negative impact. Positive impacts are promoted and negative impact taken action. The compensation policy and procedures based on FPIC are being enforced. Procedure of negotiating includes land valuation, company set values, and negotiation protocol between two parties. The responsible party is the Humas (Industrial Relation) Dept. When the negotiation is agreed by both parties then negotiation is sent for approval by GM Humas.

Main Assessment

7.6

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

Customary and legal rights have been identified and documented and were

done so with the involvement of relevant government agencies and local

communities. The company has a procedure to identify the people who may

be entitled to receive compensation. The company maintains records and

details of any negotiations with details of any compensation or settlements

made. Calculations and payments made are documented. Opportunities are

given to communities that have lost access and rights to land to benefit from

the plantation development.

The process and outcome of any compensation claims are documented and are made publicly available.




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Main Assessment

7.7

Criterion: Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

The company has a zero burn policy for preparing land for planting.

The company has a procedure in place to respond to land burning on neighbouring properties. Zero burning policy is in place and implemented. Photos of land clearing are produced. Briefing on fire fighting to the employees and surrounding community was carried out.

MA

MA Summary The company is clearly committed to compliance with the RSPO and they have improvement plans for all esates

Main Assessment

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

Findings: The continuous improvement plan contains what, why, how, where, when and who matrix table for 12 continuous improvement is prepared. IPM enhancement is continuously practised by increasing the beneficial plant area and providing barn owl. From the social aspect, estate is committed to provide RSPO awareness and this plan actually receives good response from the people. Estate also in progress to build new workers house include with water supply and electricity.

4.3 Non-conformity Raised During this Audit and Any from the Previous Year, if applicable

This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits, if applicable

If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.

The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number.




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4.3.1 Non-Conformities Identified during this Audit

NC number: 2013-01

Client name: Benua Puhun Palm oil mill

Date raised: 20/Sept/2013

Major or Minor: Minor

Raised by: Kongpichit Na Nakhonphanom

Aspect of standard: 6.5 A company working regulations and work contracts, in accordance with existing regulations.

Evidence of non-conformity: According to Bupati Kutai Kartanegara; minimum wage is Rp 1908146; ref to 1/REK.BUP/HK/2013 Sample worker Sprayer [Sinweni]& Fertilzer Applier[Yusran] Based on the contract for both workers sighted that total working day is Monday to Saturday. However company has ask workers to taken leave either Friday or Saturday. However for this leave has been treated as unpaid leave. It is noticed that as per normal OT calculation; 40hrs * 52 weeks / 12 months [ 173 ] and give an amount of Rp 11029; is still be used to calculate OT for workers who were asked to take leave; instead of 35hrs * 52 weeks / 12 months [ 151 ] and give an amount of Rp 12636. The auditor has taken into consideration of to reduce this Major to Minor non-conformance to due

1. Immediate action taken by Management to overcome these issues. 2. Collected data of employee synchronizing the to-date age. 3. Yearly Plan to Reduce the Aged employee to give way for younger generation to work fully 4. Optional New Employment Contract for Non-Harvester indicating 5 days work week and usage of 35hrs * 52 weeks

/ 12 months [ 151 ] for OT calculation with further consultation with HQ and Dinasker if necessary FPIC activities for the above issue`s

Auditors Signature

Date 20/09/2013

4.4 Issues that were raised during the Stakeholder Consultation, if any

Stakeholders were either informed by the client or by Control Union via the RSPO website.

For Main Assessments, a 30 day Stakeholder consultation announcement is published on the RSPO website

prior to the audit. The same announcement is circulated by the client prior to the audit

For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary

reports available on the RSPO website, the client’s procedures in receiving on-going feedback or if feedback

was sent directly to Control Union prior to an audit or thorough RSPO complaints procedures.

During each assessment, the audit team will review the company’s implemented procedures in receiving

feedback and will execute field visits and interviews. Not limited to the following questions, any feedback

received is reviewed and summarized in this summary report for either Part 2 – Partial Certification or Part 4 –

Assessment Findings above or noted below, if applicable:

1. Do you have any remarks on the RSPO standard?

2. What is your relation with the applicant?

3. Are there any plantation or mill management practices that affect you?

4. Do you consider any management is in conflict with the RSPO principles and criteria?

5. Do you have any suggestions for management?

6. Are you aware of any HCV in the plantations or in adjacent land?




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7. Are you aware of any endangered or rare species?

8. Are there any adverse (or positive) effects on local communities?

9. Additional comments?

11. Do you have any comments about the assessment team and would you like to meet with them?

12. Do you have any comments for the client’s management of any other plantations?

Subject raised Company response and proposed action to be taken

Audit team findings

Marlenawati

Workers Housewife The management has upgrade her house; well maintained

Will continue. Plans to further built more houses for the employee

Positive comment

Pak Idil

[ Electricity Board] Requested that work opportunities given to local people from neighbouring village

Always open for hiring. As needed the organization will publish the advertisement.

