RSPO PRINCIPLES & CRITERIA CERTIFICATION … Qualification of Lead Assessor and Assessment Team..... 13 3. Assessment Findings .....13 3.1 Summary of Findings ..... 13

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 January 2013

Page: 1 of 63

SGS RSPO, SGS (Malaysia) Sdn. Bhd., No. 26, Jalan Anggerik Vanilla, 31/93,

Kota Kemuning, 40460 Shah Alam, Malaysia

CONTACT PERSON: ABDUL HAYE SEMAIL Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927

WWW.SGS.COM

RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT

Public Summary Information

Project Number: MY02203

Certificate No.: SGS-RSPO/PM-00573

Validity Period: 23 Aug 2010 – 22 Aug 2015

Report Ref. No.: MY02023-04 Gomali 2014 Surv 04 Report

RSPO Membership

No.: 010-04(O)

Client Name: IOI Corporation Bhd Website: http://www.ioigroup.com/

Scope: Production of CPO at Gomali Mills with capacity of 120MT/hour, in the total of 89,070.79/year using SG module

Type of Certificate

Holder: MULTISITE

Number of Mill: 1 Number of Sites: 11

Mill Capacity: 120 tonne per hour

Annual CPO

Produced (MT)

(FY2013/2014):

78,063.86 MT/year

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Head Office

Level 8, Two IOI Square IOI Resort, 62502 Putrajaya Malaysia.

Mill Address

Gomali Palm Oil Mill 5 mile, Jln Gemas – Batu Anam K.B. No 102, 85109 Batu Anam, Segamat, Johor

Contact Person:

Mr. Too Heng Liew Head of Sustainability Phone No.: 03-89478691 E-mail: [email protected]

Country: Malaysia

Plantation Unit

Being Evaluated:

Supply Base Name & Address

Gomali, Paya Lang, Sagil, Bahau, Kuala Jelai, Regent, Bukit Dinding, Jasin Lalang, Bertam, Sembilan Tani

Total Certified Area

(Ha):

19,712

Total FFB

Produced (MT):

376,571.47

End of Public Summary

http://www.sgs.com/

http://www.ioigroup.com/

mailto:[email protected]

GP 7003A Page 2 of 63

BASIC EVALUATION INFORMATION

MAIN EVALUATION

Evaluation Dates: 10 – 14 August 2009

Team Leader/Team:

Report approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 1

Evaluation Dates: 23-25 August 2011

Team Leader/Team:




SURVEILLANCE 2

Evaluation Dates: 14 -16 August 2012

Team Leader/Team:




SURVEILLANCE 3

Evaluation Dates: 15-27 June 2013

Team Leader/Team:

Report approved by: Haye Semail Date: 22 Oct 2013

Certification approved by: Kenny Looi Date: 22 Oct 2013

Database logged by: Shahziela Othman Date: 22 Oct 2013

SURVEILLANCE 4

Evaluation Dates: 08-10 July 2014

Team Leader/Team:

Report approved by: Haye Semail Date: 22 Aug 2014

Certification approved by: Kenny Looi Date: 22 Aug 2014

Database logged by: Shahziela Othman Date: 22 Aug 2014


TABLE OF CONTENTS

SUMMARY ............................................................................................................................................................... 4

List of Abbreviation ................................................................................................................................................ 5

1. scope of certification assessment ......................................................................................................... 6

1.1 National Interpretation Used ..................................................................................................................... 6

1.2 Certification Scope .................................................................................................................................... 6

1.3 Location and Maps .................................................................................................................................... 6

1.4 Description of Supply Base and Mill Processing Capacity ........................................................................ 8

1.5 Date of Planting and Cycle ....................................................................................................................... 9

1.6 Other Certification Held ........................................................................................................................... 10

1.7 Organizational Information and Contact Person ..................................................................................... 10

1.8 Time-bound Plan for Other Management Units ...................................................................................... 10

2. Assessment Process ............................................................................................................................. 10

2.1 Certification Body .................................................................................................................................... 11

2.2 Assessment Methodology, Programme, Site Visits ................................................................................ 11

2.3 Qualification of Lead Assessor and Assessment Team.......................................................................... 13

3. Assessment Findings ............................................................................................................................ 13

3.1 Summary of Findings .............................................................................................................................. 13

3.2 Corrective Action Request ...................................................................................................................... 48

3.3 Status of Non-Conformities Previously Identified .................................................................................... 48

3.4 Issues Raised by Stakeholders and Findings ......................................................................................... 48

4. Acknowledgement of Organization Internal Responsibility .............................................................. 48

4.1 Date of Next Surveillance Visit ................................................................................................................ 48

4.2 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings ....................... 48

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION ................................................................ 49

APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED ..................................................................... 56

APPENDIX C: TIMEBOUND PLAN ....................................................................................................................... 63

LIST OF TABLES

Table 1: Mill GPS Location ................................................................................................................................... 6

Table 2: Budgeted Yield from Supply Base (Financial Year) .............................................................................. 8

Table 3: Mill Processing Data .............................................................................................................................. 9

Table 4: Planting Age Profiles for all Supply Base Estates ................................................................................. 8

Table 5: Assessment Program .......................................................................................................................... 11

Table 6: Auditors Profile ..................................................................................................................................... 13

LIST OF FIGURES

Figure 1: Location Map

Figure 2: Outgrower Map


SUMMARY

SGS has conducted a surveillance assessment of the Gomali Group of IOI Corporation comprising one mill,

twelve oil palm estates, support services and infrastructure. SGS concludes that IOI Gomali GROUP

operations comply with the requirements of RSPO Principles & Criteria: November 2007 and Malaysian

National Interpretation Working Group MY NIWG) Indicators and Guidance: April 2008.

SGS recommends that IOI Gomali Group comprising Gomali Palm Oil Mill and its supply base of IOI

Corporation be approved as a producer of RSPO certified sustainable palm oil.


LIST OF ABBREVIATION

Short Form Meanings

CAR Corrective Action Request

CHRA Chemical Health Risk Assessment

CPO Crude Palm Oil

DID Department of Drainage and Irrigation, Malaysia

DOE Department of Environment, Malaysia

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

EMS Environmental Management System

EQA Environmental Quality Act

ERT Endangered, Rare and Threatened species

ESA Environmentally Sensitive Area

FFA Free Fatty Acids

FFB Fresh Fruit Bunches

FR Forest Reserve

Ha Hectare

HCV High Conservation Value

HDPE High Density Polyethylene

IPM Integrated Pest Management

ISO International Organisation for Standardisation

IUCN International Union for Conservation of Nature and Natural Resources

JCC Joint Consultative Committee

JUPEM Jabatan Ukur dan Pemetaan Malaysia (Department of Survey and Mapping Malaysia)

K Potassium

kW Kilowatt

M Meter

Mg Magnesium

Mm Millimeter

Mt Metric ton

MYNI Malaysia National Interpretation

N Nitrogen

NGO Non Governmental Organisation

OA Orang Asli (Indigenous People)

OER Oil Extraction Rate

OSH Occupational Safety & Health

P Phosphate

P & C Principles and Criteria

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

PT Pejabat Tanah (Coding for Pahang Land Office)

SOP Standard Operating Procedures

Sdn Bhd Sendirian Berhad (Private Limited)

SEIA Social and Environment Impact Assessment

Sg Sungai

SGS Societe Generale de Surveillance

SOP Standard Operating Procedures

SPC Senior Plantation Controller

USECHH Use and Standards of Exposure of Chemicals Hazardous to Health

WHO World Health Organisation

yr Year


1. SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the mill and their supply based of FFB were assessed against the

Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) – Malaysia

National Interpretation (MY-NIWG dated 26th

April 2008).

1.2 Certification Scope

The scope of certification includes the production of Gomali mills and its supply base according

to the standard of Roundtable on Sustainable Palm Oil (RSPO), Principles and Criteria

(P&C) – Malaysia National Interpretation (MY-NIWG dated 26th

April 2008) and RSPO

Supply Chain Certification Standard dated 25 November 2011.

1.3 Location and Maps

Gomali Oil Mill is located in Batu Anam, Segamat, Johor (Figure 1). More detailed information

on the estates location and layouts is shown in Figures 2, 3 and 4. The GPS locations of the

mills are shown in Table 1.

Table 1: Mill and Supply Base GPS Location

Gomali Oil Mill = 102º40’45.44”, 2º36’37.68”

Estates Longitude Latitude

Gomali 102º39’21.12” 2º36’48.94”

Paya Lang 102º41’41.36” 2º36’28.53”

Bahau 102º26’44.47” 2º48’30.75”

Bertam 102º17’30.11” 2º17’55.6”

Bukit Dinding 102º05’31.36” 3º22’39.8”

Kuala Jelai 102º22’52.27” 2º46’21.56”

Tambang 102º42’53.17” 2º38’26.33”

Regent 102º24’8.23” 2º30’29.81”

Sagil 102º38’6.56” 2º19’33.84”

Jasin Lalang 102º24’44.81” 2º15’4.13”


Figure 1: Location Map for [operating unit]

Figure 2: Estates and Mills Location Map

Figure 3: [Estate 1] Layout

Figure 1: Location Map of Gomali Oil Mill


Figure 2: Sembilan Tani Estate (Outgrower)

1.4 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from 10 estates which are directly managed by Gomali Mill. The budgeted

crop yields from each estate are listed in Table 2 below.

Table 2: Budgeted Yield from Supply Base (2013/2014)

Name of estate

Plantation Area

Production /

Planted

(ha)

Annual FFB

Production (MT)

Gomali 1,707 37,184.37

Paya Lang 1,105 21,489.00

Tambang 1,886 36,233.13

Sagil 2,155 53,834.95

Bahau 2,591 60,471.49


Kuala Jelai 597 14,750.41

Bertam 327 14,476.56

Jasin Lalang 1,410.5 33,110.41

Regent 2,143 48,235.49

Bukit Dinding 1,286 30,286.03

Table 3: Mill Processing Data (2013/2014)

Financial Year

July 2013 –

June 2014

Mill Production Figures (MT) (Audited Estate)

FFBs Received FFBs Processed CPOs Produced PKs Produced

RSPO Certified Crop

(Gomali Region

Estates: Gomali, Paya

Lang, Sagil, Bahau,

Kuala Jelai, Regent,

Bukit Dinding, Jasin

Lalang, Bertam)

( Others RSPO

Certified: IOI Sister

Estates/diversion

crop: Segamat Estate,

Pukin Estate, Bukit

Serampang, Shahzan

1 & Shahzan 2

Estates)

373,776.84 373,776.84 77,545.55 19,994.81

Outside Crop

(RSPO Certified:

Sembilan Tani Estate) 2,794.63 2,794.63 518.31 144.23

Total 376,571.47 376,571.47 78,063.86 20,139.04

1.5 Date of Planting and Cycle

The Gomali Mill own estates were planted between 1988 and 2010.The palms ware considered

matured when approaching four years after planting and productive until the age of 25 years.

The age profiles for all the estates are simplified in Table 4 below.

Table 4: Planting Age Profiles for all Supply Base Estates

Name of supplying

estate

Planting Age (Ha)

Total

Immature Under 6

years 6 - 15 years 16 - 25 years >25 years

Kuala Jelai

Estate 39 46 551

636

Paya Lang

Estate 784 145 1080

2009

Bukit Dinding

Estate 121 306 898 118

1443


Bertam Estate 327 327

Bahau Estate 77 289 906 1396 2668

Jasin Lalang

Estate 205 34 1007 67

1313

Tambang Estate 1257 629 1886

Sagil Estate 22 341 285 1529 2177

Regent Estate 1 128 759 1255 2143

Total 1044 1414 5265 6812 67 14602

1.6 Other Certification Held

Gomali Mill is one of the operating unit of IOI Group’s Plantation Division which received the

International Standard for Carbon Certification (ISCC) for complying with the ISCC System

GmbH certification system.

1.7 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Mr. Too Heng Liew

Designation: Head of Sustainability

Contact No.: 03-89478691

Email address: [email protected]

1.8 Time-bound Plan for Other Management Units

IOI Group is a member of RSPO and has been involved in the certification since 2004; the

membership number with RSPO is 2-0002-04-000-00

IOI Group owns and operates 12 mills and 77 oil palms estates, together with 200 operating unit

covering approximately 700,000 ha in Malaysia. IOI Group has developed a time-bound plan

(Appendix C) for the phased implementation of the RSPO P&C, commencing with mills and

estates. IOI Group will use the experience gained from achieving certification of the first few

mills and estates to implement the RSPO P&C in parallel with the remainder of its operations.

The SGS assessment team considers that IOI Group is on the right track which is reasonable

and challenging, given the widespread geographic locations of its properties, the resources

required and the numbers of smallholders involved.

2. ASSESSMENT PROCESS

mailto:[email protected]


2.1 Certification Body

Founded in 1878, the SGS Group is the world’s largest auditing, inspection, testing and

verification organization. Truly global and benefiting from unique international network of more

than 1180 offices, 321 laboratories and 50’000 full time staff, the SGS Group is able to provide

its international clientele with a comprehensive range of services in more than 145 countries.

