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Roundtable on Sustainable Palm Oil

Annual Surveillance Audit Report Report no.: ASA2_18501693

Surveillance assessment against the

RSPO Principles & Criteria Malaysia National Interpretation year 2010

Felda Global Ventures Plantations (Malaysia) Sdn. Bhd.

Adela Palm Oil Mill Kota Tinggi, Johor, Malaysia

Date of assessment: 16-19 February 2014

Report prepared by: Dian S. Soeminta

(RSPO Lead Auditor)

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

TABLE OF CONTENTS

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 3 1.5 Organisational Information / Contact Person 6 1.6 Description of Supply Base 6 1.7 Actual production volumes, tonnages and projected outputs. 7 1.8 Dates of Plantings and Replanting Cycles 7 1.9 Area of Plantation (Total, Planted and Mature) 8 1.10 Progress Against Time Bound Plan 9 1.11 Compliance to Rules for Partial Certification 11 1.12 Progress of associated smallholders or outgrowers towards RSPO compliance 12 1.13 Approximate Tonnages Certified 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 15

3.0 ASSESSMENT FINDINGS 18

3.1 Summary of Findings 18 3.2 Status of Previously Identified Non-conformities 34 3.3 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 42 3.4 Description of Supply Chain Management System 53 3.5 Status of Previously Identified Non Conformities for SCCS 55 3.6 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 56 3.7 Noteworthy Positive Components 57 3.8 Issues Raised by Stakeholders and Findings Pertaining to Issues 58

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL

RESPONSIBILITY 59

4.1 Date of Next Surveillance Visit 59 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 59

APPENDICES 60

Appendix 1: Revised RSPO Certificate 60 Appendix 2: List of Abbreviations 62 Appendix 3: List of Stakeholders Interviewed and Contacted 64 Appendix 4: Observations and Opportunities for Improvement 66

RSPO Annual Surveillance Audit Report

- FELDA Adela Palm Oil Mill – Johor, Malaysia

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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 the Malaysia Nation-al Interpretation year 2010 of the RSPO Principles & Criteria, including smallholder national interpretation

1.2 Type of Assessment

The annual surveillance audit was carried out on one mill, 1 estate and 5 smallholder schemes under Adela Palm Oil Mill owned by FELDA. The date of certification of this unit was 16 April 2012.

1.3 Certification Details

The details of RSPO certification of Adela Palm Oil Mill are as per the table below Table 1: RSPO Certification details of Adela Palm Oil Mill

1.4 Location and Maps

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

RSPO Membership no.: 1-0013-04-000-00

RSPO Certificate no.: 824 502 14014 (Replaces previous certificate no. 18501693 001)

Date of first RSPO certificate & validity: 2012-04-16 to 2017-04-15

Date of certification audit: 21 to 26 July 2011

Date of previous surveillance audit: 13 – 16 March 2013

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

Validity of revised certificate remains the same as the initial certificate issued

CPO tonnages claimed: 28,746 tonnes

PK tonnages claimed: 7726 tonnes

Name of mill / es-tate

Location GPS locations

Latitude Longtitude

Adela Palm Oil Mill P.O. Box 73, Bandar Penawar, Kota Tinggi, Johor. 81930

0133’06.9”N 10411’10.9”E

Kledang 2 Estate Kota Tinggi, Johor, Malaysia 0128’54.2”N 10410’52.2”E

Sungai Mas Kota Tinggi, Johor, Malaysia 0136’42.3”N 10409’04.7”E

Tunggal Kota Tinggi, Johor, Malaysia 0126’37.3”N 10410’03.6”E

Adela Kota Tinggi, Johor, Malaysia 0133’40.5”N 10411’04.2”E

Sening Kota Tinggi, Johor, Malaysia 0129’56.4”N 10408’06.5”E

Kledang Kota Tinggi, Johor, Malaysia 0134’57.8”N 10409’04.7”E



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Figure 1: Location of Felda Adela Complex in Peninsular Malaysia

Adela Complex location



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Figure 2: Locations of FELDA Adela estates within the state of Johor, Malaysia

Adela

Sening

Kledang 2

Kledang

Sungai Mas

Tunggal



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1.5 Organisational Information / Contact Person

Contacts details of the company are as follows:

1.6 Description of Supply Base

There are 8 types of FFB supplier types for FELDA Palm Industries Sdn. Bhd. (FPISB), consisting of the fol-lowing:

1. FELDA schemes, which is made up of smallholder schemes with dependents (settlers) 2. FGVPM (Felda Global Ventures Plantations Malaysia Sdn. Bhd) consisting of FELDA’s owned commercial

oil palm plantation. 3. FTPSB (Felda Technoplant Sdn Bhd), a division of FELDA, which manages replanting and ongoing man-

agement of plantations owned by FELDA scheme smallholders 4. Other estates: Commercial oil palm plantations belonging to independent outgrowers 5. Independent FFB Agents (Dealers) 6. FELDA settlers, whom choose to be independent. They carry out replanting and manage their estates by

themselves and sell the FFB to FELDA mills. 7. Cooperatives, which act like FFB agents established by Felda’s smallholders 8. Independent suppliers The FFB supplier types included in the scope of the assessment include only FELDA schemes, FPSB (FFB supplied by Kledang 2 estate, a commercial estate supplying to Adela Mill) and FTSB. Data on FFB supply information as well as CPO and PK production is as per the tables below. Table 3: FFB Supply Information for Adela Mill period January to December 2013

FFB Contributors FFB supplied

Tonnes %

FELDA schemes* 18,407.63 7.50

FGVPM (Kledang 2 estate)* 16,208.27 6.60

FTPSB* 116,258.77 47.37

Dealers 81,137.87 33.06

Other estates (Bell Flower Sdn Bhd) 4001.06 1.63

Independent outgrowers 2,631.70 1.07

Ex FELDA smallholders 182.38 0.07

Diversion of FFB from other complexes 6,613.27 2.69

TOTAL 245,460.00 100

* Note: Only tonnages supplied from FELDA schemes, Felda Global Ventures Plantation Malaysia (FGVPM) and FTPSB (Felda Techno Plant Sdn. Bhd.) are included in the certification scope.

Company Name: FELDA (Adela Mill)

Address: Adela Palm Oil Mill, P.O. Box 73, 81930, Bandar Penawar, Kota Tinggi, Johor, MalaysiaHead office: Felda Global Ventures Plantations (M) Sdn Bhd Tingkat 8, Balai Felda, Jalan Gurney Saturday 54000 Kuala Lumpur

Contact Person: Mr. Anthonius Sani

Telephone/fax: + 603-26005200/ +60193087544

Email: [email protected]

Website: www.felda.net.my



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1.7 Actual production volumes, tonnages and projected outputs.

Table 4: Certified tonnages claimed, certified tonnages purchased or sold, total and projected CPO and PK production from Adela Palm Oil Mill

* Data from January to December year 2013, including amount sold from remaining stock from production in year 2013

** Actual OER and KER from mill production report for year 2013

*** Sold as Book and Claimed

1.8 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 30 years. Information on the dates of plantings are as per the table below. Table 5: Age and year of plantings of company estate supplying to Adela Mill Oil palm planted area at each es-

tate (ha)

Age & year of Plantings (ha)Total planted

area (ha) 2008- 2012

2003 -2007

1997-2002

1993-1996

1988- 1992

Kledang 2 estate 148.55 140.37 - - 879.62 1,168.54 Sungai Mas (Scheme)

- 2,714.80 - - - 2,714.80

Adela (Scheme) - 1,662.89 - - - 1,662.89 Tunggal (Scheme)

1,816.51 - - - 527.48 2,343.99

Sening (Scheme) 2,234.17 - - - - 2,234.17 Kledang (Scheme)

1,261.83 - - - 276.86 1,538.69

Total 5,461.06 4,518.06 - - 1,683.96 11,663.08

Amount (MT)

CPO PK

Certified tonnages claimed 28,746 7726

Total product tonnages sold* 50,345.55 12,858.50

Certified product tonnages sold (January to December 2013)

10,500 *** -

Certified tonnages purchased* - -

Actual Production year 2013 52,062.066 12,763.92

Actual OER and KER for year 2013** OER: 20.45% KER: 5.2%

Projected OER and KER for year 2014 OER:20.69% KER: 5.4%

Projected output for next 12 months from mill Budget 2014

56,897.5 14,850

Closing stock by the end of year 2012 (December 13, 2012)

436.52 90



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Table 6: Planned and actual oil palm replanting activities for Adela Mill

Total planned re-planting area for each estate (ha)

Total planned area (ha)

Year/ha

2011 2012 2013 2014 2015

Kledang 2 estate 879.62 - - 324.85 554.77 - Sungai Mas (Scheme) - - - - - - Adela (Scheme)

- - - - - - Tunggal (Scheme) 527.48 - 527.48 - - - Sening (Scheme) - - - - - - Kledang (Scheme) 276.86 - 276.86 - - -

1.9 Area of Plantation (Total, Planted and Mature)

Table 7: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for Adela Complex for year 2013

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

Adela Complex

Kledang 2 es-tate

1,168.54 1,168.54 1,168.54 - 20,242.86 18.07

Sungai Mas (Scheme)

2,892.45 2,714.80 2,714.80 - 46,721.94 17.28

Adela (Scheme)

1,808.80 1,662.89 1,662.89 - 30,428.35 20.47

Tunggal (Scheme)

2,551.49 2,343.99 1,816.50 527.49 - -

Sening (Scheme)

2,652.65 2,234.17 2234.17 - 36,420.56 26.97

Kledang (Scheme)

1,908.69 1,538.69 1538.69 - 2,368.74 17.47

TOTAL 12,982.62 11,663.08 11,135.59 527.49 136,182.45 13.87

Table 8: Land use data for Adela Complex

Estate Name Total area

(ha) Oil Palm Planted

Area (ha) HCV/ Potential HCV areas (ha)

Land used for other purposes (ha)

Housing Other LandKledang 2 es-tate

1,168.54 1,168.54 - - -

Sungai Mas (Scheme)

2,892.45 2,714.80 - 177.65 -

Adela (Scheme)

1,808.80 1,662.89 - 145.91 -

Tunggal (Scheme)

2,551.49 2,343.99 - 207.5 -

Sening* (Scheme)

2,652.65 2,234.17 - 418.48 -

Kledang (Scheme)

1,908.69 1,538.69 - 370.00 -

TOTAL 12,982.62 11,663.08 - 1,319.54 -

Note: * some smallholders are no longer included in FELDA Sening program.



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1.10 Progress Against Time Bound Plan

The following is FELDA’s listed of certified units to date and time bound plan at time of 2nd surveillance audit of Adela palm oil mill and complex. Table 9: Felda Management Units which have to audited and certified to date

No. Complex Date of Audit Date of Certification Certificate expiry date1 Kota Gelanggi 29.09.2009 22.07.2010 21.07.20152 Lepar Utara 06 29.09.2009 22.07.2010 21.07.20153 Jengka 21 09.07.2011 14.01.2013 13.01.20184 Jengka 3 28.03.2011 13.12.2012 12.12.20175 Jengka 8 28.03.2011 13.12.2012 12.12.20176 Lepar Utara 04 04.07.2011 12.09.2012 11.09.20177 Jengka 18 13.07.2011 16.01.2013 12.01.20188 Padang Piol 28.03.2011 13.12.2012 12.12.20179 Adela 21.03.2011 16.04.2012 15.04.2017

10 LokHeng 21.03.2011 16.04.2012 15.04.201711 Semenchu 06.06.2011 25.07.2012 24.07.201712 Waha 21.02.2011 31.05.2012 29.05.201713 Bukit Kepayang 27.12.2011 07.01.2013 06.01.201814 Bukit Mendi 19.10.2011 05.12.2012 04.12.201715 Kemasul 19.12.2011 20.12.2012 19.12.201716 Tementi 19.12.2011 09.09.2013 08.09.201817 Triang 19.12.2011 15.10.2012 14.10.201718 Fajar Harapan 21.10.2013 27.02.2014 26.02.201919 Baiduri Ayu 21.10.2013 14.04.2014 13.04.201920 Penggeli 06.12.2012 14.04.2014 13.04.201921 Bukit Besar 03.12.2012 28.03.2014 27.03.201922 Kulai 05.12.2012 14.04.2014 13.04.201923 Lepar Hilir 18.12.2012 14.04.2014 13.04.201924 Bukit Sagu 20.12.2012 12.02.2014 11.02.201925 Belitong 10.12.2012 13.06.2014 12.06.201926 Kahang 12.12.2012 13.06.2014 12.06.201927 Nitar 17.12.2012 13.06.2014 12.06.2019



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Table 10: Original time bound plan for certification of all Felda’s Management Units

Table 11: Revised time bound plan in year 2014

No Mill complexes to be audited in the respective year

2009 2010 2011 2012 2013 2014 2015 2016 2017

1 K. Ge-langgi

Jengka 21

Adela Belitong Palong Timor Neram Krau Chalok Aring A

2 L. Utara 6 Jengka

3 Lok Heng

Bukit Be-sar

Serting Hilir Pancing Mempaga J. Barat Aring B

3

Jengka 8 Semencu Kahang Maokil Besout Serting J. Baru Ciku

4

L. Utara 4

Waha Kulai Tenggaroh Trolak Pasoh Kertih Kema-

hang

5

Jengka 18

B. Kepa-yang

Nitar T.Timor Keratong 2Selancar

2A Selendang Tersang

6

Padang Piol

Bukit Men-di

Penggeli Kechau A Keratong 3Selancar

2B J.Bistari Cini 2

7

Kemasul Lepar Hilir Kechau B Sg Tengi N. Permata Kalabakan Cini 3

8

Tementi Bukit Sagu Keratong 9 Embara

BudiH.Badai Umas Sampadi

9

Triang F. Harapan L. Kemudi

Pontian

10

Baiduri AyuKembara

Sakti

11

M. Puspita

Certified 2 6 9 8 2 0 0 0 0

Plan 2 6 9 8 10 11 8 8 9

Total 2 8 17 25 37 46 54 62 71



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*As of year 2014, there are 27 Felda Complexes which have been RSPO certified (highlighted in green)

**In 2017, there is additional one mill (Pontian) As seen in the plan above, there were 8 management units planned to be audited in year 2013, i.e. Palong

Timor, Serting Hilir, Maokil, Tenggaroh, T.Timor, Kechau A, Kechau B and Keratong 9.

1.11 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of FELDA against the rules for partial certification according to RSPO Certification System clause 4.2.4 was assessed by reviewing information stated on document Infor-mation for “ Un-assessed Management Units for RSPO Self Assessment” issued by TUV Rheinland. A sum-mary of findings is as stated below.

Partial Certification Requirements Audit Findings

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

FELDA is RSPO member with member-ship no. 1-0013-04-000-00

(b-d) A challenging time-bound plan for certifying all its rele-vant entities is submitted to the Certification Body (CB) dur-ing 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 organisation can demonstrate that they are justified

There is timebound plan is as stated un-der Section 1.10 above

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

There are new development areas under FELDA’s group i.e. PT Citra Niaga Per-kasa, Sebangkit District in Landak Re-gency, West Kalimantan Indonesia with total area 14,385 ha. According to HCV assessment that conducted by Faculty of Forestry Bogor Agriculture Institute there are 7 types of HCV area with total 14,385 ha.

The New Planting Procedure assessment was conducted by certified RSPO certifi-cation body i.e. PT Mutuagung Lestari.

There is notification letter to RSPO dated on January 09, 2013 signed by RSPO team leader and Citra Niaga General Manager.

(f) Land conflicts, if any, are being resolved through a mutu-ally agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO crite-ria 6.4, 7.5 and 7.6.

There is no identified land conflict in all FELDA’s certified management unit and uncertified management unit.

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

There is no identified labour dispute in all FELDA’s certified management unit and un certified management unit.

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

Some legal non compliance as stated on the NCR below.



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1.12 Progress of associated smallholders or outgrowers towards RSPO compliance

All smallholder schemes under Felda Adela are already included in the scope of the certified unit.

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) : 28,746 MT Palm Kernel (PK) : 7,726 MT



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2.0 ASSESSMENT PROCESS

2.1 Certification Body TUV Rheinland Malaysia Sdn. Bhd. is member of Group TÜV Rheinland Group, a global leader in independ-ent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 locations in 65 countries on all five continents. TUV Rheinland Malaysia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, and SA 8000. PT TUV Rheinland Malaysia’s office is located in Shah Alam, Se-langor, Malaysia.

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 S. Soeminta (Lead Auditor) 2) Carol Ng (Environment & Best Practices) 3) Azizan bin Zakaria (OSH) New assessment team members that were not part of the previous assessment team are as per the table be-low:

Name Position Qualifications / Experience

Yusof Nizar Auditor (OSH

& Environ-ment)

Education: Diploma in Public Administration- MARA Institute of Tech-nology, Malaysia (1991). Certificate of Safety and Health Officer-Malaysian Insurance Institute (2003). Bachelor of Corporate Administra-tion (Hons)-MARA University of Technology, Malaysia (2003), Master of Science in Occupational Safety and Health Management-Northern Uni-versity of Malaysia (2011), Candidate for Phd in Occupational Safety and Health Management-Northern University of Malaysia. Trainings attended: ISO 9001:2000 IRCA/IATCA Lead Auditor Train-ing-International Management & Technology Limited (Kuala Lumpur), ISO 14001:2004 IEMA Approved EMS Advanced Lead Auditor Training Course-Aspects Moody Certification Ltd (United Kingdom). OH&SMS IRCA Certified Lead Auditor Training Course-Moody International (Kua-la Lumpur). MS 1722 Lead Auditor Training-Niosh Certification (Kuala Lumpur) Working experience: Experience in managing, consulting, training and auditing quality, environmental, occupational safety and health man-agement systems such as ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, MS1722:Part 1:2005 from 1996-Current. Contract Trainer of OSH & Environmental Legal & Other Requirements Lead Auditors course for SIRIM Training Services Sdn Bhd & NIOSH Certification Sdn Bhd. Contract Auditor for Environmental Management System for Sirim QAS International (2006). Department of Occupational Safety and Health Malaysia (DOSH) Registered Safety and Health Officer (2003-2006). Approved Human Resources Development Fund (HRDF) Trainer (2011). Assessor for Prime Minister’s Hibiscus Award and involving as-sessment for oil and gas companies, plantations industries, manufactur-ings, utilities, cleaning and transportations services (2003-2011). OSH and Environmental Auditor for TUV Rheinland Malaysia RSPO Princi-ples & Criteria.

Irpan Kadir Auditor (Social)

Education: Bachelor of Agriculture, Department of Social and Economic of Agriculture, Bogor Institute of Agriculture.

Trainings attended: Sustainable Natural Production Forest Manage-



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ment (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) train-ing - Indonesian Ecolabel Institute (LEI).

Working experience: Experienced as external auditor of PT TUV In-ternational Indonesia for RSPO Principles & Criteria since year 2009 and Sustainable Forest Management auditor since year 2003. Has ex-perience in conducting assessments of performance and social map-ping for mining and forestry companies. He also has experience as a senior social researcher since year 2000 to 2005 and is currently a CSR consultant and trainer at A + CSR Indonesia since year 2006.

Dr. Savinder

Gill

Auditor (Social, HCV & Land is-sues)

Education: Bachelor of Engineering (Hons) (Civil Engineering), Universiti Sains Malaysia (1999); Master of Science in Highway and Transportation Engineering, Universiti Sains Malaysia (2000) and Ph.D. in Environment & Resource Studies, Mahidol University, Thailand (2008). Trainings attended: November 2010: Auditor’s Training Course on the Malaysian Criteria and Indicators 2002 (Malaysian Timber Certifi-cation Council); May 2012: Auditor’s Training Course on the Malaysian Criteria and Indicators (Natural Forest) (Malaysian Timber Certification Council); September 2012: Lead Auditor’s Training Course for Roundtable on Sustainable Palm Oil (RSPO) (Proforest and WildAsia); November 2012: ISO 14001 Lead Auditor’s Training Course (by SGS (M) Sdn. Bhd.)

