roundtable on sustainable palm oil...jl. rawa gelam v kav. or/3b, kawasan industry pulo gadung...

Roundtable on Sustainable Palm Oil

1st Annual Surveillance Audit Report Report no.: ASA1-94 001

Surveillance assessment against the

RSPO Principles & Criteria Indonesia National Intepretation year 2008

Supply Chain Certification year 2011

PT Swakarsa Sinarsentosa

Head Office : Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Site Office: Benhes Village, Muara Wahau Sub District, Kutai Timur District east Kalimantan, Indonesia

Date of audit: 04 to 08 November 2013

Report prepared by: Dian S. Soeminta

(RSPO Lead Auditor)

Certification decision by: Nelly Young

(COO TUV Rheinland Malaysia)

Certification Body: TUV Rheinland Malaysia Sdn. Bhd.

No. 26 – 32, Jalan Perindustrian USJ 1/6, Taman Perindustrian USJ 1,

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

Tel: +6 03 8024 2400 Fax: +6 03 8023 1505

www.tuv.com

1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT ............ ........................................ 3

1.1 National Interpretation Used .................................................................................................................. 3

1.2 Type of Assessment ............................................................................................................................... 3

1.3 Certification Details ................................................................................................................................ 3

1.4 Location and Maps ................................................................................................................................. 4

Figure 1. PT Swakarsa Sinarsentosa Plantation in East Kalimantan Indonesia ......................................... 5

Figure 2. Map of Estate in PT Swakarsa Sinarsentosa ............................................................................... 6

1.5 Organisational Information / Contact Person ......................................................................................... 7

1.6 Description of Supply Base .................................................................................................................... 7

1.7 Actual production volumes, tonnages and projected outputs. .............................................................. 8

1.8 Dates of Plantings and Replanting Cycles ............................................................................................. 8

1.9 Area of Plantation (Total, Planted and Mature) ..................................................................................... 9

1.10 Progress against Time Bound Plan ................................................................................................... 10

1.11 Compliance to Rules for Partial Certification ..................................................................................... 10

1.12 Progress of associated smallholders or outgrowers towards RSPO compliance ............................. 11

1.13 Approximate Tonnages Certified ....................................................................................................... 12

1.14 Other Achievements and Certifications Held .................................................................................... 12

2.0 ASSESSMENT PROCESS .................................................................................. 13

2.1 Certification Body ................................................................................................................................. 13

2.2 Qualifications of Lead Assessor and Assessment Team .................................................................... 13

2.3 Assessment Methodology & Agenda ................................................................................................... 13

3.0 ASSESSMENT FINDINGS ................................................................................... 16

3.1 Summary of Findings ........................................................................................................................... 16

3.2 Status of Previously Identified Non-conformities ................................................................................. 30

3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions.......................... 31

3.4 Description of Supply Chain Management System ............................................................................. 36

3.6 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions .................................................................................................................................. 40

3.7 Noteworthy Positive Components ....................................................................................................... 41

3.8 Conclusion and Recommendation for RSPO P & C and Supply Chain Certification ......................... 42

3.9 Issues Raised by Stakeholders and Findings Pertaining to Issues..................................................... 42

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL

RESPONSIBILITY .................................... ........................................................... 44

4.1 Date of Next Surveillance Visit ............................................................................................................. 44 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client .................................... 44

Appendix 1: Details of Revised Certificate (if applicable) .......................................................................... 45

Appendix 2: List of Abbreviations ............................................................................................................... 45

Appendix 3: List of Stakeholders Interviewed and Contacted ................................................................... 45

Appendix 4: Observations and Opportunities for Improvement ................................................................. 46

RSPO Annual Surveillance Audit Report

- PT Swakarsa Sinarsentosa – East Kalimantan Indone sia

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1.0 SCOPE OF ANNUAL SURVEILLANCE AUDIT

1.1 National Interpretation Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against Indonesia National In-terpretation year 2008 of the RSPO Principles & Criteria and Supply Chain Certification Standard year 2011

1.2 Type of Assessment

The 1st annual surveillance assessment was carried out on 1 mill and 4 esates under PT Swakarsa Sinarsentosa owned by PT Dharma Satya Nusantara group. The date of certification of this unit from 2013-01-10 to 2018-01-09.

1.3 Certification Details The details of RSPO certification of PT Swakarsa Sinarsentosa are as per the table below Table 1: RSPO Certification details of PT Swakarsa Sinarsentosa

RSPO Membership no.: 1-0064-08-000-00

RSPO Certificate no.: 18501994 001

Date of first RSPO certificate & validity: 2013-01- 10 to 2018-01-09.

Date of certification audit: June 25 to 30, 2012

Date of previous surveillance audit: -

Date of revised RSPO certificate & va-lidity (if applicable):

-

CPO tonnages claimed: 85,007 tonnes

PK tonnages claimed: 11,613 tonnes

Mil Capacity 90 ton/hour

HCV area/Conservation Area HCV area : 622 ha

Conservation area : 490 ha



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1.4 Location and Maps

Table 2: GPS locations for all estates and mills in cluded in annual surveillance assessment

Name of mill / estate Location

GPS locations

Latitude Longitude

Palm Oil Mil 1 (PKS 1) PT Swakarsa Sinarsentosa

Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01° 07’ 22.0” N 116° 51’ 07.0” E

Jabdan 1 Estate Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01° 11’ 03.9” N 116° 49’ 35.8” E

Jabdan 2 Estate Muara Wahau Village, Muara Wahau subdistrict, Berau district, East Kalimantan, Indonesia

01° 06’45.4” N 116° 50’ 08.6” E

Long Jenew 1 Es-tate


01° 11’ 14.5” N 116° 46’ 56.5” E

Long Jenew 2 Es-tate


01° 07’ 46.3” N 116° 43’ 44.9” E

Kantor Besar Ber-sama (KBB)


01° 10’ 57.9” N 116° 49’ 55.7” E



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Figure 1. PT Swakarsa Sinarsentosa Plantation in Ea st Kalimantan Indonesia



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Figure 2. Map of Estate in PT Swakarsa Sinarsentosa



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1.5 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.6 Description of Supply Base PT Swakarsa Sinarsentosa Mill is located in East Kalimantan. The mill was established in 2002 with a produc-tion capacity of 45 tons/hours. The mill capacity was increased to 90 ton/hours in year 2006 from one produc-tion line become two production lines. Currently PT Swakarsa Sinarsentosa mill receives approximately 69.55% from the total supply of fresh fruit bunches (FFB) from 4 company-owned estates (i.e. Jabdan 1, Jabdan 2, Long Jenew 1 and Long Jenew 2 estate). The other 30.45% FFB supply is received from the other estates managed PT DSN group, the company’s smallholder schemes, independent outgrowers and plantation companies surrounding Muara Wahau district. The company has 3 smallholder groups supplying FFB to the mill (i.e. a patnership program, KUD SSWJ -Semoga Sawit Wahau Jaya Cooperation and KUD Tepian Jaya Cooperation. In 2012, total FFB received by PT Swakarsa Sinarsentosa mill was 373,742.80 tonnes FFB. The company’s owned estate supplied 259,935.58 tonnes (69.55 %) and others sources 113,807.22 tonnes (30.45%). The mill produces Crude Palm Oil 87,514.47 tonnes and produces Palm Kernel 14,377.24 tonnes. To fulfil RSPO requirement regarding supply chain certified palm oil and palm kernel, the company implements SCC-RSPO with “Mass Balance” model according to the nature of mill FBB supply condition. The following is a description of the company’s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements. Results of audit are described in the table below: Table 3: FFB Supply Information for PT Swakarsa Sin arsentosa Palm Oil Mill

FFB supplied

FFB Contributors

January to December 2012

January to September 2013

Tonnes % Tonnes %

Company owned estates:

Jabdan 1 Estate 44.421.140 12 44.421.140 12

Jabdan 2 Estate 135.524.860 36 135.524.860 36

Long Jenew 1 Estate 4.385.850 1 4.385.850 1

Long Jenew 2 Estate 2 75.603.730 20 75.603.730 20

Company Name: PT Swakarsa Sinarsentosa

RSPO Membership no. 1-0064-08-000-00

Address: Jl. Rawa Gelam V Kav. OR/3B, Kawasan Industry Pulo Gadung Jakarta

Benhes Village, Muara Wahau Sub District, Kutai Timur District east Ka-limantan, Indonesia

Contact Person: Mr. Tjahjono Notosuroto

Telephone: +62 21 4618135 Fax: 62-21-4606942

Email: [email protected]



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Sub Total 259.935.580 69 259.935.580 69

Smallholders / outgrowers:

Patnership program 36.921.680 10 36.921.680 10

SSWJ (Semoga Sawit Wahau Jaya) Cooperation 55.132.010 15

55.132.010 15

Tepian Jaya Cooperation 911.000 0 911.000 0

Sub Total 92.964.690 25 92.964.690 25

Other Companies

PT Dharma Intisawit Nugraha 2.276.930 1 2.276.930 1

PT Dewata Sawit Nusantara 250.920 0 250.920 0

PT Karya Prima Agro Sejahtera 8.963.640 2 8.963.640 2

PT Astra 7.174.470 2 7.174.470 2

PT NIKP 1.057.390 0 1.057.390 0

PT Makin G 1.119.180 0 1.119.180 0

Sub Total 20.842.530 6 20.842.530 6

TOTAL 373.742.800 100 373.742.800 100

1.7 Actual production volumes, tonnages and projec ted outputs.

Table 4: Certified tonnages claimed, certified tonn ages purchased or sold, total and projected CPO and PK production from PKS 1 PT Swakarsa Sinarsentosa P alm Oil Mill

*note * : Data is taken from January 11, 2012 to November 05, 2013

1.8 Dates of Plantings and Replanting Cycles The company follows a replanting cycle of 25 years. Information on the dates of planting is provided in the table below.

Amount (MT) year 2012 Amount (MT) January

to November 2013 CPO PK CPO PK

Certified tonnages claimed 85,007

11,613 85,007

11,613

Certified tonnages sold* - - - -

Certified tonnages purchased* - - - -

Actual Production* 87,514.46 14,377.23 50,332.77 8,838.18

Actual OER and KER OER : 23.42

KER: 3.85

OER: 23.46

KER: 3.67

Projected output product for next 12 months 73,.707 12,180 89,216 14,700

Project OER and KER for next 12 months 23.60 3,90 OER: 23.48 KER:

3.87



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Table 5: Age and year of plantings of company estat e supplying to PT Swakarsa Sinarsentosa Palm Oil Mill

Age & Year of Plant-ings

Oil palm planted area at each estate(ha)

Jabdan 1 Jabdan 2 Long Jenew 1 Long Jenew 2

2008-2012 - 22 - 41

2003-2007 780 - 4,327 1,342

1998-2002 2,277 357 - 1,998

1993-1997 - 4,138 - -

1988-1992 - - - -

TOTAL 3,057 4,517 4,327 3,381

1.9 Area of Plantation (Total, Planted and Mature)

Table 6: Oil Palm Planted Area Summary, FFB Product ion and Average yield/ha of PT Swakarsa Sinarsentosa

Estate NameTotal area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

Jabdan 1 3,508 3,057 3,057 - 99,945

32.55

Jabdan 2 5,121 4,517 4,517 - 138,963 30.92

Long Jenew 1 4,446 4,327 4,327 - 130,518 30.16

Long Jenew 2 3,775 3,381 3,340 41* 101,761 30.47

TOTAL 16,850 15,282 15,241 41 470,737 30.89

Note : * immature area located at ex nursery area that was opened in year year 2003.

Table 7: Land use data of PT SwakarsaSinarsentosa

Estate Name Total area (ha)

Oil Palm

Planted Area (ha)

HCV/

Potential HCV

areas* (ha)

Land used for other purposes (ha)

Office & Housing mill

Other pur-poses **

Jabdan 1 3,508 3,057 325 126 - 325

Jabdan 2 5,121 4,517 224 133 78 393

Long Jenew 1 4,446 4,327 29 119 - -

Long Jenew 2 3,775 3,381 31 126 45 223

TOTAL 16,850 15,282 609 504 123 941 Note * Some HCV area are included within tha production area.

** Other purposes area consists of fruits garden, effluent ponds and conservation area



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1.10 Progress against Time Bound Plan Table 8: Time Bound Plan of the Other Management Un its

Name of Holding Location Time bound plan for certification

Status

PT Dharma Satya Nusantara Mill 2 ; Supply base: PT Dharma Agrotama Nusantara

Muara Wahau, east Kaliman-tan

June 2013 The final audit has completed

PT Dharma Satya Nusantara Mill 3 Supply base: - PT Dharma Intisawit Nugraha - PT Dewata Sawit Nusantara - Smallholder Patneship program 3

Muara Wahau, East Kaliman-tan

August 2013 The final audit has completed

PT Dharma Satya Nusantara Mill 5 Supply base: - Pilar Wanapersada

Nangabulik, Central Kali-mantan

June 2014 The certification is un-der preparation

PT Dharma Intisawit Lestari Bulungan, East Kalimantan

2019 The certification is un-der preparation

PT Karya Prima Agro Sejahtera Muara Wahau, East Kaliman-tan

2016 The certification is un-der preparation

1.11 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of PT Dharma Satya Nusantara group against the rules for par-tial certification according to RSPO Certification System clause 4.2.4 has been assessed through document re-view against company’s selft assessment record and relevant document such as HCV, SIA etc have been checked. A summary of findings is provided in the table below.

Partial Certification Requirements Audit Findings

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

PT Swakarsa Sinarsentosa is a company managed by PT Dharma Satya Nusantara group and has RSPO membership number 1-0135-12-000-00 since 2013.

However, PT Swakarsa Sinarsentosa was regis-tered as RSPO member (i.e.number 1-0064-08-000-00) in 2009, before PT DSN (as holding) regis-tered as RSPO member.

(b-d) A challenging time-bound plan for certi-fying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills.

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

PT DSN has time bound plan for all palm oil mills and respective suplly base. There are 5 palm oil mills and 4 plantations managed by PT DSN group including time bound plan to achieve RSPO certifi-cation as stated on the table 7 above.



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justified

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

There is no evidence that company replaces prima-ry forest at all plantation area. According to Indo-nesia Goverment regulation, plantation areas can-not be established in primary forests, but conver-sion of forest area or non forest area as well as non productive area, land bank and other categories of land are permitted as decided by the government Ministry of Forestry Decree letter no. 70/KPTS-II/2001.

