Roundtable on Sustainable Palm Oil · Roundtable on Sustainable Palm Oil Public Summary Report...

Roundtable on Sustainable Palm Oil

Public Summary Report Report no.: ASA2_14002

Certification assessment against the

RSPO Principles & Criteria Indonesia (Generic) year 2013 and RSPO Supply Chain Certification System year

2014

PT Perkebunan Nusantara III Aek Torop Estate & Mill

Head Office:

Jl. Sei Batang Hari No.2 Medan, North Sumatera Province - Indonesia

Site Office: Aek Batu Village, Torgamba Sub District, Labuhanbatu Selatan District, North Sumatera Province, In-

donesia

Date of assessment: 04 to 06 April 2016

Report prepared by: Hendra Fachrurozy

(RSPO Lead Auditor)

Certification decision by : I Nyoman Susila

(Managing Director - TUV Rheinland Indonesia)

Certification Body:

PT TUV Rheinland Indonesia Menara Karya, 10th Floor

Jl. H.R. Rasuna Said Block X-5 Kav.1-2 Jakarta 12950,Indonesia

Tel: +62 21 57944579 Fax: +62 21 57944575

www.tuv.com/id

TABLE OF CONTENTS

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

1.1 National Interpretation Used .................................................................................................................. 3 1.2 Type of Assessment ............................................................................................................................... 3 1.3 Certification Details ................................................................................................................................ 3 1.3 Location and Maps ................................................................................................................................. 3 1.4 Organisational Information/Contact Person ........................................................................................... 5 1.5 Description of Company & Supply Base ................................................................................................ 6 1.6 Actual production volumes, tonnages and projected outputs ............................................................... 7 1.7 Dates of Plantings and Replanting Cycles ............................................................................................ 8 1.8 Area of Plantatiion (Total, Planted and Mature).................................................................................... 9 1.9 Progress against Time Bound Plan .................................................................................................... 10 1.10 Compliance to rules for Partial Certification ..................................................................................... 10 1.11 Progress of associated smallholder or outgrowers towards RSPO compliance .............................. 11 1.12 Approximate Tonnages Certified ....................................................................................................... 11 1.13 Other Achievements and Certifications Held ..................................................................................... 11 1.14 Recommendation for Certification ..................................................................................................... 11 1.15 Date of Certificate Issued and Scope of Certificate ........................................................................... 11 1.16 Date of next surveillance visit ............................................................................................................. 12

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

2.1 Certification Body ................................................................................................................................. 13 2.2 Qualifications of Lead Assessor and Assessment Team .................................................................... 13 2.3 Assessment Methodology .................................................................................................................... 14 2.4 Date of Next Surveillance Visit ............................................................................................................. 15

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

3.1. Summary of Findings ...................................................................................................................... 16 3.2. Status of previously identified non-conformities ............................................................................. 40 3.3. Identified Non-conformances, Corrective Actions Taken and Auditors Conclusions .................... 47 3.4. Noteworthy Positive Components ................................................................................................... 54 3.5. Conclusions and Recommendation for RSPO P & C and Supply Chain Certification .................. 54 3.6. Issues Raised by Stakeholders and Findings Pertaining to Issues ............................................... 54

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNA L

RESPONSIBILITY .................................... ................................................................... 55

4.1 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client .................................... 55

APPENDICES ..................................................................................................................... 56

Appendix 1: Details of Certificate ............................................................................................................... 56 Appendix 3: List of Abbreviations ............................................................................................................... 59 Appendix 4: List of Stakeholders Interviewed and Contacted

RSPO Certification Surveillance Report

- PT Perkebunan Nusantara III, Aek Torop Plantation & Mill-

of 59

RSPO v2 2009-10-09 3

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 RSPO Principles & Criteria (Generic) year 2013 and the RSPO Supply Chain Certification Systems (SCCS) document (November 2014).

1.2 Type of Assessment

The 2nd surveillance audit was carried out on 1 (one) mill and 1 (one) estate under Aek Torop Plantation owned by PT Perkebunan Nusantara III (Persero).

1.3 Certification Details The detail of RSPO certification of PTPN III – Aek Torop POM as per the table below:

Table 1: RSPO Certification details of PTPN III – A ek Torop POM

Further details of the certificate are as per Appendix 1.

1.3 Location and Maps

Figure 1. Location of PT Perkebunan Nusantara III in North Sumatera-Indonesia

RSPO Membership no. 1-0030-06-000-00 on behalf PT Perkebunan Nusantara III (Persero)

RSPO Certificate no. 824 502 14002

Date of first RSPO certificate & validity : June 17, 2014 & validity: June 17, 2014 to June 16, 2019

Date of certification audit: December 12-14, 2011 and September 10-12, 2013 (re-audit to update data)

Date of previous surveillance audit: 08-10 April 2015

Date of revised RSPO certificate & validity (if app licable): -

CPO tonnages claimed: 24,544 tonnes

PK tonnages claimed: 4,748 tonnes

North SUMATERA



of 59

RSPO v2 2009-10-09 4

Figure 2. Location 7 estates PT Perkebunan Nusantara III in North Sumatera

Aek Torop Es-

tate & POM



of 59

RSPO v2 2009-10-09 5

Figure 3: Map of Aek Torop Plantation

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

1.4 Organizational Information/Contact Person

Contacts details of the company are as follows:

Name of mill / es-tate

Location GPS locations

Latitude Longitude

Aek Torop Estate Aek Batu Village, Sub District Torgamba, District Labuhan Ba-tu Selatan

1o 47’ 34” N 100o 09’ 21” E

Aek Torop Mill Aek Batu Village, Sub District Torgamba, District Labuhan Ba-tu Selatan

1o 47’ 34” N 100o 09’ 21” E



of 59

RSPO v2 2009-10-09 6

1.5 Description of Company & Supply Base

PTPN III is one of fourteen State-Owned Enterprises, which operate in the plantation industry. Its business com-prises cultivation of oil palm and rubber, and the production and sale of oil palm and rubber products. The com-pany's main products are Crude Palm Oil (CPO), Palm Kernel, dry rubber and downstream, rubber product.

The Republic of Indonesia, through the process of nationalisation of foreign plantation companies, to form Perseroan Perkebunan Negara (PPN), established the enterprise through a take-over of the Dutch plantation companies in 1958

In 1968, Perseroan Perkebunan Nusantara (PPN) was restructured by the Government to form a number of Pe-rusahaan Negara Perkebunan (PNP). Thereafter, in 1974, the legal status of PNP was changed to that of a lim-ited company and given the name PT Perkebunan (Persero). In order to improve the efficiency and effectiveness of state owned companies/enterprises the Government of Indonesia restructured the state owned compa-nies/enterprises in the plantation sector, through the process of merging companies on the basis of geographical locations. Concurrently, the organisation structures of the companies were also streamlined. In 1994, through a process of merger of managements, the managements of three state owned plantations, namely PT Perkebunan III (Persero), PT Perkebunan IV (Persero) and PT Perkebunan V (Persero), were unified under the management of PTPN III.

Thereafter, through Government Regulation No. 8 of 1996 dated 14 February 1996, the three companies, whose businesses were located in North Sumatera, were merged into one company and given the name PTPN III, lo-cated in Medan, North Sumatera. PTPN III was incorporated through the Deed of Incorporation notarised by Ha-run Kamil, S.H. No. 36 dated 11 March 1996, and legalised by the Minister of Justice of the Government of Indo-nesia through Decree No. C2 8331.HT.01.01.TH.96 dated 8 August 1996, and published in the Gazette of the Republic of Indonesia No. 81 of 1996, and Annexure to the Gazette No. 8674 of 1996.

Along 2004, PTPN III has been actualising fundamental and comprehensive changes to achieve company’s vi-sion. PT Nusantara Plantation estates and mills management divide into parts management area called a district. Currently there are eight districts, which are managed estate and mills throughout the work area in Sumatera PTPN III i.e.: - Deli Serdang 1 District - Deli Serdang II District - Simalungun District - Asahan District - Labuhan Batu I District - Labuhan Batu II District - Labuhan Batu III District - Tapanuli Selatan District

Aek Torop Estate and palm oil mill is one of part under PT Perkebunan Nusantara III management. Aek Torop is estate located in Aek Batu village, Torgamba sub-district, Labuhanbatu Selatan District. Torgamba sub-district is consisting of Aek Batu village, Kota Pinang sub-district coverage Pasir Tuntung village.

Aek Torop mill is one of mills owned by Aek Torop Plantation - PTPN III in South Sumatera. Aek Torop mill was established in 1993 with a production capacity of 60 tonnes/hours. The company was Indonesia State Owned En-terprise. Currently Aek Torop Mill is receiving of its supplies of fresh fruit bunches (FFB) from company-owned estate.

Company Name: PT Perkebunan Nusantara III (Persero ) – Aek Torop POM

Address: • Head Office : Jl Sei Batang Hari No.2, Medan – South Sumatera, Indo-nesia

• Estate & POM : Aek Batu Village, Torgamba Sub District, Labuhanbatu Selatan District, North Sumatera Province, Indonesia

Contact Person: Mr Tio Handoko

Telephone / Fax: +62 361 8452244 / +62 361 8452244

Email / website: [email protected] / www.ptpn3.co.id



of 59

RSPO v2 2009-10-09 7

Table 2. FFB Supply based Information and CPO & PK Production for Aek Torop Mill in year 2015 & 2016

FFB Contribution FFB supplied * FFB supplied ** Tonnes % Tonnes %

Company owned estate: Aek Torop Estate*** 59,546.93 25.15 8,438.46 27.19

Sub Total 59,546.93 25.15 8,438.46 27.19 Out growers : UD Winata Perdana 2,858.14 1.21 0.00 0.00 UD Roma Rezeki 20,942.84 8.85 2,361.08 7.61 UD Mekar 9,065.66 3.83 0.00 0.00 UD Rata 1,799.78 0.76 0.00 0.00 UD Paima Marhusor 12,282.77 5.19 624.89 2.01 CV Torgamba Raya 4,345.24 1.84 671.62 2.16 CV Ravi Prima 3,582.58 1.51 329.13 1.06 CV Awan Tech Mandiri 20.75 0.01 0.00 0.00 CV Naga Tutur 6,747.93 2.85 859.13 2.77

Sub Total 61,645.69 26.04 4,845.85 15.61 Other estates in PTPN III: Sei Baruhur Estate**** 44,271.58 18.70 5,881.67 18.95 Sei Kebara Estate**** 47,664.56 20.13 11,870.46 38.25 Aek Nabara Selatan Estate*** 12,187.00 5.15 0.00 0.00 Aek Nabara Utara Estate***** 7,044.25 2.98 0.00 0.00 Sei Sumut Estate***** 4,399.96 1.86 0.00 0.00

Sub Total 115,567.35 48.81 17,752.13 57.20 Total 236,759.97 100.00 31,036.44 100.00

Note : *) Year 2015 **) Year 2016 (Jan to Feb 2016) ***) FFB certified year 2015 amount of 133,021.11 tonnes (from Aek Torop estate, Aek Nabara Selatan estate, Sei Baruhur estate

and Sei Kabara estate (period of January to August 2015) and Aek Nabara Utara estate and Sisumut estate (period of 15 Octo-ber to 31 December 2015)) and year 2016 amount of 8,438.46 tonnes

****) eTrace for RSPO certificate no.RSPO 00002 on behalf PTPN III – Sei Baruhur Mill (their supply base are Sei Baruhur estate & Sei Kabara estate) has expired since September 2015 so that FFB receipt period of January to August 2015 still as certified sta-tus amount of 30,898.06 tonnes (Sei Baruhur estate) and 29,652.36 tonnes (Sei Kebara estate)

*****) FFB certified year 2015 since 15 October 2015 amount of 736.76 tonnes because RSPO certificate on behalf Sisumut POM is valid from 15 October 2015.

1.6 Actual production volumes, tonnages and project ed outputs

Table 3: Total and projected CPO and PK production from Aek Torop Mill

Note :

*) Realization in year 2015

**) Budget of CPO & PK production in year 2016 with extraction rate are 22.42% (OER) and 4.53% (KER) and total of FFB process is 286,535.74 mt ***) FFB Processed in year 2016 from Aek Torop Estate after block W3 & X3 areas were excluded is 106,716 mt (OER : 23% & KER :

4.45%). Whereas, if block W3 & X3 included is 106,956 mt such as at Aek Torop POM is 42,782.40 mt (OER : 23% & KER : 4.46%) and Aek Raso POM is 64,173.60 mt (OER : 23% & KER : 4.45%) and total of volume CPO : 24,600 mt and PK : 4,764 mt.

