Roundtable on Sustainable Palm Oil · 2014-11-02 · Roundtable on Sustainable Palm Oil Public...

Roundtable on Sustainable Palm Oil

Public Summary Report Report no. : 18501949

Certification assessment against the

RSPO Principles & Criteria Indonesia (INA-NI) Year 2008

PT Bakrie Sumatera Plantation Jambi Unit

PT Agro Mitra Madani Palm Oil Mill PT Agrowiyana Plantation

Jambi Province

Report prepared by:

Dian Susanty Soeminta

Certification decision by: Manfred H. Lottig

Malaysian office: TUV Rheinland Malaysia Sdn. Bhd.

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

47600 Subang Jaya, Selangor Darul Ehsan, Malaysia.

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

www.tuv.com

RSPO Certification Assessment Report

PT Agro Mitra Madani Palm Oil Mill and PT Agrowiyana Plantation – Jambi

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RSPO v2 2009-10-09 2

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT ........................................................ 3

1.1 National Interpretation Used 3 1.2 Type of Assessment 3 1.3 Location and Maps 3 1.4 Description of Supply Base 3 1.5 Dates of Plantings and Replanting Cycles 5 1.6 Other Achievements and Certifications Held 6 1.7 Organisational Information / Contact Person 6 1.8 Description of Company History and Environment 7 1.9 Time Bound Plan for Other Management Units 9 1.10 Area of Plantation (Total, Planted and Mature) 9 1.11 Approximate Tonnages Certified 10 1.12 Recommendation for Certification 10 1.13 Date of Certificate Issued and Scope of Certificate 10

2.0 ASSESSMENT PROCESS .................................................................................... 11

2.1 Certification Body 11 2.2 Qualifications of Lead Assessor and Assessment Team 11 2.3 Assessment Methodology 12 2.4 Stakeholder Consultation and Stakeholders Contacted 15 2.5 Date of Next Surveillance Visit 16

3.0 ASSESSMENT FINDINGS .................................................................................... 17

3.1 Summary of Findings 17 3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions 36 3.3 Noteworthy Positive Components 50 3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues 51 3.5 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 56

APPENDICES .............................................................................................................. 57

Appendix 1: Details of Certificate 57 Appendix 2: Certification Audit Plan 57 Appendix 3: List of Abbreviations 59 Appendix 4: List of Stakeholders Interviewed and Contacted 60 Appendix 5: Observations and Opportunities for Improvement 62



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1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the palm oil mill(s) and its supply base of FFB were assessed against the National In-

terpretation Indonesia (INA-NI) Year 2008 of the RSPO Principles & Criteria.

1.2 Type of Assessment

The main certification assessment was carried out against PT BSP’s Jambi unit, which comprises of PT

Agro Mitra Madani Palm Oil Mill and PT Agrowiyana Plantation owned by PT Bakrie Sumatera Plantation

Tbk.

The scope of this assessment did not include assessment of compliance to Supply Chain Certification

requirements, as this will be assessed only upon approval of certification.

1.3 Location and Maps

Table 1: GPS locations for all estates and mills included in certification assessment

Name of mill / es-tate

Location GPS locations

Latitude Longitude

PT Agro Mitra Madani Mill

WKS Main Street KM.11, Tebing Tinggi Village, Tungkal Ulu Subdistrict, Tanjung Jabung District

1.040 S – 1.120S 103.080 E – 103.120 E

PT Agrowiyana Es-tate

WKS Main Street KM.11, Tebing Tinggi Village, Tungkal Ulu Subdistrict, Tanjung Jabung District

1.040 S – 1.120S 103.080 E –

103.120E

Source: HCV Assessment document from Pollito Consulting



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Figure 1: PT Agrowiyana Plantation and PT Agro Mitra Madani Mill in Jambi Province, Indonesia

Figure 2: Map of PT Agrowiyana Plantation

PT Agrowiyana & PT Agromitra Madani Mill

PT Agrowiyana Plantation

PT Agromitra Madani Mill



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1.4 Description of Supply Base

PT Agro Mitra Madani (AMM) mill is one of the palm oil mills that is owned by Bakrie Sumatera Planta-

tion in Jambi. PT AMM mill was established in 2001 with installed production capacity 60 tonnes/hour in

accordance with the legal regulations ‘Keputusan Badan Penanaman Modal dan Promosi Daerah

(BPMPD) or the Decision of Board of Investment and Regional Promotion - Jambi Province No.

15/07/1/PMDN/2001 (March 20, 2001)’. Currently, PT AMM mill receives supplies from one company-

owned estate, 7 smallholder schemes with total smallholders members of 4576, independent outgrowers

and trading, as described below. Composition of FFB supply is company owned estates: 43.38%,

smallholders scheme 55.58% and independent outgrowers: 1.04%.

Table 2: FFB Supply Information for PT Agro Mitra Madani Mill period January – December 2010

FFB Contributors FFB supplied

Tonnes %

I. Company owned estates (inti) : 104,993.28 43.38

Estate I 18,540.02

Estate II 18,989.24

Estate III 20,095.46

Estate IV 19,627.45

Estate V 16,053.83

Estate VI 11,687.28

II. Smallholders / outgrowers (Plas-ma) (KUD Maju Lancar; KUD Sawit Mandiri; KUD Karya Tani; KUD Harapan Makmur; KUD Karya Mandiri; KUD Su-ka Makmur dan KUD Swakarsa :

134,522.41 55.58

III. Independent Outgrowers: 2,505.25 1.04

TOTAL (I + II + III) 242,020.94 100.00

Source: Incoming FFB from January to December 2010 (mill data)

1.5 Dates of Plantings and Replanting Cycles

The company follows a replanting cycle of 25 years. Information on the dates of plantings is as per the

table below.

Table 3: Age and year of plantings of company estates supplying to PT Agro Mitra Madani Palm Oil Mill

Age & Year of Plantings Oil palm planted area at each estate(ha)

I II III IV V VI TOTAL

0 - 5 yrs (2007 – 2011) 0.00 0.00 0.00 0.00 0.00 0.00 0.0

5-10 yrs (2002 – 2006) 0.00 12.42 0.00 3.05 545.70 0.00 561.17

10-15 yrs (1997 – 2001) 12.15 123.68 3.02 321.98 86.15 49.70 596.68

15-20 yrs (1992 – 1996) 720.08 656.35 790.00 496.85 131.03 465.40 3,259.71



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20-25 yrs (1987 – 1991) 0.00 0.00 0.00 0.00 0.00 0.00 0.0

25-30 yrs (1982 - 1986) 0.00 0.00 0.00 0.00 0.00 0.00 0.0

TOTAL 732.23 792.45 793.02 821.88 762.88 515.10 4,417.56

No planned and actual oil palm replanting activities for PT Agrowiyana Plantation have been carried out

since all planted area of the estates are still below 20 years old. The company’s first replanting program

is planned in year 2017 for the oldest area of the estate.

1.6 Other Achievements and Certifications Held Table 4: Details of other certifications or awards held by PT Agro Mitra Madani Mill and PT Agrowiyana

Plantation

Name of mill / estate Certification Standard /

Award achieved

Certification Body /

Awarder

Date Achieved

PT Agro Mitra Madani Mill

ISO 9001:2008 TUV Rheinland 20-07-2010


OSHAS 2001 TUV Nord 01-11-2011

PT Agrowiyana Planta-tion



OSHAS 2001 TUV Nord 01-11-2011

1.7 Organisational Information / Contact Person

Contacts details of the company are as follows:

Company Name : PT Agro Mitra Madani Mill and PT Agrowiyana Plantation

Address : 1. Jakarta : Complex of Resuna Epicentrum Bakrie Tower, 18th -19th floors, HR Rasuna Said Street – Jakarta Province 12960

2. Jambi : Kol.Pol. M.Thaher Street, RT 33 RW 10 No.1A/2A Tambak Sari Village, Jambi Selatan Subdistrict – Jambi District

3. Mill: WKS Street KM.11, Tebing Tinggi Village, Tungkal Ulu Subdis-trict, Tanjung Jabung Barat District, Jambi Province

Contact Person : Efdy Ruzali

Vice Leader RSPO Group Bakrie Sumatera Plantation

Telephone : 1. Tel : 021-29941286-87, Fax : 021-29941752

2. Tel : 0741-35334, Fax : 0741-26338

3. Tel : 0741-35334, Fax : 0741-26338

Email : [email protected]; amm@ bakriesumatera.com /[email protected]



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1.8 Description of Company History and Environment Company’s History

PT. Agrowiyana Plantation was established in 1978 in Bandung West Java. As stated on Notary act Ny.

Harry Hardjito, SH. No 7, dated August 14, 1978, company has business as general trader (local, exports

and imports) either their owned or commissioned by other parties, developer in many fields, especially

agriculture and plantations, consulting in various fields except in law. In year 1991, again 140 of compa-

ny’s shares was sold to PT. United Sumatra Plantation and in 1992, PT. Agrowiyana Plantation’s office

location was moved to Jakarta following big changes composition of shareholder to PT United Sumatera

Plantation into 1,050 shares. Company’s line business also changes into plantation operation, manufac-

ture and trader of agriculture product. The company name changed to PT Bakrie Sumatera Plantation af-

ter having received approval of the change of name from the plantation directorate in letter no.

HK.350/E.4.877/11.93 dated 11 November 1993.

PT Agrowiyana operation area in Jambi provice is ex-logging company (PT ICHING) which is converted

as community’s rubber plantation, scrub and secondary forest. The company obtained their plantation

area according to land title namely ”Izin Pencadangan Lahan” (Land Provisioning Permit) issued by Jambi

Governor through decree letter no. 246 dated December 27, 1984 with total area 13,000 ha. In 1990, a

PIR-Trans (a kind of smallholder scheme for transmigration program) project financing plan was

implemented for oil palm plantation PT Agrowiyana issued by Jambi Governor through letter no. S-

383/MK.D.13/1990 dated April 2, 1990 who were followed by issuing letter No. 254/Kpts/KB.320/4/90

dated April 11, 1990 regarding implementation of PIR-Trans project oil palm plantation in Tungkal Ulu

District, Jambi Province by PT Agrowiyana.

PT Agrowiyana working area is located administratively in Tebing Tinggi village, Tungkal Ulu Sub District,

Tanjung Jabung Barat District, Jambi Province. According to land spatial planning map, company’s area

is located in the area which is categorized as Other Purposes Land (‘Areal Penggunaan Lain’/APL) not in

forest area.

PT Agrowiyana has Plantation Business Permit (Izin Usaha Perkebunan/IUP) and “Surat Pendaftaran

Usaha Perkebunan” (Plantation Business Registration Letter) from Agriculture Department Republic of

Indonesia through letter No. HK.350/540/DJ.BUN.5/VII/2001 for total area 2,737 ha and Permanent Busi-

ness Permit from National Investment Bureau and Local Promotion Jambi Province No.

02/1507/01133/IUT/2001 dated September 10, 2011 for total area of 13,000 ha regarding Oil Palm Plan-

tation with Smallholder scheme Transmigration (PIR Trans) including their product processing unit (CPO

mill and Kernel mill)

The company has three schemes, namely “Perkebunan Swasta Besar Nasional” (PBSN) or Large Nation-

al Private Plantations), PIR-Trans and “Kredit Koperasi Primer” (Primary Cooperative Credit) for its mem-

bers. Company’s owned land legality as described below:



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1. Land Used Right (HGU) certificate No.1 with total area 2,737 ha (base on Ministry of Agricul-

ture/National Land Agency decree letter No.77/HGU/BPN/1995 dated November 16, 1995 valid for 35

years.

2. Land Used Right (HGU) certificate No.11 with total area 22 ha (base on Ministry of Agricul-

ture/National Land Agency decree letter dated December 15, 2003 valid for 35 years (area of the palm

palm oil mill)


ture/National Land Agency decree letter No.17/HGU/BPN/2004 dated May 6, 2004 valid for 35 years.

HGU



HGU



HGU



HGU

Total area according to land used right certicates above (HGU No.1, 11, 14, 15, 16, and 17) is 4,708 ha.

This area includes the Land Used Right (HGU) certificate No.11 for PT Agro Mitra Madani Palm Oil Mill

covering a total area of 22 ha (base on Ministry of Agriculture/National Land Agency decree letter dated

December 15, 2003 valid for 35 years. This 22 hectares is excluded from PT Agrowiyana Plantation area

as stated in Table 7 below/

According to Hydrology map which is refer to Jambi province Watershed Map, PT Agrowiyana location

include in Batanghari River Watershed, Brasau River Watershed and Baung River Watershed which also

being external border company’s area in north and south plantation area.

There are several villages surrounding company’s area such as Kuala Dasal village, Pelabuhan Dagang

village, Taman Raja village, Purwodadi village, Brasau village and Talang Harapan village, as seen on

the Figure No. 2 below.

PT Agro Mitra Madani mill is palm oil mill under Bakrie Sumatera Plantation Jambi Unit which has opera-

tion permit from Agricultural Ministry through letter No. 729/Kpts/HK.350/Dj.Bun/IX/2001 supported by

letter from Investment and Promotion Local Agency (Badan Penanaman Modal dan Promosi Daerah)

Jambi Province through Permanent Business License (Izin Usaha Tetap IUT) No. 08/15-

07/I/PMDN/2004.



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1.9 Time Bound Plan for Other Management Units

The revised time frame laid out below is considered to be both challenging and realistic. The company

will be using the experience of this main assessment to ensure that the other management units conform

to the RSPO Principles & Criteria.

Name of Holding Location Time bound plan for certification

PT Bakrie Sumatera Plantation Kisaran (PT Agromitra Madani.)

Kisaran, North Sumatera Certified on 16 June , 2010

PT Agrowiyana Plantation Jambi Planned for year 2011 but was revised to 2012, due

to internal reason and wait-ing for certification result of

PT Agromitra Madani. PT Bakrie Pasaman Plantation* Pasaman, West Sumatera Planned on the end of year

2012 PT. ARBV (Agri resources BV) South Sumatera 2012-2013

PT Graha Dura Leidong Prima North Sumatera 2013-2014

PT Guntung Idaman Nusa Riau 2014-2015

PT Indogreen Kalteng Initially 2015, now excluded from the timebound plan of

BSP, because company shares owned by BSP is below 50%

* Note: Certification of PT Bakrie Pasaman Plantation postponed until year 2012 due to restructuring program in PT Bakrie Su-matera Plantation Tbk.

1.10 Area of Plantation (Total, Planted and Mature)

Table 5: Oil Palm Planted Area Summary, FFB Production and Average yield/ha for PT Agrowiyana Plan-tation

Estate Name Total area

(ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-production)

area (ha)

FFB Production

(tonnes)

Average yield/ ha

Agrowiyana plantation

4,686 4,417.56 4,417.56 - 104,993.28 23.77

TOTAL 4,686 4,417.56 4,417.56 - 104,993.28 23.77

Table 6: Land use data for PT Agrowiyana Plantation

Estate Name Total area (ha)

Oil Palm

Planted Area (ha)

HCV &

Potential HCV ar-eas (ha) *

Land used for other purposes (ha)

Local

Government office

NurseryCleared

Area Other Land

Agrowiyana Plantation

4,686 4,417.56 225 12 23.82 78.23 154.53

TOTAL 4,686 4,417.56 225 12 23.82 78.23 154.53 Note: * Potential HCV area due to a part of plantation area is depth peat soil > 3 m and has been planted



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1.11 Approximate Tonnages Certified

The approximate tonnages certified, based production in 2010 years is as follows:

Source : *) Production period January s/d December 2010

**) OER from incoming FFB in year 2010 is 21.04% with KER 5.03,certified tonnages was calculated based on FFB sup-ply from the company own estates only as per Table 2

1.12 Recommendation for Certification

PT Agro Mitra Madani mill has established and maintains an effective system to ensure compliance with

the RSPO Principles and Criteria. The audit team has confirmed through the audit process that the

company’s practices complies with, adequately maintains and implements the requirements of RSPO

Principles and Criteria National Interpretation Indonesia (INA-NI) version 2008.

TUV Rheinland Malaysia recommends that PT Agro Mitra Madani mill be approved as a producer of

RSPO Certified Sustainable Palm Oil.

1.13 Date of Certificate Issued and Scope of Certificate

The scope of the certificate covers production of palm oil from Bakrie Sumatera Plantation Unit Jambi

and its supply base, which includes PT Agrowiyana Plantation (Estate I to VI). The date of certificate is-

sued is [Date of certificate to be included upon certification decision and issuance of certificate]. Further

details of the certificate are as per Appendix 1.