All plantation areas in PT Dharma intisawit Nugra-ha were established in between year 2005 to 2007.According to the HCV assessment results there were HCV areas cleared i.e Riparian river along to Telen in Long Kejiak 2 estate. The compa-ny has identified the area and will follow RSPO regulation regarding compensation rule.

There is new development area in PT Dewata Sawit Indonesia, NPP assessment was done on August 2012 and the report available and can be verified at the main audit time for PT DSN Palm Oil Mill 3.

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

Land dispute between PT Dharma Agrotama Nusantara (another plantation under PT DSN) with a villager from Puhus village was identified. How-ever, the dispute has been closed since manage-ment PT DSN group make agreement with villager in Puhus village.

In addition, land conflict in PT Dhama Intisawit Les-tari and PT PT Karya Prima Agro Sejahtera were existing, however the company can provide land conflict resolution progress.

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

There is no labour dispute identified within DSN group.

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

Legal incompliance have been identified as stated on the NCR list of this report include ofthe other companies managed by DSN group such as PT DSN Mill 2, PT Swakarsa Sinar sentosa. However, those companies have been audited; some legal noncompliances have been identified and stated in the audit reports for these companies.

1.12 Progress of associated smallholders or outgrow ers towards RSPO compliance

As seen from data in Table 3, the mill receives around 25% supply of FFB from a smallholder groups, named Part-

nership 1, 2,4,5 & 9(Kemitraan 1, 2,4,5 & 9), and these smallholders are associated with the mill. The company

manages community land for the smallholder’s plantation, and all FFB from the smallholder’s plantation is sent to

the mill.

The mill has developed a plan for certification of associated smallholders as seen on document “RSPO Certification

Program for Smallholder Supply Base of Mill 3, the program will be starting on September 2013. As determined in

the plan, the program towards to RSPO certification will begin on year 2015, i.e. Understanding of RSPO require-

ment, preparation for RSPO requirement compliances will begin on year 2014 and target for certification by the end

of year 2016.



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1.13 Approximate Tonnages Certified The approximate tonnages certified shall be the same as per the original certificate, which is as follows Crude Palm Oil (CPO) : 85,007 tonnes Palm Kernel (PK) : 11,613 tonnes

1.14 Other Achievements and Certifications Held

Name of mill / es-tate

Certification Standard / Award achieved

Certification Body /

Awarder

Date Achieved

PT Swakarsa Sinarsentosa Mill & Plantation

QMS ISO 9001: 2008 SGS Year 2010

PT Swakarsa Sinarsentosa Mill & Plantation

EMS ISO 14001: 2009 SGS Year 2010

PT Swakarsa Sinarsentosa Mill

Environment Perfor-mance in Green Status (Proper Hijau)

Ministry of En-vironmental In-donesia

Year 2012



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent test-ing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta.

2.2 Qualifications of Lead Assessor and Assessment Team The assessment team members of this surveillance audit that were part of the same assessment team for the certification audit are as follows: 1. Dian Susanty Soeminta 2. Fadli 3. Aswan 4. Hendra Fachrurozi New assessment team members that were not part of the previous assessment team are as per the table be-low:

Name Position Qualifications / Experience

Carol. Ng Technical

Expert

Education: Bsc. Biotechnology & Bsc. Environmental Management - Monash University. Trainings attended: RSPO Malaysian National Interpretation Requirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - QA Plus; RSPO Stepwise Support Programme; 2nd Biodiversity Seminar – RSPO; Certification Body Biodiversity Forum & Workshop – RSPO; Envi-ronmental Quality Act 1974 (DOE) and ISO9001:2008 QMS Conversion Re-quirements (TUV Rheinland). Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO requirements, performing RSPO internal audits and implementing sustainability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation management teams (2008).

2.3 Assessment Methodology & Agenda The surveillance assessment was conducted from November 04 to 08, 2013 as per the assessment program in the table below. The assessment was carried out in accordance with PT TUV Rheinland RSPO audit proce-dure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed by the country where the assessment took place and record-ed their findings. Due to the location and proximity of the estates, combined with common management systems, both field and document assessments of all estates and the mill within the time frame without compromising the integrity of the assessment in anyway were possible to be completed. All 4 estates and 1 mill were visited and the assessment team carried out field and document assessments of compliance against the the RSPO principles and criteria and RSPO Supply Chain Certification System. Com-mon systems were identified and specific evidence was recorded for individual estates. Interviews were con-ducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the cer-tification body 15 days after the closing meeting. Verification of closure of major non-conformances was con-ducted 1 month after the closing meeting surveillanceaudit and implementation of corrective actions for minor



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non-conformities will be verified during the next suriveillance audit. The certification assessment agenda is as explained below. Surveillace Audit Agenda.

Date Location/ Main

sites Main activities

04.11.2013 Jakarta head Of-fice

Legal compliance Timebound plan Partial certification for uncertified mills and estates

05.1.3.2013 Traveling to plantation site 06.11.2013 Plantation Office Opening Meeting Jabdan 1 Best Practice Management, Gender Issue, wage Issue

Onsite verification for previous audit findings OSH issues Waste Management Water management Emplastment facility Agrochemical storage Site visit: � Interview with harvesters and sprayers – Jabdan 1 and Jabdan 2

estates � Chemical and fertilizer stores - Jabdan 1 and Jabdan 2 estates � Sprayers PPE store and shower room – Division 12 JB2 estate � Hazardous waste store – JB1 and JB2 estate � Workers housing – JB2 estate � Domestic waste management � EFB application site – block H14 of JB2 estate � Land application site – block E30 of JB2 estate � Barn owl box – Block H28 of JB2 estate • Verification to conservation block VI & VII • Verification to point of subsidence stick (point 1), water level in gate

1, Kenden Besar river, springs and watch tower, location of camera trap, planting in degradation area.

• Verification to block A38 – Jabdan 1 estate and Jabdan 2 estate (block F21 and block J27).

Document review : � Best practices – Land application records & plan, EFB application

records and plan, Integrated Pest Management detection and training records, chemical application records and material stock checks

� Hazardous waste storage documents Long Jenew 1 Best Practice Management

Environemtal Issues OSH issues

Jabdan 2 Best Practice Management, Gender Issue, wage Issue Onsite verification for previous audit findings OSH issues Waste Management Water management Emplastment facility Agrochemical storage

Long Jenew 2 Best Practice Management Waste Management Block F 32; G.32 Monitoring of Erosion



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Date Location/ Main sites

Main activities

Benhes Vil-lage Deaq Lay Village

Social impact assessment External communication

07.11.2013

PT Swak-arsa Sinarsen-tosa Mill

Sub contractor interview Best Manufacture Practice Environmental Issue Wage/salary Housing SCCS Mill site visit : � Mill compound and perimeter � Mill workshop � Sedimentation pond � Palm Oil Mill Effluent Treatment Ponds � Chemical store � Hazardous waste store

Nehas Liah Bing Muara Wahau

Social impact assessment External communication

08.11.2013

PT Swak-arsa Sinarsen-tosa

CSR Legal Boundary :

• Monitoring of boundary stone in all estate and check to BPN 615 and BPN 609

• Verification to erosion area or implementation platform in block G32, and B46

• Verification to fragile soil (block J49)



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings The following is a summary of findings during this surveillance audit for the criteria listed in the RSPO Princi-ples & Criteria Indonesian National Interpretation year 2008.

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, CR1.2 Criteria not assessed: - Findings: Requests for information made by stakeholders at the palm oil mill and the estates were recorded in one document together with any other requests or letters received from stakeholders, as required by the company’s procedure SOP 025B/SWA-CSR-WHU-/VI/2012 regarding external communication & complaints handling procedure issued on April 23, 2012. As seen from the company’s log book, there are some records of requests of information with corresponding responses from the company, as fol-lows: - Incoming letter no. 0018/CSR/Eks/III/2013 dated February 19, 2013 from Benhes villager relating to unfair distribution for jobs opportunity such as CPO and EFB transportation. The company responsed through letter no. 0017/SWA-CSR-WHU/II/2013 transmital note no. FM-SRD-29-R02 dated February 2013; Company evaluated the existing contracts with CPO and EFB transporter, commited become more transparent for jobs distribution. During 1st surveillance audit and clarify with the community, it was no more complaint regarding jobs opportunity. - Incoming letter no. LADD/DB/MW/II/2013 dated February 22, 2013 from Deabeq villager relating to ritual tradition enforcement after scaffle among company’s workers in Bong Song farmer group area. The company’s responsonsed through letter no. 0020/SWA-CSR-WHU/ II/2013 dated February 27, 2013, it was sight evidence of compensation to Deabeq villager and commitment from the relevant workers. According to company’s objective’s , all incoming letter will be responsed within 3 days after the letter recieved by CSR, Security & SHE Division, all incoming letter will be recorded on “Daftar Permintaan Informasi (FM-STD-30-ROO)” (List of Incoming Request of Information). There is no changed on company’s policy regarding documents that publicly accessed i.e. Legal Land titles/user rights, Site Permit, Plantation Operation Permit, Land Use Title or other documentation relat-ing to application for Land Use Title in accordance with relevant procedures), Environmental: Environ-mental and Social Impact Assessment (AMDAL /UKL-UPL) and environmental management and moni-toring reports (Laporan RKL-RPL); Documentation of social activities and community programs; Health and Safety Plan and Company’s improvement plan, the company has communicated to local commu-nities during meeting dated June 01, 2012 attended by representative from 6 villages which are Benhes village, Desa Diak Lay village, Deabeq village, Nehas Liah Bing village, Mura Wahau village, Miau Ba-ru Village. It is mentioned in company’s document namely “time provision of document storage (Ketentuan Waktu Penyimpanan Dokumen)” (FM-STD-18-R00”, that the company shall maintained all records of requests for information and responses made by the company for at least 3 years. Evidence so far shows that company maintains these records in accordance with this procedure Compliance status: Full Compliance

Principle 2: Compliance with applicable laws and regulations

Criteria assessed: CR2.1, CR2.2 Criteria not assessed: CR2.3 Findings:



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Company’s has new procedure for Identification of Law and Other Legal Requirements no. SOP-AGR-024-R00, dated 1 April 2013, which defines the procedure for identification of new and updated laws, and how to make updates to laws and regulations relating to the company. All related laws and regulations are listed in the document 'Evaluation of Compliance to Legal Re-quirements dated July, 2013, which includes checking compliance to all legal requirements applicable with the company. Compliance checks are also carried at every estate under PT Swakarsa Sinarsen-tosa once every 6 months. There is evidence of company’s efforts to comply with legal requirements. For example, the following company's licenses were checked and found to be valid: - Mill’s license for land application no. 660.41/K.142/2013 dated 27 February 2013 and valid for 2 years. - Mill's license for temporary storage of hazardous waste, license no. 658.31/K.632/2011 dated 13 Oc-tober 2011 and valid for 3 years for storage of oil containers, oil filter, printer tint containers, toner car-tridges, grease containers, contaminated rags, lightbulbs, used batteries, printer circuit boards, fossil fuel, chemical containers and fertilizer bags/containers. Maximum permitted storage time is 90 days. - Licenses of contractor engaged for collection of hazardous wastes, i.e. CV Sumber Agung is availa-ble. The contractor has two licenses, one for collection of oil containers and used oil dated 21 February 2011 and valid for 5 years, and another license no. 660.1/K.514.2011 for collection of other types of hazardous wastes including oil filters, used batteries, scrap metal contaminated with hazardous wastes, contaminated rags, grease containers, office waste, medical wastes, used lamps, ex-sludge, etc. - Calibration certificates for two mill weighbridges issued by the UTPD Metrologi Department were sighted valid from 24 June 2013 to 23 June 2014. Certificates no. 510.63/1849/UPTD MET.2/VI/2013 and 510.63/1848/UPTD MET.2/VI/2013. However there are several non conformance to legal regulation still found, that is raised as non con-formity, such as: 1. Some FFB transporters belong to Semoga Sawit Wahau Jaya Cooperation have no driving license,

no first aid kit, safety triangle, no periodic technical inspection report (KIR), this is inconsistent with “ Law no. 22 year 2009 (Undang-undang Lalu Lintas dan Angkutan Jalan Raya) article 49; 57 and 77. It was found also some truck driver only has SIM A instead of SIM B as required by respective regulation.

2. Overtime work for some mill workers exceed than government requirement, as stated on “Kep-menaker no. 102/men/VI/2004, regarding overtime and overtime payment regulation, such as woker No. 0005743; No. 0002984 and No. 41435.

3. Used agrochemical container (i.e Round up) were kept in improperly store without information about retention period, and controlled its amount. Inconsistent with PP No 18 year 1999 and company’s in-ternal procedure that required 7 days for hazardous waste keeping.