SGS has no manufacturing, trading or financial interests which could compromise its

independence. Its guarantee of independence, its reputation for professionalism, integrity and

impartiality, as well as it remarkable international network, place the SGS Group in a unique

position.

The RSPO Programme is the SGS Group’s RSPO Certification Programme internationally

accredited by the RSPO Executive Board to carry out oil palm plantation and supply chain

certification/verification and accreditation for global RSPO certification.

2.2 Assessment Methodology, Programme, Site Visits

The assessment was conducted in 25-27 June 2013 audit days and involving 11 estates

involved of IOI Berhad. The audit covers documentation review, internal procedures,

management system, field inspection as well as identification of any significant issues for both

environment or social issues. A sample of stakeholders was consulted during the assessment

to get their feedback on the management doing.

The assessment was conducted based on random samples and therefore nonconformities may

exist which have not been identified. The methodology for objective evidence collection included

physical site inspection, observation of tasks and processes, interview with workers, families

and stakeholders, documentation review and monitoring data.

The assessment program is included as shown in Table 5 below.

Table 5: Assessment Program

Date Time Auditor Area / Department / Process / Function Key Contact


Date Time Auditor Area / Department / Process / Function Key Contact

08 Jul am All Auditors Opening Meeting Gomali POM

* Close CAR verification from SA03

* Continuous Improvement

•

All Relevant Staffs, Mr. William & Mr. Tay

HS • Supply Chain Audit in Gomali POM –

o Environment Aspects

o Energy Management

o Safety and Health

Documentation Review in Gomali POM

Faisal • Visit to Bertam Estate –

o Good Agricultural Practices (Field Operation, IPM, PPE, Interview with Workers)

o Environment (HCV, Boundary, Riparian)

o Storage, Warehouse, Workshop, Housing

• Documentation Review in Estate 1

Interview with Union, Gender Committee and HA

09 Jul am All Auditors • Visit to Jasin Lalang –





• Interview with Union, Gender Committee and HA

10 Jul am All Auditors • Visit to Gomali Estate –





• Interview with Union, Gender Committee and HA

pm All Auditors • Preparation for Closing Meeting

• Closing Meeting – presentations of findings at Gomali POM


2.3 Qualification of Lead Assessor and Assessment Team

SGS Malaysia Sdn Bhd holds copies of educational qualifications, certificates and audit logs for

each of the audit team members. SGS has evaluated the qualifications and experience of each

audit team member and has registered the following designations for conducting RSPO

Assessment. Summary of auditors’ educational background and experience are listed in Table

6 below.

Table 6: Auditors Profile

Evaluation Team Notes

Team Leader –

GAP, Safety &

Health

Abdul Haye Semail, a degree holder in B.Sc. is a forester by profession and

has 15 years experience in forest harvesting and plywood industry. As a

trained assessor, he has been involved in forest management, palm oil and

chain of custody certification for the last 7 years. Trained by RSPO for

auditing against RSPO P&C and involved in a number of plantation

assessments and inspection of palm oil mill.

Auditor 1 –

Legal, Social and

Environment

Mohd Faisal Jaafar, is a degree holder in forestry from Universiti Putra

Malaysia. Faisal has a 7 years experience in operating Malaysian Timber

Certification Scheme with specialization in forest management certification

and forest plantation management certification. Has undergone the

necessary an RSPO Endorsed Lead Auditor Course, ISO 9000 and ISO

14001 Lead Auditor course and has gathered substantial auditing experience

pertaining to forest certification as well as RSPO certification. He has also

conducted a social audit under the supervision qualified social auditor whom

is a sociologist and anthropologist.

3. ASSESSMENT FINDINGS

3.1 Summary of Findings

3.1.1 Principles & Criteria

As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion

for the mills and estates. The results for each indicator from each of the operational areas were

evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO

indicators in order to support the findings of the assessment team.

There is 2 Major Corrective Action Request (CARs) and 1 Observation identified during this

assessment. Details for each Non-conformities and observations are given in Appendix A. Major

Non-conformities has been closed out within the period of 60 days after the assessment. Minor Non-

compliances and Observations will be followed up during the next Annual Surveillance Audit which is

scheduled to be conducted within the period of twelve months after the RSPO approval of Main

Assessment.

Principle 1: Commitment to Transparency

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

1.1.1 Records of requests and responses must be maintained. Major

Findings In compliance: Yes: X No:

Objective

evidence: Gomali-PMU has documented procedures for stakeholder information request at the corporate and estate level.

Records of requests and responses were viewed at the estate level.


The Website http://www.ioigroup.com/business/busi_plantoverview.cfm provides information on their plantation responsibilities, corporate social responsibilities and commitment to sustainability compliance. Stakeholder lists for all estates and mill is available on site. Documents for requests and grievances were view.

The mechanism for information request is clearly outlined in the estates’ Social Management Plan.

Criterion 1.2: 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

1.2.1 Land titles / user rights (C 2.2)


Objective

evidence:

Non-confidential documents are available upon request by legitimate stakeholders. The procedures are clearly outlined in the estates social management plans. The documents that are available to the stakeholders upon request are listed below:

Land titles / user rights

Safety and health plan

Plans and impact assessments relating to environmental and social impacts

Details of complaints and grievances

Negotiation procedures

Continuous improvement plan

In addition, IOI also has uploaded several documents in their website to be made publicly available as follows:

Agrochemical Management Policy

Environmental Policy

Policy Statement for Sustainable Palm Oil

Boundary Disputes Handling

Squatters Disputes Handling

Social Issues Handling

1.2.2 Safety and health plan (C 4.7)


Objective

evidence: Refer to 1.2.1

1.2.3 Plans and impact assessment relating to environmental and social impacts

(C 5.1, 6.1, 7.1, 7.3)


Objective


1.2.4 Pollution Prevention Plan (C 5.6)


Objective


1.2.5 Details of complaints and Grievances (C 6.3)


Objective


1.2.6 Negotiation procedures (C 6.4)


Objective


http://www.ioigroup.com/business/busi_plantoverview.cfm


1.2.7 Continuous improvement plan (C 8.1)


Objective


Principle 2: Compliance with Applicable Laws and Regulation

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

2.1.1 Evidence of compliance with legal requirements Major


Objective

evidence: At the time of surveillance visit, the audit team observed that copies of legal documents are available with the compilation of a list of applicable laws and regulations at both mill and estate levels. Examples of files/legal documents/licenses verified during the Surveillance Audit are as follows:

No. Details Validity

1. MPOB licence 509491002000 for producing and transporting FFB for Bertam Estate

01 Jan 2014 to 31 Dec 2014

2. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Diesel & Fertilizer for Bertam Estate:- PDN(M)SK/2/022/2008 (D&BJ) No. Permit: M 002195

14 May 2014 to 13 May 2015

3. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Diesel & Fertilizer for Bertam Estate:- PDN(M)SK/2/022/2008 (D&BJ) No. Permit: M 001358

22 May 2014 to 21 May 2015

4. Certificate of Fitness for Air Compressor (Jasin Lalang Estate) – Certificate No. PMT-MK 6688

Until 25 June 2015

5. MPOB licence 509491002000 for producing and transporting FFB for Jasin Lalang Estate

01 Feb 2014 to 31 Jan 2015

6. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Diesel, Petrol & Fertilizer for Jasin Lalang Estate:- SK(M)848/91(BJ,D&P) No. Permit: M 002881

26 May 2014 to 25 May 2015

7. Certificate of Fitness for Air Compressor (Gomali Estate) – Certificate No. PMT-JH 87799

Until 21 April 2015

8. MPOB licence 502164502000 for producing and transporting FFB for Gomali Estate

01 Feb 2014 to 31 Jan 2015

9. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Diesel for Gomali Estate:- (13)JH(SGT)00136/07PSK No. Permit: J 009786

22 May 2014 to 21 May 2015

10. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Fertilizer for Gomali Estate:- (26)JH(SGT)0029/85APSK No. Permit: J 009705

22 May 2014 to 21 May 2015

11. Scheduled Control Permit (Permit Barang Kawalan Berjadual) for Storaging of Petrol for Gomali Estate:- PPDN.SGT/UP/04/14/SKK/08-11/B(04) No. Permit: J 009473

30 Aug 2013 to 29 Aug 2014

In addition, the land titles for all estates are found to be maintained. The land titles for the supplying estates verified during the Surveillance Audit are as follows:

Estate Title No. Date Total Area

(ha) Remarks/purpose

Bertam

GRN 22732 27 Jul 2002 15.9 Oil Palm Plantation

GRN 22733 15 Aug 2002 35.53

GRN 22745 27 Jul 2002 55.88


GRN 22746 27 Jul 2002 294.30

1430 15 Jul 1972 13.92 acre Oil Palm Plantation

17268 26 Mar 1998 11a 0r 26p

17270 26 Mar 1998 43a 3r 15p

17271 26 Mar 1998 10a 2r 07p

17273 25 Mar 1998 18a 1r 23p

17275 25 Mar 1998 205a 2r 00p

17276 25 Mar 1998 17a 2r 29p

17277 26 Mar 1998 19.256 acre

17278 26 Mar 1998 11.794 acre

17279 26 Mar 1998 4.884 ha

GM 95 29 Jun 1998 6.124 acre

GM 96 29 Jun 1998 1.876 acre

GM 97 29 Jun 1998 4.946 acre

GM 98 29 Jun 1998 8.556 acre

Jasin Lalang

GRN 46411 22 May 2008 842.5 Oil Palm Plantation

H.S.(D) 10221 28 Jan 2004 263.85

GRN 23089 16 Aug 2002 39.65

GRN 46414 22 May 2008 217.9

GRN 46413 22 May 2008 147.5

GRN 46412 22 May 2008 111.4

GRN 167 25 Sept 2002 0.75

GRN 11217 15 Jul 1991 243.52

GRN 11214 15 Jul 1991 108.80

GRN 22676 16 Jul 2002 445.56

Gomali

GRN 103235 28 Aug 2003 397.82 Oil Palm Plantation

GRN 103232 28 Aug 2003 42.40

GRN 103231 28 Aug 2003 197.20

GRN 96618 28 Aug 2003 2,025.46

GRN 103497 10 Sept 2003 1,012.52

Observed evidence of conversion of oil palm plantation to properties within Bertam Estate. Unfortunately no documented evidence available pertaining to the latest survey map indicating the delineation of such from the scope of the certification. Furthermore, no documented evidence

available detailing the total area involved. (Major CAR 08)

Closing of Major CAR:

The company has taken action to ratify the CAR issued by conducting the survey map for their area within the Bertam Estate. The survey was conducted immediately after the audit i.e. 14 July 2014 and the newly surveyed map dated 31 July 2014 has been submitted to the audit team on 15 August 2014 detailing the net planted area of Bertam Estate i.e. 327 ha that has exclude the

total area taken by IOI Properties. (Major CAR 08 closed)

.

2.1.2 A documented system, which includes written information on legal requirements Minor



Objective

evidence: Documented system including written information on legal requirements is available. Observed that the list of laws highlighted within the standard are kept within a file that was recently reviewed on 20

th May 2014 (Bertam), Jasin Lalang (30

th June 2014)and Gomali (30 May 2014).

Observed also that the list has oncluded the National Minimum Wages Consultative Act 2011.

2.1.3 A mechanism for ensuring that they are implemented Minor


Objective

evidence: As described above the mechanism of tracking the changes of laws is contained in the IOI File entitled License/Permit/Regulation/ Guidelines. The person responsible for monitoring the changes and communicating it to the group remains the ‘Sustainability Team’ who carry out internal audit for each estate and mill

Each estate updates the list of relevant laws and regulations that are required to maintain various legal permits.

2.1.4 A system for tracking any changes in the law Minor


Objective

evidence: Currently, the person/team responsible for monitoring the changes and communicating it to the Group remains the ‘Sustainability Team’ who carry out internal audit for each estate and mill. In practice the team will conduct the following task:

To evaluate the effect of change of laws;

To assess current practices and suggest changes to be submitted to Senior Management (Group Plantation Director & Assistant general Manager)

Each estate updates the list of relevant laws and regulations that are required to maintain various legal permits.

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

2.2.1 Evidence of legal ownership of the land including history of land tenure Major


Objective

evidence: Evidence of legal ownership of the land is maintained in individual estates’ offices.

2.2.2 Growers must show that they comply with the terms of the land title. [This indicator is to be read with Guidance 2]

Major


Objective

evidence: Based on the above observation, it is confirmed that all of the land titles are for Palm Oil. None of the land titles observed carries a title other than oil palm.

2.2.3 Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained

Minor


Objective

evidence: Overall, the auditor observed that the estates occupation and operation comply with the terms of the land title. All estates have their boundary marked with boundary markers. IOI has a special mapping team with accurate GPS equipment for boundary verification.

2.2.4 Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. (CF 2.3.3, 6.4.1 and 6.4.2)

Minor


Objective

evidence: The Gomali-PMU does not have any land disputes. But a system to resolve land disputes is documented in ‘Grievance Procedure for Land Owner Issues’ which is detailed in the social management plan for estates and mill.

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


2.3.1 Where lands are encumbered by customary rights, participatory mapping should be conducted to construct maps that show the extent of these rights.