Name of mill

Certified tonnages (MT)

Actual Production* (MT)

Projected output for next 12 months (MT )

CPO** PK ** CPO PK CPO PK

PT Agro Mitra Madani mill

22,097 5,282 50,940.38 12,151.27 54,667.38 11,430.45

GRAND TOTAL 22,097 5,282 50,940.38 12,151.27 54,667.38 11,430.45



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2.0 ASSESSMENT PROCESS

2.1. Certification Body

TUV Rheinland Malaysia Sdn. Bhd. is member of Group TÜV Rheinland Group, a global leader in inde-

pendent testing and assessment services. The TÜV Rheinland Group was established in 1872 with of-

fices located in over 360 locations in 62 countries on all five continents. TUV Rheinland Malaysia offers

certification for a wide range of management systems according to established international standards

including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, as well as CDM Project Validations. TUV

Rheinland Malaysia’s office is located in Subang Jaya.

2.2. Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Dian S. Soeminta

Lead Auditor

Education: Bachelor’s Degree in Forestry - Bogor Agriculture Institute. Indone-sia, (1990 to 1995).

Trainings attended: ISO 9001:2000 lead assessor course 1996 - Neville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sus-tainable Forest Management (SFM) - Forest Stewardship Council (FSC) system training; Chain of Custody training for FSC System, RSPO Lead Auditor Course – Pro Forest & Wild Asia (2011).

Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Certification (SFC) and Chain of Custody (COC) Certification, Lead auditor for Environmental Manage-ment System (EMS) and Quality Management System (QMS) audits. Conducted sustainable forest management certification audits on FSC and Indonesian Eco-label Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred com-panies for TUV Rheinland Indonesia. Instrumental in the preparation of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certification. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certi-fication). Developed TUV Rheinland RSPO Gap Assessment Checklist and template.

Fadli Auditor

Education: Bachelor of Anthropology, Department of Anthropology - University of Indonesia, Jakarta.

Trainings attended: Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Eco-label Institute (LEI), Forest Management and Agriculture Auditor Training; ISO 9001:2008, ISO 14000:2004, OHSAS 18001:2007 trainings - Smart-wood/Rainforest Alliance; SA8000 training - SA International; RSPO Lead Auditor Training -Indonesian Palm Oil Commissions.

Working experience: Experienced as lecturer for D3 Tourism program, Universi-ty of Indonesia. Social Aspect Auditor of PT. TUV International Indonesia for Sus-tainable Forest Management and RSPO Principles & Criteria. Researcher of Stakeholder Mapping With CSR Indonesia.

Agus Sal-im Alfat

Auditor

Education: Bachelor Degree of Chemistry - Bandung Institute of Technology, In-donesia (1988 to 1993); Master Degree of Quality, Safety and Environment - Otto Von Geuricke, Magdeburg University, Germany (2001 - 2002).

Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS



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Name Position Qualifications / Experience

18001 Lead Auditor Training Course - PE International (Jakarta).

Working experience: Experienced in Quality Control from 1994-2004. Auditor for Quality Management System since 2004 – present. Auditor for Environmental Management System since 2005 – present. Auditor for OHSAS 18001 since 2007 - present. Conducted over 100 Quality Management System audits since 2004, over 50 Environmental Management System audits since 2006 , and over 25 OHSAS audits since 2007

Carol Ng Auditor

Education: Bsc. Biotechnology & Bsc. Environmental Management - Monash University.

Trainings attended: RSPO Malaysian National Interpretation Requirements and Certification – SIRIM; Implementation of RSPO Principles & Criteria - QA Plus; RSPO Stepwise Support Programme; 2nd Biodiversity Seminar – RSPO; Certifi-cation Body Biodiversity Forum & Workshop – RSPO; Environmental Quality Act 1974 (DOE) and ISO9001:2008 QMS Conversion Requirements (TUV Rhein-land).

Working experience: Experience in implementing sustainable practices in Sime Darby plantations to comply with RSPO requirements, performing RSPO internal audits and implementing sustainability projects. Prepared training materials and conducted several RSPO requirements trainings and workshops to plantation management teams (2008).

Hendra Fachrurozy

Auditor

Education: Bachelor’s Degree in Forestry - Bogor Agriculture Institute. Indone-sia, (1995 to 2000).

Trainings attended : ISO 9001 : 2008 lead auditor course - Neville Clark (2011), ISO 14001 : 2004 lead auditor course - TUV Rheinland Indonesia (2011), SMK3 auditor course – Department of manpower and transmigration of the Republic of Indonesia (2009), Sustainable Forest Management (SFM) – Forestry Education and Training Centre (2010), Timber Legality of Verification - Forestry Education and Training Centre (2010), RSPO Lead Auditor Course – Pro Forest & Wild Asia (2011).

Working experience: Experienced as Junior Consultant at PT Surveyor Indone-sia (2002 s/d 2010), assessor for SFM –mandatory (PHPL & PHTL), assessor for industry performance assessment (IPHHK)-mandatory, auditor for Timber Legali-ty of Verification, auditor for SMK3, auditor for QMS and EMS at TUV Rheinland Indonesia and auditor for RSPO at TUV Rheinland Indonesia.

2.3. Assessment Methodology

The certification assessment was conducted between 19 to 22 September 2011 as per the assessment

program below. The assessment was carried out in accordance with TUV Rheinland Malaysia’s RSPO

audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified

TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assess-

ment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was

possible to carry out both field and document assessments of all estates and the mill within the time

frame without compromising the integrity of the assessment in anyway.

All 6 estates (PT Agrowiyana plantation) and 1 mill (PT Agro Mitra Madani mill) were visited and the as-

sessment team carried out field and document assessments of compliance to all the RSPO principles

and criteria. Common systems were identified and specific evidence was recorded for individual estates.

Interviews were conducted at all estates and the mill.



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The company proposed the correction and corrective action for all identified non conformities raised to

the certification body 15 days after the closing meeting. Verification of closure of major non-

conformances was conducted 60 days or 2 months after the closing meeting of the main assessment

and implementation of corrective actions for minor non-conformities will be verified during the next sur-

veillance audit. The certification assessment agenda is as explained below.



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Main Assessment Agenda

The RSPO Certification Audit was conducted from 19 to 22 September 2011, according to the agenda

below. Verification of closure of the major nonconformances was carried out on-site on 17 to 18 No-

vember 2011.

Date Location/ Main

sites Main activities

Sept 19 - Traveling Jakarta & Kuala Lumpur to Tebing Tinggi (Jambi) Estate office (PT Agrowi-yana)

Opening Meeting. Introduction of team members and assessment agenda Presentation from Bakrie Sumatera Plantation Unit Jambi management Document review from all aspects

Sept 20 Hall office of Brasau Village

Stakeholder Consultation/Meeting Focus Group Discussion (FGD)

1. PT Agro Mitra Madani mill

2. PT Agrowiyana Estate

3. Badang village, Kuala Da-sal village and KUD Swakarsa

Checks of documents and relevant mill include EIA, SIA & OSH docu-ment Document of legal compliance : legal company and equipment licenses

Plant tour to the whole area of POM to checking the implementation of PPE, OHS and waste handling

Interviews with mill workers from engine room, wastewater treatment plant, security post, tractor driver, and workshop.

Checking of chemical stores and hazardous waste stores Document of legal compliance : legal company, legal permit, and legal

boundaries. Company’s management plan: long term business plan and forecast ex-

traction OER, information financial, and forecast prices (prices FFB and CPO) .

Social Aspect Document Review & SIA document Conflict Resolution Procedure, Procedure of Handling Complaints, HCV’s,

Wages, List of Stakeholder, List of Contractors, Health & clinic

Sept 21 1. PT Agrowi-yana Estate (Office)

2. II & V Divi-sion (Estate)

3. KUD Maju Lancar, KUD Klagi-an, SPSI (labour un-ion)

Environmental and social aspect document review Legal compliance : legal company, legal permit (HGU), legal boundaries

and permit of equipment. Labour union, female worker, health & clinic. EIA, SIA, OSH. Procedure Communication, Conflict Resolution Proce-

dure, Procedure of Handling Complaints, HCV’s, Wages, List of Stake-holder, List of Contractors.

Interview with female sprayers/maintenance workers, and Division 5 of-fice’s estate.

Children’s crèche, housing, barn owl boxes, washing area for chemical spraying equipment at Division 2 estate.

Company’s management plan : long term business plan and crop projec-tion (FFB yield trends), information financial, and forecast CPO’s prices

Sept 22 1. PT Agro MitraMadani mill 2. PT Agrowi-yana Estate (Office)

Environmental aspect: energy efficiency, waste & water management

Continue review of document Environmental : chemical and fertilizer store, river buffer zones, peat

planted areas and water subsidence monitoring points Closing Meeting

Sept 23 - Traveling Tebing Tinggi (Jambi) to Jakarta & Kuala Lumpur



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Agenda for Verification of Closure of Major Non-conformities

Date Location / Main sites Auditor* Main activities

Nov 17 PT Agrowiyana estate (office) FA & HF

Opening meeting

Presentation of the auditees (es-tate & mill) for the activities that have been made in closing the major findings

FA

On-site verification of KUD Maju Lancar (SP1), Brasau village, Kla-gian village, Sukadamai village, KUD Karya Mandiri (SP5), KUD Sawit Mandiri

HF Document review related to raised Major Non-Conformances

Nov 18 PT Agrowiyana estate HF

On-site verification of storage of oil fuel, water management (District V: C39 & B39 dan District IV: D15), HCV area.

FA

On-site verification of Suban vil-lage, Badang village

Document review related to raised Major Non-Conformances

PT Agro Mitra Madani mill HF

On-site verification of APAR (Fire Extinguisher), genset machine, storage of hazardous waste, ther-mometer digester, water treatment room & water management (flow meter).

Nov 19 - FA & HF Travelling Tebing Tinggi (Jambi) to Jakarta

*Note : FA = Fadli, HF = Hendra Fachrurozy

2.4. Stakeholder Consultation and Stakeholders Contacted

The stakeholder consultation involved both external and internal stakeholders. External stakeholders

were notified to make comments on the certification assessment by placing an invitation to comment on

the RSPO website. Stakeholders included those immediately linked with the operation of the company

such employees, smallholders/outgrowers, the local government, NGO’s, trade and labour unions and

local communities.

Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders

were held to seek their views on the performance of the company with respect to the sustainability prac-

tices outlined in the RSPO Principles & Criteria, and to comment on aspects where improvements could

be made. Meetings with local communities were held also at their respective premises within and near

the company’s area. A stakeholder consultation meeting was also held on Hall office’s Brasau Village on

on September 20, 2011. Letters inviting individual stakeholders to the stakeholder consultation meeting

were prepared and sent to the individual stakeholders, while electronic mail and telephone calls were

made to arrange the meetings.



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In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was

clarified at the outset followed by an evaluation of the relationship between the stakeholders and the

company before discussion proceeded to obtain the stakeholders feedback on the company’s compli-

ance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not fa-

miliar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the

promotion of sustainable palm oil in Jambi province. In all interviews and meeting, the assessment team

did not restrict discussion of both the positive and negative aspects of operations conducted by PT

Agrowiyana estates and PT Agro Mitra Madani mill.

The stakeholder consultation meeting held with stakeholders during the audit was extensive and produc-

tive, with an attendance of more than 35 persons. This was followed by site inspections, including visits

to the local communities, interviews with employees and contractors, and inspections of worker ameni-

ties and infrastructure. All stakeholder issues raised were recorded and forwarded to the management

for their written response, and this is summarized in Section 3.4. The list of stakeholders that attended

the stakeholder consultation meeting and stakeholders interviewed during the assessment is included as

Appendix 4.

2.5. Date of Next Surveillance Visit

The next surveillance visit is planned for 11 months from the date of certification [date to be confirmed upon

certification decision, to conduct surveillance one year from date of certificate]



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings

The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria INA-NI

(2008)

Criterion 1.1: Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

Findings : As evidence that company commits to provide adequate information to all relevant stakeholders on en-vironmental, social and legal issues relevant to RSPO Criteria, company made a standard operation procedure for handling incoming request of information and its response i.e. AG-SM-MR-24 rev 01 dat-ed September 27, 2011 Procedure Communication, Consultation and Participation . Documents of all information requests are available based on recapitulation of incoming letter period of 2007 - 2010 years (per July 2010). Until the audit time, there were no evidence of incoming requests for company’s information on legal documents, AMDAL, management plans, etc. All incoming letters more on requests for donations.

Documents of responses by the company relating to requests for donations were not all available, such as responses to the following letters: 1) letter no. 02/KRT/2011 date of June 1, 2011 from Head of Badang Village ; 2) letter no. 01/019/Al-Ikhlas date of July 1, 2011 from developer committee of Al-Ikhlas Mosque; 3) letter no. 510/160/PMD date of May 1, 2011 from Head of Tanjung Ulu Subdistrict.

The company has no mechanism to maintain all relevant records in certain period of time related record of information request and responses to information requests; this was raised as a non conformity. Compliance status: Non Compliance. NCR No. 2011-01 of 34

There is no evidence of responses to incoming requests of information from stakeholders e.g. Head of Badang Village Nomor 02/KRT/2011 dated June 11, 2011 regarding donation request for foodball yard in Badang Village. . NCR No. 2011-02 of 34

The company has no mechanism to maintain all incoming requests for information and responses made, and has not defined the retention time of records kept.

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

Findings :

There are some company’s document relating to company’s environmental issues and social issues such as land legal document, environmental documents (AMDAL/UKL-UPL & RKL-RPL), social documents, health & safety plan and continual improvement plan, however during audit time, management still not determined documents that shall be made publicly available or provided based on request, and this is raised as a non conformity. The company also has no mechanism to maintain all incoming request of in-formation and its responses. Compliance status: Non Compliance.

NCR 2011- 03 of 34

Management has not determined which documents shall be made publicly available and retention time for records keeping.



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

Findings: A lot of evidence that company has taken efforts to fulfil government regulation, however the company has not complied yet with some regulations and this was raised as non conformities.

Bakrie Sumatera Plantation (PT Agrowiyana plantation and PT Agro Mitra Mandani mill) has a list of ap-plicable legal and other requirements documented under “List of Laws and Regulations” (“Daftar Pera-turan & Perundang-undangan”) dated November 15, 2010 (Form AG-SMM-P-S-03). The management has a mechanism for ensuring that compliance with relevant legal requirement is implemented related en-vironmental i.e. SOP number: AG-SML-P-S-01. A documented system about legal requirement that com-pany should comply related to occupational safety and health are determined on procedure number: AG-SMK-P-S-01 and AG-SMK-P-S-0 (list of OHSAS regulations and laws), company also has a procedure for evaluation compliances to applicable legal regulation for other issues as determined on AG-SMM-P-S-01 rev.03.

Result of evaluation of company’s compliances to applicable legal regulation and other requirement can be seen on document of “Evaluations of compliance to applicable local, national dan ratified international laws and regulation”. As stated on the procedure point 6.4.5 that all departments must evaluate their compliances to applicable legal and other requirement at least once a year. Last evaluation was conduct-ed on November 15, 2010.

However at the audit time, some applicable legal and other requirement still not included on the list and not evaluated its compliances such as:

Manpower and transmigration ministry decree letter no. 100/2004 regarding temporary and permanent worker regulation still not included on the list, Per.01/MEN/1976, Per.01/MEN/1988, Kep. 155/MEN/1984, UU No.13/2003 and UU No.3/1992 also not included on the list.

PT Agro Mitra Madani mill had a license for storage of hazardous wastes dated 27 February 2007, valid for 3 years and is now expired. There is evidence that the mill has made efforts to apply for a new license from the local environmental department office (Badan Lingkungan Hidup Daerah or BLHD), Bupati Tan-jung Jabung Barat through a letter issued in 2009, however, it was informed by the government office in a letter that the license could not be renewed due the related regulation is still under process of confirmation by the 'House of Representatives of Tanjang Jabung Barat’. The BLHD has since issued 'Letters of No Objection for Temporary Storage of Hazardous Wastes' stating that the company may store hazardous wastes according to defined conditions defined in an attached documents. The ‘Letters of No Objection’ were issued on 18 October 2011 and 11 January 2011, each valid for 3 months. Since expiry of the last letter, the mill has issued a letter dated 28 April 2011 to the BLHD requesting renewal of the license. The most recent ‘Letters of No Objection for Temporary Storage of Hazardous Wastes’ was issued by the BLHD on 20 September and it is valid for one year. However, it was found that the last collection of the hazardous wastes from the mill was in August 7, 2010 by the contractor CV Surya Jaya Logam and there has been no collection since that time. This is not in compliance with government regulation PP no. 18 year 1999 which states that maximum storage of hazardous wastes is 90 days. Some empty oil drums were also sighted near the workshop that were left in the open and not stored as hazardous waste.