****) CPO sell by eTrace

Product (MT) CPO (Tones)

PK (Tones)

Certified tonnages claimed*** 24,544.00 4,748.00

Certified tonnages sold **** 2,500.00 -

Certified tonnages purchased - -

Actual production* 53,359.18 9,480.11

Extraction Rate* 22.54 4.00

Projected output for year 2016** 64,227.73 12,983.80



of 59

RSPO v2 2009-10-09 8

Table 4a: Crude Palm Oil (CPO) and Palm Kernel (PK) production from Aek Torop Palm Oil Mill in year 20 15

Table 4b: Crude Palm Oil (CPO) and Palm Kernel (PK) production from Aek Torop Palm Oil Mill in year 2016*)

Note: *). Until February 2016

1.1.1.1.7 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 5: Age and year of plantings of company estat e supplying to Aek Torop Mill

Age & Year of Plantings Oil palm planted area at each afdeling (Ha)

I II III IV V VI VII Total

0 year (2016) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

1 year (2015) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

2 year (2014) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00

3 year (2013) 0.00 0.00 0.00 503.45 281.15 0.00 0.00 784.60

4 year (2012) 0.00 39.30 0.00 330.25 200.90 0.00 575.00 1,145.45

5 year (2011) 0.00 0.00 0.00 0.00 0.00 362.15 0.00 362.15

6 year (2010) 0.00 367.70 0.00 0.00 0.00 416.85 101.05 885.60

7 year (2009) 333.40 186.10 246.35 0.00 0.00 0.00 0.00 765.85

8 year (2008) 0.00 0.00 0.00 0.00 343.70* 0.00 0.00 343.70

FFB Contributor FFB Proceed

(Tones)

Through-put

(MT/hour)

Oil Extrac-tion Rate

(OER)

CPO (Tones)

Kernel Ex-traction

rate (KER)

PK (Tones)

Aek Torop Estate 59,546.93

60 22.54% 53,359.18 4.00% 9,480.11

Sei Baruhur Estate 44,271.58

Sei Kebara Estate 47,664.56 Aek Nabara Selatan Es-tate

12,187.00

Aek Nabara Utara Estate 7,044.25

Sei Sumut Estate 4,399.96

Out grower areas 61,645.69

Grand Total 236,759.97

FFB Contributor FFB Proceed (Tones)

Through-put

(MT/hour)

Oil Extrac-tion Rate

(OER)

CPO (Tones)

Kernel Ex-traction

rate (KER)

PK (Tones)

Aek Torop Estate 8,438.46

60 22.76% 6,965.92 4.20% 1,285.25

Sei Baruhur Estate 5,881.67

Sei Kebara Estate 11,870.46

Out grower areas 4,845.85

Grand Total 31,036.44



of 59

RSPO v2 2009-10-09 9

Age & Year of Plantings Oil palm planted area at each afdeling (Ha)

I II III IV V VI VII Total

9 year (2007) 0.00 0.00 0.00 0.00 0.00 0.00 120.65 120.65

10 year (2006) 401.62 161.21 572.16 0.00 0.00 0.00 0.00 1,134.99

Total 735.02 754.31 818.51 833.70 825.75 779.00 796.70 5,542.99

Note : *) Excluded block W3 & X3 areas amount of 12.95 ha (planted areas) since 10 April 2016. Before 10 April 2016 are year planted 2008 in division V : 356.65 ha, total areas in division V : 838.70 ha and total areas in Aek Torop estate : 5,555.94 ha.

Based on information above, the company does not have replanting plan.

1.8 Area of Plantation (Total, Planted and Mature)

Table 6: Oil Palm Planted Area Summary, FFB Produc tion and Average yield/ha for Aek Torop Plantation - PT Perkebunan Nusantara III (Persero)

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

Year 2015 Aek Torop 6,471.31 5,555.94 4,771.34 784.60 82,821.30 17.36

TOTAL 6,471.31 5,555.94 4,771.34 784.60 82,821.30 17.36 Year 2016 (Jan – February 2016) Aek Torop 6,471.31 5,555.94 4,771.34 784.60 11,663.87 2.44

TOTAL 6,471.31 5,555.94 4,771.34 784.60 11,663.87 2.44

Table 7: Other land use data for Aek Torop Plantati on – PT Perkebunan Nusantara III (Persero)

Estate Name

Total area (Ha)

Oil Palm Planted

Area (Ha)

HCV Poten-tial HCV

areas* (Ha)

Land used for other purposes (ha)

Office, Hous-ing & Road

Nursery Other purposes**

Year 2015

Aek Torop 6,471.31 5,555.94 364.73 295.28 0.00 620.09

TOTAL 6,471.31 5,555.94 364.73 295.28 0.00 620.09

Year 2016 (Jan-February 2016)

Aek Torop 6,471.31 5,555.94 364.73 295.28 0.00 620.09

TOTAL 6,471.31 5,555.94 364.73 295.28 0.00 620.09

Year 2016 (April 2016 to now)

Aek Torop 6,455.61 5,542.99 364.73 292.53 0.00 620.09

TOTAL 6,455.61 5,542.99 364.73 292.53 0.00 620.09

Note :

*). Involve of estate areas



of 59

RSPO v2 2009-10-09 10

**) Occupation areas by communities are 570.03 Ha

1.9 Progress against Time Bound Plan The company has revised their time bound plan for RSPO certification of other management units as per the schedule below. The plan was revised as the company was awaiting the readiness to comply RSPO certifica-tion requirement. Table 8: Time Bound Plan of PTPN III

Name of Holding Location Time bound plan For certification

Status

PKSMK Sei Mangke / Simalungun August 2010

Renew certifica-tion but there are NCR still

open till now so that terrace has

expired

PRBTN Tebing Tinggi May 2015 In-process

PSSIL Sei Silau / Asahan May 2015 In-process

PANAS Aek Nabara / Labuhan Batu May 2014 Certified

PSSUT Sisumut / Labuhan Batu May 2015 Certified

PSBAR Sei Baruhur/ Labuhan Batu November 2014

eTrace since September

2015 has ex-pired

PPARO Aek Raso/ Labuhan Batu June 2014 Certified

PTORA Torgamba/ Labuhan Batu June 2015 In-process

PATOR Aek Torop/ Labuhan Batu June 2014 Certified

PSDAN Sei Daun/ Labuhan Batu June 2015 In-process

PSMTI Sei Meranti/ Labuhan Batu June 2015 In-process

Hapesong Mill Tapanuli Selatan December 2016 Planned

1.10 Compliance to rules for Partial Certification

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

Partial Certification Require-ments

Audit Findings

1.a The organisation is an RSPO member.

Yes, PTPN III is an RSPO member with ID No. 1-0030-06-000-00 (mem-bership since 14 December 2006). RSPO Certification system section 4.2.4

1.b A time-bound plan for achieving certification of

PTPN III has a time-bound plan to achieve RSPO certification for all rele-vant entities where include of Hapesong mill (PHPSG). Batangtoru es-



of 59

RSPO v2 2009-10-09 11

Partial Certification Require-ments

Audit Findings

all relevant entities; tate as one of suppliers to Hapesong mill has been processed compensa-tion program for new development on Muara Opu and Ampolu.

1.c. i. There are no significant land conflicts.

There are some land conflicts/ potential land conflicts ongoing in other PTPN III’s management units, such as Sarang Ginting estate, Gunung Monako estate, Silau Dunia estate, Sei Silau estate and Sei Putih estate. While the company has already made a conflict resolution mechanism (mediation, persuasive, discussion, compensation or “sugu hati”, legal re-course).

1.c. ii. No replacement of pri-mary forest or any area containing HCV since November 2005.

PTPN III’s development of a new planting area (Muara Upu and Ampolu at South Tapanuli) had been conducted before HCV assessment. PTPN III have commitment to solving case it inform of create of compensation program accordance RSPO program and mechanism (still in-process).

1c. iii. No labour dispute that are not being resolved through an agreed pro-cess.

No labour issues were found during this surveillance audit.

1c.iv. No evidence of non-compliance with law in any of the non-certified holdings.

Some of PTPN III’s other management units have not complied with cer-tain legal requirements. For example, in Silau Dunia Estate under another PTPN III management unit, an issue has been found with the area stated under the Right of Cultivation certificate (HGU). However, the company is taking action by inviting National Land Agency (BPN) to re-measure the land and resolve the issue. The process is still ongoing.

1.11 Progress of associated smallholder or out grow ers towards RSPO compliance

During surveillance audit, based on table 2 above, the company does not have smallholders and outgrowers. Whereas, information of out growers above (table 2) are traders so that the company do have programme to-wards RSPO compliance..

1.12 Approximate Tonnages Certified

The approximate tonnages certified, based on the projection of FFB production in 2016 is 106,956 tonnes for company owned estates only which processed in Aek Torop mill and Aek Raso mill as follows :

Crude Palm Oil (CPO) : 24,544.00 Palm Kernel (PK) : 4,748.00

1.13 Chronology of suspension of RSPO Certificate o f Aek Torop Mill

PT TUV Rheinland Indonesia issued a suspension letter dated on June 6, 2016 for Aek Torop Mill which had previously been RSPO certified. The suspension was issued due there are 3 (three) major non-conformities (indicator 2.2.1 (RSPO00200), indicator E.4.1 (RSPO00209) and indicator E.5.1 (RSPO00210)) were not suc-cessfully closed. In accordance with the RSPO requirements, evidence of closure of the open Major non-compliance must be furnished within a further 60 days. The deadline for submission of evidence is 04 August 2016.

1.14 Approval for certification

The audit team has confirmed that Aek Torop mill and their suppliers continue to maintain an effective system to ensure compliance with the RSPO Principle and Criteria because company has submitted all evidence of correction before deadline for submission and all NCRs was compliance based on the result of verification by auditor.



of 59

RSPO v2 2009-10-09 12

TUV Rheinland Indonesia was issued notice of lifting of suspension of RSPO certificate for PTPN III – Aek To-rop mill on 16 June 2016 so that TUV Rheinland Indonesia approvers that PTPN III – Aek Torop mill maintains their certification as a procedure of RSPO Certified Sustianable Palm Oil.

1.15 Date of next surveillance visit

The next surveillance visit is planned for March 2017



of 59

RSPO v2 2009-10-09 13

2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent test-ing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 locations in 65 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO (RSPO-ACC-013) and ISPO (LS-P&K-005-ISPO). PT TUV Rheinland Indo-nesia office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team

The assessment team members of this surveillance audit that were part of the same assessment team for the certification or previous assessment are as follow :

1. Hendra Fachrurozy (HF) (Lead Auditor)

New assessment team members that were not part of the previous assessment team are as per the table be-low:

Name Position Qualifications / Experience

Aswan Ha-sibuan (AH)

Auditor

Education : Bachelor of Industrial Engineering, University of North Sumatera. 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 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 Environmen-tal 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

Irpan Kadir (IK) Auditor

Education : Bachelor of Agriculture, Department of Social and Economic of Agriculture, Bogor Institute of Agriculture. Trainings attended : Sustainable Natural Production Forest Management (Pengelolaan Hutan Alam Produksi Lestari - PHAPL) assessor training (May 2003); Forest Plantation Management (August 2003) training - Indonesian Ecolabel Institute (LEI). Working experience: Experienced as external auditor of PT. TUV International Indonesia for Sustainable Forest Management and RSPO Principles & Criteria. Has experience in conducting assessments of performance and social mapping for mining and forestry companies. He is a senior researcher and trainer at A + CSR Indonesia.

