rspo principles & criteria public summary report … · 2014. 11. 2. · klk batu lintang pom 25...

RSPO Principles & Criteria

Annual Surveillance Assessment Report

Report Number CU827591

RSPOPC-SUM-REPORT.F01 OCT2013 Page 1 of 43

Control Union (Malaysia) Sdn. Bhd.

150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia.

Tel: +603-3377 1600 / 1700

RSPO PRINCIPLES & CRITERIA

PUBLIC SUMMARY REPORT

ANNUAL SURVEILLANCE ASSESSMENT 1

Malaysia

BATU LINTANG POM

Kuala Lumpur Kepong Berhad

2014

Report prepared by: Simon Selvaraj (Lead Assessor)

Certification decision by: Gerben Stegeman (Certifier)

Certifying Office


150-A, 1st Floor, Persiaran Raja Muda Musa,

Off Jalan Sg Bertih, Teluk Gadong, 41100 Klang, Selangor, Malaysia

[email protected]

Tel: +603-3377 1600 / 1700

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

inspection and certification body. CUC performs assessments and certification in many agricultural

based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic

Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN

45011 for the inspection and certification of CUC Organic program (according to the EU regulation

2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be

obtained from CUC.

Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited

company owned by the Control Union World Group based in Malaysia. Control Union (Malaysia)

Sdn Bhd is authorized to conduct and issue certification on behalf of RSPO and Control Union

Certifications.

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

RSPO Approval Date 12/01/2006

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







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Table of Contents

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

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

1.7.1 Location of the Supply Base ............................................................................................... 5 1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year ............... 5 1.7.3 Conservation and HCV Area (Ha) ....................................................................................... 5 1.7.4 Percentage of Planted Oil Palm by different Age Ranges ................................................ 5 1.7.5 Calculation of the Number of Production Units (N) to Sample for the Mill ..................... 6

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

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

2.1 MANAGEMENT STRUCTURE ............................................................................................................... 7 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ................................................................................... 7 2.3 SUMMARY OF THE TIME BOUND PLAN ................................................................................................. 7 2.4 UN-CERTIFIED UNITS OR HOLDINGS .................................................................................................... 9 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ..................................................................... 12 2.6 PARTIAL CERTIFICATION AUDIT AGENDA ............................................................................................ 12

PART 3: AUDIT PROCESS.................................................................................................................... 13

3.1 ABOUT THE CERTIFICATION BODY ..................................................................................................... 13 3.2 AUDIT TEAM ................................................................................................................................. 13

3.2.1 Qualifications of the Lead Auditor ......................................................................................... 13 3.2.2 Qualifications of the Assessment Team ................................................................................. 14

3.3 AUDIT METHODOLOGY.................................................................................................................... 15 3.3.1 General Overview ............................................................................................................ 15 3.3.2 Assessment agenda for this Audit ................................................................................... 16

PART 4 ASSESSMENT FINDINGS ........................................................................................................ 17

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ............................................. 17 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA .................................................................... 17

Principle 1: Commitment to Transparency ..................................................................................... 17 Principle 2: Compliance with Applicable Laws and Regulations .................................................... 18 Principle 3: Commitment to Long-Term Economic and Financial Viability ..................................... 19 Principle 4: Use of Appropriate Best Practices by Growers and Millers ......................................... 20 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

........................................................................................................................................................ 23 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by

Growers and Millers ........................................................................................................................ 25 Principle 7: Responsible Development of New Plantings ................................................................ 27 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity ............................. 27

4.3 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE ......... 27 4.3.1 Non-Conformities Identified during this Audit ...................................................................... 27 4.3.2 Non-Conformity Identified during the last ASA, not applicable for MA ................................ 31

THE FOLLOWING NC’S WERE RAISED DURING THE LAST AUDIT AND THE STATUS WAS REVIEWED AS INDICATED BELOW. 31 4.3.3 Observations Raised During this Audit .................................................................................. 35







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

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ................................................................................... 38

5.1 POM INCLUDED IN THE SCOPE OF THE AUDIT ..................................................................................... 38 5.2 CONFIRMATION OF THE COMPANY’S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM KERNEL OVER A SPECIFIED PERIOD ...................................................................................... 38 5.3 SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION ............................. 38 5.4 MONTHLY RECORDS OF CERTIFIED FFB, CPO AND PK SINCE THE LAST AUDIT ........................................... 39 5.5 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY....... 39 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY ...... 39 5.7 NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT ............................................................................ 39 5.8 DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS ............................................................ 40 5.9 FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM ................... 40

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ........... 40

6.1 DATE OF NEXT ASA ........................................................................................................................ 40 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ...................................................................................... 40 6.3 SIGNING BY THE CLIENT ................................................................................................................... 41 6.4 SIGNING BY THE LEAD AUDITOR ........................................................................................................ 41 6.5 SIGNING BY THE CERTIFIER ............................................................................................................... 41

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

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT .......................................................................... 42 APPENDIX 2: LIST OF ABBREVIATIONS ........................................................................................................... 43







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PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT

1.1 Company and Contact Details

Company Name: Kuala Lumpur Kepong Berhad

Business Address: Wisma Taiko, 1, Jalan S. P. Seenivasagam,

30000 Ipoh, Perak.

Contact Person: Mr Sin Chuan Eng

Office Telephone: +6052417844

E-Mail: [email protected]

Web Site: www.klk.com

Other Certifications Held: RSPO SCCS, ISCC

1.2 RSPO Membership & Certification Details

RSPO Membership Number: 1-0014-04-000-00

Registered Client Name: Kuala Lumpur Kepong Berhad

Certificate Number: C827591CU-RSPO-01.2013

Start Date Of Certificate: 26th

September 2013

End Date Of Certificate: 25th

September 2018

Date Of Original Certification: 26th

September 2013

Scope: Certification of the Palm Oil Mill and Supply Bases

Type Of Certification: Single site

Duration Of Certificate: 5 Years from date of certification

1.3 Annual Surveillance Assessment Details

Dates Of This Audit: 21st

– 23rd

July 2014

Audit Number: Main Assessment (1)

1.4 Assessment Type

This is a RSPO Principles &Criteria Compliance assessment of the palm oil mill and its respective supply bases as

listed in this report below.