There are two employees who have worked more than 21 days per month for 3 months continuously but not yet appointed as permanent workers, and this is not in compliance with regulation Kepmenaker no. 100 year 2004 100/2004 regarding temporary and permanent worker. There are periodic testing reports dated September 5, 2011 stated that the exhaust pipe must be coat-ed with a heat-resistant asbestos rope within 10 days, however until more than 10 days still not con-ducted yet. There is also no evidence that several fire extinguishers were re-filled by August 28, 2011 as per a documented plan for refilling of fire extinguishers. This was raised as potential for improve-ment that company should be more consistent in implementing their defined plan.

Company already made list of payment for “Jamsostek” insurance for 941 workers. The insurance cover for accident, pension and death, as required by government regulation No. 28 year 2002 however there is



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no evidence found that payment for period August 2011 has been done.

Some evidence of efforts made by company’s management to comply with changing the applicable le-gal and other requirements is as follows: There is decision letter of the Jambi Governor concerning regional minimum wage of Jambi province no. 417/Kepgub/DISSOSNAKERTRANS/2010 issued on November 26, 2010 valid since January 1, 2011 which states that minimum wage for agriculture, animal husbandry, hunting and fisheries is IDR 1, 028,000 per month or IDR 47,700 day, and the company has revised their workers’ salaries to comply with this regulation through director decree letter no. 185/HBu/BSP - JBI/XII/11 regarding minimum wage and salary increment for non staff worker. Some company’s efforts to comply with changes in the regulation such evidence of implementation hazardous waste handling through application letter for hazardous waste temporary storage. Compliance status : Non Compliance NCR 2011-04 of 34 Some evidence found that company still not comply to government regulation such as:

- Storage of hazardous wastes has exceeded the maximum permitted time for storage of hazardous wastes (more than 90 days). Some empty oil drums were also sighted near the workshop that were left in the open and not stored as hazardous waste. This is not in compliance with government regula-tion No. 18 year 1999 regarding hazardous waste management.

- There are two employees who have worked more than 21 days per month for 3 months continuously but not yet appointed as permanent workers, and this is not in compliance with regulation Kep-menaker no. 100 year 2004 100/2004 regarding temporary and permanent worker.

- There is no evidence found that “Jamsostek” payment for period August 2011 has been done this is not in compliance with government regulation No. 28 year 2002.

NCR 2011-05 of 34

Some of applicable legal and other requirements are still not listed on the company’s “List of Applicable legal and other requirement. AG-SMM-P-S-03, issued date: 15 such as Manpower and transmigration ministry decree letter no. 100/2004 regarding temporary and permanent worker regulation still not includ-ed on the list, Per.01/MEN/1976, Per.01/MEN/1988, Kep. 155/MEN/1984, UU No.13/2003 and UU No.3/1992.

NCR 2011-06 of 34 There is a procedure of evaluation of compliance to government regulation i.e. AG-SMM-P-S-01, rev. 03, date issued: 7 February 2011 section 6.4.5 stated that evaluation shall be conducted 6 monthly by each section and recorded on No. AG-SM-R-26, however there is no evidence that evaluation has been done consistently as seen that last evaluation in November 15, 2010.

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

Findings : The company’s land operation in Tanjung Jabung District Jambi province, the right to use the land can be demonstrated clearly through land use right certificate. There are several HGU for these areas are as listed below :

1). HGU certificate No. 01 with SK No.77/HGU/BPN/ 1995. HGU period is dated 16 Nov 1995 to 15 November 2030 for an area of 2,737 ha.

2). HGU certificate No. 11 with SK dated December 15, 2003. HGU period is dated 15 December 2003 to 14 December 2038 for an area of 22 ha.

3). HGU certificate No. 14 with SK No.17/HGU/BPN/ 2004 dated May 6, 2004. HGU period is dated 6 May 2004 to 5 May 2039 for an area of 504 ha.




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With the 6 HGU certificates, the company has the legal right to operate on a total of 4,708 ha. There are some other documents showing ownership or lease of the land in accordance with relevant laws beside HGU certificate, company has licenses for operation both for plantation and mill such as:

Agrowiyana plantation has a plantation business permit (Ijin Usaha Perkebunan/IUP) No. HK.350/540/DJ.BUN.5/VII/2001.

Agro Mitra Madani mill has a plantation business permit (Ijin Usaha Perkebunan/IUP) No. 729/Kpts/HK.3.50/Dj/Bun/IX/2001.

Estate boundaries are clearly identified and demarcated on the field. Management has been checking condition and position of boundary markers (reference No. 001/ESH/CA-AGW/II/2009, dated on February 6, 2009). Coordinates of boundary markers are available but management has not done ascertainment of whether the coordinates of boundary markers in the field are in accordance with the coordinates provided. There were identified land dispute between company and communities such as: Land disputes in KM.8 by H. Zaini BR but based on the judges ruling PN Kuala Tungkal (No.

06/Pdt.G/2010/PN.Ktl, dated on January 6, 2011) that lawsuit cannot be accepted. The decision was read on January 13, 2011 at the court public hearing which was attended by lawyers from both par-ties. Conflicts are resolved based on the company’s mechanism. However, there is no evidence that the mechanism has been accepted by all parties.

Company began opening the land in 1992/1993. Based on interview with the Management, it was said that information on plantation development program was communicated to the local communities before the process of land acquisition was done. Compliance status: Non Compliance. NCR No 2011-07 of 34

There is mechanism to resolve conflict but no evidence that this was mechanism accepted by all par-ties.

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

Findings: According to information from the Management, there are no identified traditional land rights in all com-pany’s areas. This was further supported by additional information gathered from the plantations’ sur-rounding local communities during interviews with several villagers from Suka Makmur Village and Ba-dang Village. The company only opened areas that were legally given by the government.

Compliance status: Full Compliance

Criterion 3.1.1(major): There is an implemented management plan that aims to achieve long-term economic and financial viability.

Findings:

Both PT Agrowiyana plantations and PT Agro Mitra Madani mill have management plans (budget and strategic plan) for a 5-year period (2011-2015). Among others, information on company activities availa-ble on this document include Total Revenue, Total Operating Cost, profit/loss before and after tax. The company has a financial schedule for yearly budget. Information contained in the document includes gen-eral plantation routine operational activities such as field maintenance, harvesting, fertilizer application, investment plans such as enrichment planting (planting of various plant species to enhance biodiversity), while mill activities/data include fresh fruit bunches (FFB) processing, projected oil extraction rate (OER) and kernel extraction rate (KER). However there is no clear and detail planning information for RKL/RPL



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(Environmental management and monitoring plan) activities and no management and monitoring plans for social impact and HCV. This is raised as a non conformity. PT Agrowiyana implements a replanting cycle every 25 years, and company’s plan for replanting activi-ties is planned to begin in year 2017.

Compliance status: Non Compliance. NCR No 2011-08 of 34 Budget for non-operational activities is available but the budget is not detail enough to indicate whether several matters such as RKL/RPL activities, OSH expert training, renewal of crane operator’s license, replacement of displacement pump no.8 (this was found to be damaged but not budgeted for repair), RSPO, Social Impact Assessment, identification of HCV areas, training for HCV officers and conflict resolution are included in the budget.

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

Findings:

PT Agrowiyana plantation (Bakrie Sumatera Plantation Unit Jambi) has standard operating procedures (SOPs) from land clearing to harvesting and PT Agro Mitra Madani (Bakrie Sumatera Plantation Unit Jambi) has SOPs from reception of FFB to dispatch of crude palm oil (CPO) and palm kernel (PK).

To ensure that all existing procedure are well implemented, company conduct Internal audits every once a year by the internal audit team. The last internal audit was conducted on October 1 to 20, 2010. The in-ternal audit program covers all company's activities relating to compliance to Quality Management (QMS), Environmental Management (EMS) and OHSAS requirements.

Record of operational result as well maintained at all estates and mill, such as FFB delivery records, FFB grading reports, and process daily report. However there is found some activities were not consistent with existing procedure such as in PT Agro Mitra Madani, there are activities not conducted according to SOP, i.e. 1). Temperature of digester in SOP pressing process is 95 ± 50C but actual in screw press no. 4 & 5 is 600C and no. 1 & 2 is 550C (record of press daily report (AG-SMM-FR-P-04) on August 1, 2011; 2), tem-perature of oil tank in SOP is 70 ± 100C but actual in record of AG-SMM-FR-P-04 on May 2, 2011 is 75-820C and on August 1, 2011 is 75-890C. Compliance status: Non Compliance. NCR No. 2011-09 of 34

There are operational activities not appropriate with procedure such as:

1) Temperature of digester in SOP pressing process is 95 ± 50C but actual in screw press no.4 & 5 is 600C and no. 1 & 2 is 550C (record of press daily report (AG-SMM-FR-P-04) on August 1, 2011;

2) Temperature of oil tank in SOP is 70 ± 100C but actual in record of AG-SMM-FR-P-04 on May 2, 2011 is 75-820C and on August 1, 2011 is 75-890C.

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a lev-el that ensures optimal and sustained yield.

Findings:

PT Agrowiyana estate has records of a soil analysis conducted in August 2010 for 6 soil samples and physical soil analysis conducted for 118 soil samples. Leaf analysis is conducted once a year for 66 sam-ples, and analysis results for year 2008, 2009 and 2010 were sighted. Leaf analysis results are used to develop annual fertilizer recommendations. For example, documented fertilizer recommendations and re-quirements for mature oil palm in year 2011 was developed based on year 2010 leaf analysis results, for application of urea, RP, MoP, and Kieserite. The estate maintains records of fertilizer applications and from records, the percent of each type of fertilizer applied against recommended application for the year is



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14% for urea, 1% for RP, 89% for MOP and 100% for Kieserite (total achieved of recommended fertilizer recommendations is 70%).

PT Agro Mitra Madani mill also has a recently established composting plant with first compost application carried out in August 2011. The company is planning to carry out monthly analysis of fertility of areas where compost is applied to analyze long term feasibility to replace inorganic fertilizers with compost. Dur-ing field visits, application of empty fruit bunches (EFB) were observed, according to EFB application pro-cedure, the rate of FFB applied is 40 ton per ha for mature plantation and 20 ton per ha for immature plantation. The mill also carries out land application of mill effluent in the estate. Both EFB and land appli-cation are conducted on mineral soil not in the peat area. The implementation of land application con-sistent with land aplication permits as well as EFB aplication consistent with the relevant procedure. The company implements a flat bed system, 3 time rotation per year with aplication rate of 5.5 mt/tree/year. There is no overflow incident found both in the effluent pond and in the field this is confirmed by mill staff and comunities surrounding mill area. Compliance status : Full Compliance

Criterion 4.3: Practices minimise and control erosion and degradation of soils.

Findings :

PT Agrowiyana estate has two maps showing two main types of soils in PT Agrowiyana area, which is mineral soil (1,996.22 ha or 51.15% area) and peat soil (1,906.24 ha or 48.85% area) within Division 1 to 5 of the estate (total area of 3,902.46 ha) and a separate map for Division 6 showing peat area of 24.89 ha (4.93%) and 490.21ha (95.17%) of mineral soil, within total area of 515.10 ha. Total peat area with depth > 3 m in all plantation area is 225 ha that has been planted, located at Division IV (block D11, D13, D15, D17, E11 and F11). Its information contained in the peat distribution map with scale 1: 50,000.

The estate area consists of flat to undulating land area with no significant sloped area; therefore the es-tate does not implement any management plan for planting on sloped areas. There are also no other fragile or marginal soils identified within the estate.

The estate has a road maintenance program, as viewed from sample road maintenance program for Divi-sion 5 office. Records of actual road maintenance works carried out are maintained and include the date, block and ha where road maintenance is carried out according to the program. From field visits, it was ob-served that estate roads and drains are maintained. The company’s road maintenance program only fo-cus for their area, but does not include smallholder area, as requested by smallholders. This should be part of the company’s consideration to improve next road maintenance program. There are 6 measurements points within Division 5 of the estate where water levels from soil surface are recorded twice a month on 5th and 20th of the month. The ideal water level is within 60 to 70 cm from the soil surface. The estate has well maintained field drains in planted peat areas and use dams (made from soil filled gunny sacks) to retain water and prevent water levels from dropping too low but the Management does not have a documented water management programme to effect minimal sub-sidence of the peat in order to prevent its irreversible degradation and damage

Compliance status: Non Compliance. NCR No. 2011-10 of 34 The company has total peat area of 225 ha with depth > 3m tat has been planted, however company has no water management program to control and prevent peat soil damage.

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

Findings :

Agrowiyana estate carries out water management through maintenance of field drains to ensure water is retained in peat areas (as described in Criterion 4.3 above).

The estate has marked 50m buffer zones from rivers and water sources within the estate, as riparian wa-tercourses and restricted area for agrochemical application. PT Agro Mitra Madani mill carries out monthly monitoring of effluent BOD, with samples taken from the pond no. 8 (discharge pond) and analysis con-ducted by the UPTB Laboratory of the Regional Environmental Body (BLHD). Effluent analysis results



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sighted for the mill for February to July 2011 showed that BOD results for the mill were all below 5000 ppm, which is within the limit for land application as stated in the mill permit.

PT Agro Mitra Madani mill monitors water usage, and from records, annual water usage for mill process in year 2011 for process was 332,301 m3, in 2010 was 411,000 m3, in year 2009 was 455,970 m3 while in year 2008 it was 511,656 m3. The mill has a program to reduce water usage as part of their Environmen-tal Objectives program. Methods to reduce water usage include regular maintenance of flow meters, monitoring of water consumption, and training and preparation of procedures and work instructions for workers to reduce water usage. However, the mill does not carry out monitoring of mill water use per tonne of FFB. Compliance status: Non Compliance. NCR No. 2011- 11 of 34

Plantation and mill use water for production process but mill does not carry out monitoring of mill water use per tonne of FFB.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed us-ing appropriate Integrated Pest Management (IPM) techniques.

Findings :

Based on information from the estate, there are no major pests at the estates and current management is focused only for nettle caterpillars and rats. Census is currently only carried out to monitor levels of nettle caterpillars and bagworms, with no census for rats as attacks of rat pests are infrequent. The estate has an SOP for management of nettle caterpillars and bagworms, which states the management shall be through hand picking (manual) or through chemical spraying of the caterpillars/bagworms using a mixture of Silahotrin 25 g/l, tralometrin 30 g/l, deltametrin 25 g/l, carbanil 85% and other active ingredients as rec-ommended. However, the SOP does not state the level at which pest attacks shall be considered high enough to require chemical spraying, although this was explained verbally by one of the field workers who conducts pest census. This was raised as an observation.

Records of census are maintained by the Division 1 office, however as sighted in Division 5 estate office, there are maps showing locations where census for pests is carried out and on which dates, however there are no documented results of the census. It was explained that this is because there was no evi-dence of pests found in Division 5. This was raised as an observation.

The estate implements methods for biological management of pests, i.e. through planting of Turnera su-bulata, and installation of 10 barn owl boxes in Division 2 estate. Monitoring records of the barn owl boxes are maintained and results show that there are 6 of the boxes are currently inhabited with barn owls (natu-ral predator of rat pests). There is no record of usage of rat bait, therefore the estate’s biological control method is adequate to control rat pests.

There is a record in-house training pest management conducted on December 17, 2010 for 25 staff. One of the staff who attended the training was able explain the information provided during the training.

The estate maintains records of dosages of chemicals applied per hectare, but no monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare). Compliance status: Non Compliance. NCR No. 2011- 12 of 34 The estate maintains records of dosages of chemicals applied per hectare but no monitoring of pesticide toxicity units as required.

Criterion 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 categorised as World Health Organi-sation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are ac-tively seeking to identify alternatives, and this is documented.



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Findings :

Agrochemicals that used in 2011 in PT Agrowiyana plantation are Round Up, Amiphosate, Gramoxone, Amiron and Ally. All agro-chemicals used by the company are approved and registered by government and listed on pesticide committee except gramoxone which contain active ingredient is paraquat, is one of hazardous agro-chemical categorised as WHO Type 1A or 1B. At the audit time, company has no plan-ning to reduce and/or eliminate the usage of gramoxone although company has used gramoxone with a lower dose than the rules of use of suppliers.

The company has records of pesticide use, including active ingredients used, area treated, amount ap-plied per ha and number of applications. For example: active ingredients for Round up are isopropylami-na glyphosate, Amiphosate is isopropylamina glyphosate, Gramoxone is paraquat dichloride, Amiron is Methyl sulphuron and Ally is Methyl sulphuron.