Working experience: Worked as a consultant/project highway and transportation engineer from 2000-2004 (Maunsell Sharma & Zakaria and Scott Wilson Pavement Engineering Sdn.Bhd.); Experience in pro-ject administration and community development with the Indigenous Knowledge Network Project (2004); Co-ordinated social develop-ment/sustainable livelihood projects as Consultant Environmental Soci-ologist for Orang Asli in Pahang under the United Nations Development Programme (UNDP)/Global Environment Facility (GEF) (2004-2007); Contract Social auditor/technical expert for sustainable forest manage-ment (Malaysia Criteria and Indicators (MC&I )(Natural Forest) & Forest Stewardship Council (FSC) and Roundtable for Sustainable Palm Oil (RSPO) for SGS (M) Sdn. Bhd. (2006-present). Consultant Environmen-tal Sociologist for due diligence, social impact assessments for sustaina-ble forest and oil palm management and has worked with various rural communities in Malaysia and Indonesia on High Conservation Value Forest assessments (HCVF) with Malaysian Environmental Consultants (MEC) Sdn.Bhd (2006-2011). Social Screening Consultant for the Sara-wak Railway Screening Project-Social Screening Social commissioned by the Bintulu Development Authority, Sarawak and assisted in APEC Transboundary Marine Spatial Planning and Management Project (with Sea Resources Management (SRM) Sdn. Bhd. from 2010-2011. Con-ducted Participatory Needs Analysis for Local Community Oil Palm Mill in Telupid, Sabah with Alter Palm Oil Trade, Japan (2010-2011). Trainer for social impact assessment for PACOS Trust, Sabah. Registered HCV as-sessor with RSPO (2010). Social and HCV Auditor for TUV Rheinland Malaysia RSPO Principles & Criteria (2014-)



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2.3 Assessment Methodology & Agenda The surveillance assessment was conducted between 16 to 19 February 2014 as per the assessment pro-gram below. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO audit pro-cedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rhein-land assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates, combined with common management systems, it was possi-ble to carry out both field and document assessments of all estates and the mill within the time frame without compromising the integrity of the assessment in anyway. All 5 smallholder schemes, 1 estate and 1 mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria. Common systems were identi-fied and specific evidence was recorded for individual estates. Interviews were conducted at all estates and the mill. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. The surveillance assessment agenda is as explained be-low. 2nd Surveillance Audit Agenda.

Date Location/ Main sites

Main activities

16/02/2014 Sening Hall

Opening Meeting - Presentation by Felda - Finalization of audit plan

Sg. Masscheme

Document review and verification of previous audit findings Agrochemical application and management Interviews with sprayers and harvesters Field visit and EFB application area – Level 1A, Block 11 Worker’s housing and interview with worker with serious hand injury Document Review: Workers’ contracts, pay slips, check-roll, HCV/SIA manage-ment plans, minutes of meetings for GPW (Gerakan Persatuan Wanita / United Women’s Movement), gender committee & JCC (Joint Consultative Committee), insurance records, CSR program records. On-site visit: Boundary stone, workers’ housing Interviews: Harvesters (Four male Indonesian workers) and Assistant Chairman of JKKK Felda Sg.Mas

Sening Document Review: Policy (social, worker, environment), social impact assess-ment document, communication log book On-site visit: housing of migrant worker, working area at the filed, settlers village Interviews: migrant worker: working condition, working contract, facility for mi-grant workers; settlers: scheme smallholder contract, communication with FTP, community activity Document Review: OSH Policy, HIRARC Report, Health and Safety Plan Year 2014, List of Legal and Compliance Requirements Related to the RSPO, the Register of Legal and Other Requirements, Field Manual on Sustainable Palm Edition II, 1st June 2012, the Medical Surveillance Report done by Dr. Tan Ching Hai dated 5/27/13, Emergency Procedures (ERP), DOSH Organization Chart FTPSB Sening 2014, Surrender Records for PPE & Equipment. On site visit: chemical store, fertilizer store, surrounding of office. Interviews: Senior Supervisor, Assistant Manager Technoplant, Stock Clerk

Adela Document Review: Policy (social, worker, environment), social impact assess-ment document, communication log book On-site visit: housing of migrant worker, working area at the filed, settlers village Interviews: migrant worker: working condition, working contract, facility for mi-grant workers; settlers: scheme smallholder contract, communication with FTP, community activity



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17/2/2014 Kledang 2estate

Document Review: Policy (social, worker, environment), social impact assess-ment document, communication log book, workers’ contracts, pay slips, check-roll, HCV/SIA management plans, minutes of meetings for GPW, gender commit-tee & JCC, insurance records, CSR program records. On-site visit: housing of migrant worker, working area at the filed Interviews: migrant worker: working condition, working contract, facility for mi-grant workers; On site visit: Spraying area (Block 12), harvesting (Block C), chemical mixing ar-ea, chemical store Interview: Manager, Assistant Manager, Supervisor, worker, mandore and driver (sprayer), worker and mandore (harvester), Stock Clerk, Document Review: List of Laws and Related Requirements for Compliance to RSPO, Sustainable Palm Estates Manual Edition II dated 1st June 2012, DOSH Forms 6 and 8

Tunggal scheme

On site visit: Spraying area (Block 12), harvesting (Block C), chemical mixing ar-ea, chemical store Interview: Manager, Assistant Manager, Supervisor, worker, mandore and driver (sprayer), worker and mandore (harvester), Stock Clerk, Document Review: List of Laws and Related Requirements for Compliance to RSPO, Sustainable Palm Estates Manual Edition II dated 1st June 2012, DOSH Forms 6 and 8

Kledang scheme

Document review and site visit - EFB application area – Block 15 - Potential marginal soil area (Lombok) – Block 4 - Replanting area – Block 16 Document Review: Workers’ contracts, pay slips, check-roll, HCV/SIA manage-ment plans, minutes of meetings for GPW, gender committee & JCC, insurance records, CSR program records.

18/2/2014 Adela Mill Document review and site visit: Mill compound, loading ramp, chemical store and scheduled wastes stores, workshop, Palm Oil Mill Effluent Treatment ponds, in-cluding final discharge point B, incinerators Interviews: Mill Manager, Assistant Mill Manager, Supervisors Workers, Caterpil-lar driver (loading), Bobcat driver, Quality Supervisor, Operation Supervisor, Foreman. Chief Clerk Document Review: Workers’ contracts, pay slips, check-roll, HCV/SIA manage-ment plans, minutes of meetings for GPW, gender committee & JCC, insurance records, CSR program records, Register of Legal and Other Requirements, Re-port HIRARC, permits for Certificated Machinery (PMD, PMT), Emergency Pre-paredness and Response Procedure, First Aid training records. Audiometric Test Report, Noise Mapping Report and license for drivers, PPE Issuance record, Hazard Identification, Risk Assessment and Determination of Control

February 19, 2014

Adela Mill -General SCC requirement -Management representative job description - SCC management system -Incoming FFB procedure - Production process -Incoming order -Product Dispatch

21/2/2014 Pulai De-saru Sening Hall

Preparation for closing meeting Closing meeting and presentation of findings



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Verification of closure of major non-conformances was conducted 1 month after the closing meeting of the sur-veillance assessment and implementation of corrective actions for minor non-conformities will be verified dur-ing the next surveillance audit. The verification audit agenda was as below:

Date Location/ Main sites Main activities

1/4/2014 Sening Hall Opening meeting and finalization of verification audit plan

Sening scheme, Kledang 2 es-tate, and Tunggal scheme

Verification of all open Major NCs for P&C

2/4/2014 Adela Mill Verification of all open Major NCs for P&C and Supply Chain

Kledang Scheme & Sg. MasScheme

Verification of all open Major NCs for P&C

3/4/2014 Sening Hall Closing meeting and explanation of further evidence required



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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 Malaysia National Interpretation year 2010.

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, CR1.2 Criteria not assessed: - Findings: CR1.1 There is evidence of transparency between Felda and their main stakeholders, the smallholder settlers. Each of the settlers got the receipt of income every month containing the crops, revenue, deductions (of paid loans, insurance, Jawatan Kuasa Kemajuan Rancangan (JKKR) (Plan Development Committee) contributory, staple loans and cash). Settlers can also ask for interim debt balance statement docu-ments each month to the management. Evidence of documents on behalf of settlers in Block 16 for De-cember 2013 has been obtained.

Each of the settlers has a copy of contract for the transfer of land to be undertaken by Felda. Evidence of Interim Statement attestation documents for September 2013 of settlers has been obtained. Interview with settlers in Adela Estate expressed that for financial affairs, settlers could direct their questions to Technoplant. So far, Felda has always been open about the plantation development cost. Felda provides Stakeholder Booklets displayed in Felda Tunggal office and in the community hall near-by the settlers residents. The Stakeholder Booklet contains Felda policies related to the development and management of settlers’ plantation. While in Adela, OHSA Exercise Program Reserves documents for 2013 were obtained. There is also the agenda of social activities performed, among others the mu-tual assistance, safety clothing campaign, fire drill, health and safety briefing, monthly safety campaign, and regular medical check-up. Whereas the JCC activities agenda includes the explanation on FFB grading. Book of visits to settlers’ residents which contains input from block representative in relation to activities in their field was also obtained. CR1.2 According to Section 7 of the Standard Operating Felda (RSPO) -Manual Lestari (ML-1A/L2-PR3(0) dat-ed March 2012, titled, “Prosedur Komunikasi Penglibatan Dan Rundingan” the publicly available docu-ments (with permission from the management) are as follows: a. Internal Circulars and Memo b. Monthly Management Minutes of Meeting c. Minutes of Meeting of Occupational Health and Safety Committee d. Suggestions from Staff e. Written comments from relevant external stakeholder f. Complaints Investigation Report g. Written feedback/responses from interested parties h. Records of internal/external communication for mill/estates i. Land titles/User rights j. Health and Safety Plan k. Plans and impact assessments relating to environmental and social impacts l. Pollution prevention plans m. Details of complaints and grievances n. Negotiation procedures o. Continuous improvement plan p. List of stakeholders



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- Procedure for calculating prices, and for grading, FFB is based on MPOB. However, the FFB price (based on 1% OER) is displayed at the mill sign boards and the weighbridge ticket. Compliance status: Compliance with observations

Principle 2: Compliance with applicable laws and regulations

Criteria assessed: CR2.1, CR2.2, CR2.3 Criteria not assessed: - Findings: CR2.1: There is evidence of efforts taken to comply with legal requirements, several mill licenses were checked found to be valid, e.g. as follows: - MPOB license for Kilang Adela valid from 1 April 2013 to 31 March 2014 for processing capacity of

259,200MT per year - License own Electricity Installation from the Energy Commission for installation capacity of 1500KW

and dated 26 August 2013 to 25 August 2014 - License for purchase of 4300kg issued by the Johor Health Department dated 1 January 2014 and

valid until 31 December 2014 - DOE licence for Adela Mill valid from 1 July 2013 to 30 June 2014 stating permitted processing capac-

ity of 54 MT FFB/hour Adela mill has two incinerators and according to DOE requirements, all mills are to cease usage of in-cinerators. The mill had requested for permission to continue usage of the incinerators from DOE, but did not receive this permission. Therefore to comply with the DOE requirements, the mill has ceased usage of the incinerators since end of 2012 as since from mill incinerator operation records. In addition, random checks of pay slips of workers (local and foreign) and staff indicate that the compa-ny has endeavored to comply with the Minimum Wage Order 2012 whereby all workers are paid no less than RM900/month for 26 days of work in a month. During the previous surveillance audit, it was found that the Legal Requirements Registers at all estate is still not yet updated with some latest regulations, such as the Minimum Wage Order 2013, Environ-mental Quality Act 1974 revision in August 2012 and Solid Waste and Public Cleansing Management Act which was gazette in 2007. This issue was found to be recurring during this surveillance audit. As this was raised as non-conformity in the previous audit, this was raised to a major non-compliance dur-ing this audit. At Felda Sening, list of Laws and Related Requirements for Compliance with RSPO reviewed on 2nd January 2014 signed by the Sening scheme manager. Legal requirements like OSHA 1994, Factories and Machinery Act (FMA) 1967, the EQA 1974, Pesticides Act 1974 were not evaluated consistently with the legal requirements identified. Many not being evaluated in terms of compliance status, e.g. for no. 17, OSHA 1994 only 5 requirements were evaluated, no. 18. FMA 1967 only 3 requirements were evaluated. Regulations only covered USECHH 2000 and not comprehensive. While at Felda Tunggal, ‘List of Laws and Related Requirements for Compliance with RSPO’ was found updated (15th January 2014) but no evidence of compliance shown for OSHA 1994 and its Regulations and FMA 1967 and its Regulations. While for EQA 1974 cover only 3 items such as disposal of waste at designated places, avoidance of open burning & avoidance of pollution when any agricultural activity performed. At Adela mill, evaluation of compliance FPI/L4/QOHSE-2.1 Pind 0 (page 20/90) was not conducted, particularly related to training for those workers exposed to high noise area above 85dB (Regulation27) and warn-ing sign for high noise area (Regulation 28). Diesel tank found having Scheduled Controlled Items Per-mit serial no. J007716 for 20,000 litres from 27th September 2013-26th September 2014. The evalua-tion formats should clearly state the evidence of compliance and related reference. Kledang 2 estate has a legal requirements register with checks of compliance conducted, however the list is dated March 2012 and does not cover all regulations or orders related to the acts which are appli-cable to the company. Checks were done for only few aspects related to the acts, e.g. for Employment Act 1955, it was only checked that all workers received copies of work conditions, that every workers receives 10 days of annual leave per year and every worker receives a pay slip, while many other re-



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quirements under the act were not checked. Kledang 2 scheme also has a similar legal requirements checklist, however the checklist was not completed, hence there is no evidence of checking done by the estate.

The smallholders are aware of legal requirement such as no open burning via roll call every day in the morning. Confirmed via interview with the smallholders. CR 2.2 The company is able to demonstrate legal ownership of the land including history of land tenure, e.g. in land title (leasehold) by the Johor State Government to Felda Kledang 2 in a document dated 9 February 2013 (ref: No. H.S. (D.): 20824), titled, “Pendaftar Hakmilik Tanah Johor Hakmilik Sementara Borang 11BK-Bersamaan Dengan Hakmilik Pejabat Tanah-FELDA”. Scheme members have individual land titles which are registered under the names of the individual smallholders. A copy of the individual land titles are kept in the scheme office and a copy is retained by the individual smallholder.

CR2.3

The land occupied by Felda is a leasehold which is outside of Orang Asli reserves/areas and forest re-serves. Orang Asli, the only indigenous peoples in Peninsular Malaysia do not have rights to land tenure-ship as per Aborigines Peoples Act, 1954 (pertaining to Aboriginal Areas (Section 6) Reserves (Section 7). Therefore, Adela Complex, according to the law, has no issues with customary rights. As such, there are no land disputes recorded which does not necessitate participatory mapping or land acquisition.

Compliance status: Non Compliance NCR No. 2014-01 of 13 It was found the evaluation of compliance (List of Laws and Related Requirements for Compliance with RSPO) was not fully implemented to cover actual related legal and other requirements. Consistently it happened at Felda Sening, Felda Tunggal and Kilang Sawit Adela. Legal requirements like Occupational Safety and Health Act 1994 and its regulations, Factory and Machinery Act 1967 and its regulations, Environmental Quality Act and its regulations 1974, Pesticides Act 1974 were not evaluated consistently with the legal requirements identified. OSHA 1994 only evaluated 5 requirements only, Bil 18. FMA 1967 only evaluated 3 requirements. Regulations only covered USECHH 2000 and not comprehensive. OSHA 1994 and its Regulations and FMA 1967 and Its Regulations. While for EQA 1974, only cover 3 items, such as waste to be disposed of at designated places, avoidance of open burning & avoidance of pollution of any agricultural activities carried out during estate field activities (Location: Felda Sening/Felda Tunggal/ Kilang Sawit Adela). NCR No. 2014-02 of 13 The tracking system for legal changes (Sistem Pengesanan Perubahan Undang-Undang for Felda and Felda Holdings) was not effective as Environmental Quality Act 1974 (revised 2012) not updated and new regulation Occupational Safety (Classification, Labelling and Safety Data Sheet of Hazardous Chemicals) Regulations was not identified in the Daftar Perundangan dan Lain-Lain Keperluan (FTS-IMS/L2/L4/2.1 Pin 0) dated 8th January 2010 for Felda Sening and Felda Tunggal. While in Adela Mill the Register of Le-gal and Other Requirements (FPI/L4/QOHSE-2.1 Pind.0) dated 15th January 2014. (Location: Felda Sen-ing, Felda Tunggal, Adela Mill)

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

Criteria assessed: CR3.1 Criteria not assessed: - Findings: FPSB Kledang 2 still applies 3 year business plan for period (2013 to 2015), information on this plan consist of projection of activities and budget for plantation operation for 3 years until 2015, such as plantation maintenance, cost operation; cost replanting harvesting plan and FFB yield plan per tonne



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FFB per ha. A detailed financial analysis which includes information about profit and loss, product pro-cessed and sold, revenue, sales cost, processing cost etc., is clearly determined on FELDA Palm In-dustries Budget for year 2013 and this document is made annually by FELDA headquarters. The estate also has documented budgets for year 2014 until year 2017 for estate operational activities for replant-ing areas and mature areas, covering field activities such as weeding, fertilizer application, pests and diseases management, drainage, roads and bridges construction, and other general costs. Compliance status: Full compliance

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

Criteria assessed: CR4.1, CR4.2, CR4.4, CR4.5, CR4.6, CR4.7, CR4.8 Criteria not assessed: CR4.3 Findings: CR 4.1 The company applies an updated sustainability Manual with 3 main sections, i.e. Felda Global Ventures Manual for Sustainable Oil Palm, 2nd edition dated February 2012; Section 1 – Immature oil palm, Sec-tion 2 - Mature Oil Palm, and Section 3 – Replanting. Section 1 on immature oil palm includes SOP for replacement of planted seedlings, installation of tree protection, application of EFB, installation of Felda Mulch (sheet placed around seedlings to prevent weed from growing), weeding of LCC area, ablation, basal pruning, scout harvesting, census for Ganoderma inoculum and planting of beneficial plants. Sec-tion 2 on mature oil palm includes including SOPs for rat baiting, weeding at mature area, pruning, cir-cle racking, harvesting and collection of FFB at the loading ramp, management of loose fruits after har-vesting, FFB grading at the field, transportation of FFB to the mill, tree netting, road maintenance, bunch census, selective weeding. Section 3 on replanting, includes SOPs for census and management of Ganoderma infected trees, installation of boundary stones, management of rhinoceros beetles, pre-lining, weeding, cutting and felling old palms, road construction on flatlands, and hilly areas, terracing, drainage and boundary drains, planting of LCC, transportation of seedling to the field, rat baiting during replanting process, installation of barn owl boxes. There is evidence of implementation of the SOPs, i.e. rat baiting is done annually with follow-up census as required in the SOP. Also Quality Manual (F-MK-01) dated 31 Oct 2011 for ISO9001:2008 mentioning about re-planting, mulching, spraying and harvest-ing including road maintenance. Records of FFB harvested by daily basis, manuring records, spraying and pesticide control are kept. CR4.2 The estates still carry out annual leaf sampling for monitoring of nutrient status; however there is no ev-idence of regular soil sampling to monitor changes in nutrient status carried out at Kledang scheme. This was raised as an observation for the schemes. The company does not apply POME to the field. There is evidence of monitoring of EFB applications and target, e.g. report sighted shows target EFB application of 700mt for Sg. Mas was overachieved with actual application of 750mt up until December 2013. The companies also monitors areas where zero-burning replanting is applied, as seen from map of replanted area at block 16, 17 and 18 of Kledang scheme totally 163.34 ha. Felda Global Ventures has produced a revised estate sustainability manual in year 2012 which states clearly that application of EFB in one layer in a circle around trees is only for recently planted and im-mature trees. For the mature trees, there is no SOP for the method for EFB application but EFB is ap-plied when available to areas which are found to be less productive. It was observed at Sg. Mas that EFB is applied in rows at maximum of 2 layers, however at Kledang 2 and Sening estate, it was ob-served that EFB is dumped in piles which may encourage breeding of rhinoceros beetles. This was raised as an observation. CR4.4 Adela mill sends samples of mill effluent for chemical analysis once a month to Penggeli Analytical La-boratory and analysis includes BOD, COD, total solids, suspended solids, oil and grease, ammonical ni-trogen and total nitrogen. Checks of the latest 3 certificates of analysis show that the results are all with-in the legal limits as defined in the mill’s DOE license. However, it was found that Penggeli Analysis Lab is not yet an accredited laboratory but has undergone an accreditation audit by the Department of