The company has SOP-AGR-LGL-02-R02 regarding Identification of Legal and Other Requirements dated 1 April 2013 which include the procedure to identify legal requirements and making updates to legal requirements. Identification and updating of legal requirements is conducted by the Legal depart-ment, HR department and ESH department. The company has listed all applicable legal requirements in a Legal Requirements Register last updated in June 2013, including checking of compliance. Check-ing of compliance is done through checklists of applicable legal requirements, e.g. for the mill, last check was conducted on 1 June 2013 with no legal noncompliances found. The updated Legal Re-quirements Register includes new and updated requirements, e.g. Government Regulation (Peraturan Pemerintah/PP) no. 81 year 2012 regarding Management of Domestic Waste. In accordance with the company's SOP for Identification of Legal and Other Requirements, updates to legal requirements are checked by the company's Legal department, HR department and ESH depart-ment, and any changes to regulations are informed to the company. For example, sighted notice letter entitled 'Report Updating on New Regulations for Semester 2 of Year 2013' dated 15 July 2013 from the ESH Department head to the company heads regarding updates to Law no. 18 Year 2008 regard-ing Waste Management and new Government Regulation (Peraturan Pemerintah/PP) no. 81 year 2012 regarding Management of Domestic Waste. The letter listed all clauses in the updated law and new regulation which are applicable to the company and required to be checked. The company’s right to use the land does not change. PT Swakarsa Sinarsentosa Mill is located inside the plantation HGU area. The mill has “Letter of Plantation Business Registered” namely SPUP or “Su-rat Pendaftaran Usaha Perkebunan nomor 199/menhutbun-VII/2000 for total areal 16,850 ha including



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1 palm oil mill with an initial capacity of 60 ton FFB/hour. The mill has a “Permanent Business License” (Izin Usaha Tetap) No. 135/HGU/BPN/1997 from Ministry of Plantation. The company also received a revised Plantation Business Permit (Izin Usaha Perkebunan/IUP) No. 188.4.45/038/Eko.1-III/2012 dat-ed March 21, 2012 for PT Swakarsa Sinarsentosa Plantation for total area 16,850 ha and revised mill capacity of 90 ton/hour in Muara Wahau Sub District, Kutai Timur District. PT Swakarsa Sinarsentosa plantation has HGU permit No. 135/HGU/BPN/1997 from National Land Agency and certificate HGU No. 1 Benhes and Beq Diah Lay village dated October 28, 1997 with total area of 16,850 ha valid for 27 years until year 2033. Company has boundary stone maintenance program for year 2013, to ensure that all legal boundaries are clearly demarcated and visibly on the ground, by August 2013 all oundary stone in company’s es-tates had been maintained such as Jabdan 1 total 60 stones , Jabdan 2 total 93 stones, Long Jenew 1 total 79 stones and Long Jenew 2 total 98 stones. As seen on the filed for stone with BPN No. 615A in blok C17 close to community land and stone no. 609 in riparian Telen River. The boundary stone position has been complying with document issued by Legal Land Agency. There is no identified land conflict at the surveillance audit, company has no new land area to be com-pensated, as explained on the previous audit report all compensation process was settled before year 1997 and conflict resolution with the three villages (Dabeq, Diak Lay, and Ben Heas) was resolved on February 8, 2011, with agreement by all parties. The mechanism of conflict resolution procedures/complaints/claim as well as communication and con-sultation procedures was agree by community on June 7, 2012, and the copy has been given to them. Compliance status: Non Compliance Non-conformance 2013-01 of 06 (Major) The inconsistency to legal compliance were identified, such as: 1. Some FFB transporter belong to Semoga Sawit Wahau Jaya Cooperation has no driving license, no

first aid kit, safety triangle, no periodic technical inspection report (KIR), this is inconsistent with “ Law no. 22 year 2009 (Undang-undang Lalu Lintas dan Angkutan Jalan Raya) article 49; 57 and 77. It was found also some truck driver only has SIM A instead of SIM B as required by respective regulation.


3. Used agrochemical containers (i.e Round up) were kept in improperly store without information about retention period, and controlled its amount. Inconsistent with PP No 18 year 1999 and compa-ny’s internal procedure that required 7 days for hazardous waste keeping.

Principle 3: Commitment to long-term economic and financial viability

Criteria assessed: CR3.1 Criteria not assessed: - Findings: The company ‘s management plan document i.e. "Proyeksi Rencana Kerja & Anggaran Tahun 2013 & 2016 “ with information on this document consisting of company activities such as profit and loss infor-mation from Total Revenue and Total Operating Cost, including information about gross operating cost, profit/loss before tax and profit and loss after tax. The a financial schedule for year 2013 is available at head office Jakarta and estate/mill office. Information in the document consist of general routine opera-tional activities such as plantation maintenance, harvesting, fertilizer, investment plans such as en-richment planting (planting of various plant species to enhance biodiversity), mill activities such as FFB processed, projected oil extraction rate (OER) and kernel extraction rate (KER), projected crude palm oil (CPO) and palm kernel (PK) production, CSR programmes and environmental monitoring, HCV management plan and other activities to fulfill RSPO requirements. Operational plan year 2013 available on estate Office Muara Wahau similar with last year planning the document containing information on the budget for each activity (including activities for environmental management programmes and all CSR related expenses, legal compliance and RSPO P & C compli-ance) and revenue from company's production including all company's liabilities. Monitoring of actual



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expenditure versus the budget is done regularly, i.e. three monthly. In the current year, if the assump-tions are planned for this year based on the assumption last year can be changed according to the cur-rent conditions. Financial statemement for PT Swakarsa Sinar Sentosa was audted by public accountant for year 2012, the document area availabel on head office, the result is positif with good profit. According to the finan-cial statement document. On the document stated that there will be 1770 ha area of PT Swakarsa Sinarsentosa become coal mining. The agrement for coal mining operation was signed; the impact will be reducing company’s total area starting year 2015. As consequency of that condition, company plan to make more patnership plantation program with community surronding as FFB supplier. The company implements a replanting cycle every 25 years, and still not make planning for a replanting activities will begin after the oldest plantation enter to 25 years old. The first replanting program will conducted for planted year 1996 area in Jabdan 2 estate. Compliance status: Full Compliance

Principle 4: Use of appropriate best practices by growers and millers

Criteria assessed: CR4.1, CR4.2, CR4.3, CR4.4, CR4. 5, CR4.6, CR4.7, Criteria not assessed: CR4.8 Findings: It was explained on minutes of management review meetings period IX (dated on January 29, 2013) a number of SOPs has been changes due to changes in company’s organizational structure such as procedure for evaluation of implementation and compliance to applicable legal requirements (SOP-AGR-024-R00 dated on April 01, 2013 while previous of SOP-AGR-LGL-02 Rev.01 dated on May 01, 2012), procedure for dispatch of CPO, PK and PKO (SOP-AGR-028-R00 dated on February 15, 2013 while previous of SOP-AGR-POM-02-R00), procedure for selling of CPO, PK, PKO and FFB (SOP-AGR-048-R00 dated on February 15, 2013 while previous of SOP-AGR-STD-12-R02), procedure for document control (SOP-AGR-036-R01 dated on November 01, 2013 while previous of SOP-AGR-STD-01-R04), etc. Other SOPs and working instructions remain non changed. Some working instruction was not consistently implemented, and this has been raised as non conformi-ty as determined on the relavant RSPO criteria below. The records of operational results are well maintained in each estate and mill on monthly report, e.g. monthly report for this years 2013 of Jabdan 1 estate, Jabdan 2 estate, Long Jenew 1 estate and Long Jenew 2 estate wich includes all activities, etc. In the mill such as daily production report, recapitula-tion of daily receipt FFB, receipt note for FFB, logbook dispatch, etc. The company has an internal audit team consisting of 6 people specifically designated to conduct in-ternal audit. The team conducts internal audits 4 times a year. There are records that the auditors have been trained on auditing techniques (training attendance lists dated 8 November 2012 and 17 January 2013), audit reporting (8 November 2012) as well as training on RSPO P&C and ISO9001, including evaluations of auditor understanding on auditing standard requirements, as seen from evaluation forms dated 4 March 2013. Sample internal audit results for the mill sighted for audits done on 20 September 2013, 22 April 2013 and 20 February 2013. The audit scope cover all requirements under ISO9001, in-cluding implementation of the company's SOPs, the Indonesian Sustainable Palm Oil (ISPO) standard and RSPO standard. Nonconformity reports sighted for internal audit conducted on 22 April 2013 in-cluded 8 nonconformities covering issues related to sounding kernel calibration records, lack of envi-ronmental monitoring plan, incorrect management of domestic and hazardous wastes, and inadequate fire-fighting facilities. The reports included the identification of root cause analysis, corrections to be taken, date of implementation and notes on verification of corrections done signed off by the audit team. The company has a detailed soil map (scale 1 : 65,000) showing gradients and all soil types within all estates prepared by an external consultant, and the last soil survey was conducted on May 2012. According to soil survey result there are 8 soil types (based on USDA) in PT Swakarsa Sinarsentosa i.e. Plinthic Kandiudults (characteristic of A3K with surface texture is clay loam), Typic Kandiudults (characteristic of A3 and A2 with surface texture is sandy clay loam to clay loam), Typic Kanhapluduts



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(characteristic of A1 with surface texture is sandy clay loam), Typic Fragiorthods (characteristic of P with surface texture is clay sandy to sandy), Aquic Udifluvents (characteristic of AL with surface texture is varied) and Typic haplohemist (characteristic of SP and DP with surface texture is hemik-saprik). The soil map available in plantation office. Categories of fragile soils are Typic Fragiorthods (P) and Typic haplohemist (SP and DP). Most of soil type in PT Swakarsa Sinarsentosa is categorized as dry soil; only a small part inside estate area consists of peat soils. However this area is not opened for plantation activities, the area still remains as a forest patch. The position of this area already mapped on company’s soil map. As seen from the company’s contour map (topographic map), company’s area is sloping to undulating, no extremely hilly area which need specific plantation technique. In year 2012, PT Swakarsa Sinarsen-tosa areas has rainfall and rain days which high such as Jabdan 1 of rainfall : 2,838 mm and rain days : 227 days, Jabdan 2 of rainfall : 2,431 mm and rain days : 177 days, Long Jenew 1 of rainfall : 3,197 mm and rain days : 223 days, Long Jenew 2 of rainfall : 2,250 mm and rain days : 187 days. The company has a management strategy for plantings on slopes above a certain limit, such as terracing, as referred to in the company’s Agriculture Manual and SOP for Oil Palm year 2008, as well as SOPs for the ‘horse-shoe’ method, terracing or platform method and silt pits. Realization of making platform in Swakarsa Sinarsentosa areas in year 2013 (January to September) is 105 unit (block A32 – Jabdan 1 estate), 262 unit (block F21, block J26 and block J27 – Jabdan 2 estate) and 95 unit (block E49 and E50-Long Jenew 2 estate). PT Swakarsa Sinarsentosa has road maintenance program for year 2013 which includes the budget for road maintenance activities for each estate, and records of actual road maintenance activities conducted such as graveling, road service (grading compact), and re-surfacing. The Assistant Road Superintendant is responsible for ensuring road maintenance activities are carried out according to plan. Records of actual road maintenance activities conducted showed that maintenance is regularly carried out according to plan and actual costs were above the planned budget. In year 2013 (until Oc-tober 2013), the company has been implementation of road maintenance (grading compact) amount of 452.33 KM (Jabdan 1 estate), 967.88 KM (Jabdan 2 estate), 537.33 KM (Long Jenew 1 estate) and 343.17 KM (Long Jenew 2 estate) whereas realization of re-surfacing in Long Jenew 1 estate (1,500 m) and Long Jenew 2 estate (4,481 m). Jabdan 1 estate and Jabdan 2 estate will implementation of re-surfacing after Long Jenew 1 eatate because heavy equipment is being used. The road condition was observed to be quite good. The company has marked observation points in identified peat soil area which allocated as protected area. Total 2 observation points (point 1 : 478779 (X) and 127787 (Y), point 2 : 478878 (X) and 126253 (Y)) have been installed in all company’s estate in 2012 to monitor subsidence level. According to monitoring program, company has periodic peat soil subsidence monitoring every 6 months. Monitoring result will be recorded on form no. SHE-KSV.002. Results of measurement are a decline the amount of 2.0 cm (point 1) and 2.0 cm (point 2) from 0 cm in period of February and August 2013. As a mechanism to prevent decline of water level in the peat, weirs were installed at strategic points to trap and maintain water in the estate canals at a certain level. Water levels are monitored on a daily basis in order to ensure that the water table is maintained at specific level (60 to 80 cm) from the ground surface (using measuring instrument). The water level sighted during audit time was 75 cm (gate 1), this is still under company’s standard. There is an internal communication letter No. 0030/R&/IV/2012 dated April 24, 2012 from regional Plantation head to plantation manager regarding recommendation for marginal soil management in PT Swakarsa Sinarsentosa such as 1). The making of discontinue ditch, 2). The implementation of soil and water conservation actions and 3). Add the frequency of fertilization. Action 1 to 3 was recommended for land class NS (block I52 and J49 – Long Jenew 2 estate) and action 2 and 3 was recommended for land class S3 (Long Jenew 2 estate : block E49, E50, I50, I51, J48; Jabdan 1 estate : block A31, A32, A38 and Jabdan 2 estate : block E18, F21, H14, I15, J26,J27). During audit (until October 2013), im-plementation of marginal soil management in Jabdan 1 estate are making platform, application of EFB, application of oilcake, making of discontinue ditch, additional of fertilizer rotation, arrange midrib with model L and planting Nephrolepis and Casiatora; in Jabdan 2 estate are making of discontinue ditch, application of oilcake, application of EFB, additional of fertilizer rotation; in Long Jenew 2 estate are making platform, making of discontinue ditch, application of EFB, application of oilcake, additional of fertilizer rotation (Hi-Kay and Higrow). The company has identified all streams that flow inside of estate area and created a riparian buffer zone management programme. There are 3 small rivers in the area of PT Swakarsa Sinarsentosa plan-tation, i.e. Kenden (Besar and Kecil) River and Long Sengat River, width of rivers ranges from 4 to10 meters. The company has a plan for protection of river riparian buffer zones along natural streams through felling of oil palm trees adjacent to these natural streams and replanting the buffer zone areas