Daulatul Wahyu (WHY)

Auditor

Education : Magister Manajemen Teknologi Manufacture Engineering, Pancasila Univesity and Bachelor of Machinery Technique, Indonesia University. Training attended: ISPO Refreshment I Auditor ISPO TUV Rheinland Indone-sia, 2014; Refreshment II Auditor RSPO, AEE TUV Rheinland Indonesia, 2015; IRCA-QMS 9001:2008 lead Auditor Training; IRCA-EMS ISO 14001 Lead Audi-tor Training;Chain of Custody LEI Lead Auditor Training: Timber Legality Verifi-cation Lead Auditor Training; Security Supply Chain Management ISO 28000 Lead Auditor Training; Maritim Security Training, OHSAS 18001 Lead Auditor Training; Inspector Training Pressure Safety Valve; Food Safety ISO 22000 Lead Auditor Training; Pelatihan ISO 17021, ISO 17020 and RSPO P & C Awareness training. Working Experience: Auditor for TUV Rheinland Indonesia; Auditor and Technical Manager for PT



of 59

RSPO v2 2009-10-09 14

Name Position Qualifications / Experience

Mutu Hijau Indonesia for ISPO , ISO 9001, ISO 14001, and Timber legality verification; Freelance consultant (ISO 9000, ISO 14000, OHSAS 18001, CSMS & Improvement); Head of QHSE on PT Carsurin, Manager Marketing di PT Internex Indonesia (PCB Design); Head of R&D di PT Dawee Electronic In-donesia; Production Engineer in PT Video Display Glass Indonesia; Production Engineer in PT Sumiko LeadFrame Bintan; and Teknisi in PT Siemens Compo-nents.

2.3 Assessment Methodology The surveillance assessment was conducted April 05-06, 2016 as per the assessment programme below. The 2nd surveillance assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During assessment, the qualified TUV Rheinland assessors the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without compromis-ing the integrity of the assessment in anyway.

All 1 estates and 1 mill were visited and the assessment team carried out field and document assessments of com-pliance to all the RSPO principles and criteria. Common systems were identified and specific evidence was record-ed for individual estates. Interviews were conducted at all estates and the mill.

The company proposed the correction and corrective action for all identified non-conformities raised to the certifica-tion body 15 days after the closing meeting. Verification of closure of major non-conformances was conducted 1 month after the closing meeting surveillance audit and implementation of corrective actions for minor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below

Table 9 : Agenda of RSPO surveillance assessment fo r Aek Torop Plantation and Mill – PT Perkebunan

Nusantara III (Persero)

Date Location/ Main sites Main activities

Monday, 04 April 2016

- Travelling from Jakarta & Medan to estate (All Auditor) Verification to PT SAN in Belawan (HF)

Tuesday, 05 April 201 6

08.00 – 08.30 Aek Torop Mill

• Opening meeting • Introduce of auditor team and explain of audit plan • Presentation about profile of auditee • Verification of NCR from previous audit

08.30 – 17.00 Aek Torop Mill

Verification of document & field/on-site visit : • IK : document are law register, license register, communica-

tion log book, CSR program records, workers pay slip. Field/on-site visit are weighbridge and loading ramp. Inter-view to mill workers and contractor representative

• HF: Document check & verification to field regarding SCCS, management plan and HCV

• AH : Document check and field visit regarding activities of process, maintenance, workshop, loading ramp. Interview to contractor and worker

• WHY : Document check and field visit regarding effluent pond, hazardous and toxic waste, process and workshop.

Wenesday, 06 April 201 6



of 59

RSPO v2 2009-10-09 15

Date Location/ Main sites Main activities

08.00 - 12.00 Aek Torop Estate

Verification of document and field/on-site visit (include verifica-tion to communities): • IK : document are SIA report, communication log book, CSR

program records, workers pay slips, license register. Field/on-site visit to Pasir Tuntung, workers housing, crèche. Inteview to harvester, contractor worker, village head and of-ficer.

• HF: Document check and field visit regarding management plan. Land use right, pillar boundary, best practices, IPM, fertilizing, spraying, HCV, block Y6 (buso areas), block Z6 (immature areas), block Z4 (immature areas)

• AH : Document check and field visit regarding agrochemical, training, fertilizing, spraying, block Y6 (buso areas), block Z6 (immature areas), block Z4 (immature areas), code of con-duct.

• WHY :Document check and field visit regarding waste, OHS, environmental assessment and zero burning and GHG

12.00 - 14.00 Lunch break 14.00 - 16.00 Aek Torop Estate Continue of previous agenda above 16.00 – 17.00 Estate office Closing meeting



of 59

RSPO v2 2009-10-09 16

3.0 ASSESSMENT FINDINGS

3.1. Summary of Findings

During 2nd surveillance audit, all 12 non-compliances have been identified on RSPO P&C and RSPO SCCS. They consist of 7 major non-compliances and 5 minor non-compliances to RSPO certification system (RSPO P&C and RSPO SCCS). The company has taken corrective action to respond these as well, and closure for these minor non-compliances will be verified during the next surveillance audit. Below is summary of all identi-fied non-compliances, corrective actions taken and auditor conclusions. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in Section 3.2.. The following is a summary of findings made for the criteria listed in the RSPO Principles & Criteria (Generic). • RSPO P&C

Principle 1: Commitment to transparency

Criteria assessed: CR1.1, CR1.2, CR1.3 Criteria not assessed: - Findings:

Company has established the procedure (Komunikasi dan Konsultasi Stakeholder) No. PK-3.00-03 Rev. 01 issued on December 15, 2015 to provide adequate information on environmental, social and legal that re-lated with RSPO criteria, which in point 6.1 of the procedure stated that communication with stakeholders will be conducted through company website, telephone, letter, email, facsimile and Suggestion Box.

All requests for information, suggestion, aspiration and response from stakeholders will be followed up by head of district or estate in accordance with their respective authorities. All records and documentation will be recorded and documented in the daily log book.

PT PN III corporate also created SMS center which informed through sign board located in front of the es-tate office and mill office. SMS center is centralized in Medan Head Office and will be checked daily by cor-porate public relationship. All information from SMS center will be forwarded to relevant sections to be fol-lowed up. Based on Director Decision Letter No. 3.12/SE/18/2013 issued November 14, 2013 the SMS cen-ter has changed from 3030 into 9600 and will be effectively applied since November 2013.

The provision of information on the website (www.ptpn3.co.id) will be handled with unit business of Whis-tleblowing System which has been formed refers to the Director Decision Letter No. 3.08/SKPTS/84/2013 issued November 28, 2013.

Mil management of Aek Torop has list of stakeholder including NGO, Civil Organization, supplier and Contractor, which is updated on January 2016, there are 17 stakeholder related to Aek Torop Mill. Unit manager is respon-sible person in communication to stakeholder as defined in above procedure.

The company has established the circular letter from PTPN III Director No. 3.00/SE/01/2015 issued on April 08, 2015 from Director of marketing and planning developing regarding publication of company data (pub-lish and not publish). There are two categories of documentation; document that can be published and cannot be published. The documents that can be published including company profile, annual report, finan-cial report, certificate of HGU, HGB and HPL, manual book of GCG, GCG evaluation result by third parties, award information, letter of company register (TDP), EIA document, CSR data, goal, policy and objectives of quality, policy, objectives and goal of environment, OHS policy, OHS program documentation, PKPT achievement, legal documentation (land application, storage of hazardous and toxic, operation of pro-cessing equipment Incinerator Waste hazardous and toxic Hospital); monitoring and measurement report, production achievement report, unit/estate name, documentation of continuous improvement program (re-sult of management review meeting), HCV documentation (criteria 5.2 and 7.3), details process of complaint procedure (criteria 6.3), final RSPO public summary report of certification result and human rights policy (criteria 6.13). Aek Torop estate & mill has informed to assistant of division (no. KATOR/INT/81/2015 dated on 16 April 2015) regarding circular letter no.3.00/SE/01/2015.

The mechanism of incoming request for company documentation and how to responses the request has



of 59

RSPO v2 2009-10-09 17

regulated in work instruction No. IK-3.00-08/03, which in point 5.4 and 5.5 explained that the for internal, the information will provided on company website and for external the information will be delivered after official letter from stakeholders approved by board of directors. SOP covering responsible person in-charge to com-munication and time frame of response information. Record of communication recorded in log book of stake-holder communication (FM-3.00-13/01-01) and record of request for information and response was available but date of response was not recorded.

Formal memorandum letter from PTPN III Marketing and Development Plan Director No. 3.12/3.00/MO/209/2015 dated 25 March 2015 was issued related Good Corporate Governance Practices handbook distribution to all level of company operation. Whereas contractor third parties (product transport company, FFB transport contractor and maintenance contractor) has socialized about it. Records of signed Code of Conduct Statement letter of compliance by employee and third parties were kept and maintained in the estate manager office such as signed Code of Conduct Statement letter of compliance by employees in Aek Torop estate and mill dated on March 26, 2015 and attendance list of the socializa-tion of code of conduct dated on January 20, 2015, April 10, 2015 and April 17, 2015 to maintenance con-tractor, FFB transport contractor and FFB suppliers (UD Roma Rezeki, UD Paiman Arthusor, UD Winata Perdana, UD Rata, UD Mekar, CV Torgamba Karya, CV Ravi Prima, UD Naga Tutur and CV Awan Tech Mandiri). This handbook consist some of ethical business conduct and integrity in all company operation and transaction. Whereas, socialization of code of conduct to transport of product company by letter dated on 20 April 2015 and website. On the letter has informed that company have code of conduct where has published on website too. Compliance status : Full Compliance.

Principle 2: Compliance with applicable laws and re gulations

Criteria assessed: CR2.1; CR2.2; CR2.3 Criteria not assessed: - Findings:

Aek Torop estate & mill has list of legal and other requirements include relevant laws (UU), government regulations (PP), Instruction of President (Inpres), Minister Regulations (Permen), Local Regulations (Per-da), Governor Regulations (Pergub), and etc. In the list of legal and other requirements was recorded 68 (sixty eight) laws and others requirements was listed related for environmental and OHS fields.

Some evidence of compliance with relevant legal requirements as seen on latest legal requirements regis-ter i.e. "Report of legal and other requirements " for year 2016 in Aek Torop Mill and Estate. There is suffi-cient evidence of compliance with relevant legal requirements, as found on documents bellows : - Daftar Peraturan/Perundangan (list of legal and other requirements) - Hasil Evaluasi Peraturan/Perundangan (Result of evaluation of legal and other requirements) - Rekapitulasi Kepatuhan Terhadap Peraturan/Perundangan (Recapitulation of compliance to legal and

other requirements)

The company have a list of permits as evidence that they has complied with the regulation. Some evidenc-es of compliance with relevant legal requirements such as : • Aek Torop mill has temporary kept for hazardous toxic waste storage permit No.503/431/BPPTPM/2014

which valid until October 16, 2019. • Auditee has land application (liquid waste usage) permit (No. 503/32/BPPTM/2014 dated on January 27,

2014) from Integration license and investment body (BPPTM) in Labuhanbatu Selatan District. Validity date until January 27, 2017.

• Labour compulsory reporting No. 560/00031 / TK / 2015 is valid until 21 April 2016. • Polyclinic operational permit No. 530/018 / BPPTPM-LS / VIII / 2014 is valid until August 22, 2019. • Letter of company registration No. 02.12.1.0105841/4340/502/09/2013 valid until 16 September 2016. • Midwives Work Permit on behalf Sutinah No. 503/013-IB / BPPTPM-LS / VII / 2014 is valid until August

22, 2017 • Auditee has working union, • Electronic weighbridge has inspected by Unit of Metrology in Rantau Prapat - Industrial and Trade Agen-

cy of Goverment of Sumatera Utara Province with evidence are Certificate of Inspection No.



of 59

RSPO v2 2009-10-09 18

510.3/704/MT.RP/15-TU, Electronic Weight-Bridge, Capacity 40,000 kg, Merk Avery Berkel, Type L 225, Serial No. 05190127 dated October 2015 and Certificate of Inspection No. 510.3/705/MT.RP/15-TU, Electronic Weight-Bridge, Capacity 50,000 kg, Merk Avery Weigh Tronix, Type E 1205, Serial No. 144950370, dated October 2015 where both certificate valid until October 2016.