Sighted sample applications records as follows: gramoxone treated in Division V block A 39 (1995) are liter/ha and block A 41 (2002) are 0.6 liter/ha while round up treated in Division V block B 31 (1995) are 1 liter/ha. Supplier recommended dosage of round up are 1.0 – 2.25 liter/ha and gramoxone are 1.5-3.0 li-ter/ha.

PT Agrowiyana has documentation to inform that usage of agrochemicals is appropriate for the target species, given at correct dosage such as Division V has documentary evidence that usage of agro-chemicals is appropriate for the target species, given at correct dosage and applied by trained personnel. Usage of round up and amiphosate for weeds, gramoxone (mixed with amiron or ally) for weeds and seedling. The mill stores empty chemical containers at their mill hazardous waste store, and maintains records of date in, date out, amount, source, and purpose of wastes taken out. Report of waste production is made to the environmental department (BLHD) once every 3 months in accordance with local require-ments. However, it was also found that the last collection of the hazardous wastes from the mill was in 7 August 2010 by the contractor CV Surya Jaya Logam and there has been no collection since. Stor-age of hazardous wastes has therefore exceeded the maximum permitted time for storage of sched-uled wastes, which is 90 days. This was raised as a non-conformity under CR2.1.

The company has record of training usage of agro-chemical and comprehension of material safety data sheets (MSDS) in each division on all workers spraying. For example: implementation of training in divi-sion IV on September 12, 2010.

Health check-up done once a year for those who apply agro-chemical. In 2011 year, health check-up do on January 6-7 by a doctor from the local health institute. Results of health checks were one employee was found to have signs of breathing difficulties, two were suffering from lung tuberculosis and 10 others have cholinesterase levels exceeding the normal level. The employees with lung obstruction and lung tu-berculosis were still found working as sprayers during the visit. The company has not taken any appropri-ate actions on these affected employees.

The company has regulation that disallows pregnant and breastfeeding woman from handling or working with any pesticides or chemical materials. This regulation has been socialized to women employee and results of interview to women workers in division V and II is they understand about these policy. Compliance status: Non Compliance. NCR No. 2011-13 of 34

The company has no plan to reduce and/or eliminate use of gramoxone.

NCR No. 2011-14 of 34

There are employees who were found to have signs of breathing difficulties, lung tuberculosis and have cholinesterase level exceeding normal levels are still working as sprayers with no action taken by man-agement.

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

Findings:

PT Agrowiyana plantation and PT Agro Mitra Madani mill has two Occupational Health and Safety (OHS)



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policies which includes the general OHS policy for Bakrie Sumatera Plantation signed by the Top Man-agement of Bakrie Sumatera Plantation group, and a more specific OHS policy prepared by the manage-ment of Bakrie Sumatera Plantation Unit Jambi, which is still in line with the head office policy. However the policy was not implemented sufficiently. For example, several cigarette butts were found in the “no smoking” zone i.e. fuel oil storage area which is categorized as dangerous and flammable location.

The company has committee of occupational health and safety advisers (OSH committee) where they have job description as responsible team for health and safety programmes. They have regular meeting program, such as meetings on June 7, 2011 and on May 5, 2011 with main topic is occupational health and safety sosialization (posters, signs of health & safety in working area), in-house training, and best practice health and safety.

The company provides accident insurance through Jamsostek program for all workers, the insurance cover for accident, life and pension as required by government regulation No. 28 year 2002 however there is no evidence found that insurance payment for period August 2011 has been done. See NCR no 2011-04 of 34 above.

Workers working in stations which have high health risk exposures are always provided with appropriate medical check-ups at regular intervals. However, two workers working in the engine room of the mill which has high noise level were found to have been missed out from the routine health examination carried out on January 6-7, 2011.

PT Agrowiyana plantation and PT Agro Mitra Madani mill has document of risk assessment for Occupa-tional Health and Safety (form AG-SM-FR-R-31). A review of danger identification and risk assessment was done on June 28, 2011. However it was found that risk assessment for non routine activities such as travelling by motorcycle to purchase spare parts was not done. This is necessary as there was record to show that a staff has lost 10 working days as a result of an accident that occurred on such work mission. This was raised as a non conformity.

The company has programme and records of OHS training such as in-house OHS training and safety technic training; and has procedure of accident and emergency preparedness procedure (mill: AG-SMK-P-L-02 and estate: AG-SM-R-23 rev.02).

OHS and first aid equipment is available at worksites such as goggles, hand gloves, mask, helmet, safety belt, ear plug, ear muff, fire extinguisher, hydrant, etc. Plantation supersiors “called mandor” has been provided by first aid kit in their waist bag. Monitoring the implementation of the use of personal protective equipment is done every day using checklist AG-SM-CLS-R-03. The company still does not provide pro-tective tools to move soda ash and Nalco to mixing tanks and it causes workers to become sick with shortness of breath due to excessive chemical spillage on the floor. The soda ash is stored at Nalco room WWTP plant and there are many spillages along the way to the mixing tank as well as on its floor. It was explained by the employee that the spillage was due to the sacks being too heavy. Besides, it also causes body ache and respiratory distress due to inhalation of the chemical while pouring it into the mixing tank.

The company has records of occurrence of any work accidents are maintained and be reported to man-power and transmigration of ministry. Investigation of the cause of occupational accidents and its losses are not carried out by the safety and health committee for all accidents that occur as required by accident investigation procedure AG-SMK-P-S-01, such for an accident which occurred on May 3, 2011 which re-sulted in a loss of 21 working days. This is raised as a non conformity.

There are no records of the occurrence of any work accidents are maintained and regularly reviewed dur-ing OSH committee monthly meeting, In May and June 2011 there is no agenda to discuss related review of occupational accidents and result of investigation. This is raised as non conformities. Compliance status: Non Compliance. NCR No. 2011-15 of 34 The company has an occupational safety and health (OSH) policy however it was not well implement-ed, with evidence that many cigarette butts were sighted in front of danger area which has sign “no smoking” area i.e. fuel oil storage which is categorized as danger and flammable location. NCR No. 2011-16 of 34 It was found regular health examination has not been done for two workers in engine room machines which have high level noise. NCR No. 2011-17 of 34



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It was found that risk assessment for non routine activities such as purchase of spareparts by motorcy-cle has not done, although there was records of an accident that occured to a motorcyclist which re-sulted in loss of 10 man day NCR No. 2011-18 of 34

The company still does provide protective tools to move soda ash and Nalco to mixing tanks, and this condition causes workers to become sick with shortness of breath and excessive chemical spillage on the floor.

NCR No. 2011- 19 of 34 Investigation of the cause of occupational accidents and its losses are not carried out by the safety and health committee for all accidents that occur as required by accident investigation procedure AG-SMK-P-S-01, such for an accident which occurred on May 3, 2011 which resulted in a loss of 21 working days. NCR No. 2011-20 of 34 During OSH meeting on May 2011 and June 2011, there were no records evidence of the occurrence of any work accidents are maintained and regularly reviewed by safety and health committee

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

Findings:

Training programs for employees and stakeholders/outgrowers are available and documented. Training for employees covers tax matters, security skills, identification of HCV, first aid, health and safety, waste management in mill training, etc. Training programs for stakeholders/outgrowers includes replanting, best practices about plantation management, etc.

Records of training for each employee are kept such as

1). First aid training on June 7, 2011 where participant from mill and estate (42 persons) with keynote speaker from social, manpower and transmigration institute – Jambi Province and Indonesian red cross;

2). Taxes training on March 16 2011 (61 persons) with keynote speaker from Tax Office or “Pelayanan Pajak Pratama” office in Kuala Tungkal District.

The company uses trained contractors for work carried out in year 2011. As interviewed during onsite au-dit, the contractor workers were provided with first aid training and training related to their activities follow-ing the existing standard operation procedure. Compliance status : Full Compliance

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have envi-ronmental impacts are identified, and plans to mitigate the negative impacts and promote the pos-itive ones are made, implemented and monitored, to demonstrate continuous improvement.

Findings:

PT Agrowiyana estate has a documented environmental impacts assessment or ‘Studi Analisis Dampak Lingkungan (ANDAL)’ dated 1996, and includes assessment of chemical-physical parameters such as climate, physiology, topography, geology, soil hydrology and air quality, biological parameters such as wa-ter bodies, natural forest vegetation and wildlife, and sosio-economy and local culture.

Significant impacts identified at operational level include maintenance of plantings, FFB harvesting and FFB processing. The ANDAL document covers a total land area of 10,216 ha, i.e. 8,000 ha of plantation area, 25 ha of central housing, 80 ha of division housing, 50 ha for the mill, 245 ha for roads and drainage and 1,841 ha of conservation areas. There have been no changes in the company’s operating activities and therefore no revisions to the ANDAL document are required.

Asides from the AMDAL document, the company also has prepared a documented identification of envi-



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ronmental aspects and impacts for all estate and mill activities as seen on document “Flow Chart busi-plans impact identification and Palm Oil Mill”, for Field and Workshop area. Besides the documented envi-ronmental identified aspects and impacts, the company also has risk assessment register to identify the risks associated with all environmental aspects and impacts; however at time of audit, the environmental risk assessment was only conducted for estate and workshop activities. It is recommended that the com-pany conducts a risk assessment for all other company activities such as supporting activities, mill pro-cessing etc. Environmental impacts identified are evaluated according to the company’s procedures SOP AG-SM-R-08, rev 02 issued on March 03, 2009. The company has developed a plan for control of signifi-cant environmental impacts and the plan is being implemented by the company. The company has devel-oped programmes to control and reduce environmental impacts, such as a Water Management Pro-gramme.

PT Agro Mitra Madani mill has an documented environmental impacts assessment in the form of the Envi-ronmental Management & Monitoring Efforts document (‘Upaya Pengelolaan Lingkungan’ and ‘Upaya Pemantauan Lingkungan’ or UPL/UKL) prepared on May 3, 2002 (it was approved by Plantation Authority of Jambi Province through decree letter no. 660/1863/UT/Disbun). The document were pertaining to pre-construction and construction activities for mill such as obtaining relevant licenses, land clearing, mobili-zation of equipment and materials, and development of the mill and estate infrastructure. The UKL/UPL documents includes results of measurement and assessment of environmental parameters such as air quality, quality of water source receiving effluent, soil type, flora and fauna, social, economic and cultural aspects, environmental health, and regional development. There is also a letter from the BLHD of Tanjung Jabung Barat dated 13 April 2009 which states that the mill shall submit a report on implementation of the UPL/UKL document once every 6 months. The mill has prepared this report once every 6 months e.g. last reports were prepared for period of January to July 2011 and for July to December 2010. The report in-cludes updates on monitoring results of road damage, air quality, noise, solid wastes, liquid waste, haz-ardous wastes, mill effluent, gaseous emissions, soil samples and occupational health. The company’s report for semester 2, 2011 will be established in the end of year 2011, however the company has con-ducted monitoring and analysis of environmental parameters such as analysis of water quality from the POME every month. In addition, the mill prepared a report once every 3 months on monitoring results for mill effluent used for land application as well as 3 month report on management of hazardous wastes.

The company has also conducted analysis of water quality from mill water treatment plant for clean water and domestic water consumption by NALCO Indonesia dated September 20, 2011 recorded on TS-ts/AMM/PSR/0811, according to the report, water treated still on the government standard.

There have been no revisions to the mill’s UPL and UKL document or the estate’s AMDAL document be-cause there have been no changes in operations that require revision. Compliance status : Full Compliance

Criterion 5.2: The status of rare, threatened or endangered species (ERTs) and high conserva-tion 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.

Findings :

PT Bakrie Sumatera Plantation (PT Agrowiyana plantation and PT Agro Mitra Madani), together with the CV Pollito, has conducted an assessment and identification of protected, rare and endangered species and HCV habitats within their area. All assessors have been registered as assessor HCV by RSPO.

The results of these assessments is that 5 types of HCVs were identified in 6 estates is HCV 1.1, 4.1, 1.3, 1.4 and 2.3 (peat area (> 3 m), Riparian zone (Baung river, Brasau river, Giring-giring river, Sianang riv-er), POM’s reservoir (B01), riparian river and watercouses, springs (B02 & D09), and conservation forest (B01 & B03).

Management does not have action plan and appropriate measure to preserve rare, threatened or endan-gered species and highly conservation value habitats. Measures taken for protecting species and their habitats including actions to control any illegal or inappropriate hunting, fishing or collecting activities were only provided through sign boards in all identified HCV areas, housing area and main roads. Posters and signs warning of the presence of protected species is not available, company only put warning board about “Illegal Hunting Restriction” and “Protected Forest”. There is also no guideline available to handling



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them.

There is no communication method to company’s workers regarding how to protect identified HCV areas including rare and endangered species. The company does not have dedicated and trained officers to monitor plans and manage activities of appropriate measure to preserve them, due to company has no management plan including their resources needed. Compliance status: Non Compliance.

NCR No. 2011-21 of 34

HCV assessment has been carried out but management does not have action plan and appropriate measure to preserve rare, threatened or endangered species and highly conservation value habitats.

NCR No. 2011-22 of 34

Posters and signs warning of the presence of protected species are not available, company only put warn-ing board about “Illegal Hunting Restrictions” and “Protected Forest”. There are also no guidelines availa-ble regarding how to protect these species.

NCR No. 2011-23 of 34

The company has not appointed dedicated and trained officers to monitor plans and manage activities of appropriate measure to preserve HCV areas.

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and so-cially responsible manner

Findings :

Identification of sources of wastes and pollution in the estates and mill is documented in the Environmen-tal Aspects and Impacts Analysis (dated 23 September 2010 for mill process and 19 September 2010 for estate). Wastes and pollution sources identified at the mill include oil containers, used sawdust from oil spills or leakage, rubbish, dirty water used for floor cleaning, used spare parts, gas emissions, empty fruit bunches, fibre and shell. For the estates, wastes identified include used polybags, used water (sewage) from housing and office activities, oil spillage or leakage, chemical spillage or leakage, fertilizer spillage, used fertilizer bags, chemical containers, and domestic waste

The estate estate and mill practice waste segregation for domestic and office wastes, organic and an or-ganic waste are separated. Every estate office and house has their own two waste bins, it will be collected by estate staff every week and to be transported to temporary waste storage. An organic domestic waste at housing and offices is currently collected once a month and sent to a government landfill, while the or-ganic waste is landfilled by the estate. The company has a license from the Management Office of Clean-liness of Tanjung Jabung Barat government for disposal of domestic waste.

As explained under Criterion 2.1, the mill’s license for temporary storage of hazardous wastes has ex-pired. Since expiry of the last license, the mill has issued a letter dated 28 April 2011 to the BLHD re-questing renewal of the license. The most recent ‘Letters of No Objection for Temporary Storage of Haz-ardous Wastes’ was issued by the BLHD on 20 September and it is valid for one year.

It was also found that the last collection of the hazardous wastes from the mill was in 7 August 2010 by the contractor CV Surya Jaya Logam and there has been no collection since that time. Storage of hazard-ous wastes has therefore exceeded the maximum permitted time for storage of scheduled wastes, which is 90 days. This was raised as non-conformity under CR2.1.

The mill and estate maintains inventories of all incoming and outgoing hazardous wastes stored at their mill hazardous waste store, including date in, date out, amount, source, and purpose of wastes taken out. Types of hazardous wastes stored according to records include oil containers, used batteries, light bulbs, used toner cartridges, filter, contaminated rags, and chemical containers. Report of waste production is made to the BLHD once every 3 months. Compliance status : Non Compliance Refer to NCR 2011-04 of 34 under CR 2.1



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

Findings :

Sources of renewable energy used for mill operations are fibre and shell. The company regularly monitors and maintains calculations for how much energy/ton CPO or energy per ton palm oil product is produced from fibre and shell consumption since year 2010. Since January to August 2011 the quantity of shell produced is 14,514,765 kg, which generates 189,354,424 MJ, and quantity of fiber used is 20,306,597 kg which generates 386,942,200 MJ. The energy production per total FFB and CPO produced by the mill is 3,689 MJ/ton FFB or 17,293 MJ per ton CPO. The company uses fossil fuel diesel oil for limited activities such as start up of boiler and transportation purposes, and operation of generator as an electricity source. According to a report of usage of fossil fuels (diesel fuel ) used in PT Agro Mitra Madani mill, the total fossil fuel consumption in the year 2010 was 145,672 liters as stated on “Fuel and Electricity Consumption Data” PT Agro Mitra Madani” year 2010 including fossil fuel consumption for estate operational and FFB transportation to the mill. Diesel Oil consumption for January to August 2011 is 92,379 liters. Records of fuel consumption from year 2008 to 2011 showed that the trend of fossil fuel consumption decreased gradually, e.g. year 2008 consumption was 171,441 liters, year 2009 was 145,686 litters and year 2010 was 145,672 liters. This is similar to the trend of consumption for renewable energy. The mill has responsibility to monitor all fossil fuel consumption also for the estate, that is why there is no individual report about the amount of fossil fuel used at the estates and by their contractors. There is no efficiency analysis for fossil fuel consumption in PT Agro Mitra Madani mill. Compliance status: Non Compliance. NCR No. 2011-24 of 34 There is no record on analysis of efficiency of renewable energy and fossil fuel usage based on moni-toring of fuel consumption result.