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with hardwood trees and leguminous cover crops (LCC) such as at Long Sengat and Kenden river ri-parian buffer zone, in order increase the retention time of canal water potentially contaminated with chemicals or surface run-off into main streams. The company also made an SOP for protection of ripar-ian buffer zones of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones, prohibition of agrochemical application activities nearby rivers or watercourses IK-AGR-STD-02-R01. The scope working instruction includes marking the boundary for protection of riparian, informing sprayers and manurers about boundary for chemical application near riparian, installation of public information board about illegal activities at the riparian zones, planting vertiver grass and trees and allowing the riparian areas to be overgrown by trees. An implemented water management plan can be seen. The company has developed and implemented a documented water management plan. For supplying water at the housing area, company already develop water treatment in Jabdan 2 estate to produce clean water for daily consumption due to water quality for daily consumption in all compa-ny’s estate very poor which is not meet government standard for human consumption. Whereas sign of the boundary for spraying and fertilization near riparian still seen, platform, plant of vertifer grass, LCC, hardwood trees, and public information board available in all estate of PT Swakarsa Sinarsen-tosa. The company has conducted soil analysis of land application area as required in their RPL/RKL docu-ment to be conducted for 14 physical parameters, 7 chemicals parameters and 4 types of metals for samples from the furrows, inter-furrows and control areas of land application sites. The company also has conducted an analysis for soil fertility for 19 samples as per certificate no. 0156/2011 for samples received on 28 January 2011, and for 34 samples as per certificate no 3095/2010 received on 9 No-vember 2010. The company has a plan for EFB application with records of actual application. Sample EFB applica-tion plan for Jabdan 2 estate was sighted and stated recommended dosage of 225kg/tree and dosage of EFB to be applied for each estate block was determined. However, records sighted show that actual amount of EFB applied had exceeded the recommended dosage for several blocks at Jabdan 2 estate, e.g. from January to October 2013, 1,297,580 kg was applied to block D18 which had recommended dosage of only 1,058,850 kg, and 512,740 kg was applied to block E14 which has recommended dos-age of only 445,275 kg. It was also sighted in the field at block H14 of Jabdan 2 estate that EFB was not applied in one layer as required in the company's work instruction for EFB application, i.e. IK-AGR-OLP-11-R01. Long Jenew 2 estate carried out application of EFB in one layer as required in the work instruction. The company also has a program for land application of POME to Jabdan 2 estates, as explained un-der CR5.6 below. The company carries out analysis of river water quality with samples taken from Wahau River once every 6 months in accordance with their AMDAL document, as sighted from analysis results from Suco-findo as follows: 1) Test certificate no. 02962/BCEKAG dated 31 January 2013 with the following results: BOD upsteam - 6.05; BOD downsteam - 6.92 (Legal limit = 3) COD upstream - 24; BOD downstream - 35 (Legal limit 25) Dissolved oxygen (DO) upstream - 5.32; DO downstream - 5.19 (Legal limit = Min 4). 2) Test certificate no. 09043/BCEKAG dated 30 July 2013 with the following results: BOD upsteam - 13; BOD downsteam - 11 (Legal limit = 3) COD upstream - 28; BOD downstream - 27 (Legal limit 25) Dissolved oxygen (DO) upstream - 3.34; DO downstream - 3.19 (Legal limit = Min 4). The levels for BOD, COD and dissolved oxygen has exceeded the legal limits for some results. How-ever, the limits were already exceeded in the upstream sample taken, with little increase and even some decrease in the downstream samples, which shows that that the exceedance was not due much to the company's activities. Monitoring of mill water use in year 2012 is 374,635 m3 with volume of FFB processed is 373,722.24 tonnes (ratio : 1.00 m3/tonnes FFB). Whereas in year 2013 (until October) is 242,943 m3 with volume of FFB processed is 243,958.38 tonnes (ratio : 0.99 m3/tonnes FFB). Ratio of consumption water in mill still within the limits allowed in accordance literature for a both period. The mill conducts monitoring of effluent BOD once every month. Sighted from sample test certificate results from Sucofindo, the BOD from outlet samples taken each month from January to July 2013 is below the BOD legal limit for land application which is 5000ppm.



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The company still implements work instruction IK-AGR-OLP-14-R00 regarding management of pests. The company conducts monthly detection of various types of pests, including nettle caterpillars and bagworms, rats, termites. Records show generally low rates of pest attacks in year 2013 at all estates except in Long Jenew 2 estate where rates of attacks of nettle caterpillars in August to September 2013 was found to be high (above 10 per frond) in some blocks as sighted from monthly detection rec-ords, e.g. at 26.05 per frond at block J49 on 7 September 2013 and at blocks F30-32 found between 10 to 50 caterpillars per frond between 2 - 6 September 2013. Treatment of the caterpillars was done through spraying with NPV virus. Records of amounts of NPV virus sprayed and blocks where treat-ment was conducted is available. For estates where no pests were found during detection, there is no preventive chemical treatment done. As sighted in the field, the company also plants beneficial plants such as turnera subulata to attract natural predators of leaf pests as biological management. There is evidence of implementation of biological methods of pest management, i.e. sighted in Jabdan 2 estate block H28 that there is a barn owl box inhabited with a mother owl with several hatchlings. On-ly Jabdan 2 estate has barn owl boxes (total of 75 boxes) as it was the first estate was planted in year 1996 when rat attacks were high. Since implementation of biological management using barn owls, the rates of rat attacks decreased significantly there was no need to have barn owl boxes at other estates. Sighted from records of rat census, rat attacks rate had decreased from 30.89% in year 2008 to be-tween 12.50% at non-land application areas to 17.43% at land application areas in year 2010. The company has separate teams for each division of each estate for conducting pest detection. Rec-ords of training for pest detection teams at all estates were done between August to November 2013 with evidence seen in form of attendance lists. There are also records of training on treatment of pests done on 20 August 2013 for 12 sprayers from LJ1 and LJ2 estates. Samples of training presentation materials were sighted. The company maintains records of pesticide toxicity units in active ingredient applied per hectare and active ingredient applied per tonne FFB each month at each estate since year 2010 to year 2013, and conducted comparision of active ingredient application from year to year. Samples records for Jabdan 1 estate shows a gradual decrease in amount of chemicals applied every year, e.g. total amount of ac-tive ingredients applied from all chemicals in year 2010 was 0.4950kg/ha which reduced to 0.4125kg/ha in year 2011, 0.4054kg/ha in year 2012 and 0.3731kg/ha in year 2013 (up until October 2013). In active ingredients applied per tonne FFB, amount applied at Jabdan 1 estate was 0.0358kg/tonne FFB in year 2010, 0.0347 kg/tonne FFB in year 2011, 0.0281kg/tonne FFB in year 2012, and 0.0258kgkg/tonne FFB in year 2013 (up until October 2013). The greatest reduction was in usage of the chemical Garlon (used for weeding). The company issued an internal correspondence dated 30 November 2012 from the company's re-gional head of East Kalimantan stating that there will no longer be any allocation for usage of paraquat in the company's budget for year 2013 and usage of paraquat is only to finish the remaining stock from year 2012. Records of material stock report dated 31 December 2012 stated stock of Gramoxone at that time was 234 litres at JB1 estate, 148 litres at JB2 estate, 344 litres at LJ1 estate, and 330 litres at LJ2 estate. However, chemical usage records show that amount of Gramoxone used from January to September 2013 was 411.50 litres at JB1 estate, 154 litres at JB2 estate, 59 litres at LJ1 estate and 63 litres at LJ2 estate. The increase why usage of paraquat at JB1 and JB2 estate was more than the final stock on December 2012 was because Jabdan 1 estate had ordered 200 litres of Gramoxone on 5 Oc-tober 2012 (before the issuance of the memorandum), which only arrived on 22 March 2013, with rec-ords of order slip and stock received records sighted. While for Jabdan 2 estate, the additional 6 litres used was not newly purchased stock but transfer of remaining stock from Long Jenew 1 estate in Au-gust 2013. There was no evidence of newly purchased stock of Gramoxone at other estates. Female sprayers interviewed at Long Jenew 2 estate were aware that pregnant and breastfeeding women are not permitted to carry out spraying activities. There was a female sprayer which had recent-ly given birth which was transferred to another work not involving chemicals when she was pregnant. Harvesters interviewed at Jabdan 2 estate was found wearing appropriate PPE, i.e. safety helmet, cloth gloves, goggles and rubber boots, which are all provided free by the company and replaced when worn or broken. Harvesting equipment is also kept at an allocated store. Sprayers are provided with adequate PPE, i.e. full plastic bodysuits, goggles, rubber gloves, and rubber boots. Very good PPE store and shower room facilities were sighted at Jabdan 2 and Long Jenew estates, including water sump to treat chemical contaminated water used for washing before being discharged to the field.



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Sprayers interviewed at Jabdan 2 and Long Jenew 2 estates confirmed that they utilize the facilities. Sighted at Long Jenew 2 estate that chemicals for spraying are brought to field in tankers and clean water facilities are available at the tanker for sprayers to wash their hands. Spraying and harvesting mandores at Long Jenew 2 estates had well equipped first aid kits available on site, and first aid kits were also sighted at various location within the estates and mill, including of-fice, workshops, children daycare centre, mill compound, gensets, etc. However, the first aid kit at JB2 estate workshop was found to be missing a pair of scissors and records of usage of first aid kit were not available at the kit. In addition, scissors in first aid kit at Long Jenew estate 2 was found to be rusty. This is company’s potential for improvement. Compliance status: Non Compliance Non-conformance 2013-02 of 06 (Minor non-conformity ) a) Records sighted show that actual amount of EFB applied at JB2 estate exceeded the recommended dosage for several blocks, e.g. from January to October 2013, 1,297,580 kg was applied to block D18 which had recommended dosage of only 1,058,850 kg, and 512,740 kg was applied to block E14 which has recommended dosage of only 445,275 kg. b) It was also sighted in JB2 estate block H14 that EFB was not applied in one layer as required in the company's work instruction for EFB application, i.e. IK-AGR-OLP-11-R01.

Principle 5: Environmental responsibility and conservation of natural resources and biodiversi-ty Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.6 Criteria not assessed: CR5.4; CR 5.5 Findings: The company has prepared a revised AMDAL, including environmental impacts analysis (ANDAL), and environmental management and monitoring plans (RPL/RKL) documents for PT Swakarsa Sinarsen-tosa plantation and mill approved on 22 April 2013 as per approval stamp no. 662/K.315/2013 from the AMDAL Commision of Kutim District for mill capacity of 90 tonnes/hour and HGU area of 16,850 ha. The document replaced the company's previous AMDAL document approved by the Agriculture Minis-try on 8 June 1998 for a HGU area of 30,000ha, estate area of 25,000 ha and capacity of 60 tonnes per hours for two mills each (Mill 1 and Mill 2). The initial AMDAL was prepared based on the compa-ny's location permit 17/PKT/BPN-16.3/Um-15/XI-1994 from Kutai District Land Authority for total area 30,000 ha, and the AMDAL document was revised to be in accodrance with the company's approved HGU No. 135/HGU/BPN/1997 dated October 28, 1997 and Plantation Business Permit (Izin Usaha Perkebunan/IUP) No. 188.4.45/038/Eko.1-III/2012 dated March 21, 2012 for 16,850ha. In addition, the company has since installed only one mill with capacity of 90 tonnes/hour (operational since March 2002) instead of two mills with capacity of 60 tonnes/hour each. The company conducts reporting on implementation of their RPL/RKL document once every 6 months for all aspects as required in the RPL/RKL. As sighted in the latest implementation report for January to June 2013, aspects covered in the reports include river water quality, POME application quality, groundwater quality, air quality, noise and vibration, community attitude and perception, work vacan-cies, soil degradation, disturbances to flora and fauna, occurances of road accidents, environmental sanitation and other aspects as required in the company's RPL/RKL document. Identification of HCVs has been done through appropriate consultation process by Daemeter Consult-ant, as sighted from their HCV report dated November 2011. Result or the content of HCVs in Swak-arsa Sinarsentosa area has been published to all worker and community. As of November 2011, based on HCV report, several protected species have been found in PT Swak-arsa Sinarsentosa area especially in conservation zones, including the following species: there are 53 birds species from 27 families such as Bucheros rhinoceros which categorized as an endangered spe-cies in East Kalimantan according to CITES, there are 21 mammal species, such as Pangolin (Manis javanica), Honey Bear (Helarctos malayanus), slow loris (Nycticebus coucang), pigtail macaque (Macaca nemestrina). There are 353 species of flora from 78 families, with dominant species from



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Eupgobiaceae, Verbenaceae, Rhizophoraceae and Moraceae. 5 dominant species i.e. macaranga gi-ganteae, Combretocarpus rotundus, Hopea griffiii, there are 10 species categorized as endangered species according to CITES and the Ministry of Forestry. From the HCV assessment report it was stated that 3 types of HCVs were identified in the PT Swak-arsa Sinarsentosa, i.e. HCV 1, HCV 3, and HCV 4.1 (riparian river). Identified HCV 1 areas (Forest ar-eas containing globally, regionally or nationally significant concentrations of biodiversity values) include HCV 1.2 and 1.3 areas due to identification of many wildlife species of protected and endangered sta-tus as explained above spread throughout PT Swakarsa Sinarsentosa area. Total overlaid HCV area in PT Swakarsa Sinarsentosa plantation is 654 ha. An outline of management plan for HCVs was established by Daemeter Consultant. Based on this, a HCV management plan for all identified HCV areas in PT Swakarsa Sinarsentosa. Jabdan 1 and 2 es-tate, and Long Jenew 1 and 2 estate has been established by PT Swakarsa Sinarsentosa HCV team and this is documented in a HCV Monitoring and Action Plan. The document describes the activities planned for each identified HCV, total area to be managed and periodic monitoring activities for each identified HCV. Based on implementation of HCV management records on period of year 2012-2013 are 1). Preparation of company regulation regarding the protection of flora and fauna are protected, 2). Installation/maintenance of boundary stone for HCV areas, 3). Patrols by forest security in conservation block VI, 4). Installation of conservation attribute, 5). Inventory of flora (HCV 1.2 and 1.3) in conserva-tion block VII, 6). Inventory of the types of fauna (HCV 1.3) in conservation block VI and VII, 7). Reha-bilitation of HCV areas which degraded in conservation block VII, 8). Control of invasive species in HCV areas, 9). Socialization of conservation/HCV to employees, 10). Monitoring water level and sub-sidence rate and 11). Conduct an inventory of tillers endangered species (Dipterocarp). The company also made a specific working instruction to protect wild life as determined in “WI to protect HCV 4.1 ri-parian river stated on IK_AGR-STD-02-R00. Company has action plan to protect existing wildlife in plantation and its surrounding areas. All monitoring result will be recorded on wildlife monitoring rec-ords. This form is also used to record activities of illegal fishing, hunting and other illegal activities that found during patrols. Monitoring of HCVs conducted by HCV team but all workers and community are required to inform the management if they know of activities related to HCV area destruction, or hunting and removal of protected flora and fauna. To prevent inappropriate hunting and collecting activities within their area, the company established a mechanism for iIlegal fishing and hunting as stated on memorandum letter No. 0011/SHE/IV/11 and 010, and company also made sign boards in front of HCV area and has periodic patrolling program. Based on daily patrols record that there is not evidence for illegal logging, hunting and illegal fishing in conservation block VI. The company has been installation of conservation attribute such as warning board “ban on hunting, felling trees, ban on spraying in riparian, types of fauna protected and endangered, conservation/HCV area of Kenden Kecil river/ Kenden Besar river/Long Sengat river/conservation block VI/conservation block VII.” Information about distribution of sign warning or posters available (sum in each estate and include coordinate information) and maintained. The company has been conduct socialization of con-servation/HCV to employees in each division and records of conducting socialization report, attedance list, results of pre and post of test and photograph/documentation. PT Swakarsa Sinarsentosa Plantation has assigned a conservation team to be responsible for handling all planned activities regarding environmental conservation and they will be assisted by several estate officers in carrying out their daily activities. All team members were trained on management and moni-toring of all HCVs, and the training was conducted by Tropenbosch consultant in Yogyakarta year 2011. The mill has identified all possible pollution sources in the documented Identifications of Hazards and Aspects, Evaluation and Management of OSH and Environmental related Risk and Impacts, dated 1 April 2013. The pollution sources identified included those from mill activities such as from the work-shop, boiler and genset emission, hazardous waste, and production of palm oil mill effluent. The docu-ment includes evaluation of risk levels for each aspect identified and appropriate measures implement-ed to avoid occurrences. There are waste containers for organic and inorganic wastes allocated at workers housing and office. Inorganic wastes are collected and disposed of at landfills located away from housing areas, while or-ganic wastes are disposed of at landfills located behind or nearby workers housing which are closed when full, as seen at Jabdan 2 and Long Jenew 2 estate housing areas. Records of monthly collection and delivery of domestic wastes is maintained as sighted at Division 12 housing area of Jabdan 2 es-tate. Medical wastes from the estate clinic are collected once a month and compiled at the main clinic before being sent to Mill 2 (under another sister company of PT Swakarsa Sinarsentosa).