• More operators have OHS license or operator permit letter from Ministry of Manpower and Transmigra-tion Republic of Indonesia in mill such as : o Suryanto I, holder of Certificate No. S. 255/BBLKI-MDN/KS/XII/2011, dated December 01, 2011, re-

garding Basic Welder Operator o Halasan Tampubolon, holder of Certificate of Competency No Reg. JIP 024.000034.2015, dated Feb-

ruary 24, 2015, regarding SMAW-Welding. Issued by Indonesian Professional Certification Authority No. 00289.0721.0003495.2015. The certificate valid for 3 (three) year (February 24, 2018)

o Marlon Manik, holder of License of Operator, No. 1382/OLD/KK/IX/2013; regarding Wheel Loader, valid until September 09, 2018

o Gusral, holder of First Aid at Workplace Officer Certificate, dated October 09, 2015 o Togu Hutasoit, holder of Certificate of Competency, No. Reg. JIP 024.0000035.2015, dated February

24, 2015, regarding 3G-SWAW Welding Issued by Indonesian Professional Certification Authority. The certificate valid for 3 (three) year

o Alexander Gultom, holder of OHS Steam Operator Class I, dated March 20, 2015 o Alexander Gultom, hlder of OHS Boiler Operator Class I Certificate, No. 15.8000.OPK3-PUBT-

B.I/III/2015 o Adi Kesuma, holder of General-OHS Expert Authority Card, Certificate of OHS Expert dated June 20,

2013, based on Decree of Minister of Manpower and Transmigration RI, No. KEP. 2016/M/DJPPK/VI/2013, regarding General OHS Expert Assignment

o Sunardi, holder of OHS Boiler Operator Class II Certificate. The certificate valid until July 03, 2020 o Poniman, holder of OHS Boiler Operator Certificate, dated April 13, 2005 o Lapos Pasaribu, holder of OHS Boiler Operator Class I Certificate No. 15.7999.OPK3-PUBT-

B.I/III/2015, dated March 20, 2015; and valid until March 20, 2020 o Ano, holder of OHS Boiler Operator Class I Certificate, No. 15.7986.OPK3-PUBT-B.I/III/2015, dated

March 20, 2015; and valid until March 20, 2020 o Ngatimin, holder of OHS Boiler Operator Class I Certificate No. 15.7985.OPK3-PUBT-B.I/III/2015

dated March 20, 2015; and valid until March 20, 2020 o Lilik Kurniadi, holder of OHS Boiler Operator Class I Certificate, No. 15.7984.OPK3-PUBT-

B.I/III/2015, dated March 20, 2015; and valid until March 20, 2020 o Budianto, holder of OHS Boiler Operator Class I, No. 15.8001.OPK3-PUBT-B.I/III/2015, dated March

20, 2015; and valid until March 20, 2020. • auditee has provided PPE where it is properly appropriate with Law No.1 year 1970 article 14, • Auditee holds a registered estate business (SPUP) No. HK.350/518/Gj.Bun.5/VII/2001 dated 5 July 2001

covering area of 10,253 Ha with commodity type of palm oil located in Kota Pinang, Labuhan Batu Se-latan District, also with licensed mill whose FFB processing capacity is 60 tonnes/hour, and the actual capacity complies with the permit

• Environmental Impact Assessment’s (AMDAL) revised version with Endorsement Letter No. 660/616/BPDL-LB/Set/2006 from Labuhan Batu District Environment Office Head on Revision of Aek To-rop PTPN III’s RKL/RPL. This document is a revision of the previous Environmental Study Document (SIL) made in 1994,

• Aek Torop estate has temporary kept for hazardous toxic waste permit from local government (no. 503/187/BPPTPM-LS/2014 dated on April 29, 2014 from head of integrated license service and invest-ment agency of Labuhanbatu Selatan district)

• Etc. But there are evidence of non-compliance with relevant legal requirement such as there are hazardous and toxic waste (type of used chemical/pesticide container) in Aek Torop estate have been kept more than peri-od time on requirement/permit. It condition was raised as non-conformity (NCR No. RSPO00199).

The company provides a mechanism for evaluation of implementation and compliance to applicable legal requirements in a standard operation procedure i.e. PK-3.11-01, rev 0, dated 25 February 2014. There are also procedures which define the mechanism of evaluation of compliance to regulations related to the com-pany's plantation, legislation related to the environment, legislation relating to labour, and regulations relat-ed to health and safety. The SOP states that the identification and evaluation is to be carried out 2 (two) times a year and conducted by the each section and estate and it will be compiled by Legal officer and sup-ported by the Head of Operations / field and other departments within the company organization. Most es-tate maintains and updates their list of all applicable legal requirements relating to environmental, occupa-



of 59

RSPO v2 2009-10-09 19

tional safety and health, the company plantations, and employment as well as records of internal compli-ance checks to legal requirements.

The company maintains a list of all applicable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements as they are summarize in the FM-3.11-01/03 and list of applicable legal, regu-lation and other requirements was recorded in the FM-3.11-01/01. The latest update of three documents above for Aek Torop mill and estate was performed on January 2016 and system for tracking any changes in the law in form “status/update” information.

There are evidence of companies have not entered the Government Regulation on Social Responsibility Environment (PP No 47 of 2012) and the decision of the Minister of SOEs on the implementation of the Partnership Program and Community Development (PER-09 / MBU / 07/2015) in the document list of legal and other requirements. It condition was raised as non-conformity (NCR No. RSPO00199).

The right to use the land from Aek Torop estate based on Cultivation Right Title (Hak Guna Usaha) No.1/Aek Batu Village dated on March 2, 1981 with the basis of registration is Ministry of Agraria / Head of National Land Agency decree No.SK.41/HGU/DA/80 are 24,253.01 ha where include of Aek Raso estate areas (other estate in PT Perkebunan Nusantara III (Persero)). Total areas which can be considered for was renewed are 9,035.64 ha which has been deducted to be returned to the government of 8,000 ha for smallholder areas and infrastructure of Regional Office for Ministry of Social in North Sumatera Province (based on leter No.3/SPPH/LB/1985), 6,000 ha for company of Perseroan Dagang & Industri Marison NV (based on leter No.15/SPPH/LB/1990), 683.99 ha for Armenia village/communities and 5.99 ha for public facilities. The results of cadastral measurement dated on 11 December 2009 are 9,725.62 ha (shown on map no.26/12/2009) so that there are deviation/gap with previous total areas because measurement tech-nique method and auditee has accepted (statement letter dated on October 18, 2010).

During 2nd surveillance audit that the company’s cultivation right title (HGU) certificate and decree renewal was still in process. The company’s effort to ensure problem it that the auditee has corresponded or sub-mitted letter No. 3.11/X/50/2012 dated on 26 Juni 2012 and No. 3.11/X/07/2014 dated on 29 January 2014 and last coordination meeting on 14 March 2016 to National Land Agency Republic of Indonesia regarding acceleration of the issuance of the decision of cultivation right title (HGU). Current process is the company is wait get approval from Director of Jenderal state of right for land - National Land Agency Republic of In-donesia.

Based on previous audit that there is part of Aek Torop estate areas (block W3 and X3) on outside of re-newal legal land (based on map no.26/12/2009) but no evidence sufficient for handling areas it until 2nd sur-veillance audit. It condition was raised as non-conformity (NCR No. RSPO00200).

The company also has evidenced legal boundaries which are clearly demarcated and boundaries has main-tained as evidenced by record of boundary maintenance in Aek Torop Estate in year 2015 (1st and 2nd se-mester) include of map of pillar boundary distribution. The results of pillar boundary monitoring semester II - year 2015 (18-19 December 2015) are 3 pcs broken from total pillar boundary amount 37 pcs (division I), all pillar boundary (12 pcs) good condition (division II), all pillar boundary (10 pcs) good condition (division III), all pillar boundary (6 pcs) good condition (division IV), 3 pcs missing and 2 pcs broken from total pillar boundary amount of 78 pcs (division V), 1 pcs missing and 1 pcs broken from total pillar boundary amount of 13 pcs (division VI) and all pillar boundary (1 pcs) good condition (division VII). It has implemented Work Instruction No. IK-3.11-07/03 (revision 00) point 6 is frequency of maintenance is minimum every semester and results of maintenance activity shall report to estate manager. Based on previous audit report that the company has request to Labuhanbatu 2 district office to repair and re-develop the pillars boundary (letter no.KATOR/DLAB2/MO/83/2015 dated on April 2, 2015) but during 2nd surveillance audit that no correction action or follow up action about it. It condition was raised as non-conformity (NCR No. RSPO00201).

Based on field observation, the company’s legal boundaries use boundary markers, isolation trench, road & collection drain/river. Year 2015, there is complaint from one of communities in block Y6-Division V (coor-dinate : 010 45’ 27” N; 1000 07’ 00.10” E) regarding her oil palm trees was broken by company while main-tain of river/collection drain activities. Based on field visit that the company has repair areas it and renew planting for oil palm trees was broken.

No land disputes have been found between PTPN III with the local community because in year 2006 the company has demarcated their boundaries by coordinating with heads of the surrounding villages. In hec-tare statement per March 2015, there are enclave areas of 683.99 ha with Armaien communities/villages since beginning to manage the estate and in the renewal process has excluded. It has still included in hec-tare statement’s auditee because cultivation right title (HGU) have not been issued.



of 59

RSPO v2 2009-10-09 20

The company has mechanism for conflict resolution which is already acceptable to all parties. Such mecha-nism is provided under Work Instruction No. IK-3.09-03/02 on Conflict Resolution (6th revision) dated 15 February 2010. The conflict resolution process starts from problem response, problem investigation, and conflict resolution through mediation, discussion and tribunal. This mechanism has been publicised to Pasir Tuntung and Aek Batu Villages in 2010 as evidenced with the photograph and participant list. The commu-nity has accepted the mechanism. In November 22, 2011, the auditee has socialized flow chart/process of conflict resolution issues to Pasir Tuntung Village (community leader and members). Flow process of con-flict resolution issues consist of information of problems, response, investigation, the problem completion (individual or group) is 2 (two) options i.e litigation (civil and crime) and non-litigation (mediation, persua-sive, deliberation, compensation).

Based on the SIA, there was no conflict between the company and the traditional land owners. Until 2nd sur-veillance, no land issues which arise. Interview with Tuntung Pasir village officials also said there was no problem of land between communities with PN III.

In accordance with the working procedures IK-3.11-12 Conflict Resolution 7.5 procedure stated that if there is a dispute between the community and PN III, they entitled to appoint their representatives during the legal process, or the two sides can establish a joint consultative committee in charge of solving those problems independently. Compliance status: Non Compliance. NCR No. RSPO00199

• The Government Regulation on Social Responsibility Environment (PP No 47 of 2012) and the decision of the Minister of SOEs on the implementation of the Partnership Program and Community Development (PER-09 / MBU / 07/2015) was not included on list of legal and other requirements.

• There are hazardous and toxic waste (type of used chemical/pesticide container) in Aek Torop estate has been kept more than period time on requirement/permit.

NCR No. RSPO00200

Based on previous audit that there are part of Aek Torop estate areas (block W3 and X3) on outside of re-newal legal land (based on map no.26/12/2009) but no evidence sufficient for handling areas it until 2nd sur-veillance audit. NCR No. RSPO00201 During 2nd surveillance audit that evidence of follow up or correction action on letter no.KATOR/DLAB2/MO/83/2015 dated on 2 April 2015 regarding repair or re-develop the pillars boundary not available

Principle 3: Commitment to long-term economic and f inancial viability

Criteria assessed: CR3.1 Criteria not assessed: - Findings:

The company established Long Term Plan (Rencana Jangka Panjang) for 2014-2018 issued on December 20, 2013. The RJP consists of three chapters, namely:

Chapter I. Introduction a. Background and History of Estate b. Vision and Mission c. Purpose and objectives of Estate d. Estate development direction

Chapter II. Business Performance Evaluation Period 2009-2013 a. Achievement and failure of the goals that have been defined for

- Production - Technic



of 59

RSPO v2 2009-10-09 21

- Financial - Human Resources/General

b. Implementation of strategies and policies that have been defined for - Estate strategy - Estate policy

c. Obstacles in the estate and effort for problem solving

Chapter III. Company long term plan 2014-2018 a. Assumption for

- Production - Financial

b. Quantitative target for - Production - Financial - Human Resource/General - Information Technology

c. Achievement strategy d. Program activities and budgeting e. Financial projection for

- Profit and loss - Cash flow - Balance sheet

In revision of the Long Term Plan (RFP) for 2014-2018 has consolidated between mill and estate, so infor-mation about the profit and loss for mill and estate and forecasts of the product price (income or sell (IDR) / volume of sell) was available.

Based on internal memo No. KSDDP/Int/Ist/2013 issued on December 16, 2013 company has conducted the socialization for RJP to all section, district, estate and unit on December 17, 2013 attended by 13 per-sons

Based on section 1.7 that it has informed there are not replanting activities because all areas in Aek Torop areas has finished. There is immature areas because result of replanting activities.