Major


Objective

evidence: Currently, there are no claims on legal or customary rights exist for the estate. Customary use of land for community purposes have been identified either on maps (places of worship, burial grounds, and archaeological site) and maintained.

2.3.2 Map of appropriate scale showing extent of claims under dispute Major


Objective

evidence: Customary use of land for community purposes have been identified either on maps (places of worship, burial grounds, and archaeological site) and maintained.

2.3.3 Copies of negotiated agreements detailing process of consent (C 2.2, 7.5, 7.6) Minor


Objective

evidence: Currently, there are no claims on legal or customary rights exist for the estate.

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

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

3.1.1 Annual budget with a minimum of 2 years of projection Major


Objective

evidence: 5 year management plan the annual budget with a minimum 2 years of projection is available covering a period from 2014/2015 to 2017/2018 that specifies the following activities/elements:

Area statement;

Crop (FFB) by Year of Planting;

Crop (FFB) Monthly Breakdown;

Crop Production 5 Years;

Replanting Programme;

Executive/Staff and Workers Requirement;

Mature Oil Palm Costing Statement;

General Chargers Statement;

Capital Expenditure Statement; and

Depreciation.

3.1.2 Annual replanting programme projected for a minimum 5 years with yearly review Minor


Objective

evidence: Replanting Programme is captured within the 5 year Management Plan that indicates the scheduled replanting programme.

Details of Replanting Programme for the supplying estates are as follows:

Area (ha)

Estate 2014 2015 2016 2017 2018 2019

Paya Lang - - - - - -

Gomali - - - - - -

Tambang - 68 - - - -

Bukit Dinding - - - - 118 -


Bahau - 141 197 101 263 183

Kuala Jelai - - - - - -

Regent 102 - 199 169 260 110

Sagil - - - - - -

Jasin Lalang 144 - - - - -

Bertam - - - - - -

Total 246 209 396 270 641 293

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

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

4.1.1 Documented Standard Operating Procedures (SOP) for estates and mills Major


Objective

evidence: The Standard Operating Procedures (StOPs) and Occupational Safety and Health (OSH) Manual are maintained. Procedures were documented at group level and then translated into StOPs and OSH Manual for individual estates where needed. Procedures exist for all operations both in the estates and mills .The StOPs and OSH Manual reflect best industry practices as detailed in IOI’s agricultural policy document.

StOPs for Estates specifies the following procedures:

Seed production unit

Planting density

Nursery

Land clearing and preparation

Tidal gates

Planting technique

Leguminous cover plant

Manuring

Weeding

Pest and disease control

Harvesting

Road Maintenance;

Workshop

Buffalo maintenance and healthcare

Foliar sampling

StOP for mill specifies the following procedures:

General regulation for POM Operations;

Receiving of FFB;

Loading Ramp

Sterilizer;

Threshing Station;

Pressing Station;

Depericarper Station;

Nut & Kernel Plant;


Oil Room Station;

Boiler Station;

Engine Room Station;

Laboratory;

Water Treatment Plant;

Shovel;

Effluent Treatment Plant; and

Workshop.

Observed also StOPs for Supply Chain. The StOP document No: StOP/MST/001 dated 23 June 2011 specifies all relevant section within the operation of the company’s supply chain system.

4.1.2 Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months

Minor


Objective

evidence: Observed that the latest revision done in July 2011 still maintained. In practice, the monitoring is done based on a case by case basis on every issue raised during work operation for the particular activity. A memo is subsequently issued to the relevant operations/workers/staff that is signed by the General Manager of the company. Example of the Memo observed as follows:

1) 04 March 2014 – memo on the intensity of the usage of the Rat Bait;

2) 16 January 2012 – memo on the final revision of the Buffalo Maintenance and Healthcare StOPs

3) 20 January 2012 – memo on the final revision of the Buffalo Harvesting StOPs

4) 19 April 2014 – memo on the update of the SOP for Harvesting.

All the actions and memo are kept in the Memo File and records are kept for more than 12 months

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

4.2.1 Monitoring of fertilizer inputs through annual fertilizer recommendations Minor


Objective

evidence: Fertilizer recommendation for 2014 is available dated 09 April 2014, 02 December 2013 and 30 November 2013 for Bertam, Jasin Lalang and Gomali Estates respectively that is issued by the Agronomist of the company.

Fertilizer application is monitored through the utilization of Fertilizer Monitoring Record that is recorded on a block by block basis.

Observed also progress in implementation of fertilizer application for 2014 for visited estates are available. Example:

Block Ha Fertilizer Tonnage Kg/palms Application

Month

Bertam Estate

PM02B 104 AS 38.2 2.5 April 2014

PM01A 18 AS 7.45 2.75 April 2014

PM01G 36 AS 14.75 2.75 April 2014

Jasin Lalang

PM95B 42 MOP 9.3 1.5 26 Aug 2013

PM95E 43 RP 10.65 2 24-25 Jul 2013

PM96C 43 Kieserite 7.4 1.75 10-11 June 2014


Gomali Estate

PM00H 24 MOP 6.0 2.00 04 June 2014

PM02D 45 Kieserite 8.8 1.5 28 Mar 2014

PR13C 17 Compound 2.5 1.0 03 Jul 2014

4.2.2 Evidence of periodic tissue and soil sampling to monitor changes in nutrient status Minor


Objective

evidence: Foliar and soil sampling results that is carried out to monitor changes in nutrient status is available in estates audited. Observed that the latest Soil and Foliar Analysis is conducted in 29 & 30 April 2014 (Bertam), February 2014 (Jasin Lalang) and July 2013 (Gomali) by the Research Centre of IOI.

With regard to Soil Analysis, the analysis is conducted covering several parameters such as pH, C, OM, N, K, Mg and Ca.

Similarly, the Foliar Analysis has been conducted covering the paramaters such as N, P, K, Mg, Ca and B

4.2.3 Monitor the area on which EFB, POME and zero-burn replanting is applied Minor


Objective

evidence: Zero Burning Policy is applied at the estate throughout the Gomali-PMU.

Records where EFB and POME application is documented in the EFB Mulching Record Book for the estates within the vicinity of the mill i.e. Gomali Estate. There is no EFB or POME application made at other visited estates i.e. Bertam and Jasin Lalang Estates due to their location that is too far from the mill.

Sample of EFB & POME application observed during the audit for Gomali Estate are as follows:

Date Total MT Block

EFB Application

04 July 2014 54.85 PM00N

10 May 2014 26.83 PM02F

18 April 2014 61.67 PM00K

03 Feb 2014 117.80 PM00E

22 Nov 2014 107.15 PM01C

POME

12 June 2014 47.03 PM02B

03 Mar 2014 33.89 PM02B

18 Jan 2014 53.95 PM02B

29 Nov 2014 55.09 PM02B

27 Jul 2014 09.06 PM02B

Application and delivery of EFB and POME are recorded both by the mill and the estates involved.


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

4.3.1 Documented evidence of practices minimizing soil erosion and degradation (including maps)

Minor


Objective

evidence: Observed that each of the individual Estates has the specific StOP for soil erosion prevention namely Soil Erosion Prevention Plan that among other specifies the following:

Avoidance of Siltation of streams

Development of LCC

Planting of steep hills

Riparian reserves

Re-planting from rubber or from Oil palm

Observed that each of the individual estates have ‘Soil Erosion Prevention Plans’ in their ‘Environmental and Impact Assessment and Management Action Plans. In addition, the Section Environmental Plan within the Management Plan file specifies the plan to minimize soil erosion and degradation by managing/implementing the following activities:

Fronds stacking;

Map of Vertiver plants planting is available;

Map of planted area is also available;

Terrace construction;

No blanket spray advocated. During audit visit, spot or woody spray was practiced;

Slope maps available .Categorise under: 0-25°, 25.01° – 50°, 50.01°- 75°;

Vertiver planting

4.3.2 Avoid or minimize bare or exposed soil within estates Minor


Objective

evidence: During the audit visit, blanket spray is not practiced in planted areas. As a result, bare and exposed soil is minimal.

Spraying is done within the circles of the palms as well as along the harvesting path along terrace to ease FFB collection and evacuation. Competing woodys and identified problem weeds like ‘itchy grass’ are also sprayed.

In the replanting area, leguminous cover crop is planted along the terraces. Once the leguminous cover crop begins to die back, soft weeds and ferns are tolerated in inter-rows, and competing woody plants removed; conservation terraces where constructed at the time of planting with stop bunds. Fronds are stacked on the lip of terraces, but contour stacking is not consistently implemented on other slopes.

In addition, road design generally minimises water run-off and soil erosion, with wash- out

drains returning nutrients and soil mass back to pits in the fields.

Furthermore, the banks of some waterways are vegetated to help retain soils.

4.3.3 Presence of road maintenance programme Minor


Objective

evidence: Road maintenance programme is available on a yearly basis. Observed also map for road maintenance programme is available for each of the estates visited. Example of the road maintenance programmes scheduled for 2014 and 2015 are as follows:

Estate Block Date

Bertam PM01A Dec 2014 & June 2015

PM01B Dec 2014 & June 2015

PM01C Jul 2014 & Mar 2015

PM01D Jul 2014 & Mar 2015

PM01E Sept 2014 & Jan 2015


PM01G Oct 2014 & Feb 2015

PM02B Jul & Nov 2014 & May 2015

PM02C Mar 2015

Jasin Lalang Road maintenance not clear. Still reflecting the programme for previous financial years. No programme reflected for current financial years. There is also no indication the progress of the implementation of the programe

Gomali No indication on the planned timeframe stated in the programme.

Observation 11 was issued following the above issues.

4.3.4 Subsidence of peat soils should be minimized through an effective and documented water management programme

Minor


Objective

evidence: No peat soil within the Gomali production unit.

4.3.5 Best management practices should be in place for other fragile and problem soils (e.g. sandy, low organic matter and acid sulphate soils)

Minor


Objective

evidence: The estate based on the fertilizer recommendation report for year 2013 to enhance the organic in the soil. No acid sulphate soils found in the estate.

The Unit implemented various practices to protect soils that prone to erosion :

a) leguminous cover crop applied in new planting areas;

b) cut and stacked fronds act as physical barriers to trap run-off and eroding soils and subsequently increased soil biomass when it degrades;

c) EFB and biomass solids in POME returned to selected fields;

d) once the leguminous cover crop begins to die back, soft weeds and ferns are tolerated in inter-rows, and competing woody plants removed; conservation terraces where constructed at the time of planting with stop bunds;

e) fronds are stacked on the lip of terraces, but contour stacking is not consistently implemented on other slopes;

f) road design generally minimises water run-off and soil erosion, with wash-out drains returning nutrients and soil mass back to pits in the fields; and

g) The banks of some waterways are vegetated to help retain soils.

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

4.4.1 Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting along all natural waterways within the estate.

Major


Objective

evidence: Verification during the field visit in Bertam, Jasin Lelang & Gomali Estates evidenced that all palms along the identified buffer zones are marked with red paint to informed sprayers on prohibition of spraying in the buffer zones.

Observed also in the same areas that there are no incidences of spaying along and within the buffer zone. In addition, the audit team also observed that Guatamala grass is also planted along the riparian to protect its sides.

4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate

Major


Objective

evidence: No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate.


4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to 5.1 and 8.1)

Major


Objective

evidence: Water sampling is conducted every 6 month. Latest sampling was conducted in January 2014 and the report analysis issued by the IOI Research Center dated 02 February 2014 stated that the analysis has been conducted among others covering the following analysis:

Chlorine residue;

pH;

Turbidity;

Total dissolved solid;

Total coliform; and

Fecal coliform

Based on analysis conducted, the audit team observed all of the parameters readings is WQI Class III.

In addition, there is also water sampling analysis i.e. Effluent and Water Sampling for Gomali POM. The analysis dated August 2013 is conducted in compliance with the Environmental Quality (Prescribe Premises)(Palm Oil Mill) Regulations, 1977. Based on the analysis, the auditor note that there are 3 sampling point identified and the following parameters are measured:

pH;

Total suspended soils;

Ammonical Nitrogen;

Total Nitrogen;

Biological Oxygen Demand;

Oil and Grease;

Chemical Oxygen Demand;

Total Solids; and

Water Temperature.

Observed that the wastewater not discharged into waterways. 100 % to Land irrigation.

Besides the above, there is also the water sampling analysis that is conducted by the Research Centre of the company. The analysis dated 24 October 2012 is available to the audit team during the surveillance audit.

4.4.4 Monitoring rainfall data for proper water management Minor


Objective

evidence: Monitoring of rainfall is conducted on a daily and monthly basis and is captured within the Rainfall Record Book and Management File respectively. Based on records for 2013, the estates received the following rainfall:

Estate Total Rainfall (mm)

Gomali 1755

Paya Lang 1889

Tambang 1875

Sagil 1909

Bahau 1479

Kuala Jelai 1666

Bertam 1541


Jasin Lalang 1744

Regent 1749

Bukit Dinding 2423

Total: 18,030

4.4.5 Monitoring of water usage in mills (tonnage water use/tone FFB processed) Minor


Objective

evidence: Observed that water usage at the POM is captured on a daily basis within the water consumption file that recorded the amount of water usage for the particular day.