Criterion 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.

Findings :

Replanting program for the oldest oil palm plantation in PT Agrowiyana Jambi will be conducted in year 2018.

Top management has established zero burning policy for all company’s activities including for preparing land before replanting and waste disposal. This is policy approved by Head of Bakrie Sumatera Planta-tion Unit Jambi (PT Agrowiyana plantation and PT Agro Mitra Madani mill) on November 15, 2010.

Sign boards are posted in the estate areas stating prohibition of land burning. A standard operating pro-cedure (AG-SML-WI-E-08 rev.01) has been established for handling emergency responses for land burn-ing.

Fire extinguishers & facilities are provided but not available in all divisions, some plantation division still not provided yet. This is raised as observation for potential improvement. Compliance status: Compliance with Observations

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are devel-oped, implemented and monitored.

Findings :

Sources of pollution and emissions were identified and documented in the document "Identification of En-vironmental Aspects and Impacts"”, such as air emissions from boiler, and genset. However there no



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greenhouse gases (GHG) emission has been identified such as methane (CH4) (generated from the palm oil mill effluent pond, and empty fruit bunch composting), carbon dioxide (CO2) (from mill operation and transportation).

Monitoring of quality of pollution and emission sources identified is conducted regularly and reported to the local government every six months, in line with local regulations. These include air emission monitor-ing results, and noise levels not for mill effluent analysis results. As seen on Record of analysis no. CRT-158/SIBA-VII/IGT/2011 from Surveyor Indonesia for scope analysis are: Ambient Air, Emission Air, Opaci-ty, Noise, Clean Water and Surface Water. The company currently has no GHG emissions reduction pro-gramme.

Records also shows that air emissions have decreased through regular maintenance of boiler and gener-ator sets. There is no clear efforts and strategies to reduce pollution and emissions has been established in PT Agro Mitra Madani Mill.

The treatment methodology for POME is a 97 days sedimentation cycle method using 8 ponds consisting of a Cooling pond 1 and 2, Deoiling pond, Seeding Pond, Primary Anaerobic Pond, Secondary Anaerobic Pond, and Facultative pond before drained for land application.

Monitoring of effluent BOD and COD levels is conducted monthly and reported in the company’s RKL/RPL report every six months to the local government e.g. July 2011 in Report of Analysis no. 361/LHU/L2JBI/VI/11 for BOD5 is 3,430 mg/L; June 2011 in Report of Analysis no. 287/LHU/L2JBI/V/11 for BOD5 is 690 mg/L etc. Information from monitoring report since January to July 2011 about BOD5 analysis still below local government standard as stated on land application permit No. 503.8/01/KPPT/2011 from Bupati Tanjung Jabung District. Monitoring used independent laboratory, con-ducted by UPTB Laboratorium Lingkungan Daerah (Badan Lingkungan Hidup Daerah) Jambi.

The mill carries out monitoring of air emissions quality at several locations (2 gensets, 2 boilers), ambient air quality (boundary of nearby village, loading ramp), noise, effluent quality (tested monthly), and river water quality. Test results showed that tested parameters were all within the applicable standard except for test results for river water quality for two samples taken upstream and downstream from Giring River (which flows through the estate but does not receive discharge from the mill) on 11 November 2010, for which is was found both the BOD, COD, and oil and grease levels for both upstream and downstream samples had exceeded the legal standard. There are other test results which were seen to have exceed-ed the standard, i.e. ammonia emissions of 0.625mg/Nm3 for a KOMATSU genset (standard is 0.5mg/Nm3) and analysis results for clean water. However, there was no analysis of the reasons for this exceedance in the mill’s monitoring report or evidence that action has been taken.

Noise levels at certain areas of the mill were tested on 10 June 2011 also found to have exceeded the standard at several points, including ambient noise levels at loading area, power plant, boiler, kernel sta-tion and workshop. As corrective action, in addition to providing hearing protection in the form of ear plugs to all mill workers and ear muffs to engine room workers, the mill has replaced a vibrating grade at the kernel stations and installed a silencer at the machine and boiler room.

As part of efforts to recycle biomass and reduce greenhouse gas emissions, the company recently estab-lished a composting plant near mill location, and applied in the field since April 2011. Compost quality still under monitoring by external laboratory. Results of analysis will be used to determine if fertilizer applica-tions in the field can be replaced with organic compost in the future.

Compliance status: Non Compliance. NCR No. 2011-25 of 34

The company does not have GHG emission identification and reduction programme.

NCR No. 2011-26 of 34 There are no efforts and strategies employed to reduce pollution and emissions.

NCR No. 2011-27 of 34

From the mill’s latest RKL / RPL implementation monitoring report, there are some results of analysis of chemical parameters that have exceeded the specified standard, e.g. the river analysis results of Giring River (which flows through the estate) for BOD, COD, and oil & grease, ammonia emissions from the KOMATSU generator, and some chemical parameters for clean water. But in this report there was no analysis of why the quality standards were exceeded and no evidence of corrective action taken by the mill



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Criterion 6.1: Aspects of plantation and mill management including replanting that have social im-pacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improve-ment. Findings:

An environmental impact document approved by the government is available and company has Social Impact Assessment (SIA) report with scope of assessment: company’s own estate, Outgrow-er/Smallholder, and cooperative (page of 10) but in SIA report does not clearly state the positive and neg-ative social impacts/effects caused by estate and mill activities to company stakeholder and special anal-ysis about effect from plasma scheme. Furthermore, the company could not show documented participa-tion of effected parties and local communities (include their employee) in process Social Impact Assess-ment, this is raised as a non conformity. The company also has not conducted regular monitoring and management of all identified social impact with participation of local communities.

The company has an environmental management and monitoring report RKL/RPL report which is pre-pared every six months e.g. sighted on site the reports for semester I & II of year 2011 and it has been submitted to BPLHD Kabupaten Tanjung Jabung Barat on January 25, 2012. Compliance status: Non Compliance. NCR No. 2011-28 of 34 Document social impact assessment does not state clearly all determined positive and negative im-pacts from company’s activities and there no evidence of participation of relevant stakeholders during impact identification activities. NCR 2011-29 of 34 There is no document of monitoring and management plan for identified social impacts which has been established through participatory method. NCR No. 2011-30 of 34 The company’s Social Impact Assessment document does not cover the impacts of outgrower schemes (where the company has smallholder scheme).

Criterion 6.2: There are open and transparent methods for communication and consultation be-tween growers and/or millers, local communities and other affected or interested parties.

Findings : Bakrie Sumatera Plantation Unit Jambi (PT Agrowiyana plantation & PT Agro Mitra Madani mill) has open and transparent methods of communication and consultation between growers and/or millers, local com-munities and other affected or interested parties. The company has procedure (SOP) of communication, consultation and participation (No. AG-SM-R-24, issued : November 15, 2010) and the company has many records of communication meeting held with smallholder/outgrower on 2011 years i.e. there is a record of a socialization with smallholders/outgrowers about FFB from smallholders/outgrowers held on May 25, 2011 (around 34 persons attended in this meeting), a coordination with smallholders/outgrowers about FFB held on September 17, 2011 (around 12 persons attended in this meeting) and a socialization with smallholders/outgrowers at Kampung Baru held on Mei 24, 2011.

The company has a list of stakeholders however it is not include stakeholders from all villagers, contrac-tors, suppliers, etc. the list of stakeholders only cover stakeholders for 3 villages surrounding company’s location and scheme participant through cooperative organization. This was raised as an observation.

The company has records of communities’ requests but not all available, according to interview result with villager from Brasau village, they already send their request regarding road maintenance, however the company did not have records of responses or follow up actions for this incoming request, and this is raised as a non conformity.

There are two dedicated person who is responsible for consulting and communicating with local communi-ties and other relevant stakeholders.



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Compliance status: Non Compliance. NCR No. 2011-31 of 34 There are some stakeholder requests and responses from the company which were not recorded, for example, according to interview result with villagers from Brasau village, they already send their re-quest regarding road maintenance, however the company did not have records of responses or follow up actions for this incoming request Criterion 6.3: There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. Findings :

The company has an open system for dealing with complaint and grievances as defined in an SOP (AG-SMM-P-S-02 rev.00) issued on February 7, 2011. The mechanism was developed without the participa-tion of local communities because no evidence that the mechanism was accepted by affected parties.

There were some incoming complains and suggestions to company. Records for incoming complaints and suggestions are well maintained by Bakrie Sumatera Plantation, example: a) Attendance list of meeting for handling of complaint of incoming letter on May 3, 2010 about land problem at KM.8 Tebing Tinggi-Jambi between a local family and PT Agrowiyana regarding a land dispute for 32 ha of land; b) Records of handling of complaint from employee regarding poor rice quality from suppliers.

The company has procedures for identification and calculation of fair compensation for the loss of legal or customary right to land, with the involvement of local community representatives and relevant agencies and made publicly available. Compliance status: Non Compliance. NCR No. 2011-32 of 34

There is no evidence that the company’s mechanism to receive complaints and to resolve dispute was accepted by relevant affected parties. Criterion 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 communi-ties and other stakeholders to express their views through their own representative institutions. Findings :

PT Bakrie Sumatera Plantation has established a mechanism for the identification, calculation and com-pensation of loss of legal or customary rights of land, with involvement of local community representatives and relevant agencies as explained on (SOP No. RSPO-01 rev.00)

The company has records of identification of people entitled to receive compensation, as seen on list of communities from Pelabuhan Dagang (12 people).

The company has records of receipt of compensation payment given to Pelabuhan Dagang communities (12 people) for acquiring 68.25 ha on July 28, 1993 and agreed compensation amount of IDR 9,540,625, statement of letter about handover land by communities and photograph. Compliance status : Full Compliance

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

Findings: The company maintains documentation of employees’ pay and wages paid are in compliance with the minimum wages defined in both local and national government regulation. On the standard minimum wage, company complies with the regional minimum wage as per the decree from the Governor of Jambi which states that the regional minimum wage standard for estate workers in Jambi for year 2011



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stated on decree letter no 417/Kepgub/DISSOSNAKERTRANS/2010 issued on November 26, 2010 valid since January 1, 2011 which states that minimum wage for agriculture, animal husbandry, hunting and fisheries is IDR 1, 028,000 per month or IDR 47,700 day, and the company has revised their work-ers’ salaries to comply with this regulation through director decree letter no. 185/HBu/BSP - JBI/XII/11 regarding minimum wage and salary increment for non staff worker). The minimum wages standard of PT Agrowiyana and PT Agro Mitra Madani complies with the related government regulation which is Government Regulation (Peraturan Pemerintah) no. 8/1981 on wages standard protection and Minister of Indonesian Manpower Regulation no. PER-01/MEN/1999 regarding minimum wages. Staff and workers receive receipts of salary payment (monthly pay slips) in a timely manner and they are paid in cash. Evidence was seen in the form of payment slip for temporary workers. There are there categories of employees at PT Agrowiyana Plantation and PT Agro Mitra Madani, i.e. 1. Management and office staff both for mill and plantation 2. Permanent staff 3. “Karyawan Bulanan Tetap (Satuan Kerja Unit/SKU)”, i.e. permanent daily worker with monthly basis payment 4. ‘Buruh Harian Lepas, temporary daily worker Beside wage or salary company also provide rice allowance and overtime

The company has a documented working agreement between PT Agrowiyana-AMM and PUK.SPPP.F.SPSI PT Agrowiyana-AMM that was approved by the Head of Manpower & Transmigration Institution of West Tanjung Jabung government for period of 2010 to 2012.

Adequate housing, medical, educational, mosque, “daycare” and other facilities are provided by company and free of charge. However, water supply facilities at emplasment were found to be inadequate because majority of workers must collect water from the water tower and “daycare” facilities (division V) flooring in the daycare centre is made of wood, which may not be safe for young children. This was raised as an ob-servation.

All activities which are not the company’s main operational activities carried out by the employee’s coop-erative. So the employee’s cooperative made agreement with company relating to the activities required. Management has working contract with cooperative as seen on Contract No. 117/AM-BSPJMB/IV/10 for FFB transportation and contract No. No, 1002B/SPk/AM-BSPJMBI/XII/07 for heavy equipment rental such as Monitor Tele-Loader. Compliance status: Compliance with observations Criterion 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. Findings: A statement permitting freedom of association for workers is also stated on the company’s documented Worker Agreement (‘Perjanjian Kerja Bersama’ or PKB) period 2010-2012 in clause 4 & 5. The policy was also informed to all employees and workers through an internal memorandum signed by Compa-ny’s management.

Worker union in PT Agrowiyana Plantation and PT Agro Mitra Mandani mill called PUK.SPPP.F.SPSI PT Agrowiyana-AMM that was approved by the Head of Manpower & Transmigration Institution of West Tan-jung Jabung government for period of year 2011 to 2012. Structure organization of labour union in no. 54/PD F.SPPP SPSI/Jambi/IV2011.

All records of regular meetings held with the labour union are well maintained and properly kept at the la-bour union office and the company’s regional office. For example, there are records of labour union meet-ings held on August 2011 at the head office’s meeting room about making a collective labour agreement. Compliance status: Full Compliance Criterion 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 programmes. Children are not exposed to hazardous working conditions.

Findings :



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Management of Bakrie Sumatera Plantation has written policy against employment of children under 18 years old within their company.

During the time of the audit time there is no evidence that the company employed children under 18 years old to work at either the plantations or the mill, including contractors. According to records, the youngest worker employed by the company currently is 19 years old.

Compliance status: Full Compliance

Criterion 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.

Findings:

Bakrie Sumatera Plantation has a policy on equal opportunities for all employees. The policy was in-formed only to employees and communities surrounding company’s location. Based on information from the local communities, company has regularly provided information about job vacancies

As seen on list of employees, employees originate from various ethnics and represent religion in Indone-sia. Company has competency and qualification requirement as consideration for worker or staff selection. During the audit, no evidence of discrimination was found. There is evidence of equal treatment in working opportunities for workers in the company. No workers interviewed on-site complained about any form of discrimination from the management of the estates or mill. Compliance status : Full Compliance

Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against wom-en and to protect their reproductive rights is developed and applied.

Findings:

The management of Bakrie Sumatera Plantation has a written policy regarding prevention of sexual har-assment and all other forms of violence against women, as well protection of their reproductive rights (stated in book working agreement regarding, menstruation leave, and maternity leave). However this pol-icy still not communicated to the workers especially woman workers, as from interview results most of them still not understand about this policy.

No evidence of sexual harassment was found during the time of the audit. There is evidence of implemen-tation of the reproductive rights policy, for example, the company has copies and records of menstruation leave and maternity leave forms applied by workers and these records are kept by the clinic and estate of-fice

The company did not make a specific grievance mechanism for gender-related issues; all workers issues including woman-related cases will be handled following their procedure of internal communication. All workers have been informed that they should report to their supervisor if any problem happens. This pro-cedure already acknowledge by woman workers. Compliance status: Non Compliance. NCR No. 2011-33 of 34 There is evidence that company has not effectively communicated their policy regarding prevention of sexual harassment and all other forms of violence against women to all workers, as from interview re-sults most of the workers interviewed still not understand about this policy.

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

Findings:

The company allows the public to access current and past prices for FFB. Current FFB prices and previ-ous day FFB prices are clearly published on the notification board in front of the mill. Current FFB price defined according to meeting results between Local Plantation Officer and FFB Price monitoring team e.g.



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meeting result on August 19, 2011 for FFB price period August 15 to September 5, 2011. Information of FB price was kept by mill manager.

Smallholders/outgrowers understand the contractual agreement they enter into and that contracts are fair, legal and transparent. At audit time there was no evidence of complaints from smallholders/outgrowers about implementation of contractual agreement.

Payments to suppliers/outgrowers are made on time. Payment schedule is every two weeks appropriate request smallholders/outgrowers. For example: payment to KUD Swakarsa (Kampung Baru) on Septem-ber 16, 2011 amount IDR 229,081,842 (period: July 21 to August 20, 2011), etc. Compliance status: Full Compliance

Criterion 6.11: Growers and millers contribute to local sustainable development wherever appro-priate.

