· Kota Garo Village, Tapung Hilir Sub District, Kampar District, Province of Riau, Indonesia ......

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

[ ]Stage-1 [√] Stage-2 [ ] Surveillance [ ] Re-Assessment

Plantation Management/Owner : KUALA LUMPUR KEPONG Bhd

Plantation Name : Tapung Kanan POM, PT SEKARBUMI ALAMLESTARI

Location :

Kota Garo Village, Tapung Hilir Sub District,

Kampar District, Province of Riau, Indonesia

Certificate Code : MUTU-RSPO/025

Date of certificate issue : 24 April 2013

Date of expiry of certificate : 24 April 2018

Assessment Assessment

Date PT. Mutuagung Lestari

Auditor Review

by Approved

by

ST-1 13 – 15 November 2012 Octo HP Nainggolan (Lead Auditor),

Marsudi Eko Santoso Taufik

Margani Tony

Arifiarachman

ST-2 17 – 21 December 2012

Octo HP Nainggolan (Lead Auditor), Marsudi Eko Santoso,

Ardiansyah,Bukti Bagja

Mutuagung Lestari • Raya Bogor Km 33,5 Number 19 • Cimanggis • Depok 16953• Indonesia

Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6

Email : [email protected] ● www.mutucertification.com

MUTU Certification • Approved by RSPO Secretariat on June 2008

Submitted to RSPO on:

Approved by RSPO on:

Approved by Certification Body on:

21 March 2013 22 April 2013 24 April 2013

http://www.mutucertification.com/


ASSESSMENT REPORT

SPO – 4006a.5 ii Prepared by Mutuagung Lestari for Tapung Kanan POM (PT Sekarbumi Alamlestari) –Kuala Lumpur Kepong Bhd

TABLE OF CONTENT

FIGURE

Figure 1. Location Map Figure 2. Operational Map

3 4

1.0 SCOPE of the SURVEILLANCE ASSESSMENT

1.1 National Interpretation Used 5

1.2 Organization Information 5

1.3 Type of Assessment 5

1.4 Location of Plantations, Mill and Area Statement 5

1.5 Description of Supply Base 6

1.6 Dates of Plantings and Cycles 7

1.7 Tonnage Certified 7

1.8 Other Certifications 8

1.9 Time-Bound Plan for Other Management Units 8

2.0 ASSESSMENT PROCESS

2.1 Certification Body 11

2.2 Assessment Team 11

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 11

2.4 Stakeholder Consultation and List of Stakeholders Contacted 14

2.5 Date of Next Surveillance Visit 14

3.0 ASSESSMENT FINDINGS

3.1 3.2

Summary of Assessment Report of the RSPO Certification Summary of Assessment Report of Supply Chain Requirement

15 42

3.3 Conformity Checklist of Certificate and Logo Use 45

3.4 Summary of RSPO Partial Certification 46

3.5 Identification of Findings, Corrective Actions, Observations, Opportunity for Improvement and Noteworthy Positive Components

52

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 59

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Signing of Assessment Findings 63

APPENDICES

1. List of Stakeholders Contacted in the RSPO Certification Process 64

2. Assessment Program 65

3. Glossary 67

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 3 Prepared by Mutuagung Lestari for Tapung Kanan POM (PT Sekarbumi Alamlestari) –Kuala Lumpur Kepong Bhd

Figure 1. Location Map of PT Sekarbumi Alamlestari

Kampar

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 4 Prepared by Mutuagung Lestari for Tapung Kanan POM (PT Sekarbumi Alamlestari) –Kuala Lumpur Kepong Bhd

Figure 2. Operational Map of PT Sekarbumi Alamlestari


ASSESSMENT REPORT

SPO – 4006a.5 Prepared by Mutuagung Lestari for Tapung Kanan POM (PT Sekarbumi Alamlestari) –Kuala Lumpur Kepong Bhd

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil

Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and RSPO Supply Chain

Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name Kuala Lumpur Kepong Sdn. Berhad – Tapung Kanan POm (PT Sekarbumi Alamlestari)

1.2.2 Contact person Tan Kei Yoong

1.2.3 Company address and site address RSPO registered company: Wisma Taiko, 1, Jalan S. P. Seenivasagam, 30000 Ipoh, Perak, Malaysia

Site: Kompleks Pertokoan Taman Anggrek Blok B2 – B5 Jl. Tuanku Tambusai, Pekanbaru, Riau

1.2.4 Telephone 0761 – 571885, 571861/62

1.2.5 Fax 0761 – 571884

1.2.6 E-mail [email protected]

1.2.7 Web page address www.klk.co.id

1.2.8 Company status Private

1.2.9 Management Representative who completed the application for certification

Tan Kei Yoong

1.2.10 Registered as RSPO member 8 October 2004 Registration number: 1-0014-04-000-00

1.3 Type of Assessment

1.3.1 Scope of Assessment Palm Oil Mill and supply base

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate

PT Sekarbumi Alamlestari – Kuala Lumpur Kepong Sdn. Berhad

1.3.4 Number of management unit 1 (one) Palm Oil Mill and 3 (three) Estates: Tapung Kanan POM, Tapung Kanan 01 Estate, Tapung Kanan 02 Estate and Tapung Kanan 03 Estate

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Tapung Kanan POM Village of Kota Garo, Sub district of

Tapung Hilir, District of Kampar,

Province of Riau

0° 45' 26"

N

101° 13' 11"

E

http://www.klk.co.id/


ASSESSMENT REPORT


1.4.2 Location of Supply Base

Name of Supply Base Location

GPS

Latitude Longitude

TAPUNG KANAN 1 Village of Kota Garo, Sub district of


Province of Riau

0° 47' 31"

N

101° 10' 44"

E



Province of Riau

0° 46' 53"

N

101° 10' 9"

E



Province of Riau

0° 42' 56"

N

101° 15' 0"

E

1.4.3 Tenure

Private

State 6,200 Ha

Community

1.4.7 Area Statement

Total area 6,200 Ha

Mature area 5,124 Ha

Immature area 54 Ha

Mill 8,34 Ha

Infrastructure 61,66 Ha

Unplanted area (low land, swamp) 489 Ha

Riparian / river 57 Ha

Others area 10 Ha

HCV 1,364.20 Ha

1.5 Description of Supply Base

1.5.1 Description of Mill

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Tapung Kanan POM

30 142,042 30,640 21.57 7,814 5.5 - -

* Production data on December 2011 – November 2012

1.5.2 Description of Estate(s)

Name of Estate(s) Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)

Supplied to Mill

FFB (tonnes/year)

%

TAPUNG KANAN 1 2,445 1,977 44,776,840 22.65 44,776,840 31.5

TAPUNG KANAN 2 1,888 1,665 42,917,450 25.78 42,917,450 30.2

TAPUNG KANAN 3 1,867 1,536 38,653,820 25.17 38,653,820 27.2

Total 6,200 5,178 126,348,11 24.4 126,348,11 88.9

* Production data on December 2011 – November 2012


ASSESSMENT REPORT


1.5.3 Smallholder(s) and other source

Name of

source(s) Member(s) Location

Total Area (Ha)

FFB (tonnes/year)

Supplied to Mill

FFB (tonnes/year)

%

KKPA

PT Sekarbumi Alamlestari

Scheme Smalholder

Sub district of Tapung Hilir,

District of Kampar, Province

of Riau 1,050 668 668 0.47

Ikatan Petani

Sawit Kota Garo Individual

smallholders

Sub district of Tapung Hilir,

District of Kampar, Province

of Riau - 15.025 15.025 10.57

Total 15.693 15.693 11.04

*Source Production Data on 12 months before assessment

1.5.4 Product categories FFB/CPO/PK/PKO

1.6 Dates of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting Year

Hectarage

Name of Estate (Ha)

Name of Estate (Ha)

Name of Estate (Ha)

Total (Ha)

1992 144 358 - 502

1993 663 478 85 1,226

1994 367 539 549 1,455

1995 194 223 350 767

1996 249 - - 249

1997 - - 146 146

1998 38 - 174 212

1999 201 - 164 365

2001 14 - 51 65

2005 15 67 7 89

2006 38 - 10 48

2010 54 - - 54

Total 1,977 1,665 1,536 5,178

1.6.2 New Planting area after November 2007 54 Ha

1.6.3 Planting Cycle 1st 25 Years

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product

FFB Production - Tonnes/year

CPO Production - Tonnes/year

Palm Kernel (PK) Production - Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonnage of FFB


ASSESSMENT REPORT


Name of Estate(s) Total Area

(Ha) Planted Area

(Ha) FFB

(tonnes/year) Yield

(tonnes/ha/year)

TAPUNG KANAN 1 2,445 1,977 47,448 24

TAPUNG KANAN 1 1,888 1,665 43,290 26

TAPUNG KANAN 1 1,867 1,536 39,936 26

Total 6,200 5,178 130,674 25.23

1.7.3 Claim Certified Tonnage of Palm Product

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

PKS Tapung Kanan

30 130,674 28,186 21.57 7,187 5.5 - -

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Others -

1.9 Time Bound Plan for Other Management Units

Management Unit Location

Hectarage (Ha)

Time Bound Plan

Status Mills Estates

Berau POM Malindomas Perkebunan

Berau, Kalimantan Timur 7,971 2014

Hutan Hijau Mas


Jabontara Eka Karsa


Karya Makmur Abadi

Mentaya Hulu, Kalimantan Tengah 13,127 2015

Menteng Jaya Sawit Perdana

Mentaya Hilir Utara, Kalimantan Tengah

6,399 2015

Mulia Agro Permai

Baamang, Kalimantan Tengah 9,056 2015

Steelindo Wahan Perkasa POM

Steelindo Wahana Perkasa

Belitung, Bangka Belitung 14,065 2013

Parit Sembada POM

Parit Sembada Belitung, Bangka Belitung 3,990 2013

Alam Karya Sejahtera

Belitung, Bangka Belitung 6,012 2013

Mandau POM Mandau Bengkalis, Riau 14,799 2012 Certified

Nilo POM Nilo Pelalawan, Riau 12,860 2013

Mutiara Kampar, Riau 1,800 2014


ASSESSMENT REPORT


Tapung Kanan POM

Sekarbumi Alamlestari

Kampar, Riau 6,200 2012 Audited

KKPA (Scheme smallholder of PT Sekarbumi Alamlestari)

Kampar, Riau 2015

Gohor Lama POM

Basilam Langkat, Sumatera Utara 2,337 2014

Gohor Lama Langkat, Sumatera Utara 3,307 2014

Tanjung Beringin

Langkat, Sumatera Utara 4,157 2014

Maryke Langkat, Sumatera Utara 2,827 2014

Bekiun Langkat, Sumatera Utara 2,979 2014

Padang Brahrang POM

Padang Brahrang

Langkat, Sumatera Utara 2,024 2014

Bukit Lawang Langkat, Sumatera Utara 1,482 2014

Tanjung Keliling Langkat, Sumatera Utara 2,360 2014

PENINSULAR MALAYSIA

Batu Lintang POM

Pelam Kulim, Kedah 2,526 2012

Batu Lintang Serdang, Kedah 2,355 2012

Ghim Khoon Kulim, Kedah 434 2012

Kekayaan POM Kekayaan Paloh, Johor 4,436 2011 Certified

Landak Paloh, Johor 4,451 2011 Certified

Voules Tenang, johor 2,977 2011 Certified

Bandar Tenggara

Bandar Tenggara, Johor 950 2011 Certified

New Pogoh Tenang, johor 1,560 2011 Certified

Fraser Kulai, Johor 2,932 2011 Certified

Paloh Paloh, Johor 2,029 2011 Certified

Sungai Bekok Bekok, Johor 636 2011 Certified

Ban Heng Pagoh, Muar, Johor 631 2011 Certified

See Sun Renggam, Johor 589 2011 Certified

Paloh POM Paloh, Johor Outside Crop

Jerang Padam POM

Ayer Hitam Bahau, Negri Sembilan 2,640 2012 Certified

Batang Jelai Rompin, Negri Sembilan 2,162 2012 Certified

Jeram Padang Bahau, Negri Sembilan 2,114 2012 Certified

Kombok Rantau, Negri Sembilan 1,915 2012 Certified

Ulu Pedas Pedas, Negri Sembilan 923 2012 Certified

Gunung Pertanian

Simpang Durian, Negri Sembilan 686 2012 Certified

Sungai Kawang Lanchang, Pahang 1,889 2012 Certified

Renjok Telemong, Pahang 1,578 2012 Certified

Tuan Telemong, Pahang 1,353 2012 Certified

Tanjung Malim POM

Tanjung Malim Tanjung Malim, Perak 1,544 2013

Glenealy Parit, Perak 1,059 2013

Serapoh Parit, Perak 936 2013

Subur Batu Kurau, Perak 1,290 2013


ASSESSMENT REPORT


Kuala Kangsar Padang Rengas, Perak 843 2013

Allagar Trong, Perak 805 2013

Tuan Mee POM Tuan Mee Sungai Buloh, Selangor 1,556 2012 Audited 2012

Kerling Kerling, Selangor 619 2013

Sungai Gapi Serendah, Selangor 603 2013

Kuala Pertang POM

Kerila Tanah merah, Kelantan 2,191 2013

Pasir Gajah Kuala Krai, Kelantan 2,107 2013

Sungai Sokor Tanah Merah, Kelantan 1,603 2013

Changkat Chermin POM

Lekir Manjung, Perak 3,332 2012 Audited 2012

Changkat Chermin

Manjung, Perak 2,540 2012

Raja Hitam Manjung, Perak 1,497 2012 Audited 2012

SABAH

Mill 1 Tawau, Sabah Outside Crop

Mill 2 Jatika Tawau, Sabah 3,508 2009 Certified 2009

Tundong Tawau, Sabah 2,155 2009 Certified 2009

Ringlet Tawau, Sabah 1,834 2009 Certified 2009

Sri Kunak Tawau, Sabah 2,770 2009 Certified 2009

Pang Burong Tawau, Sabah 2,548 2009 Certified 2009

Pinang Pinang Tawau, Sabah 2,420 2009 Certified 2009

Jatika Tawau, Sabah 3,508 2009 Certified 2009

Sigalong Tawau, Sabah 2,864 2009 Certified 2009

Pangeran Tawau, Sabah 2,855 2009 Certified 2009

Lungmanis Lungmanis Lahad Datu, Sabah 1,656 2010 Certified 2010

Sungai Silabukan

2,654 2010 Certified 2010

Rimmer Rimmer Lahad Datu, Sabah 2,730 2010 Certified 2010

Tungku 3,418 2010 Certified 2010

Bukit Tabin 2,916 2010 Certified 2010

Bornion Bornion Kinabatangan, Sabah 3,233 2010 Certified 2010

Segar Usaha Kinabatangan, Sabah 2,792 2010 Certified 2010


ASSESSMENT REPORT


2.0 ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari

Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953

Telp. +62-21-8740202; Fax +62-21-87740745/46

Website: www.mutucertification.com Email : [email protected]

2.2 Assessment Team

2.2.1 Lead Assessor and Assessment Team

ST-2 1. Octo Nainggolan (Lead Auditor). Indonesian citizen, Bachelor of Agriculture, majoring of Social Economics of Agriculture (Agribusiness). He has a working experience since 2004 oil palm Plantation Company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO 9001-2008/SNI 19011-9001:2008), Environment Management System (ISO 14001:2004) , RSPO Lead Auditors Training Course, Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course and supply chain certification system training. Currently, he worked at Professional Certification Body. In the assessment activity, he assessed on legal aspect, best practices, environment aspect, social aspect, workers welfare, FFB Processing and supply chain requirement.

2. Marsudi Eko Santoso (Auditor). Indonesian citizen, Bachelor of Agriculture, majoring in Agro technology. Followed the Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor training, ISPO Lead auditor training and distribution quality management process - APMEA. He had involved several time in RSPO certification assessment activities as an auditor. Currently he works for Independent Certification Body. In this assessment activity, he assessed on Best Practices, Soil and water conservation, Integrated Pest Management and safety and health.

ST-2 1. Octo Nainggolan (Lead Auditor). 2. Marsudi Eko Santoso (Auditor). 3. Ardiansyah (Auditor). Indonesian citizen, Bachelor of Forest Resources Conservation, Department of Forestry,

Bogor Agricultural University. He has followed several activities such as preparing EIA document for plantation and plantation forest, contribute on several HCV identification and several times following audit activities related to sustainable palm oil certification system as an auditor. In this Assessment assessed the environmental aspects, HCV, soil and water conservation.

4. Bukti Bagja (Auditor). Indonesian citizen, Master of Science in the field of Environmental Sciences, University of Indonesia. Training he has followed are: awarness of RSPO certification system. He has followed several activities GAP Analysis of the RSPO Principles and Criteria implementation in several oil palm plantations in Indonesia as assessor. Besides that he is also involved in several assessments HCV / HCV as an assessor with the specifications in the field of GIS (mapping). He has expertise in mapping such as ArcGIS, MapInfo, Global Mapper, ER Mapper, Erdas Imagine. In this activity, he has assessed for environment aspect and management of waste.

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Figure of person days to implement assessment

ST-1

Number of auditors : 2 (two) auditors Number of days for ST-1: 3 (three) days Number of working days for: 6 (six) working days

ST-2 Number of auditors : 4 (four) auditors Number of days for ST-2 on site : 5 (five) days Number of working days for ST-2 on site: 20 (twenty) working days

2.3.2 Detail process of assessment

ST-1 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Tapung Kanan POM and its supply base (PT Sekarbumi Alamlestari). to the requirements of National Interpretation of

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008 and Scheme Smallholders October 2009) and Supply Chain Requirement for CPO Mill. The assessment was conducted in three methods by document review, aiming to observe the sufficiency of types or substances from required documents;

ST-2 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Tapung Kanan POM and its supply base (PT Sekarbumi Alamlestari). to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008 and Scheme Smallholders October 2009) and Supply Chain Requirement for CPO Mill The assessment was conducted in three methods: (1) document review, aiming to observe the sufficiency of types or substances from required documents; (2) interview, aiming to obtain more detailed information and cross check the information; and (3) field observation, aiming to observe directly the sufficiency of implementation on site. Several opportunities for improvement of the results ST-2 delivered by the auditors to the management unit and the results are the subject will be verified at the next assessment. Improvement of findings from main assesment findings were observed by auditors at this ST-2 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of ST-2. Please find Appendix 2 for the assessment program

2.3.3 Locations of Assessment

ST-2 The sample locations in this certification activity are 1 POM with three Estates, which supply the raw material (FFB), namely the Tapung Kanan 1 Estate, Tapung Kanan 2 Estate and Tapung Kanan 3 Estate. In conducting the assessment, the team of auditors used the 0.8√y formula to determine the management units sampling to be focused on. Based on this formula, the team of auditors determined that the plantations to become sampling locations are two estates, Tapung Kanan 1 Estate and Tapung Kanan 3 Estate. Tapung Kanan POM: 1. The processing (from loading ramp to dispatch). Observation of the processing of FFBs into crude palm oil

(CPO) and the fire emergency response facilities in the mill. Interviews with mill workers (boiler operator, engine room operator) regarding medical check-ups, operator licenses, wages, complaint delivery, Occupational Health and Safety implementation, training, work safety practices, the availability of Personal Safety Equipment and the mass balance model supply chain mechanism.

2. Chemical warehouse. Observation of the handling of chemicals and interviews with the warehouse workers regarding chemical handling procedures, emergency procedures, and Occupational Health and Safety implementation.

3. Water Treatment Plan. Observation of clean water supply management. 4. Workshop. Observation of emergency response equipment and Occupational Health and Safety (first aid kits)

and interviews with the welding workers regarding training, medical check-ups, Occupational Health and Safety implementation, complaint delivery, safe occupational practices, complaint delivery, freedom to join unions, and waging system.

5. Diesel Tank. Observation of the availability of fire emergency facilities. 6. The Hazardous Material waste material temporary storage at the POM. Observation of Hazardous Material

waste material handling in accordance to the existing regulations and interviews with the hazardous waste storage workers regarding medical check-ups, Hazardous Material waste material handling procedures, and the availability of contamination and exposure handling equipment.