Compliance status : Full Compliance.

Principle 4: Use of appropriate best practices by g rowers and millers

Criteria assessed: CR4.1; 4.2; 4.3; 4.4; 4.5; 4.6; 4.7; 4.8 Criteria not assessed: - Findings:

The company has procedure for estate and mill. The estate procedure covers, among others, zero burning land clearing policy, planting, IPM, manuring, spraying, soil conservation, hazardous waste management, conservation, etc. Procedure for mill covers, among others, FFB incoming, grading in loading ramp, emer-gency response, processing machine, threshing machine, engine room, CPO transport, FFB transport, SCCS and others.

Sample of procedures that be use for Palm Oil Plantation are : - Working instruction of land preparation (Instruksi Kerja Persiapan Lahan Penanaman Kelapa Sawit) IK-

3.01-02/02 Rev.00 - Working instruction of preparation and planting (Instruksi Kerja Persiapan dan Penanaman Kelapa

Sawit) IK-3.01-02/03 Rev.00 - Working instruction of nurseries (Instruksi Kerja Pembibitan Kelapa Sawit) IK-3.01-02/10 Rev.00 - Working instruction of Immature plantations (TBM) maintenance (Instruksi Kerja Pemeliharaan TBM

Kelapa Sawit) IK-03.01-03/02 Rev. 00 - Working instruction of pest control (Instruksi Kerja Pengendalian Hama Kelapa Sawit) IK-3.01-03/11

Rev. 00 - Working instruction of disease control (Instruksi Kerja Pengendalian Penyakit Tanaman Kelapa Sawit)

IK-3.01-03/12 Rev.01 issued 15 Juli 2014



of 59

RSPO v2 2009-10-09 22

- Working instruction of fertilization (Instruksi Kerja Pemupukan Tanaman Kelapa Sawit) IK-3.01-03/16 Rev.00

- Working instruction of harvesting (Instruksi Kerja Panen Kelapa Sawit) IK-3.01-05/04 Rev. 00 - Working instruction of Immature plantations (TBM) harvesting (Instruksi Kerja Panen di TBM Kelapa

Sawit) IK-3.01-05/05 Rev.00 - Working instruction of FFB receipt in POM (Instruksi Kerja Penerimaan TBS in POM) IK-3.03-12/01

Rev.00 - Working instruction of FFB process (Instruksi Kerja Pengolahan Kelapa Sawit) IK-3.03-03/08 Rev.00 - Working instruction of the control of production process & quality in POM (Instruksi Kerja Pengendalian

Proses dan Mutu Produksi di PKS) IK-3.03-03/09 Rev.00 - Working instruction of analyst of oil & kernel losses (Instruksi Kerja Analisa Kehilangan Minyak dan Inti

Sawit) IK-3.03-03/10 Rev.00 - Working instruction of FFB sortation (Instruksi Kerja Sortasi TBS) IK-3.03-03/11 Rev.00 - Working instruction of standard of oil and kernel quality (Instruksi Kerja Standar Mutu Minyak dan Inti

Sawit) IK-3.03-03/12 Rev.00 - Working instruction of analyst of PKO quality (Instruksi Kerja Analisa Mutu PKO) IK-3.03-03/05 Rev.00 - Working instruction of water treatment in POM (Instruksi Kerja perlakuan terhadap air) IK-3.03-05/01

Rev.00 - Working procedure of FFB Analyst (Prosedur kerja analisa TBS) PK-3.03-10 - Working procedure of CPO sell (Prosedur kerja penjualan CPO) PK-3.07-05 - Working procedure of PKE & PKO (Prosedur kerja penjualan minyak kernel dan pellet) PK-3.07-08 - Working procedure of management system audit (Prosedur kerja audit sistem manajemen) PK-3.12-03 - Working procedure of corrective and preventive action (Prosedur kerja tindakan perbaikan dan

pencegahan) PK-3.12-05 - Working procedure of water management and usage (Prosedur kerja pengelolaan dan penggunaan air)

PK-3-05 rev.00

SCCS procedure such as: - Working procedure no. PK-3.03-12 Rev. 00 issued on 25.02.2014 for Purchasing and determination of

price for FFB from third parties (Pembelian dan Penentuan Harga TBS Kelapa Sawit Pihak Ketiga). - Work instruction no. IK-3.03-12/01 Rev. 01 issued on 25.03.2014 for Receiving and storage of FFB in

the Palm Oil Mill (Penerimaan TBS di Pabrik Kelapa Sawit). - Work instruction no. IK-3.03-03/11 Rev. 00 issued on 25.02.2014 Sorting process for FFB (Sortasi

Tandan Buah Segar Kelapa Sawit) - Working procedure no. PK-3.03-03 Rev. 00 issued on 25.02.2014 for Planning and Controlling of Pro-

cessing Process (Perencanaan & Pengendalian Proses Pengolahan) - Working procedure no. PK-3.03-11 Rev. 01 issued on 01.07.2014 for Supply Chain Certification Sys-

tem Mechanism (Mekanisme Rantai Pasok (SCCS)) - Work instruction no. IK-3.03-03/08 Rev. 00 issued on 25.02.2014 for Palm Oil Processing (Pengolahan

instruction no. IK-3.03-03/10 Rev. 00 issued on 25.02.2014 for Loss Analysis of Palm Oil and Kernel (Analisa Kehilangan Minyak dan Inti Sawit).

- Work instruction no. IK-3.03-03/09 Rev. 00 issued on 25.02.2014 for Quality Control Production Pro-cess in Palm Oil Mill (Pengendalian Proses dan Mutu Produksi Pabrik Kelapa Sawit.

- Working procedure no. PK-3.03-08 Rev. 01 issued on 01.07.2014 for Finished Goods Delivery (Pengi-riman Produksi Jadi Pabrik ke Instalasi Belawan, PT. Sarana Agro Nusantara, PT. IKN, PKSMK dan Pihak Swasta)

All this SOPs area available in Intranet and can be accessed by unit. Mostly these SOPs are understood by all workers and their supervisor and manager. As part of the SOP, working instruction prepared and avail-able in working station as a short brief information to direct workers to run the job as well. Revision of the SOPs are following document controlling procedure and to address non-compliance and corrective action for continuous improvement using mechanism of corrective and preventive action (PK-3.12/05).

A mechanism to check consistent implementation of procedures available in place, following procedure PK-3.12-03 (Audit Sistem Manajemen). At least once in yearly audit conducted in mill by audit department from corporate. Audit conducted in February 17th, 2016 generate 13 Observation and 9 Minor non-conformities, all NC already followed up by related parties and cases already closed. There is inconsistency implementa-tion with procedure example special working permit has not been signed by person have authority for maintenance of crane on 18-23 March 2016 so that it is not compliance to procedure of special working permit (PK-3.12-09). It condition was raised as non-conformity (NCR No. RSPO00202).

The auditee has recorded the origins of all third-party document in order to apply as suppliers (apply letter,



of 59

RSPO v2 2009-10-09 23

information of suppliers each supplier such as tax number, account bank number, estate location map, plantation business permit, etc.) on behalf UD Roma Rezeki, UD Paima Marhusar, UD Torgamba Karya, CV Ravi Prima and CV Naga Tutur, FFB delivery note, weighbridge ticket, FFB purchase agreement, payment list, etc.

The company’s soil and leaf sampling analysis for Aek Torop Estate has been conducted by the Indonesian Palm Oil Research Institute (PPKS) where results of leaf analysis year 2015 and 2016 has available. Leaf analysis is performed biannually to produce fertiliser recommendation. The company conducts soil analysis once in 5 years. The leaf analysis covers Na, Ca, Zn, and Mg level, as well as other parameters.

Fertilize planning in 2015 define based on recommendation from Indonesian Palm Oil and Research (PPKS) year 2015, where recommended to use Urea, TSP, MOP, KCL, and Dolomite. Fertilize Planning and Realization report year 2014 describe Aek Torop Estate already define all plant in riparian already ex-clude from Fertilize Planning accordance to Work instruction of Maintenance Riparian (IK-3.01-10/02 Rev.01), based on observation in the field (block Y6 - division V) proved there is no fertilize activity in ripar-ian.

Records of fertilizer input have maintained i.e. fertilizing report on mature areas, fertilizing report on imma-ture areas, type and stock of fertilizer, etc. Volume of fertilizer has implemented to field year 2015 are :

• Mature (year planted 2008) : 107,866 kg for NPK 15-10-18, 35,956 kg + 52,598 kg for dolomite, 119,851 kg for NPK 15-18-2.

• Immature (year planted 2013) : 1,217 kg + 167 kg for borate, 2,343 kg for kiesrite, 35,295 kg for dolo-mite, 40,317 kg for MoP (KCl), 19,322 + 17,648 kg kg for TSP and 20,995 kg for urea.

Block Z6 (year planted 2013) has applied MoP amount of 1,629 kg (doses : 0.50 kg/tree) and dolomite amount of 3,257 kg (doses : 1 kg/tree), borate amount of 81 kg (doses : 0.025 kg/tree) and urea amount of 2,443 kg (doses : 0.75 kg/tree).

A nutrient recycling strategy has implemented such as EFB application (period of January to March 2016 amount of 10,078,929 kg and year 2015 is 54,310.06 ton), land application (POME) and palm residues after replanting samples in afdeling I - block R13, S15, R15 and S16 for land application (POME) and afdeling V – block Y6 (palm residues after replanting).

The company has implemented maintenance activity as stated on maintenance program & record/report (mature and immature) per three monthly. Information on record/report above are maintain of production road by manual, wiping (immature), global telling, handling of rat attack (immature), applied marshall (imma-ture), maintain of FFB collect point (TPH), inventory of tree and spraying circle.

The company has a soil map informing fragile-soiled area in the company concession. The fragile soil type here is medium-sloped area because based on soil fertility map that soil fertility status consists of high till medium. The company has employed its management strategy for fragile soil at medium-sloped areas through terrace, cover crop and stacking midrib application to control erosion on ground surface especially in immature areas. Block Z6 has implemented EFB application, planting legume as cover crop and develop of trace. The company also has programme for road maintenance in every division with manual or me-chanic example in block Z6 where it is good condition.

From the soil analysis conducted by Palm Oil Research Centre in 2011, it is known that the soil type in the company concession consists of Typic Paleudult or Red-yellow podzolic, and there no peat soil is found in the company.

The organization has established procedure no. PK-3-05, Rev.0, namely Working Procedure of Water Management and Usage. The procedure include of providing, distribution and usage of water. The purpose of procedure is to ensure that management and usage of water in accordance with established standard. The organization also has established working instruction no. IK-3.03-05/01, namely POM’s Water Treat-ment.

There is evidence that the organization has established water management plan include identification water sources; efficient use of water, e.g.: by defined water usage standard; effort to renewability of water source, e.g.: by protection and quality monitoring of water sources; taken account impacts on catchment area and local stakeholders; considering access of clean drinking water all year round for stakeholders; and also avoidance of surface and ground water contamination. There is evidence that the identified actions in the plan has been implemented.

Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and oth-



of 59

RSPO v2 2009-10-09 24

er buffer zones, please refer to HCV report.

There is evidence that the organization has mill effluent treatment process in place, and the organization has established working instruction (WI) for monitoring mill effluent pond installation (IPAL), document no. IK-3.03-15/05, rev. 00. The purpose of WI is to ensure that all IPAL under PTPN III well maintained and comply with applicable regulations, including to prevent land, water and air pollutions. The WI was con-tained detail of environmental monitoring activities of POM’s Effluent (IPAL), including quality standards of each processes, e.g :

1. Fat Fit - Oil content before Fat Fit (%) - Oil content after Fat Fit (%) or losses (%) - Mud sediment/dirty (% volume of Fat Fit)

2. Supporting Equipment of IPAL - Circulations pump, aerator, piping, application pump (ready for use, well and optimum operation)

3. Effluent Ponds - Temperature of effluent enter to IPAL - Oil content enter to IPAL - Scum thickness on anaerob pond (maximum 30cm) - Mud sediment (% of pond’s volume) - Pond’s wall conditions - Pipeline conditions between ponds (smooth, not smooth, and plug)

4. Effluent to environmental - Effluent flowrate (M3 per tonne FFB) - Quality of effluent (comply with the applicable requirements) - Contamination load - Flow meter of effluent or basculator (daily recorded)

5. Effluent for land application - Quality of effluent (comply with the applicable requirements)

6. Effluent dosage for land application Cm Rey)

The company has conducted BOD monitoring of effluent every month by third party accredited laboratory i.e. Sucofindo Laboratory. Until March 2016 All BOD monitoring results complies with the standard i.e: Min-istry of Environmental decree No. 28 year 2003 and Head of integration license service and investment agency of Labuhanbatu Selatan District no.503/032/BPPTPM/2014 dated on January 27, 2014 about the land application permit for PTPN III’s Aek Torop Estate and Mill i.e: BOD ≤ 5,000 mg/l and pH : 6-9.