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The estates collect their hazardous waste and stores them temporarily at the estate workshops for maximum of one week before sending the hazardous wastes to the mill hazardous wastes store for col-lection by a licensed contractor, i.e. CV Sumber Agung. The estates maintain daily inventories of each type of hazardous wastes collected and delivery notices when wastes are sent to the mill for collection by licensed contractor. Manifests of collection of hazardous wastes at the mill were sighted for collec-tions done on 31 October 2013, 17 September 2013, 30 July 2013, 4 July 2013, 10 May 2013, and 28 March 2013. The records show that collection of hazardous wastes by the contractors is consistently less than the timeframe of 90 days as required in the mill's license for hazardous waste storage. How-ever, it was found that some hazardous wastes sent from the estates was not recorded in the mill's hazardous waste inventories, i.e. Jabdan 2 estate has records of hazardous waste delivery notes ('Berita Acara Serah Terima B3') sent to the mill on 7 October 2013, 18 September 2013, 15 August 2013, and 2 August 2013 but there are no records of the hazardous wastes received from JB2 estate on these dates in the hazardous waste inventories ('Lembar Neraca LB3') of the mill. The mill did not have copies of the waste delivery notes from Jabdan 2 estate on these dates. This was raised as a nonconformity It was found that no labels with warning symbol are used on hazardous waste containers at Jabdan 2 estate hazardous waste store. The estate took immediate corrective action at time of audit to label the hazardous wastes containers accordingly. This was raised as an observation. The mill has identified all possible pollution and emission sources in the documented Identifications of Hazards and Aspects, Evaluation and Management of OSH and Environmental related Risk and Im-pacts, dated 1 April 2013. The pollution sources identified included those from mill activities such as from the workshop, boiler and genset emission, hazardous waste, and production of palm oil mill efflu-ent. The document includes evaluation of risk levels for each aspect identified and appropriate measures implemented to avoid occurrences. The mill conducts monitoring of the identified pollution and emission sources as seen from the latest RPL/RKL implementation report for January to June 2013. Sample analysis results from Sucofindo were sighted for boiler emission test results dated 31 January and 30 July 2013 for Boiler 1 and 12 May 2013 for Boiler 2, genset emission test results dated 28 February 2013 for Genset 1 and 4 July 2013 for Genset 3, ambient air quality tests for samples taken from the front of office, housing area and mill mess, and Jabdan Village area near PT SWA river dated 30 March 2013, and noise level test re-sults dated 2 June 2013. Noise test results were 100.7dBa and 94.8dBa for the mill genset area and kernel operational area respectively. Results show no exceedance of the legal limits for all parameters tested, except for the noise levels which exceeded the legal limit of 85dBA. This is managed through providing appropriate hearing protection to the mill workers. The mill has a monitoring program for mitigation of greenhouse gas emissions which include increasing energy efficiency through increasing usage of fibre and shell and reducing usage of shell and fibre (records maintained as described under CR5.4), planting of trembesi plants around the mill and hous-ing (planned 120 plants which were planted by end of year 2012), and regular vehicle maintenance. The mill also has a plan to implement a methane capture project at the mill with a document time schedule for the project from November 2013 until April 2013, which states timeframes for license ap-plication, location survey,creating tender for the project for contractors, preparation of work orders and financial preparations. The mill has received a proposals for the methane capture project development from two contractors, i.e. PT Bumi Cahaya Unggul and Chua Heok Wee. The mill's effluent treatment facilities consist of 7 treatment ponds (1 mixing pond, 1 cooling pond, and 5 anaerobic ponds). The mill carries out daily monitoring of pH and temperature of the ponds and anal-ysis of inlet and outlet BOD is conducted once a month. In accordance with the mill's license for land application dated 27 February 2013, the mill's permitted land application area is for 393.2ha covering blocks E26-E30, F27-F33, G32-G34, and H32-H34 in Jabdan 2 estate, with application monitoring block at G33 and non-application control block at E29. The mill carries out monitoring of BOD of efflu-ent used for land application once a month, monitoring of ground water samples once every 6 months and analysis of soil quality at land application areas once a year for all parameters required as per their license for land application. The two test results for ground water analysis conducted for year 2013 dated 28 February 2013 and 18 September 2013, and conducted at blocks G33, F31, E29 and housing area wells. Jabdan 2 estate has a documented POME application program for year 2013 with comparison against actual amount applied up until October 2013. However, there is evidence that the land application plan was not prepared according to the company's work instruction (WI) for land application, IK-AGR-OLP-10R00. The WI states the dosage to be applied to the field is 750m3/ha/year or 250m3/ha x 3 rotations applied every 4 months, however the plan stated POME to applied above 250m3/ha per rotation in



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some months, e.g. 330.36m3/ha at block F27 in August, 428.57m3/ha at block H32 in October, and 500m3/ha in block F33 in October. Actual records of POME applied also show amount applied to cer-tain blocks exceeded the recommended dosage of 750m3/ha/year, e.g. since January to October 2013, 37,810m3 of POME was applied to block F28 with area of 30ha (equivalent to 1260.33m3/ha/year) and 22,714 m3 of POME was applied to block E30 with area of 19ha (equivalent to 1195.47m3/ha/year). This is raised as nonconformity. Compliance status: Non Compliance Non-conformance 2013-03 of 06 (Minor non-conformity ) 1. It was found that some hazardous wastes sent from the estates was not recorded in the mill's haz-ardous waste inventories, e.g. Jabdan 2 estate has records of hazardous waste delivery notes ('Berita Acara Serah Terima B3') sent to the mill on 7 October 2013, 18 September 2013, 15 August 2013, and 2 August 2013 but there are no records of the hazardous wastes received from JB2 estate on these dates in the hazardous waste inventories ('Lembar Neraca LB3') of the mill. The mill was unable to lo-cated their copies of the waste delivery notes from Jabdan 2 estate on these dates. 2. It’s found that used agrochemical (round -up) container was kept in improperly store and without in-formation about retention period. Non-conformance 2013-04of 06 (Major non-conformity) Domestic waste disposal is not following the respective procedure SOP-AGR_035-R01, domestic waste were disposed in improper place, such as at mill housing area block A and block C and at part-nership housing area, there was found anorganic waste mixed with organic waste. Non-conformance 2013-05 of 06 (Minor non-conformity ) a) The land application plan was not prepared according to the company's work instruction (WI) for

land application, IK-AGR-OLP-10R00. The WI states the dosage to be applied to the field is 750m3/ha/year or 250m3/ha x 3 rotations applied every 4 months, however the plan stated POME to applied at Jabdan 2 estate above 250m3/ha per rotation in some months, e.g. 330.36m3/ha at block F27 in August, 428.57m3/ha at block H32 in October, and 500m3/ha in block F33 in October.

b) Actual records of POME applied at Jabdan 2 estate show amount applied to certain blocks ex-ceeded the dosage states in IK-AGR-OLP-10R00, which is 750m3/ha/year, e.g. since January to October 2013, 37,810m3 of POME was applied to block F28 with area of 30ha (equivalent to 1260.33m3/ha/year) and 22,714 m3 of POME was applied to block E30 with area of 19ha (equiva-lent to 1195.47m3/ha/year)

Principle 6: Responsible consideration of employees and of individuals and communities af-fected by growers and mills

Criteria assessed: CR6.1, CR6.2, CR6.3, CR6.4, CR6. 5, CR6.6, CR6.7, CR6.9, CR6.10, CR6.11 Criteria not assessed: CR6.8 Findings: There is not change on company’s social impact assessment (SIA), made by Daemeter Consulting. The report contain the impact of the company to community, employee, and local government, and co-vers positive and negative impacts with evidence of participation of local communities and all affected parties. As part of company’s improvement, there is a document management and monitoring plan has been prepared with the participation of local communities and relevant stakeholders. As seen on year 2013 management document and monitoring report for semester 1 year 2013. Since company’s has been established smallholder scheme, particular attention has been paid to the impacts of smallholder schemes, especially for patneship program in sevefal villages such as Benhes village, Dabeg village, Nehas Liah Bing village, Wahau Baru Village, and Wanasari village. The parameters used in measuring the components of the affected environment of development part-nership program/smallholderschme is the number of farmer groups who organize the land provided by the PT Swakarsa and progress of partnerships program plantation area. Company has monitoring activities for progress of partnership program in all respective villages.



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Procedure for communication and consultation with stakeholders has been changed which was agreed by the local community and companies on une 7, 2012, and has been given to all local communities, i.e. SOP no. 0215B/SWA-CSR-WHU/VI/2012 appendix 1. The procedure including mechanism to rec-ords all local communities’ aspiration. Some records of communication were kept maintain such as communication with Muara Wahau Ele-mentery School principle no. 422.1/200/SDN.008-MW/XII/2012 dated December 6, 2012regarding re-quest of donation, and it was responded through letter no. 0001/SWA-CSR-WHU/I/2013 dated January 13, 2013. The list of stakeholders has been updated on May 2013: community leaders, ‘Muspika’ (Forum of community leader), supplier, NGO, social institution, etc. Incoming local communities’ aspiration has been recorded on a log book for incoming request of information and aspiration (FM-STD-30-ROO) for example: Incoming letter no 145/2004/121/DB/VIII/2013, dated August 13, 2013 from Dea Beq villager regarding request of donation for road maintenance and it was responded by company on August 22, 2013 through letter no. 0056/SWA-CSR-WHU/VIII/2013 and incoming letter no. 145/2004/221/DB/III/2013 dated April 1, 2013 from Dea Beq villager Forum regarding request of donation for local heritage event called “Erau Padi” and it was responded by April 03, 2013. According to procedure no. 0215B/SWA-CSR-WHU/VI/2012, there CSR deparetment team has responsibilites for communication and consultation with communities including a head of public rela-tion, as explained also on decree number 0472/SWA/HRA/SK-GU/JKT/I/11. An open system, which is accepted by affected parties, to receive complaints and to resolve dispute in an effective, timely and appropriate manner. Communication and dealing complain with external par-ties has been exlpain on SOP no. 0215B/SWA-CSR-WHU/VI/2012 while communication for internal parties such as workers and its family has been explained on company’s regulation section VIII, article 37(communication). During September 2012 to November 2013, there is no incoming complain from external parties, while there are 3 records incoming complaint from internal party (workers) regarding broken housing fasilities ( December 18, 2012 has two incoming complaints and August 26, 2013 has one incoming complaint)

Company has procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies, i.e. no. 0215B/SWA-CSR-WHU/VI/2012. There is no land and no identified parties to be compensated during 1 year period, all company’s land has been planted and compensation process was settled before year 2005. There is has a decree of Directors about the change of the minimum salary, number 001/DIR/I/2013 dated January 15, 2013 was state that the minimum salary for employee is Rp. 1,765,000 per month, valid from January 1st, 2012 based on decree of Governor of East Kalimantan number 561/K.830/2012 dated December 04, 2012 which state that the minimum salary is Rp 1,765,000 per month. The company has a list of salary for all employees in every estate which shows the salary paid is in compliance with the Governor and Directors decree. Example salary slips on March 2013, for level 1A Jabdan 1 estate and harvester salary from Long Jenew 2 estate with gross salary is Rp. 1,785,000. There are salary deductions i.e. for worker insurance Jamsostek Rp 35,700 and Astek Rp. 14,994. A company working regulations and work contracts, in accordance with existing no. KEP.322/PHIJSK-PKKAD/PP/IV/2013 dated April, 26 2013. Working regulation always communicated regularly during morning briefing as well as published in eve-ry housing area and meeting room. The company provides adequate housing for all estate and mill employee. The public facilities were providing such as clinic, mosque and sport facilities. There are also primary school within the area of company, and primary school, kindegarten, and junior high school established by the “Yayasan Darma Setya Nusantara” foundation, and also provides school buses for children to attending school from the outside and inside the company. The company provide clean water for daily consumption at each housing area; there are water purifiers for daily water consumption, such as at Jabdan 1 and Jabdan 2 estate.



