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RSPO SCC StandardCore Requirements(Part 1)

RSPO LEAD AUDITOR SERIES

SCCS M2a May 2013

Control of Certified Palm Oil

products in Supply Chain

RSPO Supply Chain Certification

Standard

2011

1. CERTIFICATION OVERVIEW

3. GENERAL REQURIEMENTSa.General for all facilities (inc. CPO mills)

2. BOOK & CLAIMa.Overview & Guidelines

4. MODULAR REQUIREMENTSa.SG andb.MB

SCC StandardSCC Standard1. Certification 1. Certification OverviewOverview

To physically manage sustainable palm oil products; or specifically administrate all purchases and sales of certified products

SCS Objective

6

Trade of batches of crude palm oil (CPO) or palm kernal oil (PKO) and its derivatives, products

SCS Coverage

6

Unit of Certification

“All operators who take legal ownership & physically handle (including receipt into storage tanks) RSPO certified sustainable oil palm products”

This applies up and including the end product manufacturer:– First operator: Palm Oil Mill (BC, SG or MB only)

– Last Operator: End Product ManufacturerFacility or parent company are RSPO members

RSPO memberCPO mill SC during P&C auditCPO Mill adopts SG/MB models

RSPO memberSCCS certifies individual facilities

RSPO memberTrademark & claims controlled by RSPO rules

Non-conformances

RSPO

SCCSys 5.3

• All non-conformances are considered Major

• Where non-conformances are not closed out within (3) months of the audit, a full re-audit is required

For NC after certification…1 month to close.

Awarding Certification

CB submits to RSPO and updates E-trace

RSPO to upload certificate on RSPO website and E-trace system within 1 working week

SCC StandardSCC Standard2. Book & Claim2. Book & Claim

To broker direct payments between supporters of sustainable palm oil and CSPO producers

Objective

6

CPO Mill is RSPO CertifiedAdopts Book & Claim as its SCCS certification model

Green Palm member purchases GP certificates from CPO Mill

Physical trade of palm oil products continues …

Greenpalm Trademark is only used in any market claims

Certified CPO (PKO) registered into Greenpalm Web Database

General Requirements

• Must be a member of Greenpalm• Only RSPO certified producers can sell

certificates (growers or smallholders)• Supporters/End users can buy certificates

and claim to support sustainable palm oil.

Rules governed by RSPO/Greenpalm • Sales transacted directly or off-market.

Buyers

• 1 GP certificate is equivalent to1 mt CPO• Sales no less than 25 GP certificates• Buyers cannot resell certificates• Greenpalm logo and claims must be approved

before use• Olechemical derivatives, commonly used by home

care products, are guided by conversions

determined by the 2012 RSPO Rules for Home and

Personal Care Derivatives.

SCC StandardSCC Standard3. General 3. General RequirementsRequirements

General Requirements

Consist of the following elements; 5.2 Documented procedures 5.3 Purchasing and goods in 5.4 Outsourcing activities 5.5 Sales & goods out 5.6 Registration 5.7 Training 5.8 Claims

• Procedures for Implementation• Records and reports to demonstrate

compliance• Person-in-charge named & demonstrate

awareness of facility procedures

5.2 Documented Procedures

• Documentation purchases from suppliers indicate IP/MB/MB • E.g., purchase orders, contracts, material

specifications• Checks by facility

• RSPO certified in origin• SCC Certificates Valid• Confirmation of trade (e.g., Shipping Announcement

and Shipping Confirmations in e-Trace)• Mechanism/procedures for handling non-conformity

material/documents.

5.3 Purchasing and goods in

• Third-parties can be included in Facility's SCC certification. (e.g., subcontractors for storage, transport)

• IF:• Maintains legal ownership• Enforced agreement facility-third parties (allow

unrestricted access of CBs)• Documented control procedures

• Facility maintains names/contact details of all contractors and inform CB of any updates

5.4 Outsourcing activities

• Sales invoices or relevant documents (e.g. delivery notes, shipping documents, etc) includes sufficient information on RSPO certified palm oil products delivered.• Names/Contacts of buyer or seller• Loading/delivery date• Certified product description (IP/MB/SG)• Quantities delivered• Transportation information• SCCS Certificate Reference Number

5.5 Sales of Goods Out

• Registration in RSPO IT System:• Legal/physical ownership of certified product• All supply chain actors, up to final refinery

• MUST• CPO and PKO Mills• Refineries (note: final refinery confirms receipt of shipments

only)• EXCLUDES

• Traders but not handling physical material (traceability number must be included in shipment documentation)

• Operators after final refinery (retailers/end product manufacturer)

5.6 Registration

• Defined training plan for implementation of the SCCS requirements.

• Training to all staff to implement the SCCS requirements.

• Training plan subject to review and updates.• Maintain relevant training records.

5.7 Training

• Facility shall only make claims regarding use or support of CSPO in compliance with RSPO Rules for Market Claims.