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Standards Malaysia on 7 January 2013 as seen from letter from the department, but approval of ac-creditation has not yet been received by the lab. This was raised as an observation. CR4.5 During 1st surveillance audit, it was found that there is no SOP or work instruction for management of nettle caterpillar or bagworms which defines when census and at what rate of pest attacks (biological and chemical) are required to be conducted. At time of this 2nd surveillance audit, it was found there was still no SOP for census and definition of rate of pest attacks (biological and chemical) are required to be conducted, however during the audit week, the company produced two SOPs, one for “Manage-ment of bagworms through monitoring and census”, one for “Control of Leaf Eating Pests and the Es-tates”. It is raised as an observation that the SOP was not made available previously, however based on earlier interviews with estate staff, implementation is according to the requirements of the new SOP and this is not deemed a major issue since bagworm attacks are relatively low. Records of bagworm census done on ad-hoc basis (only when leaf attacks was observed) were sight-ed. Only Level 1C block 17-19 of Sg. Mas estate was found to have bagworm attacks, as sighted from monthly census records from March – October 2013. According to Kledang 2, only PM08 has some bagworm attacks and bagworms census was done on 22 April 2013 for PM08, with no follow up chemical treatment as it was found to be low. It was also found during the 1st surveillance audit that at some estates, there was no records of census done to determine if rates of rat attacks are above 20% to justify usage of chemicals to manage these pests, as required in Felda's Sustainable Estate Operation Manual. As in previous years, the company still conducts rat baiting for 100% of their company’s area annually. It was found that census is now conducted after rat baiting to determine if follow-up baiting is required for areas found with attack rates above 5%. Sighted from Sg. Mas census records for May 2013, after rat baiting all blocks had attack rates from 17%-28%, so follow-up rat baiting was conducted. For Kledang 2 level PM08, rat baiting was last done on 16 April 2013 with follow up census on 23 April where found attack rates at all blocks were from 25% - 57%. However, Kledang 2 did not carry out follow-up rat baiting as explained by the staff that most of the rat bait was eaten by ants and not rats, but there was no note of this in the records sighted to justify why rat baiting was not conducted. This is noted as an observation. CR4.6 At Felda Sening and Tunggal, there was a ‘Manual Ladang Sawit Lestari Edisi II’ (Estate Manual on Sustainable Palm Edition II), 1st June 2012 explaining the SOP for chemical handling and applications as guide in activities using pesticides. At Felda Sening, visited chemical store and only available chemicals kept were Garlon and Ally. MSDS were available and proper labelling and storage of chemicals. There was sufficient ventilation and the store clerk demonstrated clear understanding on chemical requirements. At Felda Sening, the last medical surveillance was done by a licensed doctor for 7 workers from Felda Sening as seen from medical report dated 27/05/13. For 2014, medical surveillance was not yet ar-ranged and planned to be done in May 2014. In Felda Tunggal, Medical Surveillance and Health Sur-veilance Report was sighted for 15 workers including the chemical store clerk. It was found out that not workers performing work related to pesticides at both sites underwent medical surveillance, only select-ed ones sent due to budget constraint according to auditee. This is against related legal requirements (USECHH, 2000) and Assessor recommendation in the CHRA Report. This was raised as a non-compliance At all schemes and the estate, no female sprayers were hired. The female chemical store clerk under-stands the requirement and will not handling chemical control if she pregnant. In Felda Tunggal, similar-ly the only lady that does work related to chemical is the store clerk and the rest of the sprayers are men. At Kledang estate, training records of chemicals type, PPE handling, storage of chemicals and spraying method have been conducted on 12 Feb 2014 and 23 July 2013 by the Supervisor. At Adela estate, PPE training of safety and health during spraying the supervisor done on 11 June 2013. Also training provided to the smallholders on 28 Jan 2014 about spraying, agrochemicals and PPE as well. CR4.7 At Felda Sening, there is a Occupational Health and Safety Policy for Felda Global Ventures Holdings Berhad signed by Dato' Sabri Ahmad (Group President) dated 4th January 2013, while the obsolete copy is still being kept in the C 4.7 OSHA file. However there are many versions of OSH policies dis-



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played and available that create confusion, e.g.: - OSH policy for Felda Technoplant Sdn Bhd Chief, signed by executive Mr. Md Salleh Awang

dated 11th January 2013. (Revision 3) - At Kilang Adela, found in meeting room, a QOHSE Policy authorised by Ismail Hassan (Head

Executive) dated 2nd August 2010 Revised. - Policy Keselamatan dan Kesihatan Pekerjaan by Dato' Sabri Ahmad (Presiden Kumpulan).

At Felda Sening, Hazard Identification, Risk Assessment and Determination of Control (HIRARC) (IMSL2/L4/1.2 Rev. 1 dated 10th January 2013 was sighted. Procedure for HIRARC defined in the the company’s Sustainability Manual 1A 9MA-1A/L3-GP3(0) dated March 2012. At Felda Tunggal, their HIRARC dated 11th January 2013 was sighted. Control measures for most hazards and risks identified only proposed simplified measures such as SOP compliance and PPE. This was noted as an observa-tion thet the control measures are not adequately specific or detailed. While in Kilang Adela, found Borang Kenalpasti Hazad dan Risiko (FPI/L4/QOHSE-1.3 Pin.0) latest 1st January 2014. The format not having clear control measures recommendation to reduce or eliminate the risk. Refer to Manual Prosedur Doc. No. FPI/L2/QOHSE-1.0 Rev. 3. Also, hazard was identified for activities in factory. The only concern is that for risk of exposure related to noise was not controlled properly as evidence found requirement of having warning sign for high noise area. Records of trainings were sighted, e.g. at Felda Sening, a training entitled ‘Pruning workshop’ conduct-ed on 1st October 2013was attended by 8 workers, a workshop on chemical mixing was done on 15th March 2013 attended by 6 workers from Felda. FTPSB Sening’s OSH plan was approved by the Estate Manager and contained training planned for PPE (2nd May 2014), First Aid (1st March 2014). At Felda Sening, PPE issuance records are maintained and sighted in PPE and Equipment submission records by the PPE issuance officer since 17th January 2010 with records available up until13th Febru-ary 2014. PPE provided to sprayers include aprons, goggles, masks and safety boots, and mandores are given safety helmets and safety boots. At Felda Tunggal, Section 24 on harvesting of their Occupa-tional Safety and Health and the Environment 2009 manual is used as a guide to decide on PPE to be worn during activities involving harvesting. These PPE include helmets, long sleeves, safety boots, eye protection and gloves. Control measures proposed in HIRARC only mention PPE. At Kilang Adela, ob-served workers not wearing earplugs. According to issuance record PPE Issuance/Change records, one worker did not receive any earplugs since 4th January 2011 but only received safety shoes, and leather gloves. Another works also was found not wearing safety helmet, leather gloves and ear plugs. According to issuance records, he did not receive any safety helmet since 4th January 2011, he only received earplugs, safety shoes and earplugs. When check with noise mapping result shows that the area where these workers work regular recorded 90dB and above level of noise. Chemical sprayers at Kledang 2 and some schemes still bring their PPE home after work and there is no designated separate area for washing of sprayers PPE to reduce occurence potential chemical contamination. This was raised an NC during the previous surveillance and now raised to major nonconformity. Appointed OSH Committees are available at each scheme and the estate, e.g. the OSH organizational chart for Felda Sening, Felda Tunggal and the mill were sighted. For Felda Sening’s OSH committee, appointment letters were issued dated 1st January 2014. Photos for employee representative should be made available same like employer representative. Appointment letters for OSH committee members for other schemes and the mill were sighted as well. For Felda Sening, sighted evidence of Safety and Health Committee (SHC) meeting held on 15th Janu-ary 2014 at FTPSB Sening attended by En. Yaakob Ahsan (Chairman), and 6 other members. Before that meeting were held on 15th October 2013, 12th July 2013, 10th October 2013 and 11th January 2013. At Felda Tunggal, SHC meeting planned last in 16th December 2013. The last minutes available were for meeting held on 23rd September 2013. At Adela Mill, the meeting of SHC as sampled was conducted on 21st December 2013, 21st January 2014, 19th October 2013, 17th August 2013, 18th April 2013, 29th June 2013, and 25th February 2013. In Felda Sening, sighted Emergency Procedures (ERP) ML-1A/L2-PR7 (0) dated March 2012, which covers emergency procedures for 2 potential emergencies such as Chemical and Diesel Spill and Fire. Adela Mill also has a Procedures Manual (Emergency Preparedness ERP) -14.0 FPI/L2/QOHSE. The mill also has a form for Monitoring Fire Prevention and Relief Equipment.



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Felda Sening was not able to provide evidence of trained first aider and training conducted to equip workers on first aid knowledge. Felda Sening’s OSH Training plan for year 2013 was approved by Pen-gurus Ladang contained First aid training was planned on 31st March 2013. But no evidence of training records available upon request. In Adela Mill, records of first aid training by the Red Crescent society were sighted with 5 participants, organized by Felda Global Ventures Plantations (M) Sdn Bhd on 31st October-2nd November 2012 by PBSM. At Felda Sening, found 3 First aid boxes kept in the office which are well equipped. Adela Mill maintains a first aid kit inspection form with evidence of last check on all mill first aid kits done on 24th January 2014. At Adela Mill, checked at Workshop and Supervisor room found first box available. At Sg. Mas scheme, an accident occurred in year 2013 affecting harvester named Redwan where his hand was injured by a thorn and he did not report it until his hand became swollen and he reported it on 1 July 2013, and was on leave from 1 July until 31 August 2013, as sighted from 5 separate MC slips. Sg. Mas estate prepared accident report according to the requirements of the Workman's Compensa-tion Act 1952, and submitted for claim under the Foreign Worker's Compensation Scheme from Etiqa Insurance on 1st October 2013. The claim is still being processed by the insurance company and so far, the worker has received other compensation from the company for medical treatment claims amounting to RM620 and received pay of RM2000.28 for the two months he was on MC. At Felda Sening, only 1 accident reported on 5th October 2013 involving harvester, i.e. 25 year old man from Indonesia where his thigh was struck by a knife, and he was given 14 + 3 days medical leave. The JKKP 6 accident report form was sent to Department of Occupational Safety and Health (DOSH) ac-cordingly and investigated. The accident occurred was covered by Etiqa Insurance and Takaful with ev-idence seen from claims made on 20th December 2013. Sampled Acknowledgment of the Foreign Workers Compensation for FTRSB Sening under Etiqa Insurance Bhd. Policy No. (L5001847) for 5 In-donesian workers. In Felda Kledang 2, there was one fatality case involving a harvester which occurred on 23rd November 2013, where a tractor overturned and crashed on him. The accident was reported to DOSH using JKKP 6 accident form dated 24th November 2013. A police report was made accordingly on 23rd November 2013. Another JKKP 8 accident summary form was sent to DOSH on 28th January 2014. The case was compensated by insurance Etiqa under policy no CWF-L0123536-W1 from 21st January 2013 until 20th January 2014. Accidental death and permanent disability (RM 23,000), repatri-ation expenses (RM 4,800) and extra RM 7,000. In Felda Tunggal, a JKKP 8 was sent to DOSH and no incident reported for 2013 as reported on 8th January 2014. In Adela Mill, a fatal accident was reported to DOSH on 30th July 2013 related to contractor who fell while repairing roof of the building. The JKKP form was sent to DOSH dated 27th January 2014. The compensation was still in progress at time of the audit. CR4.8 In Felda Tunggal, sighted Program / Plan Employee training for year 2014 was sighted. Example: ERP (15th May), First aid (9th April), Chemical Management (6th March), triple rinsing method (6th March). At Adela mill, training Schedule for Task / Contractors 2014 includes the following: QOHSE Awareness Course (Jan), Work Safety Awareness Course (21st January 2014), Course Post 1 - Loading Ramp, Capstan / Sterilizer, Press / Crace (March) Course, Post 2 - Room Oil (April), Course Post 3 - Nut / Kernel Plant (March), Course Post 4 - Boiler & Water Treatment Plant (April). At Kledang 2 estate, the last fire training was done by the local fire department at Kledang 2 estate on 28 August 2013 and at-tended by 97 workers from different blocks, with photographic evidence attached and letter of invitation to the fire department dated 25 August 2013. However, there is no evidence on emergency response training for land fires. Based on interviews with workers at Sg. Mas, some are not able to explain well how to deal with land fires. This was raised as an observation. During the previous surveillance audit, it was found that the responsible persons for preparing the aspect impact assessment at all schemes were not well trained to conduct the assessment. This has been confirmed with discussion with the persons-in-charge that there is no proper training being done and seen from aspect impact assessments for some estates which were done incorrectly, stating occupational safety hazards and risks, instead of environmental related impacts. During this surveil-lance audit, no evidence of training provided as found, however updated EIA for some schemes were sighted and deemed adequate. Therefore this issue was deemed closed with observations.



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Compliance status: NCR No. 2014-03 of 13 Medical Surveillance was not done for all workers that work related to pesticides as required from the Chemical Health Risk Assessment. Only 7 workers from Felda Sening and 15 from Felda Tunggal sent in May 2013. But this not covered all worker that work related to pesticides. Only selected ones sent due to budget constraint. For 2014 no evidence of medical Surveillance arrangement was planned yet.

(Location : Felda Sening and Tunggal) NCR No. 2014-04 of 13 Workers at the mill must wear PPE and have proper recording for issuance as required but observed workers like Burhanudin, Abdul Halim (Bob cat driver) not wearing earplugs and when referring to issu-ance record (Rekod Penerimaan/Penukaran Alatan Perlindungan Diri (PPE), he did'nt receive any ear-plugs since 4th January 2011 and only received safety shoes, and leather gloves. Abdul Halim also not wearing safety helmet, leather gloves and ear plugs. According to issuance record (Rekod Pen-erimaan/Penukaran Alatan Perlindungan Diri (PPE), he did'nt receive helmet since 4th January 2011. On-ly received earplugs, safety shoes and earplugs. When check with noise mapping result shows that this area recorded 90dB and above level of noise. (Location: Adela Mill) NCR No. 2014- 05 of 13 At Felda Sening no evidence of trained first aider and training conducted to equip workers on first aid knowledge. According to Pelan Kesihatan dan Keselamatan Tahun 2013 FTPSB Sening approved by Pengurus Ladang contained First aid training planned on 31st March 2013. But no evidence of training records available upon request. (Location : Felda Sening)

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity

Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.4, CR5.5, CR5.6 Criteria not assessed: - Findings: CR5.1

Aspect impact risk assessment has been established dated 15 Jan 2013 but not periodically reviewed and updated

Environmental Management Plan has been established dated 15 Jan 2013 with activities of reduction in fertilizer bags, domestic waste (plastic, glass, metal etc.), paper, used PPE, empty pesticide containers and tyres as well.

The assessment includes draining and irrigation system and re-planting as well. At Adela estate, aspect impact assessment have been assessed and reviewed dated 10 Oct 2013. The assessment includes draining and irrigation system and re-planting as well

Follow up from last year NCR, no evidence have been provided and hence, issue is still open for Kledang and Adela CR5.2 The company has conducted an identification and assessment of HCV habitats and protected areas for Adela complex in a document titled, “Laporan Pengenalpastian Nilai-Nilai Pemuliharaan Tinggi (HCV), Bi-odiversiti dan Pelan Pengurusan Di Kompleks Felda Kompleks Adela” (dated 04 May 2011). The docu-ment has identified the following HCV attributes within the Adela complex, i.e. watersheds such as Bukit Adela (Bt.Kuali), Bukit Resang (Bt.Chengkerung), Bukit Tunggal and river buffer zones for Sungai Santi, Sungai Mentangor, Sungai Sebina, Sungai Sening, Sungai Lebam and Sungai Kledang (HCV4) and a swamp reserve, Rizab Paya Kledang (HCV 3). Among the HCV 6 values identified within Adela complex are graveyards and mosques.The HCV assessment was conducted in conjunction with the SIA assessment whereby a standard questionnaire survey was conducted involving various levels of internal and external stakeholders. The HCV component was included at the final portion of the questionnaire. The HCV report was prepared internally using the MR 5.2/100 Standard Operating Procedure on the identifica-tion of HCV attributes (1-6) titled, “Pengenalpastian Kawasan Pemuliharaan Tinggi dan Tindakan Pemuli-



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haraan”. The HCV assessment also included relevant wider landscape-level consideration, i.e. the assessment captured HCV habitats and protected areas surrounding Adela complex, specifically the borders of Hutan Simpan Sungai Santi (HCV2 and human-wildlife conflict), Hutan Simpan Tanjung Surat (HCV 2). The HCV document also includes a management plan for HCV habitats (including ERTs) and their con-servation. A management plan for a duration of 12 months (for 2011 only) is available for each estate and mill within the Adela Complex. The company is in the process of updating the management plan for 2014. The company has erected signboards in each of the estates to discourage any illegal or inappropriate hunting, fishing or collecting activities. Interviews with workers confirm that the company conducts regular briefings on the prohibition of hunting during the daily morning muster/roll call. CR5.3

Manual RSPO - Identification and management of waste products and source of pollutions dated in 2009 and the action plan to eliminate or reduce the waste

No evidence of empty pesticide containers are disposed to the authorized contractor. The inventory of the empty containers also unavailable and just started to record in Jan 2014. The empty containers also have been kept for more than 6 months which is against the EQA Act 1974 - Environmental Quality (Scheduled Waste) Regulations 2005. The Manual RSPO also stated that the inventory of the sched-uled waste shall be record or kept

At Sening estate, 3R (reduce, reuse, recycle) plan has been established dated 8 January 2014 for ferti-lizer bags re-use, plastic, glass, metal is recycle, paper recycle, used PPE, used tyres, empty pesticide containers and organic rubbish as well. However, no records available to prove that training have been conducted on the management and disposal of waste including pesticide containers, also no evidence and implementation of 3R (reduce, reuse and recycle) as stated in the recycle policy stated in the Sus-tainability Manual ML-1A (Compliance to P&C RSPO) dated January 2012. See also 5.6 & 8.1. For Kledang estate, 3R plan has been established dated 8 Jan 2014 for fertilizer bags re-use, plastic, glass, metal is recycle, paper recycle, used PPE, used tyres, empty pesticide containers and organic rubbish as well. No proper training have been conducted on the management of disposal of waste. For Adela mill, 3R plan has been established dated 24 Dec 2013 for fertilizer bags re-use, plastic, glass, metal is recycle, paper recycle, used PPE, used tyres, empty pesticide containers and organic rubbish as well. Adela mill maintains inventories of scheduled wastes produced in a log book as well as according to the standard form as per the EQA Scheduled Waste Regulation 2005. Latest manifest of collection by con-tractors are maintained, with manifests for most recent collection on 11 October 2013 sighted for cotton rags, used filters, hard gloves and hydraulic oil. It was confirmed through checks of the contractor’s li-cense that their license is still valid and they collect only the waste permitted as per their license. There is evidence of recycling of crop residues and biomass being recycled, i.e. empty fruit bunches from the mill are sent to Kledang 2 estate and all schemes under Adela complex for mulching. Seen from the EFB Delivery Report for year 2013, total amount of EFB delivered for year 2013 was 28,444.48 MT. CR5.5 The company still applies their policy on Restriction of Open Burning dated 12 July 2011 signed by the Executive Head of Felda Plantations Sdn. Bhd. In addition, the company states a no open burning poli-cy in in their Sustainability Manual (ML-1A) Compliance to RSPO P&C, Issue 1, 2012 Land clearing activities for replanting are carried out by contractors engaged by the company, and not the smallholders. Sighted a work contract for contractor Pucuk Tiara for preparation of workers and equipment for land preparation for replanting of 175.12ha at Felda Kledang, Level 2. The contract is dated 2 July 2013 and stated date of start work on 15 July 2013. The contracts defines the instructions for land clearing which involves chipping and felling, and only states requirements that there shall be no land burning. It was confirmed from site visit to newly planted area of Kledang 2 that there is no evi-dence of burning in the area.