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The company prepares child daycare centres at each workers housing area. As seen at the daycare centre at Long Jenew estate, there are two female daycare workers taking care of 9 children with ade-quate water and washing facilities and a first aid kit. Food for the children is brought by their parents. However during 1st surveillance audit there were found several broken facility still exist since last year audit condition, such as Housing at Long Jenew 2 estate; Unfinished road graveling and uninstalled sewerage in block H; Broken Septic tank at housing area block C and block H; Sewage drainage from bathroom in block A and block H ; broken wood bridge has potential risk for the people in block C; Or-ganic waste disposal too close with housing area at afedling 11 Jabdan 2 estate, this is raised as non conformity. The company has a documented agreement with contractors as sighted from contract between PT Swakarsa Mill 3 with a contractor for CPO transporter that they are to abide with local labour laws. Some clauses in the contract include compliance to labour laws. There was also evidence sighted that FFB contractors for transportation namely PT Sumber Harapan Jaya as stated on contract no. 004/SWA/DPC/2013. The company has a documented regulation 2013 – 2015 period, regarding freedom for association for workers that is available in several locations. In point ‘4’ company regulation it is stated that wokers are entitle to join associations for workers or to be a member/leader of workers association based on the government regulation. Communication regarding freedom for association was carried out on May 01, 2013. There is documented minutes of meeting with labor union such as meeting on August 24, 2013 regard-ing new worker union program, 2013-2014, it was attended by 18 union steering committee including representative from each estate and mill. There no changed on company policy regarding child labour was defined since year 2011 by Head of management System & Human Resources Department, and informed to employees through an internal memorandum no: 009/HRA/VII/2011 dated on July 12, 2011. The company regulation for period 2013 to 2015 also states under article 5 that employee recruitment shall not below 18 years according to ap-plicable laws and regulation. There is no evidence underage worker found both in the mill and the es-tates. There is no changes on company’s policy regarding prevention of sexual harassment and all other forms of violence against women, as well protection of their reproductive rights. The company’s regula-tion for 2013-2015 clause 12 page 18 contain prevent sexual harassment. The company established an SOP to for handling sexual harassment incident as seen on SOP - AGR- STD-13-R01 issued on April 23, 2012 Female sprayers interviewed at Long Jenew 2 estate were aware of the sexual harassment policy and knew who the elected gender committee representative for their area. They had not experienced or know of any sexual harassment cases within the estate. It was sight good implementation regarding prevent sexual harassment, good recording system about sexual harassment and violence cases. Company can demonstrate their implementation regarding pol-icy to protect reproductive rights through provide nursery room in each estate office; provide menstrua-tion leave and maternity leave following government regulation. There are two records of handling of sexual harassment incident that was happen on Macrh and Au-gust 2013. The company took action and carried out disciplinary action on the person and during the audit time the case had been closed. The Gender Committee, with representatives from each estate division, can demonstrate their jobs re-garding handling of sexual harassment incident. There is evidence of implementation of the reproductive rights policy, for example, the company has copies and records of menstruation leave and maternity leave forms applied by workers and these rec-ords are kept by the HRD department, estate clinic and estate office. As recorded on FM-HRA-02-R00 dated August 22 to November 21, 2013 for worker no 48345. And menstruation leave for woman workers dated July 25, 2013. The company allows the public to access current and past prices for FFB. Current FFB prices and pre-vious day FFB prices are clearly published. Prices of FFB based on prices was determined by Estate Office East Kalimantan Province every month. There is renewal contractual agreement was understood to all parties, such as purchase contract for FFB with “Koperasi Perkebunan Semoga Sawit Wahau Jaya” on January 2013 with contract no. 004/SWA/PKS 1/2013.



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And the company made agreed payments in timely manner, with evidence as evidence payment for “Koperasi Perkebunan Semoga Sawit Wahau Jaya” on April 2013 and for contarct no. SPK 003/DSN/PKS2/2013 July 22, 2013. The company makes contributions to local communities through CSR company program in 2013, with evidence as follows: 1. For Deabeg village Rp. 1,800,000 and Diaklay village Rp. 1,700,000 on August and September

2013. 2. Agriculture training program for Muara Wahau and Kohbeng farmer groups on May and september

2013. 3. Donation to celebrete traditional event “Erau paddys” in Benheas villlage and deabeq village with to-

tal Rp. 9,500,000 on April and May 2013. Compliance status: Non Compliance Non-conformance 2013-06 of 06 (Minor non-conformity ) There is found improper houses and general facilities such as: - Housing at Long Jenew 2 estate - Unfinished road graveling and uninstalled sewerage in block H. - Broken Septic tank at housing area block C and block H - Sewage drainage from bathroom in block A and block H - broken wood bridge has potential risk for the people in block C - Organic waste disposal too close with housing area at afedling 11 Jabdan 2 estate.

Principle 7: Responsible development of new plantings

Criteria assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7. 5, CR7.6, CR7.7 Criteria not assessed:- Findings: According to the company’s AMDAL document, HCV document and plantation history document such land use map and plantation statement document, planting activities was began in year 1996 and fin-ished in year 2004. There are no findings related to new development area because company has no development area program. Compliance status: Not applicable

Principle 8: Commitment to continuous improvement in key areas of activity

Criteria assessed: CR8.1 Criteria not assessed: - Findings: The mill has a monitoring program for mitigation of greenhouse gas emissions which include increasing energy efficiency through increasing usage of fibre and shell and reducing usage of shell and fibre (records maintained as described under CR5.4), planting of trembesi plants around the mill and hous-ing (planned 120 plants which were planted by end of year 2012), and regular vehicle maintenance. The mill also has a plan to implement a methane capture project at the mill with a document time schedule for the project from November 2013 until April 2013, as described under CR5.6. Jabdan 2 estate has a documented program for mitigation of greenhouse gases which includes targets to reduce usage of chemicals and fossil fuels. Stated in the plan target usage of chemicals for year 2013 is 5,185.52 litres and actual usage up until 30 September 2013 is 4,863.34 litres, while target us-age of fossil fuels is 42,768 litres while actual usage up until 30 September 2013 is 31,076 litres. Compliance status: Full Compliance



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3.2 Status of Previously Identified Non-conformitie s

A total of 4 nonconformances were identified during the main certification assessment. These consisted of 4 minor non-conformities. During this surveillance assessment, it was found that there was sufficient evidence for closure of all non-conformities. The following is a description of the evidence of action taken to close the non-conformities raised during the previous assessment, as well as auditor’s conclusions on the status of the non-conformities.

Criterion 2.1. (Minor indicator 1): A documented system, which includes written information on legal requirements that the palm oil company should comply with. Non-conformance 2012-01 of 04 (Minor non-conformit y): The company has a mechanism for updating applicable legal and other requirements, as recorded on “list of regulation” however there is some applicable regulations still not listed on the updated “list of regulation” such as: i) Local regulation of Kutai Timur District No.6 Year 2005 regarding Plantation Business Permit in

Kutai Timur District ii) Decree letter from head of District “Kutai Timur” No. 261 year 2002 regarding Guidance for Planta-

tion business Permit in Kutai Timur District Evidence of Correction and Corrective Action taken: The list of regulation has been updated to include Local regulation of Kutai Timur District No.6 year 2005 regarding Plantation Business Permit in Kutai Timur District and "Decree letter from head of Dis-trict “Kutai Timur” No. 261 year 2002 regarding Guidance for Plantation business Permit in Kutai Timur District from Regional Administration of Kutai Timur Regency . The company conducted reidentifies all the regulations related to plantation and mill operation activities and made the list updated, some new lagal regulation such as Ministry of Environment regulation no.04/2013 regarding environmental dis-putes resolution. etc. Auditor Conclusions: Closed.

Criterion 4.7 (Minor indicator 2): Regular health examination by a doctor for workers in station or exposed to high risk work.

Non-conformance 2012-02 of 04 (Minor non-conformit y): Regular health examination for workers in chemical warehouse which has high risk work is not provid-ed, such as a warehouse worker in Jabdan 2 estate. There is no follow up action for a medical recommendation result from doctor in which a worker was recommended to go to an Ear, Nose and Throat (ENT) specialist. Evidence of Correction and Corrective Action taken: It was sight blood tests (Cholinesterase) records for all warehouse crews who handle the storage and mixing of chemicals. Acording to information from interviewed spayer in Afdeling 2 Jabdan 2 estate, company provided medical check ups for all workers who carry out work related with chemicals twice a year including blood test. The company hass been follow up recommendation from doctor for relevant workers who has problem affected from their jobs, such as two boiler operators at PT Swakarsa mill were transfer to other sec-tion (loading ramp and strelirazer section) due to from audiometry test the result are exceed than normal requirement . It was proved that the company use the risk analysis result to make annual medical surveillance pro-gram especially for the worker with high health risks as observed on the PT Swakarsa Sianrsentosa Mill and estates. The company has been taken follow up action for every recommendation given by company's doctor in every employee's medical check up and regular (general) medicine. Auditor Conclusions: Closed.



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Criterion 6.1. (Minor indicator 1): Regular monitoring and management of social impact, with the participation of local communities.

Non-conformance 2012-03 of 04 (Minor non-conformity ): The company has no management and monitoring plan prepared with the participation of local com-munities and relevant stakeholders. Evidence of Correction and Corrective Action taken: It was verified company made integration of recommendation of SIA together with related stakeholders into the CSR's Activity Plan as seen on CSR program for year 2013 and confirmed to communities in Benhes Village. Company conduct monitor and evaluate the implementation of the Social Impact Surveillance Plan. The monitoring report was available at CSR office. Auditor Conclusions: Closed Criterion 6.5. (Minor indicator 1): Growers and millers provide adequate housing, water sup-plies, medical, educational, and other facilities for employees where such facilities are not available or accessible. Non-conformance 2012-04 of 04 (Minor non-conformit y): Some estates (LJ 1, JB 2, and LJ2) are still not provided with adequate clean water for drinking since existing water is not suitable to consume as drinking water because it does not meet to drinking water quality standards as defined by the government, and there is no action taken to ensure such facilities are made available or accessible. Evidence of Correction and Corrective Action taken: Water purifier has been available in each housing area such as in Division IV, Jabdan 1 Estate (JB1). All water purifier are well operates and has been tested by external laboratory to check the water quali-ty. According to housewife in Division IV jabdan 1 estate, they are now very easy to get clean water. Auditor Conclusions: Closed.

3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions During this surveillance assessment, a total of 8 nonconformances were identified. These consisted of 6 non-conformities regarding RSPO P & C ( 3 major and 3 minor non conformities) and 2 non conformities regard-ing RSPO Supply Chain (all categorized as major) . For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 60 days of completion of the assess-ment, and this was verified by the audit team through checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below:

Criterion 2.1.(Major indicator 1) Evidence of compliance with relevant legal requirements.

Non-conformance 2013-01 of 06 (Major) It was found inconsistency to legal compliance such as: 1. Some FFB transporter belong to Semoga Sawit Wahau Jaya Cooperation has no driving license, no

first aid kit, safety triangle, no periodic technical inspection report (KIR), this is inconsistent with “ Law no. 22 year 2009 (Undang-undang Lalu Lintas dan Angkutan Jalan Raya) article 49; 57 and



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77. It was found also some truck driver only has SIM A instead of SIM B as required by respective regulation.


3. Used agrochemical container (i.e Round up) were kept in improperly store without information about retention period, and controlled its amount. Inconsistent with PP No 18 year 1999 and company’s in-ternal procedure that required 7 days for hazardous waste keeping.

Correction: 1. Issue no. 1

a. Suspension given to the related drivers until they have driving licensed. b. To identify drivers who don't have driving license or have inappropriate driving license with its

vehicle type. c. To state the requirement of valid driving license and suitable with its vehicle in the working

contract. d. To bring in Police Officer and Transportation Service (Dinas Perhubungan) to site to socialize

the arrangement of SIM (driving license) & KIR (periodic technical inspection report). e. To socialize the obligation of having driving license, first aid kit, safety triangle and periodic

technical inspection report (KIR) together with its sanction to contractor, cooperative and community

2. Issue no.2

a. To determine maximum 40 hour/week working hour and 14 hour/week overtime, but not includ-ing Sunday or any other public holiday, as stated in Kepmenaker No 102/men/VI/2004, pasal 7 ayat 1c

a. Coordinating with Disnaker (Labour Service) for the possibility of giving the additional overtime license for special condition (breakdown machine and limited pick crop, etc.)

b. To provide food or drink compensation with adequate calorie suitable with Kepmenaker No 102/men/VI/2004 for more than 3 hour overtime.

3.Issue no. 3 a. To recall all the agrochemical container that still used for storing diesel fuel, used oil and send it

to hazardous waste warehouse. b. To purchase a separate container for fuel and used oil gradually.

Corrective Action: Issue no. 1 To monitor or to inspect the driver and his truck periodically and to give sanction according to compa-ny's rules if non conformity found. Issue no. 2 To monitor the overtime hours not exceeded the limit overtime allowed. Issue no. 3 a. Never reuse the agrochemical container b. To provide a pressing machine for plastic container, so it will be simplifying the delivery to the li-

censed hazardous waste transporter. c. To socialize the restriction of reuse of agrochemical container and give sanction to employee that

still use it. Auditor Conclusions: Closed. Date of closure: 1. Company provide suspension letters for driving among PT Swakarsa Sinarsentosa activities to the

respective drivers until they have driving license as seen on the letter no 210/EXT-PKS1/SWA/XII/2013 truck no. KT 8110 RR; no 209/EXT-PKS1/SWA/XII/2013 truck no. KT 8718 R; no 208/EXT-PKS1/SWA/XII/2013 truck no. KT 8785 RF; no 207/EXT-PKS1/SWA/XII/2013 truck



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no. KT 8350 MS. There is a list of drivers who don't have driving license or have inappropriate driv-ing license for its vehicle type, it was sight 12 drivers in Jabdan 1 estate; 26 in Jabdan 2 estate, 4 in Long Jenew 1 estate and 10 in Long Jenew 2 estate have not driving licenses. Company re-quires to all subcontractors FFB vechicle to provide licenses as required by the end of June 30, 2014. There is signed commitment from subcontractor regarding driving license fulfilment maxi-mum June 30, 2014. There are records of briefing about driving licenses procedure conducted by local Police Office Muara Wahau and Transportation Agency Kutai Timur.

2. There is CEO decree letter No.018/DIR/XII/2013 regarding new working time regulation. The new working time following government regulation i.e. 40 hours a week and maximum overtime only 14 hours a week. The company will provide extra food for those who over time over than 3 hours a day. There are sight report overtime for period November 2013 for all mill workers has been fulfill government regulation and following CEO decree letter, maximum working hours are 8 hours with overtime no more 3 hours. It was sight also from report extra food for wokers who ovetime on No-vember 23, 2013.

3. It was reported and sight from photograph all empty agrochemical container recalled from each sources and as been disposed to licensed supplier including empty Round Up container. Company purchase pressing machine to press all empty container before disposed to licensed supplier. There is PO to PT Sumber Agung Makmur Abadi to purchase new pressing machine i.e PO no. 1110006297, dated December 4, 2013. Company also purchase a separate container for fuel and used oil as seen on purchase order no. 1110006749 to Thio Chaniago shop samrinda to purchase 95 plastic jerigen that will be use for fule and used oil separation.