5.8 Claims

Defined Person-in-Charge for SCCS

Outsourcing services covered by facility certification

E-Trace updated when RSPO product delivered by CPO mill or arrives at final manufacturer

Facility checks validity of RSPO Certificates delivered

Certificate Number indicated on outgoing documents

SCC StandardSCC Standard4. Modular 4. Modular RequirementsRequirements

Modular Requirements

• Facility must comply with General Requirements and at

least one of the modules. • Several modules can be implemented simultaneously.• CPO Mills must apply either SG or MB • Modules:

• A Identity Preserved• B Segregation• C Mass Balance• D CPO Mills (Segregation)• E CPO Mills (MB)• F Multi Site Certification• G Group Scheme NEW 2013

Covered in this section

A/B – IP & SG

SEGREGATION

Segregation ensures receipt, processing and storage maintains RSPO products is physically separated

Source of Certified Material is identified

Product has minimum 95% RSPO certified product

Outgoing documentation identifies Certified product

• Follows same or less strict model of supplier (IP > SG > MB > Uncertified)

Processing

• 100-95% of source is identifiable to: • (a) a single mill and supply base (IP)• (b) certified segregated material (SG)

• Demonstrate (inc. procedures & record keeping) segregation:• Prevents physical mixing (isolated)• Transport and Storage

(note: handling non conformities or diversion of new crop to mill due to mill shutdowns)

Processing

95% rule

• Objective is for 100% CSPO product• Allows for minor contamination up to 5%

• Residual oils/products in storage tanks,

transport facilities• Tanks/pipes/valves need to have

procedures to handle different SCCS

systems (SG vs MB)

• Records and reports for at least 5 years• Documented proof that supply is traceable:

• (a) IP: to a single palm oil mill and supply• (b) SG: certified segregated material

• Trade names shall be indicated on relevant documents (e.g., purchase and sales contracts): • [Product Name]/IP or Identity Preserved• [Product Name]/IP or Segreagated

Record Keeping

SG Suppy Chain Yield SchemeCPO

100 %1,000 mt

Refined Palm94 %

940 mt

PFAD5 %

50 mt

Losses1 %

10 mt

OLEIN80 %

752 mt

STEARIN20 %

188 mt

Palm Mid Stearin65 %

122 mt

Double Frac Stearin

35 %66 mt

Double Frac Olein (Super Olein)65 %

489 mt

Palm Mid Fraction

35 %263 mt

Estimated only (+/- 2%)

C - MB

MASS BALANCE

MB products are purchasedMB Yield Scheme used to determine how much MB products can be sold

Mixed sources of FFB (certified and non-certified)

Product has minimum 95% RSPO certified product

Facility maintains an account of volume of certified material received and processed

• Follows same or less strict model of supplier (IP > SG > MB > Uncertified)

Processing

• Records and reports for at least 5 years. • Trade names shall be indicated on relevant documents

(e.g., purchase and sales contracts): • [Product Name]/MB or Mass Balance

Record Keeping

• Quantity of physical RSPO mass balance material inputs and outputs (volume or weight) at the physical site are monitored on a real-time basis.

• Accounting of material ensures:• Delivery of MB sales from positive stock• Allows for short selling (sales ahead of actual

receipt)• MB volume starts from date it enters the accounting

system and is deducted when it is allocated to outputs supplied by the organisation.

• MB claims on outputs matches inputs as per yield scheme.

Mass Balancing System

MB Suppy Chain Yield Scheme

New

• SG palm and palm kernel products can be used to support a MB claim, without a physical/chemical link between the SG product and the derivative sold as MB.

• However…SG palm oil products cannot be used to offset mass balance claims on palm kernel products or vice versa.

Mass Balancing Scheme

Palm Kernel MB Yield Scheme100 mt palm

kernels

45 mt palm kernel oil

29.2 mt PKO olein

15.8 mt PKO stearin

+

Companies that purchase segregated palm kernel products can either:•Apply segregated claim to all subsequent derivatives …..OR•Use it to offset sales of equal volumes of MB palm kernel derivatives(not necessarily derived from the segregated product acquired)

PK Mass Balancing Scheme

PK MB/SG Yield SchemeModel Yield Scheme

MB100 mt PK --> 45 mt PKO --> 15.8 mt PKO Stearin + 29.2 PKO Olein

SG-a Apply segregated claim to all derivatives

SG-bOffset equal volumes of MB PK-derivatives with SG PK-products

Refinery receives an order for 1,600 mt of CSPO MB Olein.

2,000 mt RBDPO is required to produce 1,6000 mt of Oleine.

It has in the RSPO account 5,000 mt MB CPO and 3,000 mt CPO in physical

stock.

Following should occur:

1.Physical stock is refined to produce 1,600 mt MB Oleine.

2.2,000 mt is deducted from the RSPO account

3.400 mt of Stearin is added to the RSPO account.

Sales can be affected anytime in the future

Example: Harmonisation

Refinery purchases 1,000 mt of

CSPO MB.

Options for sales:

1.MB 1,000 mt Refined Palm Oil

(RBDPO); or

2.MB 800 mt Oleine and MB 200 mt

Stearin; or

3.MB 520 mt Double Frac Olein or

280 mt Palm Mid Fraction etc

PFAD, offset MB with equal volumes of SG

products

Example: HarmonisationRefinery purchases 1,000 mt of MB PK.

Options for sales:

1.MB 450 mt PKO; or

2.MB 158 mt PKO Stearin and 292 mt

PKO Olein

All other derivatives, offset MB with equal volumes

of SG products

1. 50 mt of SG + 10 mt of MB = 60 mt MB

2. 10 mt of non CSPO + 10 mt of SG = 10 mt MB

3. 10 mt of MB + 13 mt MB = 23 mt MB

4. 20 mt of MB + 10 mt of non CSPO = 20 mt of MB

Example: Combined

1. 1,000 mt SG/IP CPO = 1,000 mt MB of any fractions

2. 1,000 mt SG/IP PKO = 1,000 mt MB of any fractions

(e.g., PFAD, etc)

BUT cannot buy SG CPO for MB PK fractions or vice versa

Example: Substitution

SCC StandardSCC StandardConclusionConclusion

Conclusion

• The SCCS certificate covers all operators who legally

own or physically handle RSPO certified products.• SCCS requirements focus on handling, accounting

and communication of use of certified products.• Three supply chain models are covered:

• Book & Claim• Segregated and Identity Preserve• Mass Balance

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