4.4.6 Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders.

Minor


Objective

evidence: No water being drainage into the protected areas.

4.4.7 Evidence of water management plans Minor


Objective

evidence: Water Management Plan for Gomali Production Unit (covering both Mill and Estates) reviewed on June 2014 are available specifying the following:

1. Introduction;

2. Operating Units;

3. Identification of Physical System for Water Management;

3.1. Water Management Plan for Gomali POM;

3.1.1. Abstraction of water for FFB milling and domestic use;

3.1.2. Water storage and use for FFB Processing and Domestic Purpose;

3.1.2.1. Water Treatment;

3.1.2.2. Raw water treatment plant;

3.1.2.3. Domestic water treatment plant;

3.1.2.4. Monitoring;

3.1.2.5. Water consumption monitoring;

3.1.3. Waste water treatment and discharge management;

3.1.4. Surface runoff of sediments from the mill

3.1.5. Palm Oil Mill Effluent (POME)

3.2. Water Management Plans for Estates;

3.2.1. Soil Moisture Conservation Programme;

3.2.1.1. Pruned Fronds;

3.2.1.2. EFB mulching;

3.2.1.3. Fibre

3.2.1.4. Moisture Conservation of the hill and rolling terrains plantings

3.2.1.5. Oil palm planting terraces

3.2.1.6. Flat alluvial land

3.2.1.7. Bufferzone of stream and rivers


3.2.1.8. Water for domestic use

3.2.1.9. Sewage and septic tank

3.2.1.10. Nursery

3.2.1.11. Workshop, lubricant store

Verification within the above document also observed that the proper maps as well as details of each of the estates visited are available.

Water supplying to each of the estates (during water interruption) is captured in the Water Supply record book and recorded on a daily basis.

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

4.5.1 Documented IPM system Minor


Objective

evidence: The documented IPM is well specified within the section 10 of the company’s group StOPs for Estate Operations that identify the relevant pest as well as the means to control the pest as follows:

a) Rat

b) Bagworm

c) Rhinocerous Beetle

d) Bunch Moth

e) Valanga

f) Termite

g) Cattle

h) Ganoderma

i) Elephants, wildboar, etc

Observed that the map showing the IPM programme for financial year 2014/2015 is available for every IPM as follows:

Beneficial Plant covering Tunera subulata, Cassia cobanensis and Antigonan spp; and

Barn Owl

4.5.2 Monitoring extent of IPM implementation for major pests Minor


Objective

evidence: There is evidence of IPM Implementation for major pests.

For instance, monitoring for rat damage is done for every harvest for the particular field. Record is done by the field staff. In addition, the estates also carry out daily rat damage surveys through the use of forms IC2 (Estate daily Infield Grading Report) that record both old and new/fresh rat damage percentages. For example:

Date Block Damage recorded Remarks (action)

Bertam Estate

07 July 2014 PM01G 0.15 No action taken as

the damage is below 5%

30 June 2014 PM01A 1.43 No action taken as


17 June 2014 PM01C 0.14 No action taken as


Jasin Lalang


07 Jul 2014 PM95A 0.8 No action taken as


02 Jul 2014 PM95A 1.8 No action taken as


03 Jul 2014 PM96F 1.2 No action taken as


Gomali

20 April 2014 PM02E 3.47 No action taken as


15 April 2014 PM02G 4.26 No action taken as


21 Mar 2014 PM00L 3.04 No action taken as


4.5.3 Recording areas where pesticides have been used Minor


Objective

evidence: Record of pesticides application is kept within the Costing Book that is recorded on a block by block basis. Sample of pesticides application are as follows:

Block Ha Pesticide Quantity Application Date applied

Bertam

PM01B 30 Amine 1.2

Selective Spraying 17 Dec 2013 Comet 1.5

PM01A 34 Kenly 1.5

Selective Spraying 04 Jan 2014 Amine 0.8

PM01F 37 Kenly 3

Selective Spraying 09 Jan 2014 Amine 1.5

Jasin Lalang

PM95E 43 Storm (Rat Bait) 4.08(kg)

(1020 pcs) Spot Rat baiting 28 Feb 2014

PM91A 23 Glyphosate 30

Circle Spraying 15 May 2014 Ally (Canyon) 100(g)

PM91A 7 Glyphosate 30 CircleSpraying 30 Dec 2013

Gomali

PM00B 20 Glyphosate 15

Circle Spraying 30 Oct 2013 Amine 3

PM00F 14 Glyphosate 15

Circle Spraying 16 Dec 2013 Amine 3

PM00S 16 Glyphosate 8

Circle Spraying 08 May 2014 Amine 1.5


4.5.4 Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredients (a.i) used/tone of oil

Minor


Objective

evidence: Herbicide Usage a.i volume per Ha, MT & CPO recorded in the Management Plan file.

For example, for Bertam Estate, for financial year 2013/2014 the following information are evidenced:

Chemical a.i. per Ha

Bertam

Amine 0.055

Glyphosate 0.186

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

4.6.1 Written justification in Standard Operating Procedures (SOP) of all agrochemical use

Major

Findings In compliance: Yes: No:

Objective

evidence: Written justification of all agrochemicals use is documented and available and is kept in the StOPs file. Observed that the justification for all chemical such as Glyphosate isopropylamine, 2,4-D methyl amine, Metsulfuron methyl and Brodifacoum.

4.6.2 Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53); and in accordance with ESECHH Regulations (2000)

Major


Objective

evidence: Pesticides shall be restored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations

4.6.3 Pesticides shall be restored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations

Major


Objective

evidence: StOPs for the use of Pesticides clearly emphasizing procedure in storing the pesticides used in the estate. Pesticides used in the estates observed to be stored appropriately in a closed room with proper ventilation chamber and adequate label at the designated area. Observed also that the powdered based pesticides is stored above the liquid based pesticides.

Observed also the hazardous mark paste on the wall depicting the toxicity of the pesticides to the human health.

The StOPs for the use of Pesticides emphasize on the use of triple rinse and piercing method to dispose of the used chemical containers. Visit to schedule waste store in Bertam Estate, Jasin Lelang Estate and Gomali Estate confirmed adequate implementation of the triple rinse and piercing method.

Furthermore, interview and demonstration made by the workers found that he is aware and knowledgeable of the pre-mixing method.

4.6.4 All information regarding the chemicals and its usage, hazards, trade and generic names must be available in language understood by workers or explained carefully to them by a plantation management official at operating unit level

Major



Objective

evidence: Chemical storage is observed to be satisfactorily stored according to the Malaysian Occupational Safety and Health and pesticide regulatory requirements. Material Safety Data Sheets (MSDS) are available for chemicals stored and the relevant personnel well versed in the information in these sheets.

4.6.5 Annual medical surveillance as per CHRA for plantation pesticide operators Major


Objective

evidence: Annual Medical Surveillances for all workers for 2014 is available.

Observed that all medical surveillance report are in place and updated.

The Annual Medical Surveillance for 2014 for Bertam, Jasin Lalang & Gomali Estates, are conducted on 29 May 2014, 14 March 2014 and 28-30 May 2014 respectively The result of the medical surveillance has yet to be produced by the appointed health doctor.

4.6.6 No work with pesticides for confirmed pregnant and breast feeding women Major


Objective

evidence: No evidence that spraying are assigned to confirmed pregnant or breastfeeding female workers. As reflected in the SOP, such female workers are transferred for general workers such as line sweeping, gardening and baby sitting (at crèche) until the delivery (for pregnant) or stop breastfeeding before can continue work on the chemical related working field.

4.6.7 Documentary evidence that use of chemical categorized as World Health Organization Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM

Minor


Objective evidence:

Since 2008, there is no evidence that the company is using chemical listed under Type 1A or 1B by WHO.

4.6.8 Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant authorities

Major


Objective

evidence: No aerial spraying.

4.6.9 Evidence of chemical residues in CPO testing, as requested and conducted by the buyers

Minor


Objective

evidence: No chemical residues were found in CPO testing according the testing result made available.

4.6.10 Records of pesticides use (including active ingredients used, area treated, amount applied per hectare and number of applications) are maintained for either minimum of 5 years or starting November 2007

Minor


Objective

evidence: As described earlier, records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) are maintained within the Costing Book that is recorded on a block by block basis. Summary of records since 2010 is available within the Management File.

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

4.7.1 Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967 (Act 139)

Major


Objective

evidence: Risk Assessment for Mill No. and Estate dated 12 June 2014 and 18 April 2014 (Bertam), 16 April 2014 (Jasin Lalang) and 22 April (Gomali) available covering all operations within the mill and


estates. The risk assessment is found to be approved by the manager.

Safety and health policy dated 04 April 2008 and signed by the companys Group Plantation Director is available that among others specifies the requirement of the company to comply with the requirement of the Occupational Safety and Health Act 1994.

Training plan for 2014 is available that also includes the requirement for Occupational Safety and Health Training that covering the first aid training, fire drill, safe operating procedures and daily briefing of PPE as well as the MSDS training.

Safety and Health Officer is identified and has been appointed for both Mill and Estates. Evidence of training is available together with the appointment letter that is signed by the respective managers

Safety and health committee meeting is conducted quarterly. Based on record the meeting has been conducted as follows for 2013/2014:

Date Venue

17 Sept 2013 Bertam

12 Dec 2013 Bertam

31 March 2014 Bertam

17 June 2014 Bertam

24 June 2014 Jasin Lalang

17 March 2014 Jasin Lalang

17 September 2013 Jasin Lalang

20 June 2013 Jasin Lalang

26 June 2014 Gomali

22 March 2014 Gomali

03 December 2013 Gomali

25 September 2013 Gomali

Observed also the minutes of the meeting is available that is prepared by the appointed safety and health officer and approved by the manager who acts as the chairman of the meeting.

Organization chart of the OSH committee is available.

In addition, the Emergency Response Procedures is available covering the following working areas/activities:

Animal Attack;

Chemical Spillage;

Tractor/lorry driver;

Fire Outbreak; and

Safety and health plan is also available that is found to be reviewed on a yearly basis. In general, the plan specifies the following:

Safety and health Plan;

Safety and Health committee

Emergency Response Plan;

Summary of OSH Risk Assessment;

Safety and Health Training Programme;

Monthly Accident Key Performance Indicator;

Chemical Procedure.

Observed also the first aider is found to be trained. In general all first aider are found to be trained as follows:

06 June 2014 (Bertam Estate);


.19 June 2014 (Jasin Lalang)

27 June 2014 (Gomali Estate)

Evidence of training in the form of training records and attendees is available during the audit.

Verification during the field visit evidenced that proper PPE is used for workers during working at their respective working areas. Furthermore, fire extinguisher is found to be constantly checked and monitored to ensure that such equipment is at workable stage.

In addition, visit to line site also confirmed that the harvesting sickles is always found with the protective sheath.

4.7.2 Records should be kept of all accidents and periodically reviewed at quarterly intervals

Major


Objective

evidence: Accident records are found to be updated on a monthly basis (using JKKP 6 form) for both Mill and Estates. Observed also JKKP 8 is used for reporting the accident records at a yearly basis. Observed that latest submission was conducted as follows:

03 January 2014 – Bertam Estate. Letter signed by the Estate Manager

10 January 2014 – Jasin Lalang Estate. Letter signed by the Estate Manager

08 January 2014 – Gomali Estate. Letter signed by the Estate Manager

4.7.3 Workers should be covered by accident insurance Major


Objective

evidence: All Workers (both local and foreign) are found to be covered by the valid accident insurance.

Local Workers are bound to subscribe to EPF and SOCSO in addition to their accident insurance. Observed sample of insurance policy as follows:

Bertam Estate – MSIG Insurance – Policy No. DL-08855474-FWC with a validity from 01 October 2013 to 30 September 2014;

Jasin Lalang – MSIG Insurance – DL-08855456-FWC with a validity from 01 October 2013 to 30 September 2014

Gomali Estate – MSIG Insurance – DL-08856591-FWC with a validity from 01 October 2013 to 30 September 2014

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

4.8.1 A training programme (appropriate to the scale of the organization) that included regular assessment of training needs and documentation, including records of trading for employees are kept

Major


Objective

evidence: A training programme and plan for 2014, including records of training for employees are kept in the training file at each estate and mill. Example of trainings conducted are as follows:

Training Date

Manuring workers including mandores • 16 August 2013;

• 15 May 2014

• 05 July 2013; and

• 30 June 2014.

Chemical Handling training • 05 July 2013

• 08 July 2014;

• 15 February 2014

• 24 May 2014

• 12 June 2014.


• 24 June 2014

• 06 July 2014

• 09 July 2014

Harvesting workers including mandores • 03 July 2013

• 06 August 2013;

• 23 August 2013;

• 03 May 2014;

• 05 June 2014

• 03 July 2014

• 08 July 2014.

Spraying workers including mandores • 04 July 2014;

• 19 February 2014.

• 15 April 2014

• 24 June 2014

Excavator Driver (for replanting) • 06 July 2013

• 23 April 2014.

• 15 March 2014

• 07 May 2014

• 03 July 2014

First Aid Training • 06 June 2014;

• 19 June 2014.

• 27 June 2014

Fire Drill • 27 June 2014.