Criterion 4.2 (Minor indicator 2) Records of efforts to maintain and increase soil fertility (e.g. the use of fertilizer, legume cover crops, compost, and land applications of POME or EFB) based on the results of analysis carried out as in Point 1 above. Non-conformance 2013-02 of 06 (Minor non-conformity ) a) Records sighted show that actual amount of EFB applied at JB2 estate exceeded the recommended dosage for several blocks, e.g. from January to October 2013, 1,297,580 kg was applied to block D18 which had recommended dosage of only 1,058,850 kg, and 512,740 kg was applied to block E14 which has recommended dosage of only 445,275 kg. b) It was also sighted in JB2 estate block H14 that EFB was not applied in one layer as required in the company's work instruction for EFB application, i.e. IK-AGR-OLP-11-R01. Correction: To make sure there is coordination between the supervisor (mandor) and the driver before the place-ment of EFB according to working plan. To monitor the unloading of EFB Corrective Action: There is an EFB applied inspection by Assistant, and if the application is not suitable with the Working Instruction, the worker must be fix it, but if there is no action to fix it then there will be a sanction to the worker. To make sure that the Afdeling Assistant/ Land Application controlling intensively the receive of EFB application at the block and to make the EFB realization monitoring at the block. Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 5.3. (minor indicator 1)

Non-conformance 2013-03 of 06 (Minor non-conformity ) 1. It was found that some hazardous wastes sent from the estates was not recorded in the mill's haz-

ardous waste inventories, e.g. Jabdan 2 estate has records of hazardous waste delivery notes ('Beri-ta Acara Serah Terima B3') sent to the mill on 7 October 2013, 18 September 2013, 15 August 2013, and 2 August 2013 but there are no records of the hazardous wastes received from JB2 estate on



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these dates in the hazardous waste inventories ('Lembar Neraca LB3') of the mill. The mill was una-ble to locate their copies of the waste delivery notes from Jabdan 2 estate on these dates.

2. It’s found that used agrochemical (round -up) container was kept in improperly store and without in-formation about retention period.

Correction: 1. To revise the record the hazardous waste balance sheet according to hazardous waste delivery re-

port from estate. 2. To reconcile the delivery and receive hazardous waste record data between the estate and mill by

SHE Assistant every month 3. To recall the agrochemical container and deliver it to hazardous warehouse. To buy container for

fuel. Corrective Action: 1. To record every incoming hazardous waste and stamped it as an evidence that hazardous waste al-

ready received. 2. To purchase a separate container for fuel and used oil gradually Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 5.3. (Major indicator 2)

Non-conformance 2013-04of 06 (Major non-conformity) Domestic waste disposal is not following the respective procedure SOP-AGR_035-R01, domestic waste were disposed in improper place, such as at mill housing area block A and block C and at part-nership housing area, there was found anorganic waste mixed with organic waste. Correction: a. To provide the hazardous waste domestic facility complete with the instruction use. b. To make sanction rules for violating the housing rules and socializing it. Corrective Action: a. Housing condition inspection periodically b. To clean the housing environment together ("kerja bakti') periodically c. To give sanction for those who violate the rules Auditor Conclusions: Closed Date of closure: December 10, 2013 Verification result: Mill head issued a memorandum letter no. 0059/DSN-POMHD(/2013 dated November 27, 2013 regard-ing instruction for separation organic and anorganic waste from domestic activities following respective standard operation procedure SOP-AGR_035-R01. All housing are provided two domestic waste for organic and anorganic waste. Mill head and plantation head issued instruction letter to conduct weekly housing area cleaning pro-gram. And made periodic inspection to ensure that SOP-AGR_035-R01 is pproperly implemented and give sanction for violating the rule. It was sight from photograph all domestic waste has been separat-ed between organic and an organic waste in mill housing area.

Criterion 5.6. (Minor indicator 2)

Non-conformance 2013-05 of 06 (Minor non-conformity ) a) The land application plan was not prepared according to the company's work instruction (WI) for



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land application, IK-AGR-OLP-10R00. The WI states the dosage to be applied to the field is 750m3/ha/year or 250m3/ha x 3 rotations applied every 4 months, however the plan stated POME to applied at Jabdan 2 estate above 250m3/ha per rotation in some months, e.g. 330.36m3/ha at block F27 in August, 428.57m3/ha at block H32 in October, and 500m3/ha in block F33 in Octo-ber.

b) Actual records of POME applied at Jabdan 2 estate show amount applied to certain blocks ex-ceeded the dosage states in IK-AGR-OLP-10R00, which is 750m3/ha/year, e.g. since January to October 2013, 37,810m3 of POME was applied to block F28 with area of 30ha (equivalent to 1260.33m3/ha/year) and 22,714 m3 of POME was applied to block E30 with area of 19ha (equiva-lent to 1195.47m3/ha/year)

Correction : a. - To make calculation simulation of POME per year and average application per month. - To propose a letter to R&E Dept. to review the recommendation based on the average production. - To review IK-AGR-OLP-10-R00 Land Aplikasi LCPKS about Applied POME dosage in agronom-

ical standard. b. To apply an extended LA licensed area if needed to add the Land Application Area based on the

evaluation of POME amount. Corrective Action: a. To monitor the receive/application of POME according to land application allowed capacity b. Periodically coordination of mill and plantation for POME distribution. c. To conduct technical arrangement by moving pump 1 (line E/F) to pump 3 (line G/H) with wider

cover Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of im-plementation to verified at next audit.

Criterion 6.5. (Major indicator 1)

Non-conformance 2013-06 of 06 (Minor non-conformity ) There is found improper houses and general facilities such as: - Housing at Long Jenew 2 estate - Unfinished road graveling and uninstalled sewerage in block H. - Broken Septic tank at housing area block C and block H - Sewage drainage from bathroom in block A and block H - broken wood bridge has potential risk for the people in block C - Organic waste disposal too close with housing area at afedling 11 Jabdan 2 estates. Correction: a. To repair the house that already damage and not deserve for living and to prepare wood material for

repairment process b. To make long term program to replace the house that already damage and not deserve for living c. To finish the road repairment and to put the culverts. d. To fix the damage septic tank e. To fix the trench/ drainage and to make sure that the water runs down to the lower area f. To fix the wooden bridge Corrective Action: a. To monitor/ to inspect the housing condition periodically. To provide the complaint book for resident b. To build the care of housing environment culture by cleaning the housing environment together

every Friday ('kerjabakti'). c. Giving the warning letter and sanction to the employee who violate the rules d. & e. To monitor/ to inspect the housing condition periodically



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Auditor Conclusions: Closed Date of closure: December 10, 2013 Verification result: It was sight through photograph all broken house at long Jenew 2 estate has been repaired, unfinished road in blok H has been finished, damage septic tank at housing block C and blok H has been repaired including sewage drainage and broken wood and company provide new checklist FM-SHE-043-R00 for housing area checking to investigate any other broken houses and other facilities to be included in pe-riodic repair program. Company also provide program to replace wooden house become concreate house by year 2014.

3.4 Description of Supply Chain Management System

1. Documented procedures

Findings: There is no change on company’s procedure for implementation of SCCS requirements. There are a set of existing working instructions consist of 38 working instruction from incoming FFB until product dispatch as listed on “list of quality system document (FM-STD-21-R00)” for Muara Wahau site such as : • Working instruction for Traceability of CPO and PK product (IK-AGR-STD-04-R02 issued dated

on July 01,2013), • Working instruction for weighbridge (IK-AGR-PRO-01-R02 issued dated on February 20, 2013), • Working instruction for receive, unloading and loading CPO/PK in transfer tank and dispatch

tank (IK-AGR-DIS-01-R00 issued dated on June 03, 2013), • Working instruction for transport kernel (IK-AGR-DIS-03-R00 issued dated on August 01, 2012) • Working instruction for grading (IK-AGR-LAB-01-R02 issued dated on February 20, 2013).

Incoming order procedure is handling by commercial department in Jakarta Head Office. The com-pany implements quality management system ISO 9001:2008 as a part of compliance to this stand-ard company has to establish complete and up to date standard operation procedure. Procedure for receiving and processing certified and non-certified FFBs include in traceability of CPO and PK product (IK-AGR-STD-04-R02). The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements has been assigned at the audit time. There is Memorandum No. 0007/DIR/JKT/XI/13 dated November 20, 2013 about Manage-ment Representative (MR) assignment letter for RSPO (P&C and SCCS), ISPO, ISCC, and ISO i.e. Mr. Tjahjono Notosuroto. Implementation of SCCS in field/strategic unit that MR assisted by each head of strategic units like in Mill is Mill Head, and in Jabdan station is Kerani despatch (based on internal correspondence No. 0065/MS/VIII/2013 dated on July 1, 2013) Compliance status : Full Compliance

2. Purchasing and goods in

Findings: PT Swakarsa Sinarsentosa Palm Oil mill has mechanism to receive FFB both from certified sources and non certified sources. The document to be verified from certified sources are: material deliv-ered (Nota Pengiriman Buah) (FM-OLP-33-R00) including wet stamp from the origin estate and cer-tified code. Certification status will be stated on ‘Incoming FFB received’ documents in Weigh Bridge location as seen from sample documents e.g. Received Material notes (Nota Penerimaan)



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FM-PRO-01-R00, and FFB Grading Report (‘Laporan seleksi buah’). A person has been appointed to be responsible to check and ensure the FFB quality and quantity as per purchase documents. According to incoming FFB working instruction, when receiving RSPO certified palm, personnel in the material unloading ramp are to verify the claimed category of the material under mass balance system, supplier supply chain certification number, and quality and quantity of products. In year 2012, total certified FFB received by PT Swakarsa Sinarsentosa mill amount of 259,935.58 ton (69.55 %) and non-certified FFB amount of 113,807.22 tonnes (30.45%). Certified FFB come from company’s owned estate (Jabdan 1 estate, Jabdan 2 estate, Long Jenaw 1 estate and Long Jenaw 2 estate). The company has mechanism to inform the CB immediately if there is a projected overproduction. The mill head will inform to management representative and management representative will inform to Certification Body (CB) by email/letter about if there is any projected overproduction. It is mech-anism was explained on section B.3 - working instruction for traceability of CPO and PK product no. IK-AGR-STD-04-R02. Compliance status: Full Compliance

3. Records Keeping

Findings: The company provided a revised master list of records and retention time on working instruction (FM-MS-18-R00). It is required that all records related to SCC implementation will be maintenance for a minimum 5 years, including the following records : incoming FFB daily report, daily production report, CPO/PK daily dispatch report, working sheet oil extraction, working sheet kernel extraction, working sheet oil stocking but the facility has not yet determined retention time for recapitulation of mass balance document, transaction of receipt FFB (soft copy), transaction of delivery CPO/PK in mill (soft copy) and delivery CPO from Labanan Bulking (soft copy). This was raised as a Non-conformity (NCR No.2013 No.01 of 02) . The storage and maintenance of documents is the re-sponsibility of the respective departments. The mill has record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO on daily basis in online/software/application system; however there is no record for PK pro-duction because still hard copy. The material balance includes information about incoming FFB from certified sources and non-certified sources of FFB processed, CPO and PK production result, OER and KER; delivered CPO and PK , balance stock and information about percentage of content of certified material in CPO or PK production on daily base. PT Swakarsa Sinarsentosa mill dis-patch CPO to Labanan Bulking and Baturedi Bulking but there are not information of receipt CPO in Baturedi Bulking and delivery CPO from Baturedi Bulking on mass balance online application and mass balance record. This was raised as a Non-conformity (NCR No.2013 No.02 of 02). All volumes of palm oil that are delivered are deducted from the material accounting system accord-ing to actual daily conversion ratios. The material balance can show deliver product sales from a positive stock. The company has establish mechanism how to indicate the selected supply chain model in all pur-chase and sale contracts documents. There are no outsourced supply chain processes in PT Swakarsa Sinarsentosa Palm Oil Mill. Compliance status: Non-compliance NCR No. 2013-01 of 02 The facility has not yet determined retention time for recapitulation of mass balance document, transaction of receipt FFB (soft copy), transaction of delivery CPO/PK in mill (soft copy) and deliv-ery CPO from Labanan Bulking (soft copy). NCR No. 2013-02 of 02 There are not information of receipt CPO in Baturedi Bulking and delivery CPO from Baturedi Bulk-ing on mass balance online application and mass balance record.



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4. Sales and Good Out

Findings: The sales and goods out mechanism of the company are described in their procedure of sales of palm oil. Records for CSPO product sold are recorded in material balance sheet. All products dispatched from PT Swakarsa Sinarsentosa Mill in Muara Wahau District transported to Labanan Bulking and Baturedi Bulking station accompanied by documents such as : - Weightbridge slip (WBS) and expedition note includes data about : reference/transaction number, date issued, bulking name including the address of bulking (because dispatch CPO from mill to bulking is not sale status however transfer status only), the quantity of the products delivered and reference to related transport documentation and wet stamp by writings “certified and MB : …..%”. - ‘Surat Pernyataan Truck/ Tangki Bersih’ (statement of clean tank) - Form "Berita Acara Analisa Mutu" (Note of Quality Analysis) - Form of Vehicle Control - ‘Bukti Ekspedisi’ (Expedition Note) FM-DIS-01-R00 In year 2012, volume of dispatch CPO to Labanan and Baturedi Bulking amount of 84,274.10 tonnes. Compliance status : Full Compliance

5. Training

Findings: PT Swakarsa Sinarsentosa has training procedure and annual training program for their employees, such as training program for year 2013 (FM-HRD-19-R01) where one of them is SCCS training (awareness or refreshing/updating). Socialization of SOP and IK about SCCS training was done on June 07, 2013 with evidence is training records such as attendance list, training evidence and pho-tographs. Compliance status: Full Compliance

6. Claims

Findings: The company has not yet prepared a procedure for certified product communication and claim ac-cording to RSPO requirements as they have not made any claims yet. According to product tracea-bility instruction, the mill will 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 after sold CPO and PK under RSPO claim. This will confirmed during the next audit. Compliance status: Compliance with observations

3.5 Status of previously identified non-conformitie s

SCCS Non-conformance 2012-01 of 06: There is no SOP or WI for shipment, reporting and documenting CSPO product available at the Labanan bulking station. Evidence of correction/corrective action:



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The company has SOPs/working instruction relevant for SCCS implementation at The Labanan Bulking Station such as : CPO & PK traceability working instruction (IK-AGR-STD-04-R01), Sounding and stor-age tank working instruction (IK-AGR-Lab-39-R01), Incoming and weighing palm kernel product (IK-AGR-SMD-01-R00), Unloading CPO product (IK-AGR-LBN-03-R01), Incoming and weighing CPO product (IK-AGR-LBN-01-R00) and CPO loading process (IK-AGR-LBN-03-R01). Implementation in the field has been referring to the work instructions it.