1.5 Location of the Palm Oil Mill

Name

Palm Oil Mill

Mill

Capacity Location GPS Reference

(POM) MT/Hour Address Longitude Latitude

KLK Batu Lintang

POM 25 09800 Serdang, Kedah E 100.62843

N 5.193591

1.6 Palm Oil Mill Output and Approximate Tonnages Certified

Figures below are from:

• Only from certified supply bases (Y/N). YES

• Combining certified with uncertified supply bases (Y/N). NO

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

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

Projected Production from the

last 12 Months (MT)

Actual Production for this Audit Year

Sept 2013/ July 2014 (MT)

Projected 12 Months (MT) from

July 2014 / June 2015 Forecast

Certified in this Report

FFB CPO PK FFB CPO PK FFB CPO PK







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115,635 30,007 7,257 82,801 18,630 4,140 115,635 30,007 7,257

1.7 General Description of Supply Base

Batu Lintang POM is owned by Kuala Lumpur Kepong Berhad and has 4 supply bases named Batu Lintang Estate,

Subur Estate, Pelam Estate, and Buntar Estate. Details of each supply base are listed below.

1.7.1 Location of the Supply Base

OPP

Oil Palm

Plantation Location GPS reference Area Summary (Ha)

Name Address Longitude Latitude Total Mature

OPP 1 Batu Lintang

Estate

09800 Serdang, Kedah E 100.62907 N5.204542

1,809 1,743

OPP 2 Subur Estate Bt. 23 Batu Kurau, 34520

Taiping, Perak

E100.79527 N5.047778

1,290 1,261

OPP 3 Pelam Estate 09020 Malau Baling,

Kedah

E100.73515 N 5.514208

2,960 2,341

OPP 4 Buntar Estate 09800 Serdang, Kedah E 100.60 N 5.168326

900 817

TOTAL 6,959 6,162

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

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

OPP 1 Batu Lintang Estate * 38,346 1990-2013 25

OPP 2 Pelam Estate 27,742 1990-2013 25

OPP 3 Subur Estate 51,502 1990-2013 25

OPP 4 Buntar Esate * - -

TOTAL 117,590

*Buntar estate will be combined with Batu lintang estate from 2013

Only use data from 1.7.3 in the eTrace Summary

1.7.3 Conservation and HCV Area (Ha)

OPP Oil Palm Plantation Conservation Area (Ha) HCV Area (Ha) * HCV part of

Conservation

OPP 1 Batu Lintang Estate * 160.00 - Yes

OPP 2 Pelam Estate - - -

OPP 3 Subur Estate - - -

OPP 4 Buntar Esate * - - -

TOTAL 160.00 -

* Indicate if HCV area is part of the Conservation Area. If the HCV area is part of the Conservation Area, then

“YES” otherwise, “No”

1.7.4 Percentage of Planted Oil Palm by different Age Ranges

OPP Planting Years by 5 year Ranges

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

OPP 1 9 9 39 11 25

OPP 2 3.55 11.28 38 20.84 10.4

OPP 3 10.3 9.04 20.78 13.17 26.57

OPP 4 - - - - -







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

N = 0.8√Y, where “Y” is the number of units, with the result always to be rounded “up” to the next whole

integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in

the certification program, are to be preferred over those more recently assessed

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

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

3 3 0 0

Explanation as to the selection of estates sampled

2 estates were sampled.

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

Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in

accordance to the 3 year implementation plan, if applicable to this assessment

Not applicable as there is no smallholders crops received.

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







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PART 2: PARTIAL CERTIFICATION

The rules for partial certification allow organizations that have a majority holding in and / or management

control of more than one autonomous company growing oil palm to certify individual management units and /

or subsidiary companies subject to certain rules.

2.1 Management Structure

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

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are

no other plantations or mills owned by the same

company?

No Section 2 is

N/A

Go to 2.1.2

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

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency

company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary

companies and / or with any operating groups?

- Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and

subsidiaries involved with the growing of oil palm

and for the production of palm oil?

- Go to 2.4 Go to 2.2.2

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

Yes Go to 2.3 2.2.3

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

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category

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

partial certification.

- Major

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

- Major

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

- Major

2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

2.3.1 Does the plan include all

subsidiaries, estates

and mills?

New inclusion of supply base and mill has been updated in

below time bound plan.

Yes

2.3.2 Is the time bound plan challenging?

� Age of plantations.

� Location. � Mill

development.

� Infrastructure. � Compliance

Existing time bound plan has been included with new supply

base and mill.

Yes







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with applicable

law.

2.3.3 Have there been any changes since

the last audit? Are

they justified?

The time bound plan reviewed by CUC and changes such as new

inclusion is updated and accepted.

Yes

2.3.4 If there have been changes, what

circumstances have

occurred?

New inclusion of mill and supply base. No changes on the

targeted time line.

Yes

2.3.5 Have there been any stakeholder

comments?

• Recent stakeholder comment on acquired land in Papua New Guinea on the credibility on land obtained has been

raised by OCEAN-Program Officer Collingwood Bay

Community Representative, Mr. Adelbert Gangai has sent

comments to KLK on a letter dated 5th

December 2013 and

kept RSPO & other parties in copy. Currently, KLK has

leased a piece of a land to park all the machineries

temporarily. As of 09 December 2013, this matter is being

handled with RSPO and currently KLK is in progress to reply

to RSPO. Wild Asia had been appointed since April 2013 to

undertake SEIA assessment and subsequently 1st

meeting

at Wanigela district on 25th

Nov 2013 and community and

representative attended was recorded. Pending official

assessment report.

• On PT Menteng Jaya Sawit Perdana IUP for 7,400Ha approval no: 525.26/153/II/EKBANG/2007 dated on 13

February 2007 and Izin Lokasi (IL) is renewed and

documented no: 188.45/359/HUK-BPN/2013 dated: 1st

August 2013 which includes an approval clause 1a that this

IL will remain in force until land swap process is finalised.

Yes

2.3.6 Have there been any newly acquired

subsidiaries?

No new acquisition other than Papua New Guinea. Yes

2.3.7 Have there been any isolated lapses

in the

implementation of

the plan?

No lapses. Yes

2.3.8 Has there been any systematic failure

to proceed with the

implementation of

the plan?

No. Yes

2.3.9 General statement as to progress made

since the last audit?

The target to certify all the units within year 2015 remain same. Yes







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2.4 Un-Certified Units or Holdings

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all

subsidiaries, estates and Palm Oil Mills)

Section Requirement Findings and any action required Compliance

2.4.1 Did the company conduct an internal

audit? If so, has a

positive assurance

statement been

produced?

The internal control points have included all the requirements to

validate the compliance against uncertified units or holdings as

per partial requirements and assurance statement has been

generated by KLK has a list of subsidiaries inspected and dated

30th

Nov 2013.

Yes

2.4.2 No replacement after dates defined

in NIs Criterion 7.3

of:

• Primary forest.

• Any area identified as

containing

High

Conservation

Values (HCVs).

• Any area required to

maintain or

enhance HCVs

in accordance

with RSPO

criterion 7.3.

The company has conducted HCV assessment by Jump

Consulting in January – February 2012 for all subsidiaries where

the assessment report confirms that there was no replacement

of primary forest or containing HCV. The new mills and newly

acquired land are still under consultant preliminary report.