• 05 June 2014

PPE • 17 April 2014;

• 04 July 2014

• 26 May 2014

Contractors • 27 June 2014

• 08 July 2014.

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

Criterion 5.1: 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.

5.1.1 Documented aspects and impacts risk assessment that is periodically reviewed and updated

Major


Objective The Gomali-PMU EIA and Management Action Plan as well as Continuous Improvement Plans


evidence: are viewed.

The periodic review of environmental pollution impacts with management recommendations for further action is made available to the auditing team during the audit. All sources of wastes and pollution are identified with mitigation and monitoring plans for negative impacts.

In addition, Special Existing Environmental Issues Management Plans is available at each of the visited estates. The plan is found to be periodically reviewed.

5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored

Minor


Objective

evidence: Action plans and continuous improvement plan have been updated to 30

th June 2014 (Bertam &

Jasin Lalang) & 13 June 2014 (Gomali). All the impacts have been mitigating with the improvement plan.

Segregation of waste and recycling receive good respond from the worker as they can sell the recyclable waste.

Environmental Impact Assessment (EIA) is available covering period of June 2012 until May 2017. The document dated 20th June 2012 is subjected to annual review for continuous improvement.

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and highly 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.

5.2.1 Identification and assessment of HCV habitats and protected areas within land holdings and attempt assessments of HCV habitats and protected areas surrounding landholdings

Major


Objective

evidence: HCV habitats continued to be protected on all of the estates visited. Observed that the assessment is being reviewed annual to further improve the management plan for each of the identified HCV. Based on records, the latest review has been conducted on August 2013. For 2014, the document is due to be reviewed in August.

5.2.2 Management plan for HCV habitats (including ERTs) and their conservation Major


Objective

evidence: Management plans for HCVs identified include maintaining protection and limited access. No hunting or collection is allowed. There are no spraying or chemical use activities in the water catchment zone.

Annual Review of the HCV assessment is found to be conducted on August 2014 and based on the review, a management has been established covering the following:

HCV 4 – River and Streams – proper demarcation of the bufferzone be done using iron pegs or markings or paintings at the last palm adjacent to buffer zone as indication of budderzone. Training to sprayers also to be given to avoid encroachment into the bufferzone.

HCV 6 – Religious sites – continue to monitor such sites on a monthly basis.

5.2.3 Evidence of a commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities and developing responsible measures to resolve human-wildlife conflicts

Minor


Objective

evidence: Hunting is prohibited in all plantation areas. in addition, there are evidences of signage in the field prohibiting hunting and collection of flora and fauna.

Interview with workers confirmed that the awareness programme on all inappropriate activities prohibited within the plantation areas found to be conducted and that they are well aware of all activities prohibited within the plantation areas such as hunting, collecting and fishing in the rivers.

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

5.3.1 Documented identification of all waste products and sources of pollution Major



Objective

evidence: The pollution prevention plan is available within the EIA document. The plan contains the identification of the pollutions, the environmental impact of the pollution, the improvement (action) plan, documents that need to be reviewed and management review comments. As of the date of the audit, the following pollution source has been identified as follows:

Empty Fruit Bunch (EFB) (mill waste product)

Boiler ash (mill waste product after burning fibre and shell and

Disposal of spent oil / lubricants and empty chemical containers

Pruned oil palm fronds

Diesel/fossil fuel used

Office/domestic waste

Pesticides derived from pesticides store and pesticides pre-mixing area

Scrap metal and used tyre

The waste mainly categorized into 3 different types which is schedules waste, household waste and recyclable waste. All records for the schedule waste are available.

In Bahau estate, clinical wastes send to Medivest for disposal as schedule waste. Consignments note as the records were check.

5.3.2 Having identified wastes and pollutants, an operational plan should be developed and implemented to avoid or reduce pollution

Minor


Objective

evidence: Various aspects have been identified such as domestic waste, disposal of spent oil & container and pesticides up to 30

th June 2014 (Bertam & Jasin Lalang) & 13 June 2014 (Gomali).

Observed that an operational plan for each of the identified waste source is found to be established and implemented as follows:

Aspects Operational Plan

Boiler ash Daily usage of fibre and shell to be monitored

Workshops/Disposal of spent oil/lubricants and empty containers

Proper storing, labelling , monitoring and disposal of schedule waste in accordance with EQA, 1974

Segregate all waste in accordance with the coding as per in EQA, 1974

Triple rinse and perforate all chemical container to avoid reuse

Oil trap to be installed and be cleaned on a weekly basis

Pruning of palm fronds To carry pout progressively during harvesting

Stacking of fronds on the ground based on contour or terrace lips

Pest management To implement IPM as per in the StOPs

Domestic waste, sewage and garden residue

Systematic collection of garbage at twice a week

Diesel To avoid purchasing second grade diesel from unauthorized dealer that may contains higher sulphur thus increasing likely of fire hazards

To place fire extinguisher and spill kits at storage area

Office use (electricity and papers)

Recycling of papers

Day light energy saving programme

Clinical Waste Disposal of the waste at a monthly basis through a clinical waste collector

Pesticides/chemical store and premixing area

Proper storing, labelling , monitoring and disposal of schedule waste in accordance with EQA, 1974


Segregate all waste in accordance with the coding as per in EQA, 1974

Triple rinse and perforate all chemical container to avoid reuse

Spill kit to be allocated in the store

PPE to be placed and usage of such equipment is deemed compulsory

Training be given for handling of chemical and providing accurate dosage.


Fertilizer application Avoid applying the fertilizers along the stream edges

Recycle all empty fertilizer bags

Water quality index to be carried out on a six monthly basis

Natural streams – application of chemical

No physical construction within the natural streams

No chemical application in the streams/bufferzones

To continue water quality index on a six monthly basis

Maintain the width of the bufferzone

Landfill Maintain the distance of at least 3 km from nearest housing areas

To monitor/inspect the landfill on a monthly basis

Generator Monitoring of diesel consumption on a monthly basis

Disposal of lubricants and containers as scheduled waste


Scheduled waste is found to be disposed according to the Environmental Quality (Disposal of Scheduled Waste) Regulations, 2005. Based on records, latest disposal has been made as follows:

Empty container on 3 May 2013 to the licensed scheduled waste collector i.e. Newgates Industries (Borneo) Sdn. Bhd. covering the following:

o Green Container = 58 pcs;

o Kenlly Bottle = 26 pcs; and

o Mytron Container = 8 pcs

Used oil/lubricants/containers/rags on 23 April 2014 for Bertam Estate covering the following:

o Oil Container - 113 pcs; and

o Contaminated Rags – 6.4kg

Used oil/lubricants/containers/rags on 14 June 2014 for Jasin Lalang Estate covering the following:


o Contaminated Rags – 40kg

Used oil/lubricants/containers/rags on 11 June 2014 for Gomali Estate covering the following:


o Oil filter – 24 pcs

All the above has been disposed through the licensed scheduled waste collector i.e. OLST Petro-Chemical Sdn. Bhd.

With regard to the recycling of waste, the audit team observed that the company has taken proactive action to implement the recycling process. Observed that all recyclable waste is segregated at the estate office and be disposed through the appointed collected. Observed latest disposal of recyclable waste has been conducted on

05 July 2014 (Bertam Estate) , covering used newspaper with a total quantity of 170kg.


07 July 2014 (Jasin Lalang) – Plastic (704kg), Boxes (60 kg) and Bottle (100kg)

Verification during the field visit showed the following:

• All waste are properly segregated at the line sites and working areas (i.e. office and clinic) before being disposed off; and

• There is also no evidence of reuse of empty chemical container observed.

5.3.3 Evidence that crop residues/biomass are recycled (Cross reference C 4.2) Minor


Objective


Crop residue are recycled

Palm frond that were cut down during harvesting or during pruning are stacked along the interrows.

EFB are sent back to the estates that are within travelling distances to be used as mulch.

Fruit fibre and shell are used as renewable energy in the boiler

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

5.4.1 Monitoring of renewable energy use per ton of CPO or palm product in the mill Minor


Objective

evidence: For the mill, shell burnt in boiler per MT CPO produced in year 2014, Jan- June is 0.184.

Fibre burnt in boiler per MT CPO produced in year 2014, Jan- June is 0.72.

5.4.2 Monitoring of direct fossil fuel use per ton of CPO or kW per ton palm product in the mill (of FFB where the growers has no mill)

Minor


Objective

evidence:

Ref: Fossil Fuel consumption Report a) Diesel consumption b) FFBProcessed c) CPO produced d) Ratio diesel / FFB e) Ratio diesel / CPO

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

5.5.1 No evidence of open burning. Where controlled burning occurs, it is as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003

Major


Objective

evidence: Observation during the field visit showed no evidence of open burning on site.

5.5.2 Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ploughed and mulched

Minor


Objective

evidence: Felled palms are placed in a closed and conservation terrace are mulching. It helps to enhance nutrition of the soil and to prevent soil erosion.

5.5.3 No evidence of burning waste (including domestic waste) Minor


Objective

evidence: Visit to estates line site confirmed no evidence of burning of domestic waste. In addition, the company also has placed a signboard at linesite to warn workers of ‘No open burning’ allowed at the line site.

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

5.6.1 Documented plans to mitigate all polluting activities (Cross reference C 5.1) Major



Objective

evidence: Polluting activities such as diesel usage and waste disposal have been identified. Mitigation plan such as monitoring diesel usage and vehicle service, segregation and recycling of waste are available and updated to 2014.

5.6.2 Plans are reviewed annually Minor


Objective

evidence: Plans are reviewed annually. In Regent estate, plans are reviewed annually and latest reviewed on 30

th June 2014.

The ‘Group Environmental Impact Assessment and Management Action Plans’ provides plans for action for those potentially polluting activities that have been identified.

5.6.3 Monitor and reduce peat subsidence rate through water table management (Within ranges specified in C 4.3)

Minor


Objective

evidence: No peat soil within Gomali region.

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

and Millers

Criterion 6.1: Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored to demonstrate continuous improvement.

6.1.1 A documented social impact assessment including records of meetings Major

Findings In compliance: Yes: x No:

Objective

evidence: Social Impact Assessment and Management Action Plans (May 2009 – June 2015) are available for both palm oil mill and supplying estates. The Social Impact Assessment and Management Action Plans found to be covering all social aspects and impacts identified within the operations of the company covering both internal and external elements. Observed that the assessments are reviewed and updated at both the Palm Oil Mill and estate level as follows:

o Palm Oil Mill – latest review on June 2014

o Bertam estate – latest review is on June 2014

o Jasin Lalang_Estate – latest review is on June 2014

o Gomali Estate - latest review is on June 2014

Observed that the assessment specifies the following:

Introduction;

Objectives;

Estate/Mill Demographic;

Adherence to National Laws and Regulations;

General Work/Labour Conditions;

o Employment of Children and Young Persons;

o Equal Opportunity;

o Rights to Freedom of Association;

o Contracts and Terms and Conditions of Work;

o Wages;

o Employment of Women;

o Minimum Facilities and Amenities

Social Liaison Officer;

o Responsibility of Liaison Officer;


Grievance Procedure;

Sexual Harassment Procedure;

Stakeholder Request Procedure;

Grievance Procedure for Land Owner Issues

Employees Handbook;

Facilities and Amenities;

Custom and cultures;

Social Impact Assessment;

o Methodology;

o Social surveillance programme;

o Continuous improvement of social impact assessment

conclusion

The plans provide records of meetings with affected stakeholders and timetable for action to be taken including the reviews document and the outcome of these actions.

6.1.2 Evidence that the assessment has been done with the participation of affected parties

Minor


Objective

evidence: Representatives from different department have been invited to the stakeholder meeting dated 28 June 2014 (Bertam), 12 June 2014 (Jasin Lalang) & 19 June 2014 (Gomali POM & Estate). Meeting minutes and picture have attached as the evidence of stakeholder participation.

6.1.3 A timetable with the responsibilities for mitigation and monitoring is reviewed and updated as necessary

Minor


Objective

evidence: Timetable with responsibilities for mitigation and monitoring of social aspects as stipulated in the estates and mill social management plans is available.

a) The monitoring and revision of the timetable is conducted and updated as necessary. The record of such revision and monitoring is maintained.

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

6.2.1 Documented consultation and communication procedures Major


Objective

evidence: Documented consultation and communication procedures exist and are covered in the estate’s Social Management Plan. Example of communications procedures viewed are as follows:

Grievance reporting flowchart;

Stakeholder request procedure (corporate and estate level); and

Grievance procedure for land owner issues (Group)

6.2.2 A nominated plantation management official at the operating unit responsible for these issues

Minor


Objective

evidence: All grievances raised within the Gomali-PMU are addressed at the unit level. The estate manager is responsible as a social liaison officer for each estate ensuring the social management plan is implemented and monitored. In addition, they are also responsible for handling the issues raised by the affected stakeholder.