At Sening estate, as follow up from nonconformity raised during the previous surveillance audit, a warn-



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ing signboard of no dumping and no burning of waste was constructed near chemical store, and a gar-bage bin was provided near workers housing. At Adela estate, no open burning issue is highlighted dur-ing roll-call every day in the morning. Confirmed via interview with the smallholders. However, at Kledang estate, there was evidence of open burning besides the office and confirmed by the Assistant Manager and the store clerk as well. CR5.6

At Sening estate, recycling activities are maximized to reduce waste and by-products - fertilizer bags recycle, metal scrap, return empty pesticide containers and selling old newspaper. Actual record of re-turn empty pesticide containers are 702 pcs in 2013. See 8.1 At Kledang estate, the empty pesticide containers have been disposed by using 3x rinse method and punctured a hole which sent to the supplier. In 2013, total of 1072 pcs have been disposed accordingly. At Adela estate, empty pesticide containers are 3x rinse and punctured holes at the bottom before sent to supplier. In 2013, total of 832 pcs have been disposed accordingly. The organization currently carries out monitoring of pollution and emissions from the mills, but emis-sions from other operations such as land use changes are still not regularly monitored used an appro-priate tool approved by RSPO such as Palm GHG. This was raised as an observation. Compliance status: NCR No. 2014-06 of 13 No evidence of empty pesticide containers are disposed to the authorized contractor. The inventory of the empty containers also unavailable and just started to record in Jan 2014. The empty containers also have been kept for more than 6 months which is against the EQA Act 1974 - Environmental Quality (Scheduled Waste) Regulations 2005. The Manual RSPO also stated that the inventory of the scheduled waste shall be record or kept. (Location: Kledang 2) NCR No. 2014- 07 of 13 There was evidence of open burning besides the office and confirmed by the Asst. Mgr. and the store clerk as well. (Location: Kledang 2)

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, CR6.8, CR6.9, CR6.10, CR6.11 Criteria not assessed: - Findings: CR6.1 There is a social impact assessment for Adela Complex, titled, “Laporan Penilaian Impak Sosial Kompleks Adela”, dated 13 January 2014. The report includes a profile of the Adela Complex, assessment method-ology (with internal and external stakeholders) and identification of positive and negative social impacts. A standard questionnaire was used to elicit information from respondents. The SIA report was prepared in-ternally using the ML-1A/L3-GP7 (0) Standard Operating Procedure on the identification of social impacts titled, “Pengenalpastian Penilaian Impak Sosial” dated March 2012. There is evidence that the assessment has been done with the participation of various levels of employ-ees. The data collection was done through a questionnaire survey involving each category of internal and external stakeholders, i.e. staff, workers (local/foreign), supplier, contractors, scheme participants (smallholders) and their families as well as external government agencies The gender dimension was al-so included in the sampling. This was raised as a positive observation. However, the SIA did not ade-quately capture the responses of foreign workers, especially those who are not conversant in the local language. Also, the SIA relied solely on questionnaire and did not consider stakeholders who are illit-erate/not conversant in Bahasa Malaysia. This was raised as a negative observation. The SIA’s management plan showed a time-bound plan for 2013. However, the time-bound for 2014 was being updated at the time of the surveillance audit; hence it was not presented to the auditors. The SIA was updated after 2 years (first conducted in 2010 and updated in 2014), but there is no evidence



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of participation of affected parties in the second SIA process. This was raised as an observation. In Sening, no evidence was obtained to prove that the company has developed a SIA monitoring time-table for year 2013 and 2014. Only the timetable for year 2011 was obtained. A survey for SIA were conducted in February 2013, there are 12 forms filled in. Similarly in Tunggal and Adela Estate, there are no documents of SIA monitoring plan. The most recent document was created in 2012, but did not indicate any progress made. CR6.2 There is a Joint Consultative Committee (JCC) at Felda Adela which is a platform for consultation and communication between the different schemes and estates. There are other platforms for scheme par-ticipants (smallholders) such as the Jawatankuasa Kemajuan Rancangan (JKKR), Felda smallholders cooperative and a united women’s movement for female scheme participants and their dependents (Gerakan Persatuan Wanita / GPW). There is documented evidence of these meetings being held, samples include: minutes dated 27 December 2013 at Kledang estate (ref Bil.(10) 2013), titled, “Minit Mesyuarat Jawatan Kuasa Tanam Semula FELDA Sg.Mas”, “JKKR FELDA Kledang Minit Mesyuarat Bulanan (ref: Bil: 01/2014), Koperasi Peneroka FELDA Kledang Kota Tinggi Berhad-Minit Mesyuarat Bulanan Oktober & November 2013, GPW FELDA Kledang Minit Mesyuarat Bulanan (ref: Bil: 1/2014) and Minit Mesyuarat Gerakan Persatuan Wanita (GPW) Felda Sg.Mas. There are evidences of JKKR Minutes of Meeting in January 2014 and GPW in December 2013 in Sening Estate. Based on visits to the Migrant Workers Dormitory in Sening, information was obtained on the implementation of rollcall that were regularly done every morning before the work begins. Each estate under Felda has a Social Development Assistant (SDA) who is responsible for engaging with stakeholders and dealing with social issues within the estate, including women’s issues. The SDA also acts as company representative in the women’s movement (GPW). Issues related to workers are handled by Technoplant or Felda Global Ventures while issues related to the smallholders are dealt by Felda. Tunggal Estate has appointed employees for the social section. There were two complaints in 2013, namely on April 11, 2013 which denounce the existence of wood branches felled by Felda and disrupted the trench. This was communicated to the officials for immediate solution in the same day. In October 9, 2013, settler of Block 3 reported that fertilization was not done properly. Later that day Felda sent officers to perform fertilization. There is a list of stakeholders, titled, “Felda Palm Industries Sdn.Bhd. Kilang Sawit Adela-Daftar Stake-holder” which is kept at all schemes and estates. CR6.3 Each of the estates and the mill has a grievance mechanism which is documented and open to all in-ternal stakeholders, i.e. all workers (local and foreign), staff, contractors, suppliers and smallholders.. There are several methods whereby a grievance can be channelled to the relevant authority at the es-tates and mill. There are two Standard Operating Procedures related to grievance mechanism, i.e. “Prosedur Komunikasi, Penglibatan dan Rundingan” (ref: ML-1A/L2-PR3(0) and “Prosedur Menangani Aduan dan Rungutan” (ref: ML-1A/L2-PR4(0), which took effect since March 2012. Among the methods to channel complaints is via the morning muster/roll call, via respective supervisors (mandores), direct to the manager, in a complaints box located at the entrance to each estate/mill office or a standard form which is filled by workers to report about their housing/work conditions. The standard form is also avail-able as a Standard Operating Procedure (ref: 105 FPI/L4/QOHSE-22.1 Pind 1, titled, “Felda Palm In-dustries Sdn.Bhd. (FPISB). Borang Kawalan Rungutan Keingkaran Dan Tindakan Pembetulan” dated 7 February 2011) which is applicable for all estates and mill at Adela Complex. In addition, at the man-agement level, the Joint Consultative Committee (JCC) is the platform for the grievance resolution at the highest level of Adela Complex, which is a body consisting all estates and mill. The grievance mechanism for smallholders include the complaint box, meeting with the managers or SDA or in a weekly register as observed in Sg.Mas estate in a weekly register of complaints from smallholders (ref: ( (01) 880205010/7/7.1 (2013), titled, “ Hari Bertemu Pelanggan (Setiap Khamis)”. Es-tates such as Sg.Mas (FTPSB) also conduct joint field checks with smallholders to resolve grievances related to plantation management. This was evident from a document titled, “Lawatan Ketua Unit Perkebunan Bersama Peneroka Ke Ladang” sighted at Sg.Mas estate.



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The audit team has checked the complaints book and confirms that the system resolves disputes in an effective, timely and appropriate manner. Upon checking the information log book, by December 2013, there were two complaints that went as follows: 1. On December 30, 2013, a complainant requested for an explanation about the land taken for Petronas’ pipeline, whether it will be replaced. Felda directly re-sponded that the pipeline affairs are a matter between landowners and Petronas. The complainant had the right to refuse or accept the explanation. Felda is not promising there will be replacement for the land. 2. On December 31, 2013, there was dissatisfaction in the community on the result of election of the chairman block. To that, Felda provided explanation about the (election) process. Based on interviews with Indonesian and Pakistani migrant workers in Sening Estate, complaints were found on water bill that costs more than RM40 each month. To date, no plan has been made for the settlement. They also claimed that workers complaints were still not immediately responded. Mean-while, interviews with settlers in Adela Estate stated that any problem can directly be presented to Felda in each project. But usually before reporting to Felda, reports were submitted first to the representative designated as block supervisor. CR6.4 There is a procedure for identifying legal and customary rights, as reflected in the Standard Operating Procedure (SOP), or more specifically, Manual Lestari dated March 2012, titled, “Prosedur Mengenal-pasti Hak Perundangan dan Adat” (ref: ML-1A/L2-PR12(0)). This manual also includes identification of people entitled to compensation. Note that the Orang Asli, the only indigenous peoples in Peninsular Malaysia do not have rights to land tenureship as per Aborigines Peoples Act, 1954 (pertaining to Abo-riginal Areas (Section 6) Reserves (Section 7). Therefore, Adela Complex, according to the law, has no issues with customary rights. There is a Standard Operating Procedure (SOP) for calculating and distributing fair compensation, i.e. Manual Lestari dated March 2012, titled, “Prosedur Penghitungan Dan Pengagihan Pampasan” (ref: ML-1A/L2-PR13(0)). There are no land claims which necessitate compensation to date at Felda Adela Complex. CR6.5 The audit team observed that there are employment contracts for local workers and staff at Adela Complex. There is also evidence to show that the migrant workers are legalised, i.e. through random checks on migrant workers’ passports (work permits). There are also pay slips for each employee. Workers’ pay slips are based on the check-roll which is filled in by the respective supervisors of the workers (local and foreign) whereas staff have a fixed monthly salary, the amount is stated in the em-ployment contract. In Kledang 2, interviews with Indonesian migrant workers generated information on the average monthly salary of RM1,000. As for December salaries that paid in January, the number could reach RM2,000, because Felda also paid for bonuses and savings at the month. Migrant workers in Kledang 2 said that they got a paycheck that was given only after the salary was paid. In addition to their normal salary, workers are provided an incentive of RM150 per month known as AIPS incentive, of which 50% is banked into worker’s accounts with their salary and another 50% is kept as savings for the workers. Workers are allowed to take out these savings once a year. This was noted as a positive observation. Workers work eight hours a day for 6 days a week. The audit team confirms that workers do not work on public holidays and week off days and that the overtime working hours and payments are in accord-ance with the Employment Act 1955. Foreign workers are insured under the Workmen’s Compensation Act 1952 (Act 273) whereas local workers and staff have social security (SOCSO) deductions, in ac-cordance with the Employees Social Security Act 1969 (Amended 2003). The audit team also confirms that the local workers and staff and the employer also contribute to the Employees Provident Fund (EPF), in accordance with the Employees Provident Fund Act 1951 (Act 272). The company also pro-vides adequate housing, water (from Syarikat Air Johor) and electricity (from Tenaga Nasional Berhad, TNB) for its workers, in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446). Foreign workers are housed according to their ethnicity and religious beliefs and have adequate beds, running water from taps, kitchen and toilet facility. There is a regular solid waste dis-posal system and routine maintenance for the upkeep of the linesite/housing. There is also a special la-bour policy, titled, “Polisi Pengambilan Pekerja Asing” (dated 28 June 2011) stating non-discriminatory practices, sighted at Sg.Mas/Kledang estates.



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In Kledang 2, the company provides dormitory furnished with bedding and a communal kitchen. Water and electricity are also available, in which each month every migrant worker will pay RM20. Meanwhile, in the migrant workers dormitory in Sening, electricity and water bill reached RM40. Workers also said they got work as promised by the employment agencies in Indonesia. A number of employees claimed to have read the employment contract of Felda. The document has provided infor-mation on leave of absence and salary. However, there are also claims of other workers in Sening stat-ing that they have never seen and read the employment contract. According to confirmation from Felda, copies of the employment contract were not all held by the migrant workers; because the documents were still in Felda headquarter in Kuala Lumpur. There is evidence of post arrival orientation program conducted at the headquarters (FGV) in Kuala Lumpur upon arrival in Malaysia as well as briefing by the respective estate managers, with specific focus on safety, work scope and labour laws, as con-firmed by migrant workers interviewed on 16 February 2014 (Sg.Mas estate). However, the effective-ness of the post arrival orientation is questionable as foreign workers continue to voice out grievances pertaining to work conditions and entitlement. The audit team traced the source of most work-related grievances to ambiguities and discrepancies in the employment contract and the company’s lack of ef-fective communication of the employment contract (especially pertaining to wage calculations, medical benefits, entitlement and utility deductions) to its workers (e.g. ineffective post-arrival orientation due to inappropriate language). The following are the findings related to employment contracts for Adela Complex which were raised as non-conformity (Major):

Direct contracts of employment are not available for foreign workers at the at the FTPSB Sg.Mas office. Only a template is available, not actual signed contracts. Based on an interview with an Indonesian foreign worker) of Housing 1B on 16 February 2014, employment contracts are not signed and workers are unsure of their terms and conditions of employment. The em-ployment contract is kept by the foreign workers but are not signed and dated. (Sg.Mas).

Employment contract for Nepali worker observed at Kledang 2 office (contract is in English, signed in Nepal and endorsed by FELDA representative) stipulates that water and electricity is provided for free by the employer but the January 2014 payslip contradicts the contract, i.e. there is deduction of water and electricity from the wages.( Kledang 2).

Employment contracts for local workers employed by Technoplant (FTPSB) and Felda Global Ventures Plantations Malaysia Sdn.Bhd (FGV) only stipulate the pay, working hours, termina-tion/dismissal period of notice and deductions such as SOCSO and EPF. There is no mention of benefits/allowance/insurance, holiday entitlements, overtime, sickness, maternity leave. (All FTPSB and FGV)

Employment contracts for Felda Technoplant (FTPSB) and Felda Global Ventures Plantations Malaysia Sdn.Bhd. (FGV) staff only mentioned about pay and termination/dismissal period of notice. There is no mention of working days/hours; benefits/allowance/insurance, holiday enti-tlements, overtime, sickness, maternity leave or deductions such as SOCSO and EPF (how much contributed by employer and how much contributed by employee). There is also no ref-erence to a Technoplant manual should there be any changes in the future). (All FTPSB and FGV).

Employment contracts for Felda staff only mentioned about pay, deductions such as SOCSO and EPF and retirement age. There is no mention of working days/hours; bene-fits/allowance/insurance, holiday entitlements, overtime, sickness, maternity leave termina-tion/dismissal period of notice. (Felda)

Employment contracts for Bangladesh/Indonesia and Nepali workers are different, i.e. the con-tracts for Bangladeshi workers are in Bahasa Malaysia and Nepali in English and the contents are different (observed at Kledang 2). Contracts, company regulations and explanation of works are delivered in Malaysian language (Malay) for Indonesian employees. For employees from other origins, such as those from India, Nepal and Pakistan, they have the option to have it in Malay or English. But interviews with Pakistani employees in Sening revealed that they did not fully understand either English or Malay language.

There is no evidence of contracts for Nepali workers at FTSSB Kledang office. (Kledang) CR6.6 There is a union for staff called Felda Global Ventures Plantations Workers Union (Malaysia) Sdn.Bhd.



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and a Felda Palm Industries Sdn.Bhd. Worker’s Union Semenanjung for all workers and staff. However, as per immigration department rules, foreign workers are not allowed to join unions. There is evidence of documented minutes of meetings with the workers’ union representatives from Felda Adela, i.e. minutes of meeting between the Kesatuan Pekerja-Pekerja Felda Palm Industries Sdn.Bhd and Adela mill management, dated 19 February 2013, titled, “Per: Mesyuarat Ahli Jawatan kuasa Bersama Pengu-rus Kilang 3/2010-2013”. The workers’ union conducts general meetings once every three years. There is a notice of the meeting, 28 August 2012, “Notis Mesyuarat Agung Tiga Tahunan Kali Ke 8” (ref: (20) KPPFPSB/HEK/SU/3). The mill has a strong worker’s representative body which is linked to the main workers’ union of Felda Palm Industries Sdn.Bhd. However, local workers and staff at the estates are not well-informed about the worker’s union. Some local staff are members of the union, with RM6 de-ducted from salary but they have no information about activities of the union and are not involved in the workers’ union. The union representative at the scheme level is not known. This was raised as an ob-servation. Felda also could not provide the document from the immigration stating that foreign workers are not allowed to join unions. Felda has made special policy regarding Foreign Workers Recruitment, ML-1A/L2-PO7 (0) which took effect since March 2012. Felda provides a-week training on responsibilities, rights and rules applicable on field for the newcomers. There is evidence of training materials given to the new migrant workers. There is also a published statement in Bahasa Melayu (dated 28 June 2011) sighted at Sg.Mas/Kledang 2/Kledang recognizing freedom of association, titled, “Polisi Kebebasan Menggang-gotai Kesatuan/Khidmat Sukarela”. CR6.7 Child labor policy contained herein the Sustainable Manual 1A No ML-1A/L2-PO9 (0) document which took effect since March 2012. Based on interviews with selected employees and examination on the list of local and foreign workers, as well as the passport documents, there are no workers aged less than 18-years-old. There is documented evidence that minimum age requirement is met. Random checks of staff and local workers’ employment contracts and personal details as well as passports of foreign workers at Sg.Mas, Kledang, Kledang 2 and Adela mill demonstrate compliance to the minimum age requirement of Malay-sia, i.e. 16 years. Moreover, Felda, in a document dated 20 December 2010, titled, “Polisi Pekerja Ka-nak-Kanak” clearly stipulates that children under the age of 17 are not permitted to work in the estate. CR6.8 In Sening and Kledang 2, there is a policy of equality of opportunities that is still using the Policy No. ML-1A/L2-PO10 (0) on Equality of Opportunities, which took effect since March 2012. Based on the in-terviews with local employees, there are no complaints of discriminatory practices, for example in the promotion opportunities as well as in the training opportunities. Likewise, the working opportunity in Felda is open to all residents of Malaysia. There is a document on employment opportunities as clerk and drafter in February 2014, installed on the information board of Felda office in Sening. Interviews with migrant workers (Indonesian) at Sg.Mas estate on 16 February 2014 confirm that mi-grant workers are not discriminated against. Migrant workers receive the same employment benefits such as pay, holiday entitlement, working hours as local workers. Foreign workers have the Workmen Compensation insurance in lieu of the SOCSO for local workers. Interviews with four migrant workers (Indonesian) at Sg.Mas estate on 16 February 2014 confirm that migrant workers are recruited based on their skills (especially for harvesters) and medical fitness. Women are given work which is suitable to their physical capabilities and receive the same piece-rated/daily wage as men for the same category of work. CR6.9 There is a policy on sexual harassment, titled, “Polisi Gangguan Seksual (Seksyen 22, Kod Etika dan Tatalaku Petugas)“ dated 20 December 20 sighted at Sg.Mas/Kledang 2/Kledang. There is also a Standard Operating Procedure (Manual Lestari) for the grievance mechanism pertaining to sexual har-assment dated March 2012 titled, “Prosedur Menangani Aduan Oleh Gender Committee“ (ref: ML-1A/L2-PR10(0)). There are dedicated gender officers and gender committees in Sg.Mas and Kledang 2 estate. Appointment letters were sighted for new female office staff into the gender committee at Sg.Mas estate dated 9 January 2013, titled, “Pelantikan Jawatankuasa Gender Wanita FELDA Sg.Mas (Pn.Nurul Atiqah sebagai AJK Gender Wanita) (ref: (4)3116/12/05) and Kledang 2 estate



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“Per:Perlantikan Sebagai Anggota Gender Committee Ladang Felda Kledang” 02 dated 16 August 2010 (ref: (01)3667/6.9). There is also a Gender Committee at the Regional level (Johor Bahru) as demonstrated in the minutes of meeting dated 28 October 2013, titled, “Minit Mesyuarat Ahli Jawa-tankuasa Bertindak Wanita (RSPO) 2/2010-Felda Wilayah Johor Bahru.” However, the sexual harass-ment policy is not adequately implemented and communicated to all levels of staff. The grievance mechanism is available but not effectively communicated to all levels of workforce. These were collec-tively raised as non-compliance at the criterion level. The details of the non-conformity are as follows: 1) No activity has been carried out by the Consultative Committee on Women at Kledang 2 since 2010.

2) New female staff are not sensitised on the sexual harassment policy, not appointed to theexisting gender committee (Consultative Committee on Women) at Kledang 2.

3) There is no monitoring on the implementation of the sexual harassment policy as the gender committees remain dormant at Adela.

4) There is no Gender Committee at Kledang. New staff are not aware of the requirement for a gender committee. No awareness-raising on gender issues during induction course. Induction course only focuses on duties of staff , e.g. clerk.

5) There is a newly formed Gender Committee (comprising 7 workers/staff at mill) which has broken away from the Consultative Committee on Women for JCC Kilang Sawit Adela. The previous committee at the JCC level has had no activities since 2010. The new committee has just had one meeting in February 14 and no activities to date. CR6.10 FFB price information in Kledang 2 was displayed on the information board. For February 15, 2014, the applicable price was RM27.90, while the previous price was RM27.40. FFB payment punctuality is with-in an interval of 10 days, i.e. on the 10th, 20th and 28th of the month. While the extraction value rate is determined by the refinery, based on the condition of the fruit. Settler who became Felda’s contractor in Kledang 2 claimed to have experienced more than 5 years performing working contract with Felda. There was never a late payment, he usually get paid within 10 to 15 of every month. CR6.11 Felda has a document of social activity agenda. Findings in Sening Estate showed that Felda supports and financing activities which include: Quran recital and graduation (Tadarus and Khatam Quran), as well as the Independence Day celebration. Felda also developed an annual plan for community activi-ties in 2013 which included: the mutual assistance program, Rollcall, Program Jom Sehat (let's get healthy Program), and the Ten Thousand Steps Program. In addition, Felda also provides loans to set-tlers, for example through the provision of loans for house enlargement (RM1,269,600) and loans for college admission fee (RM27,000). Compliance status: Non Compliance NCR No. 2014-08 of 13 Not obtained evidence that management makes SIA monitoring plan for year 2014. In addition manage-ment is also not able to show the progress of settlement of issues / impacts that have been identified in the documents SIA for year 2012.