There is evidence that the organization has monitored and measured mill water usage. Records of mill wa-ter use per tonne of Fresh Fruit Bunches (FFB) are available. Based on the data of Monthly Report of POM’s Processes Water Use, for year 2015 was recorded 329.141 M3 totally or 27,428.42 M3 per month in average. And, until March 2016, was recorded 69,944 M3 totally or 23,314.67 M3 per month in average.

The company has established the riparian – buffer zone on the river or others natural stream. The riparian identification has completely been assessed when during the HCV assessment. The riparian on the river has assessed as a HCV 4.1. From the company procedure all of riparian buffer zone will be marking twice the width of the river or natural streams and natural water quality analysis (parameter such as physics (sed-imentation and temperature), chemical (Fe, Zn, Mn, Kd, Tb, DO, COD, BOD, pH and organic material), de-tergen and the location cultivated by the plant reforestation such as Swietenia macrophylla, Anthocephalus cadamba, and Hibiscus tiliaceus before the replanting process where all program has implemented.

The company has Work Instruction No. IK-3.01-17/14 on Pest Management. The work instructions covered the early warning system for IPM, census for pest and diseases. Census will be conducted for caterpillar, bagworm, rats, and other pest to get the information about the attack level. This result of census will be used for IPM recommendation.

The company has programme for IPM through the census programme in 2015. Based on global telling re-port and pest & disease monthly report (January to December 2015) that there are oryctes rhinoceros at-tack, caterpillar attack, bagworm attack and rat attack with attack intensity is low & medium (based on work-ing instruction no.IK-3.01-03/11 that if medium attack may use treatment) so that to control attack it by manual/hand picking and using agrochemical. Volume of agrochemical has used to handling pest in mature & immature areas are 22.90 liter (caterpillar attack with insectisida), 699 kg (rat attack with rodentisida) and



of 59

RSPO v2 2009-10-09 25

1,119.52 kg (oryctes attack). Whereas, the company using hand picking & net as handle of oryctes attack. Total of larva is 7.13 kg with hand picking.

The company (afdeling III) have equipment of pest and disease management are single sprayer: 6 unit, mist blower I 3W F3 Tanaka: 1 Unit, fulspog seri K.10 SP: 1 unit, net to catch of oryctes : 12 unit and rat trap: 12 unit. Whereas, the company (afdeling III) has implemented beneficial plant i.e. turnera subulata, Turnera ulmifolia, and antigonon leptopus, at near main road; and also keep Sycanus dichotonus live. Sycanus di-chotonus is known as predator active from caterpillar.

The company (afdeling III) has delivered IPM training on 10 September 2014 to 17 workers being person in charge in pest management or early warning system. Material issues on training are handling of pest and disease (caterpillar) by manual (hand picking and beneficial plant) or chemist and telling mechanism. The records of training are invitation letter, minute of meeting, attendance list and photograph.

Aek Torop mill has some chemical such as Soda Ash and Caustic Soda where these chemical was used in boiler operation and cleaning and water treatment to gain pure water for boiler operation. All workers who involve with the chemical have adequate training regarding safety and emergency action. Training con-ducted on October 23rd, 2015 by chemical supplier and boiler service contractor, training attendance was laboratory assistant, laboratory foreman, laboratory analyst and water analyst, water treatment operator, and boiler operator.

The company have recommendation for usage dangerous and poisoned agrochemical during year 2016 from Social, Labor and Transmigration agency (decree no.560/190/DSTKT/2016). The company allowed to used such as Herbicide are Ally 20WDG (active ingredients : metil metsulfuron), Pelita 480AS (active ingre-dients : isopropyl amine glyphosate), Sida up 490AS, Decis 2,5gr/liter (active ingredients : deltametrin), Gar-lon 670 EC (active ingredients : triklopir butoksi etil ester), Starane 480EC & 290EC (active ingredients : floroksipir metil heptil ester), basmilang 480AS (active ingredients : isopropyl amine glyphosate), Round Up 486 SL (active ingredients : isopropyl amine glyphosate), Gempur 480AS (active ingredients : isopropyl amine glyphosate), Gledek 480SL (active ingredients : isopropyl amine glyphosate) and Insecticide are Marshall 3G (active ingredients : karbosulfan), Matador 25EC (active ingredients : lamda sihalotrin), Klerat RMB (active ingredients : brodifakum), Petrocum RMB (active ingredients : brodifakum), Ratgone (active in-gredients : brodifakum), Scud 100 EW, and Ripcord EC (active ingredients : sipermetrin).

Base on visit in division IV that company has implemented procedure of integrated pest management as well. Pest management implement by regular census, and biological method. For weeding company use agrochemical less than.

All pesticide was used which recorded on recapitulation of pesticides oil palm cultivation. Records of pesti-cides used was available include information of active ingredients, their LD50, area treated, amount of ac-tive ingredients applied per ha and number of application year 2015 and 2016. Based on records of pesti-cides no longer uses paraquat and not categorised as WHO class 1A or 1B or that are listed by the Stock-holm or Rotterdam conventions. Beside it, pesticides have been used Aek Torop estate is no prophylactic. The company try to minimized usage of pesticide by planting beneficial plant such as turnera subulata, Turnera ulmifolia, and antigonon leptopus.

All empty container inventory countercheck to initial inventory record, to ensure there is no empty agro-chemical container used to other purpose except waste containers in emplasment and flower pots (low quantity). All empty containers kept in hazardous storage and treated as hazardous waste so that worker and manager has understood disposal of waste material because all used agrochemical and agrochemical container was returned to hazardous and toxic waste warehouse.

The company has carried out training/socialization regarding work instruction of pesticide application (IK-3.01-03/14) on May 05, 2015 to all pesticide applicator with total of participant is 47 persons consist of foreman, sprayer, mixing man, waterman, manuring foreman so that they has understood about mechanism of spraying which safe and effective.

Information of pest and disease monthly report on March 2016 that no caterpillar, apogonia and ganoderma attack while rat and oryctes attack available. Auditee only used agrochemical (Ratgone) to control rat at-tack and has applied by persons or team who have completed the handling agrochemical and hazardous and toxic waste training.

Auditee has carried out annual medical surveillance dated on May 12, 2015 for 20 spraying workers where one of analysis/parameter is cholinesterase inside blood. The result of analysis is normal condition except 1 (one) worker indicated poisoning because under reference value. Annual medical surveillance conducted to subcontractor workers too which are supplied by CV Anghgi, CV Jefri, CV Raja Gemilang and CV Caha-



of 59

RSPO v2 2009-10-09 26

ya Terang. Medical check-up has implemented on 7 August 2015 for all workers such as harvesting, maintenance, administration, infrastructure, administration in office and spraying & fertilizing from sub-contractor.

Auditee has claimed that spraying workers especially women not pregnant or breastfeeding where all wom-en workers & director of subcontractor company has sign of statement letter dated on 21 April 2015 and re-sult of check-up that they are not pregnant or baby breastfeeding on working. The statement renewing for every six months.

Aek Torop mill has established OHS’s commitment and policy that has been signed by Chairman of P2K3 (Committee of OHS’s Officer), Secretary of P2K3 and Chairman of SP-BUN (Worker Union of Company). Contents of the policy, i.e.:

- OHS is priority at each operation’s stage in accordance with principles and applicable OHS’s legal and requirements.

- Improve organization’s performance by providing safe, comfort and health workplace for all workers and all persons who exist in the organization’s premises.

- All persons who enter the organizations promises (e.g.: POM) has responsible and commitment to comply OHS by understanding and implementing of OHS’s commitment and policy.

OHS’s commitment and policy of Aek Torop POM consist of: 1. To comply with all relevant legal and other requirements. 2. To build OHS’s culture at all activities. 3. To minimize sources of potential hazards and illnesses through build workplace’s safety, comfort and

health. Whereas, the estate’s OHS’s commitment and policy has defined on February 2016. The OHS’s commit-ment and policy was signed by Chairman of P2K3, Head of Worker Union (SP-BUN), and acknowledge by District Manager of Labuhanbatu 2. OHS’s commitment and policy contained, i.e.: - To provided OHS’s protection and prevention of incident and illnesses at workplace. - To improve performance through providing workplace’s safe, health and efficient.

There is evidence that the organization’s policy has been socialized to all personnel at all levels and func-tions within the organization, i.e:

- Attendance list of socialization of organization’s policies and PPE, dated February 11, 2016. The so-cialization was attended by 76 persons.

- Attendance list of socialization of OHS and environmental policies (new paradigm vision and mission), dated February 10, 2016; The socialization was attended by 12 persons.

- Attendance list of socialization of OHS policy for third parties was attended by 10 persons.

The organization has defined objectives and target and established programme to achieve defined objec-tives and target. At POM’s Aek Torop, POM’s manager has defined objectives and target dated January 2016. The objectives and target was acknowledged by Secretary of P2K3 and Chairman of Worker Union (SP-BUN). The objectives and target as follows:

- To comply with all OHS’s applicable legal and other requirements. - To protection all workers and other peoples during at workplace - To ensure that safety and health of all workers and peoples at workplace are provided - To ensure that all production equipment and facilities are safe during operation - To provide PPE appropriately

There is evidence that the organization implemented OHS’s operational control appropriately both for exter-nal and internal parties. Especially for external party, the organization has made the external party compul-sory to compliance all environmental requirements defined by the organization. For example Agreement Letter between PT Perkebunan Nusantara III (PTPN III) and PT Tiga Sidoli Jaya; No. 3.02/SPJ/173/2015, dated July 06, 2015. In the agreement, was stipulated that PT Tiga Sidoli Jaya has to comply with all envi-ronmental requirements defined by PTPN III, including, but not limited to: “all workers has to using appro-priate PPE. There is evidence that Work Permit system was implemented for high risk works.

There is evidence that updated risk assessments have been conducted for all operations where health and safety is an issue for year 2016. The risk assessment was documented in form no. FM-3.12.02/12 and was cover all POM’s processes and activities, such as office, laboratory, weight-bridge, workshop, warehouse,



of 59

RSPO v2 2009-10-09 27

Security, Loading Ramp, Sterilizer St., Rail Track St, Hoisting Crate St., ant etc. And also cover all estate’s processes and activities such as fertilizer, maintenance, transportation, harvesting, washing tool’s work, and etc. FM-3.12.02/12 (form of risk assessment or hazard identification) has not included risk control in-formation which has implemented existing so that risk control effectiveness assessment currently and next time could not determine further correction action. It is condition was raised as nonconformity (NCR No. RSPO00203).

However, a nonconformity was raised during audit (NCR No. RSPO00203), i.e.:

There is lack and inconsistency when determined occurrence and severity values and risk control in the hazard identification, risk assessment and risk control, for example :

1. POM, risk assessment of Hoisting Crane St. (The activities are lift and move the lorry that contained boiled FFB from rail to hoper and put empty lorry to rail); Type of activity is Routine (R), identified po-tential hazards are struck down by lorry; Occurrence value is C (may be happen); Severity value is 2 (light injury/first aid only, and medium material losses); and then risk levels is Low, current/existing risk control by implement routine procedure. Comment : based on interview, there is no incident of struck down by lorry since the POM established and there is no information the incident from other similar companies, so the defined occurrence value was too high. Then the occurrence value should be E (rarely happen); Based on common sense, there is no human able to tolerate struck by lorry contained boiled FFB, so the defined value of severity value was too low. Then the severity value should be 5 (fatality and large materials losses). As consequence the risk level become High (need pay attention from senior management)

2. Estate, risk assessment of harvesting under high voltage wire. Type of activity is Routine (R), identified potential hazard is get an electricity shock; Occurrence value is C (may be happen); Severity value is 1 (there is no injury, materials losses are small); then risk level is Low; current/existing control by imple-ment routine procedure. Comment : based on interview, there is no incident of electricity shock since the estate’s operation and there is information the incident from other similar companies, so the defined occurrence value was too high. Then the occurrence value should be D (small possibility happen); Based on common sense, there is no human able to tolerate high voltage electricity shock, so the defined value of severity value was to low. Then the severity value should be 5 (fatality and large materials losses). As consequence the risk level become Extreme (need to be taken any action needed immediately).