7. Waste Water Treatment Plant (WWTP). Observation of the processing of the mill’s wastewater and the pollution reduction procedures.

Tapung Kanan 1 Estate: 1. Operational boundaries, Land Use Title boundary poles number 56 (block 93-C) & 20 (block 93-E).

Observation of the maintenance of the demarcation of the land boundary poles. 2. PT. SA’s Central Warehouse. Observation of the availability of brush fire control facilities and the emergency

procedures.


ASSESSMENT REPORT


3. Block 94 C.

Observation and interviews with the spraying workers and supervisors regarding work procedures, the use of personal protective equipment, Emergency First Aid, occupational hazards, routine check-ups, the implementation of reproductive rights (maternity leave, menstrual period leave, and other special treatments), the presence of signs for areas being sprayed, the prohibition for pregnant and breastfeeding women to be involved in spraying, the waging system, the prohibition of spraying near riparian areas, the housing facilities provided, and gender-related complaint delivery mechanism.

Observation of the application of empty fruit bunches on sandy soil with a dose of 30 tons/ha using the single layer between 2 plants system (2x3 m).

Observation of the presence of Silt pits, U-Shaped Frond Staking, and beneficial plants. 4. Observation and interviews with the tractor operator (Mr. Irma Purba) and the loader regarding the use of

personal protective equipment and Operator Licenses. 5. Division 2-B, block 99-D. Observation of the Integrated Pest Control through the keeping of owls (Tyto alba). 6. The 1-B Division Housing. Observation of the housing facilities, religious facilities, and clean water facilities

provided, and the handling of domestic/household waste. 7. Division 1-B, block 92-D. Observation of the fresh fruit bunch transportation mechanism from the field (the

harvested block) and an interview with the bookkeeper regarding the transportation of FFBs to the palm oil mill. 8. Division 1-B, block 99-E. Observation of chemical spraying by workers and interviews with 10 sprayer workers

regarding the implementation of Occupational Health and Safety, the use of personal protective equipment, medical check-ups, wages, health assurance, discrimination, spraying training, and the freedom to join unions.

9. Division 1-B, block 92-D. Observation of the harvesting process and the compliance to good harvesting standards. Interviews with the harvesting workers regarding the waging system, safe working practices, the availability of personal protective equipment, the complaint delivery mechanism, the implementation of Occupational Health and Safety, health assurance, and the freedom for joining unions.

10. Block 93 E. Observation and interviews with harvesting workers and harvesting supervisors regarding the working procedures, the ripe criteria of loose palm fruit > 10, the use of personal protective equipment, emergency first aid, occupational hazards, waging system, the housing facilities provided, the school bus, and the complaint delivery mechanism.

11. Block 92 B. Observation and interviews with the harvesting workers and the harvesting supervisor regarding working procedures, the ripe criteria of loose palm fruit > 10, the use of personal protective equipment, emergency first aid, occupational hazards, waging system, the availability of First Aid Kits, the housing facilities provided, the school bus, and the complaint delivery mechanism.

12. Block 94 A. Observation of the maintenance of the Turnera subulata plants and interviews with the Turnera maintenance workers regarding their working hours (7.00 – 14.00), the swapping for spraying and fertilizing workers who are pregnant or nursing.

13. Division 2A. Observation of erosion management through the silt-pit system. 14. Division 1B. Observation of domestic waste management. 15. Block 95 E. Observation of land application in the field. 16. River riparian areas. Observation of the marking of riparian areas, the diversification of species and the

prohibition of the use of chemicals in the Sepano River (KTK 2 Div 3A), Paloge (KTK 3), Tapung River (KTK 3 Div 4 A), and Sepahat River (KTK 1 division 2A and 2B).

17. Heslth Clinic. Interview with the company doctor pertaining to the mechanism for treatment of spraying workers who are pregnant/breastfeeding, the management of medical waste, and routine medical check-ups.

Tapung Kanan 3 Estate: 1. Operational boundaries, Land Use Title boundary poles number 103 (block 95-D) & 88 (block 94-A).

Observation of the maintenance of land boundary poles of demarcated areas. 2. Division IV-Housing. Observation of housing facilities and clean water facilities provided by the company and

the management of domestic waste which is disposed at the landfill. 3. Division 2B. Observation of domestic waste management at the Hazardous Material Temporary Storage. 4. Division 4A Block G. Observation of the unmarked riparian areas. 5. Division 2B’s Personal Protective Equipment (PPE) Washing Area. Observation of the personal protective

equipment washing area and the handling of the resulting waste water. 6. Division 4A Block G. Observation of the management of road and ditch maintenance.


ASSESSMENT REPORT


7. Division 4A Block G. Observation of peat management. 8. Block 98 C. Observation and interviews with the fertilizing worker fertilizing supervisor regarding working

procedures, the use of personal protective equipment, the fertilizer dosage is suitable, routine checking has not yet been done, the implementation of reproductive rights (maternity leave, menstrual period leave, and other special treatment), wages, and housing facilities provided.

9. 4B Housing. Observation and interviews with employees regarding the appropriateness of the facilities and infrastructure provided by the company, including clean water, housing, electricity, household facilities the fact that they had never received explanations of emergency procedures.

Villages and Agencies: 1. Kota Garo Village. Interviews with village representatives regarding the relationship between PT. SA and Kota

Garo Village and PT. SA’s contribution to the village. 2. Kota Bangun Village. Interviews with village representatives regarding the relationship between PT. SA and

Kota Bangun Village and PT. SA’s contribution to the village. 3. Kampar District Environmental Body. Interview with the environmental supervisor in relation to the company’s

compliance to the regulations pertaining to environmental management and monitoring. 4. Kampar District Labor Agency. Interview with the representatives of related agencies pertaining to the

company’s relationship with their labor and their compliance to labor regulations. 5. Kampar District National Land Agency. Interviews with the representatives of related agencies pertaining to

the company’s land acquisition legality.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process.

Public consultation process was carried out through two ways, namely: 1) Conducting a public announcement on RSPO website (www.rspo.org) 30 days at minimum prior to the Stage-2

audit implementation. 2) Consultation of stakeholders for PT Sekarbumi Alamlestari was held by public consultation meeting with internal

(workers and management representative), external (villagers, local peoples, non government organization and district agencies) by interviews and visits. Numbers of input from stakeholders were clarified by PT Sekarbumi Alamlestari management. Numbers of inputs from stakeholders both positive and negative were received by the audit team as a material of consideration and observations in the assessment of the stage-2 assessment.

The consultation result present on 3.6 (Summary of Arising Issues from Public, Management and Auditor Response)

2.4.2 List of stakeholder contacted

Please find appendix 3

2.5 Determining Next Visiting

The next visit (first surveillance) will be determined nine months after the certificate issued.


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT

3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted an assessment of PT Sekarbumi Alamlestari. – Tapung Kanan POM, Kuala Lumpur Kepong Bhd operation consisting of 1 (one) mill and 3 (three) oil palm estates.

During the assessment, there were two (2) Nonconformities were assigned against Major Compliance Indicators 4.6.4

and 5.3.2; Twelve (12) nonconformities were assigned against Minor Compliance Indicators 4.6.1, 4.6.2, 4.7.1, 4.7.2,

4.7.3, 4.7.6, 4.7.8, 5.3.2, 6.4.1, 6.4.2, 6.4.3, 6.6.1, 6.8.1; one (1) non conformance against supply chain requirement for

CPO mill 5.1 Mass Balance model and twentytwo (22) opportunities for improvement were identified.

Further explanation of the non-conformities raised and corrective actions taken by the company are provided in section

3.5. The company prepared and implemented corrective action that was reviewed and accepted by MUTU in form of

documents and photographic evidence. Those corrective actions taken that consist of two (2) Major non-conformities;

one (1) non conformance of Supply Chain requirement and one (1) minor nonconformance had been closed out shall be

verified during next assessment.

MUTUAGUNG LESTARI found that PT Sekarbumi Alamlestari comply with the requirements of RSPO Principles &

Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of

Indonesia - RSPO INA-NIWG, May 2008. Therefore MUTUAGUNG LESTARI recommends a certificate of compliance is

Issued.

Ref Std.

VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making.

SOP number 1 dated 12 April 2012 pertaining to Information Request and Feedback which was approved by the Senior Manager is available; the information available is, among others:

Every written information request from stakeholders must be recorded in “The Information Request and Feedback Logbook”

The time limit for responding to the information request is 15 days

If there is a reason why the response is given later than 5 days, the company must inform the stakeholder and state the reason for the delay.

The letter containing the response must be signed by the manager or the person in charge and dated.

Every oral information request from stakeholders must be recorded in “The Information Request and Feedback Logbook”

Up to this moment, there have been no requests for information made by stakeholders. There have only been records of requests for assistance. Nevertheless, the company records all requests for information and they are responded according the pre-determined procedures. There have been requests for assistance from the community that had exceeded the procedural response time limit. Therefore, the team of auditors will conduct an observation during surveillance 1 pertaining to the point that response to information requests/requests for assistance may not exceed 15 days. The records of requests and their responses for both information and assistance are stored for 5 years in accordance to the procedures. This document explains the kinds of documents which may be accessed by the public and which are confidential, the duration of document storage, the document storage location, and the document holder.

Comply with observation


ASSESSMENT REPORT


1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

The type of information and the possible responses for public and confidential access refers to the document main list. Documents that are accessible to the public are the job safety committee structure, training programs, accident reports, etc. Documents that are confidential are internal audits, management staff, Jamsostek, progress reports, etc. Records of information requests and their responses are stored for 5 years in accordance to the Main Document List. There is a main document list, which is approved by the Senior Manager. This document explains about the types of documents, which are accessible to the public and which are confidential, the duration of document storage, the document storage location, and the document holder, for example, the information request and response documents are stored for 5 years except for permits which are stored until there is a revision.

Full Compliance

PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

PTSA has complied to the existing regulations such as: a. PTSA has built plantation partnerships using the KKPA (the Cooperative Credit Scheme) pattern covering 1,294 Ha

in accordance to Statute Number 18 Year 2004 pertaining to plantations. b. PTSA has determined protected areas and HCV areas in accordance to the President’s Decree Number 32 Year

1990 pertaining to the management of protected areas. c. PTSA has a plantation business permit in compliance to the Regulation of the Minister of Agriculture (Permentan)

Number 26 Year 2007 pertaining to the plantation business permit guidelines. d. There has been an assessment of the plantation business in compliance to the Regulation of the Minister of

Agriculture (Permentan) Number 7 Year 2009 pertaining to the assessment of plantation businesses. e. PTSA has a location permit in compliance to the Agrarian Affairs Regulation Number 2 Year 1999 pertaining to

location permits. f. PTSA has rights for the land/soil in compliance to Government Regulation Number 40 Year 1996 pertaining to the

Land Use Title. g. PTSA has managed hazardous material in compliance to Government Regulation Number 18 Year 1999 pertaining

to the management of hazardous material. h. PTSA owns Environmental Impact Assessment documents (Environmental Impact Assessment, Environmental

Management Plan/Environmental Monitoring Plan) in compliance to Government Regulation Number 27 Year 2012 pertaining to environmental permits.

i. PT. Sekarbumi Alam Lestari’s Plantation Business Class Certificate is Class II / Good with the parameters of Legality (100), Management (88.66), Plantation (88.54), Product Processing (89.28), Social (77.07), Regional Economy (62.5), Environment (81.90) and Reporting (75) in compliance to the Regulation of the Minister of Agriculture Number 7 Year 2009 pertaining to Plantation Business Assessment.

There are several regulations that have not yet been applied regularly by the company, the Plantation Business Reporting which should be submitted routinely every 6 months to related agencies in compliance to the Plantation Business Permit- for Cultivation and Plantation Business Permit- for Processing requirements. Therefore, the Team of Auditors will conduct an observation during surveillance 1 in order to make sure the reports are routinely submitted. SA has made efforts to adjust to the changes in regulations such as: a. The Minimum Pay Regulations for the Plantation Sector year 2012 formulated by PT. Sekarbumi Alamlestari’s

Board of Directors amounting to IDR 1,282,200 (not including the rice share which is given in accordance to each company’s Collective Labor Agreement) in reference to the BKS-PPS Letter Number 15/BKS-PPS/2012 dated 9 February 2012.

b. The Governor of Riau’s Decree Number 11 year 2012 dated 6 March 2012 pertaining to the Minimum Wage for the Agricultural/Plantation Sub sector, which is IDR 1,389,450.

SA has applied a documentation system, for example there are 26 rules related to RSPO principle number 2, 13 rules


ASSESSMENT REPORT


related to RSPO principle number 4, 21 rules related to RSPO principle number 5, and 8 rules related to RSPO principle number 6. The evaluation executing procedure for fulfilling the legal requirements are contained in SOP number 2 dated 12 April 2012 pertaining to Compliance to Existing Law and Regulations.


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

SA own and can produce the documents proving its rights to the land are in compliance to regulations, for example: a. The Minister of Agrarian Affairs / the Head of the National Land Affairs Agency Number 36/HGU/BPN/94 dated 29

July 1994 pertaining to the granting of the Land Use Title to PT. Sekarbumi Alamlestari covering an area of 6,200 Ha

b. Land Use Title Certificate number 01 Sukamaju Village, Kota Baru, Kota Bangun, Siak Hulu Sub-district, Kampar District, Riau Province dated 1 December 1994 for 6,200 Ha which is effective until 31 December 2024 (30 years).

c. The Time Extension of the Land Use Title for Land located in Kampar District, Riau Province based on the Head of the National Land Affairs Agency’ decree Number 133/HGU/BPN/2004 dated 2 November 2024 which is extended another 25 years starting 31 December 2024.

Based on the Special Situational Map number 01 Year 1993 PT. Sekarbumi Alamlestari, it can be seen that there are 148 Land Use Title boundary poles. Based on the field observations in Tapung Kanan 1 Estate at boundary pole Number 20 (block 93-E Division 1B) and Number 56 (block 93-C Division 2B) and in Tapung Kanan 3 Estate at boundary pole Number 88 (block 94-A Division 4A) and Number 103 (block 95-D Division 4B), it is known that the poles and boundaries are well maintained and well-marked. However, not all Land Use Title boundary poles which are noted in the Land Use Title map are located within PTSA operational areas (72 boundary poles were identified out of the total of 148 poles or 48.6 %). The team of auditors will conduct an observation of the boundary poles which are not yet identified. It is known that there have been land disputes within PT. SA’s operational area. a. Between the Gotong Royong Farmers’ Group and PT. Sekarbumi Alamlestari dated 20 April 2010 pertaining to an

area of 341.5 Ha which is located in Tapung Kanan 1 Estate. The dispute was resolved through litigation at the Bangkinang District Courthouse; Kampar District based on Verdict Number 36/PDT-6/2009/PN.BKN and was won by the company, dismissing the Gotong Royong Farmers’ Group indictment.

Based on field observations at block 99-H Tapung Kanan 1 Estate and interviews with occupants (Dolok Seribu), it was discovered that there had been a dispute resolve process involving the Bangkinang District Courthouse. Records of the verdict which stated the company as the victor are available and are filed neatly in SA’s plantation office.

However, there is an area of 10 Ha within the disputed location which is in status Quo and is still occupied by Dolok Seribu because the verdict was not accepted by the occupants. The company management will attempt to approach the occupants so that the verdict may be executed by both parties.

b. The land cultivated by the people of Dusun II Rumah Tiga Kota Garo Village covered 33 Ha and there has been a settlement, which was accepted by 27 people and has been resolved on 24 April 2004 through a process, which was agreed upon by both parties.

There is evidence for land acquisition with Free Prior and Informed Consent, for example: The resolve of the land cultivated by Dusun II Rumah Tiga Kota Garo Village covering 33 Ha. There has been a resolution which was accepted by 27 people on 24 April 2004 supported by:

a. The report of the resolution of PT. SA’s Land Use Title based on the Kota Garo Village Head’s letter Number 029/KG/TH/V/2004 dated 21 May 2004.

b. The official report of the resolution of the cultivation of PT. Sekarbumi Alamlestari’s land by people of Dusun II Rumah Tiga, dated 19 May 2004. The meeting was headed by the Head of Kota Garo Village, the Head of Lembaga Ketahanan Masyarakat Desa (Village Resilience Council), the Head of the Village Supervision Agency (Badan Pengawas Desa /BPD), Ninik Mamak (tribal elders), community elders, and the cultivators (the attendance list is available).


ASSESSMENT REPORT


c. The document stating that the cultivators had appointed their representative to the Head of Kota Garo Village in resolving the disputed land, dated 24 April 2004.

Based on an interview with the Head of Kota Garo Village, it was found that the dispute regarding the 33 Ha cultivated by 27 people from Dusun II Rumah Tiga Kota Garo Village had been resolved in April 2004. The conflict resolving mechanism which had been accepted by both parties involved covered: a. The 33 Ha cultivated by the people of Dusun II Rumah Tiga Kota Garo Village had been resolved and the resolution

was accepted by 27 people. b. The official report of the returning of the cultivated land to the company dated 18 May 2004 complete with the

signatures of both parties witnessed by the Head of Village Resilience Council, the Head of Kota Garo Village, the Head of Kota Garo Village, and Ninik Mamak (tribal elders).

c. The payment receipt dated 19 May 2004 for the payment of the resolve of an area of 33 Ha for 27 people. d. A map/chart of the area cultivated by the people, complete with photographs of the cultivators. e. Suparman (2 Ha), Rahmat Supardi (2 Ha), Sucipto (2 Ha), Sairon (1 Ha), Kemen (1 Ha), Ilham Dani (1 Ha), Edi

kampret (1 Ha), Meswardi (1 Ha), Sari/Boimin (1 Ha), Ngatimin/Paino (1 Ha), Ponidi (1 Ha), Ayub/Sikus (1 Ha), Maksum (1 Ha), Jumilah (1 Ha), Herman (1 Ha), Saripudin, (1 Ha), Sutanto (1 Ha), Ramli (2 Ha), Muliadi Bejo (1 Ha), Katiman (1 Ha), Jumari (1 Ha), Suyetno (1 Ha), Salimin (1 Ha), Radianto (2 Ha), Posan (1 Ha), Anto (1 Ha), Naim/Riaman (1 Ha).


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

Within the operational area of PT. Sekarbumi Alamlestari, there is no area under traditional rights recognized, so there are no available maps or documents related to it. This information was obtained through interviews with community elders around the area of PT. Sekarbumi Alam Lestari, i.e.: 1. The Kota Garo Village Head Ad interim (Nazarudin) and the Head of Kota Bangun Village (Nefrizal Pili) 2. Ninik Mamak Datuk Rajo Lelo (Haji Idris) It was discovered that there are no areas within PT. SA’s operational area which are set aside as Traditional Rights.

Full Compliance

PRINCIPLE #3 Commitment to long-term economic and financial viability

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

SA has long-term plan documents for the Estate and Palm Oil Mill which are stated in the 2012/2013 Financial Year Estimate (October 2012 – September 2013) which locates funds to, among others: a. The estimates of plantation production for the 2012/2013-2015/2016 period, administration cost, labor cost, upkeep,

manuring, harvesting, roads and bridges, pest and disease, transport, etc. b. Estimates of Crop intake (FFB), CPO production, Palm Kernel production, processing cost, administration cost,

training cost, environmental cost, health cost, transport cost, etc. c. For environmental management and social plans, the company has allocated budgets for these activities: employee

clean water wells, Insurance, Medical and Hospital, Amenities and Welfare, Occupational Health and Safety (OSH) and Sustainability, and Corporate Social Responsibility (CSR).

The company also has long-term plans for the next three years which includes the estimates of FFB production, CPO production, CPO oil extraction rate, kernel production, Kernel oil extraction rate, the estimate of the cost for each kilogram of FFB at the plantation, the cost of each kilogram of CPO at the Tapung Kanan mill, and the estimated price of CPO per kilogram for the next three years. SA has not yet planned the replanting program for the next 5 years, but there are plans for replanting in 2018 which will be re-evaluated in 2013.