Currently, the estate manager has been appointed as a liaison officer has been appointed at management level that has a specific role as follows:

o Welfare and social needs of stakeholders;


o Periodic visits to line-site and social amenities to ensure that buildings are in good conditions;

o Periodic visits to neighboring stakeholders on a proactive manner to ensure that social issues are being taken care of (to have consultation to ensure that communications chain is available and maintained);

o Identification of social issues affecting stakeholders and neighboring communities and to decide upon mitigation plans to solve social issues after consultation with the Manager;

o Maintenance and monitoring of grievance issues and facilitate feedback mechanism to ensure that a line fo communication is available;

o Monitoring of crèche and daycare center to ensure that children are being well taken care off and adequately educated;

o To stakeholders request and ensure that requests are followed up with a response;

o Grievance issues (encompassing social, work, repairs etc) and ensuring that proper follow up is conducted;

o Safety and health aspect of line-site/estate/workers etc; and

o Other social issues arising/ad-hoc social issues.

However, still, the ultimate decision is made by the upper management level e.g. Group Plantation Director after due verification process of each of the grievances raised by the stakeholders.

6.2.3 Maintenance of a list of stakeholders, records of all communication and records of actions taken in response to input from stakeholders

Minor


Objective

evidence: A list of stakeholders is available, listing all government agencies, non- governmental organizations, village representatives and employees.

Records of communication with stakeholders and actions taken are maintained and made available.

As reflected earlier, representatives from different department have been invited to the stakeholder meeting dated 28 June 2014 (Bertam), 12 June 2014 (Jasin Lalang) & 19 June 2014 (Gomali POM & Estate). Meeting minutes and picture have attached as the evidence of stakeholder participation.

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

6.3.1 Documentation of the process by which a dispute was resolved and the outcome Major


Objective

evidence: Flowchart of the grievance procedure dated May 2009 (revised June 2014) is available detailing the procedure in addressing grievance raised by the affected parties from the submission of complaints by the complainant until the action taken by the management.

During the surveillance audit, Grievance / Request Book records are viewed request and grievances are recorded since 2007 until May 2014. The auditing team observed that generally the follow-up action has been taken within 5 – 7 working days from the day the complaint received.

6.3.2 The system resolves disputes in an effective, timely and appropriate manner Minor


Objective

evidence: During the surveillance audit, Grievance / Request Book records are viewed request and grievances are recorded since 2009 until 1 August 2013. The auditing team observed that generally the follow-up action has been taken within 5 – 7 working days from the day the complaint received.

In addition, ECC for Palm Oil Mill is continuously being implemented. Based on record, since last annual surveillance audit, the company has conducted the following ECC meetings:

Venue Date

Bertam Estate 19 June 2013


09 June 2014

Jasin Lalang 17 September 2013

17 June 2014

Gomali 26 June 2014

The minutes of the Meetings mentioned above is maintained and made available to the auditing team during the surveillance audit.

6.3.3 The system is open to any affected parties Minor


Objective

evidence: The system for dealing with complaints and grievances is open to all affected parties and interviews with workers and stakeholders indicate that no discrimination has taken place. The system is open to any affected parties (see 6.3.2) through:

i. Employees Consultative Committee (ECC).

ii. Gender representation (at least a designated gender representative).

iii. Designated grievance book which is endorsed by the complainants when action has been taken to resolve a grievance.

iv. Other internal mechanisms and external mechanisms are as per 6.3.2.

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

6.4.1 Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation

Major


Objective

evidence: The procedures for identifying legal and customary rights and for identifying people entitled to compensation are maintained. The company continue to provide necessities to the communities living nearby and maintain good rapport with the community leaders.

Nevertheless, since last surveillance visit, there were no records on issues of compensation or complaints from the communities.

6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land.

Minor


Objective

evidence: Similar to above.

The procedures for identifying legal and customary rights and for identifying people entitled to compensation are maintained.

The company continue to provide necessities to the communities living nearby and maintain good rapport with the community leaders.

Nevertheless, since last surveillance visit, records show that there are no issues of compensation or complaints raised from the communities.

6.4.3 The process and outcome of any compensation claims is documented and made publicly available

Minor


Objective

evidence: Similar to above.

The procedures for identifying legal and customary rights and for identifying people entitled to compensation are maintained.

The company continue to provide necessities to the communities living nearby and maintain good rapport with the community leaders.

Nevertheless, since last surveillance visit, records show that there are no issues of compensation


or complaints raised from the communities.

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

6.5.1 Documented of pay and conditions Major


Objective

evidence: There is no change of documentation of pay and conditions that is found to be adequate. The documentation covers the salary in the form of pay slips and payment records for contract workers and company workers detailing the basic pay, deductions, overtime, bonuses, allowance etc.

6.5.2 Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit

Minor


Objective

evidence: Observed evidence no employment contract between CK Permai Enterprise as appointed harvesting contractor and harvesting worker. This is observed in Bertam and Jasin Lelang

Estates. (Minor CAR 06 upgraded to Major CAR 07)

Closing of Major CAR:

Following the audit, the company has taken action to reformulate the contract agreement involving all contract workers for all supplying estates of Gomali Production Unit. The close-out evidence was submitted on 15 August 2014 detailing the sample of contract agreement to be used for contractor workers. Observed that the contract details all items as per required in the Employment Act 1955.

6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders)

Minor


Objective

evidence: Workers have access to clean water, segregated sanitary and bathing facilities and electricity. All employees are given adequate housing, medical, educational and welfare amenities and waste disposal facilities in accordance with Workers’ Minimum Standard of Housing and Amenities Act. Disposal of domestic solid wastes at the line site is conducted at least twice a week. The audit team also observed that the lines site as well as other buildings such as crèche and clinic has been upgraded with proper window panes installed. In addition, the drainage surrounding the lines site for both estates visited has been upgraded to ensure smooth water flow to the near drain. Furthermore, water supply has been upgraded with constant supply by the mill (if water interruption occurs in the estate).

Criterion 6.6: The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.

6.6.1 Documented minutes of meetings with main trade unions or workers representatives

Major


Objective

evidence: The ECC represents the avenue for collective bargaining for all w o r k e r s i n c l u d i n g f o r e i g n e r s . ECC meeting plan for 2013 is available.

Based on record, since last annual surveillance audit, the company has conducted the following ECC meetings:

Venue Date

Bertam Estate 19 June 2013

09 June 2014


Jasin Lalang 17 September 2013

17 June 2014

Gomali 26 June 2014

The minutes of the Meetings mentioned above is maintained and made available to the auditing team during the surveillance audit.

6.6.2 A published statement in local languages recognizing freedom of association Minor


Objective

evidence:

A valid freedom of association policy dated 20 August 2009 is available in local language i.e. Bahasa Malaysia.

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

6.7.1 Documented evidence that minimum age requirement is met Major


Objective

evidence: The minimum age of 18 years old in the policy statement is maintained.

Employee records show that employment age requirement is met. Ground observation during surveillance visit also does not show evidence to suggest employment of underage workers.

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

6.8.1 A publicly available equal opportunities policy Major


Objective

evidence: There is a publicly available equal opportunities policy dated 20 August 2009 which states that the company is an equal opportunity employer, whereby the company does not practice discrimination based on race, caste, national, origin, disability, gender, sexual orientation, union membership, political affiliation, or age, except for positive discrimination.

6.8.2 Evidence that employees and groups including migrant workers have not been discriminated against

Minor


Objective

evidence: There is no evidence of discrimination when a cross section of employees was interviewed. A functioning grievance mechanism is in place. The ECC also looks into allegation of discrimination if reported.

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

6.9.1 A policy on sexual harassment and violence and records of implementation Major


Objective

evidence: A policy on sexual harassment dated 06 December 2006 is available and maintained. A mechanism for recording harassment is also available. No evidence or practices that contradict this policy were observed. A Gender Report Book is establish to record of possible harassment.

6.9.2 A specific grievance mechanism is established Minor


Objective

evidence: A mechanism for recording harassment is also available. No evidence or practices that contradict this policy were observed. Discussion with the workers shows that the company provide fair and just treatment to women. Grievance mechanism for sexual harassment is in place. A documented sexual harassment grievance mechanism exists.

A Gender Representative appointed for each estate and mill, whose duties include attending to grievances pertaining to gender issues, especially sexual harassment. The Gender Representative is also in-charge of communicating the Policy on the Prevention and Eradication of Sexual Harassment in the Workplace to the workers and staff.

Specific grievance mechanism is established.


Sexual harassment meeting records available. No issues related sexual harassment arises at the estate.

Records of minutes of meeting is also kept and made available to the auditor where the latest meeting was conducted

Since last surveillance audit, the Gender Committee Meeting was conducted as follows:

Bertam Estate – 23 June 2014

Jasin Lalang – 19 June 2013 (the the forthcoming Meeting to be held in August 2014)

Gomali Estate – 08 June 2013 & 11 June 2014

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

6.10.1 Pricing mechanisms for FFB and inputs/services shall be documented Major


Objective

evidence: Contractual agreements between Gomali and the out grower i.e. Sembilan Tani also is verified and found to be fair and transparent. All the terms

6.10.2 Current and past prices paid for FFB shall be publicly available Minor


Objective

evidence: FFB purchase and creditor statement up to May 2013 is made available during onsite audit. All the prices and tonnages were clearly indicated in the statement.

6.10.3 Evidence that all parties understand the contractual agreements they enter into and that contracts are fair, legal and transparent

Minor


Objective

evidence: All contractual agreements are legal and appear to be fair and transparent. The contractual agreements between Gomali and the out grower i.e. Sembilan Tani also is verified and found to be fair and transparent.

Interviewed with the Owner and he is has a copy of the contract.

6.10.4 Agreed payments shall be made in a timely manner Minor


Objective

evidence: Interview with local contractors confirmed with no payments issues. The payments normally will be settled.

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

6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities

Minor


Objective

evidence: The local communities well provided with the facilities such as well constructed road, free of water and electricity for school. Monetary contribution to local temple for their festival contribution.

Contribution to local community is an active corporate social responsibility exercise for IOI Corporation Bhd and the estates keeps records of contribution e.g. road upgrading, transport for water supply during drought, school sport activities, security issues concerning workers , permission to allow smallholders passagfe of way through the estate etc are available at each estate.

Yearly the estate conduct stakeholder meeting to discuss issued that affect the community.

Principle 7: Responsible Development of New Plantings (Not Applicable)


Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

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

8.1.1 Minimize use of certain pesticides (C 4.6) Major


Objective

evidence:

The company has implemented best practices for management of pesticides and the improved controls associated with this program has reduced overall chemicals usage over the past 5 years.

The Unit has not used the herbicide Paraquat since 2011 in line with the management memo to replace paraquat with alternatives.

The monitoring of barn owl occupancy rate is continuing to reduce the usage of rodenticide

Planting of beneficial plants to encourage the proliferation of predators of leaf eating larvae is also continuing.

Continue monitoring of pesticide use per ha

8.1.2 Environmental impacts (C 5.1) Major


Objective

evidence: Annual review of the Environmental Impact assessment , management Action plans and continuous improvement plans is available for all visiting estates. In general all estates has reviewed their document in June 2014.

Documented records of Scheduled Waste storage and disposal

Periodic training on awareness and maintenance of HCVs as well as conservation areas

8.1.3 Maximizing recycling and minimizing waste or by-products generation Major


Objective

evidence: Domestic waste systematically collected at 2-3 times a week. Segregation of glass, plastic, aluminium, paper for recycling purpose is implemented at the line site.

Reminder during Muster concerning waste and its disposal.

8.1.4 Pollution prevention plans (C 5.6) Major


Objective

evidence: The company has implemented a best practice system for the segregation of wastes at source into composts, recyclables and non-recyclable for disposal at landfills. This program has reduced substantially the quantity of waste disposed in landfills. It also encourages the worker to collect the recyclable waste to sell.

The ‘Group Environmental Impact Assessment and Management Action Plans’ provides plans for action for those potentially polluting activities that have been identified.

Based on records, the periodic submission of reports to the Department of Environment on wastewater analysis, stack sampling etc

8.1.5 Social impacts (C 6.1) Major


Objective

evidence: Social impact assessments have been carried out for each estate and the mill and improvement programmes introduced.

There is a commitment to review social impacts and social management plan on an annual basis and during budget review.

The SIA for the mill as well as the four estates are available outlining the methodology approach of the document. All records of meetings, consultation takes place during the SIA is incorporated in the document. List of the stakeholders consulted are also available. There is evidence of action plan incorporated in the SIA. The action plan describes the plan for mitigate the impacts identified in the SIA as well as plan to monitor the impact.

8.1.6 A mechanism to capture the performance and expenditure in social and environmental aspects

Minor



Objective

evidence: Mechanism to capture social and environmental aspects will review annually.

The internal and external stakeholder meeting with the representatives will be conducted annually to ensure continuous improvement purpose.

A draft will be prepared by the estate and the employees ( during the ECC Meeting ) and discussed with the GM during the budget meeting.

Budget for social, environmental and safety and health is now available inside estates and mill

General budget for Corporate Social Responsibility Programme (CSR) and Environmental Control Budget are available.

3.1.2 Supply Chain (Module D)

For supply chain, the Gomali Palm Oil Mill has decided to use Module D in this assessment. The

findings and objective evidence find during the assessment are outlined in the table below. The results

for each indicator from each of the operational areas were evaluated to provide an assessment of

conformity. A statement is provided for each of the RSPO indicators in order to support the findings of

the assessment team.