Findings:

The company has many records of contributions made to local government organizations and local com-munities (Badang village, Pulau Pauh village, Purwodadi village, Tebing Tinggi village, Brasau village, Adi Jaya village, Taman raja village, Pematang Pauh village, Kampung Baru Village, Dusun Kebun, and Su-ban village) for education, economic, health, religion, infrastructure, social, environmental, and publication sector. Compliance status: Full Compliance.

Principle 7: Responsible development of new plantings

Findings: No finding related to new development area because company has no development area program. The company’s first planting took place in year 1993 for an area of 659.00ha and completed plantings in year 2005 for an area of 274.83ha. As there are no new plantings, this requirement is not applicable. According to the estate’s AMDAL document prepared in 1996, the area within the company’s ‘Ijin Perlepasan’ (Release permit) covering an area of 13,000ha had no primary forest but only secondary forest classified under ‘Hak Pengusahaan Hutan’ (Forest Development Rights) and vegetation in the forms of wild bushes and other types of commercial and non-commercial vegetation. Compliance status: Not applicable

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

Findings: Overall implementation plans are defined based on risk level evaluated for identifying significant as-pects. Verified & cross checked implementation of the actions such as waste management control, chemical management control, etc.

The estate has an Environmental Monitoring and Management Plan based on the estate’s RKL/RPL documents and produces a report about implementation of RKL/RPL every 6 months. The report was submitted to BLHD of Tanjung Jabung Barat. RKL/RPL report for semester 1 year 2011 was not yet ready at time of audit. The report for July to December 2010 was sighted. The improvement plans was established include water quality management program by reducing the impact of fertilizers and pesti-cides in estate, reduce application of fertilizers and starting fertilizer application activities before rainy season according to recommendations. The mill also has composting program from empty fruit bunch, the program just starting and has been applying in the field since April 2011. The mill also has a docu-mented plan to reduce water usage (as explained under CR4.4) Compliance status: Non Compliance. NCR No. 2011-34 of 34



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There is no evidence that the mill or estate has a monitoring action plan for the following aspects: • Reduction in use of certain chemicals (criterion 4.6). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6). • Social impacts (6.1).

3.2 Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions A total of 34 nonconformances were identified during the main certification assessment. These consisted of 12 major non-conformities and 22 minor non-conformities (note : criterion 2.3 & 7.1 – 7.7 are Not Applicable). For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances within 60 days of completion of the assessment, and this was verified by the audit team through an on-site verification audit conducted on November 17-19, 2011 as well as checks of documents submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as below :

Criterion 1.1.2 (Major): Records of responses to information requests.

NCR No. 2011-01 of 35 :

There is no evidence of responses to incoming requests of information from stakeholders e.g. Head of Badang Village Nomor 02/KRT/2011 dated June 11, 2011 regarding donation request for foodball yard in Badang Village.

Correction :

For every incoming letter, company make records of responses for each incoming letter from stake-holders.

Corrective Action :

Management Representative and General Affair section will maintain records of all response to infor-mation requests in journal book and these shall be reviewed periodically.

Auditor Conclusions: Closed Audit Verification Findings :

There were records of responses by the company to information request from stakeholder such as :

Responses about request of donation from head of Badang village in the form of payment slip on No-vember 17, 2011.

Response donation for Al-Ikhlas mosque construction. Responses letter (No. 88/CA-AGW/XI/2011, dated Nov 18, 2011) to head of Suban village.

Response for incoming letter from KUD Swakarsa through letter no. 87/CA-AGW/XI/2011) regarding invitation letter to a meeting for clarification of a problem in KUD Swakarsa. The letter explained that company cannot attend the meeting.

Criterion 1.1.3 (Major): The records mentioned in 1 and 2 must be maintained for a period of time determined by the company, taking into account their relative importance.

NCR No. 2011-02 of 34 Company has no good filing system and has no rule of retention time of records keeping especially rec-ords for company responses for all incoming letter.



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Correction : Records control procedure. AG-SM-R-24 rev.01 (date issued September 27, 2011) was revised include statement that records will be kept for 3 years.

Corrective Action :

To ensure that respond for all information requests are recorded in the journal book, and reviewed period-ically.

Auditor Conclusions : Closed Audit Verification Findings :

The company developed a procedure that records of information request and responses have to main-tained by estate officer, CA/CSR (external) officer and HRD (internal) with period of time for 3 years as stated on procedure no. AG-SM-R-24 rev.01 (date issued September 27, 2011) point 8.3 was issued by Company Affair (CA). Criterion 1.2.1 (Major) Information and responses must include any relevant or required documen-tation, in accordance with applicable national laws, such as: • Legal: Land titles/user rights (Site Permit (Izin Lokasi), Plantation Operation Permit (Izin Usaha Perkebunan), Land Use Title (Hak Guna Usaha) or other documentation relating to application for Land Use Title in accordance with relevant procedures) • Environmental: Environmental and Social Impact Assessment (AMDAL /UKL-UPL) and environ-mental management and monitoring reports (Laporan RKL-RPL) • Social: Documentation of social activities and community programs. • Health and Safety Plan • Continuous improvement plan

NCR 2011- 03 of 34

The company has no mechanism to maintain all incoming requests for information and responses made, and has not defined the retention time of records kept.

Correction :

Management has determined which documents are to be made publicly available in issued letter num-ber 55/CA-legal/JMB/IX/2011 signed by General Manager and state that retention time for records is 3 years.

Corrective Action :

To submit the letter to stakeholders such as head of village and other relevant stakeholder upon re-quest To ensure that a community knows which document can be access and record all incoming re-quest letter properly according to documents and data control procedure.


Management has determined which documents are publicly available in letter number 55/CA-legal/JMB/IX/2011. Document which are made publicly available or provided upon request include permits (location permit, IUP, HGU certificate, etc.), AMDAL/UKL-UPL document, document of social activities and relation with communities, occupational health and safety programme, partnership pro-gramme, statement of vision and mission and continual improvement programme. This letter has been received and known by communities from village surrounding company’s area, with evidence in the form of a transmittal note that was signed by 15 persons from the surrounding communities.

Criterion 2.1.1(Major): Evidence of compliance with relevant legal requirements.



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NCR No.2011- 04 of 34 (Major) :

Some evidence was found that the company still not comply to government regulations such as:

- Storage of hazardous wastes has exceeded the maximum permitted time for storage of hazardous wastes (more than 90 days).,Some empty oil drums were also sighted near the workshop that were left in the open and not stored as hazardous waste. This is not in compliance with government regula-tion No. 18 year 1999 regarding hazardous waste management.

- There are two employees who have worked more than 21 days per month for 3 months continuously but not yet appointed as permanent workers, and this is not in compliance with regulation Kep-menaker no. 100 year 2004 100/2004 regarding temporary and permanent worker.

- There is no evidence found that “Jamsostek” payment for period August 2011 has been done this is not in compliance with government regulation No. 28 year 2002.

Correction :

- Hazardous waste has been collected by licensed supplier. All empty drums were move to proper stor-age place separated with other hazardous waste storage area in front of the warehouse and covered properly to prevent unintended usage.

- Workers status were changed into permanent staff

- The company has submitted a payment letter to the related institution regarding Jamsostek (Worker Social Insurance) as payment for period August 2011

Corrective Action :

The company conducts periodic review for all applicable legal and other requirements to ensure it compli-ances following procedure of legal compliance evaluation. Legal evaluation will be conducted be Man-agement Representative every six months and the result will be discussed during management review meeting for the next action.


Hazardous waste in storage of hazardous waste has been taken by licensed supplier (CV Surya Jaya Logam (Kepmen LH No. 53/2011)) on November 16, 2011 with evidence is hazardous waste manifest no. KX 0000472 – 475. Hazardous waste has been taken are oil drum filled with used oil, used bat-tery, used filter oil, and contaminated rough mop.

There are evidence about change of status from temporary workers into permanent worker on No-vember 1, 2011 for 6 employees. It was change of status of 6 employees stated in decree of Human Resources Department & General Affair head where has been sign by HRD & GA head, business head and employee.

The company has paid Jamsostek period August 2011 on October 20, 2011 for amount of IDR 68,450,452 (947 employees and 12 additional employees).

Criterion 2.1.1 (Major) Evidence of compliance with relevant legal requirements.

NCR No. 2011-5 of 34

Some of applicable legal and other requirements are still not listed on the company’s “List of Applicable algal and other requirement. AG-SMM-P-S-03, issued date: 15 such as Manpower and transmigration ministry decree letter no. 100/2004 regarding temporary and permanent worker regulation still not includ-ed on the list, Per.01/MEN/1976, Per.01/MEN/1988, Kep. 155/MEN/1984, UU No.13/2003 and UU No.3/1992.

Correction : Company revised List of Applicable legal and other requirement. AG-SMM-P-S-03, include all applica-ble regulation and other requirement such as Kepmenaker no. 100/2004 regarding temporary and per-manent worker regulation, Per.01/MEN/1976, Per.01/MEN/1988, Kep. 155/MEN/1984, UU No.13/2003



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and UU No.3/1992. Corrective Action : Management Representative will review periodically and updates all applicable legal and other re-quirements on the list and ensures its compliances, as required by procedure. Auditor Conclusions : Closed Audit Verification Findings : Kepmenaker no. 100/2004, Per.01/MEN/1976, Per.01/MEN/1988, Kep. 155/MEN/1984, UU No.13/2003 and UU No.3/1992 have been included on “ List of Applicable legal and other requirement”. AG-SMM-P-S-03 includes all relevant applicable requirements.

Criterion 2.1.2 (Minor) A mechanism for ensuring that compliance with relevant legal requirements is implemented.

NCR 2011-06 of 34 There is a procedure of evaluation of compliance to government regulation i.e. AG-SMM-P-S-01, rev. 03, date issued: 7 February 2011 section 6.4.5 stated that evaluation shall be conducted 6 monthly by each section and recorded on No. AG-SM-R-26, however there is no evidence that evaluation has been done consistently as seen that last evaluation in November 15, 2010.

Correction : Section head conduct evaluation of applicable legal requirement as required by procedure and record the result on AG-SM-R-26. The report will be submitted to management representative.

Corrective Action : Management representative will sent a letter for each section head every six months to ensure that evaluation of compliance to government regulation always conducted as determined by relevant proce-dure.

Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit

Criterion 2.2.2 (Minor). A mechanism to resolve conflict which is accepted by all parties.

NCR No 2011-07 of 34 There is mechanism to resolve conflict but no evidence that this was mechanism accepted by all par-ties. Correction : Company made conflict resolution mechanism and communicated with relevant stakeholder for ac-ceptance

Corrective Action : Identify whether still any other mechanism which is need communicated to stakeholder

Auditor Conclusions:

Evidence of corrective action plan accepted. Effectiveness of implementation to be verified at next audit

Criterion 3.1 (Major): A documented working plan of the company for a minimum of 3 years peri-od.

NCR No 2011-08 of 34 Budget for non-operational activities is available but the budget is not detailed because for several ac-



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tivities such as RKL/RPL activities, OSH expert training, renewal of operator crane’s license, replace-ment of displacement pump no.8 (this was found to be damaged but not budgeted for repair), RSPO, Social Impact Assessment, identification of HCV areas, training for HCV officers and resolution conflict, it is not clear whether its activities are included in this budget. Correction :

Revised company’s management plan for year 2012 include budget for all activities such as budget for environmental management and monitoring, Safety and Heath activities, Social issues activities, and operational activities. Corrective Action : The company made a procedure as guidance to each section for making budget plan every year as consideration to make 3 years management plan. Auditor Conclusions : Closed Audit Verification Findings :

As the company’s management plan for year 2011 has been approved by their management, it cannot be revised, but several activities related of RSPO has been implemented such as SIA, HCV assessment, in-stallation of sign board, make of subsidence monitoring location for 3 location, etc. The company has pre-pared a management plan for 2012 which includes a budget for CSR/Community development and envi-ronmental activities (trees planting and management of forest conservation) but budget to make sign-and replacement boundary markers in estate is included in operational expenses. Budgeting for medical checkup, cleaning of canals, renovation emplacements in head office and estate has been included Gen-eral &Affair expenses. Procedure for budget plan development has been established and is available in each section.

Criterion 4.1.2 (Minor): Records of operational results.

NCR No. 2011-09 of 34 There are operational activities not appropriate with procedure such as: 1) Temperature of digester in SOP pressing process is 95 ± 50C but actual in screw press no.4 & 5 is 600C and no. 1 & 2 is 550C (record of press daily report (AG-SMM-FR-P-04) on August 1, 2011; 2) Temperature of oil tank in SOP is 70 ± 100C but actual in record of AG-SMM-FR-P-04 on May 2, 2011 is 75-820C and on August 1, 2011 is 75-890C. Correction :

Replace digester temperature control on screw press machine and oil tank and make adjustment the parameter control according to existing standard operation procedure in the mill.

Corrective Action :

Made monitoring program periodically for all measuring equipment, ensure that all equipment in good condition and good function. Company will provide awareness training for all relevant operators to im-prove their knowledge about how to operate the equipment in the right way according to existing stand-ard operational procedures.


Criterion 4.4.1 (Minor). An implemented water management plan.

NCR No. 2011-10 of 34 The company has total deept peat area of 225 ha that has been planted before year 2005, however company has no water management program to control and prevent peat soil damage.



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Correction :

The company made standard operation procedure including relevant working instruction for subsidence monitoring level for peat land area. Corrective Action : Implement consistently standard operation procedure for subsidence level monitoring. Reporting the result periodically to management representative for further action. Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit

Criterion 4.4.3 (Minor)Monitoring of mill water use per tonne of FFB.

NCR No. 2011- 11 of 34 Plantation and mill use water for production process but mill does not carry out monitoring of mill water use per tonne of FFB. Correction :

Company made monitoring of mill water used for FFB processed every month, record of water con-sumption per ton FFB are kept maintained by engineering section in the mill Corrective Action :

Develop a working instruction for water consumption monitoring, communicate the working instruction to all relevant employees and implement it consistently.


Criterion 4.5.2((Minor): Monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare).

NCR No. 2011- 12 of 34 The estate maintains records of dosages of chemicals applied per hectare but no monitoring of pesti-cide toxicity units as required. Correction :

Monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare) has been made. And will be monitor periodically at least one a month. Corrective Action :

Develop a working instruction for monitoring of pesticide toxicity units, communicate the working in-struction to all relevant employee and implement it consistently.

. Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit Criterion 4.6.1 (Minor): Documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated. NCR No. 2011-13 of 34 The company has no plan to reduce and/or eliminate use of gramoxone.



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Correction :

Made program to reduce gradually the use of gramoxone which contains paraquat. Ask purchasing de-partment to find another agrochemical to replace Gramoxone which has the same functional effect.

Corrective Action : Purchasing department and RSPO management representative will identify any other agrochemical material which is listed on type 1A and 1B, WHO list or Stockholm or Rotterdam Convention and will try to find agrochemical material which is not listed as forbidden agrochemical.


Criterion 4.6.2 (Minor) Records of the results of health check-up for those who apply agrochemi-cals.

NCR No. 2011-14 of 34

There are employees who were found to have signs of breathing difficulties, lung tuberculosis and have cholinesterase level exceeding normal levels are still working as sprayers with no action taken by man-agement. Correction :

Rechecking relevant worker who suffer from breathing difficulties, lung tuberculosis and have cholines-terase exceeding normal level and send them for further medical check-ups to ensure that they are ap-propriately treated.

Corrective Action :

Identify sections that apply agrochemical, identify all existing workers in that section and made routine medical check-ups for those who apply agrochemicals directly.


Criterion 4.7.1(Major) Evidence of a documented occupational safety and health (OSH) policy and its implementation.

NCR No. 2011-15 of 34 The company has an occupational safety and health (OSH) policy however it was not well implement-ed, with evidence that many cigarette butts were sighted in front of danger area which has sign “no smoking” area i.e. fuel oil storage which is categorized as danger and flammable location. Correction:

The company placed larger “No Smoking” sign boards in all locations with high explosion risk and cir-culate warning letter to inform on punishment for those who violate this warning.

Corrective Action :

The company will provide training to improve workers awareness about safety and health including hazard from smoking activities.

Auditor Conclusions: Closed Audit Verification Findings:

During on-site revisit there were no cigarette stubs sighted in “no smoking areas” i.e. fuel oil storage.

Person in-charge and employee in warehouse has been made aware of the importance of upholding oc-



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cupational safety by making a statement not to smoke and throw cigarette stub in “no smoking area” i.e. fuel oil storage. A letter on this has been signed by 4 employees in warehouse. If they do not comply then they should accept the sanction imposed by the company.

Criterion 4.7.2(Minor): Regular health examination by a doctor for workers in station or exposed to high risk work.