Yes

2.4.3 Any new plantings since January 1

st

2010 must comply

with the RSPO New

Plantings

Procedure.

PT Anugerah Surya Mandiri has undergone NPP and published in

RSPO website on 1st

April 2013.

Yes

2.4.4 Any Land conflicts are being resolved

through a mutually

agreed process,

e.g. RSPO

Grievance

procedure or

Dispute Settlement

Facility, in

accordance with

RSPO criteria 6.4,

7.5 and 7.6.

For PT Karya Makmur Abadi, a total land of 4,745.13Ha has been

compensated. PT Adei Plantation land conflicts around 2,544Ha

are still in progress of negotiation.

Yes

2.4.5 Any Labor disputes are being resolved

through a mutually

agreed process, in

accordance with

RSPO criterion 6.3.

None noted.no stakeholder comments or complaints received Yes







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2.4.6 Any Legal non-compliance is being

resolved in

accordance with

the legal

requirements, with

reference to RSPO

criteria 2.1 and 2.2.

None noted. No stakeholder comments or complaints received. Yes

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

Palm Oil Mill Country Supply Bases (estates,

plantations, associations)

Targeted RSPO

Certification Year

Current

Certification Status

as per this Audit

Batu Lintang Serdang, Kedah.

Malaysia

• Pelam Estate

• Batu Lintang Estate

• Subur Estate

• Buntar Estate

2013 Certified

Kekayaan Paloh, Johor.

Malaysia

• Landak Estate

• Kekayaan Estate

• Voules Estate

• Sg Penggeli Estate

• New Pogoh Estate

• Fraser Estate

• Paloh Estate

• Sg Bekok Estate

• Ban Heng Estate

• See Sun Estate

Oct 2011 Certified

Paloh Paloh, Johor.

Malaysia

Supply base consisting of

smallholders 2015 Pending

Jeram Padang

Bahau, Negeri

Sembilan.

Malaysia

• Ayer Hitam Estate

• Batang Jelai Estate

• Jeram Padang Estate

• Kombok Estate

• Ulu Pedas Estate

• Sg Pertanian Estate

• Sg Kawang Estate

• Renjok Estate

• Tuan Estate

Sept 2012 Certified

Tanjung

Malim

Tanjung Malim,

Perak. Malaysia

• Changkat Asa Estate

• Kerling Estate

• Sg Gapi Estate

2013 Certified

Tuan Mee

Sungai Buloh,

Selangor.

Malaysia

• Tuan Mee Estate 2013 Certified

Kuala Pertang

Kuala Krai,

Kelantan.

Malaysia

• Kerilla Estate

• Pasir Gajah Estate

• Sg Sokor Estate

By 2013 Pending

Mill 1 Tawau, Sabah.

Malaysia

100% independent

smallholders, not to be

included in the scope of the

certification

N/A N/A







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Mill 2 Tawau, Sabah.

Malaysia

• Pang Burong Estate

• Sri Kunak Estate

• Tundong Estate

• Ringlet Estate

March 2009 Certified

Pinang Tawau, Sabah.

Malaysia

• Jatika Estate

• Sigalong Estate

• Pangeran Estate

• Pinang Estate

March 2009 Certified

Lungmanis Lahad Datu,

Sabah. Malaysia

• Tungku Estate

• Bukit Tabin Estate

• Lungmanis Estate

July 2010 Certified

Rimmer Lahad Datu,

Sabah. Malaysia

• Rimmer Estate

• Sg. Sibalukan July 2010 Certified

Bornion Kinabatangan,

Sabah. Malaysia

• Bornion Estate

• Segar Usaha Estate July 2010 Certified

Changkat

Chermin

Manjung, Perak.

Malaysia

• Lekir Estate

• Changkat Chermin Estate

• Raja Hitam Estate

• Glenealy Estate

• Serapoh Estate

• Kuala Kangsar Estate

• Allagar Estate

2013 Certified

Berau 1 Berau, Kaltim.

Indonesia

• Kebun Malindomas Perkebunan,

• Kebun Hutan Hijau Mas,

• Kebun Jabontara Ekakarsa

By 2014 Pending

Steelindo

Wahana

Perkasa

Belitung,

Indonesia

• Kebun Steelindo Wahana Perkasa

By 2013

Audited on 30/9-

04/10/2013.

Pending.

Parit

Sembada

Belitung,

Indonesia

• Kebun Parit Sembada

• Kebun Alam Karya Sejahtera

By 2014 Pending

Mandau Riau, Sumatera,

Indonesia • Kebun Mandau Oct 2012 Certified

Nilo 1 Riau, Sumatera,

Indonesia • Kebun Nilo Timur By 2013

Approved by RSPO,

pending certificate

issuance.

NIlo 2 Riau, Sumatera,

Indonesia • Kebun Nilo Barat By 2013

Approved by RSPO,

pending certificate

issuance.

Tapung

Kanan

Riau, Sumatera,

Indonesia

• Kebun Sekarbumi Alamlestari

By 2013 Certified.

Gohor Lama

Langkat,

Sumatera Utara.

Indonesia

• Kebun Basilam

• Kebun Gohor Lama

• Kebun Tanjung Beringin (New inclusion)

By 2014 Pending

Padang

Brahrang

Sumatera Utara.

Indonesia

Kebun Padang Brahrang

Kebun Bukit Lawang

Kebun Tanjung Keliling

Kebun Bekiun

Kebun Maryke

(New Inclusion)

By 2014 Pending







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MAP March

2013

Kalimantan

Tengah.

Indonesia

Kebun Karya Makmur Abadi

Kebun MAP

Kebun Menteng Jaya Sawit

Perdana

By 2015 Pending

2.5 Summary of the findings for Partial Certification

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-

compliance identified may lead to certification suspension.

Overall findings are satisfactory and a minor non-compliance raised has been closed with an assurance

statement. The 6 estates which have been excluded from time bound plan previously is included now with a

target date. Out of the two mills in Kalimantan Timur, a new palm oil mill named Berau 2 POM is yet to

commission. Stabat POM in Medan & KMA POM in Sampit has not commissioned and will be included in the

time bound plan once ready. The company has also made decision to include Paloh Mill into certification by year

2015. Mill 1 which consists of 100% of independent smallholders will be shut down within 3 years from 2012.

For final conclusion, please refer to table 3.1.

2.6 Partial Certification Audit Agenda

Date Location Agenda

- Conducted during Jeram Padang audit on 01/7/2014







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PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group – an international inspection and

certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO,

and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and

GTP.