Full Compliance

PRINCIPLE #4 Use of appropriate best practices by growers and millers


ASSESSMENT REPORT


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

Available PT. Sekarbumi Alamlestari Sustainable Palm Oil Procedure authorized by the Senior Manager on 15 December 2012 (Revision 4) and PT. KLK Agriservindo Technical Guidelines for Oil Palm Plantations (Number: GP/AGRIC/OP) 25 November 2004 are available. These include the following activities:

Re-planting including land clearing without burning (it is also mentioned in SOP 4 / Re-planting and GP/AGRIC/OP7)

Nursery (GP/AGRIC/OP7 the re-planting division)

Block (GP/AGRIC/OP9)

Road and drainage construction (GP/AGRIC/OP10)

Land maintenance, including weed control (GP/AGRIC/02)

The SOP about Nutrition/Fertilization (Plantation SOP 12 and GP/AGRIC/03)

The planting of oil palm plants on mineral soil (SOP RSPO 34)

The planting of oil palm plants on peat soil (RSPO SOP 32)

There is a fertilization recommendation from AARI (Applied Agricultural Resources Indonesia) and safe fertilization procedures in the Safety Operating Procedure point 10;

The Integrated Pest Management SOP (RSPO SOP 7 and GP/AGRIC/OP5);

Soil and Water Conservation (GP/AGRIC/OP5);

Erosion Control (Plantation SOP 13);

HCV Identification and Management (Plantation SOP 15),

Harvesting (RSPO SOP 37). There is a Plantation Operational Safety and Health Procedure authorized by the Senior Manager on 1 November 2011 (SaOP/Safety Operational Procedure) available. It explains safe operational steps. There is also Standard Operating Procedures For Mill Operation at Tapung Kanan POM which is authorized by the Mill Manager on 1 April 2011. The procedure includes Fruit Reception SOP (SOP for the Weighbridge Station), oil palm processing in every station’s SOP (Loading Ramp Station; Sterilization Station, Hoist and Threshing Station, Digester Station, Press station, Depicarper station, Nut Cracker Station, Kernel Silo, Boiler House, Power station and CPO Dispatch). Based on the results of the field observation at both the plantation and the mill, for example at the spraying, fertilizing, harvesting, and FFB processing locations, it is seen that the operational activities are conducted based on the existing SOPs. Checking and monitoring activities of operational procedures include: 1. The Public Accountant Audit which was held on 1 October 2012 by an Internal and External Auditor (Sasfit and M.

Rafly). A copy of an invitation dated 19 September 2012 from KLK’s Internal Audit Manager is available. The internal audit is done once a year and has been done more than once such as on 1 October 2012, audited on 28 August 2012 and records of the improvements done are available.

2. The report for the result of the September 2012 Internal Audit (Comment Account Report) is available and it was responded by the Manager on 8 November 2012.

3. The evaluation of the results of the field work is done by the manager every month by inspection. For example, the evaluation of the fertilizing results in the Fertilizer Application Efficiency Checklist at KTK 2, inspected on 27 October 2012 at Block 93E (3C) for the fertilization of RP, the dose used was 1.5 Kg/Palm

4. There are reports of the Quality Control done by the Laboratory (daily for the POM laboratory and monthly for the Mandau Central Lab)

5. Machinery performance is evaluated by the maintenance section headed by the Maintenance Assistant (the results of the evaluation are recorded in the Machinery Maintenance Report Book made by the Maintenance Supervisor, checked by the Maintenance Assistant and authorized by the Mill Manager).

6. The evaluation of SOP-appropriate procedures for operators is done by the Assistant and the Manager through training result assessments. For example, the Pressing Station Technical Operational Training on 21 November 2012 for Pressing Station operators.

7. There is an RSPO internal audit report dated 12/03/2012-15/03/2012. The records of the operational activity results are available in monthly periods for Tapung Kanan Plantation in the Tapung Kanan Plantation Progress Report. The updated version is available for November 2012. This was compiled by


ASSESSMENT REPORT


the Senior Manager’s Secretary based on the reports from the Assistant, under the knowledge of the manager and reviewed by the Senior Manager and submitted to the Region Director. The records of the operational activities are available in the monthly periods for Tapung Kanan Mill in Tapung Kanan’s POM Progress Report. This report is compiled by the Factory Manager’s secretary based on reports from the factory assistant under the knowledge of the, reviewed by the Senior Manager and is submitted to the Region Director.

Full Compliance

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

The company has conducted a series of regular analyses consisting of: a. Soil Analysis. The company conducts a soil analysis every 5 years as a basis for fertilizer recommendation. The

results of the 2006 and 2011 soil analyses done by AARI (Applied Agricultural Resources Indonesia) are available in the 2006/2007 and 2011/2012 fertilizer recommendation documents Appendix 4.0. The 2012 soil analysis was not done because the fertilization still used the 2011/2012 soil analysis.

b. The Foliar Analysis Result for each block covers the analysis of Major Elements (Ash, N, P, K, Ca and Mg). c. Visual analysis is done by AARI (Applied Agricultural Resources Indonesia) and is recorded in the Field Assessment

Note. For example the 2012/1013 Field Assessment Note includes Canopy Size Assessment, Nutrient Deficiency and palm circle assessment.

The 2012/2013 Oil Palm Manuring Recommendation Revision 1 which is published by the Agronomist dated 8 November 2012 is available. It explains fertilization recommendations based on the foliar analysis for each plantation, soil analysis, and visual plant analysis. The activities conducted by PTSA in order to maintain and increase soil fertility are: fertilization, empty fruit bunch application, and land application.

During the stage-2 conducted the fertilization realization on the second semester inline with the fertilization plan, for example Rock Phosphate fertilization at KTK 1 conducted on October 2012 with a doze 1.5 Kg/palm and at KTK 3 (block 94-I) conducted on November 2012 with a doze 1.5 Kg/palm.

There is a Land Application available in the Waste Water Volume to Land Application at KTK 1 (98 I/ Block 344 and 374 with an area of 38 Hectares). For example, on 30 November 2012, the total pump operation time was 9 hours at Block 344 with a land application volume of 216 M3.

There is an EFB application recommendation available with a dose of 30000 Kg/Ha. The EFB application realization documents at Block 93C (2B) in July 2012 was 25 Ha, in September 45 Ha and in December 37 ha (Total 107 Ha) and in KTK 3 at Block 93E (4B) it was realized in 2011 (February 2012=20 Ha; March 2012 = 22.5 Ha; May 2012 20 ha; June 2012=12 Ha and July 2012=10.5 Ha; November 2012=20 Ha; December 2012=20 ha).

Based on the observation results, the company has conducted activities which support the effort to maintain soil fertility and is supported by the FFB yield of 24.4 Ton/Ha.

Status: Full Compliance

4.3 Practices minimize and control erosion and degradation of soils.

PT. Sekarbumi Alamlestari has a Tentative Detail Soil Map which explains the types of soil:

Peat

Type A Lowland: sandy clay, flat surface

Type A* Lowland: sandy clay, flat surface

Type A Highland: sandy clay, undulating surface

Type* Highland: sandy clay, undulating surface

Type B: Alluvium; clay

Type B*: Alluvium; sandy

Type C: sandy clay

Type D: sandy clay

Type D highland: sandy clay Based on the map, there are types of soil classified as marginal soil, the peat soil.


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For slope management strategies there are:

KLK Good Argricultural Practice (GAP) which explains the Planting of Oil Palm on Terraced Areas (Policy number: GP/Agric/OP7, Re-planting– 4, 29 July 2005 edition).

KLK Good Argricultural Practice (GAP) which explains about the Making of Terraces (Policy number: GP/Agric/OP5, Conservation– 4, 3 June 2005 edition).

SOP 12. Management of Optimum Soil Fertility for Production which was approved by the Senior Manager (Ng Yee Hong) on 12 April 2012.

PT. Sekarbumi Alamlestari has a road maintenance program such as the maintenance of bridges/box culvert, roadside ditch washing, road hardening, and road maintenance (grader) which are documented in the road maintenance program and realization records, for example the bridge maintenance at KTK III: the 2012 program was conducted in Division 4A for 9 blocks (blocks 94A, 94B, 94C, 94D, 97E, 99F, 99G, 01H, 06) and in division 4B for 12 blocks (blocks 93E, 94F, 94I, 94J, 95B, 95D, 95G, 95H, 97K, 98A, 98C, 05). The plans had been realized in all of the blocks as of December 2012. PT. Applied Agricultural Resources Indonesia (AAR)’s analysis explains that there is shallow peat soil at KTK 3 covering an area of 75 Ha at 4 blocks (94D, 97E, 99G, 01H) which are spots and most of them are mineral soil, so water management is not deemed very crucial. PT. Sekarbumi Alam lestari has strategies in managing marginal soil as stated in SPO12 Optimum Soil Fertility Management for Productivity which was endorsed by the Senior Manager (Ng Yee Hong) on 12 April 2012 and explains about:

Marginal soil management– sandy, low organic material, podzolic, acidic/peat soil

Technical applications such as empty fruit bunch application to sandy soil and low organic material soil, and silt-pits for podzolic

For acidic/peat soil, the effort to manage the water surface level is through a water gate/dam to control the water surface level at between 50-70 cm beneath the ground surface as in agronomical guidelines

A checklist to monitor the condition of the water gate and ditches

Monitoring the level of the water surface at the water gate and containment channel

Making a peat area map

No planting on peat areas > 3 m

Draining the excess water during the rainy season

Extreme prohibition for burning

The application of CuSO4 and ZnSO4 in order to fulfill the lack of trace elements

Ditch clearing


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

In order to protect it’s wetlands and riparian area, PTSA has issued management plan and several SOPs which are: 1) SOP concerning riparian protection, 2) SOP concerning Ground and Surface Water Quality, 3) SOP concerming Planting in Peat Swamp Area, 4) Annual Water Management Plan, 5) Management Plan of HCV area including riparian management plan.

According to the above mentioned documents, various riparian protection measures had been undertaken by PTSA, such as: 1) Non chemical treatment in river banks area (50 metres), 2) installation of warning / sign boards and markers of riparian area, 3) rehabilitation of riparian area (starting in 2012), and 4) Regular measurement of surface and ground water quality. During document examination, PTSA showed records / evidence of implementation of these activities in the form of: documentation of SOP socialization to the employees, documentation and map of warning signboards location, map of rehabilitation planting location, recapitulation of rehabilitation progress, and result of ground and surface water quality test.

To prevent pollution caused by waste water from palm oil mills, PTSA applies Land Application system, and regularly test the BOD of the waster water. Waste water samples taken from effluent pool (4th pool), BOD test done by the Laboratory of the Public Works Departement of Riau Province. Records of BOD test result was available and well


ASSESSMENT REPORT


documented.

In addition to those above mentioned efforts, ind order to protect its water sources, PTSA also monitors water usage for FFB processing in palm oil mills. Monitoring conducted daily by measuring water consumption, and then recapitulated the total water usage everymonths. Graph of water use for the year of 2012 shows that average of water use in 2012 slightly above the planned budget. This occured mostly due to decrease in number of FFB processed in some particular months and water leakage in some location like hydrant and public facilities. Mesures to overcome this problem has been made and will be implemented in the near future.

Despite all conformity to the standard, still there are several important observastion notes for PTSA which are:

1) Completion of riparian protection through completion of riparian border marking, replacing dead rehabilitation plants, and continue rehabilitating the riparian area as previously planned.

2) To ensure the accuracy of water quality test, PTSA needs to review the accreditation status of laboratories used to test the quality of groundwater and surface water.

3) To ensure the consistency of water savings, reparation on water leakage as well as other inefficiency sources needs to be implemented immediately.


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

The integrated pest control program includes: 1. An SOP about integrated pest control (SOP RSPO Number 7) is available and it explains the steps in integrated

pest control.

2. Pest and disease census by the integrated pest control officials (employees) are planned:

Nettle caterpillar census is done every 6 months and if any are found, the census is done monthly.

Rat census every 6 months.

Ganoderma annually.

3. The planting of beneficial plants (Turnera) in 2013 (KTK = 4000 Meters and KTK III = 5000).

4. Owl monitoring every 6 months by Integrated Pest Control employees

5. Annual Integrated Pest Control training

6. There is a Barn Owl Box Plan and Realization from 2012 dated 10 January 2012. For example, the construction of

Barn Owl Box with the ratio of 1 Barn Owl Box for 40 Ha in compliance to the RSPO Plantation SOP 7 so that the

total number of Barn Owl Boxes planned in KTK 1 is 56 Barn Owl Boxes. Up to this moment, 33 Barn Owl Boxes

have been made.

The documentation of the Integrated Pest Control coverage includes: 1. There is a Turnera planting location map with a scale of 1:170,000, for example on Main Road 92 B. It shows the

number of plants in every division. For example, in Division 2 B it is 5,600 M and in KTK III at 94A shows the

coverage at Division 4A is 9,000 M.

2. Owl monitoring documentation (the checking is done every 6 months by Integrated Pest Control employees. For

example, the monitoring of owls at KTK 1 on 23/10/2012 at Block 92B showed that there were 5 eggs and 1 owlet

discovered. At KTK 3 Block 94 A Box number 26 (there is a box, parents, and eggs).

3. Monitoring of nettle caterpillars on 16 March 2012 and 26 September 2012 based on the Nettle Caterpillar Census

at KTK 3 showed no infestation. Monitoring of Nettle Caterpillar infestation at KTK 1 on 20 September 2012 (no

infestations were found).

4. KTK 1 Ganoderma census on 21 September 2012 and at KTK 3 on 28 September 2012 showed no infestations

5. Rat census at KTK 3: observations on 23 March 2012 and 19 September 2012, for example, at Block 94 A the

percentage was 2% and 1.45%, the number of plants censused was 594 plants, the results of the observation

showed that the infestation rate is below the threshold (5%). At KTK 1 on 22 September 2012 and 18 March 2012,


ASSESSMENT REPORT


for example at Block 94B Dev 1 the number of plants censused was 461 plants and 11 were infested (2.89%) and

in March the number of plants censused was 461 plants and 13 were infested (2.81%). The infestation was still

below the threshold.

6. Training for Integrated Pest Control refers to RSPO SOP number 7 was held at KTK 1 on 4 June 2012. It was

conducted by KTK 1 Office and was attended by 7 maintenance employees (an attendance list is available) and at

KTK 3 the training was held on 10 June 2012 and was held by Division 4A Office. It was attended by 4 maintenance

employees (an attendance list is available).

7. Chemical pest control can be done if the pest infestation exceeds the threshold.

There is a Costing Book for each division which is compiled and analyzed by the Assistant every month, providing

information about pesticide toxicity (active ingredients /Ha), for example at Division 2A in November 2012 it was

\Trychlopir (Dalopir 480 EC). The usage in November was 41 liters with 48% active ingredients for an area of 368 ha.

Therefore, the total amount of active ingredients used was 19.68 Kg and the active ingredient /Ha was 0.05 Kg. Based

on the recommendation analysis, the dosage of the ingredient is 1.5 – 3 liters/ha (the active ingredient dosage is 0.72 –

1.44 Kg/Ha).


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

Company has document of Ministry of Agriculture No. 01/Permentan/OT.140/1/2007 regarding the list of active ingredient of prohibited pesticides and also limited pesticides as a guideline to ensure that the agrochemicals used are allowed by the institution. In addition, PT. Sekarbumi Alamlestari showed a document contained the list of pesticide use that informed the Name and Registration Numbers of the Pesticides in the Commission of Pesticide. Names of the pesticides used and available in Agrochemical warehouse of PT. Sekarbumi Alamlestari, among others: 1. Supertox 276 AS with Registration Number RI 2037/9-2008/T 2. Dacomin 865 SL with Registration Number RI 2062/4-2009/T 3. Kemrane 288 EC with Registration Number RI. 01030120103759. 4. Kon-Up 480 SL with Registration Number RI 01080120001503 5. Dalopir 480 EC with Registration Number RI 01030120021256 There has been a Costing Book available from each division that is compiled and analyzed every month by the Assistant. The Costing Book informs the active ingredients used, the applied areas and the amount of use per hectare. For example, in Division 2A in November 2012 there was Dalopir 480 EC (Triklopir Active Ingredient) used in the amount of 41 liters with 48% active ingredients for an area of 368 ha. The number of rotational use of pesticides contained in the Program Document and implementation of Maintenance Year 2012-2013 according to the type of activity. Among others: 1. Circle/Path Spraying is conducted every 4 months. For example, in Block 93A Tapung Kanan Estate I is planned in

November, March and July (The Application has been made in November; there is a Costing Book of November available).

2. Selective Weeding is conducted every 6 months. For example in Block G (4A) Tapung Kanan Estate III, selective weeding is planned in November and May 2013 (Application has been done in November, there is a Costing Book of November available).

There is Costing Book available from each division that is compiled and analyzed by the Assistant that provides information about the dose of pesticides, for example the dose of Triklopir pesticide material used is 1.3 – 3 liters/ha. There has been MSDS (Material Safety Data Sheet) available for pesticide and fertilizer that describes trademarks, active ingredients, hazard identification, first aid emergency (P3K), fire prevention, prevention against spills and leaks, storage and handling of materials, prevention of pesticide exposure, prevention against fire and explosion, storage, special condition of material storage, prevention of exposure and personal protection equipment (goggles, respirators, aprons, gloves, boots, long-sleeved shirts and long pants), physical and chemicals nature, reactivity and stability, and toxicological information. Fuller Earth has been provided to handle poisoning due to the use of paraquat. On 14 December 2012, a limited pesticide operator training has been conducted for spray workers attended by 81 workers


ASSESSMENT REPORT


consisting of 18 foremen and 63 spray operators. The training has been held at the meeting room of PTSA and has been delivered by PT. Dharma Guna Wibawa as the manufacturer of active paraquat pesticides and also witnessed by the representative of Province Plantation Service (Mr. Indra Fuadi). Based on the study of SOP RSPO 17. Estate Point 1 on hazardous waste management and result of visit in Hazardous Waste Temporary Warehouse, the agrochemical waste including pesticide packaging waste has been managed in accordance with applicable regulation (Government Regulation No.18 year 1999) which is stored in a licensed Hazardous Waste Temporary Warehouse. The hazardous waste collected is delivered to PT. Horas Miduk that is licensed as a depository, collector, and transporter of hazardous material (including used oil, dirty oil, used solvent, used batteries, ex-contaminated sludge and packaging, toxic waste and other hazardous material waste) according to Decree of Ministry of Environment No. 474 year 2007 and Ministry Permit No. 563 year 2009. It is also indicated that water used for pesticide leaching will be reused for chemicals mixing. Based on the result of field visit in the area of Hazardous Waste Temporary Warehouse Tapung Kanan Estate I, the pesticide packaging disposal was not in accordance with the regulation (it was discarded in the drains). On the observation activity on 21 December 2012, PT. Sekarbumi Alamlestari and representative of Guiding Committee of Occupational Health and Safety conducted inspection and corrective action including: a. Taking the discarded pesticide packaging and placed it to Hazardous Waste Temporary Warehouse of Tapung

Kanan Estate 1 then recorded it.

b. Conducting re-training and re-dissemination to hazardous waste officers in order to anticipate the waste

management well.