NCR No. 2014-09 of 13 Foreign worker stated there are difficulties complained to management. When delivered orally, some-times there is no response. Examples of complaints from Foreign worker from Indonesia about the water bills of more than RM40 per month. Has been reported to management but there has been no response solution to the present.

NCR No. 2014-10 of 13 1) Direct contracts of employment are not available for foreign workers at the at the FTPSB Sg.Mas office. Only a template is available, not actual signed contracts. Based on an interview with an Indonesian foreign worker of Housing 1B on 16 February 2014 revealed that contracts are not signed and workers are unsure of their terms and conditions of employment. The employment contract is kept by the foreign workers but are not signed and dated.

2) Employment contract for Nepali worker observed at Kledang 2 office (contract is in English, signed in



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Nepal and endorsed by FELDA representative) stipulates that water and electricity is provided for free by the employer but the January 2014 payslip contradicts the contract, i.e. there is deduction of water and electricity from the wages.

3) Employment contracts for local workers employment by Technoplant (Felda Global Ventures Planta-tions Malaysia Sdn.Bhd.) only stipulate the pay, working hours, termination/dismissal period of notice and deductions such as SOCSO and EPF. There is no mention of benefits/allowance/insurance, holiday enti-tlements, overtime, sickness, maternity leave.

4) Employment contracts for Felda Technoplant (Felda Global Ventures Plantations Malaysia Sdn.Bhd.) staff only mentioned about pay and termination/dismissal period of notice. There is no mention of working days/hours; benefits/allowance/insurance, holiday entitlements, overtime, sickness, maternity leave or de-ductions such as SOCSO and EPF (how much contributed by employer and how much contributed by employee). There is also no reference to a Technoplant manual should there be any changes in the fu-ture).

5) Employment contracts for Felda staff only mentioned about pay, deductions such as SOCSO and EPF and retirement age. There is no mention of working days/hours; benefits/allowance/insurance, holiday en-titlements, overtime, sickness, maternity leave termination/dismissal period of notice.

6) Employment contracts for Bangladesh/Indonesia and Nepali workers are different, i.e. the contracts for Bangladeshi workers are in Bahasa Malaysia and Nepali in English and the contents are different (ob-served at Kledang 2

7) There is no evidence of contracts for Nepali workers at FTSSB Kledang office. NCR No. 2014-11 of 13 Sexual harassment policy not adequately implemented and communicated to all levels of staff.

-Grievance mechanism is available but not effectively communicated to all levels of workforce.

1) No activity has been carried out by the Consultative Committee on Women at Kledang 2 since 2010.

2) New female staff are not sensitised on the sexual harassment policy, not appointed to the existing gender committee (Consultative Committee on Women) at Kledang 2.

3) There is no monitoring on the implementation of the sexual harassment policy as the gender commit-tees remain dormant at Adela.

4) There is no Gender Committee at Kledang. New staff are not aware of the requirement for a gender committee. No awareness-raising on gender issues during induction course. Induction course only focuses on duties of staff , e.g. clerk. 5) There is a newly formed Gender Committee (comprising 7 workers/staff at mill) which has broken away from the Consultative Committee on Women JCC Kilang Sawit Adela. The previous committee at the JCC level has had no activities since 2010. The new committee has just had one meeting in Febru-ary 14 and no activities to date.

Principle 7: Responsible development of new plantings

Criteria assessed: none Criteria not assessed: CR7.1, CR7.2, CR7.3, CR7.4, CR7.5, CR7.6, CR7.7 Findings: Principle 7 is not applicable as there are no new plantings within Adela complex. All areas replanted since year 2005 were already previously planted with oil palm and had only undergone replanting. Compliance status: Not Applicable

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

Criteria assessed: CR8.1 Criteria not assessed: -



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Findings: For all schemes and estate, continual improvement is based on the environmental impacts - Reduction of pesticide usage by means of reduction of paraquat (policy), increase number of owls, cows for grass grazing and beneficial plants (Turnera, Cassia, Antigonon). - Segregation of waste for disposal (metals, glass, plastic and organics) - Infrastructure for sport activities, house painting, free tuition, repair houses and supply clean water. See also 5.6 However, for Adela estate, no continual improvement has been established for Year 2014 Adela mill has started implementation of a plan to reduce BOD of effluent treated with installation of a pol-ishing plant which is expected to reduce the final BOD of discharged effluent. The mill has a budget of RM2 million for the plant and evidence of asset approval form dated 14 February 2013. Sighted at the mill, there is a contract for a contractor for construction of a Tertiary Effluent Treatment Plant at Adela Palm Oil Mill. According to letter dated 2 January 2014 regarding this project, the project was scheduled to start on 3 February 2014 and complete on 4 June 2014. It was sighted during the site visit that earthworks for the project had commenced on-site at the effluent treatment pond. In addition, since December 2012, the mill is no longer permitted to incinerate EFB, so all EFB is to be ap-plied to fields. As seen from delivery records for year 2013, there were records of delivery of ash amount-ing to 135.64MT in January and February 2013 but no more delivery of ash after that. Seen from the EFB Delivery Report for year 2013, total amount of EFB delivered from the mill to the Adela complex schemes and Kledang 2 for application in the field in year 2013 was 28,444,48 MT. This is part of the company ef-forts to increase biomass recycling and reduce environmental impacts. There is no mechanism to capture the performance and expenditure in social aspects. (Adela mill and all schemes) Compliance status: NCR No. 2014-12 of 13 Scheme Managers currently do not have action plan for continual improvement in a participatory man-ner with their organized smallholder representatives, based on consideration of the main social and en-vironmental impacts and opportunities for improvement. NCR No. 2013-13 of 13 There is no mechanism to capture the performance and expenditure in social aspects.

3.2 Status of Previously Identified Non-conformities

During the 1st surveillance assessment in year 2013 for Felda Adela, a total of 14 non-conformances were identified. These consisted of 2 major non-conformities and 12 minor non-conformities. During this surveil-lance assessment, it was found that there was insufficient evidence for closure of all non-conformities, and several non-conformities were maintained as or raised to Major-Nonconformities during this surveillance au-dit 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 (Major indicator 1) Evidence of compliance with relevant legal requirements

Non-conformance 2013-01 of 14 (Major non-conformity) Procedures on compliance with relevant legal requirements were documented and evidence of compli-ance was evident. However the implementation of compliance were found short addressing the following:

1. Mill employee informed that workers occasionally work for two shifts due to second shift employee on leave. This is inconsistent with Employment Act 1955.

2. Deduction of wages from local employees for Great Eastern Insurance Scheme premium repayment and water and electricity usage exceeding the subsidized amount from foreign employee’s wages without approval from Labour Dept, as found on payment slips



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3. Minimum wage of all estate workers was not implemented in accordance with National Minimum Wage Act year 2013, e.g. RM 800 plus as review on the payslip while in the regulation stated RM 900.

Correction: Location: Adela Mill 1. Mill management should ensure our staffs are not working more than 12 hours per day in order to obey the Employment Act 1955 However.Mill management also have to make an agreement with the employee regarding this issue. This is to ensure all the employee alert or understand the rules inside Employment Act 1955. Location: Adela Mill & Schemes 2. All the deduction of wages from local employees included Great Eastern Insurance Scheme, water and electricity usage should have the approval from Labour Dept. Location:All schemes

3. Minimum wage of all estate are implemented in Felda commencing March 2013. The evidence of Surat Pekeliling Gaji TKA FELDA & Gaji Minimum Pekerja Ladang dan Kadar Upah 2013 enclosed.

Corrective action: Location: Adela Mill 1) Mill management has ensured our staffs are not working more than 12 hours per day in order to

obey the Employment Act 1955. However, there are certain case the employee can work more than 12 hours per day which is noticed in Circular letter no. 30 (Revision 1) no.6 “Requirements for Over-time, Working on Off Day and Public Holidays, circular no.30 (Amendment 1)” enclosed. Mill man-agement also have make an agreement with the employee regarding this issue. This is to ensure all the employees alert or understand the rules inside Employment Act 1955. The agreement is en-closed.

2) All the deduction of wages from local employees included Great Eastern Insurance Scheme, water and electricity usage already have the approval from Labor Dept. The approval letter from Head-quater of Labour Dept (16)dlm.BSM.7/2/35/68 Bhg.1 dated 25 October 1996 and the Employee Wage Deduction Permit clearly state the type of deduction that can be deducted. The approval letter enclosed.

Auditor Conclusions: Closed 1. -Thorough checks of the pay slips and check roll and interview with four workers/staff from various divisions (including Worker’s Union leader) at Adela POM shows that only during emergency situations such as breakdown of machines and high influx of FFB workers do work more than 12 hours (which is allowed under Section 60A 2(d), i.e. “Urgent work to be done to machinery/plant” under the Employ-ment Act, 1955). -Moreover, the audit team confirms that workers are paid overtime. -The mill management has a “Borang Arahan/Kebenaran Kerja Lebihmasa, Kerja Pada Hari Cuti Rehat dan Kerja Pada Hari Cuti Kelepasan Am (Lampiran I)” which is an application for overtime by the em-ployee which is endorsed by the division manager and approved by the mill manager. Random checks on the utilisation form against the workers’ punch card confirm that all employees who have worked overtime had utilised the form to apply for overtime and this form is then translated to the Borang Tuntutan Bayaran Kerja dan Kerja Lebih Masa Lebihmasa, Kerja Pada Hari Cuti Rehat dan Kerja Pada Hari Cuti Kelepasan Am (Lampiran II)” 2. The company has provided documented evidence of approved deductions (refer to Verification Result 1&2). 3. Random checks of workers’ pay slips against their respective check-roll revealed that the company is complying with the Mininum wage requirement (‘Perintah Gaji Minimum 2012’ or Minimum Wages Or-der 2012) where every effort is made to ensure that workers who have not met their monthly targets are given work such as picking of loose fruit bunches and other general work in order to meet the RM900/month minimum wage requirement.



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Criterion 2.1. (Minor indicator 2) A documented system, which includes written information on legal requirements.

Non-conformance 2013-02 of 14 (Minor non-conformity) Sening estate has no documented system with written information on legal requirements, and no evidence of implementation of a mechanism to ensure they are implemented within the organization and by smallholders

Correction: The legal requirement will be documented and implementation as appointment officer for schemes in dealing with legal requirement.

Corrective action:

Felda scheme to appoint an officer as to monitor the legal requirement annually and communicate regu-larly with Felda Headquarters from legal department in assuring the legal requirement being updated ac-cordingly. Auditor Conclusions: Open Sening estate has a documented system with written information on legal requirements in their legal requirements register, however the system was still ineffective as it was not updated with several legal requirements. The tracking system for legal changes was also found to be ineffective, as explained in Section 3.1, Principle 2. This was raised to a Major Non-conformity, i.e. NCR No. 2014-02 of 13.

Criterion 2.1(Minor indicator 3) A mechanism for ensuring that they are implemented.

Non-conformance 2013-03 of 14 (Minor non-conformity) Evaluation of compliance at the mill has been done for Safety, Health & Environmental relevant legal and other requirements as reviewed from Register Of Legal And Other Requirements FPI/L2/QOSHE – 2.1; Issue 0. However evaluation of compliance on the rest of the relevant legal requirements for e.g. on la-bour laws i.e. Employment Act 1955 was not yet conducted. Correction:

Evaluation on the all relevant legal requirement will be done annually by mill’s appointed officer. Corrective action:

The mill manager to ensure that the officer appointed to evaluate the relevant legal requirement conducts the evaluation by covering the other entire relevant legal requirement such as e.g. on labour laws i.e. Employment Act 1955. Auditor Conclusions: Open There is no documentation by the ref no. FPI/L2/QOSHE-2.1. There is only a file name FPI/L2/QOSHE-2.0 and FPI/L4/QOSHE-2.1. The mill had yet to conduct evaluation of compliance in the legal require-ment of the labour laws at Adela Mill as the mill had not appointed the officer-in-charge of evaluating legal requirements on labour laws after the previous officer in-charge resigned in October 2011. There is a dedicated officer in-charge of evaluating legal requirement (during the verification audit). For Kledang 2 estate, Evaluation of compliance to Employment Act was done in basic manner, only checked that all workers received copies of work conditions that every workers receives 10 days of an-nual leave per year and every worker receives a pay slip. Last evaluation of compliance was done on March 2012 with no update. At Kledang scheme, legal Requirements checklist is available but not yet completed by the scheme; there is no evidence that evaluation of compliance has been conducted. This was raised to a Major Non-conformity, i.e. NCR No. 2014-01 of 13.



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Criterion 2.1. (Minor indicator 4) A system for tracking any changes in the law.

Non-conformance 2013-04 of 14 Minor non-conformity There is evidence that mechanism or tracking system for identifying legal changes is poorly implemented. For example, Environmental Quality Act 1974 was revised in August 2012 and Solid Waste and Public Cleansing Management Act was gazetted in 2007, however these legal requirements were not included in the ’List of Regulations and other RSPO Requirements’ dated 13/12/12.

Correction: Location: Felda Tunggal & Kilang Adela

1) The scheme and mill will refer to Felda Headquarters on updating the revised acts and amended laws accordingly and being included inside the’List of Regulations and other RSPO Requirements’.

Corrective action: Location: Felda Tunggal & Kilang Adela 1) Annual monitoring by mill’s manager and scheme’s manager to ensure that the legal requirement being updated and being implemented according to new ammendments and revision of Malaysia Laws and Acts. Reference with the Felda Headquarters be made to update accordingly with the company’s policies.

Auditor Conclusions: Open Sg. Mas, Kledang 2 estate and Kledang scheme has not yet updated their list of legal requirements to include the Environmental Quality Act 1974 revision in August 2012 and Solid Waste and Public Cleansing Management Act was gazetted in 2007, as well as other latest applicable legal requirements such as the Minimum Wage Order 2013. At Felda Sening found that the list of legal and other re-quirements (FTP-IMS/L4/2.1 Pind. 0) dated 8th Jan 2010 and not being revised accordingly and new regulation (Occupational Safety (Classification, Labelling, Safety Data Sheet of hazardous Chemicals) Regulations 2013) was also not updated accordingly. This was raised to a Major Non-conformity, i.e. NCR No. 2014-02 of 13.

Criterion 4.2.3 (Minor indicator 3) Monitor area on which EFB, POME and zero-burning replant-ing is applied.

Non-conformance 2013-05 of 14 (Minor non-conformity) EFB sighted in the field at Block 13 of Sg. Mas estate was applied in a row with two layers. This is not in compliance with Felda's Sustainable Estate Operational Manual for October 2007, which states that application shall be in 3 circles around each tree and in one layer

Correction: Location: Sg Mas 1) In block 13 of Sg Mas,on next EFB application the implemention will be corrected in 3 circles around each tree and in one layer. Corrective action: Location: Sg Mas 1) Scheme would conduct the EFB application record monitoring in 3 circles around each tree and in one layer for next EFB application. The mechanism was explained to smallholder during JKKK monthly meeting. Auditor Conclusions: Closed with observations Felda Global Ventures has produced a revised estate sustainability manual in year 2012 which states clearly that application of EFB in one layer in a circle around trees is only for recently planted and im-



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mature trees. For the mature trees, there is no SOP for the method for EFB application but EFB is ap-plied when available to areas which are found to be less productive. It was observed at Sg. Mas that EFB is applied in rows at maximum of 2 layers, however at Kledang and Sening schemes, it was ob-served that EFB is dumped in piles which may encourage breeding of orytes.

Criterion 4.5.2 (Minor indicator 2) Monitoring extent of IPM implementation for major pests.

Non-conformance 2013-06 of 14 (Minor non-conformity) There is no SOP or work instruction for management of nettle caterpillar or bagworms which defines when census and at what rate of pest attacks (biological and chemical) are required to be conducted. At some estates, there was no records of census done to determine if rates of rat attacks are above 5% to justify usage of chemicals to manage these pests, as required in Felda's Sustainable Estate Operation Manual Correction: Location: Kledang 2 & all schemes 1) Reference with Felda Agricultural Services(R&D), on the SOP of nettle caterpillar or bagworms. 2) The rat census will be done annually in determining the rat attacks are above 5% to justify usage of chemicals. Corrective action: Location: Kledang 2 & all schemes 1) Reference made with Felda Agricultural Services(R&D),there is still no SOP management of nettle caterpillar and bagworms but there is guideline in refer to “Crop Management Brochure” which is used as reference for Felda Group.

2) Monitoring records on rat census by schemes’s management updated referring to guideline. Auditor Conclusions: Closed with observations 1) At time of this surveillance audit, it was found there was still no SOP for census and definition of

rate of pest attacks (biological and chemical) are required to be conducted, however the company produced two SOPs, one for ”Management of bagworms through monitoring and census”, one for ”Control of Leaf Eating Pests and the Estates”. It is raised as an observation that the SOP was not made available previously, however based on earlier interviews with estate staff, implementation is according to the requirements of the new SOP. Only Level 1C block 17-19 of Sg. Mas estate was found to have bagworm attacks, as sighted from monthly census records from March – October 2013. Kledang 2 estate also still has no SOP or WI for census and rate of pest attacks. According to Kledang 2, only PM08 has some bagworm attacks and bagworms census was done on 22 April 2013 for PM08, with no follow up chemical treatment as it was found to be low.

2) The company conducts rat baiting for 100% of their company’s area annually census is conducted after rat baiting to determine if follow-up baiting is required for areas found with attack rates above 20%. Sighted from Sg. Mas census records for May 2013, after rat baiting all blocks had attack rates from 17%-28%, so follow-up rat baiting was conducted. For Kledang 2 level PM08, rat baiting was last done on 16 April 2013 with follow up census on 23 April where found attack rates at all blocks were from 25% - 57%. However, Kledang 2 did not carry out follow-up rat baiting as ex-plained by the staff that most of the rat bait was eaten by ants and not rats, and this was noted as an observation.

Criterion 4.6.5 (Major indicator 5) Pesticides selected for use are those officially registered un-der the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accord-ance with USECHH Regulations (2000). Non-conformance 2013-07 of 14 (Major non-conformity) There is no evidence that annual medical surveillance for chemical levels in blood has been done annually for all plantation pesticide operators at all estates in accordance with the CHRA, which requires medical checks for exposure to chemicals Ecomax, Ally 20DF Herbicide and CSH paraquat. At Kledang 2 estate, last medical surveillance was done in year 2011.



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Correction: Location: Kledang 2 & all schemes 1) Medical Surveillance has been already done. Corrective action: Location: Kledang 2 & all schemes

1) The schemes manager to inform the Felda Technoplant of Johor Bahru region related to Medical Surveillance to be done before due 1 year. 2) Felda Technoplant of Johor Bahru region to make arrangement with the DOSH appointed clinic on Medical Surveillance checkup every year. Verification Result : The company provides evidence of medical surveillance for all plantation pesticide operators, the pa-rameter checked during medical surveillance include chemical levels in blood. The test result showed that chemicals level for sprayer is normal. The workers still allowed to do spraying unless the chemical content in their blood is high level. Auditor Conclusions: Open Medical Surveillance done with normal results at Felda Sening (7 workers) and Tunggal (15 workers) and Kledang 2 (14 workers) in 2013 but this was not involving all workers that expose to chemical haz-ardous to health as required due to budget constraint. This is maintained as a Major Non-conformity, i.e. NCR No. 2014-03 of 13. Criterion 4.7 (Minor indicator SS) Scheme and Group Managers should implement a health and safety plan for their organized smallholders that include agrochemical use and fire drills. The management should keep records of all accident and review them periodically. If records are not easily available, the management has to show evidence of measures adopted to seek such records. Non-conformance 2013-08 of 14 (Minor non-conformity) There are aspects of OSH which are not adequately implemented, i.e.:

1) Chemical sprayers at Kledang 2 and some schemes still bring their PPE home after work and there is no designated separate area for washing of sprayers PPE to reduce occurence potential chemical contamination.

2) Some schemes have no updated safety and health plan for smallholders including agrochemical use and fire drills.

Correction: Location: Kledang 2 & all schemes 1) Memo instruction to the chemical sprayers on the restriction of bringing PPE back to their hostel. 2) Refer to Felda Johor Bahru region on the designated separate area for washing of sprayers PPE. 3) The health and safety plan updated annually especially the training on agrochemical used and Fire Drill. Corrective action: Location: Kledang 2 & all schemes 1) Briefing to chemical sprayers on PPE usage and management.

2) Designated separate area for washing of sprayers PPE to be considered with small holder consultation. 3) Annual monitoring on plan and safety health by assistant manager updated with training record of Agrochemical Used and Fire Drill.