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

the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and

EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

Control Union (Malaysia) Sdn Bhd is a registered affiliate member of RSPO and is a private limited company

owned by the Control Union World Group based in Malaysia. Control Union (Malaysia) Sdn Bhd is authorized

to conduct and issue certification on behalf of RSPO and Control Union Certifications.

3.2 Audit Team

Lead auditor: Simon Selvaraj

Team member 1: Mohd Jamalul Arif

Team member 2: Ramani

Team member 3: Atiqah [Trainee Auditor]

Team member 4: Mohd Syafiq

3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

A minimum of post high school (post-secondary

school) training in either agriculture/forestry,

environmental science or social sciences;

Post graduate qualification in agriculture with more than

5 years working experience in plantation.

At least 5 years professional experience in area of

work relevant to the assessment (e.g., palm oil

management; agriculture/forestry; ecology; social

science);

More than 5 years working experience in plantation.

Involved in RSPO auditing since November 2010. Fully

trained in similar agriculture certification programmes

such as RSPO SCCS, Global Gap, ISCC and GMP.

Training in the practical application of the RSPO

criteria, and RSPO certification systems;

Involved in RSPO assessment since November 2010.

Member of CUC RSPO audit team. Involved in audits

conducted in Malaysia and Indonesia

Successfully completion of an ISO 9000:19011 lead

auditors course;

Completed ISO 9001:2008 lead auditor course in July

2011. Successfully completed RSPO Lead Auditor Course

Training in the practical application of RSPO

certification systems.


5 years working experience in plantation

A supervised period of training in practical auditing

against the RSPO criteria or similar sustainability

standards, with a minimum of 15 days audit

experience and at least 3 audits at different

organizations.


5 years working experience in plantation

RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in 2011

Signed code of conduct. Signed with CUC

General knowledge of:

• RSPO P&C standards. Sound knowledge of the P&Cs, Nis and Local Interpretations.

• CUC organizational structure. Sound understanding and has prepared training documents for others

• CUC quality systems. Sound understanding and has prepared training







Tel: +603-3377 1600 / 1700

documents for others

• Lead auditor role. ISO 9001. Prepared an ISO 19011 training course and conducts internal training on auditing techniques

• Report writing. Extensive experience in report writing

• Stakeholder consultation. The process and need for this is fully understood.

• Certification decision process. Fully understand

• RSPO SCCS program manual. Fully understand

• CUC filing systems. Fully understand

• Correct use of RSPO trademarks. Fully understand

• History and objectives of RSPO. Fully understand

• CV available. CV is available

Completion of CUC RSPO lead auditor training. Complete Lead Auditor training

3.2.2 Qualifications of the Assessment Team

RSPO Requirement Team Member Name Qualifications

Fluent in main local

languages and English.

Mohd Jamalul Arif Fluent in English and Bahasa

Ramani Fluent in English and Bahasa

Nor Atiqah Fluent in English and Bahasa

Mohd Syafiq Fluent in English and Bahasa

Field working

experience in the palm

oil sector, or a

demonstrable

equivalent.

Mohd Jamalul Arif Involved in RSPO auditing since November 2010.

Auditing experience in GMP and Globalgap.

Ramani Diploma in Mill Management

Nor Atiqah Graduated on geo-science.

Mohd Syafiq Diploma in Plantation with more than 5 years

working in various palm oil plantations.

Good agricultural

practices (GAP),

integrated pest

management (IPM),

pesticide and fertilizer

use.




Nor Atiqah Attended In-house GAP trainings.



Health and Safety

auditing on the farm

and in processing

facilities. (For example

OHSAS 18001 or

occupational. Health

and safety assurance

system).




Nor Atiqah Attended ISO 9001 awareness trainings.



Workers welfare issues

and social auditing

experience. (For

example with SA8000 or

related social or ethical

accountability codes).




Nor Atiqah Nil









Tel: +603-3377 1600 / 1700

Environmental and

ecological auditing. (For

example experience

with organic agriculture,

ISO 14001 or

environmental

management systems).




Nor Atiqah Nil



Economic issues. Mohd Jamalul Arif Involved in RSPO auditing since November 2010.



Nor Atiqah Nil



3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the

RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO

standard as endorsed for the country in which the audit took place and recorded their findings.

Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to

include:

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

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

Field observations of all operations.

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

• Re-planting sites. Zero burn.

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

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

• Water management. Water courses. Water monitoring.

• Road maintenance. Run off.

• Social amenities. Social Impact Audits.

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

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

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

• Documentation review.

The Palm Oil Mill audit verification included the following activities:

• Mill and workshop inspections. Documentation review & worker interviews.

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

• OSH. Training. Management structure. First aiders.

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

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

• Compliance against the RSPO SCCS certification scheme.

Verification:







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Verification of implementation was done through field observations, workshop and chemical store inspections,

worker and community interviews and mill inspections as summarized above.

3.3.2 Assessment agenda for this Audit

Date Location Main activities

21/07/2013 Batu Lintang

Club House

(All auditors)

08.30 Opening meeting

Chaired by the audit team leader

• Introduction by team leader

• Presentation by respective managers

• Presentation of Palm Oil Mill source of FFB by respective managers

Batu Lintang

POM

9.00 am -

5.00pm

(All auditors)

Supply Chain Certification Assessment of the POM (RSPO SCCS)

Mill inspection

• Workshops

• Stores

• POM application

• Document review

22/07/2013 Pelam Estate

8.00am-

5.00pm

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

• Field inspections. Herbicide application programmers. Harvesting sites and efficiency. Fertilizing operations. SOP’s. Soil maps. Land

preparation. Ground cover. IPM. First aiders and boxes. Ground cover.

Soil erosion. Field observations of all operations.

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

• New planting sites. Zero burn.

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

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

• Water management. Water courses. Water monitoring.

• Road maintenance. Run off.

• Social amenities. Social Impact Assessments.

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

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

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

Document inspection and assessment.

23/07/2013 Pelam Estate

8.00am-

1.00pm

Closing

meeting

1.00pm-

3.00pm

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

• Field inspections. Herbicide application programmers. Harvesting sites and efficiency. Fertilizing operations. SOP’s. Soil maps. Land

preparation. Ground cover. IPM. First aiders and boxes. Ground cover.

Soil erosion. Field observations of all operations.

Closing meeting

Chaired by the audit team leader

• Welcome and introduction by the team leader

• Presentation of findings by the audit team

• Questions and answers

• Final summary by team leader







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End of assessment

Number of assessors participating: 5

Number of days spent for the assessment on site: 3

Total number of person days used for the assessment on site: 15

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The mill and supply bases visited (as per the above Tables 1.5 and 1.7.1) were assessed at field, office, facilities,

stores and a document review was carried out in accordance to the RSPO principles and criteria. The audited

RSPO management system’s documentations seen with minor changes that due to internal and external

influenced factors that in relation to scope of certification. Specific evidence was recorded for estates and mill.