Record of corrective activities above was recorded and well-documented. Non-conformance status CAR 2012.10 is Closed with observation). There has not been enough evidence that the use of paraquat had been reduced or eliminated. Company only has a plan of reducing the use of paraquat in the document of the use of paraquat dichloride for 5 years approved by General Manager. In 2013, the use of paraquat is targeted to be reduced 10% as much as 6,241 liters; 2014 the use of paraquat is targeted as much as 5,548 liters; in 2015 the use of paraquat is targeted as much as 4,855 liters; in 2016 the use of paraquat is targeted as much as 4,172 liters; in 2017 the use of paraquat is targeted as much as 3,469 liters. Brodifacum has been used since 2011 and based on the field visit in Hazardous Material Warehouse of Tapung Kanan Estate 1, there was not any active Brodifacum pesticide found. Non-conformance CAR No. 2012.01 There have been results of examination available by Indah Clinic Medical Laboratory to 136 spray workers, pesticide

spray mixer and spray foremen on 18 May 2011 (physical examination, regular blood examination, urine examination,

EKG examination, conclusions and recommendation of the examination). Medical screening for Sprayer and Manuring

workers in 2012 has not been conducted. Non-conformance rasied see CAR No. 2012.11

In SOP 21 RSPO, company has a policy which states that:

A pregnancy test. A chemicals spray worker is obliged to inform the company about her pregnancy. After being

examined by company’s doctor and after the result shows a positive pregnancy, the company will then transfer the

worker to other jobs that are lighter and do not come into contact with chemicals.

Breastfeeding women are prohibited from doing works using chemicals.

There has been a Pregnancy Book that informs results of examination by estate midwife, clinic recommendation, and

the company’s action. For example, after undergoing an examination on 9 October 2011, Mrs. Suharnani, a manuring

worker of Division 2B of Tapung Kanan Estate I, was confirmed pregnant. The company’s action was moving her to

Turnera care).

Minor 4.6.1 Minor 4.6.2

Status: See Nonconformance CAR No. 2012.01 with Minor Category. Status: See Nonconformance CAR No. 2012.11 with Minor Category.

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


ASSESSMENT REPORT


Policy of Workers’ Health and Safety has been set by Group Plantation Director on 10 January 2005, that decided:

- To comply with all rules and regulations related to the workers’ health and safety.

- To ensure the stages of occupational health and safety procedure are implemented and updated.

- To provide comprehensive training, information and guidance on the aspects of OHS (Occupational Health and Safety).

- To ensure that all workers understand their responsibility to work safely in order to avoid accidents to themselves and to other workers.

Occupational Health and Safety programs during January 2011 to December 2012 included:

Training program including technical OHS, environment, manpower and RSPO.

Use of Personal Protective Equipment (PPE), meeting of Guiding Committee of OHS.

Medical Screening

Test of noise

Emergency response

First Aid Emergency boxes

Fire Extinguisher

OHS/RSPO Audit

OHS Risk analysis

Accidents reports. There has been a Procedures of Occupational Health and Safety of the mill that was ratified by the Mill Controller on 1 December 2011 (SaOP/Safety Operational Procedure). This procedure explains safe work measures that include work procedure for activities in Weighbridge Station, Loading Ramp Station, Sterilization Station, Hoist and Thresing Station, Digester Station, Press Station, Depicarper Station, Nut Cracker Station, Kernel Silo, Boiler House, Power Station, and SPO Dispatch. There has been a Procedure of Occupational Health and Safety of the estate ratified by Senior Manager on 1 November 2011 (SaOP/Safety Operational Procedure). This procedure explains safe work measures that include work procedure for Oil Palm Harvesting, Oil Palm Transportation to the Palm Oil Mill, Chemicals Storage, Chemicals Transporting, Manuring, Heavy Equipment Operators, Nursering, etc.).

Company has a personal expert of General OHS for the scope of company namely Mr. Adria, that according to Decree of Ministry of Manpower and Transmigration No. KEP.1011/M/DJPPK/V/2011 has been assigned as the secretary of Guiding Committee of OHS. The Guiding Committee of OHS of Tapung Kanan Estate is in accordance with Decree of Head of Manpower and Transmigration Agency of Kampar District No. Kep.700/DSTK –PHI/2012/10 dated 28 August 2012. The Guiding Committee of OHS of Tapung Kanan POM is in accordance with Decree of Head of Manpower and Transportation Agency of Kampar District No. Kep.700/DSTK-PHI/2012/15 dated 19 September, chaired by Mawardy with Adria as the secretary. There is a Minute of Guiding Committee of OHS Meeting at the Estate available. For example, the meeting held on 9 October 2012 which was attended by 28 members of the Board that discussed division of duty for the Guiding Committee of OHS, division of firefighting team, formation of firefighting team, determination of fire training schedule on 17 October 2012 (attendance list available). Every 3 month, Guiding committee of Occupational Health and Safety reports to Department of Manpower, for example the report of Guiding Committee of Occupational Health and Safety of the Estate which was submitted on 6 December 2012 (handover evidence available of Covering Letter No. 161/SPI/X/12) and Report of Guiding Committee of Occupational Health and Safety of the Mill on 29 November 2012 based on the Letter No. 0250/FM-SA/TKF/XI/12.

In the Collective Labour Agreement (CLA) Article 47, it is stated that the company is obliged to involve the employees in the Labour Social Assurance program. This program includes occupational accident assurance, death assurance and retirement. Based on the Payment of Labour Social Assurance according to the data of dues payment recapitulation details (Labour Social Assurance form 2), Receipt of Payment and Transfer Evidence of November 2012 comparing to the data of Employees Distribution of November 2012, there are 530 employees and 8 BHL employees who are not registered in the program of Labour Social Assurance. Non-conformance see CAR No. 2012.02 There have been results of examination by Indah Clinic Medical Laboratory to 136 spray workers, pesticide mixers and spray supervisors on 18 May 2011 which included physical examination, regular blood test, blood chemistry examination, urine test, EKG, conclusion and recommendation of the test. Examination for Manuring Workers, Generator Operators, Warehouse Keepers and Welders has not been conducted yet. Audiometric test for 12 workers (4 Kernel Station workers, 4 Press Station workers, and 4 Engine Room workers) was conducted on 17 March 2012.


ASSESSMENT REPORT


Medical examination for Boiler Operators, Lab Analysts, Mechanics and Warehouse Officers is not available yet. There has been an application letter for medical screening available for Boiler Operators, Lab Analysts, Mechanics and Warehouse Officers to the Operational Director on 19 November 2012 No. 234/FM-SA/TKF/XI/12. Non-conformance raised see CAR No. 2012.12 There has been a document of OHS hazard identification and risk assessment related to the activities in the field, such as: process/workplace: Nursery, replanting, immature/mature maintenance, FFB harvesting, FFB Transporting, Workshop, chemical mixing place, generator warehouse, employees and staffs residential housing that informs activities, hazard source, risks, risk level, measures to minimize the risks. There has been an OHS Hazard Identification and Risk Assessment related to the Activities in the Mill that details the stations, main activities, hazard sources, risks, risks level, measures to minimize the risks, and people in charge. For example:

1. Loading Ramp– demolishing – fallen FFB– wounded persons– low – using PPE (helmet, gloves, boots), sorting operator training, training for Truck driver – Assistant.

2. Sterilizer (boiling station) – opening and closing the sterilizer door – steam – blistering – medium – sterilization training, using PPE – Assistant.

However, hazard identification for the repair of equipment such as activity in sterilizer station has not been done. Nonconformance raised see CAR No. 2012.03

Program and training in 2012 included OHS training, such as:

Training of spraying techniques for spray workers by Manager on 14 January 2012.

First Aid Emergency training for staffs and employees by Dr. Budiarto.

Training program for 22 forklift and transporting operators on January 2012.

Welding training program. There has been an application letter for welder training of PT. Sekarbumi Alam Lestari on 17 December 2012 No. 369/SA-UM/XII/2012 and has been accepted by Mr. Safrizal, SE on 19 December 2012.

Certification training of Forklift and Transporting Operators, for example on behalf of Edi Santoso Manurung on 9

November 2009 (Certificate No. 09.2116/OTC/KK/XI/2009) and Edi Pitriana (No. 09.2115/OTC/KK/XI/2009.

Training and dissemination on the use of PPE was conducted for warehouse officers (2 persons) on 1 and 4

September 2012 at the Warehouse.

Training on OHS Operator was conducted on 7 September 2012 which was attended by 10 operators (Power

House Operator, Threser, Boiler, Clarification and Press).

Certification training of Boiler operator, for example for Teopilus Sihotang as a Class 1 boiler operator on 6

October 2000 (Certificate No. 6495/SCF/OB-I/X/2000) and training for Class 1 Boiler operator for Mr. Kaswir on 5

November 1995 (Certificate No. 124/BNDP/OB-I/XI/95).

There has been a statement letter of attending the Boiler operator Training conducted by PT. Arpindo Pratama in

cooperation with Department of Manpower and Transmigration of Republic of Indonesia on 26 November to 1

December 2012 at the Sabrina City Hotel, which has been attended by 4 Boiler operators namely Junianto,

Hendro, Sulowiyoto and Supartono. For example, statement letter No. 437/SK-PU/XII/12 on behalf of Mr.

Junianto.

There has been statement letter of attending OHS coaching for Heavy Equipment Operators conducted by PT.

Arpindo Pratama in cooperation with Ministry of Manpower and Transmigration of Republic of Indonesia on 16 to

18 November 2012 which was attended by 46 heavy equipment operators. For example, statement letter No.

524/AP/SK/XI/12 on behalf of Mr. Jamali, No. 525/AP/SK/XI/12 on behalf of Mr. Junaedi and No. 530/AP/SK/XI/12

on behalf of Mr. Maizul Efendi.

Emergency response procedures are available for: 1. Fire includes fire signs, evacuation and handling mechanism, and emergency telephone number. 2. Wildlife attacks (available in the form of Flowchart). 3. Spills and leaks of chemicals/diesel/waste include signs of occurrence, evacuation and handling mechanism, and

emergency telephone number.


ASSESSMENT REPORT


4. Accidents include first aid, advanced handling to the Clinic, hospital treatment (if necessary), investigation, reporting and emergency number.

5. Fire emergency responses in the SOP RSPO 29.Estate include signs of occurrence, fire fighting and handling team, zero-burning policy, map of fire-prone areas and water sources, and fire monitoring.

6. There has been a procedure of Natural Disaster identified as flooding available on 19 December 2012 and has been approved by the Senior Manager.

Evidence of submission of the PPE and First Aid Emergency boxes:

There has been a document of PPE expenditures, among others:

Submission of PPE for 14 Stoker Division 4 B. For example on 5 April 2012 for Gloves and on 24 May 2012 for boots. Based on the observation at Block 94 C, loaders have been wearing PPE.

Submission of PPE for 11 harvesters from Division 4 B supervised by Efrianto. For example on 25 October 2012 for helmets and boots, on 23 May 2012 for boots and on 13 December 2012 for boots and safety cover (sarung egrek). Based on the observation at Block 93 E, harvesters have been wearing PPE.

There has been a list of First Aid Emergency box available: List of First Aid Emergency box distribution at the mill that is spread over 12 places (Security Post, POM Office, Lab/Weighing, Sorting I, Workshop, and Loading Ramp/Sterilizer, Processing office/threser, Press/Kernel, Boiler, Clarification/Power Station, Warehouse and Hazardous Waste Warehouse). There has been a list of First Aid Emergency box contents, such as: eyedrops, wound medicine (liquid betadine), antiseptic (Betadine ointment), Hansaplast, warm medical plasters, muslin, cotton, plasters, burn treatment (bioplacenton), elastic bandages, arm-slings, balsam, scissors and notebook.

There has been data of 18 locations of fire extinguisher at the mill. Company has been providing PPE for workers. Based on the field visit, there have been several things found, among

others:

1. At the Hazardous Waste Temporary Warehouse of the Mill and Hazardous Waste Temporary Warehouse of Tapung

Kanan Estate-1, a First Aid Emergency tool (Eye Shower) had been found not functioning. A transporting operator of

Tapung Kanan Estate-1 FFB Division 2 B at the Loading Ramp had been seen not wearing PPE (safety shoes and

helmets) because they have not been provided by PT. Sekarbumi Alamlestari. This is not in accordance with the

policy, program and regulation on Occupational Health and Safety (Regulation of the Ministry of Manpower No. 9

year 2010).

2. Based on the field visit in PT. Sekarbumi Alamlestari Palm Oil Mill, at the dispatch station, workers of electrical

installation repair had been found not wearing PPE (gloves).

3. Based on the field visit, the company has provided helmets and boots as PPE for harvesters, but they do not wear

goggles and gloves, while based on the SaOP of harvesters the PPE for harvesters also includes goggles and

gloves.

Observation on 21 December 2012. PT. Sekarbumi Alamlestari had repaired the First Aid Emergency tool (Eye

Shower) so it functions well; PT. Sekarbumi Alamlestari showed recording evidence of PPE handover (safety shoes) to

workers (FFB transporting operators); Based on the field observation, the FFB transporting operators has been wearing

the PPE (safety shoes) given; the company showed recording evidence of PPE handover to workers of Electric matters

signed by the workers. Recording of improvement activities above is noted and well-documented. Non-conformance

raised see CAR No. 2012.13.

Workers who had attended First Aid Emergency training should be in operation in the field and mill. First Aid Emergency Training includes:

First Aid Emergency Training at Tapung Kanan Estate-1 on 8 October 2012 at the Clinic which was attended by

19 participants (staffs, supervisors and employees), delivered by Dr. Imawan Hardiman (attendance list

available).

First Aid Emergency Training at Tapung Kanan Estate-III on 8 October 2012 at the Clinic which was attended

by 11 participants (staffs, harvest foremen, maintenance foremen, Foreman 1 and TPA keeper).

First Aid Emergency Training at the Palm Oil Mill on 25 June 2011 in KMS attended by 7 participants (foremen),

delivered by Dr. Budianto Chandra (attendance list available).


ASSESSMENT REPORT


There has been a document report of occupational accident (reported to Department of Manpower). For example, accidents on behalf on Muhammad Ridho Syahlan on 26 January 2012, the scene was at PT. Adei. Chronology: during the fire training at Adei he fell from the car and had his right calf broken. However, the accident analysis for the estate is not available yet. Non-conformance raised see CAR No. 2012.04

Minor 4.7.1 Minor 4.7.2 Minor 4.7.3 Minor 4.7.6 Minor 4.7.10

Status: See CAR No. 2012.02 with minor category. Status: See CAR No. 2012.12 with minor category. Status: See CAR No. 2012.03 with minor category. Status: See CAR No. 2012.13 with minor category. Status: See CAR No. 2012.04 with Minor category.

4.8 All staff, workers, smallholders and contractors are appropriately trained.

There have been training program and implementation in 2012, for example:

Training of spraying techniques for spray workers delivered by the Manager on 14 January 2012.

First Aid Emergency Training for staffs and employees by Dr. Budianto.

Training program for 22 forklift and transporting operators on January 2012.

Welding training program. There has been an application letter for welder training of PT. Sekarbumi Alam Lestari on 17 December 2012 No. 369/SA-UM/XII/2012 and has been accepted by Mr. Safrizal, SE on 19 December 2012.

Records of employees training in the form of Training Participants Attendance of PT. Sekarbumi Alamlestari Tapung kanan Estate-1 are available, for example:

Training of spraying techniques by Manager on 14 January 2012, attended by 14 employees (attendance list

available).

Training of Integrated Pest Management (IPM) on 10 April 2012 which was delivered by AAR and attended by

Staffs (attendance list available).

Training of IPM on 4 June 2012 at the Tapung Kanan Estate-1 office which was attended by 7 maintenance

employees and delivered by the Manager (attendance list available).

Training of manuring conducted on 26 January 2012 at Division 4A, attended by 15 participants (employees

and foremen), and delivered by Manager (attendance list available).

Dissemination of RSPO on 20 October 2012 attended by 15 participants (supervisors and employees) at

Division 4B and delivered by Manager (attendance list available).

Training of FFB grading on 14 January 2012 which was attended by 21 participants (Manager, Assistant, and

grading officers) and delivered by Mr. Stephen Thiong (attendance list available).

There has been document of contractors list that describes contractors work experience which proves their competence. For example, PT. Anugerah Bintang Abadi Contractor (contractor for manufacturing, civil technicians, etc.), has 10 years work experiences. CV Surya Kencana Sakti (contractor for residential building, mechanics, procurement of goods and services). Contractor company profile is available that informs competence, for example Company Profile of CV. Manshuri (building contractor): 1. Trading Business License (SIUP) for Goods/Services Trading and General Trading/Procurement No. 503/KPT-

SIUP/1026 dated 3 May 2011. 2. Company Registration Certificate No. 040834500603 dated 24 April 2011 valid from 1 January to 31 December 2012

for principle business activities: agriculture, general contracting, general trading, Real Estate, Developer and Palm Oil Mill.

3. Member card of National Joint Venture of Construction Company of Indonesia No. 04.1406-00112 on behalf of Ahmad Bukhori (owner).

4. Construction Service Enterprise Certificate No. 00019271 dated 6 February 2012.


PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity


ASSESSMENT REPORT


5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

During the audit process, PTSA showed its Environmental Document namely Environmental Management Effort (UKL) and Environmental Monitoring Effort (UPL) compiled in February 1995. The document contains environmental impact assessment for 6200 hectares area of plantation and palm oil mills with a capacity of 30 tonnes FFB / hour. The document had been approved by Agribusiness Board - Ministry of Agriculture, and had been approved by Ministry of Environment through letter No. B-5109/Dep.I/LH/07/2008.

Report on implementation of environmental management activities are submitted regularly to local authorities in the form of: 1) UKL - UPL report every 6 months, which contains all of environmental aspects including social aspect. Report for second half of 2011 and first half of 2012 available, 2) Report on mills waste water test and control wells water quality test every 6 months, 3) Annual soil quality test report.

Since there is no changes in business specification (plantation area and processing capacity), therefore no revision of existing environmental document is necessary to be done.


5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations.

Presence of rare or endangered species and high conservation value habitats have been identified and documented by PTSA through: 1) UKL and UPL document (1995), and 2) High Conservation Value (HCV) Analysis which were completed on September 2012. The HCV documents also contains management plan of HCV area and protected species. Among the protected species exist in the plantation are: Sumatran tigers, Sumatran elephants, tapir, deer, bears, root tigers, trenggiling, etc; while HCV areas identified in the plantation area are HCV 1, 3, 4, and 6 with an area of 1364.2 hectares.

Some action that have been taken by PTSA to protect the HCV areas and protected species, are: 1) the installation of HCV sign boards and prohibition board for hunting, destructive fishing and illegal harvesting, 2) sign boards / poster of protected species that exist in the plantation area, 3) Socialization of wildlife handling SOP to internal and external stakeholders, 3) planting rehabilitation trees (enrichment) in the HCV area. In general, all these actions comply the existing prevail laws and regulations in terms of protection of wildlife and protected areas.

In field checking, sign boards / warning of HCV area and protected species can be verified (11 signboards of HCV areas and 8 sign boards of protected wildlife protection). In addition to that, PTSA has also made publication to be disseminated to internal and external stakeholder even though still in very limited quantities.

To monitor the implementation of HCV management plan, PTSA has appointed two staffs, namely: 1) Ali Nurdin (Assistant Manager) as the coordinator of HCV management and 2) Edi Syahputera (Assistant Manager) as Deputy Coordinator of HCV. Both of these officers have received internal training on HCV management in year 2012.

Despite it’s compliance to standard, still there are several important points to be observed, most notably: 1) PTSA should consider improvment of socialization method so it can reach wider public, not only limited to the

village head or some government employees. 2) PTSA needs to consider improvement of sign boards and circulars quality


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

For the purposes of identifying sources of waste and pollution, PT. Sekarbumi Alamlestari has a document entitled: Waste and Pollution Source Identification and Plan to Reduce Pollution caused by the waste. The waste identification available for the estate and mill had been compiled on December 2011 containing the following explanation: types of waste, sources of waste, estimated volume of waste generated, actions, targets and relevant persons in charge.

In accordance with document of waste identification and waste management plan, a number of waste management


ASSESSMENT REPORT


measures have been done such as: hazardous waste management by a licensed contractor, land application for POM waste water, fruit empty bunches applied to estate, smoke and dust are monitored periodically, iron is sold to old iron collector, domestic waste is buried in the landfill at each division. In practice, the inspection at Tapung Kanan Estate-1 Division 1B found evidence that there is still a lot of domestic waste that is not well-managed according to the set plan of the company. Field-checking at the housing landfill of Tapung Kanan Estate 3 Division 2B also found a water leak from the landfill (leachate) to the body of the water.