4) Memo to workers on PPE Auditor Conclusions: Closed with observations 1) At Kledang 2 during interview with supervisor, sprayers said that they still bring home all PPE and

clothing for cleaning. As it was explained by Felda that smallholders have agreed to allocate budg-



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et for medical surveillance of sprayers but not yet adequate budget for preparing washing area for sprayers, this was considered closed with observation.

2) Safety and health plan for smallholders was sighted and confirmed from interviews with stakehold-ers that they are aware of techniques for proper chemical management and fire drills are conduct-ed. This is closed.

Criterion 4.7 (Minor indicator SS) Scheme and Group Managers should implement a health and safety plan for their organized smallholders that include agrochemical use and fire drills. The management should keep records of all accident and review them periodically. If records are not easily available, the management has to show evidence of measures adopted to seek such records. Non-conformance 2013-09 of 14 (Minor non-conformity) Found mandores and contractor’s lorry driver not having 1st aid kit at worksite and no evidence of train-ing related to first aid being conducted for mandore, estate supervisor and workers involve with chemi-cals at worksites.

Correction: Location: Tunggal & Kledang 1) First aid kit given to mandore and lorry driver. Letter of receiving, sign by them in evidence. 2) For next First aid training, both mandore and lorry driver to be included and attendance of training to be view. Corrective action: Location: Tunggal & Kledang 1) Memo by schemes management to mandore and lorry driver to carry first aid at working place.

2) The mandore and lorry driver to be included in the first aid training. Training record to be monitor annually. Auditor Conclusions : Closed At Felda Tunggal there was evidence of 1st Aid training conducted on 17th June 2013. First aid box was issued to staff such as to Johan, Khairul, Farhan, Hafizan and etc on 17th June 2013. Criterion 4.8. (Minor indicator SS) The participants and registered workers on participants’ plots are provided adequate training and skills and this is documented. The trainings can be achieved through extension activities of growers, FFB dealers or mills that purchase fruit from them, or through collaboration with relevant government agencies. Non-conformance 2013-10 of 14 (Minor non-conformity) The responsible persons for preparing the aspect impact assessment at all schemes was not well trained to conduct the assessment. This has been confirmed with discussion with the persons-in-charge that there is no proper training being done and seen from aspect impact assessments for some estates which were done incorrectly, stating occupational safety hazards and risks, instead of environmental re-lated impacts.

Correction: Location: Adela, Tunggal, Kledang 1) Person incharge on EIA will be send EIA training. 2) Correction on aspect impact assessments for some estates which were done incorrectly, stating occupational safety hazards and risks, instead of environmental related impacts. Corrective action: Location: Adela, Tunggal, Kledang 1) Consultation with Felda Johor Bahru region on EIA training on person incharge for schemes. Proceed with EIA training after the endorsement by Felda Felda Johor Bahru region. 2) EIA to be reviewed annually and correction to be as soon as possible. Auditor Conclusions: Closed with observations No documented evidence of EIA training was provided, but it was informed that informal training is pro-



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vided and through interviews with the personnel to test their understanding of aspect and impacts anal-ysis, their understanding was adequate. In addition, updated EIA for some schemes were sighted and deemed adequate.

Criterion 5.3 (Minor indicator 2) Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pollution.

Non-conformance 2013-11 of 14 (Minor non-conformity) Chemical mixing is done on a lorry and not accordance to the Environmental Management Plan which requires chemical mixing to be done at premix area before it can be used at the estate. At Adela estate, empty containers (paraquat) were seen at the roadside while on the way to the plantation Correction:

Location: Adela, Tunggal, Kledang 1) Warning letter on prohibition of chemical mixing done on the lorry to the contractors and smallholders based on Environmental Management Plan and empty container (paraquat) left at the roadside. Corrective action:

Location: Adela, Tunggal, Kledang 1) Training and briefing of on chemical mixing and empty container storage to the contractors and smallholder to be included in training plan and organised yearly.

Auditor Conclusions: Closed At Kledang 2 and Tunggal, the chemical mixing was done at chemical mixing area near the office and not at site as interviewed with the Assistant Managers. Chemical mixing workshop was done on 15th March 2013 attended by 6 workers from at Felda Sening.

Criterion 5.5. (Minor indicator 3) No evidence of burning waste (including domestic waste).

Non-conformance 2013-12 of 14 (Minor non-conformity) Next to Sening estate chemical store, there was sighted an open area with rubbish and evidence of burning

Correction:

Location: Sening 1) The warning signboard of no dumping and no burning of waste to be constructed near chemical store. Corrective action: Location: Sening 1) Provide garbage bin near workers housing

2) The warning signboard of no dumping inside the drains and no burning of waste on open land has been constructed..

Auditor Conclusions: Closed Follow up from last year NCR, warning signboard of no dumping and no burning of waste was con-structed near chemical store and garbage bins provided near workers housing. No open burning policy has been established dated Mar 2012 from Sustainability Manual (ML-1A) Compliance to P&C RSPO, Issue 1, 2012 as an obligation in open burning

Criterion 6.1. (Minor indicator 3) A timetable with responsibilities for mitigation and monitoring is reviewed and updated as necessary.



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Non-conformance 2013-13 of 14 (Minor non-conformity) No specific timetable for mitigation and monitoring of social impacts has been developed and there is no evidence of follow up done on the plan of impact mitigation and monitoring developed in the SIA. Correction: Location: Sening 1)The person who responsible to develop the timetable of mitigation plan based on social impacts was assigned Corrective action: Location: Sening 1) The scheme manager are responsible on the timetable of mitigation plan for social impacts and assuring the person incharge in line with social impacts compliance.

Auditor Conclusions: Open Management is unable to show that SIA monitoring plan is made for the year 2014. This was raised to a Major Nonconformity, i.e. NCR No. 2014-08 of 13. Criterion 6.5 (Minor indicator 2) Labour laws, union agreements or direct contracts of employ-ment detailing payments and conditions of employment (e.g. working hours, deductions, over-time, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit. Non-conformance 2013-14 of 14 (Minor non-conformity) FFB pickers sourced from contractor Massiah Enterprise Sdn. Bhd. were interviewed and found to have not received any copies of the employment contracts, pay slips and EPF and SOSCO benefits from the contractor. Adela mill has no system to ensure contractors comply with legal requirements Correction: Location: KKS Adela 1) Letter send to contractor Massiah Enterprise in hand in the copies employment contracts, pay slips and EPF and SOSCO benefits to their employee and Adela mill for reference in complying with RSPO compliance. Corrective action: 1) Mill management to appoint an officer whom responsible in monitoring the contractor’s employees welfare.

Auditor Conclusions: Closed with observations In response to the mill’s request for Massiah Enterprise to hand in the copies of the employment con-tracts of its employees, the mill management requested Massiah Enterprise to hand in copies of the employment contracts, pay slips and EPF/SOCSO of their employees. However, the contractor, in a let-ter to the mill management dated 7January 2013 states has provided a signed collective scope of work and states that they are unable to prepare EPF and SOCSO to workers as they are on tender for one year only. However, Massiah Enterprise has provided evidence of workmen compensation for its work-ers. The mill has appointed the Assistant Manager of Adela POM as the Officer In-Charge of the contrac-tor’s welfare (ref: (169)/4039/AD/840A 1Pt.III.

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

During this surveillance assessment, a total of 13 nonconformances were identified. These consisted of 8 major non-conformities and 5 minor non-conformities. 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



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assessment, and this was verified by the audit team through checks of documents submitted by the compa-ny. 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 (Minor indicator 3) A mechanism for ensuring that they are implemented.

Non-conformance 2014-01 of 13 (Raised to Major non-conformity from previous surveillance) It was found the evaluation of compliance (List of Laws and Related Requirements for Compliance with RSPO) was not fully implemented to cover actual related legal and other requirements. Consistently it happened at Felda Sening, Felda Tunggal and Kilang Sawit Adela. Legal requirements like Occupational Safety and Health Act 1994 and its regulations, Factory and Machinery Act 1967 and its regulations, Environmental Quality Act and its regulations 1974, Pesticides Act 1974 were not evaluated consistently with the legal requirements identified. OSHA 1994 only evaluated 5 requirements only, Bil 18. FMA 1967 only evaluated 3 requirements. Regulations only covered USECHH 2000 and not comprehensive. OSHA 1994 and its Regulations and FMA 1967 and Its Regulations. While for EQA 1974, only cover 3 items, such as waste to be disposed of at designated places, avoidance of open burning & avoidance of pollution of any agricultural activities carried out during estate field activities Location: Felda Sening/Felda Tunggal/ Kilang Sawit Adela Correction: 1) To update the list of legal requirements 2) To conduct evaluation of compliance to legal requirements of Malaysia 3) To document the evaluation and file in the RSPO file

Corrective action: 1) Appoint an officer to update the list of legal requirements 2) Conduct monitoring every 6 months on the list of legal requirements updated by the appointed officer 3) FGV officers to conduct internal audits to ensure the plan is in compliance with RSPO requirements Auditor Conclusions: Closed Felda Sening: Sighted appointment letter dated 20/03/14 appointing Asst. Manager FTSP Sening as person in charge (PIC) for monitoring of legal requirements by Manager FTSP Sening. Sampled “List of Legal and Compliance Requirements relating to RSPO” reviewed 25/03/14.

Felda Tunggal: Sighted appointment letter of a supervisor as PIC for legal by the Manager of Felda Tunggal dated 01/03/14. Sighted “List of Legal and Compliance Requirements relating to RSPO” revised dated 05/03/14 that contained the specific regulations and being evaluated. Audit RSPO will be conducted next year Feb-ruary.

Adela Mill: Appointment Letter for Mohamed Najib b. Kammalluden (Asst. Manager) as PIC by Md Aseri Mohamad (Manager Adela Mill) dated 21/03/14. Register of Legal and Other Requirements (FPI/L4/QOHSE-2.1 Pind. 0) revised 27/03/14 for Felda Palm Industries Sdn Bhd (FPISB) Date of closure: 2 April 2014

Criterion 2.1 (Minor indicator 4) A system for tracking any changes in the law.

Non-conformance 2014-02 of 13 (Raised to Major non-conformity from previous surveillance) The tracking system for legal changes (Sistem Pengesanan Perubahan Undang-Undang for Felda and Felda Holdings) was not effective as Environmental Quality Act 1974 (revised 2012) not updated and new regulation Occupational Safety (Classification, Labelling and Safety Data Sheet of Hazardous Chemicals) Regulations was not identified in the Daftar Perundangan dan Lain-Lain Keperluan (FTS-IMS/L2/L4/2.1



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Pin 0) dated 8th January 2010 for Felda Sening and Felda Tunggal. While in Adela Mill the Register of Legal and Other Requirements (FPI/L4/QOHSE-2.1 Pind.0) dated 15th January 2014.

Location: Felda Sening, Felda Tunggal, Adela Mill Correction: 1. PSQM Department issued a notice to project changes in the law and the instructions to update the System for Tracking Changes to Legal Requirements. 2. Updating the System for Tracking Changes to Legal Requirements.

Corrective action: 1. Monitoring by the manager after it is updated by the appointed officer 2. Revision by the Internal Audit Department PSQM SPO Officer, HQ. 3. Updated files RSPO by law officers who were appointed every 6 months or every time there is a up-

date in legal requirements. 4. To conduct a workshop on how to carry out review of the list of legal requirements once a year at the

HQ Auditor Conclusions: Closed Felda Sening: Sampled List of Legal and Compliance Requirements relating to RSPO (‘Senarai Un-dang-undang dan Keperluan yang berkaitan bagi Pematuhan RSPO’) reviewed 25/03/14. Occupational Safety (Classification, Labelling, Safety Data Sheet of hazardous Chemicals) Regulations 2013 or CLASS 2013 was included. Felda Tunggal: Sampled List of Legal and Compliance Requirements relating to RSPO (‘Senarai Undang-undang dan Keperluan yang berkaitan bagi Pematuhan RSPO’) revised dated 05/03/14 that contained the specific regulations and being evaluated. CLASS 2013 was included. Audit RSPO will be conducted next year February. Adela Mill: Sighted Register of Legal and Other Requirements (‘Daftar Perundangan dan Lain-lain Keperluan’) (FPI/L4/QOHSE-2.1 Pind. 0) revised 27/03/14 for Felda Palm Industries Sdn Bhd (FPISB). CLASS 2013 was included. During the verification audit, it was sighted at Lok Heng Mill & Lok Heng Barat an email FGVPMSB- South Zone on 30/03/14 including attachment 2.1.2a on List of compliance, which was updated to include the Environmental Quality Act amendments in 2012 (’Senarai pematuhan, Akta Kualiti Alam Sekeliling pindaan 2012’) and CLASS 2013. Felda also conducted a Workshop for Discussion of Policies and checking of Legal Compliance, PSQM Department done on 9 May 2014 with 11 participants from the PSQM department. The agenda for the workshop included briefing to all participants about the system for tracking changes to legal require-ments implemented at Felda and Felda Holdings level, where any changes to legal requirements are to disseminated from regional level to all Felda projects, mills and estates. The agenda also included an update on latest revised legal requirements, including CLASS 2013, Classification, Packaging and La-belling (CPL) 1997, revisions to Environmental Quality Act 2012, Minimum Wage Act 2012, and Work-ers’ Minimum Standards of Housing and Amenities 1990. The signed attendance list for this workshop was sighted. Another workshop at PSQM department level was held on 5-6 June 2014 for 22 members of the de-partment regarding checking of the safety manual, Quality, Occupational Health and Safety, and Envi-ronment (QOHSE) manual), policies and checking of legal compliance. The agenda included briefing on the current system for tracking changes to legal requirements and handover of the latest update le-gal requirements register applicable for the organization. The attendance list of the workshop and pho-tos were sighted. Date of closure: 9 May 2014

Criterion 4.6 (Major indicator 5) Annual medical surveillance as per CHRA for plantation pesti-cide operators.

Non-conformance 2014-03 of 13 (Major non-conformity, maintained from previous surveillance) Medical Surveillance was not done for all workers that work related to pesticides as required from the Chemical Health Risk Assessment. Only 7 workers from Felda Sening and 15 from Felda Tunggal sent



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in May 2013. But this not covered all worker that work related to pesticides. Only selected ones sent due to budget constraint. For 2014 no evidence of medical Surveillance arrangement was planned yet.

Location : Felda Sening and Tunggal Correction: 1. Provide a list of employees who are involved in carrying out spraying work. 2. Conduct medical surveillance for sprayers who have not yet undergone medical surveillance 3. To update RSPO file with information on sprayers and medical surveillance results

Corrective action: 1. To apply for sufficient annual budget to perform medical surveillance 2. Reviewed RSPO FGV officer through internal audit to ensure that the plan complies with the re-

quirements of the RSPO. 3. Medical surveillance to be centrally coordinated at regional level in order to get a lower price and

monitoring to be carried out by the province. Auditor Conclusions: Closed Felda Sening: Letter dated 07/03/14 to Kota Tinggi clinic on Implementation of Medical Surveillance. Done on 25/03/14 and report not yet received. Listing 13 workers (excluded 2 resigned earlier). Available also list of Sprayer (’Pekerja Merumput’) for year 2014. 9 sprayers’ names listed.

Felda Tunggal: Letter dated 13/03/14 to Pengurus Besar Wilayah Johor listing 10 workers (sprayers). According to the letter, balance of another 7 manurers were not sent as not required as they were not handling Muriate of Potash and Butik S from CHRA report done on 20/09/10-30/09/10. A call was made to Dhillon Clinic, Kota Tinggi confirming workers were sent for medical surveillance on 28-29/03/14. The report not yet ready.

Sungai Mas: Sampled and found in 2013, only 15 workers handling chemicals were sent. As evidence found a letter dated 01/03/14 to the chairman of the JCC of Adela Mill from the Manager of FTPSB Sg. Mas requesting budget to send 25 workers (supervisor, clerk, mandore, sprayer and manurer). Planning to send them in May 2014 as previous year carried out on 8th May 2013. Date of closure: 2 April 2014 Criterion 4.7 (Major indicator 1d) The appropriate personal protective equipment (PPE) are used for each risk assessed operation. i. Companies to provide the appropriate PPE at the place of work to cover all potentially haz-ardous operations such as pesticide application, land preparation, harvesting and if used, burn-ing. Non-conformance 2014-04 of 13 (Major non-conformity, maintained from previous surveillance) Workers at the mill must wear PPE and have proper recording for issuance as required but observed workers like a bob cat driver not wearing earplugs and when refering to issuance record (Rekod Pen-erimaan/Penukaran Alatan Perlindungan Diri (PPE), he did not receive any earplugs since 4th January 2011 and only received safety shoes, and leather gloves. Another worker also found not wearing safety helmet, leather gloves and ear plugs. According to issuance record (Rekod Penerimaan/Penukaran Alatan Perlindungan Diri (PPE), he did'nt receive helmet since 4th January 2011. Only received ear-plugs, safety shoes and earplugs. When check with noise mapping result shows that this area recorded 90dB and above level of noise. Location: Adela Mill

Correction: 1. To prepare a list of employees and required PPE. 2. To prepare and update records of delivery and return of PPE to be signed by the employees

involved. 3. Implementing PPE training including awareness, importance and wearing of PPE 4. Prepare training reports (attendance lists, reports and pictures) 5. To update the RSPO file

Corrective action: 1. Check PPE handover and return records each month by the Assistant Manager.



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2. Implement PPE training each March and September of each year and should be included in the an-nual training plan.

3. Division head will check that subordinates used appropriate equipment and PPE before beginning daily tasks and record findings in the attendance book.

4. RSPO internal audit review by FGV officials to ensure that projects comply with the RSPO. Auditor Conclusions: Closed Reminder letter was issued to the bobcat driver from Mill Manager dated 27/02/14 and to worker found not wearing safety helmet on 22/02/14. Sighted Personal Protective Equipment Acceptance (’Akuan Penerimaan Alat Perlindungan Diri (FPISB)) with clear name of workers, type of PPE issued, date of receive and signature as evidence of receipt. Jadual Pematuhan PPE, Kilang Sawit Adela stating frequency of PPE training and Issuance of PPEs. PPE Training conducted on 24/03/14 as letter issued to all employees from Mill Manager dated 21/03/14. Evidence of photo available on date mentioned. This is translated in the Annual Training Plan every March and September. A memo issued for all PIC on requirement of monitoring and enforcement of PPE at workplace dated 24/03/14 Date of closure: 2 April 2014

Criterion 4.7 (Major indicator 1h) Workers trained in First Aid should be present in both field and mill operations.

Non-conformance 2014-05 of 13 (Major non-conformity) At Felda Sening no evidence of trained first aider and training conducted to equip workers on first aid knowledge. According to Pelan Kesihatan dan Keselamatan Tahun 2013 FTPSB Sening approved by Pengurus Ladang contained First aid training planned on 31st March 2013. But no evidence of training records available upon request. Location : Felda Sening

Correction: 1. Implement immediate first aid training for at least 2 officers per project 2. Update RSPO files

Corrective action: 1. Provide two officers trained in first aid so that when a transfer of one first aider, there is one more on

the project pending the training of a new officer 2. Prepare and display a list of all the trained First Aid Officer and the expiry date of the certificate. Auditor Conclusions: Closed Felda Sening: Evidence of email from Felda Johor Bahru to Felda Sening and others on First Aid and CPR on 14-15/01/14 at Wisma JKKR Sening. 3 workers selected to participate in the training Felda Tunggal: Evidence of email similar from Felda Johor Bahru on First aider training on 14-15/04/14 at Wisma JKKR Sening. 3 workers selected to participate in the training Sg. Mas: Sampled similar email and plan for training on first aider by Felda Johor and 3 workers identified to participate on 14-15/04/14. Date of closure: 2 April 2014 Criterion 5.3 (Scheme smallholder guidance) Scheme managers should develop and implement an appropriate plan for the management and disposal of waste from smallholdings including the safe disposal of pesticide containers (eg National Programme on recycling of used HDPE pesticide containers). Scheme managers should encourage/ educate participants to use re-sources efficiently and apply reduce, reuse, recycle methods wherever feasible/possible Non-conformance 2014-06 of 13 (Minor non-conformity) No evidence of empty pesticide containers are disposed to the authorized contractor. The inventory of the empty containers also unavailable and just started to record in Jan 2014. The empty containers also have



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been kept for more than 6 months which is against the EQA Act 1974 - Environmental Quality (Scheduled Waste) Regulations 2005. The Manual RSPO also stated that the inventory of the scheduled waste shall be record or kept. Location: Kledang 2 Correction: 1. Prepare and update the record book for incoming and collected pesticide contractors 2. Find a qualified contractor to dispose of wastes and get a copy of the waste contractor’s license for scheduled waste collection. 3. All empty pesticide drums are disposed to qualified wholesalers. (receipt as proof).