Interviews with Estate Managers, Mill Manager, members of workers union and committee took place in both

formal and informal environments and worker interviews were conducted at the supply base and the mill. The

management is highly committed in maintaining the RSPO system by adopting to continuous improvement

programs. There was no complaint or feedback received during the audit or during the field assessment when

interviewing with the external stakeholders. Under partial certification rules, there is a time-bound plan

established. For further clarification on Partial Certification, see PART 2 above. The management continually

monitoring the established KPI / objectives that significantly rules the achievement of company’s corporate

policy on RSPO. The mill is fully verified for RSPO SCCS system verification and it is found to be in full

compliance. See PART 5 below.

It is therefore the recommendation of the lead assessor that:

• To award the certificate of compliance.

Signed:

Name: Simon Selvaraj

Date: 23/07/2014

4.2 Summary of the findings by Principles and Criteria

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

• Identified Non-Conformities and noteworthy Positive and Negative Observations.

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

Principle 1: Commitment to Transparency

Criterion by

Audit

Summary

Company has demonstrated their commitment to transparency and this is

evident through its stakeholder engagement and willingness to share

documents to the public. One observation and one minor Non Compliance

has been raised under this principle.

ASA 1 1.1 All policies is being well communicated as its being placed at the office and

line site notice board. The company has a system that allows the internal and

external stakeholder to participate effectively to share their view on issues







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raised and the decision made through stakeholder meeting. The meeting has

been set up at least once a year. It stated in the file SOP 1 Stakeholder

Engagement. Sighted every meeting minute placed in the file. That file also

contain SOP for stakeholder request for information. Sample of complaint

form were maintained on stakeholders files and will be retained for 5 years.

Records are being placed in the same file under Stakeholder Logbook form.

‘Stakeholder Logbook’ form contains the details for engagement, proposed

action and action that have been taken with evidence. However, information

request and response given to statuary bodies that came to the facilities has

not been recorded. An observation has been raised for this.

ASA 1 1.2 In SOP 9 – Control of Documents and Records, it’s mentioned that

management must provide adequate information to others stakeholders on

environmental, social, and legal issues. The list of documents that should be

kept confidential and those that can be made publicly available is clearly

distinguished.

EIA and SIA being update based on stakeholders participation during

stakeholder meeting. The negative environmental and social impacts have

been identified and its mitigating measures identified. All activities in

operation has been assessed includes maintenance of field, up keeping, line

site, transport, replanting works, etc. Plan objective is to avoid the pollution

and mitigation measure. This is contained in the files ‘SOP 10 Environment

Impact Assessment’ and ‘SOP13 Social Impact.

OSH guidelines are available in ‘KLK Group Policy – Occupational Safety and

Health Guidelines OSH 150 (G)’ file. SOP, safety guidelines, checklist, and

signages, training materials, HIRADC and OSH training programs are included

in the file.

Pollution prevention plan is done to mitigate all polluting activities. The mill

and estate have identified their wastes and plans have been made to

minimize or reduce wastes for each activity that may lead to pollution. This is

available in ‘SOP 10 -Environmental Impact Assessment’ file. Waste identified

such as spent lubricating oil, spent filter, spent batteries, used laboratory

chemicals – Hexane and IPA, POME and etc. Scheduled waste is being

collected by Tex Cycle Sdn Bhd.

Public summary of certification assessment report is accessible in the RSPO

website.

ASA 1 1.3 Written policy committing to a code of ethical conduct and integrity in all

operations and transactions is under management review where it is not

being finalized yet. Minor NC was raised on this indicator.

Principle 2: Compliance with Applicable Laws and Regulations

Criterion by

Audit

Summary

The company has complied with local, national, and international regulations

regarding the plantation operation in Malaysia. There are complete set of

relevant national law and regulation available at all sites audited with the

master copy available at HQ which are systematically documented and

addressed. Relevant legislation includes regulations governing land tenure

and land-use rights including customary rights, labour, chemical use, wildlife

laws, pollution, environmental management programs are well practice.

There is no legal or customary rights of other users been found. Land title

available that own by Kuala Lumpur Kepong Berhad [KLK]. Detailed

documentation of the communication to reach a negotiated settlement is

evidenced. The land occupied by the estates and mill are owned by KLK group

and since the land possession, there was no land dispute, negotiation nor







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conflict registered. One observation was raised with regards to the process

of maintaining each boundary stones.

ASA 1 2.1 List and summary of applicable laws and regulations is available which

includes information on documents, regulatory authority, requirements,

currents status and remarks. These are available in SOP 2 file. Documents

stated in the list are:

• OSHA and Regulations Act 1994

• Factories and Machinery Act with Regulations Act 139

• National Land Code 1965

• Environmental Quality Act 1974

• Pesticides Act and Regulations Act 149

• Industrial Relations Act and Regulation Act 177

• Workmen’s Compensation Act 1952

• Trade Union Act 1959

• Land Acquisition Act 1960

• Sales Tax Act 1972

• MPOB Licence

• Diesel and petrol permits, etc In that file too, legal compliance checklist is available where it includes

permit/license, person in charge, expiry date and status/remarks. Sighted

checklist for tractor driving license status. There also checklist on permit and

license needed in this estate. Ex: MRB license, MPOB license, diesoline

storage permit, air compressor permit, gun license, fire extinguisher, and

weighbridge stamping.

Managers are required to carry out periodic review and evaluation on the

Laws & regulations list in order to track changes in the law on line at least

once a year. Changes, amendment and addition in the laws are being tracked

by

• Enquiring the laws books publisher • Communication with law/enforcement officers

ASA 1 2.2 All the land title is under Kuala Lumpur Kepong Berhad named and approved

by Land Department, Kedah, Malaysia. Estates have boundary stones

inspection program checklist. However, an observation is being raised as it is

not enough to demonstrate that each boundary stones is being maintained.

There is no legal or customary rights of other users been found. The land

occupied by the estates and mill are owned by KLK group and since the land

possession, there was no land dispute, negotiation nor conflict registered.

ASA 1 2.3 Maps of appropriate scale are clearly available to demonstrate the land used

and no land disputes were noted during this audit.

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

Criterion by

Audit Summary

The company is committed to the long term economic and financial viability.

This is evident through the budgets and 2 year financial projections as well as

the annual replanting programme for the next 5 years

ASA 1 3.1 Annual financial plan is available in Financial Year Estimate 2013/2014

booklet. There, business management plan is available for until 2018 where it

includes data on summary of estimated crop production.

Estates have a 5 years future replanting program record that shown program

started on 2016. No replanting program is going on this period of assessment.