On 30 December 2012, PT. Sekarbumi Alamlestari has shown evidence of domestic waste management to reduce

pollution such as:

a. Domestic waste in Tapung Kanan Estate-1 Division 2B had been managed and put in specific place at the landfill.

Records of management of domestic waste activities are available and properly stored.

b. Location of the landfill had been repaired so that the waste water from the waste does not flow back into the body of

the water/trench. Records of the landfill improvement activities are available and properly stored.

Non-conformance Major CAR No. 2012.14. is closed

Especially for hazardous waste, PT. Sekarbumi Alamlestari already has a specific SOP regarding hazardous waste management through SOP No. 16 on Hazardous Waste Management. The SOP describes classification, hazardous waste symbols, storage, data collection, transportation and so forth. For the storage of hazardous waste, PT. Sekarbumi Alamlestari has obtained a temporary storage permit from Local Government of Kampar in two places, namely warehouse and mill. The hazardous waste itself is transported by a licensed contractor, PT. Horas Miduk.

The hazardous waste has been monitored through hazardous waste Logbook in the temporary warehouse. Every 3 months, PT. Sekarbumi Alamlestari conducts analysis of hazardous waste balance sheet to be reported to the local government. The receipt of Report document (archives) to the Environment Bodies for the last two periods of delivery (November and August 2012) can be presented.

Full Compliance

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

PT. Sekarbumi Alamlestari has made a renewable energy program by using fiber and shells to reduce the use of diesel as a source of power generation. The use of fiber and shells has been recorded, monitored and well-stored as the use of KWh/ton of Crude Palm Oil (CPO).

There have been records of the use of fossil fuels (diesel) in the monthly report for mill and estate at PT. Sekarbumi Alamlestari, as in November 2012 with an average use of 70,442.29 liters/month or 5 litres of fossil fuel usage per mt FFB which had been evenly used for processing of 23.55%, for transporting of 52.09% and for machines in employees housing of 24.36%. Company has also targeted the reduction of diesel use by 5% in the period of 2012/2013.


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

SOP 04 is available. Replanting approved by Senior Manager (Ng Yee Hong) on 12 April 2012 that describes:

Land-clearing is conducted based on the result of EIA/Environmental Management Efforts-Environmental Monitoring Efforts.

Ensuring zero-burning during the replanting. PT. Sekarbumi Alamlestari plans to conduct the replanting in 2018. SOP 29 is available on Field Fire Emergency Response which had been approved by Senior Manager Mr. Ng Yee Hong on 12 April 2012. There has been a Field Firefighting Team of Tapung Kanan Estate approved by Senior Manager Mr. Ng Yee Hong on 18 October 2012. There is also a Firefighting Team of PT. Sekarbumi Alamlestari POM which had been approved by Senior Manager Mr. Hendy Warsito on 22 September 2011. The Field Firefighting Team of PT. Sekarbumi Alamlestari had attended firefighting training by Drs. Zul Azmi (Head of Fire and Disaster Management Agency) on 22 September 2011 at South Mandau Estate. There has been a map of fire-prone area in Tapung Kanan Estate I and Tapung Kanan Estate III available. PT. Sekarbumi Alamlestari has not conducted field fire monitoring periodically, so


ASSESSMENT REPORT


Auditor Team will conduct an observation at surveillance 1 related to field fire monitoring. There are firefighting tools available at PT. Sekarbumi Alamlestari, Tapung Kanan Estate namely: John Deere 2400, fire trucks, fire tanks, Shibaura Machine (jet pump), Robin Machine, Stick 2”, Suction Hose 3”, Hose 2”, Goggles, Yellow Helmets and Fire Extinguisher. There are firefighting facilities and infrastructure at PT. Sekarbumi Alamlestari, that contain: fire-response tank with the capacity of 4 tons, hydrant hose 2.5”, Nozzle 2.5”, Robin Pump 2”, Hydrant box and hose 2.5”, fire extinguisher, sand in a bucket, hydrant line and sirens. There is an inspection checklist of fire equipment in 2012 that is conducted once a month at PT. Sekarbumi Alamlestari Palm Oil Mill. Based on the inspection, all equipment are in good condition. There is an inspection checklist of fire equipment in 2012 that is conducted once a month at Tapung Kanan Estate of PT. Sekarbumi Alamlestari. Based on the inspection result, all equipment are in good condition.


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

To prevent air pollution, PTSA has performed identification of waste and pllution source at the estate and palm oil mills. The result of identification can be seen at the document entitled: "Identification of Waste and Pollution Sources & Pollution Reduction Plans". The document mentions types of waste generated by mills (about 19 items of waste including emission) and volume estimation. The identification document also contains emission reduction action plans, target time, as well as person in charge of each activities.

As evidence of implementation of emission and pollution reduction, PTSA showed documentation of regular waste monitoring reports (6 monthly) to local government (BLH) of Kampar. The report contains the results of periodic monitoring on: 1) smoke emission from boilers, 2) emission from generators, 3) air quality (ambient) of surrounding area of mills, 4 ) waste water quality (effluent) before it’s applied to land, and 5) the quality of water in the domestic waste water pond.

In addition to monitoring of emissions and pollution, PTSA also showed records of emission reduction measures, such as: 1) regular maintenance of dust collector to reduce smoke emissions from boilers, 2) Reduce the wet shell burning to avoid black smoke pollution, 3) Stop the incinerator operation since 2004 to reduce smoke pollution from the burning of empty bunch. 4) Optimize mills performance (reduction of breakdown time) by ensuring availability of spare parts stock and work planning, 5) Maintenance and monitor emmision from boiler and generator emmision periodically (6 month), routine maintenance of generator and boiler (daily and weekly), and planning installation of methane capture.

For management of POME of Tapung Kanan Mills, PTSA has issued two SOP, which are: SOP no. 18 concerning Mills Waste Management and SOP concerning POME management methodology. Both of the SOPs describe the methods of POME management including: number and spesification of waste treatment pond, work flow chart, the retention time, the recording of effluent, sampling point, effluent recycling, land application, monitoring ponds, and water quality monitoring in the final wastewater discharge. Periodic testing on the waste water quality conducted by officers from POME, and reported periodally to local authorities.

Nevertheless, still there are several observastion points to be considered by PTSA, such as:

1) PTSA needs to ensure that all domestic wastewater discharged into the water bodies are not polluted by waste water from FFB processing station in mills (floor cleaning, etc). PTSA has made a plan to build oil traps and special drainage channels for waste water from floor cleaning into waste water treatment plant (not to domestic waste water pond any longer).

2) In addition to that, PTSA also needs to ensure a better measurements of waste water debit by using proper equipment since at the time audit was held, the flowmeter was not work properly.


PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills

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 the continuous improvement.


ASSESSMENT REPORT


To anticipate the social impacts, there are two social impact analysis documents used as reference, namely: 1) Environment document in the form of Environmental Management Efforts/Environmental Monitoring Efforts made at the beginning of land (estate) opening, 2)Social Impact Analysis document (Social Impact Assessment) prepared in September 2012. This Social Impact Analysis document contains the description of: assessment area overview, stakeholder analysis, the posisitive aspects of plantation, social issues in the internal of the company and the company’s follow-up, social issue/external impact and the company’s follow-up, recommendation for conflict management at Kota Garo village.

As a continuation of the prepared impact social analysis, PTSA shows the availability of Periodical Social Impact Monitoring and Management Plan document and the participation of the community. This Social Impact management plan document contains: 1) Plan for the management of quality program on communication between the community and PTSA, 2). Plan for the monitoring and management of CSR program, 3) Plan for the management and monitoring of social and physical environment management program, 4) Plan for the management and monitoring of Occupational Health and Safety (OHS) in the environment of PTSA.

Since the opening of the estate until the implementation of audit, there is no changes on business specification either in area of business, operational capacity, or the use of raw materials so that in principle, revision to this environment document is not necessary.

According to the current regulations, the company has reported the environmental management activties every 6 (six) months to the local goverments in the form of environmental management and monitoring activities. Report for the second semester of year 2011 and the first semester of year 2012 as the sample can be shown. The report of first semester of year 2012 has been delivered to the local Environment Bodies in September 2012. Information on the progress of social conditions (the environment) and community development activities which has been implemented are also contained in this report.

From the examination of documents and interviews with the management of PTSA, it was known that the company also runs the KPPA ‘plasma’ scheme at Kota Garo village on a 1,568 hectares area (based on the scheme location permit from the Head of Kampar District in year 2000). Several steps were taken to ensure positive impacts on smallholders, such as: 1) PTSA acts as the guarantor and provides the bailout of estate development loan repayment to the bank, 2) Distribution of IDR 100,000/month compensation from year 2011 while the scheme plantation has not yield anything with evaluation every 2 years, 3) Management of the legality of land by the PTSA, 4) Fully management with the standards of the company, and replanting fund savings which planned for the company. Public consultation with the community leaders and figures at Koto Garo and Kota Bangun villages shows positive appreciation to this step.


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

SOP 19. Communication, Consultation and Socialization with Stakeholder approved by the Senior Manager (Ng Yee Hong) on 12 April 2012 which explains about:

The management performs a periodical communication, consultation and sosialization with the stakeholder (at least once a year) concerning the issues: the border stone, river riparian area, the quality of commodity, surroundings impression, social impression and the condition of main road etc.

The evidence records of river riparian socialization is available, for example:

At Kota Garo village adjacent to Tapung Kanan Estate III. Socialization was implemented on 19 November 2012, followed by 14 participants consisting the parties from the company and community leaders.

At Kota Bangun village adjacent to Tapung Kanan Estate I. Socialization was implemented on 29 November 2012, attended by 10 participants, the party of the company and community leaders.

PTSA has had a list of stakeholders which includes: 16 Legal instituitions, 3 Labor Organizations, 9 Hospitals/Health Institution, 4 buyers, 6 Car services, 2 Electronics and 89 others. 7 Small owner/village/local community, 6 Contractors, 4 Non Government Organizations and 2 Security Officers. A letter from the Head of Koto Aman village’s office No. 50/KA/IX/2012 on 27 September 2012 regarding the request for the provision of Bekoloder Transportation equipment and 2 unit of cars to stockpile/repair the yard of Koto Aman Village


ASSESSMENT REPORT


Office Hall which was in improper condition is available. Records of the responses to this letter was the Equipment Operational Report on 30 September 2012 to repair the village hall yard is available. However the given responses has exceeded the time limit as set out in the SOP. Auditor Team will conduct observation at the time of surveillance 1 regarding the given responses must not be more than 15 days. There is Structure of organization at PTSA which among others explains that Firmansyah is Public Relation Manager.


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

There’s an availability of SOP 20 on Complaints and Objections HandlingProcedure which was approved by the Senior Manager (Ng Yee Hong) on 12 April 2012 explaining about:

All complaints reported to the Exclusive/Assistant must be recorded.

The completion of complaints/disputes is justly and wisely established through an open negotiation agreement of the parties involved through the following procedures: - Any issue which can not be resolved by the manager/assistant must be reported to the General Manager. - Manager must refer to the General Manager (GM)/Mill Adviser (MA) for advice if there is a complaint that can

not be resolved. - Manager must refer to the General Manager GM/MA for advice if there is a complaint that can not be

resolved. There’s an availability of SOP 26 on Dispute Negotiation which was approved by the Senior Manager (Ng Yee Hong) on 12 April 2012 which describes:

Disputes of land/border is equipped with the land/border disputes handling flowchart.

Disputes on the land territories (squatter disputes) is equipped with land territories disputes handling flowchart.

Social issue is equipped with social issue completion flowchart. When the audit is taken place, staf from KKPA (PTSA Scheme) performs the delivery of aspiration (related to the annual bonus) massively to PTSA office, this case was responded by the management and dialog between the representative of workers and the company was conducted. The delivery of complaints done by the KKPA workers (PTSA Scheme) has not in accordance with the mechanism owned by PTSA. This will become the observation of auditor team to ensure that the delivery of complaints has been understood by the all related stakeholders. This will become the observation of auditor team at the time of surveillance 1. PTSA records every complaints/objections coming from either the community or the workers into the book of complaint/requests for assistance, but up to the present there is no complaints comes from the community. The evidence of records of complaints from workers, for example complaints about the poor quality of rice on 28 September 2012 and it has been responded in accordance with the minutes of the acceptance of good rice on 31 October 2012 . There’s an availability of SOP 27 on Land Acquisition and Compensation which was approved by the Senior Manager (Ng Yee Hong) on 12 April 2012 which describes about:

Land acquisition is done through proper and right ways and has no negative impact on corporate investment and doesn’t cause any negative impact on social interests.

Land/Area that will be acquired is the Land/Area which has been agreed to be managed as plantation area completed with its supporting documents.

The land to be acquired is a land which rights has previously been submitted administratively by the owner/sovereign to the company. And prior to the implementation of land acquisition, special steps are taken as follow: - Delivery of information concerning the land acquisition plan to the related parties. - Inventory and field research. - Legality aspect and land administration including price/value of compensation. - Investigating the facts in the field againts the land to be acquired, including not performing any land

acquisition in area/region which is based on regulations has forest/HCVF/river riparian area status


ASSESSMENT REPORT


- Provision of compensation and/or land compensation payment including crops which grow on it. - Step of land compensation payment fund request - Step of investigation/verification of payment documents. - Step of land acquisition compensation payment. - Step of land acquisition document/evidence storing.


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

There is a dispute negotiation procedure in the SOP No. 26 on 12 April 2012 and Land Acquisition and Compensation Procedure in the SOP No. 27 on 12 April 2012 among others describing:

Identification of land/area to be acquired by way of coodination with community leaders.

Investigating the documents of agreement between area/landowners and the company.

Investigating the facts in the field against the land to be acquired.

Provision of compensation and indemnity payment in accordance with the established agreement.

The availability of Memorandum/Land handover statement for State Land, Indigenous Land, Village treasury land, individuals or groups cultivation land.

Payment fund request of compensation and indemnity.

Investigation and verification on documents of payment.

The supporting documents of land/area handover agreement known by the government officials. Minutes of location review, Minutes of measuring result, transaction document of compensation payment implementation.

PTSA has not been able to show the results of identification on parties that received compensation. Nonconformance raised see CAR No. 2012.05 PTSA has not been able to show the results of negotiation process or agreement of parties that received compensation. Nonconformance See CAR No. 2012.06 PTSA has not been able to show the results of payment implementation on parties that received compensation. Nonconformance See CAR No. 2012.07

Minor 6.4.1 Minor 6.4.2 Minor 6.4.3

Nonconformance See CAR No. 2012.05 with minor category Nonconformance See CAR No. 2012.06 with minor category Nonconformance See CAR No. 2012.07 with minor category

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

There is a list of the employees’ wages, such as:

List of employees’ wages recapitulation at Mill which explains: Name of employee, Family status, Basic salary, total of gross salary, cuts (insurance, taxes, labor union dues, loan) total of nett salary, overtime, and incentives.

List of employees’ wages recapitulation in the estate which explains: Amount of wages, attendance allowances, incentives, gross wages, cuts (taxes, labor union, insurance) and amount of paid wages.

Wages paid to employees has been in accordance with the the applicable regulations and matched the minimum standard. Based on interviews, it was known that harvesting and maintenance workers with daily worker status (daily SKU) haven’t received the payment slip. This will be the observation of auditor team at the time of surveillance 1. PT. Sekarbumi Alamlestari has had regulations in force in the company: a. Regulations of PT. Sekarbumi Alamlestari year 2012-2014 based on the Decree of the Head of Labor and Social

Welfare Agency of Kampar District No. KPTS.560/DSTK-PP/2012/004 legalized on 14 March 2012 which valid for 2 years (14 March 2014).

b. Collective Labour Agreement between the Cooperation Agency of Sumatera Plantation Company with the Central


ASSESSMENT REPORT


Board of Plantation and Agriculture Labour Union Federation of Indonesian Workers Union(PP.FSP.PP-SPSI). PT. Sekarbumi Alamlestari is a member of BKS-PPS since 1 November 1995.

SA has provided adequate facilities to its employees such as: a. The scope of SA Palm Oil Mill: G2 Housing (106 doors), G1 (7 doors), Employees’ Cooperative (KOPKASA), sports

grounds, places of worship (mosque and mushalla), clean water facilities (supply from mill and drilling well), electricity for lighting.

b. KTK-1 and KTK-3 estates: G2 housing, G1, sports grounds, places of worship (mushalla), clean water facilites (drilling well), electricity (generator’s engine) and baby/child care.

SA has an agreement with the contractor and set out in the employment agreement, such as: a. Employment Agreement Letter No. 007/SA-PKS/ABDI/IX/2012 with PT. Anugrah Bintang Abadi on 8 September

2012 for Upkeep Mill Building (replace roofing at Press station, Sterilizer station, Boiler station, Capstand station and Bogies building) types of work. Article 6 states “ Second party is responsible for any risks to the use of labour, transportation, safety and occupational health (Astek)”.

Agreement with this contractor requires that contractor must comply with safety, environmental health and labor regulations, such as:

- All employees must give priority to safety during work.

- All employees must be equipped by appropriate PPE.

- Hazardous waste (used oil) must be collected and delivered to SA company.

- Employees must be insured, provincial minimum wage standards, experienced and well-trained.

- Violation of these requirements may result in termination of contract.


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

SA has had a policy for workers to join an association (union) which made by the Director (Tan Kei Yoong) on 1 October 2011 and socialization has been implemented to workers, such as: a. Socialization about RSPO (3 Principles and 6 Policies) including the policy of joining an association on 16

November 2012 at KTK-3 Division 4A which was attended by 16 participants consisting of 2 foremen and 14 harvesting workers. On 28 October 2012 at KTK-3 Division 4A which was attended by 10 participants consisting of 2 foremen and 8 harvesting workers.

b. Socialization of RSPO (3 Principles and 6 Policies) including the policy of joining an asssociation on 11 January 2012 at PTSA mill which was attended by 14 participants from station operator.

SA has not had the records of meeting with the workers’ union. Nonconformance rasied see CAR No. 2012.08. The auditor team will conduct observations related to the records of the workers’ union meetings regularly on the next visits.

Minor 6.6.1 Noncorformance See CAR No. 2012.08 with Minor Category

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

Policy on Child Labour on 1 October 2011 which was signed by the Director (Tan Kei Yoong) containing the company’s commitment not to employ children under 18 years old is available. SOP 21 on Management and Employee on 18 December 2012 which was signed the Senior Manager (Ng Yee Hong) is available. Information provided including the recruitment of qualified workers:

Minimum age for worker is at least 18 years old.

Checking the worker’s personal data.

There is a list of employees by October 2012 which shows the data of employee’s name; Gender; Status; Division;


ASSESSMENT REPORT


Tribes; Religion; date of Birth and the work start date. There were workers under 18 years old recruited at PTSA, however currently the worker was more than eighteen years old. The Auditor Team will perform observation to ensure that no underaged workers received for the next recruitment.


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

There’s a policy on Equal Opportunities and Treatment in Employment on 1 October 2011 signed by the Director (Tan Kei Yoong) stating that the company always gives fair and equal treatment without discrimination of race, ethnicity, caste, nationality, religion, sexual orientation and union membership. SOP 21 on Management and Employee on 18 December 2012 signed the Senior Manager (Ng Yee Hong). Information provided among others is the requirements of employment:

No discrimination against employees on race, caste, nationality, religion, disability, gender, sexual orientation, union membership, political party or age.

In terms of freelance labour or migrants labor, its practices include no discrimination, no working contract transfer, the aimed orientation program primarily related to language, security, law of labor, local culture, etc.