NCR No. 2011-16 of 34 It was found regular health examination has not been done for two workers in engine room machines which has high level noise. Corrective Action: Company conducted Audiometric test for all worker in engine room on November 2011, in Health and Hy-giene Agency (Balai Hiperkes) Jambi Province. Corrective action: Identify all sections which have high risk for workers and make program for medical check-up once a year in Health and Hygiene Agency (Balai Hiperkes) Jambi. Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit

Criterion 4.7.3(Minor) A documented risk assessment for Occupational Health and Safety (OHS)

NCR No. 2011-17 of 34 It was found that risk assessment for non routine activities such as purchase of spare parts by motor-cycle has not done, although there was records of an accident that occured to a motorcyclist which re-sulted in loss of 10 man days Correction :

Risk assessment for all company activities both routine and non routine activities will be done at least by December 2011, including riding motorcycle for company’s operational activities.

Corrective Action :

Management representative will issue reminder letter to all section always update risk assessment and include the result as management review agenda for further action.


Criterion 4.7.6.(Minor): Evidence of OHS and first aid equipment available at worksites

NCR No. 2011-18 of 34

The company still does not provide protective tools to move soda ash and Nalco to mixing tanks, and this condition causes workers to become sick with shortness of breath and excessive chemical spillage on the floor.

Correction : - Corrective Action :

Provide palette to prevent slippery and split the packaging into smaller package. Issued instruction to all workers in this section shall use appropriate mask and other relevant protective equipment.

Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-



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tion to be verified at next audit

Criterion 4.7.8 (Minor): Records of the occurrence of any work accidents are maintained and regu-larly reviewed.

NCR No. 2011- 19 of 34 Investigation of the cause of occupational accidents and its losses are not carried out by the safety and health committee for all accidents that occur as required by accident investigation procedure AG-SMK-P-S-01, such for an accident which occurred on May 3, 2011 which resulted in a loss of 21 working days. Correction :

Investigation was done for this accident on May 03, 2011 and the investigation report is kept in docu-ment control office.

Corrective Action :

To carry out identification of all location or activities which has potential danger and give protection to prevent accident.


Criterion 4.7.8(Minor): Records of the occurrence of any work accidents are maintained and regu-larly reviewed.

. NCR No. 2011-20 of 34 During OSH meeting on May 2011 and June 2011 , there were no records evidence of the occurrence of any work accidents are maintained and regularly reviewed by safety and health committee. Correction :

Investigation the cause of accident and their correction was discussed during OSH committee meeting on October, 2011. Records of review process were maintained by document controller.

Corrective Action :

For next 2012, head of OHS will make “One year meeting program” Include the agenda of meeting. Management will review the agenda for adequacy..

Auditor Conclusions : Evidence of corrective action plan accepted. Effectiveness of implemen-tation to be verified at next audit

Criterion 5.2.2 (Major): If, rare, threatened or endangered species, or high conservation value habi-tats are present, appropriate measures to preserve them are to be taken.

NCR No. 2011-21 of 34 HCV assessment has been carried out but management does not have action plan and appropriate measure to preserve rare, threatened or endangered species and highly conservation value habitats. Correction :

Company make action plans to manage and monitor all HCVs identified

Corrective Action :

Implementation of HCV management and monitoring plan will be monitor by Management Representa-



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tive and will be reported during management review meeting. Training will be conducted for HCV offic-ers to improve their knowledge and their capability for making HCV management and monitoring plan.


Programme of monitoring and management plan HCV have been prepared/available for period March – December 2011. Action plan programme are make signboard HCV, rehabilitation for damage area, put marking along riparian river, making footpath in conservation area as monitoring line, identification and put on name board of trees in conservation forest, develop security gatehouse and monitoring of HCV ar-ea. All programs above have been verified in the field.

Detail action plan as interpretation HCV Management plan has been establish, action plan for 2012 years e.g. assign a team for monitoring HCV area and the implement action plan, make procedure & work in-structions related to monitoring and management of HCV, maintain condition of conservation forest, in-ventory of fauna in each of estate, provide signboard to inform about rare, threatened or endangered spe-cies in HCV area, measuring existing protected area, understanding of HCV area (HCV 1-6), and evalua-tion of HCV management.

Auditor Conclusions : Evidence of corrective action plan accepted. Effectiveness of implemen-tation to be verified at next audit

Criterion 5.2.1 (Minor): Posters and signs warning of the presence of protected species are to be produced, distributed and made visible to all workers and the community, including guidelines in handling them.

NCR No. 2011-22 of 34

Posters and signs warning of the presence of protected species are not available; company only put warn-ing board about “Illegal Hunting Restrictions” and “Protected Forest”. There is also no guideline available regarding how to protect these species. Correction :

Posters and signs warning of the presence of protected species are to be produced in several places such as identified in front of HCV area, housing area, entrance gate to plantation area, and in front of head of village office. The company made a working plan to protect forest and remain biodiversity in-side.

Corrective Action : Program on communication regarding how to protect rare and endanger species and to inform workers and their families through warning signboards will start in the beginning of year 2012.

Criterion 5.2.2 (Minor) Companies are to appoint dedicated and trained officers to monitor any plans and activities as above.

NCR No. 2011-23 of 34

The company has not appointed dedicated and trained officers to monitor plans and manage activities of appropriate measure to preserve HCV areas. Correction :

Company assigned a team to manage and monitor HCV area; team coordinator will be trained by a consultant.

Corrective Action :

Made training program for all HCV team member by year 2012

Auditor Conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-



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tion to be verified at next audit

Criterion 5.4.2 (Minor). Records of monitoring renewable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product).

NCR No. 2011-24 of 34 There is no record on analysis of efficiency of renewable energy and fossil fuel usage based on moni-toring of fuel consumption result. Correction :

Efficiency analysis of fiber and shell consumption has been made including fossil fuel consumption for operational activities. This information will be reported to management representative for further action.

Corrective Action :

Efficiency analysis of shell, fiber and fossil fuel consumption will be conducted periodically following re-sult of monitoring of shell, fiber and fossil fuel consumption every month. Management representative issue reminder memo before end of month


Criterion 5.6.1(Major): Evidence of identification of pollution and emissions sources at mills.

NCR No. 2011-25 of 34

The company does not have GHG emission identification and reduction programme. Correction :

Made identification of GHG emission source in mill and estate and planning to reduce GHG emission for short term period company conduct routine maintenance program, such as for boiler, genset, com-pany’s vehicle and company require to all FFB transporter to switch off their vehicle engines while queuing to enter the weighbridge.

Corrective Action :

Revised the procedure of identification environmental aspect and impact procedure to include source of GHG emission into the object of assessment process, and review periodically for updating infor-mation. The company has planning for methane gas capture from effluent pond and make it into biogas in long term period. The process now under feasibility study.


Based on the aspects and impacts identification document that have been revised (AG-SM-FR-R-18 rev.01) on November 17, 2011 that GHG emission source in mill have been included as additional as-pects and impacts. Results of GHG emission source identification in mill are Methane (CH4) from waste pond and Carbon Dioxide (CO2) from Genset. There is a notification letter in front of mill gate that all FFB transporters have to switch off their vehicle engines while waiting for weighing process. There are preven-tive maintenance program found such as maintenance program for boiler and genset

Criterion 5.6.1(Minor): Records of efforts and strategies employed to reduce pollution and emis-sions NCR No. 2011-26 of 34 There is no efforts and strategies employed to reduce pollution and emissions.



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Correction :-

Corrective Action : Company has planning for methane gas capture from Effluent pond and make it into biogas in long term period. The process now under feasibility study.


Criterion 5.6.2 (Minor): Records of efforts and strategies employed to reduce pollution and emis-sions. Records of identification, monitoring, and treatment methodology for POME.

NCR No. 2011-27 of 34 From the mills latest RKL / RPL implementation monitoring report, there are some results of analysis of chemical parameters that have exceeded the specified standard, e.g. the river analysis results of Giring River (which flows through the estate) for BOD, COD, and oil & grease, ammonia emissions from the KOMATSU generator, and some chemical parameters for clean water. But in this report there was no analysis of why the quality standards were exceeded and no evidence of corrective action taken by the mill Correction: Due to some mistake during taking water sample, RKL and RPL report document has been revised and company’s make coordination with Environmental Officer in Tanjung Jabung District Officer (BLHD/Badan Lindungan Hidup Daerah) to get re approved report of RKL/RPL document through re-take sample from the field for related environmental parameter. Corrective Action: Identify the cause of problem and analyze especially for environmental parameter which is exceed defined standard to make next action plan. Auditor conclusions: Evidence of corrective action plan accepted. Effectiveness of implementa-tion to be verified at next audit Criterion 6.1.1(Major);Documented environmental and social impact assessment, including details of positive and negative social effects that may be caused by plantations and mills, and docu-mented participation of affected parties and local communities. NCR No. 2011-28 of 34 Document social impact assessment does not state clearly all determined positive and negative im-pacts from company’s activities and there no evidence of participation of relevant stakeholders during impact identification activities. Correction :

Correction SIA report with additional information about positive and negative social effect caused by es-tate and mill to stakeholders.

Corrective Action:

Review of SIA reports periodically and include additional positive and negative impact according to on-going condition and always communicate with relevant stakeholder to improve SIA document including development of impact management and monitoring plan.

Auditor Conclusions: Closed Audit Verification Findings:

SIA has been revised including information about positive and negative social impacts from company’s



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operational. Company provide evidence records of participation of affected parties and local communities (include employee) in during Social Impact Assessment process such as photographs during interviews with stakeholders.

Criterion 6.1.2 (Minor): Regular monitoring and management of social impact, with the participa-tion of local communities..

NCR 2011-29 of 34 There is no document of monitoring and management plan for identified social impacts which has been established through participatory method. Correction :

Document for management and monitoring social impact has been made through participatory method with facilitated by external consultant. Social impact management will be combined with company’s Community development program or CSR program, next 2012 year, because for year 2011 the budget for CSR and Community development (Comdev) has been approved and cannot be revised.

Corrective Action :

Company’s ComDev’s division will make review about social impact management and monitoring plan and include the planning of yearly action plan program to be implemented by the company’s own es-tates.


Criterion 6.1.4 (Minor): Particular attention paid to the impacts of outgrower schemes (where the plantation includes such a scheme).

NCR No. 2011-30 of 34 The company’s Social Impact Assessment document does not cover the impacts of outgrower schemes (where the company has smallholder scheme). Correction:

Revised Social impact document include information about impacts of outgrower schemes

Corrective Action:

Community development division will always inform to management representative if there any activi-ties both new activities or existing activities will be consider to revised social impact assessment docu-ment.


Criterion 6.2.2 (Minor): Records of local communities’ aspiration and responses or follow up ac-tions by companies to these requirements

NCR No. 2011-31 of 34 There are some stakeholder requests and responses from the company which were not recorded, for example, according to interview result with villagers from Brasau village, they already send their re-quest regarding road maintenance, however the company did not have records of responses or follow up actions for this incoming request Correction :

Community aspirations are to be been documented as required by record keeping procedure. Corrective Action :

The company will regularly monitor incoming information about community aspiration periodically during



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stakeholder forum, and record it properly as determined by relevant procedure. .


Criterion 6.3.1 (Major): An open system, which is accepted by affected parties, to receive com-plaints and to resolve dispute in an effective, timely and appropriate manner.

NCR No. 2011-32 of 34

There is no evidence that the company’s mechanism to receive complaints and to resolve dispute was accepted by relevant affected parties. Correction:

Communication with stakeholders and made evidence that stakeholders accept with these system. Im-prove the function of worker union as media for communication among workers and or workers with management.

Corrective Action:

The company has established a stakeholder’s communication forum to facilitate any grievances from stakeholder surrounding company’s area.

Auditor Conclusions: Closed Audit Verification Findings :

There are minutes of meeting on November 17, 2011 stakeholder surrounding company’s area including representative of workers union (communities of village near company area, cooperative of outgrow-ers/smallholders and employee representative) accepted grievances and resolve dispute procedure (AG-SMM-P-S-02, issued on February 7, 2011). The outcome of the meeting also included a program for stakeholder’s communication forum as seen from the minutes of meeting.

Criterion 6.9.1(Minor): Proof of implementation of sexual harassment policy

NCR No. 2011-33 of 34 There is evidence that company has not effectively communicated their policy regarding prevention of sexual harassment and all other forms of violence against women to all workers, as from interview re-sults most of the workers interviewed still not understand about this policy. Correction :

Policy on prevention of sexual harassment policy and all other forms of violence has been communi-cated to all woman workers in each plantation division

Corrective Action :

The company has included prevention of sexual harassment as an additional morning briefing agenda to inform the workers regarding the punishment to the relevant parties if such a case occurs. Auditor Conclusions : Closed Audit Verification Findings :

There is evidence of awareness program on sexual harassment policy conducted in Division I (dated November 3, 2011) Criterion 8.1.1 (Major): A monitoring action plan based on the social environmental impact as-sessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to:



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• Reduction in use of certain chemicals (criterion 4.6). • Environmental impacts (criterion 5.1). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6). • Social impacts (6.1).

NCR No. 2011-34 of 34

There is no evidence that the mill or estate has a monitoring action plan for the following aspects: • Reduction in use of certain chemicals (criterion 4.6). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6). • Social impacts (6.1). Correction :

The company made program to reduce agrochemical usage, reduce hazardous waste and monitor the implementation periodically. Pollution and emission always monitor every six month and reported to-gether with RKL/RPL report. Social impact will be monitor as determined on SIA management and monitoring plan.

Corrective Action :

The company made procedure Integrated with ISO 14001, Proper (‘Program Penilaian Peringkat Kinerja Perusahaan’ or Company Performance Assessment Program) conduct by Ministry of Environment , and CDM composting and monitoring of trend for reduce of waste, agrochemical usage, emission, pollution and social impact on a certain period.


There are evidence that the mill and estate has a monitoring action plan for the following aspects : • Reduction in use of certain chemicals (criterion 4.6). This is related with explanation in criterion 4.6

that company has shown reduction in use of chemicals by 75% against manufacturers’ recommenda-tion for weeding maintenance of mature areas

• Waste reduction (criterion 5.3). This is related with explanation in criterion 5.3 that company has dis-posed of hazardous wastes through registered and licensed collectors.

• Pollution and emissions (criterion 5.6). This is related with explanation in criterion 5.6 that company has identified the sources of GHG emissions from the mill and estates

• Social impacts (criterion 6.1). This is related with explanation in criterion 6.1 that company has revised the SIA report to include both the positive and negative impacts.

3.3 Noteworthy Positive Components

Criterion: 2.2

Findings : The company provides information to public in a transparent manner, such as having regular updates on their website, a complaints box at all estates, and a company public summary.

Criterion: 2.2

Findings: The method to evaluate legal compliance is good.



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3.4 Issues Raised by Stakeholders and Findings Pertaining to Issues A) Issues Raised during Stakeholder Consultation Meeting

No. Issues Raised Management Response Audit Verification

1.

We not deeply understand about certification process. It is better if TUV gives a print out material regarding RSPO certification process. Partnership program in Agrowiyana not only in sur-rounding Tebing Tinggi sub District. Auditor team should visit directly to the field un-derstanding the problem oc-cur such as damage road etc.

Information about certification process was done by Public Hearing team in Berasau village it was attended by representaive from each villages.

Road maintenance always discussed during cooperative (koperasi) meeting as villager forum.

TUV audior visited directly to village but could not locate the vil-lage representative to confirm what are the problems occurring in the village

2.

We suggest this activities also exposed to government. E.g. if there are damaged roads, communities will report to government. This info was not heard by governemnt. Incoming and outgoing work-ers were not reported to head of villages. 40% from Batang Asam sub District has production forest status, however it is not well known by communities who has responsibility to manage that area.

Company communicate this certification process to District head of Agriculture local Office (Dinas Perkebunan Kabupaten dan Prov)..

There is no clear information about whom workers, due to all workers include in Tebing Tinggi sub District.

Forest production status problem in Batang Asam will be handle by government, because they more understand about the problem.

Company has road maintenance program as explained on CR 4.3 above. There is no company’s area with production forest status. All area under defined HGU. However this condition will be checked clearly during surveillanbce audit,

3.

There is an issue that Malaysia has no more focus on oil palm rather than rubber? Why? Is there any relationship with climate changes. Company should involve surrounding communities during development planning such as, planning for village development. Recently company only has CSR program. Company always send personnel who dont understand about planning. There is no information from company about development in their village.

Company involvement only for ca-pacity building program for farmer smallholder. If there is any planning for village development, company will involve and give donation for villages.

Capacity building program records available in plantation office and could be shown by company’s staff. .