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Replanting program includes the entire activities plan such as felling, chipping

and stacking.

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

Criterion by

Audit

Summary

The company overall implemented best practices in their operation. Variation

of SOP’s is maintained and be the guidelines to all operations. Monitoring of

fertilizer and agrochemical is based on soil and tissue sampling as well for

water management is keep maintained with buffer zone and water analysis is

carried out periodically. Observations were raised where discharge water

from sprayer wash room being channeled to the drain where it supposed to

transfer to sump at mixing area. Moreover, there are spillage of fertilizer in

the fertilizer store and the fertilizer bag was torn. Safety and health is

compulsory implemented in all operations but during the assessment three

minor non-conformities were raised as below:

1. Pesticides are being kept together with other general item in one

store. Moreover, all the general items were not separated and

labelled.

2. Mineral lubricant oil drums and water treatment chemical

containers were reused at most station for the mill operation as oil

recovery and other purpose.

3. Estate management did not provide safety boots to their

harvesters.

ASA 1 4.1 The company has a set of generic SOPs for the estates and mill. All SOPs for

mill are sighted in the Guideline on Safe operation Procedure which covering

procedures from receiving FFB till despatch CPO for estate, during the audit.

Monitoring is carried out for all the best practices and SOP’s to ensure the

practicality. It is reported monthly basis in “Monthly Progress Report”,

covering nursery practices, replanting with zero burn, Upkeep mature and

immature area, fertilizing, spraying, maintenance, FFB production, fuel

consumption, FFB Incoming, CPO produced, OER, KER, FFB Quality, Despatch

CPO, PK, process performance each station, equipment and vehicles

maintenance The retention period for records of monitoring is for a minimum

of 12 months. Estate Manager is responsible to check the consistent

implementation of procedure in working order. No third party sourced FFB

are received at the mill.

ASA 1 4.2 Monitoring for soil erosion & fertility and road maintenance is being carried

out by the management agronomist and later, they advise the estate

management on the best practice to maintain soil fertility. Annual oil palm

fertiliser programme will be provided by Applied Agriculture Resources Sdn

Bhd. Records of the fertiliser inputs are kept in the estate office in the Oil

Palm Manuring Recommendation. In the manuring book all the information is

available date of applying, hectarages, type of fertilizer, amount of applied,

labour cost, and cycle of application. Records of changes in nutrient status

was kept in the Foliar Analysis and Soil Analysis Result 2013.

Currently the EFB are transferred to the estate for mulching purpose which

break down as fertilizer and the final discharge were discharged to the estate

for land application as nutrients requirement for the oil palm trees.

All application of EFB was shown in the Standard Operating Procedure on

Sustainability SOP 4 page 1of 1.

ASA 1 4.3 As in Soil and Erosion & Fertility and Road Maintenance file, there is no oil

palm planted on peat soil as verified in the topography map. Estate practice







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when planting need to be done in the slope area, the land is being converted

into terrace. This practice is being documented in the Group Policy

Agriculture in Oil Palm.

The road maintenance is documented in the Soil Erosion & Fertility and Road

Maintenance where the Identification Flow, person in charge, Details of

problems and rectification and reference are recorded in detail.

ASA 1 4.4 Gazetted riverbanks, water catchment pond and wetland are included in the

water management plan as documented in SOP 11, Attachment 1 issue 2/0. 7

steps plan is available in order to ensure the water management impacts,

domestic usage for workers, and to avoid contamination on surface and

ground water.

Riparian and buffer zones available at the estate area are shown in the

Appendix 3, in High Conservation Value Area Management file. These area

were highlighted in the estate map. There are about 20 meters riparian zone

along the estate boundaries. Non-maintenance Programme is then

implemented i.e. no fertilizer applications and spraying of agrochemicals

within riparian zones).Map is update since June 2012.

127mg/l of final effluent were analysed by the TQCC KLK Quality Centre in

order to check the BOD. This regular monitoring was carried out every 15

days by the mill to follow the requirement levels as set by DOE for the palm

oil mill effluent discharge standards. Results are filed in Effluent Results File

2014, kept in the laboratory.

Water usage in mill to process one tonne of FFB is 1.33 metric tonne

averagely. Monitoring was carried out on monthly basis and being recorded in

Monthly Progress Report.

ASA 1 4.5 In SOP 7, Integrated Pest Management file, IPM management plan is

available. This SOP were implemented and monitored by the management.

Usage of agrochemicals are recorded on a yearly basis to minimise the usage.

The common method applied for IPM were spraying, trunk injections, and rat

baiting.

There were record of training for those involved in IPM, recorded in Training

Record file. Ex: training conducted by the equipment supplier, Mr Lim Soon

Seng from MyCrop Sdn Bhd. This training was held at Pelam Estate and being

attended by 13 workers.

ASA 1 4.6 Pesticide usage were demonstrated. Plan to reduce and consider less harmful

were documented in the safe use & storage of agrochemicals / chemicals.

Estate management have implemented this minimal effect on non-target

species.

Records of pesticide used as documented in Pest & Disease Costing book

2013, active ingredients applied per hectare was 0.14 litres.

Plan to minimize pesticide usage is by introducing the beneficiary plant where

the type of the plant can be seen in the Integrated Pest Management file.

No paraquat used since 1 July 2011 (According the circular letter dated 25

february 2011), Paraquat replace by Glyphosate. The company applied the

IPM technique to help reduction of all chemical usage. Ex: plant beneficial

plant as mentioned above. No use of Pesticides 1A and 1B as register in

“Chemical Hazardous to Health” list that are kept in the chemical store. The

list covering pesticides, such as Ally (a.i. Metsulfuron Methyl), Ken-Amine

(Dimethyl Amonium), Glyphosate (a.i. Isopropylamina salt), Furadan 3G (a.i.

Carbufuron 3%), etc. Agrochemicals are selected based on the use and for

specific target pest.







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Pesticides were handled, used and applied by persons that have completed

the necessary training. Ex: training on safety and handling while spraying

using the interpump. This training was attended by sprayers and the

equipment supplier as recorded in Spray Pump Parts & Safe Working Practice

briefing report.

Minor NC was raised as pesticides are being kept together with other

general item in one store. Moreover, all the general items were not

separated and labelled. Pesticides should be isolated or shifted to another

individual store room with proper ventilation. Disposal of pesticide

container were done by G Planter Sdn Bhd.

Applications of pesticides are followed as documented in group policy

agriculture where the censors will indicate the type of pest recognition or

symptoms and control in order to minimize risk and impacts. No aerial

pesticide spraying is done in estate.

Spent oil and scheduled waste are being collected by Aliran Segar Sdn Bhd.