There is a list of employees that shoes the data of Employee’s name; Gender; Status; Division; Ethnicity; Religion; Date of Birth and work start date. Based on the review results, types of ethnics of workers who work at PTSA consist of Bataknese Malay, Nias, Javanese, Ambonese, Madurese, Minangese, Sundanese and Acehnese. Based on the review results, religion professed by the employees consists of Moslem, and Christian. However not all workers (574 workers) have the same opportunity to become permanent employees (SKU). Nonconformance raised see CAR No. 2012.15. There is a job promotion plan for BHL employee into SKU employee for year 2012 with details as follow:

Estate Total Job Promoton Plan Year 2013

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

KTK I 222 16 16 23 17 18 20 18 18 19 19 19 19

KTK II 171 13 13 16 14 14 14 14 14 14 14 14 17

KTK III 133 10 10 13 11 11 11 11 11 11 11 11 12

Office 48 4 4 4 4 4 4 4 4 4 4 4 4

TOTAL 574 43 43 56 46 47 49 47 47 48 48 48 52

Auditor Team perform an observation during surveillance 1 to ensure that all workers have met all requirements to be promoted as permanent employee (SKU)

Minor 6.8.1 Noncorformance See CAR No. 2012.15 with Minor Category

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

There is a policy on Sexual Harassment and Violence signed by Tan Kei Yoong on 1 October 2011:

The company has no tolerance for sexual harassment and voilence againts women in the workplace.

Sexual Harassment and Violence is a serious mistake that the company will provide stern action against the culprit.

The management should be an example and take responsibility as a role model and prevent sexual harassment and violence.

There is a policy on the Protection of Female Reproductive Rights signed by Tan Kei Yoong on 01 October 2012:

The company will comply with all legal and regulatory requirements that related to reproductive rights.

Gender commitee will be formed to execute and monitor this policy.

SOP 21 on Management and Employee on 18 December 2012 signed by the Senior Manager (Ng Yee Hong) is available. The available information includes:

Maternity Leave – Every female worker deserves the right to get maternity leave (1.5 months before birth and 1.5 months after delivery.)


ASSESSMENT REPORT


Breastfeeding women are prohibited from doing work using chemicals.

Menstruation Leave – Every female deserves the right to get menstruation leave for 2 days with the provisions of menstrual leave is taken on the recommendation of the clinic.

There is a Gender Commitee which chaired by Holidina Fiddin S and has been legalized by the Senior Manager (Ng Yee Hong). Member of the gender commitee is available at each Division Representatives, KTK offices and POM offices. There is a Gender Commitee’s Program of year 2011 – 2012 such as: Gender Commitee in November 2012: regarding daycare facilities and its caretaker (nannies), sexual harassment complaints socialization; and socialization of Integrated Health Center (Posyandu). There is an availability of pregnancy book, for example on behalf of Suharnani, Fertilizer worker at KTK I Division 2B which based on clinical examination confirmed as pregnant and was recommended to be transferred into turnera care division. Based on pocket check roll (absence book), this employee (Suharnani) was no longer working as spraying worker since 18 january 2012 and has been transferred into Turnera care division. Based on field visits, all women workers have acknowledged the gender commitee and its functions. There is a special complaints handling procedure such as SOP 25 on Sexual harassment Complaints Procedure which was approved by the Senior Manager (Ng Yee Hong) on 12 April 2012 which describes about:

Workers who are bullied or witnessed sexual harassment should report to the Gender Commitee or to the company.

Complaints may be made if the events taken place in within the estate/mill environment or outside the region.

Complaints will be confidentially kept.

Complaints of Sexual Harassment will be investigated as soon as possible by the Manager and Member of Gender Commitee.

Disciplinary action will be taken against the accused if convicted.

Full Compliance

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

The Price of FFB applied at PTSA Palm Oil Mill is set out by the Oil Palm FFB Pricing Team of Riau Province which weekly set out at the period of Wednesday until Tuesday. This price set out is known and valid for all Palm Oil Mills at Riau Province. The price of FFB applied at PTSA Palm Oil Mill is set out by the Oil Palm FFB Pricing Team of Riau Province which weekly set out at the period of Wednesday until Tuesday, such as at period 12 – 18 December 2012 based on Minutes no. 49/TPH TBS-XII/2012 with criteria: 1. Age 3 years at a price of IDR 863.24 / Kg 2. Age 4 years at a price of IDR 964.96 / Kg 3. Age 5 years at a price of IDR 1,033.00 / Kg 4. Age 6 years at a price of IDR 1,062.48 / Kg 5. Age 7 years at a price of IDR 1,103.30 / Kg 6. Age 8 years at a price of IDR 1,137.64 / Kg 7. Age 9 years at a price of IDR 1,173.61 / Kg 8. Age 10≥ years at a price of IDR 1,206.81 / Kg There is a Contract of FFB Purchasing No.01/SA-IPS/X/2006 on 2 October 2006 between PT. Sekarbumi Alamlestari (Rudy Tantono/Operational Director) with the Smallholders Cooperative of Oil Palm Smallholders Union (IPS) of Kota Garo on behalf of Sulaiman which describes: a. Cooperative of Oil Palm Smallholders Union is willing to supply FFB originating from the estates of Kota Garo

village community every week ± 50 ton. b. Price of FFB is based on the price determined by the Plantation Agency every week. c. Procedure of payment is done every week after FFB weighing evidence was received the central office. d. FFB criterias must comply with the POM requirements standard.


ASSESSMENT REPORT


Payment has been done by PTSA routinely and has met the agreement between PTSA with the Oil Palm Smallholders Union of Kota Garo every week, such as: a. Payment on 29 Noveber 2012 for the period of 21-23 November 2012 a total of 17,970 kg with price IDR 905,-/kg

and the amount paid was IDR 16,262,850,-and for the period of 24-27 November 2012 was 34,640 kg with price IDR 919,-/Kg, and the paid amount was IDR 31,834,160,- equipped with payment receipt which has been received by the representative of Oil Palm Smallholders Union (Sulaiman) on 30 November 2012.

Status Full Compliance

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

Records of the company’s distribution:

Construction of school fence of SDN 03 at Kota Garo village on 27 August 2012 (pictures of work completion and thank you letter 047/SD-003/IX/2012 on 3 October 2012 from the Head Master of SDN 03 Kota Garo are available).

Development of Kota Aman and Kota Garo village connecting bridge (pictures of work completion on 11 February 2012 are available) and based on field visits and interview with the Head of Kota garo village, it was known that the bridge was built from CSR PTSA funds.

Development of KKPA KOPNI Sahabat Lestari on 1,050 Hectares area.

Provision of cement materials for GKPI Flamboyan Church.

Maintenance of Kota Aman village roads is continuously conducted, for example on 27 September 2012.

Assistance of Kota Aman village office stockpiling on 19 November 2012.

Provision of fund for IHC personnel training in the community health centre. 1. Health – Youth (encouraging the development of youth organizations such as youth clubs and Family Welfare

and Empowerment (PKK)/Integrated Health Center (Posyandu)). 2. Social – Sport facilities, business partners, roads and bridges – for example: provision of uniforms for Youth of

Sakai, Pinggir Sub-district, Bengkalis District (IDR 200,000,-). 3. Places of worship – Church and Mosque (Community Cooperative Development Program). 4. Heavy equipments for Road maintenance 5. The company provides a public burial area for the community of Kota Garo village.

Evidence of tax payment is available, for example: Land and Building Tax of year 2012 based on the Evidence of Land and Building Tax Payment on 20 October 2010 with Notification Letter of Payable Tax (SPPT) No14.06.042.007.900.0007.1. Community Development /Corporate Social Responsibility has not been programmed properly. The implemented CD/CS was an incidental provision and not a planned inspiration gained through identification of priority needs from the community or affected society. The auditor team will perform observation related to a planned CD/CSR at the time of surveillance 1.


PRINCIPLE #7 Responsible development of new plantings

7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

According to the existing environmental documents, PTSA estates have been established since 1995. Until ST1 and ST2 audits were being conducted (2012), there were no changes made to the total area or to the mill capacity.

The planting of oil palms were done in stages; where the large part of it were cultivated in the period before November 2005, and only a small number of plants that were planted after November 2005.

Since there were no fundamental changes in the area and in the operational of the estates, the environmental document prepared in 1995 (UKL-UPL) is essentially still a valid reference, reinforced by social impact analysis compiled in 2012.

In complying with the laws and regulations and environmental monitoring plan specified in UKL-UPL (Environmental Management Efforts / Environmental Monitoring Efforts) from year 1995, PTSA has conducted the environmental monitoring and management on a regular basis and has submitted the results to the local authorities (BLH – Environment Bodies) every 6 months.


ASSESSMENT REPORT


To reduce the negative impact on the society, PTSA has established a KKPA (Cooperative Credit Scheme) plasma estate at Kota Garo village, which covers an area of 1,568 hectares (as specified in the plasma site license, issued by the Head of Kampar District in 2000). An area of 1,050 acres has already been developed and has secured the property rights status, while the rest is still in legal arrangements. Public consultations conducted with community leaders and respected figures at Koto Garo village and Koto Bangun village have indicated several positive appreciations towards plasma development measures taken by PTSA.


7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

Map of contours and types of soil is available in medium scale (1: 80,000), which is used to distinguish between the areas that can be cultivated and those that cannot, when the plantation is going to be constructed. For example, several low areas that are frequently submersed around Tapung river have been excluded from planting areas due to their infeasibility for planting. Records for the implementation of estate development are served in data tabulations, as well as in planting year map. Such maps are available in proper scale, and can be used to indicate which sites are cleared for estates, and which ones are not.


7.3 New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

In general, it can be said that the areas cultivated by PTSA are those intended for their initial purpose according to the site plan, as stated in HGU (Land Use Title) issued by BPN (National Land Agency) at the beginning of estate activity. Moreover, those cultivated since 2005 are not the new areas and are included in the extent of environmental and social impact assessments (UKL/UPL), as well as in the Social Impact Assessment.

The UKL/UPL (Environmental Management Efforts / Environmental Monitoring Efforts) documents have indicated that PTSA estates are not cultivated on primary forest. In addition, the overlay of planting year map and identification map of HCV distribution areas revealed that the areas that have been cultivated since November 2005 are not those included in the HCV areas. There are a number of riparian areas cultivated with oil palms that have been established as HCV areas, thus are given non-chemicals treatment.


7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

The topographic maps shows that in general, the areas belong to PTSA are located within the lower landscape throughout Tapung river. Its topography is generally of a sloping type with corrugated variations in several places, such as TKE 1 Division 2A. The field inspections showed there are no significant areas with extreme slopes (> 40%) that could potentially cause erosions. In several parts of small hills on the edge of the creek, a sediment trap (silt pit) treatment and frond arrangements parallel to contour are applied.

The field inspections and soil map examination have found several parts of the estates soil that are composed of sand-dominated type of soil, such as those in TKE 1 Division 2A and 2B. There is high erosion potential identified on such land, even though it doesn’t have a very steep slope. To sort this out, PTSA has done several hard crop tree (bamboo) enrichments and has also steered clear from the use of chemicals.

Referring to the above-mentioned explanation, there are several observation points worth taken into account, i.e.: consistent to what were being observed in criteria 4.4.1, PTSA shall take notice of and be concerned about the progress of the Watershed protection program, especially those bearing erosion potential, as part of the protection program for water quality and water reserve, as well as erosion and sedimentation prevention.


7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.


ASSESSMENT REPORT


At the time of estate’s establishment (1995), there was a prepared environmental document containing the social impact assessment which serves as the reference for any future environmental and social impact analysis management. After the aforementioned document preparation, until the time of the audit there were no changes made to the specification of business, in the form of new area addition other than the areas specified in HGU (Land Use Title), IUP (Plantation Business Permit) and UKL-UPL (Environmental Management Efforts / Environmental Monitoring Efforts).

The establishment of the estate (planting of oil palm) was carried out in several stages, and for the whole area of the estate that was opened, dissemination to the local community has been done by the PTSA. This has been confirmed by the village officials when gathered during public consultation in ST2 audit. The voice of the community was in general conveyed through traditional officials and village officials, as well as through the people who work at the PTSA. During the said public consultation, the officials from Koto Garo Village and Koto Bangun Village were explaining that the compensation payment for the HGU area of PTSA has basically been settled (refer to criteria 2.2.3 and 2.3.1). In its development, a few obstacles turned up as there were still a certain group of local people (Dolok Saribu Cs.) who felt that their interests had not been accommodated. This issue is still under settlement by PTSA, especially since there is no official support from the village authorities on the claim from Dolok Saribu Cs.


7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

SA does not undertake any new estate establishment and expansion other that those listed in the HGU (Land Use Title) secured by the company. There are areas of oil palm planting activities conducted after November 2005, i.e. those from the planting year of 2006 which cover an area of 48 Ha (38 Ha located in TKE-1, and 10 Ha located in TKE-3 which was formerly used for nurseries), and those from the planting year of 2010 covering an area of 54 Ha (TKE-1) which are not conducted on HCV specified area.


7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

There is SOP 31 for Land Clearing, which was approved by the Senior Manager (Ng Yee Hong) on 1 May 2012 which describes the following:

The clearing of land shall be based on the result of AMDAL/UKL-UPL (Environmental Impact Assessment and Environmental Management Efforts / Environmental Monitoring Efforts).

Zero burning policy shall be applied to all wood waste generated during land clearing activity. There is also SOP 04 for Replanting, approved by the Senior Manager (Ng Yee Hong) dated 12 April 2012 which describes the following:

The clearing of land shall be based on the result of AMDAL/UKL-UPL (Environmental Impact Assessment and Environmental Management Efforts / Environmental Monitoring Efforts).

It is compulsory that zero burning policy is being applied to during replanting activity. There is an area of 54 Ha which was cultivated in 2010, located in Tapung Kanan Estate I Division 2B. There is also an SPK (Mutual Working Agreement) for land preparation using stacking in Division 2B, which complies with the Addendum of SPK (Mutual Working Agreement) between LONGSEEN and PT. Sekarbumi Alamlestari No. 006/ADD-SA/TKE-LS/IV/2010 dated 29 April 2010. There was no land burning activity found during land preparation. There is a SOP 29 for Field Fire Emergency Response which was approved by Senior Manager (Ng Yee Hong) on 12 April 2012. There is a Fire Fighting Team for Tapung Kanan Estate which was authorized by the Senior Manager (Ng Yee Hong) on 18 October 2012, with the following organizational structure; Fire Team Chief: Kasiman, Deputy Chief: Sumarno, TKE I Coordinator: Supandri, TKE II Coordinator: M. Ali, TKE III Coordinator: Hamonangan. There is also a Fire Fighting Team for PT. Sekarbumi Alamlestari-POM which was authorized by the Senior Manager


ASSESSMENT REPORT


(Hendy Warsito) on 22 September 2011, with Armansyah as Fire Team Chief and FE. Prasetyo as Deputy Chief. A map of fire-prone areas is also available at PTSA. The following list contains all fire fighting equipment available at Tapung Kanan Estate: Transport vehicle, towing machine, water tank, two water pump machine, 2-inch sticks, 3-inch suction hose, 2-inch hose, goggle eyewear, yellow helmet, fire extinguisher The following list contains the infrastructure and facilities for fire fighting available at Tapung Kanan POM: 4-ton capacity water tank for fire emergency response, 2,5-inch hydrant hose, 2-inch robin pump, hydrant box with 2,5-inch hydrant hose, fire extinguisher, fire sand buckets, hydrant line pipes, sirens. A checklist of firefighting equipment is available from year 2012, which was conducted monthly at PTSA POM. The result indicated that all equipment are in a well-maintained condition. A checklist of firefighting equipment is available from year 2012, which was conducted monthly at Tapung Kanan Estate of PT. Sekarbumi Alamlestari. The result indicated that all equipments are in a well-maintained condition.


PRINCIPLE #8 Commitment to continuous improvement in key areas of activity

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.

The company has set up a plan to reduce the use of paraquat, as stated in the document of the Monitoring of Paraquat chloride Use for 5 year which was approved by the General Manager. 2013 seeks to a 10% reduction in paraquat use (equal to 6,241 liters), while 2014 will target on having only 5,548 liter of paraquat use. For 2015, the use of paraquat will be targeted to as low as 4,855 liters, while for 2016 and 2017, the targets are 4,162 liters and 3,469 liters respectively. There is an RSPO audit report available, which was conducted by Stephen Tiong, Yah Kim Seng and Florida Hutasoit on 12/03/2012-15/03/2012. PTSA has followed up accordingly to the results of this audit finding.



ASSESSMENT REPORT


3.2. Summary of Assessment Report of Supply Chain

Clause (Module E) CPO Mills - Mass Balance Requirements

1 Documented Procedures

1.1

The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

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

b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

PTSA has a procedure in implementing the Supply Chain, such as: a. RSPO Supply Chain Certification System (SCCS) Scheme for Palm Oil Mill.

The specification of RSPO certified FFB from internal and external

The documentation of Certified Sustainable Palm Oil (CSPO); specified into daily, monthly and annual records.

The documentation of Palm Kernel.

General Training which is to be carried out and documented to support the supply chain b. Mill Advisor or company’s representative (Mill Manager)

Full Compliance

1.2

The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

2 models of the documentation procedure of the receipt and the processing of certified and non-certified FFB are as follow: a. SG (Segregation) b. Mass Balance (MB). The receipt of FFB at weighbridge station

Internal and external FFB are weighed and recorded into computerized data.

The computer automatically records the daily data that will simultaneously indicate the amount of internal and external FFB respectively.

Production records

To supply with the supplementary record to count the CSPO (MB) produced daily. This daily record is to be added into the total calculation of CPO x% FFB internally.

Full Compliance

2 Purchasing and goods in

2.1

The facility shall verify and document the volumes of certified and non-certified FFBs received.

PTSA has a procedure to verified the certified and non-certified FFBs received volumes on RSPO Supply Chain Certification System (SCCS) Scheme for Palm Oil Mill

Full Compliance

2.2

The facility shall inform the CB immediately if there is a projected overproduction.

Auditors will verify during annual surveillance, due to the fact that PTSA has not been RSPO certified. However, PTSA is committed to providing information at the earliest point for the Mutuagung Lestari Auditor on any overproduction occurs that is different than those projected.


ASSESSMENT REPORT


Full Compliance

3 Record keeping

3.1

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

Auditors will verify during annual surveillance, due to the fact that PTSA has not been RSPO certified. PTSA has specified a 7-year retention period for all documents and records containing all requirement aspects of Supply Chain.

Full Compliance

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

PTSA has specified a 7-year retention period for all documents and records containing all requirement aspects of Supply Chain.

Full Compliance

3.3 (a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and

palm kernel meal on a three-monthly basis. (b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system

according to conversion ratios stated by RSPO. (c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

(a) PTSA has procedure for record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel in monthly basis on RSPO Supply Chain Certification System (SCCS) Scheme for Palm Oil Mill.

(b) Auditors will verfy on next annual surveillance (c) Auditors will verfy on next annual surveillance PTSA has not been RSPO certified.

Full Compliance

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

PTSA has prepared the relevant documents clearly indicated for using the supply chain model as mass balance Auditors will verify on next annual surveillance, due to the fact that PTSA has not been RSPO certified.

Full Compliance

3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

Sekarbumi Alamlestari POM shall only sell Palm Kernel.

Full Compliance

4 Sales and goods out

4.1

The facility shall ensure that all sales invoices issued for RSPO palm oil delivered include the following information:

(a) The name and address of the buyer

(b) The date on which the invoice was issued

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


ASSESSMENT REPORT


(d) The quantity of the product delivered

(e) Reference to related transport documentation

Not Applicable. Will be verified during surveillance, due to the fact that PTSA has not been RSPO certified. PTSA has ensured all issued invoices of palm oil delivery contain the necessary information in the Invoice product which explains:

a) Name of Buyer

b) Invoice date issued.

c) Description of product; Crude Palm Oil, but doesn’t explain the type of RSPO certified products, due to PTSA has not RSPO

certified.

d) number of delivered product was mention in the document.

e) The agreed delivery and transportation.

However auditors will verify on next annual surveillance assessment related on the procedure implementation.

Full Compliance

5 Training

5.1

The facility shell specifies and provides the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

SA has not performed any training of Supply Chain for all staff as required to implement the Requirements of Supply Chain Certification System. On 2 February 2013 PTSA has presented the evidence of supply chain training for relevant personnel, which was held on 30 January 2012 and attended by 22 participants. The materials and records of the training are also available. Noncorformance of CAR.2012.09 is closed.