4. We respect that from Agrowiyana can improve community income. But

Public road should be maintained together with government.

Company has road mainternance program. As explained on CR 4.3.



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handling of natural disaster very slow, for example, the corridor road from Kuala Dasal village to Pelabuhan Dagang village is badly damaged but not repaired. Very slow response if we report to management and we we are always informed that there is another company use the road not only Agrowiyana, e.g. in year 2010 damage road very poor, should be any cooperation between Agrowiyana and their neighboor PT WKS. The company’s monitoring program for smallholder activities has been completed since bank credit was finished Handling process for FFB from smallholders is very slow, There were complaints that smallholders are made to wait more than 3 days to receive FFB report for FFB sent 3 days earlier

- Capacity building for smallholder scheme always conducted. And PT AGW has commitment for that; company has Estate Smallholder Department for handling plasma problem. Queue during peak season, this condition always happen..

Capacity building program records available in plantation office and can showed by company’s staff.

5.

Community is company’s partner. Over ripe FFB problem caused by road construction. There is no attention from company for road condition. The company should provide donation for road maintenance. Because community always pay by themself to maintain the road.

- The company has not enough equipment to maintain all road in the same time. We make road maintenance schedule according to availiblity of excavator.

Company has road mainternance program. As explained on CR 4.3

6.

There is no attention from Agrowiyana to villager during workers recruitmentr process. Donation for village infrastructure still not fulfill yet. It is very difficult to get donation from company for road maintenance.

Recruitment procees will consider company’s need and base on competency of people. We have open system for recruitement process. We consider donation base on priority. Road maintanence will be conducted according to condition and schedule.

Company through their website always inform about job vacancy.

7.

There is no CSR program for community health. Only for workers family.

Company invite Cancer foundation ”Kasih Ibu” and made one day seminar for all smallholders and their family.

Evidence that company provide information about this program was not verified. It will be considered during next audit.



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8. FFB thief was happen only once time, it is very rare.

Security system in smallholder area very good.

No need further verification/explanation.

9.

Is there any information regarding conservation forest in Agrowiyana area. There is no more Siana river in Pelabuhan Dagang village, only the estuary. Is that true that company”s HGU area in customary land?

Location of conservation Forest in Agrowiyana inside company’s HGU area. The truth name is Sianang river. According to Hydrology map, the river is being a border between smallholder area and company’s main area. After reverification, the river function still in good condition. The river flowing in company’s main area. The upstream and downstream river are in outside company’s area. Company’s HGU is inside Other Purposes Area (APL) according to land spatial map Tanjung Jabung Barat District.

According to HCV assessment company already identify which area categorized as conservation area. Company has several location, see explanation on CR. 5.2. As explained on the CR 2.2.1 company’s HGU area is ex logging area previously owned by the company PT Hitching. The area has no identi-fied customary land, the plantation establishment was earlier than com-munities surrounding.

10.

We hope company’s existence bring positive influence to community livelihood.

Keep coordination among stakeholder to maintain harmony. No need further

verification/explaination.

11.

Positive impact from partnership program through smallholder scheme with total 1300 ha , indirectly can help the livelihood of 1700 local community people. There is not enough attention from company to smallholder.

Positive response because communities understand the meaning of unity between company and community. There is no further explaination about attention needed.

No need further verification/explaination.

12.

A lot of communities’s FFB was returned because of quality reason not meet mill specification. Company provide good quality of seedling, community can buy from company. Community Development (Comdev) program can be improved that can be per-ceived by community sur-rounding company area.

Continuing capacity building program for smallholder however it is found many time FFB from scheme area was mixed with non scheme FFB. BSP group preparing seed from Costa Rica for replanting program. Community Development program will be conducted according to company’s capability and program scale to improve community welfare.

Company’s has FFB specification. Company’s CSR program was explained on CR 6.11.

13.

Land claim in year 2000 was solved with facilitated by company. Technical assistent for Good Agriculture Practice Plantation wa provided for

No further comment needed.



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scheme foreman that was placed in every cooperation (KUD) From economic side, PT. Agrowiyana can improve community livelihood/ welfare . PT. Agrowiyana preparing replanting program.

Positive response

14.

Waste water from palm oil mill was diposed to Brasau River. Please check whether the water still can use for daily consumption. Flooding in Brasau River every raining season, it caused the bridge broken and water sedimentation. With the CSR program in PT. Agrowiyana has empowered for the poor through several activities such as vegetable sampling plot. , school schol-arships, artesian wells con-struction, etc.. With RSPO certification, we expect that FFB price will increase.

Brasau river that passes through the company’s main area are well main-tained as scheduled. The water depth of Brasau river around 1.2 meter as checked on the field.

Issue regarding water quality has been explained on the CR 4.4 above. How company protect existing watercourses in all company’s area.

15.

What is the benefit from RSPO certification for smallholder? Is smallholder included in certification scope?

If FFB quality from smallholder improve, the proce will also improve. Certification only for company’s main area not include smallholder plantation.

Explained clearly to participant during stakeholder consultation regarding the benefit of RSPO certification, including explanation about rule of smallholder in RSPO certification and when smallholder will be inlcuded in certification process.

16. Distribution CSR program in my village only 8 package @ Rp 70,000 every year.

CSR programs were conducted gradually, todate only for group activities not personally.

Company’s CSR program were explained on CR 6.11

B) Issues Raised during Stakeholder Interviews On-site


1.

The company should improve the condition of the river buff-er zones in order to protect the rivers.

For management and protection of water bodies and streams within the company’s area, the company has conducted the following : Estab-lished procedures on the manage-ment of water bodies or streams bordering the neighbouring area

The company’s response was accepted.



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2

The company makes efforts to meet the needs of villag-ers, for example on education and school development.

No response as this is positive is-sue.

No verification required as this is a positive comment.

3

Additional food (milk) should be given to sprayers

Milk is provided free of charge to workers in regular direct contact agrochemicals, such as sprayers and manurers. Milk, in addition to being an additional food supple-ment, also doubles as a binding agent to neutralize the poisonous ef-fects of chemicals. This is in line with the company’s internal directive to provide milk to all workers han-dling chemicals, which was issued Internal Memorandum No. 014/GM/VIII/2009.

According to interviews with female sprayers in the field, the company provides milk as extra food for females sprayers (one can per week).



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3.5 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content. Signed on behalf of PT. Bakrie Sumatera

Plantations, Tbk

Efdy Ruzali Vice President RSPO Group BSP Date: 10 July 2012

Signed on behalf of TUV Rheinland Malaysia …………………………………………. Dian S. Soeminta Lead Auditor Date: February 15, 2012



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APPENDICES

Appendix 1: Details of Certificate [Details of certificates to be included upon certification decision and issuance of certificate]

Appendix 2: Certification Audit Plan

Date / Time

(1)

Organizational Unit and

Processes Auditor / Abbrev.

IntervieweeProcedure - RSPO Element -

Standard Chapter

Monday, 19 September 2011 7.15- 12.00

All audi-tor team

Traveling Jakarta to Jambi con-tinue to t to Site by GA 130

13.30-17.00 Stakeholder consultation All audi-tor team

Selected stakeholders

Tuesday, 20 September 2011

Mill 08.00-17.30

Opening Meeting

Introduction by team leader.

Presentation of estates by respective managers.

Presentation of Oil Mills source of FFB by respective managers

Auditor Team

Top Man-agement & Related Man-ager

Economic Issue & Process Compliance

Management Plan

Environment Issue

Legal compliance & Process com-pliance

DSS Manager Principle 1 Principle 3 Principle 4 Principle 8 Principle 5 Principle 2

Social issues

Labour Union (if any)

Contractors (if any)

Workers facilities (house, school, transport, sports, etc.)

Female workers

Sexual harazzement policy

Health & Clinic

Land used

Local communities

Fadli Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 8 Principle 2 Principle 1Criteria 1.1; 1.2;

OSHAS, Enviroenmental Issue Carol & Alfat

Principle 4 Principle 5

17.30 1st day audit

Wednesday,21 September 2011

Plantation Office & Site 08.00-17.00

Management Office,

HGU legal requirement ,

All related legal requirement & docu-mentation checking,

All procedure or SOP related operation,

Maps in appropriate scale.

Auditor Team

Plantation and Palm Oil manager

Principle 1 Criteria 1.1; 1.2; Principle 2 Criteria 2.1;2.2;2.3; Principle 3 Criteria 3.1;

Economic Issue & Legal Issue

Management Plan

HCV Management Environement

DSS Manager Principle 3 Principle 4 Principle 7



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Date / Time

(1)

Organizational Unit and

Processes Auditor / Abbrev.

IntervieweeProcedure - RSPO Element -

Standard Chapter


Social issues



Workers facilities (house, school, transport, sports, etc.)

Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 7 Principle 8



17.30 End of 2nd day audit

Thursday,22 September 2011

Plantation Estate 08.40 to 12.00

Economic Issue & Process Compliance

Management Plan

HCV Management

Environnent Issue

Legal compliance & Process com-pliance

DSS Manager Principle 1 Principle 3 Principle 4 Principle 8 Principle 5 Principle 2

Social issues



Workers facilities (house, school, transport, sports, etc)

Female workers


Health & Clinic

Land used

Local communities

Fadli Manager Principle 2 Criteria 2.1; 2.2; 2.3; Principle 4. Criteria 4.7; 4.8 Principle 6 Criteria 6.1 to 6.11 Principle 8 Principle 2 Principle 1 Criteria 1.1; 1.2;



12.00 Break

13.30 Preparing for closing meeting

16.30 Closing meeting

17.30 End of Final Audit

18.00 Traveling to Jambi

Friday, 23 September 2011

08.00-09.00 Traveling to Jakarta



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Appendix 3: List of Abbreviations AMDAL AMM

Analysis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) Agro Mitra Madani

APL BLHD BPMPD

Area Penggunaan Lain (Other Purposes Area) Badan Lingkungan Hidup Daerah (Local Environmental Agency) Badan pengurus Musyawarah Pimpinan Daerah (Local authority for decision making)

CPO Crude Palm Oil CSR EIA

Corporate Social Responsibility Environmental Impact Assessment

ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches GA HCV HRD

General Affair High Conservation Value Human Resources Department

IPM IUP KKPA

Integrated Pest Management Ijin Usaha Perkebunan (Land Business Permit) Kredit Koperasi Pembiayaan Anggota (Members Cooperative Credit Financ-ing)

LTA Lost Time Accident MSDS Material Safety Data Sheets NGO Non-Government Organization OSH OSHAS PIR-Trans

Occupational Safety & Health Occupational Safety & Health Assurance System Perkebunan Inti Rakyat-Transmigrasi (Smallholder program for transmigrants)

PKO Palm Kernel Oil POME Palm Oil Mill Effluent PPE Personal Protective Equipment RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SKM SOP SPSI

Satuan Kerja Mandiri (Independent Task Force) Standard Operating Procedure Serikat Pekerja Seluruh Indonesia (Indonesia Worker Union Organization)

UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL UU

Upaya Pengelolaan Lingkungan (Environmental Management Efforts) Undang-undang (Law)



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Appendix 4: List of Stakeholders Interviewed and Contacted

No. Name of

Stakeholder Institution - Address Remark

Stakeholders Interviewed during Public Consultation Meeting

1. Abdullah Head of Village Kunadasa 2. Fauzi Village Cooperation Badang 3. Khairul SY Head of Village Badang 4.

Kusnadi Secretaris of Village Coopretaion Karya Tani

5 Kardiman

Head of Village Cooperation Karya Tani

6. Syaiful Qori

Head of Village Cooperation Sawit Mandiri

7. H. Abbas

Head of Village Cooperation Maju Lestari

8. Joni Village Cooperation Badang 9. Harnanuni Head of Village Brasani 10. Efendi Village Cooperation 11. Deden Village Cooperation 12. Ilal Local Police Officer 13. Fazikka Ibrahim NGO Kehati 14. Afrizal Pers 15. Rustam E Village Cooperation Kualasian 16. Zainal Contractor 17. Jajang General Affair Head 18. Sugianto Representative from Brasau village 19. Hariyadi Representative from Brasau village 20.

Hasan Basri Worker Union Agrowiyana and Agro Mitra Madani

21. Syahrial STTP

Head of sub District (Camat) Batang Asam

22. Syjur Head of Village Kelam 23 M. Hasan B Economic sector Tungkal Ulu District 24. A Kusobi Head of Village Kelam 25. M. Salim Head of Sub District Tungkal Ulu 26.

Agus Susanto Member of Village cooperation Swakarsa

27. Sudarman

Member of Village cooperation Swakarsa

28. Daniel Ginting Representative of village Purwodadi 29. Roby Pers 30. Junandar Brasau Villager 31.

Hamid Secretary of Tebing Tinggi sub District

32. Toko Dua Salma Supplier 33. Dani Sopadi Representative form Village 34. Amirudin GA 35. Dadan Ramdhani BSP Jakarta Office 36. Dikna D Putri BSP Office 37. Dhany Saputra Smallholder section 38. Kasman Ardi HRD 39. Ahmad Purchasing section 40. Supandi HRD 41. Ade Perdana Officer



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42. Hasan S. Lubis Agro Mitra Madani 43. Hartanto ISO section 44. Irwin Syarif Smallholder 45. Ridwan Utility 46. Amir Hasan Agro Mitra Madani 47. M. Padhirx Purchasing 48. Sunadi Head Office Jambi 49. Ahmad Fuad PBSN 50. Triadi Agro Mitra Madani 51. Harsono Kasino 55. Zulnofirman Agro Mitra Madani 56. Najmul Manar HO (Head Office) 58. Jasmin Mill Agro Mitra Madani 59. Eliyah Head office Jambi 60. J Lase Warehouse

Stakeholders Interviewed On-Site

1. Khairul SY Head of Village Badang 2.

Kusnadi Secretary of Village Cooperation Karya Tani

3. Sudarman


4. Agus Susanto


5. Syahrial STTP

Head of sub District (Camat) Batang Asam

6. Irwin Syarif Smallholder 7. Hariadi Brasau Village 8. Misbah Worker 9. Agus Mill Worker 10. Suparni Sprayer 11. Wantini Sprayer 12. Tuti Sprayer 13. Hasan Basri Worker Union 14. Zainal Contractor 15. Fauzi Head of Village Badang



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Appendix 5: Observations and Opportunities for Improvement

No. Observations / Opportunities for Improvement Criteria1

Specific numbering system for existing standard operation procedure to prevent confusing. Due to all SOP in the mill has almost similar number such as BSP-POM-SOP-CTO. (2.1)

1.2.2

2 There is no evidence that several fire extinguishers were re-filled by August 28, 2011 as per a documented plan for refilling of fire extinguishers

2.1

3 1) The SOP for management of pests does not include state the level at which pest attacks shall be considered high enough to require chemical spraying

2) Division 5 office does not maintain records of pest census conducted

4.5

4 List of Agrochemical material still not available especially those which are in-cluded in WHO type 1A & 1B or include in Stockholm convention and Rotterdam both in estate or mill.

4.6

5 Improvements should be made to aspects of mill safety, e.g.:

1) The mill should provide masks and goggles for workers near stations wear dust production is high, e.g. the engine room located near the boiler.

2) The mill should also regularly clean the floor as it is slippery due to excess water and even drops of leaking oil at some areas.

3) There should be a spill kit made available near the lubricant oil store

4) Several outside suppliers of FFB such as smallholders were sighted not wearing PPE while supplying FFB at the loading ramp. Although risk of injury is low as the mill workers move FFB and not the suppliers, the mill should ensure all visitors wearing PPE within the mill area

5) The mill should have an alarm system instead of only a bell to be used in case of emergencies

4.7

6 Simulation of emergency and response procedure for plantation according exist-ing SOP should be conducted to demonstrate adequacy of SOP. (5.5)

5.5

7 Water pump not available especially in plantation division office, this is very diffi-cult to find water without water pump during emergency condition.

5.5.

8 Replacement program of mask filter for spraying is not available 4.7

9 The company has a list of stakeholders however it is not include stakeholders from all villagers, contractors, suppliers, etc. the list of stakeholders only cover stake-holders for 3 villages surrounding company’s location and scheme participant through cooperative organization.

6.2

10 Communication about working agreement only by formal method, sometime this is not effective especially for field worker.

6.5

11 Water supply facilities at emplasment were found to be inadequate because major-ity of workers must collect water from the water tower and “daycare” facilities (divi-sion V) flooring in the daycare centre is made of wood, which may not be safe for young children

6.5

12 Company road maintenance program does not include smallholder areas. During stakeholder consultation, there were several comments from stakeholders regard-ing road maintenance program requested for smallholder’s area.

4.3

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