There are evidences the organization has provided PPE to all workers and replaced when damaged. Dur-ing observation to General Workshop, Sparepart’s Workshop and Effluent Ponds (IPAL) was observed all workers wearing PPE appropriately except ripple mill – POM areas because worker & supervisor/foreman at ripple mill not use earplug and masker as PPE although there have been sign of warning mandatory using PPE it and one spraying worker not using boot shoes as PPE based on record/documentation from assis-tant. It is condition was raised as non-conformity (NCR No. RSPO00204).

The organization has identified responsible person/persons to implement OSH, by established Committee of OHS / Panitia Pembina Keselamatan dan Kesehatan Kerja (P2K3) with compliance to Permenaker RI No. PER.04/MEN/1987. The P2K3 of organization has approved by Head of Social, Labor, and Transmigra-tion Agency of Labuhanbatu Selatan District, with accordance Decree No. Kep.15/P2K3/DSTKT/2016, dat-ed April 05, 2016, regarding to Approval of P2K3. The committee of P2K3 of the organization consist of :

- Chairman: Ramot Lumban Tobing (Manajer) - Vice chirman: Suparlan - Secretary: Alberi Juanda - Vice secretary: Sukarman and Mahyudi Hermawan - Members: Evaluation Field, Task Force field, Training/education field and Health fields.

The organization has an licenced officer of OHS’s Chemical, i.e.: Bahagia Sinuraya, Register No. 1913/PK3KIMIA/VI/2015/P.1; valid until June 01, 2018 in accordance with Permenaker No. PER-02/MEN/1992.

There is evidence that the P2K3 and workers conducted meeting and reported to competent authority agency (Social, Labor, and Transmigration Agency of Labuhanbatu Selatan District) on regular basis monthly. Meeting minutes and attendance list of meeting and issues discussed are available. All parties who are concerns about OHS and welfare were attended at these meeting such as representative of work-ers union, managers and etc.

The organization has established procedures for response accidents and emergencies situations, include of fire, chemical spillage, explosion, natural disaster, flood, sabotage, and etc. The procedure was document-



of 59

RSPO v2 2009-10-09 28

ed as “Prosedur Kerja Kesiagaan Tanggap Darurat”, document no. PK-3.12-08, Revision 0, and flowchart of emergency response plan. There is evidence that the accident has been investigated and action taken to prevent recurrence, for example record of Accident Investigation Report (form FM-3.12-11/02), accident dated on April 17, 2015, investigation dated on April 21, 2015. The recommendation proposed to prevent recurrence are to ensure that all harvest’s tool (egreg) always equipped by cover that was provided. The accident records has provided to local authority (Social, Labor, and Transmigration Agency of Labuhanbatu Selatan District) in regular basis. All procedure and documentations available in Indonesian language so easy to understood by all workers at all levels within the organization.

Health and safety training for emergency response (simulation) was conducted related to response to earthquake and fire on 21 October 2014. This training covers information on health and safety and first aid.

Based on observation result to Chemical Storage and estate’s temporary hazardous waste storage (TPS-LB3) found some nonconformities, i.e. hazardous materials and PPE ‘s to be used symbols has not com-plete and standard, design of emergency eyes shower has not appropriate and water has not available and first aid box at TPS-LB3 has not available and there is only 1 (one) licensed person as first aider officer for estate (License No. DTK-TR/SU/IX/2015) valid until September 22, 2017. It is condition was raised as non-conformity (NCR No. RSPO00205).

Records of accident year 2015 were available in estate and POM but not included information of Lost Time Accident (LTA) metrics. It is condition was raised as non-conformity (NCR No. RSPO00206). All workers have covered with medical care (own hospital) and accident insurance (Jamsostek or workers social securi-ty agency (BPJS)). There is evidence that for accidents that have occurred, the affected worker received appropriate medical treatment, and was able to claim and receive compensaton. There evidence that the insurance policies are valid, i.e.: BPJS membership cards and payment received of BPJS (Memorandum from estate’s manager of Aek Torop, No. KATOR/MO/386/2015, dated October 30, 2015, to head of gen-eral affair, regarding contribution of BPJS-Kesehatan; The memo contained information deduction receipt for contribution January to October 2015 (the organization obligation 4.0% and worker 0.5%).

The company also has been developed and published the training program in 2016 include outsource worker such as RSPO P&C, RSPO SCCS, health safety operation, dangerous of agrochemical, pesticide dangerous and best management practice. Whereas, year 2015, Aek Torop estate and mill has conducted some training/awareness/socialization/updating/refreshing such as refreshing HCV monitoring and conser-vation of environment on 12 August 2015 by MR from district as trainer, using agrochemical and IPM in morning briefing on 1 June 2015 (division I to VII include outsource worker) by head of division as trainer, emergency response and first aid in morning briefing on 20 to 27 April 2015 (division I to VII include out-source worker) by MR from district as trainer and SCCS on 24 September 2015 by administration and fi-nance manager as trainer. Basic welder operator could not conduct because no schedule from training provider. Some training/awareness/socialization/updating/refreshing above has provided record of training accordance to PK-3.08-08 Rev.00 such as attendant list, documentation/photograph, train-ing/socialization/refreshing report and resume/summary of training evaluation.

In the procedure of Human Resource Development No. PK-3.08-08 Rev. 00 for On Job Training (OJT) which included awareness training/OHS simulation/Knowledge sharing/Socialization there are some training documentations that should be attached including

- Attendance list for participants and trainer - Training evaluation and - Training documentation

And after training conducted the document that should be completed including - Training Implementation Report - Resume of Training evaluation

Compliance status : Non Compliance NCR No. RSPO00202 Special working permit has not been signed by person have authority for activity has done example mainte-nance of crane on 18-23 March 2016 so that it is not compliance/consistent to procedure special working permit (PK-3.12-09).

NCR No. RSPO00203

• There is lack and inconsistency when determined occurrence and severity values and risk control in the



of 59

RSPO v2 2009-10-09 29

hazard identification, risk assessment and risk control example are risk assessment of Hoisting Crane Station in POM and risk assessment of harvesting under high voltage wire in estate.

• FM-3.12.02/12 (form of risk assessment or hazard identification) has not included risk control information which has implemented existing so that risk control effectiveness assessment currently and next time could not determine further correction action

NCR No. RSPO00204

• Worker & supervisor/foreman at ripple mill not use earplug and masker as PPE although there have been sign of warning mandatory using PPE it

• one spraying worker not using boot shoes as PPE based on record/documentation from assistant

NCR No. RSPO00205 Based on observation result to Chemical Storage and estate’s temporary hazardous waste storage (TPS-LB3) found some nonconformities, i.e. hazardous materials and PPE ‘s to be used symbols has not com-plete and standard, design of emergency eyes shower has not appropriate and water has not available and first aid box at TPS-LB3 has not available and there is only 1 (one) licensed person as first aider officer for estate (License No. DTK-TR/SU/IX/2015) valid until September 22, 2017.

NCR No. RSPO00206 Records of accident year 2015 were available in estate and POM but not included information of Lost Time Accident (LTA)

Principle 5: Environmental responsibility and conse rvation of natural resources and biodiversity

Criteria assessed: CR5.1; 5.2; 5.3; 5.5; 5.6 Criteria not assessed: - Findings:

The organization has been conducted an EIA according to the scope of operation covering building new roads, processing mills or other infrastructure; putting in drainage or irrigation systems; replanting and/or expansion of planting areas; management of mill effluents, clearing of remaining natural vegetation; man-agement of pests and disease palms by controlled burning. The EIA has been conducted and documented according to national and local requirements. There is evidence that the assessment include consultation with relevant stakeholders to identify impacts and to develop any mitigation measures.

The EIA of the organization namely Studi Evaluasi Lingkungan (SEL) that has been approved by competent authority body i.e the Secretary General of Ministry of Agriculture Republic of Indonesia, according to De-cree No. RC.220/269/B/II/94, dated on February 09, 1994.

Scope of SEL including rubber plantation, palm oil plantation and Rubber & Palm Oil Mills. The SEL has been conducted and documented by Center of Natural Resources & Environmental Research (Pusat Penelitian Sumber Daya Alam dan Lingkungan) University of Sumatera Utara (Puslit SDAL USU). Total of plantation area is 24.220,26 ha that consist of 5 (five) estates area, i.e.:

1. North Aek Nabara: 3.258,71 ha 2. South Aek Nabara: 7.166,43 ha 3. Sisumut : 5.345,66 ha 4. Aek Torop: 3.969,96 ha for Palm Oil Plantation 5. Aek Raso : 4.530,50 ha for Palm Oil Plantation

During the SEL conducted, the POM of South Aek Nabara, Sisumut and Aek Torop has been operated, and the POM at Aek Raso estate still in construction phase.

The environmental management plan has been documented in the document “Rencana Pengelolaan Ling-kungan” or RKL. The RKL included the potential impact fom current practices, measure to mitigate negatie impacts, potential locations or area impacted, and responsible persons or functions assigned. There is evi-dence that the organization’s RKL has been implemented and reported to the competent authority agency periodically 6 (six) monthly basis. For example: Letter no. DLAB-2/X/193/III/2016, signed by District Manag-



of 59

RSPO v2 2009-10-09 30

er of Labuhanbatu II District, PTPN III, dated March 14, 2016, regarding Implementation Report of RKL and RPL for Semester II of 2015. The letter addressed to head of environmental agency (BLH) of South Labuhanbatu at Kota Pinang. The report included POM and Estate of Aek Torop and POM and Estate of Aek Raso. There are evidences that the report has been received by staf of BLH of South Labuhannatu.

The above management plan incorporate a monitoring protocol, as documented in the document “Rencana Pemantauan Lingkungan” or RPL. The monitoring protocol has adaptive to operational changes, e.g.: the organization has revised RKL and RPL documents due to any change of law and regulations. The revision has been aporoved by the competent authority agency (head of environmental impacts control body) of Labuhanbatu District in accordance decree no. 660/608/BPDL-LB/2006, dated December 22, 2006. The monitoring protocol has been implemented to monitor the effectiveness of the mitigation measures.

Environmental management and monitoring plan (RKL/RPL) Aek Torop Mill and Estate regularly monitored and reported every 6 (six) months to Environmental Agency of Labuhanbatu Selatan District. On the previ-ous audit that accordance to evidence receipt letter of Laporan RKL/RPL Distrik Manager Labuhan Batu No. 2/X/22/III/2015 dated 27 March 2015 but there are 2 (two) type of impact not carried out monitored i.e level of erosion in field with slope 40% and index of biodiversity so that results of monitoring not available on environmental management and monitoring plan report semester I & II year 2014. It condition was raised as non-conformity. 2nd surveillance audit that there are 2 (two) type of impact not carried out moni-tored i.e level of erosion in field with slope 40% and index of biodiversity so that results of monitoring not available on environmental management and monitoring plan report semester I & II year 2015. It condition was raised again as non-conformity (NCR No. RSPO00207).

HCV assessment has been carried out by Centre for Natural Resources and Biotechnology (PPSHB) of Bogor Agriculture University in 2011. Information is obtained from the HCV assessment on flora and fauna, such as: Halcyon smymensis, Macaca fasicularis, Macaca nemestrina, Tupaina tana, Varanus salvator, and Ophiapagus hannah. From the HCV assessment, it is known that there are 5 HCV types in the company concession, namely HCV 1.1, 1.3, 2.3, 4.1 and 5 with total HCV area of 364.73 hectares. This consists of Raso River riparian area (29.57 hectares), Tasik river riparian area (88.79 hectares), water reservoir (10.38 hectares) and other riparian areas along the natural streams (riparian areas no.14 to 19 amount of 246.37 ha). Location of HCV areas not set-asides with existing the right of local communities so that agreement not available.