SOP is available in SOP 12 - Scheduled Waste Management file. Observations

were raised where discharge water from sprayer wash room being

channeled to the drain where it supposed to transfer to sump at mixing

area. Moreover, there are spillages of fertilizer in the fertilizer store and the

fertilizer bag was torn.

Medical checkup is conducted by Fomema on yearly basis for foreign workers

permit renewal. For local workers, yearly medical checkup done by doctors

certified by DOSH.

Women sprayers interviewed are aware of this policy and risks of spraying

while pregnant and breastfeeding. They are also aware of the process in

informing Management of their pregnancy. Management confirms the

pregnancy via medical check-up. This covered in the SOP. Alternative jobs

(lighter work) are given to pregnant and lactating women. This was also

confirmed during worker interviews.

ASA 1 4.7 Health and Safety Plan were located in the KLK OSH Group Policy. Minor NC

were raised as it is found during audit day that mineral lubricant oil drums

and water treatment chemical containers were reused at most station for

the mill operation as oil recovery and other purpose. These items should be

disposed as schedule waste and collected by appointed contractor according

to the safety and health policy. Moreover, shovel drivers do not possess a

valid driving license for heavy machine handling. The reverse sensors are

not working during operation at the mill.

Risk assessment in mill which involve operations where safety and health is

an issue, it is being documented and implemented in the HIRARC and

monitored by the mill assistant. In estate, this is documented in the Risk

Assessment Programs Record and it is estate manager responsibility to

observe and implement the plan to the workers.

PPE were provided to all workers in mill operation in order to cover all

potentially hazardous. The PPE’s include safety shoes, helmets, gloves,

goggles, earplug, welding apron, musk and lab coats. Training were given to

workers and being divided into several categories which are spraying,

manuring, harvesting, tractor drivers, first aid application, FFB loader field

workers, hopper attendant, shovel driver, emergency response team, diesel

receiving, maintenance on spraying pumps, fire extinguisher and security

guard. All trainings are well documented. Minor NC was raised as it is found

that estate management did not provide safety boots to their harvesters.

Both mill and estate have their person in charge for issues related safety and

health. Sighted minute of meetings involving person in charge and workers

where issues on safety and health were being discussed. Safety briefing was







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carried out on a monthly basis for the safety awareness in all aspects to all

workers.

Accident and emergency procedures and instructions were documented in

JKKP 6 file. Instructions to workers on accident procedure were sighted in the

training programmes documentations. Workers were trained for first aid

application in worksite and first aid boxes were available and fully equipped

with necessary items and medicine. Accident records are kept in OSHA

record, file NO 5. All accidents are documented and kept in the office.

Sonic Audio Mentrics Services (JKKP Ref: JKKP PUA 01/10) was provided for all

worker on yearly basis carried out by Procoma Environmental Sdn. Bhd.

Medical treatment provided every 3 months to all critical worker such as

sprayers, manuring and yearly medical surveillance by external medical

laboratory BP Diagnostic Centre to other workers. Foreign worker were

covered with AXA Affin General Insurance Bhd. (LWX/91060264/13/09/IPO)

and the local under known as Socso.

Lost Time Accident (LTA) was recorded in the JKPP 8 for accident occurred in

the mill for 2013. Last LTA record show one accident occurs in 2013.

ASA 1 4.8 The Formal Training Programme was conducted by the manager for all

aspects of RSPO Principles & Criteria, ISCC /Sustainability to all workers and

office staff. All the documents were sighted in SOP 8 file. Other training

includes Environmental Emergency Respond Procedures (EERP),Open

Burning/Riparian Zone, Training Staffs & Executive, Rubish Disposal &

Recycling of House Hold Waste, Environmental training for Stakeholders,

Scheduled waste Management Spraying pump Calibration, Gotong Royong

was documented in the file. All records for employee training are maintained

and kept in order in the main office. The records for each employee are

maintained and kept in the mill office.

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

Criterion by

Audit

Summary

The company has conducted an environmental impact assessment, HCV

assessment, proper waste management, implemented zero-burn policy and

has a pollution prevention plan. Three Minor Non-Conformities were raised

regarding these issues:

1. Fertilizer bag being re-used for beneficial plant planting

2. Assessment for significant pollutant not include plan to reduce

greenhouse gas (GHG) emissions in EIA

3. No monitoring system that regularly report the progress for these

significant pollutants and emissions from estate and mill

operations

ASA 1 5.1 Environmental Impact Assessment (EIA) were documented in SOP 10 file. It

consists of identification, implementation & maintenance, and review. It

details the following:

1) The process of conducting the assessment 2) Impact of major activities/operations 3) Risk level 4) Mitigating measures 5) Timeline for mitigation of impacts 6) Person-in-charge for monitoring of impacts. EIA will be reviewed annually based on input received from stakeholder

consultation meeting that attended by internal and external stakeholders.

ASA 1 5.2 High Conservation Value (HCV) assessment been conducted by the







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management and it is found that no HCV exist. There are river and water

catchment in the estate area. Appropriate signages were sighted during site

visit. The appropriate buffer zones on each side of the river are maintained in

accordance with the relevant environmental regulations. There were no Rare,

Threatened and Endangered (RTE) species found in any of the estates. This

was also verified through consultation with the local community surrounding

the estate. As such, no specific management and monitoring plans are

required due to the absence of HCV areas.

ASA 1 5.3 All waste products and sources of pollution were identified and documented

in Identification of All Waste Products and Operational Plan to Reduce

Pollution. The plan objective is to maximise recycling and minimise the

pollution. List of waste were updated annually and being separated into

scheduled waste and common waste. Scheduled waste and empty container

is being collected by DOE authorized collector which are Aliran Segar Sdn Bhd

and G Planter. Laboratory waste container were collected by supplier, Tex

Cycle Sdn Bhd. Minor non-conformity was raised as during site visit, sighted

fertilizer bag being re-used for beneficial plant planting where it against

their EIA mitigation measure plan.

Waste management and disposal plan were documented in Identification of

All Waste and Operational Plan to Reduce Pollution. Operational plan

contained details such as waste products, sources of pollutions, mitigation

measures, target, and person responsible.

POME is applied as land application. BOD is average on 400 BOD limit of BOD

for land application is around 5000 ppm. Shell and fibre used for boiler. EFB is

continuously applied to the field. POME goes for land application and within

the allowed BOD limit. Plastic, used oil, empty pesticides containers and

metal to the recycle company, other domestic waste to landfill.