Auditor Conclusions: Closed. SCCS Non-conformance 2012-02 of 06 : The company has no mechanism to inform the certification body if there is any projected overproduction

Evidence of correction/corrective action: The company has CPO & PK traceability working instruction (IK-AGR-STD-04-R01). it is stated on sec-tion B. 3, the working instruction explained that mill head will inform to management representative and management representative will inform to certification body if there is any projected overproduction to management representative. The certification body will be informed through email/letter by management representative. Auditor Conclusions: Closed SCCS Non-conformance 2012-03 of 06 : Retention times for all records and reports still not follow SCC requirement, current system only define 1 year instead of 5 years. Evidence of correction/corrective action: The company has the master list of records and retention time work instruction (FM-STD-18-R00). It is required that all records related to SCC implementation will be maintained for a minimum 5 year, includ-ing the following records : - Incoming FFB daily report - Daily production report - CPO/PK daily dispatch report - Working sheet oil extraction - Working sheet kernel extraction - Working sheet oil stocking - Daily Weighing report in Labanan - Transmittal notes - Worksheet daily data for palm kernel in Samarinda - Loading palm kernel notes. Auditor Conclusions: Closed SCCS Non-conformance 2012-04 of 06: The company has no established mechanism to calculate mass balance for palm kernel product. Evidence of correction/corrective action: The company has working instruction for calculating mass balance for palm kernel product, which is ex-plained in section III. A. b.of the working instruction. The company has implementing of working instruc-tion it. Auditor Conclusions: Closed

SCCS Non-conformance 2012-05 of 06:



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The company’s SOPs still do not explain about how to indicate the selected supply chain model used in trade documents such as purchase documents and sales contracts.

Evidence of correction/corrective action:

The company has working instruction for CPO and PK traceability IK-AGR-STD-04-R01. The working in-struction explains that all formats used related to certified material and product will indicate supply chain mode i.s. “Mass Balance” as seen on several forms such as : - FFB delivery notes (FM-OLP-33-R00) indicate wet stamp “certified”status - CPO/PK Product dispatch note FM-PRO-016-R00 indicated “certified status and mass balance

percentage. - Product delivery letter (delivery notes) “with certified status and mass balance percentage. - Road tanker “delivery notes” with certified status and mass balance percentage. - Vessel “shipment notes” with certified status and mass balance percentage. - Etc

Implementation in the field has been referring to the work instructions it. Auditor Conclusions: Closed. SCCS Non-conformance 2012-06 of 06: Sales documents/transport documents still do not include information about applicable supply chain model (Segregated or Mass Balance)

Evidence of correction/corrective action:

The company has working instruction for CPO and PK traceability IK-AGR-STD-04-R01. The working in-struction explain that all sales documents/transport document such as contracts both for certified CPO and PK product will indicate information about the selected supply chain model (Mass Balance), it is also stated on the certificate of product analysis, bill of lading, invoice and payment receipt. Implementation in the field has been referring to the work instructions it.

Auditor Conclusions: Closed

3.6 Identified Non-conformances against RSPO SCCS R equirements, Corrective Actions Taken and Audi-

tors Conclusions

SCCS Non-conformance 2013-01 of 02 :

The facility has not yet determined retention time for recapitulation of mass balance document, transac-tion of receipt FFB (soft copy), transaction of delivery CPO/PK in mill (soft copy) and delivery CPO from Labanan Bulking (soft copy). Correction : To revise the master list of records and retention time (FM-MS-18-R00). Corrective Action : To implement consistently the rule of records keeping as stated after the mill approved as SCCS certi-fied, management representative will monitor the implementation of records keeping periodically through internal audit program. The report of monitoring result will be considered in the company’s management review agenda. Auditor Conclusions : Closed.



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Date of closure : December 8, 2013 Verification result : The company provided a revised master list of records and retention time (FM-MS-18-R00) issued dat-ed on December 1, 2013 where retention time for recapitulation of mass balance (hard copy) in mill is 3 years (1 years as active archive and 2 years as passive archive), recapitulation of mass balance (soft copy) in mill is 5 years (1 years as active archive and 4 years as passive archive), recapitulation of mass balance (soft copy) in Labanan Bulking is 10 years (as active archive), transaction of receipt FFB (soft copy) is 5 years (1 years as active archive and 4 years as passive archive), transaction of dispatch CPO/PK in mill (weighbridge ) (soft copy) is 5 years (1 years as active archive and 4 years as passive archive), and dispatch CPO from Labanan Bulking on monthly and third monthly report (soft copy) is 10 years (as active archive).

SCCS Non-conformance 2013-02 of 02 :

There are not information of receipt CPO in Baturedi Bulking and delivery CPO from Baturedi Bulking on mass balance online application and mass balance record. Correction : Issue of memorandum related Baturedi Bulking out of scope from SCCS and inform to certification body. Corrective Action : Management Representative to ensure that the facilities are out of scope will inform to CB. Auditor Conclusions : Closed. Date of closure: December 8, 2013 Verification result : There is memorandum from Director on November 27, 2013 no. 0102/MS/XI/13 to inform that all certi-fied CPO/PK will not dispatched from Baturedi Bulk, due to small amount and Baturedi Bulking will not included in SCCS certification scope.

3.7 Noteworthy Positive Components

No. Clause Comment

1 6.5 Clean housing area, good water treatment in each area

2 6.9 Good implementation regarding prevent sexual harassment, good recording sys-tem about sexual harassment and violence cases. Company can demonstrate their implementation regarding policy to protect reproductive rights through provide nursery room in each estate office; provide menstruation leave and maternity leave following government regulation.

3 5.2.2 (Major)

• Telah melaksanakan rehabilitasi areal terdegradasi di blok konservasi VII

• Telah melakukan upaya yang serius dan optimal dalam rangka menjaga nilai-nilai kandungan HCV yang ada di blok konservasi VI dan VII

4 4.7.6 Very good PPE washing area and store, as well as shower facilities are made available at the estates for the sprayers, as seen at Jabdan 2 and Long Jenew 2 estate

5 5.6.1 The mill has a plan to implement a methane capture system to reduce production of greenhouse gases



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3.8 Conclusion and Recommendation for RSPO P & C an d Supply Chain Certification

The audit team has confirmed through the audit process that PT Swakarsa Sinar Sentosa Palm Oil Mill has estab-lished and maintains an effective system to ensure compliance with the RSPO P & C and Supply Chain Certifica-tion System requirements (dated November 2011). It is also confirmed that the company’s annual volume of CPO and PK sold for the period of year 2013 has not exceeded the certified annual tonnages as claimed in the organi-zation’s RSPO certificate no. 18501994 001 because no CSPO and CSPK claimed product sold as until 1st surveil-lance audit. TUV Rheinland recommends that PT Swakarsa Sinarsentosa Palm Oil Mill and estates be continuing approved for certification of compliance to the RSPO P & C and Supply Chain Certification System requirements.

3.9 Issues Raised by Stakeholders and Findings Pert aining to Issues Below is a summary of issues raised by stakeholders interviewed on-site:

No. Stakeholders Issues Raised Management Response Audit Verification

1 Benheas Village

Head

Requests have been made to

the company:

1. not to clear area of 300 me-

ters width along both sides

of the river as this area

must be reserved for com-

munity cultivation purpose;

2. to expand the conservation

area;

3. not to disturb or to main-

tain any traditional sites

and graveyard locations;

and

4. not to complicate the

community when passing

through the company’s

road on the way to their

cultivation land nearby.

The company will pay

attention to the com-

munity’s demand

1&2. The company will

comply with Govern-

ment regulation on con-

servation area.

3. The company has

promised not to disturb

the graveyard locations

and the local communi-

ty’s traditional sites

around the HGU con-

cession.

4. The company never

complicates the com-

munity members pass-

ing through its road

1. The company re-

serves and maintains

conservation areas

according to Govern-

ment regulation.

2. No proof of the

company expanding

its conservation area

as demanded by the

community.

3. Proof has been ob-

tained indicating that

the company does not

disturb the communi-

ty’s graveyard and

traditional sites.

4. Clarification has

been made by the

community that the

company has never

complicated them

when passing through

the company’s road.

2 Benheas Village

Secretary

[Give advantage to the commu-

nity to monitor and manage the

negative social impact.]

The company has con-

ducted negative social

impact management

and monitoring by tak-

ing into account the

community’s participa-

tion.

The company has

managed and moni-

tored the social im-

pacts based on the

community’s partici-

pation.

3 Diaklay Village

community Repre-

sentative Head

Area for partnership program

over Telen River under man-

agement of Jengea Bon Pek Kuk

It is not a land conflict,

but rather, only an in-

ternal disagreement be-

No land conflict has

been found in this

matter. It is only an



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No. Stakeholders Issues Raised Management Response Audit Verification

Cooperative (KM 11) is under

tenurial conflict [between Ben-

heas Village community and Di-

aklay and Dea Beg village com-

munity].

tween the [cooperative]

members from several

villages.

internal disagreement

between cooperative

members.

4 Diaklay Village sec-

retary

Relationship between the local

community and PT Swakarsa is

much better [than with Sinar-

mas and Astra company].

The company always

seeks to improve the re-

lationship having been

established with the lo-

cal community.

The community con-

firmed that the har-

monious relationship

they are enjoying with

PT Swakarsa is not ex-

perienced with any

other surrounding

companies, including

with Sinarmas Group

and Astra Group.

5 Jabdan Sub-village

Head

Fruit garden at Simpang Cem-

pedak location is not properly

maintained.

The company keeps

maintaining the fruit

garden according to its

commitment made to

the community under

agreement.

Proof has been ob-

tained that the com-

pany has developed

the fruit garden ac-

cording to the agree-

ment.

6 Nehas Liah Bing

community Repre-

sentative Head

There is no land conflict be-

tween community and PT Swak-

arsa at present.

It is true that no tenurial

conflict with the com-

munity has arisen in last

one year.

No tenurial conflict

with the community

in last one year.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for September 2014

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content.

Signed on behalf of PT Swakarsa Sinar Sentosa

T. Notosuroto Management Representative Date: December 27, 2013

Signed on behalf of PT TUV Rheinland Indonesia

Dian Susanty Soeminta Lead Auditor Date: December 20, 2013



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APPENDICES Appendix 1: Details of Revised Certificate (if appl icable)

Appendix 2: List of Abbreviations AMDAL Analisis Dampak Lingkungan & Sosial

(Social & Environmental Impacts Assessment) CPO BOD COD CPO DO

Crude Palm Oil Biological Oxygen Demand Chemical Oxygen Demand Crude Palm Oil Dissolved Oxygen

EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV HPK ISPO

High Conservation Value Indonesian Sustainable Palm Oil Hutan Produksi Konversi (Production Forest for Conversion)

IPM Integrated Pest Management LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organization OSH Occupational Safety & Health PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL RTRWP

Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) Rencana Tata Ruang Wilayah (Urban Land Use Plan)

SIA Social Impact Assessment SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 3: List of Stakeholders Interviewed and Co ntacted

No. Name of Stakeholder

Institution - Address Remark

Stakeholders Interviewed On-Site 1. Ratiah Workers jabdan 1 estate 2. Saleh FFB transporter/ Sub contractor 3. Latif FFB transporter/Sub contractor 4. Tono FFB transporter/Sub contractor 5. Joko FFB transporter/Sub contractor 6. Ery FFB transporter/Sub contractor 7. Nur B Sprayer 8. Sumati B Sprayer 9. Waliyah Sprayer 10. Betti Sprayer 11. Musliah Sprayer 12. Sarmiati Sprayer



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13. Rudi Middle man 14. Ruslan Harvesting 15. Hermawan Contractor worker 16. Eko Planning & performance

Departement

17. Dani HRD Departement Norhalima Sprayer/loose fruit collector JB2 Mohammad Malik Harvester JB2 estate Suprianto Harvester JB2 estate 16 female sprayers Long Jenew 2 estate

Appendix 4: Observations and Opportunities for Impr ovement

No. Observations / Opportunities for Improvement Crit eria 1. Inconsistent information about total area for PT Dharma Intisawit Persada as stat-

ed on HCV document 11,557.5 ha and according to kadastral mapped No. 13/PB-64.200/VII/2012 from National Land Agency total PT DIL arena only 7968.54 ha

2.2

2. Medical surveillance result for sprayer in Afdeling 5 Jabdan 1 was not communi-cated to the respective workers.

4.7

3. Enforcement for using google and mask should be improved for some sprayer in afdeling 5 Jabdan 1.

4.7

4. Company has good mechanism for knapsack and contaminated clothes clean-ing, however no clear instruction available in the cleaning area how to using wa-ter tank level 1, 2 and 3.

5.3

5. There is no specific mechanism to control legal compliance for contractor work-ers

6.20

6. Company’s policy regarding freedom to form and joint workers association should be conducted continuously to increase workers awareness about collective bar-gaining both for mill and estate.

6.6

7. Company should consider tributarian run off to control erosion and protect run off such as for Riparian nearby G2 road. For preventive erosion control and protection water flow in the river and be adjusted to the water flow rate and flow profile as oc-curred in riparian river near G32 road.

4.4.1

8. Company has not determined internal standard for water consumption. 4.4.3

9. Company should conduct fauna survey to acknowledge fauna population and dis-tribution.

5.2.2

10. First aid kit at JB2 estate workshop was found to be missing a pair of scissors and records of usage of first aid kit was not available at the kit. Scissors in first aid kit at Long Jenew estate 2 was found to be rusty

4.6

11. Manifests for collection of hazardous wastes currently states number of drums of each wastes collected but not amount in pieces or litres according to the waste records maintained by the mill, therefore actual amount collected by the contrac-tor is unclear.

5.3

12. The maximum time for storage of each hazardous waste received from the es-tates is stated in the mill inventories as 90 days from the dates of receipt, how-ever this timeframe of 90 days does not include the time of storage of the wastes at the estates which can be between one to two weeks.

5.3

13. No labels with warning symbol are used on hazardous waste containers at Jabdan 2 estate hazardous waste store. The estate took immediate corrective action at time of audit to label the hazardous wastes containers accordingly.

5.3

roundtable on sustainable palm oil...jl. rawa gelam v kav. or/3b, kawasan industry pulo gadung...

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