Corrective action: 1. Record book for incoming and collected pesticide contractors to be regularly updated 2. Monitoring and review by the manager every three months. 3. Checks to be done by the Internal Audit Department PSQM SPO Officer, HQ Auditor Conclusions: Correction & Corrective action plan accepted. Implementation to be veri-fied at next surveillance audit. Sening estate has a log book for collection of collection of chemical containers and fertilizer bags and receipts of sale of the containers and bag to unlicensed collectors. No collection by licensed contractor done yet as the company is still locating a licensed contractor.

Criterion 5.5 (Minor indicator 3) No evidence of burning waste (including domestic waste).

Non-conformance 2014-07 of 13 (Minor non-conformity) There was evidence of open burning besides the office and confirmed by the Asst. Mgr. and the store clerk as well. Location: Kledang 2 Correction: Organize the training and awareness of open-burning ban (attendance list and report to be maintained as evidence)

Corrective action: 1. Monitoring and review by the manager every three months. 2. Checks to be done by the Internal Audit Department PSQM SPO Officer, HQ. Auditor Conclusions: Correction & Corrective action plan accepted. Implementation to be veri-fied at next surveillance audit. Sighted meeting minutes with 21 smallholders dated 23 February 2014 which included request to stop opening burning. Also sighted notice issued to all smallholders requesting them to stop carrying out open burning effective 16 February 2014. Criterion 6.1 (Smallholder scheme guidance) Management aspects that can result in social im-pact should be identified with the consultation of their participants or representatives. If it war-rants, a documented SIA should be conducted with the participation of the affected parties. A time bound mitigation plan with responsibilities should be drawn and implemented (with review and update if necessary). Non-conformance 2014-08 of 13 (Raised to Major non-conformity from previous surveillance) Not obtained evidence that management makes SIA monitoring plan for year 2014. In addition manage-ment is also not able to show the progress of settlement of issues / impacts that have been identified in the documents SIA for year 2012. Correction: 1. Monitoring and review by the Manager at least once a year. 2. Checks to be done by the Internal Audit Department PSQM SPO Officer, HQ

Corrective action: 1. SIA Monitoring Plan for 2014.



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2. Documents or minutes of the meeting recorded evidence of the resolution of issues / impacts identi-fied during the SIA 2014

Auditor Conclusions: Closed The client submitted the SIA monitoring plan for year 2014, stating identified issues, action plan, re-sponsible persons, schedule for implementation. Issues identified include drought causing dryness of young plantings, cases of break-ins at smallholder homes, monthly payment of household expenses, and matters related to smallholder payments and loans. The client submitted a report on progress of issues raised during the previous SIA for year 2012, e.g. PPE usage among workers was increased to reduce risk of injuries, maintenance of smallholder es-tates and estate roads was improved, complaints about strict FFB grading where the company gave additional briefing on FFB grading requirements. Date of closure: 2 April 2014 Criterion 6.6 (Smallholder scheme guidance) Scheme and Group Managers should provide the necessary mechanism to deal with complaints and grievances by their participants and other stakeholders and the outcome is open to affected parties. The management should actively seek to resolve the complaint and grievances within a reasonable period. Non-conformance 2014-09 of 13 (Major non-conformity) Foreign worker stated there are difficulties complained to management. When delivered orally, some-times there is no response. Examples of complaints from Foreign worker from Indonesia about the water bills of more than RM40 per month. Has been reported to management but there has been no response solution to the present.

Correction: 1. Explain to all employees about the complaints process. 2. Prepare a complaint boxes in offices and hostels and a book to record complaints and grievances. 3. Recording all complaints and take action within 14 days. 4. Make continuous review complaints record book.

Corrective action: 1. Enforcement of use of complaints record book. 2. Periodic reviews by the project management to ensure that actions have been taken to resolve all

complaints Auditor Conclusions: Closed Sighted complaints record book at Sening estate with one complaint dated 10/3/2014 from an Indone-sian worker requesting to reduce amount of water deduction which is currently Rm41.50 per worker. Company response in the logbook was that they only subsidize electricity usage by RM6 and water us-age by RM4 for each worker. It was verified during the surveillance audit that the water deductions are not done every month but deduction of RM40 or more is accumulation of several months water bill, and therefore the amount deducted is reasonable. However, it is not clear at time of the verification audit whether the workers were provided this explanation on why their water bill deduction appears to be high every few months. The company provided additional evidence of efforts taken to respond to the complaint by providing a briefing to all foreign workers located at each estate or scheme regarding the terms of their employ-ment contract, including payment of electricity and water, responsibility of employees (housing and employer’s responsibilities, work contract duration, working hours, discipline and behaviour, mainte-nance of work equipment, levis and temporary work passes, annual leave), employer’s responsibility (ensuring job opportunities, housing and transport, foreign worker’s insurance scheme (‘Skim Pampa-san Pekerja Asing’ or SPPA), medical check-ups for workers, medical exams, etc). Foreign workers who understood Malay were appointed as translators as seen from sample appointment letters, in order to assist other workers to understand the briefing. Photographic evidence of the briefings done and at-tendance lists were also sighted. The workers also signed a statement that they have attended the briefing, understood what was explained during the briefing and received a copy of their contracts. Date of closure: 5 May 2014



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Criterion 6.5 (Major indicator 1) Documentation of pay and conditions.

Non-conformance 2014-10 of 13 (Major non-conformity) 1) Direct contracts of employment are not available for foreign workers at the at the FTPSB Sg.Mas office. Only a template is available, not actual signed contracts. Based on an interview with an Indonesian for-eign worker of Housing 1B on 16 February 2014, it was revealed that contracts are not signed and work-ers are unsure of their terms and conditions of employment. The employment contract is kept by the for-eign workers but are not signed and dated.

2) Employment contract for Nepali worker observed at Kledang 2 office (contract is in English, signed in Nepal and endorsed by FELDA representative) stipulates that water and electricity is provided for free by the employer but the January 2014 payslip contradicts the contract, i.e. there is deduction of water and electricity from the wages.

3) Employment contracts for local workers employment by Technoplant (Felda Global Ventures Planta-tions Malaysia Sdn.Bhd.) only stipulate the pay, working hours, termination/dismissal period of notice and deductions such as SOCSO and EPF. There is no mention of benefits/allowance/insurance, holiday enti-tlements, overtime, sickness, maternity leave.

4) Employment contracts for Felda Technoplant (Felda Global Ventures Plantations Malaysia Sdn.Bhd.) staff only mentioned about pay and termination/dismissal period of notice. There is no mention of working days/hours; benefits/allowance/insurance, holiday entitlements, overtime, sickness, maternity leave or de-ductions such as SOCSO and EPF (how much contributed by employer and how much contributed by employee). There is also no reference to a Technoplant manual should there be any changes in the fu-ture).

5) Employment contracts for Felda staff only mentioned about pay, deductions such as SOCSO and EPF and retirement age. There is no mention of working days/hours; benefits/allowance/insurance, holiday en-titlements, overtime, sickness, maternity leave termination/dismissal period of notice.

6) Employment contracts for Bangladesh/Indonesia and Nepali workers are different, i.e. the contracts for Bangladeshi workers are in Bahasa Malaysia and Nepali in English and the contents are different (ob-served at Kledang 2

7) There is no evidence of contracts for Nepali workers at FTSSB Kledang office. Correction: 1) Provide information to foreign workers, including Nepalese workers, regarding the terms and

conditions of the agreement which they sign. 2) Prepare attendance list and report as evidence were employees were briefed on the terms and

conditions of the contract of employment. 3) The Manpower Unit will review the employment contract of Nepalese workers so that it is the same

as the contract for workers of other countries. 4) To attach a copy of local worker’s employment contract with the terms and conditions of employment

of estate workers when making job offers to new employees. 5) To review employment contracts and standardize the content to be used for new employees. Corrective action: 1. All new employees will be given a re-briefing on their employment contract before they start work. 2. A copy of the employment contract which has been signed will be given to the employee and a copy

will be retained by the estate management. 3. Monitoring and enforcement by the management and human resources unit. Auditor Conclusions: Closed with observations 1) The company provided evidence of briefings conducted for all foreign workers located at each es-

tate or scheme regarding the terms of their employment contract, including payment of electricity and water, responsibility of employees (housing and employer’s responsibilities, work contract du-ration, working hours, discipline and behaviour, maintenance of work equipment, levis and tempo-rary work passes, annual leave), employer’s responsibility (ensuring job opportunities, housing and transport, foreign worker’s insurance scheme (‘Skim Pampasan Pekerja Asing’ or SPPA), medical



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check-ups for workers, medical exams, etc). Foreign workers who understood Malay were ap-pointed as translators as seen from sample appointment letters, in order to assist other workers to understand the briefing. Photographic evidence of the briefings done and attendance lists were al-so sighted. The workers also signed a statement that they have attended the briefing, understood what was explained during the briefing and received a copy of their contracts. As the company has many workers, evidence that employment contracts have been signed will be sampled and checked during next surveillance audit.

2) The company has revised and standardised the contracts for all new foreign workers but will retain the contracts for existing foreign workers. It was noted that all new contracts for foreign workers is in Malay language. The revised working agreement template for Bangladesh & Nepalese workers with revised clause states that water and electricity will be deducted at minimum rate depending on the type of supply. If electricity or water is supplied by TNB or the Water Department, the com-pany will subsidied the deduction for these amenities. No signed contracts are available.

3) There is a Guide to the Management Regulations and the Employment of Local Plantation Workers (’Panduan Peraturan Pengurusan Dan Penggajian Pekerja Ladang Tempatan’) (Bil.03/2012) (Technoplant) & Terms of Service for Local Employees of Estate Operations (‘Syarat-syarat Perkhidmatan Pekerja Operasi Ladang Tempatan’) Felda Global Ventures Planta-tions (Malaysia) Sdn.Bhd. (FGVPMSB) which stipulates the terms and conditions of employment (e.g. benefits, insurance, leave, wages, EPF, SOCSO) which is supposed to be appended with the work contracts of the employers. It will be verified at next surveillane audit if the terms and conditions are appended to new employment contracts as stated in the corrective actions.

4) There is a standard practice for Technoplant and FGV of staff to sign the handbook “Syarat-syarat perkhidmatan petugas syarikat” (Enforced on 1 January 2010) whereby each staff is provided with the staff handbook and a signed copy detached from the handbook is kept at HQ as proof that staff have understood their terms and conditions of employment.

5) For employees of Felda (which is a government entity), the letters of appointment of staff has a reference to a government circular ref:Pekeliling Perkhidmatan Bil.4 Tahun 2002) which stipulates the terms and conditions of employment as civil servants bound by the Public Services Department (JPA).

6) The company has revised and standardised the contracts for all new foreign workers but will retain the contracts for existing foreign workers.

7) The workers have signed a statement that they have attended the briefing, understood what was explained during the briefing and received a copy of their contracts. As the company has many workers, evidence that employment contracts have been signed and received by each worker will be sampled and checked during next surveillance audit.

Date of closure: 5 May 2014

Criterion 6.9 (Major indicator 3) A specific grievance mechanism is established.

Non-conformance 2014-11 of 13 (Major non-conformity) Sexual harassment policy not adequately implemented and communicated to all levels of staff.

-Grievance mechanism is available but not effectively communicated to all levels of workforce.

1) No activity has been carried out by the Consultative Committee on Women at Kledang 2 since 2010.

2) New female staff are not sensitised on the sexual harassment policy, not appointed to the existing gen-der committee (Consultative Committee on Women) at Kledang 2.

3) There is no monitoring on the implementation of the sexual harassment policy as the gender commit-tees remain dormant at Adela.

4) There is no Gender Committee at Kledang. New staff are not aware of the requirement for a gender committee. No awareness-raising on gender issues during induction course. Induction course only focus-es on duties of staff, e.g. clerk. 5) There is a newly formed Gender Committee (comprising 7 workers/staff at mill) which has broken away from the Consultative Committee on Women of JCC Kilang Sawit Adela. The previous committee at the JCC level has had no activities since 2010. The new committee has just had one meeting in Feb-ruary 14 and no activities to date.



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Correction: 1. Provide an explanation of the policies and procedures regarding sexual harassment to all levels through the elected Project Committee Representatives 2. To conduct re-election of the women's committee. 3. To conduct Women Committee meetings and focus the discussion on sexual harassment, domestic violence against women, rights of pregnant and lactating women as well as activities for women. 4. Implementation of activities planned for the women

Corrective action: 1. To establish women committees by zone and monitored by regional management 2. Checks to be carried out during RSPO internal audits by FGV officials to ensure that projects comply

with the RSPO requirements Auditor Conclusions: Closed with observations A) Evidence of communication of sexual harassment policy and grievance mechanism: There is evidence of briefing conducted on the sexual harassment policy and its associated grievance procedure during a meeting held on 31 March 2014 involving 59 members and female representatives from all schemes/estates (see minutes of meeting) at the Wilayah (Regional) level (attendance sheet is also attached with the minutes). Appointed representatives are responsible to disemminate information received during the meeting to the other women located at their area, however there is inadequate evidence that this is done. Dissemination of information will be verified at next surveillance audit.

B) Evidence of implementation of sexual harassment policy: - A new gender committee was formed during the meeting (rendering all previous gender committees at schemes/estates obsolete). The committee is divided into three zones and each scheme/estate has a representative in the committee. - A list of committee members is recorded in the minutes of meeting. - Letters of appointments of the newly-formed gender committee (regional level) were sighted. - There is a suggested activities program for women regional level developed at regional level, where suggested activities include training on dealing with sexual harassment, briefings to be done for all levels of female staff, workers and scheme smallholders and a seminar on dealing with sexual harassment of children Date of closure: 5 May 2014 Criterion 8.1 (Smallholder scheme guidance) Scheme Managers should develop an action plan for continual improvement in a participatory manner with their organized smallholder repre-sentatives, based on consideration of the main social and environmental impacts and opportu-nities for improvement. Non-conformance 2014-12 of 13 (Minor non-conformity) Scheme Managers currently do not have action plan for continual improvement in a participatory man-ner with their organized smallholder representatives, based on consideration of the main social and en-vironmental impacts and opportunities for improvement. Correction: To conduct programs / meetings with settler representatives, contractors and other interested parties to discuss the plan for continuous improvement, especially in terms of social and environmental impact.

Corrective action: 1. Update RSPO CR 8.1 files (continuous improvement). 2. Checks to be conducted by the Internal Audit Department PSQM SPO Officer, HQ Auditor Conclusions: Correction & Corrective action plan accepted. Implementation to be veri-fied at next surveillance audit

Criterion 8.1 (Minor indicator 6) A mechanism to capture the performance and expenditure in social and environmental aspects.



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Non-conformance 2014-13 of 13 (Minor non-conformity) There is no mechanism to capture the performance and expenditure in social aspects. Correction: To update RSPO file with evidence of achievement and spending in the social aspects.

Corrective action: 1. Update RSPO CR 8.1 files (continuous improvement). 2. Checks to be conducted by the Internal Audit Department PSQM SPO Officer, HQ Auditor Conclusions: Correction & Corrective action plan accepted. Implementation to be veri-fied at next surveillance audit



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3.4 Description of Supply Chain Management System

The following is a description of the findings pertaining to the company’s supply chain management system according to the RSPO SCCS requirements, including status of compliance of the company and their out-sourced third parties to RSPO SCCS requirements:

Module E – CPO Mills: Mass Balance

E.1. Documented procedures

Findings: There are no changes on company’s procedure for implementation of SCCS requirement. As stat-ed on FELDA Agriculture Service FPISB Palm Oil Mill “SOP for Mill Compliance to RSPO Supply Chain Certification System’ FGVPM-RSPO SCCS issued No. 2.0 dated July 2013. Company im-plement quality management system ISO 9001:2008 as a part of compliance to this standard com-pany has to establish complete and up to date standard operation procedure. The Mill Manager is having overall responsibility for and authority over the implementation of SCCS requirements and compliance with all applicable requirements. Job description has been made for Mill operator who will implement SCCS. However Implementation of the SCCS is not in accordance with the SOP, i.e. the job description for Assistant Mill Managers states that they are responsible for conducting annual audit 3 months before the RSPO SCCS third party audit. The mill assistant is al-so responsible to check that the SCC system is properly implemented and all documents required for mass balance tracking, delivery, etc are in place. However, there is no evidence that the mill does such checking of SCC implementation or internal auditing as required in the SOP. This is raised as non-conformity during 2nd surveillance audit. Compliance status: Non Compliance NCR SCCS 2014-01 of 01 Implementation of the SCCS is not in accordance with the SOP, i.e. the job description for Assistant Mill Managers states that they are responsible for conducting annual audit 3 months before the RSPO SCCS third party audit. The mill assistant is also responsible to check that the SCC system is properly implemented and all documents required for mass balance tracking, delivery, etc are in place. However, there is no evidence that the mill does such checking of SCC implementation or in-ternal auditing as required in the SOP.

E.2. Purchasing and goods in

Findings: Adela Palm Oil mill has mechanism to receive FFB both from certified sources and non-certified sources. As correction from last year audit result the procedure has clear information regarding def-inition of FFB from certified source that will be claimed as certified material and the condition that will make certified FFB become non certified FFB. All FFB from Adela complex as certified scheme were categorized as certified FFB, and FFB from other complexs were categorized as non-certified. Incoming FFB from Smallholder Adela Complex such as (Tunggal; Adela; Sening; Sungai Mas; Kledang and Kledang2 estate) accompanied by document “FFB Delivery Note” about Project code; Smallholder name and code, field code; driver name; Vehicle number, date of FFB transported, IC code driver Receiving FFB in Weigh Bridge will be recorded on GatePass (FFB receiving Form/ Penerimaan FFB) and form FFB Receipt Account including information about quantity and quality FFB, grading result. Information on gate pass and “Receipt Account”(incoming notes) is Pass no. ; Project code; Smallholder name and code, field code; driver name; Vehicle number, date of FFB transported, IC code driver; quantity and quality of FFB and Delivery Order number. There is information about MB certification status attached on the document both document from smallholder and incoming FFB documents issued by the mill.



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Compliance status: Closed

E.3. Record keeping

Findings: The company has established a mechanism for control and maintenance of the document and data control procedure as stated on FGVPM-RSPO SCCS page 7 of 8 the retention time for all records and reports has been defined for at least for ten (10) years. The storage and maintainance of doc-uments is the responsibility of the respective departments. The list of records stated on the proce-dures. The mill has record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO on daily basis; including record for PK production on “Laporan Penerimaan FFB dan Operasi Pada Harian” (Report on incoming FFB and daily operations); “Laporan Daily Figure Produk Sampingan” (By-product daily figures report) on January 06, 2014 and Daily Figure ISCC/RSPO report (FFB, CPO, Kernel) as sampled on December 30, 2013. The company has defined method for mass balance calculation, the formula for MB calculation has been determined on the procedure considers actual condition of certified FFB and non-certified FFB processed. Spreadsheet form to records material and production balance has no longer used since July 2013 replaced by “Daily op-eration Figure ISCC/RSPO (FFB,CPO,Kernel) ” PIMP739. Information about mass balance per-centage has been included on the figure including information about quantity of incoming certified and non certified FFB. All volumes of palm oil that are delivered are deducted from the material accounting system accord-ing to actual daily conversion ratios. The procedure require material balance have to show deliver product sales from a positive stock. The company has establish mechanism to indicate selected supply chain model in all purchase and sale contracts documents, this is raised as non-conformity during this audit. There is no outsource process, company has their own facility to produce CPO and PK.

Compliance status: Full Compliance.