Full Compliance

6 Claims

6.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

PTSA has procedure for make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims. However auditors will verify on next annual surveillance assessment related on the procedure implementation.

Full Compliance


ASSESSMENT REPORT


3.3. Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which submitted by Client

X or√

ST-2 Will verify at annual surveillance assessment.

Status: Not Applicable

2. Implementation of certificate and logo used by Client comply with size and type (shape) against Guideline of Logo Use

X or√



3. Implementation of Certificate and Logo is not used on product

X or√



4. Controlling of Certificate and Logo, including withdrawing inappropriate logo.

X or√




ASSESSMENT REPORT


3.4. Summary of RSPO Partial Certification.

The Management Unit name, under subsidiaries of Kuala Lumpur Kepong Bhd: 1. PT ADEI PLANTATION AND INDUSTRY – NILO POM 2. PT STEELINDO WAHANA PERKASA - STEELINDO WAHANA PERKASA POM

2.1

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

X or√

NILO POM (PT ADEI PLANTATION AND INDUSTRY – Kebun NILO) and PT STEELINDO WAHANA PERKASA - STEELINDO WAHANA PERKASA POM are compliance with applicable laws and regulations, such as: 1. Company has been certified with estate Land Use Title in accordance with Statute No. 05

year 1960 Jo. Statue No. 40 year 1996 on Land Use Title, Building Use Title and Use Title.

2. Use of labour with over 18 years of age is in accordance with Statue No. 20 year 1999 on the

ratification of ILO convention No.138 regarding the minimum age for work.

3. Company has compliance to Statute No.18 Year 2004 on Plantation

4. Company has compliance to Statute No.13 Year 2003 on Employment

5. Company has compliance to Government Regulation No.27 Year 2012 on Environment

permit

6. Company has compliance to Agriculture Ministry Regulation No.26 Year 2007 on Plantation

Bussiness Permit

Status: Full compliance

2.2

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

X or√

NILO POM (PT ADEI PLANTATION AND INDUSTRY – Kebun NILO) and PT STEELINDO WAHANA PERKASA - STEELINDO WAHANA PERKASA POM are compliance with applicable laws and regulations, such as: PT. ADEI PLANTATION AND INDUSTRY KEBUN NILO: Company can show the documents of property right over an area 12,860 ha. It is stated in Land of use certification 1 (HGU) fot plantation in Telayap, Kemang and Nilo Kecil village in area 12,860 Ha. HGU was issued by head of Kampar District Land office in January 1994. Some results of the release agreement on community lands/ local community lands, are :

a. Deal with Batang Nilo Kecil villagers covering + 600 ha. Compensation process in january 2000

b. Completion deal of sialang lands and cemetery. Compensation process in November 2001

c. Completion deal of Khaidir’s land cover 4 Ha. Compensation process in July 2002 d. Completion deal of Mashuddin’s land cover 4 Ha. Compensation process in July 2002 e. Muhammad Yunus’s land cover 3.04 Ha in CD. Compensation process in November

2003 PT. STEELINDO WAHANA PERKASA :

1. Land use title (HGU) on behalf of PT Sahabat Mewah dan Makmur (SMM) No. 1/Senyubuk year 1990 (No.11/HGU/BPN/1990) date March, 29 1990, expired on December, 31 2020. Extensive HGU 14,065.12 Ha

2. Based on BPN Decree No. 20-VIII-1990, dated June 30, 1990 has approved the transfer of HGU permit from PT Sahabat Mewah and Makmur to PT Steelindo Wahana Perkasa

3. Actual removal of HGU in 1994 (Notary Djoko Waliatun) and was registered to BPN


ASSESSMENT REPORT


'Registration Page Transition Rights, Liberation and Other Records on September 8, 1995 ".

4. The entire of HGU area PT SWP has been planted, planting year 1995 (1,970 Ha), 1996 (6,617 ha) and 1997 (5,071 Ha)

5. Since 2005 there is no land concession of HGU area PT SWP because all HGU areas have been released before year 2000.

6. The document of land completion evidance before year 2005 are not yet available in the unit.


6.3

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

X or√

PT. ADEI PLANTATION AND INDUSTRY KEBUN NILO: Available mechanism of land acquisition and compensation for community lands/local community lands by involved representatives of local communities, governments and institutions. Compensation both for land and plant (tanam tumbuh) or the cost of land clearing of the previous owner. The results of the land acquisition agreement was drafted without any force from any party. Available mechanism for handling complaints and objections from employees and other stakeholders (SOP No. 21) dated October 1, 2010. PT. STEELINDO WAHANA PERKASA: PT SWP has provided mechanism of Requests, Complaints and Stakeholder Negotiation (SOP No. 21) dated October 1, 2010 , which complaints are managed by the company with the flow as follows; inquiry / complaint / stakeholder negotiations - Request for Information - Bargaining and Negotiation about complaints – Consultation and Problem solving - Recording - Repair. PT SWP also have SOP Dispute Negotiation Procedures (SOP No.25) dated April 12, 2012 which regulates the handling of :

1. Land Dispute / Border. 2. Squatter Disputes. 3. Social Issues.

Data requests and complaints of the current year is responsibility of the Human Resourches department, while for the previous year was collected in the Requests, Complaints and Collective Logbook (RSPO-34). Internal (employees) and external (community) party can submit complaint through the assistant and manager. The Parties may also submit an objection directly to other staff in order to be submitted to assistant and manager. Available mechanism for handling complaints and objections from employees and other stakeholders. Information request, complaints and requests for support from people / instancy is well documented. Each plantations and mills documented in the log book. Until Time bond Verification Plan, there is no any inquiries / complaints from employees. Although all areas has been released but PT SWP have mechanism for land acquisition and compensation for the community lands/ local community lands by involved representatives of local communities, governments and institutions (SOP 26. Land Acquisition and Compensation) on April, 12 2012. Compensation for land and plant (tanam tumbuh) and the cost of land clearing the previous owner. The result of the land acquisition agreement was drafted without any force


ASSESSMENT REPORT


from any party. Land compensation documents available in jakarta Office.


6.4

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

X or√

PT. ADEI PLANTATION AND INDUSTRY KEBUN NILO: The parties have got the compensation, has been documented such as minutes of completion compensation for community land within the HGU. Compensation process was witnessed by the village’s head and local community leaders. Compensation rates were adjusted to extensive area and plants that grow in the area. Some results of the release agreement on community lands/ local community lands, are :

a. Deal with Batang Nilo Kecil villagers covering + 600 ha. Compensation process in january 2000

b. Completion deal of sialang lands and cemetery. Compensation process in November 2001

c. Completion deal of Khaidir’s land cover 4 Ha. Compensation process in July 2002 d. Completion deal of Mashuddin’s land cover 4 Ha. Compensation process in July 2002 e. Muhammad Yunus’s land cover 3.04 Ha in CD. Compensation process in November

2003 PT. STEELINDO WAHANA PERKASA: HGU area of PT SWP have completed released in the period before 1996 and have planted all with the palm oil in year 1995 (1,970 ha), 1996 (6,617 ha) and 1997 (5,071 ha).


7.3

New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

X or√

PT ADEI PLANTATION AND INDUSTRY KEBUN NILO: PT. ADEI Kebun Nilo obtain concessions development of palm oil plantations covering 12,860 ha based on Decree of the Head of National Land Agency No.. 23/HGU/1993 dated July 27, 1993 and HGU Certificate 05.05.14.84.2.0001 years 1994. It was confirmed based on Decree of the Forestry Ministry No.846/kpts-II/91 in November 1991 about the release of production forest conversion. Above the extensive area, the PT. Adei Kebun Nilo have assessment HCV identification by invited Aksenta team as executors during period 8 - 15 October 2011. From the results of HCV report was prepared by a Aksenta team, concluded that in PT. Adei Kebun Nilo area was found 4 of 6 HCV type cover 112.41 Ha from total area 12,860 ha, which HCV area is not the sum of area of each HCV type but may have one or more HCV types. The four HCV types include HCV1, HCV4, HCV5 and HCV6.

HCV1 (endangered animals and refugum), Result identification of HCV consultant (Aksenta) team, there are 5 species included in HCV1 elements and within the HGU, ie Batagur baska (biuku), Tomistoma schlegeii (crocodile fish), Amblonyx cinereus (beaver) , Cuora amboinensis (turtles), Amyda cartilaginea (labi-labi). The species status included into Critical (CR), Endangered (EN) and Vulnerable (VU) based on IUCN Redlist and classified in Appendix II by CITES.

HCV4 (environmental services), is important source of water that are Rivers, reservoirs and seepage. There’s are rivers that flow within the Kebun Nilo area include Nilo Kecil and Telayap river. Total area of HCV 4 is 108.31 hectares covering important water source and buffer zone area. Field observations carried out at Telayap Block 16 Division


ASSESSMENT REPORT


IV to check the condition of riparian zones, conservation areas and implementation of tree species enrichment (enrichment planting) in riverbank were included HCV4.2.

HCV5 (socio-economic), in the PT Adei Kebun Nilo was identified HCV5 which an important area of resource for the basic needs of local communities. The Place is form Kepung sialang in Batang Nilo village and mixed farms of Bakal Paebo in Telayap Village Area. Land cover form are rubber plantations and other cover vegetation which still use for medicine by the local community. In addition, there are several Sialang trees (honey tree) in the area where honey still be used. total area of HCV5 is 7.20 Ha.

HCV6 (cultural / spiritual), is Kepung Sialang (enclave Block 20), Muslim TPU Block 35, TPU Christian Block 53, Bakal Paebo (enclave Block 46) with total area of HCV6 is.8.26 ha

Based on HCV Identification report from Plantation Data of PT Adei Nilo Complex, there are 22 Ha of planting in 2008. After verified by interviews with management representatives (Nasution-Public Relations Mgr.) The planting was done on the ex nursery and were in the HGU area. While, the HGU areas within radius of 50 m riparian zone Telayap River, there are palm with planting years 2000, 2002 and 2003, but has been reforested naturally with dominance Acacia tree sp and no maintenance activities on the palm. PT. STEELINDO WAHANA PERKASA: 1. All HGU PT SWP area has been fully planted, palnting years 1995 (1,970 Ha), 1996 (6,617

Ha) dan 1997 (5,071 Ha). 2. PT SWP have applied some effort to protect protect the suspected areas of having High

Conservation Value (Riparian, old community cemetery). 3. Identification of HCV presence according to HCV identification toolkit edition June 2008 was

published by Consortium, had not yet done by PT SWP 4. HCV Management and Monitoring Plan has not been prepared by PT SWP. 5. There are working area of PT SWP directly border with Lindung Gunung Sepang Forest (

south) 6. From document of Environmental Impact Assessment / AMDAL (1996) was found the types

of protected species, namely; a. Plants; Durian (Durio zibethinus), balam (Palaqium sp.) dan Bayur (Pterospermum sp.). b. Animals; Hare (Trangulus javanicus), Deer (Muntiacus muntjak), Pangolin (Manis

javanicus), Javan (Hylobates sp.), Pecuk Snake (Anhinga rufa), Pythons (Phyton sp.), Crocodile (Tomistoma schiengelii).

PT SWP had got operational permit since 1990 and land clearing during period 1994 until 1996. All working area of PT SWP has been fully planted before 2005 so that there no new plantings after 2005.

Status: Full compiance

7.5

No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.

X or√

PT ADEI PLANTATION AND INDUSTRY KEBUN NILO: Based on interview result with management representatives (Adria- RSPO staff), (Nasution- Humas Manager), there is no new plantings in the local community lands. New plantings in 2008 covering 22 Ha located inside Kebun Nilo Area and it was ex nursery lands. Field observations had been done on Block 08E Division II, where the amount of allotment area cover 24 Ha but the


ASSESSMENT REPORT


realization of plantings only 22 Ha because of 2 Ha was functioned as buffer zone along the drain. The company has documented system relatid with mechanism of resolution dispute land such as Dispute Negotiation Procedures (SOP 26) dated April 12 2012. The flow chart of process completion as follow, The Procedurs contains : Land Dispute / Border: where if there is an indication of disputes over land claims by the community or adjacent stakeholders with plantation, so the preliminary negotiations are handled by the Manager. If negotiations fail, it will be consulted with GM and conducted observation by invite the official surveyor of related entities. If there is no agreement, it will be processed and referred to local government. The defendant appointed a representative in negotiations and legal efforts. Negotiation agreement is achieved through FPIC

Squatter Disputes: If it is detected, the taken action according to mechanism of Land Dispute until stage negotiation between both parties with supporting documents evidence. Then, conducted resolution in the negotiation process such as expulsion the defense from dispute area, payment of compensation to the defendant, transfer the defendant to place / another location had offered by company. Company will be responsible to pay administrative costs as CSR. the end is negotiation can involve independent representatives and relevant stakeholders.

Social Issues: Social issues that arise will be handled by the parties through negotiations until if there is no meeting point, it will be pursued in accordance with the law and regulations corridor.

Social Impact Assessment in PT. Adei kebun Nilo has been carried out by Aksenta team during period 1 to 10 November 2011 and all assessment results are presented in Social Impact Assessment Report December 2011. The stages of social studies include: Stakeholder Mapping, Field Observation, Indepth Interview, Focus Group Discussion, Document Review.

PT. STEELINDO WAHANA PERKASA: PT SWP had got operational permit since 1990 and land clearing during 1994 until 1996. Implementation of land compensation process has been completed before to 1996 and all working area of PT SWP has been fully planted before 2005 so there no new plantings after 2005.

Status: Full compiance

7.6

Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

X or√

PT ADEI PLANTATION AND INDUSTRY KEBUN NILO: Available Land Acquisition and Compensation Procedures (SOP 27) dated April 12, 2012 which contains I Purposes, II Target, III status of origin Land, IV. Legal basis of Land Acquisition, V. Basic Principles in the Land Acquisition, VI. Meaning of Land Acquisition, VII. Public interest in Land Acquisition Process, VIII. Land Acquisition Procedures, IX. Environmental interests, X. Interests of Order and Environmental Safety, XI. Orderly Administration, XII. Verification. VIII. Land Acquisition Procedures:

The submission of information about plans of land acquisition by forum presentations

Inventory and Field Research with traditional leaders, government representatives and other stakeholders


ASSESSMENT REPORT


Legal and Land Administrative Aspects, conducted legal documents review such as the Land Certification / Land Ownership Decree, agreement of land handover, etc.

Investigate the Facts of acquired land

Compensation distribution and / or Payment of land compensation

Submission Phase of fund compensation request/ land compensation

Verification of Payment Document

Phase of compensation payments / compensation for land acquisition;

Phase of documents storage / land acquisition evidence; samples of compensation for land acquisition refer to the criteria 6.4

PT. STEELINDO WAHANA PERKASA: PT SWP had got operational permit since 1990 and land clearing during 1994 until 1996. Implementation of land compensation process has been completed before to 1996 and all working area of PT SWP has been fully planted before 2005 so there no new plantings after 2005.



ASSESSMENT REPORT


3.5 Identification of Findings, Corrective Action, Observations, Opportunity for Improvement and Noteworthy Positive Components.

3.5.1 Identification of Findings, Corrective Actions and Observations at ST-1 Assessment

CAR No

Ref Std Finding Area Grade Time

Limits Corrective Action Observation Status

Closing Date

2012. 01

Minor 4.6.1

Evidencce of a reduced of paraquat use. No sufficient evidence of reduced use of paraquat pesticide, nor its entire elimination.

Estate Minor S-1 The company shall present the evidence of the reduced use of paraquat.

2012. 02

Minor 4.7.1

Labour Insurance Program. The document study revealed there are 530 Estate workers and 8 POM workers who have not been listed in the Occupational Accident Assurance program.

Mill and

Estate

Minor S-1 PTSA shall provide such occupational accident assurance for all workers.

2012. 03

Minor 4.7.3

Records of Hazard Identification & Risk Analysis. The document of Hazard Identification & Risk Analysis in POM has not fully covered the entire Hazard Risk potentially occur in all activities, such as in the repair and maintenance activities at each processing station as well as at chemicals warehouse.

Mill Minor S-1 PTSA shall perform the Hazard Identification & Risk Analysis on all activities at the company’s operational areas.

2012. 04

Minor 4.7.8

A review on Occupational Accident. There has not been any sufficient evidence showing that the Guiding Committee Of Occupational Safety & Health (P2K3) has conducted the studies on the occupational accidents occurred at the estate.

Estate Minor S-1 PTSA shall present the record of the study of occupational accidents occurred at the company.

2012. Minor Identification of the compensation. PTSA Minor S-1 PTSA shall fully present the


ASSESSMENT REPORT


05 6.4.1 PTSA has not been able to fully present the results of the identification of those receiving the compensations.

identification of the people receiving the compensations.

2012. 06

Minor 6.4.2

The process of land compensation settlement. PTSA has not been able to present the results of negotiation and settlement process for the people who receive the compensation.

PTSA Minor S-1 PTSA shall present the negotiation process done with the people receiving compensation.

2012. 07

Minor 6.4.3

Payment receipts of land compensation. PTSA has not been able to present the results of payment process done to the people receiving compensation.

PTSA Minor S-1 PTSA shall present the records of land compensation payment process.

2012. 08

Minor 6.6.1

Records of the meeting with labour union. PTSA has not been able to present the records of the meeting held with the labour union.

PTSA Minor S-1 PTSA shall present the evidence of the meeting held with labour union.

2012. 09

SC-MB 5.1

Supply chain Training. SA has not conducted the Supply Chain Training for all staff as required in order to implement the requirements of Supply chain Certification System.

PTSA NC Before Report Issued

SA shall conduct the supply chain training for all relevant personnel in complying with such procedure.

2 February 2013. SA has conducted the supply chain training for all relevant personnel on 30 January 2012, which was attended by 22 participants. Materials and records are available.

Closed 5 February

2013


ASSESSMENT REPORT


3.5.2 Identification of Findings, Corrective Actions and Observations at ST2 Assessment

CAR No



Closing Date

2012. 10

Major

4.6.4

Used pesticide packagings were not

properly disposed of in accordance

with the regulations.

The field visit to the area of Hazardous

Waste Temporary Warehouse in TKE I

found used pesticide packaging that

were not properly disposed of in

accordance with the regulations (they

were instead discarded into the

disposal waterways).

Hazardous

Waste

Temporary

Warehouse

in TKE I

Major Before

report

issued

The company shall

properly manage the used

pesticide packaging in

accordance with the

applicable regulations.

21 December 2012.

PTSA and the representative from P2K3 have

conducted the inspection and corrective

actions in the following form:

a. Picking up the discarded pesticide

packaging and storing them in

Hazardous Waste Temporary Warehouse

in TKE-I, to be recorded in the

Hazardous Waste Balance Sheet.

b. Conducting the re-training and re-

dissemination for the Hazardous Waste

officers in anticipation of a good waste

management.

The records of the abovementioned activities

are well recorded and well documented.

Closed

With

observat

ion

21

December

2012

2012. 11

Minor

4.6.2

Medical Health Check for

agrochemical operators.

The document study and the result of

interviews done with fertilizing and

spray workers have revealed that PTSA

has not performed any regular medical

health check for Spray and Fertilizing

Workers.

Estate Minor S-1 PTSA shall present the record of the health check results for spray and fertilizing operators.

2012. 12

Minor

4.7.2

Health Check for high-risk

operators.

The document study and the result of

Mill and

Estate

Minor S-1 PTSA shall conduct a regular basis health check for high-risk workers.


ASSESSMENT REPORT


CAR No



Closing Date

interviews with the workers have

revealed that PTSA have not

conducted any health check for a

certain numbers of high-risk operators

(Boiler Operators, Lab Analysts,

Genset Operators and Welders).

2012. 13

Minor

4.7.6

Fulfillment of the equipment for OHS

and First Aid Emergency Kit.