Module D: Segregation

Module D.1: Documented Procedures

Criterion D.1.1: The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements.

D.1.1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements


Objective

evidence: The procedure name: RSPO Supply Chain – Module D – CPO Mills: Segregation (Doc: RSPOSC/SOP/SG/2) covering the implementation of all the elements in RSPO Supply Chain.

D.1.1.2 The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements

Verifiers and guidance:

This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.


Objective

evidence: Muhammad Uzair B. A. Jais as the assistant mill manager has been appointed as RSPO Supply Chain Officer on 01 January 2014.

Criterion D.1.2: The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.


Objective

evidence: In the procedures, RSPO Supply Chain – Module D – CPO Mills: Segregation (Doc: RSPOSC/SOP/SG/2) clause 5.0 has already stated the procedures for receiving and processing certified and non-certified FFBs.

Module D.2: Purchasing and Goods In

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


Objective

evidence: All the FFBs source are from IOI certified supplying units. There are total 4 supplying units under IOI Pukin region which are Shahzan 1, Shahzan 2, Segamat and Pukin Estate will send to Gomali estate occasionally due to breakdown/maintenance of the Pukin Mill. Pukin Region is certified


under Segregation system.

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


Objective

evidence: Up to date, there is no any overproduction.

Module D.3: Record Keeping

Criterion D.3.1: The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.


Objective

evidence: Sales volume for RSPO certified CPO is not certain at mill because all transaction is control by IOI

Commodity Sdn. Bhd. (NC 01)

Closing of NC 01:

The company has taken action to ratify the issue by incorporating the monthly sales volume through E-Trace for RSPO certified CPO into the Mass Balance Table. Sample of Mass Balance Table has been submitted to SGS on 15 August 2014

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


Objective

evidence: According to the procedures, all the records and reports are achieved and stored for 5 years.

Criterion D.3.3: The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.


Objective

evidence: Transaction and book keeping of CPO and PH will be recorded on the daily and monthly basics. The summary will be submitted to Head office every 3 months.

Criterion D.3.4: The following trade names should be used and specified in relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). The supply chain model used should be clearly indicated.


Objective

evidence: RSPO Sales document such as Weighbridge ticket did not state adequate information as required. E.g:

1. No RSPO certification reference number

2. Wrong description of product and format (CSPO-SG: instead of CPO/SG)

3. No E-Trace number

(NC 02)

Closing of NC 02:

Gomali Oil Mill had amended the format of CPO dispatch chit (CPO/SG to replace the currently stated CSPO-SG)

IOI Sustainability Team had corresponded with IOI Marketing Department to ensure RSPO certification reference number and E-Trace numbers are available on the relevant future sales document. Attached is the sample of how the information will appear in the future sales document.

Module D.4: Sales and Good Out

Criterion D.4.1: The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information:

a) The name and address of the buyer

b) The date on which the invoice was issued


c) A description of the product, including the applicable supply chain model (Segregated)

d) The quantity of the products delivered

e) Reference to related transport documentation


Objective

evidence: All certified CPO is manage by IOI Commodity Trading Sdn. Bhd as marketing arm.

Buyers are :

IOI Loaders Croklaan Procument Company Sdn. Bhd. – The rest

Intercontinental Speciality Sdn. Bhd - 1000 MT

RSPO sales to Intercontinental Sdn. Bhd did not specify

e-trace number and Supply chain certification reference number

Module D.5: Processing

Criterion D.5.1: The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100% segregated material to be reached. The systems should guarantee the minimum standard of 95% segregated physical material; up to 5% contamination is allowed.


Objective

evidence: Mixing of certified and non-certified FFB is strictly forbidden. All certified FFB must be kept and handled separately from reception at the ramp, throughout processing, handling and storage of CSPO & CSPK.

Only certified FFBs received from its own supplying units.

Criterion D.5.2: The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material.


Objective

evidence: Traceability was evidenced from monthly production report up to May 13 which was verified through documents such as weighbridge ticket , Chain of Custody Report, road tanker bill of landing report etc.

Criterion D.5.3: In cases where a mill outsource activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to separately certified. The mill has to ensure that:

a) The crush operator conforms to these requirements for segregation

b) The crush is covered through a signed and enforceable agreement


Objective

evidence: IOI Gomali did not outsourcing activities to any independent palm kernel crush.

IOI sell the palm kernel to their client and did not buy back any PKO.

Module D.6: Training

Criterion D.6.1: The facility shall provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System.


Objective

evidence: The training has been conducted on 02 July 2014. The training will be conducted annually for different department.

Module D.7: Claims

Criterion D.7.1: The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.



Objective

evidence: The company only displays the RSPO Corporate logo at the website: http://www.ioigroup.com/Corporateresponsibility/environment_plantation.cfm with the link lead to page at www.rspo.org.

3.2 Corrective Action Request

There are total of 2 Majors and 1 Observation were raised. In addition, there are 2 NCs raised

under Supply Chain Certification. Please refer to the Appendix A for the details findings and

relevant correction actions have been taken.

3.3 Status of Non-Conformities Previously Identified

Please refer to Appendix B for the previous audit.

3.4 Issues Raised by Stakeholders and Findings

Stakeholders did not provide any comments in writing regarding the IOI Gomali environmental

and social performance. All interviewed stakeholders had positive comments about IOI Gomali

4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY

4.1 Date of Next Visit

The next audit is planned before on July 2015.

4.2 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings

SGS Malaysia acknowledges and confirms acceptance of the Report contents and including the

assessment findings. SGS Malaysia accepts the responsibility for addressing the opportunities

of improvement detailed in this report.

Signed on behalf of Mr. Too Heng Liew Head of Sustainability (Malaysia/Indonesia)

Signed on behalf of SGS Malaysia Sdn Bhd

http://www.ioigroup.com/Corporateresponsibility/environment_plantation.cfm

http://www.rspo.org/

SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 January 2013

Page: 49 of 63

SGS RSPO, SGS (Malaysia) Sdn. Bhd., No. 26, Jalan Anggerik Vanilla, 31/93,

Kota Kemuning, 40460 Shah Alam, Malaysia

CONTACT PERSON: ABDUL HAYE SEMAIL Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927

WWW.SGS.COM

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATION

Corrective Action Request under P&C

CAR # Indicator CAR Detail

01

Major

2.1.2

Date

Recorded>

27 June

2013

Due

Date>

26 Sep

2013

Date

Closed> 24 Sep 2013

Non-Conformance:

Land title not updated & growers were not in compliance with the terms of the land title – BDE

‘Tanah ini adalah dikhas utk semua jenis tanaman kecuali getah, kelapa sawit dan koko’. After

1 year, the documents yet to be available for compliance.

Objective Evidence:

BDE land title is not updated or converts for the oil palm plantation.

Close-out evidence:

Letter of application which officially acknowledge received by Bentong Land Deparment

officer is available.

02

Minor

4.2.1

Date

Recorded>

27 June

2013

Due

Date> S04

Date

Closed> 15 July 2013

Non-Conformance:

Sembilan Tani: Fertiliser – no recommendation & soil and foliar analysis done.

Objective Evidence:

No recommendation no recommendation & soil and foliar analysis done for Sembilan Tani

during site visit.

Close-out evidence:

Foliar & Soil Sampling and analysis to be carried out by IOI Research Centre upon request by Sembilan Tani Estate. Memo by higher management to agree that IOI will help to carry out sampling, analysis and provide recommendation.

03

Major

4.6.5

Date

Recorded>

27 June

2013

Due

Date>

26 Sep

2013

Date

Closed> 24 Sep 2013

Non-Conformance:

At Sembialn Tani, the spray, Sutresno, worker has not gone his annual medical surveillance

Objective Evidence:

No medical surveillance record available during onsite audit.

Close-out evidence:

Sembilan Tani Estate management shall send the sprayers for medical surveillance within a month time. Evidences documents shown that the respective worker has gone through medical surveillance by OHD Doctor.

04

Minor

5.3.2

Date

Recorded>

27 June

2013

Due

Date> S04

Date


Non-Conformance:

http://www.sgs.com/



Waste management plan is not well implemented in Sembilan Tani.

Objective Evidence:

Accumulation of empty chemical containers – BDE

However it was also noted that : In Bahau Estate nursery store, a spill kit was not provided in

case of spillage .- BE

In Sembilan Tani - Waste disposal lacking

Reuse of chemical containers – at bath area – for collecting water from the pond and use for

loose fruit scraper.

Domestic waste is still being thrown indiscriminately

Close-out evidence:

Chemical containers will be sent to Gomali Estate and disposed through authorize agent by

DOE. Inventory records of schedule wastes shall be provided.

Correspondence letters from both Sembilan Tani Estate and Gomali Estate management to

confirm the disposal of empty chemical containers from Sembilan Tani Estate will be assisting

by Gomali Estate management to ensure disposed through authorized agent by DOE.

‘Gotong-royong’ has been conducted to clean up the Sembilan Tani Estate compound.

Segregation of recyclable waste has been started to implement at Sembilan Tani Estate.

Recycle bin and start to implement the recyclable waste collection system in Sembilan Tani

Estate.

05

Minor

5.5.3

Date

Recorded>

27 June

2013

Due

Date> S04

Date


Non-Conformance:

Burning waste was observed during onsite audit.

Objective Evidence:

At the Gomali Security Guardhouse on the way to Sembilan Tani & Sembilan Tani - domestic

waste being burned indiscriminately ( including plastics)

Close-out evidence:

NO burning has been started to implement in Sembilan Tani Estate. ‘No burning’ sign been displayed at the estate.

06

Minor

6.5.2

Date

Recorded>

27 June

2013

Due

Date> S04

Date

Closed> 10 Jul 2014

Non-Conformance:

In Sembilan Tani, the contract is done on a Group basis and not on an individual basis.

Information concerning the terms and conditions are lacking in the contract

Objective Evidence:

In Sembilan Tani, the contract is done on a Group basis and not on an individual basis.

Information concerning the terms and conditions are lacking in the contract.

Minor CAR upgraded to Major CAR 07

Close-out evidence:

07

Major

6.5.2

Date

Recorded>

10 July

2014

Due

Date>

09 Sept

2014

Date

Closed> 15 Aug 2014

Non-Conformance:

The contract is done on a Group basis and not on an individual basis. Information concerning

the terms and conditions are lacking in the contract



Objective Evidence:

Observed evidence no employment contract between CK Permai Enterprise as appointed

harvesting contractor and harvesting worker. This is observed in Bertam and Jasin Lelang

Estates

Close-out evidence:

Following the audit, the company has taken action to reformulate the contract agreement involving all contract workers for all supplying estates of Gomali Production Unit. The close-out evidence was submitted on 15 August 2014 detailing the sample of contract agreement to be used for contractor workers. Observed that the contract details all items as per required in the Employment Act 1955.

08

Major

2.1.1

Date

Recorded>

10 July

2014

Due

Date>

09 Sept

2014

Date

Closed> 15 Aug 2014

Non-Conformance:

Evidence of incompliance with legal requirements

Objective Evidence:

Observed evidence of conversion of oil palm plantation to properties within Bertam Estate.

Unfortunately no documented evidence available pertaining to the latest survey map indicating

the delineation of such from the scope of the certification. Furthermore, no documented

evidence available detailing the total area involved.

Close-out evidence:

The company has taken action to ratify the CAR issued by conducting the survey map for their area within the Bertam Estate. The survey was conducted immediately after the audit i.e. 14 July 2014 and the newly surveyed map dated 31 July 2014 has been submitted to the audit team on 15 August 2014 detailing the net planted area of Bertam Estate i.e. 327 ha that has exclude the total area taken by IOI Properties.

NC Under Supply Chain

01

D.3.1

Date

Recorded>

10 July

2014

Due

Date>

09 Sept

2014

Date

Closed> 15 Aug 2014

Non-Conformance:

The facility do not maintain accurate, complete, up-to-date and accessible records and reports

covering all aspects of these requirements

Objective Evidence:

Sales volume for RSPO certified CPO is not certain at mill because all transaction is control by

IOI Commodity Sdn. Bhd.

Close-out evidence:

The company has taken action to ratify the issue by incorporating the monthly sales volume through E-Trace for RSPO certified CPO into the Mass Balance Table. Sample of Mass Balance Table has been submitted to SGS on 15 August 2014

02

D.3.4

Date

Recorded>

10 July

2014

Due

Date>

09 Sept

2014

Date

Closed> 15 Aug 2014

Non-Conformance:

The trade names is not used and specified in relevant documents (e.g. purchase and sales

contracts, *product name*/SG or Segregated).

Objective Evidence:


RSPO Sales document such as Weighbridge ticket did not state adequate information as required. E.g:

1. No RSPO certification reference number

2. Wrong description of product and format (CSPO-SG: instead of CPO/SG)

3. No E-Trace number

Close-out evidence:

Gomali Oil Mill had amended the format of CPO dispatch chit (CPO/SG to replace the currently stated CSPO-SG)

IOI Sustainability Team had corresponded with IOI Marketing Department to ensure RSPO certification reference number and E-Trace numbers are available on the relevant future sales document. Attached is the sample of how the information will appear in the future sales document.