ASA 1 5.4 Mill has sufficient plan to improve the efficiency of fossil fuels usage and

optimizing renewable energy. The mill use renewable energy such as fibre

and shell for turbine and recorded daily basis and summarized the report by

monthly. Reducing the usage of fossil fuels were included in the 2013/2014

budget where no genset were used. Electricity supply by TNB is the long term

plan that started from May 2014. Fossil fuels usage were monitored in SOP 12

– Energy Usage. This SOP is to ensure that all waste being disposed effectively

to prevent pollution and to ensure all personnel are given appropriate

training. In estate, plan to reduce fossil fuels usage include servicing all

operation vehicles once it reach 210-260 working hours. Leakage from the

vehicles were monitored and being fixed too. The plan will be reviewed

annually.

ASA 1 5.5 All the estates assessed have applied the zero burning policy for its respective

replanting programs. There were no evidences of open burning to clear the

land for replanting and this was verified during the field visit.

ASA 1 5.6 The assessment of polluting activities has been conducted and this is

incorporated in the EIA. It covers:

1) The environmental aspects and impact of an activity or operation 2) The severity of the impact - normal, abnormal or emergency 3) Measures taken to mitigate the risks and impacts The monitoring and mitigation plan for all negative impacts are available and

this is based on the requirements of the Department of Environment of

Malaysia.

Mill has identified the significant GHG emission by CO2 from POME treatment







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(9,812,191 kgCO2e allocated to CPO) on 28/04/2014. Estate has identified the

significant GHG emission by CO2 from FFB production not including

transportation to the mill (2,347,196.81 kgCO2e) on 2013 record. However,

the assessment not including plan to reduce greenhouse gas (GHG)

emissions in EIA. Also plans that includes objectives, targets and timelines is

not available. Minor NC were raised regarding this issue.

Another minor NC were raised as there is no monitoring system that

regularly report the progress for these significant pollutants and emissions

from estate and mill operations, using appropriate tool.

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

Millers

Criterion by

Audit

Summary

There were 2 minor non-conformities raised with regards to the used

lubricant oil donated to school and no policy to respect human rights.

Observation is raised as some estate did not update their stakeholders list

where visitors such as DOSH, SOCSO, and MPOA are not in the list. Apart

from that the company has complied with the requirements of Principle 6.

ASA 1 6.1 Social Impact Assessment (SIA) was carried out to identify the social impacts

of estate and mill operations towards the stakeholders which include workers

and also the local community. This was done through stakeholder

consultation and participation from stakeholders such as union member,

workers, contractors, head village, etc during stakeholder meeting. Input of

the assessment is normally obtained by the questionnaire given to the

stakeholders. The SIA document includes flow, hazards, level of negative

social impact, mitigation measures, person in charge and target date.

ASA 1 6.2 Communication and Consultation procedures were sighted at all estate and

mill offices. SOP for consultation and communication is available in SOP 1 –

Stakeholders Engagement/Negotiation file where it includes the procedures

for request & response, consultation & meeting and complaint & grievances.

Responsible person for communication and consultation issues were officially

nominated in estate and mill. Moreover, this is also manager and assistant

manager responsibility as stated in the Sustainability Palm Oil Manual

(SPOM). List of stakeholders was available that include government bodies,

workers representative, contractors, suppliers, surrounding community and

smallholders. Records of communication included stakeholders meeting

minutes and complaint were available. Observation is raised as some estate

did not update their stakeholders list where visitors such as DOSH, SOCSO,

and MPOA are not in the list.

ASA 1 6.3 SOP for complaint and grievances is available in SOP 1- Stakeholders

Engagement/Negotiation. All complaints, grievances, consultations and

negotiations are documented in a log book. Details of the nature of the

complaints and its resolution are clearly spelt out. The respective Mill and

estate managers are responsible for the handling of all consultation and

negotiation with stakeholders. No complaint was registered and all requests

have been attended promptly. No complaint registered and all requests have

been attended promptly. Request and complaint are being requested through

stakeholder logbook form. Many complaints were verbally received and

corrected on house or electrical repairs.

ASA 1 6.4 Procedure of handling land compensation is available and this is part of the

Stakeholder Engagement Procedure (SOP 1.0). There were no negotiations







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concerning land disputes and compensation for loss of legal or customary

rights to the land for all the estates and mill assessed.

ASA 1 6.5 Workers salary is clearly documented under check roll pay slips. Workers are

given pay slip and it is signed by them as acknowledgement. There is a permit

to carry out deduction. All terms and conditions of contract, whether

Malaysian or foreign workers are recorded. Contracts of employments are

evident and interview with workers confirm that they understand what is in

the contract. There is no collective agreement because there is no workers

union although local workers are free to form their own union. Foreign

workers are not allowed to form workers union as per Immigration

Department’s terms for hiring foreign workers. As stated in the employment

contract, company provide free water supply, electricity is by TNB. Occupants

need to pay for their bills themselves (not through salary deduction). Medical

treatment also free at the company clinic.

ASA 1 6.6 Policy on freedom of association is available and being displayed at mill office

and notice board surrounding the mill. Workers interviewed are able to

explain the policy. All workers are member of trade union, NUPW including

foreigner workers. No record of disputes or complaint with management

recorded for past two years. Further, workers have several platforms to raise

any issue at OSH meeting and Gender Committee meeting. However, the key

word of “the rights to collective bargaining” is not evident. Unions meetings

are held with workers representatives. Minutes of meeting of such meetings

were sighted.

ASA 1 6.7 The company has a Child Labour policy in place. This policy states that the

minimum age for employment is 18 years old. Labour Registration Cards were

sighted and inspected and field inspections were carried out and it was found

that no under-aged persons were working as employees for this company.

ASA 1 6.8 An Equal Opportunities policy has been established by the company,

communicated, displayed and publically available at all assessed operation for

both mill and estate. There has been no evidence of discrimination of workers

and staff based on gender, nationality, age, race or religion.

ASA 1 6.9 Policy on sexual harassment and violence is available. There is no specific

policy to protect reproductive rights available but the company respect

reproductive right as stated in their sexual harassment and violence policy.

It’s being communicated to all workers and staff through policy displayed at

notice board in mill and estate office and surrounding.

Moreover, during gender committee meeting, chairwomen will asked for any

sexual harassment incident. There also sexual harassment monitoring

checklist done on monthly basis.

There were two cases reported on sexual harassment in the estate. The victim

refers to gender committee chairwomen and the issue then brought to estate

manager. The issue then being resolved by calling the respective victims and

accused person for hearing before any solutions is done.

A grievance mechanism is also in place and this is clearly stated in the flow

chart “Handling of Sexual Harassment”. Allegations will be channelled to the

members of the Gender Committee and this information will be passed to the

chairperson of the Gender Committee during the gender committee meeting

that being conducted at least once/6 months.







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ASA 1 6.10 The FFB pricing is in accordance with the MPOB pricing system. The

computation of payment for FFB purchased is reviewed and updated on a

fortnightly basis.

ASA 1 6.11 The company has demonstrated that they care about the local community

developme