1. The field visit done to Hazardous

Waste Temporary Warehouse of

the Mill and to Hazardous Waste

Temporary Warehouse of TKE-I

resulted in the finding of non-

functioning Eye Shower (First Aid

Emergency Kit).

2. In TKE I Division 2B, the FFB

Transport Operator working at the

Loading Ramp was seen not

wearing PPE (safety shoes and

helmet), as such equipment were

not yet supplied by PTSA. This

instance did not comply with the

policy, program, and regulation of

Occupational Health and Safety

(Permenaker No. 9 year 2010).

3. The result of the field visit done at

Dispatch Station of PTSA POM

showed that the electrical

Hazardous

Waste

Temporary

Warehouse

of the Mill

Minor S-1 The company shall make

available all equipment

needed, for Occupational

Health and Safety, as well

as for First Aid Emergency

Kit.

21 January 2012

1. PTSA has done several repairs to the Eye

Shower so that the equipment is well

functioning.

2. PTSA has presented the record evidence

of PPE receipt (safety shoes) for workers

(FFB transport operator). The field

observation has indicated that the FFB

transport operator has been equipped

with PPE (safety shoes) provided.

3. PTSA has presented the evidence of

record of PPE supplies given to

Electricians who also signed the receipt.

4. The improvement has not been done.

The record of the above mentioned the

improvement activity is well recorded and

well documented.

Open


ASSESSMENT REPORT


CAR No



Closing Date

installation repair workers were not

equipped with PPE (gloves)

properly.

4. The field visit has confirmed that

the Company has supplied the

harvesters with PPE properly, i.e.:

Helmets and Boots. However, they

were not equipped with goggles

and gloves, two of the required

PPE for harvesters to comply with

the SOP.

2012.14

Major

5.3.2

Implementation of Domestic Waste

Management.

The field observation done at TKE-I

Division 2B has found that domestic

waste was not properly managed (the

waste was discarded into the

residential septic tank) and leachate

released from the landfill to flow and

contaminate the trenches in TKE-3

Division 4B. This is not complying with

the previously specified plan and

procedure.

TKE-1

Division

2B

and TKE-

3

Division

4B

Major Before

Report

Issued

The company shall carry out a good waste management to reduce the pollution and contamination.

30 December 2012.

The company has conducted the domestic

waste management to reduce the

contamination in the following manners:

c. The domestic waste management has

been conducted at TKE-I Division 2B by

storing it into a special landfill. The

record of domestic waste management

activities is available and well kept.

d. Improvements have been made on the

location of Landfills, so that the sewage

from the waste will not flow back into the

trench. Records of the landfill

improvement activities are available and

properly stored.

Closed

with

observat

ions

1 February

2012

2012. 15

Minor

6.8.1

Discrimination of Opportunity in

Becoming Permanent Employees.

PTSA Minor S1 The company shall

provide equal opportunity


ASSESSMENT REPORT


CAR No



Closing Date

Not all daily labours are given equal

opportunity and treatment in becoming

permanent employees (574 workers).

and equal treatment to

574 workers who are still

in Daily Labour status to

become permanent

workers.

3.5.3 Opportunity for Improvement

No Ref Std Descriptions

1 Major 1.1.2 The record showed that the response given by PTSA to the request of information has exceeded the time limit specified in the procedure (15 days).

2 Major 2.1.1 The report on Plantation Business prepared by PTSA has not been submitted on a regular basis to the relevant institution, in complying with the IUP-B and

IUP-P requirements

3 Major 2.2.2 Not all HGU (Land Use Title) boundaries poles listed in HGU map were installed in the operational area of PTSA (72 out of 148 poles are identified, or equals

to 48.6%)

4 Minor 4.2.1 A 5-year basis soil analysis shall be consistently performed.

5

Major 4.4.1. The labeling and enrichment have not been done for the entire area of riparian in PTSA, which aim to maintain the quality of surface water (the labeling for

chemical treatment limit and replanting of dead hard crop trees, as well as evaluating the priority of planting locations at riparian prone to erosion or at the

upstream).

6 Minor 4.4.1. The observation on water quality at the Sungai Tapung (HCV area) shall put into consideration the accreditation status of the observing laboratory.

7 Minor 4.4.3 The repair of water leakage spots at the mill are done to ensure that water usage efficiency is applied.

8 Major 4.7.1 a. The current OHS policy is upgradeable by adding the policies and preventive actions to avoid accidents.

b. PTSA and safety committee are able to study the equipment checklist of occupational safety.

9 Major 4.7.2 A regular meeting of safety committee has not been held regularly in a monthly basis.

10 Minor 4.7.4 A program of OHS training has been entirely put into realization.


ASSESSMENT REPORT



11 Minor 4.7.5 a. PTSA needs to ensure that the emergency response procedure is recognized by every person within the mill and the estate.

b. PTSA has opportunity to equipped with emergency evacuation route (residential and office area).

12 Minor 5.2.1 A distribution mapping of protected key species and those found in HCV area is in accordance with the SOP of HCV identification and management.

13 Minor 5.2.2 The publicity / dissemination of HCV and wild life protection need to reach more people (through publication, posters, circulars, leaflets, etc.)

14 Major 5.5.3 The monitoring of field fire has not been done regularly by PTSA.

15 Minor 5.6.2 The monitoring of POME flows has not been supported with proper equipments (flow meter is currently not functioning).

16 Major 6.2.1 Based on the field visit to the surrounding villages, the people there still do not fully recognize the procedure of grievance mechanism or expressing

aspirations or delivering information specified by PTSA. PTSA shall re-evaluate the dissemination effectiveness.

17 Major 6.5.1 PTSA has not provided the list of payroll (payment slip) for all workers (daily labours) that can serve as an evidence of receipt for the employee who receive

the wages.

18 Major 6.5.2 The Mutual Working Agreement and the Company Regulation are still not thoroughly recognized by the whole employees and workers.

19 Minor 6.2.2 The records of response given by PTSA on aspirations conveyed have exceeded the specified time limit procedure, which is 15 days.

20 Major 6.3.1 PTSA needs to evaluate and improve the dissemination activity regarding the procedure of grievance mechanism or expressing aspirations or delivering

information as well as the Procedure of Dispute Negotiation in order for the people or relevant stakeholders to better comprehend.

21 Minor 6.7.2 PTSA is able to re-evaluate the implementation of an 18-year-old minimum age policy for workers recruitment.

22 Minor 6.11.1 Community Development /Corporate Social Responsibility is still not well-programmed, as those having been carried out are the incidental ones, not of

planned inspirations acquired from the identification results of the community’s primary needs or of the affected community.


ASSESSMENT REPORT


3.5.4 Noteworthy Positive Components


1 5.5 Land fire facilities such as water tank and machines support with the transportation were properly equipped and well fuction.

3.6 Summary of Arising Issues from Public, Management and Auditor Response

Public Issues (Institution/ NGO/Community)

Management Responses Auditor Responses

Board of Labour Union.

It has been a while that the company and the labour union have not set up a meeting to discuss company policy.

Not all workers are listed as members of labour union and hence both the company and the labour union need to work together to do the dissemination.

There has never been any scholarship granted to any worker’s children with good academic achievement.

The company is to set up a regular meeting/gathering once a year. Target: Jan 2013.

The company is to facilitate the board of labor union to conduct the dissemination on the organization. Target: Jan 3012.

We will communicate this issue with the management. Submission target: Jan 2013.

An observation on the meeting practice with the labour union will be carried out on the next visit.

POM workers

The amount of specified basic salary is not in accordance with the wages stipulation (currently at a rate of IDR 854,800), which is supposed to be higher. This shall have an effect on the overtime multiplier per hour, and will be detrimental to the workers.

The workers have been questioning about the policy of one revised Decree concerning the stipulated basic salary which is lower than the one stated in the previous Decree/first issued (from IDR 950,000 to IDR 854,000).

There has been a misconception on basic salary and overtime multiplier. This happened due to different terms used. KTU (Mr. Agus Haryanto) has conveyed this matter to Pekanbaru’s head office. The company is to conduct the dissemination on this particular issue for the employees. Target: Jan 2013.

In point of fact, the revised Decree was issued by the Head Office to settle the demands addressed by SPSI (Indonesian Labour Union) to the mill management at the time. To settle this issue, the mill management will conduct a dissemination/discussion with SPSI and will submit the report to the Head Office. Target of dissemination: Jan 2013.

The concerned issue has been settled by the company to the workers.


ASSESSMENT REPORT




Environment Bodies of Kampar.

The reports of the implementation of environmental management in PTSA were submitted on regular basis and on time.

The reports related to the license for wastewater utilization were submitted regularly and on time.

The company has secured the license for Hazardous Waste Temporary Warehouse and has regularly submitted the obligation specified in the license.

PTSA is committed to submitting the reports on a regular basis.



SA has submitted the reports of environmental management and waste management on a regular basis to Environment Agency.

Labour Agency of Kampar.

The company has submitted the reports of wages and working requirements to the Labour Agency on a monthly basis.

The company has secured the Operator License for boiler and conveyor. As for the certificate for welders, it was recommended by the Labour Agency that the company work together with the registered third party.

The GCOHS reports were regularly submitted on a monthly basis.

The company is actively involved in blood donation activity held in collaboration with Indonesian Red Cross (PMI) and Labour Agency.


We have filed the request of certification for welders to Labour Agency. As for the recommended third party, we shall consult such matter with the Labour Agency. Target of Implementation: Mar 2013.

PTSA is committed to regularly submitting the reports on a 3-monthly basis.

Such activity is a regular event held by PTSA every 6 months, and the partners are the Indonesian Red Cross (PMI) of Kampar District and of Riau Province.

PTSA has made some improvements, and good follow-ups, in compliance with the regulations in labour affairs.

Kota Bangun Village.

The social relationship built between the village and PTSA was well maintained.

There was no land issue/problem encountered by both the village and PTSA.

This relationship shall be continuously maintained and improved.

PTSA’s land ownership rights and their limits are legitimate.

The dissemination of HCV and SIA shall be conducted

Such good relationship established between the villages and the company shall as remain observation point on the next visit.


ASSESSMENT REPORT




PTSA has conducted the dissemination of HCV identified areas.

PTSA has not conducted any dissemination for grievance mechanism or for expressing aspirations or for delivering information, as well as for the response.

annually. Target: Dec 2013.

In point of fact, such dissemination has already been done, yet it may still lack public’s comprehension, hence a re-dissemination is already scheduled. Target: Jan 2013.

Kota Garo Village.

The relationship between the company and the people of Kota Garo is well built.

PTSA has provided a number of assistance for Kota Garo Village, such as: lending heavy equipments for road repairs, provision of land for public cemetery, medical aid, bridges construction to connect Kota Garo Village with Kota Aman Village and other villages.

PTSA has conducted the dissemination on the HCV identified areas.

PTSA has not conducted any dissemination for grievance mechanism or for expressing aspirations or for delivering information, as well as for the response.

PTSA has not conducted the well-planned and well-programmed CSR activities.

Such relationship shall be continuously maintained and improved.

PTSA is committed to continuously taking parts in community contribution in accordance with the company’s capability.

The dissemination of HCV and SIA shall be done annually. Target: Dec 2013.

In point of fact, such dissemination has already been done, yet it may still lack public’s comprehension, hence a re-dissemination is already scheduled. Target: Jan 2013.

Public Relation (Mr. Firman) shall set up a CSR plan for year 2013. Target: Jan 2013.

Such good relationship established between the village and the company shall remain as observation point on the next visit.

Conflict with Doloksaribu.

Doloksaribu’s son (Iwan) has claimed that Doloksaribu owned the rights of land as he has been using the land since 1980’s, and has secured the SKT (Surat Keterangan Tanah – Certificate of Land) from Village Head (H. Ilyas), even though H. Ilyas has refused to recognize such certificate in court.

Aside from Dolo Saribu’s claim, there were also other residents who owned the land in that area and who are currently stepping aside for being evicted by the company.

In court it was stated that such SKT was invalid and the court has decided the land to be the property of PTSA (refer to page 16, Verdict on Case of Gotong Royong Farmers Group vs. PTSA)

The mentioned residents are the members of Gotong Royong Farmers Group and they could accept the court’s decision. Warga

Prior to such court’s decision, PTSA did not manage the said

The company has won the case of the acquisition of disputed land in court; however, this matter shall be continuously monitored.


ASSESSMENT REPORT




A number of lands were initially being cultivated with oil palms by the people, and it was not prohibited at first for the people to manage and harvest the oil palm trees cultivated there.

Since 2008, the company has been putting forward violent methods, including using police force, to intimidate, to forcibly evict the disputing residents, and to forbid Dolok Saribu from harvesting the palm kernel on his claimed land.

Dolok Saribu is currently in coordination with the Indonesian Farmers Union (SPI) for claim settlement assistance.

Iwan (Dolok Saribu’s son) saw a negotiation potential of compensation should the offered price is favorable (not detrimental).

lands, nor did the company prohibit the people to manage instead.

PTSA did not commit any violence; on the contrary, the employees working in that area were protected by the security.

As for the coordination with SPI, it was fully in Dolok Saribu’s interest. The company did not have any objections on that matter.

PTSA is expecting an official statement letter from Dolok Saribu, in order for this issue to be able to be forwarded to the Head Office for further action.


ASSESSMENT REPORT



ASSESSMENT REPORT


Appendix 1. List of Stakeholder Contacted in the RSPO Certification Process

No Institution/NGO/Community Address Phone/Email Form of Contact

Date of Contact

1 Environmental Body Kampar District, Riau Province Interview 18 December

2012

2 Labour Agency Kampar District, Riau Province Interview 18 December

2012

3 Riau Natural Resources Conservation Agency

Pekanbaru, Riau Interview 18 December

2012

4 Kampar National Land Agency Kampar District, Riau Province Interview 18 December

2012

5 Scale Up Pekanbaru, Riau Interview 18 December

2012

6 Kota Bangun Village Head and community leaders

Tapung Hilir Sub district, Kampar District, Riau Province

Interview 18 December

2012

7 Kota Garo Village Head and community leaders



2012

8 Sekarbumi ALamlestari Labour Union / Serikat Pekerja Sawit Indonsesia (SPSI)



2012


ASSESSMENT REPORT


Appendix 2. Assessment Program

DATE 17 - 21 December 2012

ACTUAL PROGRAM PROCESSES / CLAUSES TO BE AUDITED AUDITOR

Monday, 17/December/2012 06.00 - 08.30 09.00 – 13.00 14.00 – 14.30 14.30 – 17.30

Jakarta – Pekanbaru Pekanbaru – PT.Sekarbumi Alamlestari office Opening Meeting Document Observation:

Commitment to transparency (1.1;1.2)

Compliance with applicable laws and regulations (2.1;2.2;2.3)

Commitment to long-term economic and financial viability (3.1)

ON / MES / ARD / BB

Tuesday, 18/December/2012

06.30 - 14.00

08.00 – 12.00

14.00 – 15.00

15.00 – 17.00

Public Consultation:

Kampar District, Bangkinang (Labour Agency, Environmental Agency, National Land Agency, NGO)

Villages (Kota Garo village, Kota Bangun village) Public Consultation clarification Document observation:

Use of appropriate best practices by growers and millers (4.1; 4.2; 4.3; 4.4; 4.5; 4.6; 4.7; 4.8; 8.1; 8.2)

Responsible consideration of employees and of individuals and communities affected by growers and mills (6.1; 6.2; 6.3; 6.4; 6.5)

BB / MES

ON / ARD

ON / MES / ARD / BB

ON / MES / ARD / BB

Wednesday, 19/December/2012 08.00 - 12.00

14.00 – 17.00

16.00 – 17.00

Field Observation: a. Tapung Kanan P.O.M

Documentation, workers interview (payment, training, facilities, racial harassment), safe working practices, safety and health equipments, fuel, water usage, process station, waste water treatment plant, workshop, hazardous waste storage and handling,

b. Tapung Kanan 3 Estate

Legal boundaries, housing complex and facilities (clean water, electric, worship buildings, health clinic, school, landfill and emergency response), harvesting activity, spraying activity, conservation area, IPM implementation, chemical storage (mixing and handling mechanism), workshop and interviews (payments, sexual and racial harassment, child labour, religious, complaints procedures)

Document Observation:

Environmental responsibility and conservation of natural resources and biodiversity (5.1; 5.2; 5.3; 5.4; 5.5; 5.6)

Responsible consideration of employees and of individuals and communities affected by growers and mills (6.1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8; 6.9; 6.10; 6.11)

Interview: Sekarbumi Labour Union secretary and Gender Committe

ON / MES

MES / ARD / BB

ON / MES / ARD / BB

ON / MES


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Thursday, 20/December/2012 08.00 - 12.00

14.00 – 17.00

Field Observation: a. Tapung Kanan 1 Estate

Legal boundaries, housing complex and facilities (clean water, electric, worship buildings, health clinic, school, landfill and emergency response), harvesting activity, spraying activity, IPM implementation, chemical storage (mixing and handling mechanism), workshop and interviews (payments, sexual and racial harassment, child labour, religious, complaints procedures)

b. Conservation, erosion and lowland area

Implemetation, riparian zone, water management, run off Interview: a. Sekarbumi Gender committee Field Observation Clarification Document Observation: a. Responsible development of new plantings ( Principal 7) b. Continuous improvement (Principal 8)

ON / MES

MES / ARD / BB

ON / MES / ARD / BB

ON / MES

Friday, 21/December/2012 08.00 - 10.00 10.00 – 12.00

14.00 – 15.30

16.00 – 19.00

19.00 – 21.00

Field Observation Clarification Audit finding and conclusion preparation Closing Meeting at PT Sekarbumi Alamlestari Office PT Sekarbumi Alamlestari – Pekanbaru Pekanbaru – Jakarta

ON / MES / ARD / BB


ASSESSMENT REPORT


Appendix 3. Glossary

AMDAL (SEIA) : Analisis Mengenai Dampak Lingkungan (Social and Environmental Impact Assessment)

APD (PPE) : Alat Pelindungan Diri (Personal Protective Equipment)

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BOD : Biological Oxygen Demand

CPO : Crude Palm Oil

CSR : Corporate Social Responsibility

HCV : High Conservation Value (Nilai Konservasi Tinggi)

HGU : Hak Guna Usaha. (Land Use Permit)

IUP : Izin Usaha Perkebunan. (Plantation Operation Licence)

IPAL (WWTP) : Instalasi Pengelolaan Air Limbah (Wastewater Treatment Plant)

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor)

Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch

K3 (OHS) : Keselamatan dan Kesehatan Kerja. (Occupational Health and safety)

KER : Kernel Extarction Rate

KTK 1 : Kebun Tapung Kanan 1 (Tapung Kanan 1 Estate)



LC : Land Clearing

MRC : Minamas Research Center

OER : Oil Extarction Rate

P2K3 :

Panitia Pembinaan Keselamatan dan Kesehatan Kerja (Guiding Committee of Occupational Safety & Health)

PHT (IPM) : Pengendalian Hama Terpadu (Integrated Pest Management)

PK : Palm Kernel

PKS (POM) : Pabrik Kelapa Sawit (Palm Oil Mill)

POME : Palm Oil Mill Effluent

PTSA : PT Sekarbumi Alamlestari

RKL/RPL : Rencana Kelola Lingkungan/ Rencana Pemantauan Lingkungan. (Environmental Management Plan/ Environment Monitoring Plan)

RSPO : Roundtable on Sustainable Palm Oil

SEL : Studi Evaluasi Lingkungan (Environment Evaluation Study document)

SIA : Social Impact Assessment

SOP : Standard Operating Procedure

ST-1 : Stage 1

ST-2 : Stage 2

S1 : Surveillance 1

TBS (FFB) : Tandan Buah Segar (Fresh Fruit Bunch)

UKL/UPL : Upaya Kelola Lingkungan/ Upaya Pemantauan Lingkungan. (Environmental Management Efforts/ Environmental Monitoring Efforts)

· Kota Garo Village, Tapung Hilir Sub District, Kampar District, Province of Riau, Indonesia ......

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