OBSERVATIONS

OBS # Indicator Observation Detail

01

2.2.2 Date Recorded>

27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

One of the legal requirements was found in not updated in the list.

Objective Evidence:

Hard and soft copies of relevant legal documents such as laws, licences and permits are

viewed at the estate office.

However, National Minimum Wages Consultative Act 2011 is defined as basic wages

determined under Section 23 is not documented in the legal requirements.

Close-out evidence:

National Minimum Wages Consultative Act 2011 has been added into the list of legal

compliance and publicly display at the office.

02


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

Sembilan Tani- SOP for basic operation harvesting, weeding lacking. Only SOP on IPM

available.

Objective Evidence:

No wedding training has been provided for the workers in Sembilan Tani.

Close-out evidence:

Sembilan Tani Estate has conduct the StOP training (Include: Harvesting, manuring, spraying and IPM StOP) to the respective workers. * StOP are provided by IOI Sustainability Team and acknowledge received by the Sembilan Tani Estate Manager. Attendant list of the respective training which signed by the Sembilan Tani Estate workers has been provided.

03


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

In Sembilan Tani- Water management

- well water,

- For drinking - water is brought by Owner in Kg Awat- 200 litres when required

No records of domestic usage kept.

Objective Evidence:

No water management plan and no records of domestic water usage.

Close-out evidence:

Water Management plan has been produced by Sustainability Team for Sembilan Tani Estate. Sembilan Tani Estate Manager has provided the records of water usage. The records are a part of attachment in the water management plan.



04


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

Lack of protection at the water courses.

Objective Evidence:

Some application of fertilizer near riparian 03B – BDE.

Close-out evidence:

Buffer zone maintenance training have been re-conducted to the manuring and

harvesting gang to remind them not to have frond stack and apply the fertilizer at the

buffer zone.

05


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

Few of the chemical is not listed in the SOP.

Objective Evidence:

However some chemicals used in the estate are not in the list in Bahau Estate e.g. Fluoxy-pyr,

difeconozole, diuron, chlorpyrifos are lacking.

Close-out evidence:

All the chemicals already been added into the chemical justification by Sustainability

team.

06


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

In Sembilan Tani - Stock card of chemical and fertilizer lacking.

Objective Evidence:

No stock card of chemical available during onsite audit.

Close-out evidence:

Stock card/similar type or recording system has been implemented in Sembilan Tani Estate. Records of stock issuance and etc. for chemicals such as fertilizer and pesticide have been key in to a format provided by IOI Sustainability Team.

07


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

Workers were found did not cover by accident insurance.

Objective Evidence:

Sembilan Tani workers only cover for life Insurance only, but no cover for accident.

Close-out evidence:

All the while, Sembilan Tani Management already purchased the accident insurance coverage for the workers as required by the law.

08


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013



Non-Conformance:

The implemented training program was found did not meet the

Objective Evidence:

New storekeeper En Yunus although was trained for the ‘Procedure for work safety on Storage

and management of chemical store’ however on checking the stock card, chemicals of different

active ingredients were placed in the same stock card as he was following the previous

storekeeper’s.

Close-out evidence:

Different chemicals had already been separately recorded in the stock card and clearly

categorized based on their active ingredients.

09


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

In Sembilan Tani, a Greviance file is established. However when the problem is solved, there is

no acknowledgement by the complainant.

Objective Evidence:

No acknowledgement by the complainant when the problem is solved.

Close-out evidence:

The action taken to resolve the grievances already acknowledged and signed by the

complainants and verified by Sembilan Tani Management.

10


27

June

2013

Due

Date>

Date

Closed> 15 Jul 2013

Non-Conformance:

In Sembilan Tani – payslip is available for the workers however there was no

acknowledgement by the worker

Objective Evidence:

There is no acknowledgement for the receiving of the payslip by worker.

Close-out evidence:

Acknowledge by workers either by signature or thumbprint already added into the pay

statement.

11

4.3.3 Date Recorded> 10 Jul 2014 Date Closed>

Objective Evidence:

Jasin Lalang – current road maintenance programme is not clear i.e. still reflecting the

programme for previous financial year.

There is also no indication on the specific timeframe for the planned road maintenance (occur

in both Jasin Lalang & Gomali).

Close-out evidence:


APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED


05 2.1.2 Date

Recorded>

25 Aug 2011

Due

Date> S02

Date

Closed>

14 August 2012

Non-Conformance:

Inconsistent buffer zones identification and demarcation along rivers and streams.

Objective Evidence:

Gomali has taken action to identify and demarcate most of the visited buffer zone along river streams. However, the auditing team is of the view that the process taken is insufficient to close the Minor CAR due to a visit in one buffer zone in Bahau Estate evidenced that the Buffer zone is not properly demarcated

Close-out evidence:

- Guidance on buffer zone available

- Mapping the buffer zone

- Proper demarcation of the buffer zone was done using red marking and signage

Minor CAR 05 – Closed


19 2.1.2 Date

Recorded>

25 August 2011

Due

Date> S02

Date

Closed> 14August 2012

Non-Conformance:

Insufficient documented system including written information on legal requirements.

Objective Evidence:

Hard copies of all relevant legal documents such as laws, licences and permits are viewed at the estate office. However, the auditing team observed that the copies of laws available at the estate office are not completed as per the list of the laws listed within the RSPO standard.

Close-out evidence:

List of law already compiled into the list and updated according to the changes


20 4.6.3 Date

Recorded>

254 August 2011

Due

Date> S02

Date

Closed>

14 August 2012

Non-Conformance:



Pesticides used in estates are not sufficiently stored in accordance to the Occupational Safety and Health Act, 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations.

.

Objective Evidence:

Visit to the Bahau Estate evidenced the triple rinsing and perforated procedure is inconsistently implemented at the chemical storage area

Close-out evidence:

Guidance on triple rinsing was made available for every estate.

Used container already pierced to prevent misused.


21 4.7.1 Date

Recorded>

25August 2011

Due

Date> S02

Date

Closed>

14 August 2012

Non-Conformance:

Inconsistency in the implementation of the Personnel Protective Equipments (PPEs) as required by the Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).

Objective Evidence:

However, the ASA1 evidenced a non-conformance whereby there is inconsistency in the implementation of the Personnel Protective Equipments (PPEs). The auditing team observed that in some estates that the sprayers are not using goggles and long-sleeve shirt during spraying activities.

Close-out evidence:

Issuance of PPE checklist made available for all estates

Audit on site found that sprayers are using the appropriate PPE : long sleeve shirt, goggles, mask and gloves

Minor CAR 21– Closed

22 4.8.1 Date

Recorded>

25August 2011

Due

Date> S02

Date

Closed> 14 Aug 2012

Non-Conformance:

Inadequate training programme that includes regular assessment of training need and documentation, including records of training for employees.

Objective Evidence:

Although there are various trainings conducted, there is no training assessment conducted for each of the trainings conducted. In addition, there is also evidence that the Hospital Assistant is not attending any proper chemical handling training

Close-out evidence:



Hospital Assistant already attended the chemical handling training as shown on the training record.


24 5.3.2 Date

Recorded>

25August 2011

Due

Date> S02

Date

Closed>

14 August 2012

Non-Conformance:

Operational plan to avoid or reduce pollution is not properly implemente

Objective Evidence:

There is an evidence of used Chemical containers and scheduled waste that is not disposed off in a proper manner. In addition there is also evidence of oil leaking into drainage system.

Close-out evidence:

-Clean out the relevant drainage which found oil leak.

- Training record for proper schedule waste management handling

Minor CAR 24– Closed

25 6.2.1 Date

Recorded>

25August 2011

Due

Date> S02

Date

Closed>

14 August 2012

Non-Conformance:

Incomplete documented consultation and communication procedures.

Objective Evidence:

The consultation and communication procedure is integrated in Social Impact Assessment. However, the auditing team found that the consultation and communication procedure between growers and/or miller, local communities and other affected or parties is incompl

Close-out evidence:

Total 3 new consultation and communication procedure has been developed as guidance for communication process which is:

i) Boundary disputes handling

ii) Squatters disputes handling

iii) Social disputes handling


27

( New )

4.3.1 Date

Recorded>

16August 2012

Due

Date> S03

Date

Closed> 10 Nov 2012

Non-Conformance:

Although there were documented evidence of practices minimizing soil erosion and degradation (including maps) yet practices not monitored

Objective Evidence:



In JL at 96E, the stream along 96E was silted up due to erosion

Close-out evidence:

Sand bags were stacked along the stream to prevent further soil erosion


28 ( New )

4.4.7 Date

Recorded>

16August 2012

Due

Date> S03

Date

Closed> 10 Nov 2012

Non-Conformance:

Evidence of water management plans.

Objective Evidence:

BS: No records were available to show that domestic water usage is monitored

Close-out evidence:

Documented Records of water usage have been initiated immediately by the estate management. (Bukit Serampang Estate)


29 ( Major )

4.7.1 Date

Recorded>

14 August 2009

Due

Date>

14 Oct

2012 Date

Closed> 10 Oct 2012

Non-Conformance:

Inconsistency in the implementation of the Personnel Protective Equipments (PPEs) as required by the Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act 139).

Objective Evidence:

First aid available with mandore and Staff ( eg in the spray area the spray mandore , Muharram Mullah and the Staff ,Arumugam has the complete kit. Contractor foreman FA kit incomplete

BS: PPE aprons were found at the linesite instead of being kept in the PPE storage area

JL : Contractor harvesting worker Muslimin do not have the protective sickle sheath as he reported it was damaged and not replaced

Sagil: Wearing slipper during FFB loading on the truck, incomplete first aid kit

Tambang: Sickle protective sheath is not been used.

Close-out evidence:



1. Photos of completely furnished first aid kits box available.

2. Photos to show that PPEs properly stored at PPEs storage area after work instead of bringing back to linesite shall be provided as evidence documents 3. Photos of issuance PPEs to the respective workers are available.

4. Another PPEs training to the FFB loaders including the contractors and formally documented.

5. PPEs issuance records available.

Major CAR 29 - Closed

30 5.3.2 Date

Recorded>

14 August 2012

Due

Date> S03

Date

Closed> 10 Nov 2012

Non-Conformance:

Operational plan to avoid or reduce pollution is not properly implemented.

Objective Evidence:

Although we saw the reuse of the green empty containers as implements, Jasin Lalang was able to show to us a debit note: 018-11/12 that shows a purchase of 96pieces of Green plastic container to be used as the raw material for the creation of the implements like loose fruit scraper.

Records of ‘Inventory of Scheduled Waste ( May 2012 ) was shown as evidence that records are kept of Scheduled Waste disposal. In May the following was disposed from Jasin Lalang Estate.

SW 305 Used Oil 220 litres

SW 409 Used container 1140 pcs

SW 410 Used Filter 12 pcs

Collector – OLST Petrol-chemical Sdn Bhd

JL

At the temple in 96B, all types of waste especially plastic cups etc were dump into the shallow landfill

BS:

Reuse of chemical container for other purposes : buffalo cart item holder, Water holder at AP station, Grease holder in staff desk in Sagil, item holder in Workshop in BS, Petrol container in Linesite,

Waste at linesite not completely segregated although there is a recycling programme in place

Motorbike leaking oil at linesite

Chemical container, caps and security tab in the dustbin at the chemical store



Close-out evidence:

1. Proper bin/ container has been prepared for the temple to throw their rubbish. Photos taken. Training for waste segregation and storage area for recyclable waste conducted to the temple personnel. 2. Training for disposal of empty chemical containers by triple rinse, punched holes, keep in the empty chemical containers store and dispose through OLST and consignment obtained, conducted to all the estate communities. 3. Segregation and recycle of waste training conducted to the line sweeper and others linesite residents. Record of training provided. 4. Photos showed that the Motorbike has been removed available. 5. Photos of oil trap after cleaning available.


31 5.5.3 Date

Recorded>

14 August 2012

Due

Date> S03

Date

Closed> 10 Nov 2012

Non-Conformance:

Evidence of burning waste (including domestic waste) found

Objective Evidence:

BS : domestic waste being burn to ward off mosquitoes

Sagil: burn evidence was found in the contractor place

Close-out evidence:

1. Photos of clearing off the burning marks available. 2. Training conducted to inform personnel on the ban of burning of domestic waste.


32 6.5.3 Date

Recorded>

14 August 2012

Due

Date> S03

Date

Closed>

Non-Conformance:

Evidence of housing, water supplies, medical, transport and educational amenities were available however some welfare amenities provided by the company were lacking

Objective Evidence:



Objective evidence:

Jasin –

school SRJKT lading Jasin, ambulance, dispensary

Sagil Estate :

SRJK Tamil Ladang Sagil

Housing unit = 254 units

Community Hall

Place of Worship ( Surau, Indian Temple, Church and Chinese Temple)

Free water supply and electricity from TNB

Security Guard -

Estate clinic

Football Field/Court

Provision shop

BS: Exposed septic tank, drainage, mosquitoe larvae in tyres, illegal wiring at houses in linesite and the absence of light fittings in the new wiring system

Close-out evidence:


APPENDIX C: TIMEBOUND PLAN