Positive comment

Pak Suriansar

[ BPD Head] Safety awareness has tremendously improved in difference from before RSPO implementation to now; after RSPO implementation

Will continue. Positive comment




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PART 5: RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011 RSPO Supply Chain Certification Standard. November 2011

5.1 POM Included In The Scope Of The Audit

Name Palm Oil Mill

Mill Capacity

Location Supply Chain Model

(POM) MT/Hour Address (IP or SG or MB)

BENUA PUHUN 60 Desa Benua Puhun, Kec. Muara Kaman, Kab. Kutai Kartanegara

MB

5.2 Confirmation Of The Company’s Summary Of Annual Certified Volume Of RSPO Certified Palm Oil And Palm Kernel Over A Specified Period

Product CPO (MT) PK (MT) Specified 12 month period

CU Code

POM 1 39,775 7,400 Forecasted volumes between 1/09/2013 to 31/08/2014. See also 1.6 above.

5.3 Summary Report Including A Brief Description Of The Scope Of Certification

A full RSPO SCCS certification audit was used during this annual assessment and the findings support the certification based on supply chain model listed above. The mill is certified under the MB model as it’s also receiving outside FFB.

5.4 Monthly Records of Certified FFB, CPO and PK Produced Since the Last Audit

No MONTH-YEAR Certified FFB (MT) Certified CPO (MT) Certified PK

1 NA as this a main audit

5.5 Records of Certified CPO & PK Sold under GreenPlam to Buyers since the Last Audit, if Any

No Buyers Name GreenPalm Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 NA

5.6 Records of Certified CPO & PK Sold under UTZ eTrace to Buyers since the Last Audit, if Any

No Buyers Name UTZ eTrace Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 NA

5.7 Non-Conformities Identified during this Audit

Timeline for compliance: 1. All non-conformances observed during an audit shall be classified as ‘major’ since all requirements for

Supply Chain certification have to be met before granting certification. 2. For Main Assessments, all non-conformances shall be addressed satisfactorily by the operation before

certification may be granted by the certification body. If non-conformances are not addressed within three (3) months of the audit, a full re-audit shall be required. The certification body shall assess the effectiveness of the corrective and/or preventive actions taken before closing out the non-conformances.

3. For Annual Surveillance Assessments, non-conformances raised after the certification are serious (i.e. must be considered as a major) and the integrity of the RSPO Supply Chain Certification is at risk. A maximum of one month is to be given to the certified client to satisfactorily address the non-conformance. The certification body shall assess the effectiveness of the corrective and/or or preventive actions taken. Should




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the nonconformance not be addressed within the one month maximum timeframe, a suspension or withdrawal of the certificate and a full re-audit may be necessary.

4. If no non-conformances are observed at an audit or when the corrective action plan has satisfactorily addressed raised non-conformance(s), the client shall be recommended for (re-) certification.

Non-were raised during this audit. Or

5.8 Description of the Organizational Management Systems

Including organizations, management and operational systems to ensure compliance with the RSPO Supply Chain Certification Systems and Standards as detailed above

Palm Oil Mill has their 7 supplies base and also buying outside crop from local company. The ratio between their own crop and outside crop is 80% and 20% approximately. All the product e.g. CPO, PK after processing will be sent to their own Bulking Jetty which located about 20 Kilo Meters away. There are 3 storage tanks with capacity of 1 x 3000 and 2 x 5000 Metric Tons. The goods will be load to Barge to delivery to customer. All the transaction will be done from the Bulking station.

5.9 Final Certification decision by Control Union for the RSPO SCCS Audit of the POM

Recommendations made: Yes

Summary of non-compliances:

n/a

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.




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PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA

The provisional date for the next ASA is: Q4, 2014

6.2 Date for Closure of Non-Conformities

See sections above for details of NC’s, if any

All major NCs to be closed by: Prior to certification

All minor NCs to be closed by: Before next surveillance audit

6.3 Signing by the Client

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by:

Name: Abdul Aziz Muhshi

Position: Manager, Sustainability & Certification

Date: 15/10/2013 Signature

6.4 Signing by the Lead Auditor

I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by:

Name: Kongpichit Na Nakhonphanom

Position: Lead Auditor


6.5 Signing by the Certifier

I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by:

Name: Hari Naveen Christopher

Position: Certifier





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PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit

From 1.9, the location map(s)

Map in World Map




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Map Location and Nerbouring stakeholder




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Appendix 2: List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

BOD Biological Oxygen Demand

BRC British Retail Consortium

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

HGU Hak Guna Usaha

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OER Oil Extraction Rate. (CPO as a % of the mass of FFB).

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PET Polyethylene Terephthalate

PK Palm Kernel

POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RKL Rencana Pengelolaan Lingkungan Hidup

RPL Rencana Pemantauan Lingkungan Hidup

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

RTE Rare, Threatened, and Endangered

SA8000 Social Accountability 8000

SEIA Social Environmental Impact Assessment.

SIA Social Impact Assessment

SOCSO Social Security Organisation

SOP Standard Operating Procedure

UKL/UPL Upaya Pengelolaan lingkungan (UKL) / Upaya Pemantauan Lingkungan (UPL)

USDA/NOP United States Department of Agriculture – National Organic Program

MT Metric Tonnes

WHO World Health Organization

Documents

RSPO audit Report · RSPO Principles & Criteria Main Assessment Report Report Number CU827593 RSPOPC-SUM-REPORT.F01 JULY2013 Page 3 of 45 Control Union (Malaysia) Sdn. Bhd