E.4. Sales and goods out

Findings: The sales and goods out mechanism of the company are described in their procedure of sales of palm oil. Records for next CSPO and CSPK product sold are recorded in daily Figure ISCC/RSPO report for CPO and PK both certified and non-certified All products dispatched from Adela mill transported to FOD (Felda Oil Depot); DOP (Delima Oil Product Refinary); FOP (Felda Oil Product) Refinery all process in Pasir Gudang. - Weigh bridge ticket (CPO Delivery Account) already included data about: Contract Number, Date of issued, Delivery Order number, Buyer name including the adress of buyer,the quantity of the products delivered and Reference to related transport documentation. - Gate Pass Penghataran CPO - Malaysian Palm Oil Board (MPOB) form Borang L-3 ( Palm Oil Board Act of Malaysia 1998) - Delivery Order already inform about buyer address - quality and quantity, delivery date Transports documents issued by the administration staff. The Mass balance calculation for certified product has been considering actual condition of incoming certified material. The information can be seen on the Daily operation Figure ISCC/RSPO (FFB,CPO,Kernel) ” PIMP739. Compliance status: Full Complaince



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E.5. Training

Findings: Adela Mill has training procedure and annual training program for their employee, training has been conducted on February 15, 2013 by Unit RSPO FELDA. The training was attended by two Adela mill staff for SCCS implementation. The mill manager and asisten as the person incharge for SCCS Im-plementation in Adela mill has not trained yet. Training program for year 2014 was found during audit. All relevant staff and workers were trained as well as the mill manager as management representa-tive. Compliance status: Full Compliance

E.6. Claims

Findings: According to product traceability 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 SCCS certificate issued. Company has established specific procedure for claim and communication as guidance for their worker especially for their CSPO/CSPK administration staff to handle communication about certified product. Compliance status: Compliance

3.5 Status of Previously Identified Non Conformities for SCCS

SCCS Non-conformance 2013-01 of 04: Finding: E.2 The SCCS procedure has no clear information regarding definition of FFB from certified source that will be claimed as certified material and the condition that will make certified FFB become non cer-tified FFB. Evidence of Correction/corrective action: It was sight the SCCS procedure has been updated with the definition of FFB from certified source that will be claimed as certified material has been highlighted with green color. The condition that will make the certified FFB downgrade to non-certified FFB also has been highlighted with green color. This is stated on the procedure. Company provides revised SCCS procedure i.e. FELDA Agriculture Service FPISB Palm Oil Mill “SOP for Mill Compliance to RSPO Supply Chain Certification System’ FGVPM-RSPO SCCS issued No. 2.0 dated July 2013. The procedure has included information regarding claim for certified material and condition become non-certified. As stated on page 4 and 5 of 9 from SCCS procedure Auditor Conclusions: Closed SCCS Non-conformance 2013-02 of 04: Findings: E.4 Sustainable verification Information Spread Sheet record still not include information about % MB calculation Adela mill Evidence of Correction/corrective action: Spreed sheet form to records material and production balance has no longer used since July 2013 re-placed by “Daily operation Figure ISCC/RSPO (FFB,CPO, Kernel) ” PIMP739. Information about mass balance percentage has been included on the figure including information about quantity of incoming



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certified and non certified FFB as basic information to get MB% The SCCS procedure FGVPM- RSPO SCCS has been updated with the method of calculation % MB Auditor Conclusions: Closed SCCS Non-conformance 2013-03 of 04: Findings E.5. Formula to calculate mass balance product is not considering actual condition of incoming certified material in the SOP. Evidence of Correction/corrective action: The company provided their revised SCCS procedure FGVPM- RSPO SCCS; the procedure has in-cluded information regarding calculation of mass balance including information regarding actual condi-tion of incoming certified material. The formula to calculate mass balance product has been updated in the SCCS procedure and been highlighted with yellow color. Auditor Conclusions: Closed SCCS Non-conformance 2013-04 of 04: Findings E.6. The mill manager and assistant as the person in charge for SCCS Implementation in Adela mill has not trained yet. Evidence of Correction/corrective action: The company provided training evidence for mill manager and mill assistant, such as training attend-ance lists and training material of RSPO SCC The mill manager and assistant in charge for SCCS im-plementation has been trained as the evidence given. Auditor Conclusions: Closed

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

SCCS Non-conformance 2014-01 of 01: Finding: E.2 Implementation of the SCCS is not in accordance with the SOP, i.e. the job description for Assis-tant Mill Managers states that they are responsible for conducting annual audit 3 months before the RSPO SCCS third party audit. The mill assistant is also responsible to check that the SCC system is properly implemented and all documents required for mass balance tracking, delivery, etc are in place. However, there is no evidence that the mill does such checking of SCC implementation or internal au-diting as required in the SOP. Correction: 1. The manager issued an order letter to the Mill Assistant Managers to carry out the tasks described in

the SCCS SOP 2. To maintain records of RSPO Internal audits carried out by the Mill Assistant Managers

** Internal Audit SCCS was carried out by the mill assistant manager together with the SPO officer on 6.1.2014 Corrective action:

1. Monitoring and checking by the Mill Manager to be done 3 months before the third party audit is conducted



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2. Internal audit checking by the SPO Officer for PSQM Department, HQ. 3. To updated the RSPO SCCS files

Auditor Conclusions: Closed It was sight the SCCS procedure has been updated with the definition of FFB from certified source that will be claimed as certified material has been highlighted with green color. The condition that will make the certified FFB downgrade to non-certified FFB also has been highlighted with green color. This is stated on the procedure. Company provides revised SCCS procedure i.e. FELDA Agriculture Service FPISB Palm Oil Mill “SOP for Mill Compliance to RSPO Supply Chain Certification System’ FGVPM-RSPO SCCS issued No. 2.0 dated July 2013., the procedure has include information regarding claim for certified material and con-dition become non certified. As stated on page 4 and 5 of 9 from SCCS procedure. Date of Closure: 2 April 2014

3.7 Noteworthy Positive Components

Criterion 6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. There is evidence that the assessment has been done with the participation of various levels of employees, i.e. staff, workers, settlers, contractors and suppliers. The gender dimension was also included in the sam-pling. A standard questionnaire was used to elicit information from respondents.

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

Findings: In addition to their normal salary, workers are provided an incentive of RM150 per month known as AIPS incentive, of which 50% is banked into worker’s accounts with their salary and another 50% is kept as savings for the workers. Workers are allowed to take out these savings once a year.

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

Findings: Adela mill has started implementation of a plan to reduce BOD of effluent treated with installation of a polishing plant which is expected to reduce the final BOD of discharged effluent



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3.8 Issues Raised by Stakeholders and Findings Pertaining to Issues

No. Issues Raised Audit Verification

1.

DOE officer who conducted inspections for Adela Mill was contacted by phone and informed that Adela Mill follows up on all issues raised by DOE during their inspections through regular reports. The officer also informed that Adela Mill has ceased usage of their incinerators in accordance with legal requirements.

Sample DOE reports from Adela mill were sighted, including responses to issues raised by DOE during their site visit. Based on ash bagging records, the last usage of the incinerator was in February 2013, and since then there has been no usage of incinerators.

2.

Migrant worker in Kledang 2 complained that their pay slips given after salaries are paid, so that they can not express object if there is a mistake in the salaries payment.

Felda provide pay slips to each em-ployee, including migrant workers. Employees can also request directly to the Felda management. However, as recognized by Felda management in Sening complex, sometimes pay slips delivered after the salary is paid.

3. Foreign workers do not understand the terms and conditions of the contract.

It was raised as a non-compliance. See Section 3.1, Principle 6.

4. Some smallholders are not satisfied with the FFB grading and OER from Adela Mill.

The FFB prices are based on grading whereby the price paid to the small-holders are based on the quality of the FFB.The mill management has ex-plained this to the smallholders. The MPOB FFB prices are also put up for public viewing at the mill on a daily basis.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for March 10, 2015

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 FELDA …………………………………………. Name: Position: Date:

Signed on behalf of PT TUV Rheinland Malaysia ………………………. Dian S. Soeminta Lead Auditor Date: 29 October 2014

Anthonius Sani Sustainability Manager PSQM, FGVPM 20 November 2014



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APPENDICES

Appendix 1: Revised RSPO Certificate The certificate was reissued under name of TUV Rheinland Indonesia as the newly accredited RSPO Certifi-cation Body under TUV Rheinland Group. The previous certificate was issued under TUV Rheinland Malay-sia.



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Appendix 2: List of Abbreviations BOD Biological Oxygen Demand CHRA Chemical Health Risk Assessment CLASS Occupational Safety (Classification, Labelling, Safety Data Sheet of hazardous Che-

micals) Regulations CPL Classification, Packaging and LabellingCPO Crude Palm Oil CSDS Chemical Safety Data Sheet DOE Department of Environment DOP Delima Oil Product Refinary DOSH/ JKKP

Department of Occupational Safety and Health/ Jabatan Keselamatan dan Kesihatan Pekerja

EFB Empty Fruit Bunches

EIA Environmental Impact AssessmentERTs Endangered, Rare & Threatened speciesESH Environmental Safety & HealthEQA Environmental Quality ActFFB Fresh Fruit BunchesFMA 1967 Factories and Machinery Act 1974FOD Felda Oil Depot FOMEMA Foreign Workers Medical Screening

FOP Felda Oil Product

FPISB FELDA Palm Industries Sdn. Bhd.FPSB Felda Plantation Sdn. BhdFTSB Felda Technoplant Sdn. Bhd FTPSB Felda Techno Plant Sdn Bhd GPW Gerakan Persatuan Wanita / United Women’s MovementHCV High Conservation ValueHIRARC Hazard Identification, Risk Assessment and Risk Control HQ Headquarters

IPD Ibu Pejabat Polis (Police Headquarters)

IPM Integrated Pest ManagementJCC Joint Consultative CouncilJKKR Jawatan Kuasa Kemajuan Rancangan (Plan Development Committee) JKKP Jabatan Keselamatan dan Kesihatan Pekerjaan (Department of Occupational Safety

and Health) KER Kernel Extraction Rate LTA Lost Time Accident MSDS Material Safety Data Sheet

MBFM Majlis Belia Felda Malaysia (Felda Malaysia’ Youth Council) MPOB Malaysian Palm Oil BoardNADOPOD

Notification of Accident, Dangerous Occurrence, Occupational Poisoning and Occupatio-nal Disease Regulations 2004

NCR Nonconformity report NGO OER

Non-Government Organization Oil Extraction Rate

OSH Occupational Safety & HealthOSHA Occupational Safety & Health ActPKO Palm Kernel Oil PMD Pendaftaran Mesin Dandang (Steam Machine Registration)PMT Pendaftaran Mesin Tekanan (Pressure Machine Registration)POME Palm Oil Mill EffluentPPE Personal Protective EquipmentRKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan)



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RSPO Roundtable for Sustainable Palm OilSDA Social Development AssistantSIA Social Impact AssessmentSOCSO Social Security OrganizationSOP Standard Operating ProcedureSPPA Skim Pampasan Pekerja Asing (Foreign Worker’s Compensation Scheme) UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) USECHH Use and Standard of Exposure of Chemical Hazardous to Health



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Appendix 3: List of Stakeholders Interviewed and Contacted

No. Name of Stakeholder Institution / Position Remarks Stakeholders Interviewed On-Site

1. Suresh a/l Sundramurthy Department of Environment Contacted by phone2. Fauzi b. Samsudin Chairman Felda Sening3. Hj. Mahmod Omar Chairman JCC Kilang Sawit

Lok Heng

4. Hj. Zakaria Daud Chairman JCC Kilang Sawit Adela

5. Zairi Sr. Supervisor-Sening6. Abd Har’rashid b. Abd

Rahman Asst. Manager-Sening

7. Aziana Stock Clerk-Sening8. Mohd Kazael Mandore-Kledang 29. Musanip b. Razak Supervisor-Kledang 2

10. Rosdiyanto Sprayer-Kledang 211. Kukuswali Sprayer-Kledang 212. Rizal Mandore-Kledang 213. Hasni bt. Ahmad Stock Clerk-Kledang 214. Abdullah b. Muhammad Ali Manager-Tunggal-Felda15. Mohd Hairi b. Adris Manager-Tunggal16. Hj Nordin Sabran Manager-Kledang 217. Saayah bt. Mohd Noh Chief Clerk-Mill18. Md. Aseri b. Mohamad Mill Manager19. Arif Abdullah Asst Mill Manager20. Mohammad /Mansur b. Ja-

mian Asst Mill Manger

21. Yusof b. Harun Operation Supervisor-Mill22. Norehan bt. Kasiran 23. Burhanudin Bobcat Driver-Mill24. Abd Halim Bobcat Driver-Mill25. Moch Daim Bin Wakim Settler from Blok 2 Adela 26. Abu Bakar bin Zainal Settler from Blok 2 Adela 27 Yono Indonesia Migrant

Worker/Harvester/DormitoryAdela

28. Faturahmat Indonesia Migrant Worker/Sprayer

Adela

29. Hartono Indonesia Migrant Worker/Sprayer

Adela

30. Khan Abdul Latif Pakistan Migrant Worker/Sprayer

Sening

31. Imran Nafiz Pakistan Migrant Worker/Sprayer

Sening

32. Aldi Indonesia Migrant Worker/Harvester

Sening

33. Alwi Indonesia Migrant Worker/Harvester

Sening

34. Juraimi Village head of Sening/Settler Sening 35. Kukuh Indonesia Migrant Worker/

SprayerKledang2

36. H. Moh Sis Contractor/Settler Kledang2 37. Heri Indonesia Migrant Worker/

SprayerKledang2

38. Sahban Indonesia Migrant Worker/ Sprayer

Kledang2

39. En.Zulhaq Harvester Male foreign worker (from Lombok, Indonesia)



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40. En.Sameq Harvester Male foreign worker (from Lombok, Indonesia)

41. En.Adenan Harvester Male foreign worker (from Lombok, Indonesia)

42. En.Jan Alam Harvester Male foreign worker (from Lombok, Indonesia)

43. En.Maharam bin Muhamad Assistant Chairman of JKKK Felda Sg.Mas

Smallholder

44. En.Hazlan bin Hanaffee Maintenance Contractor Adela Mill

Local Contractor

45. En.Lokman Jauhari Laboratory Male Adela Mill Employee46. En.Hairul bin Bujang Kernel Plant Operator Male Adela Mill Employee47. En.E.D. Asmadi Mechanical Department Male Adela Mill Employee48. En.Ahmad Bukhari bin

Mohamad Electrical Department/Union Leader

Male Adela Mill Employee

49. Pn.Fatimah bt.Yahya Felda Adela GPW Chairwoman Smallholder 50. En.Abu Bakar Secretary JKK Felda Adela Smallholder 51. Tn.Hj.Hassan Ismail JKKK Felda Tunggal Smallholder 52. En.Radzuan bin Yusof JKKK Felda Tunggal Smallholder 53. En.Mohd.bin Parman JKKK Felda Tunggal Smallholder 54. En.Madon bin Salleh JKKK Felda Tunggal Smallholder 55. Pn.Samsiah bte. Hassan Senior Clerk Female Adela Mill

Employee 56. Pn.Sa’yah Md.Noh Clerk Female Adela Mill

Employee 57. Pn.Norita Bte.Salleh Clerk Female Adela Mill

Employee 58. En.Mat Nuzi bin Yaacob Executive Tenaga Kerja

(Human Resource Executive)Felda Wilayah Johor Bahru

59. En.Mohd.Shahril bin Zah Estate Manager FeldaTechnoplant Kledang

60. Cik Hasnaliza binti Kanan Clerk II Felda Technoplant Kledang

61. En.Mohd.Faiq bin Tukiman RSPO Officer Felda Technoplant Kledang

62. Mr.Hari Prasad Gautam Sprayer Male foreign worker (from Nepal)

63. Mr.Tule Oli Sprayer Male foreign worker (from Nepal)

64. En.Ahmad Shahrir Ismail RSPO Officer (HQ) FGV HQ 65. Cik Asiah Md. Yusop Kerani RSPO Kledang 2 66. En.Mohd.Husain bin Razali Document control officer Kledang 2

67. Pn. Norhuda binti Ahmad Clerk Technoplant Sg.Mas68. Pn.Nurul Atiqah Abdul

Nepar Social Development Assistant Felda Sungai Mas

69. En.Mohd. Khusari bin Mohd.Farid

Assistant Estate Manager N/A



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Appendix 4: Observations and Opportunities for Improvement

No. Criterion Observations / Opportunities for Improvement 1 - 1) There is lack of standardization between system and documents/ templates used be-

tween different estates, e.g. estate basic data (“maklumat asas”) such as total area, plant-ed area, year of planting, is presented at different formats at different estates.

2) Documentation storage system requires improvement, due to long retrieval time to ob-tain documents requested at most estates and difficulty in locating requesting documents including FGV’s Sustainability Manual and Agricultural Manual

3) The estates have a filing system arranged according to RSPO requirements, however the files are not up-to-date as all information in the files are from year 2010.

2 2.1 1) Mill scheduled waste store was observed to be lacking hazard signage, e.g. dangerous chemicals warning, flammable

2) The chemical store at Adela Mill’s wastewater treatment plant has a broken lock, so anyone can access the store easily.

3 4.2 There is no evidence of regular soil sampling to monitor changes in nutrient status carried out at Kledang scheme and potentially at all other schemes

4 4.2 It was observed at Kledang and Sening schemes, that EFB is dumped in piles which may encourage breeding of orytes.

5 4.4 Penggeli Analysis Lab which is used for analysis of effluent sample from Adela mill is not yet an accredited laboratory but has undergone an accreditation audit by the Department of Standards Malaysia on 7 January 2013 as seen from letter from the department. Ap-proval of accreditation has not yet been received by the lab

6 4.5 1) During the audit time, the company produced two SOPs, one for “Management of bagworms through monitoring and census”, one for “Control of Leaf Eating Pests and the Estates” which has yet to be disseminated and applied at all estates. Implementation will be verified during the next surveillance audit. It is also noted that the SOPs are not dated.

2) For Kledang 2 level PM08, rat baiting was last done on 16 April 2013 with follow up census on 23 April where found attack rates at all blocks were from 25% - 57%. However, Kledang 2 did not carry out follow-up rat baiting as explained by the staff that most of the rat bait was eaten by ants and not rats, but there was no note of this in the records sightedto justify why rat baiting was not conducted.

7 4.7 There is no evidence on emergency response training for land fires. Based on interviews with workers at Sg. Mas, some are not able to explain well how to deal with land fires

8 5.3 As seen from scheduled wastes manifests, there is evidence that the mill had stored scheduled wastes for more than 180 days, i.e. for hard gloves, previous collection before collection on 11 October 2013 was on 6 November 2012, which is approximately 11 months. Other wastes were found to be collected within the required timeframe of 180 days.

9 6.1.2 The SIA did not adequately capture the responses of foreign workers, especially those who are not conversant in the local language. Also, the SIA relied solely on questionnaire and did not consider stakeholders who are illiterate/not conversant in Bahasa Malaysia.

10 6.5 It was informed by workers during interviews that their housing is supplied with electricity from a genset at certain hours from around 6.30pm to midnight, but in the early morning when the workers need to prepare for work but it is still dark, no electricity is supplied to the housing and the workers use candles in the morning

11 6.6 -Some local staff are members of trade union, with RM6 deducted from salary but they have no information about activities of the trade union and are not involved in trade union. Union representative at Scheme level is not known.

12 6.9.2 There is no policy to protect the reproductive rights of all, especially women.

13 P&C 2013 Management has not provided a report of HCV; Human Rights Policy; and Public sum-



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CR1.2 mary of certification assessment report to be known by stakeholders

14 P&C 2013

CR1.3

The company has no written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be documented and communicated to all lev-els of the workforce and operations.

15 P&C

2013

CR3.1

1) Kledang 2 does not have a documented business or management plan which in-cludes: • Attention to quality of planting materials; • Crop projection = Fresh Fruit Bunches (FFB) yield trends; • Cost of Production = cost per tonne of Crude Palm Oil (CPO) trends; • Forecast prices; • Financial indicators. 2) The schemes do not have a documented business or management plan (mini-mum three years) which includes a business case for scheme smallholders

16 P&C 2013

CR4.1

There is no formal training programme in place that covers all aspects of the RSPO Prin-ciples and Criteria, and that includes regular assessments of training needs and docu-mentation of the programme. Records of training of each employee are not maintained.

17 P&C 2013

IN5.2.3

No programmes to regularly educate the workforce about the status of the RTE spe-cies.

18 P&C 2013 IN5.2.4

No monitoring plans to support management prescriptions listed in HCV report for Adela complex.

19 P&C 2013 CR5.6

The organization currently carries out monitoring of pollution and emissions from the mills, but emissions from other operations such as land use changes are still not regularly moni-tored used an appropriate tool approved by RSPO such as PalmGHG.

20 P&C 2013

IN 6.1.3

Management cannot provide the monitoring of SIA result also considers the promotion of positive impact.

21 P&C 2013

IN 6.1.4

Management does not yet have a policy that the monitoring plan of SIA is reviewed and updated at least once every two years

22 P&C 2013

IN 6.1.4

The SIA was updated after 2 years (first conducted in 2010 and updated in 2014), but there is no evidence of participation of affected parties in the second SIA pro-cess.

23 P&C 2013

IN 6.2.3

Records of responses and communications with stakeholder has not included evidence that stakeholders have received the answer

24 P&C 2013

IN 6.5.4

There is no policy and program from management to monitor and improve workers’ ac-cess to adequate, sufficient and affordable food.

25 P&C 2013

IN 6.6.2

Management has not been able to show the minutes of a meeting between union workers with management

26 P&C 2013

IN 6.11.2

Management of Smallholder Scheme has not been able to show evidence (documenta-tion) that they have programs to improve smallholder productivity.

27 P&C 2013

CR 6.12

Management has not conducted a review and identification of practical forms of forced or trafficked labour and contract substitution

28 P&C 2013

CR 6.13

Management has yet to make and communicate human rights policy

29 P&C 2013

CR8.1

All estates and schemes have yield targets, but no plan for optimizing the yield of the supply base.