Recommendation has been made in the company’s HCV management plan and monitoring plan by PPSHB. Aek Torop Estate has created reported for HCV management, where it is known that several of activities has complied with the actual practice in the field. The company has provided signboards for dissemination of HCV information in relevant divisions including the prohibition from hunting, planting conservation plant in riparian, mark of agrochemical activities in riparian. In monitoring report division III, IV and V has informed regarding the status of HCV and RTE species where status HCV is good or OK example riparian areas on block Y6 (division V) and status or population of RTE species is low with incidental method. Whereas, monitoring of flora and fauna status/population for protected and rare status with permanent sample plot (PSP) method has not been used by company. It is accordance with HCV monitoring plan so that it was raised as non-conformity (NCR No. RSPO00208). Moreover, one of activity on HCV monitoring plan has not been implemented/carried out i.e measurement of water volume/debit on river/drain. it was raised as non-conformity too (NCR No. RSPO00208). All division shall carried out HCV monitoring but division I, II, VI & VII have not evidence that they has carried out HCV monitoring year 2015. it was raised as non-conformity too (NCR No. RSPO00208).

To ensure HCV management and monitoring has carried out maximally so that result of HCV management and monitoring activities shall be evaluated but the company not evaluating it period year 2015. Based on condition it so that the company creating HCV management and monitoring year 2016 not referring to result of HCV management and monitoring evaluation year 2015. It was raised as non-conformity (NCR No. RSPO00208).

The company has conducted waste and pollution assessment through identification of environmental im-pacts. Following are several results from the waste and pollution assessment in Aek Torop.

- Solid waste such as second containers, plastic waste, paper waste, EFB, fibre, shell, etc. - Waste water such as POME, wastewater from laboratory, and domestic wastewater from hous-

ing. - Emission of waste such as emission from mill and generator operations, etc. - Hazardous waste such as oil, grease, accumulator, chemical container, etc.

According to these types of waste having been identified by the company, Aek Torop Mill has established



of 59

RSPO v2 2009-10-09 31

its management plan and carried out waste management practice according to following work instructions. - Work Instruction No. IK-3.12.01/14 on Solid Waste Control and Use (3rd revision) dated 15 Feb-

ruary 2010. - Work Instruction No. IK-3.03-14/01 on Waste Water (POME) Management (2nd revision) dated

15 February 2011.

The organization has a registry/list of waste products produced, i.e.: hazardous waste, solid waste, and liq-uid waste (POME). Hazardous waste including used oil, used drum, chemical container, bottle ex-chemical, oil filter ex dump truck, ex-ball-lamp, and used battery. Solid waste including domestic waste, used metal, used paper, plastic waste, EFB, Fibre, shell and etc.

The organization also has a list of pollution sources, i.e. POM activities, laboratory, housing activities, emis-sion from mill, generators, boiler, and transportation vehicles, fertilizer, chemical usage and etc.

The organization has an inventory of chemicals and their containers that are used and kept on site. The in-ventory was exist in temporary hazardous waste storage (TPS-LB3) and the data available in the following documents are hazardous waste manifest, hazardous waste balance (neraca limbah B3), hazardous waste storage activity sheet (lembar kegiatan penyimpanan LB3), and hazardous waste monthly report (Laporan Bulanan Limbah B3)

The chemicals and their containers has stored at TPS-LB3 in accordance with national and regional re-quirements. The organization’s TPS-LB3 has licensed No. 503/431/BPPTPM/2014, dated October 16, 2014 and valid for 5 (five) years since issued (October 16, 2019).

The chemicals and their containers were disposed off in accordance with applicable requirements. The or-ganization has an agreement with third party to dispossed off hazardous waste, i.e.: PT Putra Tunas Sejati. PT Putra Tunas Sejati has licensed as hazardous waste collection company based on Decree of State Min-ister of Environmental No. 324 year 2010, dated December 28, 2010, regarding License of Hazardous Waste Collection. Collection and disposal records of chemicals and their containers are maintained, e.g. at POM, there is official report of hazardous waste handover from the organization to PT Putra Tunas Sejati, dated April 4, 2015. The hazardous waste are used battery 4 pcs, chemical’s sack 741 pcs, ex printer tape/laser jet 97 pcs, and ball lamp 46 pcs. There is evidence that the hazardous waste data updated peri-odically at monthly basis.

The organization has a documented waste management and disposal plan to avoid or reduce pollution, in-cluding measures for identifying and monitoring sources of waste and pollution, improving the efficiency of resource utilisation and recycling potential of wastes as nutrients or converting them into value-added prod-ucts, appropriate management and disposal of hazardous chemicals and their containers (see 5.3.2). There is evidence that the organization has utilized POME for land application as nutrients substituted fertilizer. The organization has license no. 503/032/BPPTPM/2014, dated January 27, 2014, regarding License of POME for Land Application, PTPN III AEK TOROP POM. The license valid until January 27, 2017. There is no evidence that waste disposed off using open fire.

To control the use of fossil fuel efficiency and the use of renewable energy, the company has published the procedure Management of usage of natural resources (SDA) No. PK-3.02-05 Rev. 00 which include the re-port of electricity use, fuel oil and lubricants. The monitoring process of the electricity, fuel oil and lubricants usage conducted regularly each month. The monitoring report are include: a. Fuel and lubricants consumption for vehicles b. Fuel and lubricants consumption for machinery and equipment’s c. Electricity consumption d. Water consumption

Aek Torop estate has an analysis document of usage of petrol & diesel from year 2011 to 2015 for estate vehicles and equipment, including the truck/dump truck, carpool vehicles, school buses, excavators, trac-tors, power generator, water pump, grader and compacter. The total annual diesel usage was 332.842 liters during year of 2015.

Aek Torop mill maintains records of energy use and efficiency analysis for year 2016 (up until March) and 2015. The efficiency analysis was prepared using monthly data on FFB processed, CPO produced, fiber and shell produced, turbine energy usage and amount of shell and fiber used for the turbine, including calo-rie values for shell and fiber and renewable energy usage.

Auditee has plan for improving efficiency of the use of fossil fuels and to optimise renewable energy and it has implemented example using shell as renewable energy, maintenance of machines and vehicle periodi-cally, minimizes of stand by time for processing.



of 59

RSPO v2 2009-10-09 32

To avoid the usage of fire during land clearing or replanting, the company has issued circular letter No. 3-01/SE/05/2012 dated February 23, 2012 for all entire Estate Manager in PTPN III in order to: a. Estate that will be conduct land clearing or replanting do not burning in the area of land clearing or

replanting. b. In case if there are still burning in the area of land clearing or replanting, the responsibility for that

violation will be handled by local management. c. Estate management should conduct the monitoring regularly and located the sign of prohibiting burn

in strategic area/location.

Circular letter above as zero burning policy. There is no record indicating the company’s burning activity re-lated to their replanting activity or others example block Y6 and Y7. Year 2016, there are not replanting ac-tivities.

The monitoring for land clearing that will be conducted by subcontractor through agreement letter that state the prohibition of burning during land clearing or replanting example agreement between CV Dimensi Mulia with company (no.3.01/SPJ/104/2013) section requirements and send internal employee to control and monitored the implementation. In replanting activities, the company applies zero burning as well because they use heavy equipment such grader, excavator and others.

The company has Work Instruction No. IK-3.12-01/10 on Emergency Response Procedure (1st revision) dated 7 January 2005. This procedure covers emergency condition from fire, accidents, flood, explosion, earthquake, and chemical spills). The company also provides fire extinguishers facilities in housing, office, and mill. hydrant facilities are provided in mill. The fire extinguishers are regularly checked by foreman.

The Aek Torop Mill has performed pollution and emission source identification including greenhouse gases (GHG) to, among others, land conversion, generator operational, boiler, welding machine, transportation unit, and POME pond. Emission monitoring is conducted towards several emission sources such as gener-ator and boiler.

Auditee have short term plan to reduce or minimise GHG i.e. optimization of use fertilizer, maintenance of machine include genzet, develop of methane capture, working plan of efficiency of using fossil fuel and op-timization of using renewable energy. Working plan of efficiency of using fossil fuel such as maintenance of vehicle machine, installing the barrier height of truck, optimization of using shell, road maintenance, develop of the methane capture, strategy of harvesting, etc. Realization from working plan of fossil fuel efficiency are maintenance of vehicle periodically in workshop, installing the barrier height of truck on the road to mill, shell was used by dominant, road maintenance example in block Y6 and implementation of harvesting & transport plan.

All programme has implemented exclude develop of methane capture example volume of fosil fuel year 2015 amount of 35,545 liter and year 2016 (till March 2016) amount of 25,075 liter for diesel genzet (2 unit), pomp of liquid, welder machinery, dump truck, car, excavator and loader. Volume of fiber production year 2015 amount of 29,121.48 ton and shell amount of 19,414.32 ton. All volume of fiber production using boil-er as renewable fuel, whereas shell amount of 11,648.59 ton only as boiler fuel. Whereas, long-term plan to reduce or minimise GHG i.e. enrichment of conservation areas include riparian areas, develop of bio-diesel mill and electricity from biogas plant distribute to communities. All programmes have been not im-plemented.

Auditee has monitoring of emission and pollutants include GHG emission. Monitoring of GHG emission us-ing GHG Calculator version 2.0.1, whereas other GHG emission are analysis laboratory. It has explained on indicator 5.1 (RKL/RPL report). All source GHG emission has calculated on result of GHG calculation by GHG calculator include of fuel consumption from transportation activities (FFB transportation which using vehicle’s contractor and FFB transportation from suppliers) and genzet in mill.

Compliance status : Non Compliance.

NCR No. RSPO00207 2nd surveillance audit that there are 2 (two) type of impact not carried out monitored i.e level of erosion in field with slope 40% and index of biodiversity so that results of monitoring not available on environmental management and monitoring plan report semester I & II year 2015.

NCR No. RSPO00208

• Monitoring of flora and fauna status/population for protected and rare status with permanent sample plot



of 59

RSPO v2 2009-10-09 33

(PSP) method has not been used by company where It is accordance with HCV monitoring plan.

• One of activity on HCV monitoring plan has not been implemented/carried out i.e measurement of water volume/debit on river/drain.

• All division shall carried out HCV monitoring but division I, II, VI & VII have not evidence that they has carried out HCV monitoring year 2015.

• Result of HCV management and monitoring activities shall be evaluated but the company not evaluating it period year 2015.

• Based on condition above so that the company creating HCV management and monitoring year 2016 not referring to result of HCV management and monitoring evaluation year 2015.

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills

Criteria assessed: CR6.1; 6.2; 6.3; 6.4; 6.5; 6.6; 6.7; 6.8; 6.9; 6.10; 6.11; 6.12; 6.13 Criteria not assessed: - Findings:

PTPN III – Aek Torop estate and mill still uses Social Impact Assessment document created in 2010. From the SIA assessment, information has been obtained on positive and negative impacts from the company ac-tivities. The negative impacts are, among others, road damage caused by FFB and CPO transportation ac-tivity, public facilities, work opportunities, company workers and others. PN III also has Environmental Management and Monitoring Plan document (RKL/RPL) that included social impact too so that SIA docu-ment and RKL/RPL are complementary. The company has made management plan focusing on Aek Batu and Pasir Tuntung Villages as villages located nearby the concession.

There is a document of social impact management action plans 2016 dated March 2016 shows the impact of source identification, management objectives, management plans and the location and time of implemen-tation. The aspects that are managed include: infrastructure and social facilities, employment and business opportunities.

Social impact management plan was created through the involvement of representatives of local govern-ment (village officials of Pasir Tuntung and AEK Torop) as well as community members. A visit to the office of Pasir Tuntung Village, the village head and village secretary confirmed the company representatives visit them to discuss the issue of access for the villagers who want to use the PN III road.

PN III also has carried out evaluation of social impact implementation for year 2015 and documented. The document describes the priority issues, alternative settlement, follow-up and completion status. for 2015, there are three projects were completed i.e: heavy machinery and materials roadwork, soft loan for small business owner.

There is revision to the Working Procedures No. PK-3.00-03 on stakeholders Consultation and Communica-tion dated December 1, 2015. While the Working Procedure of the publications still use No. PK-3.00-06 dated on 15 September 2014. According to the working procedures, stakeholders can express their aspira-tions, suggestions and feedback to the PN III via the website, telephone, mail, email, fax, the suggestion box or visit. The company has created signboards and communication flowchart to stakeholders. The com-pany also has provided communication box and to record incoming letters the company has provided log-book.

The company has assigned persons to be in charge and responsible for stakeholder communication and consultation in Aek Torop estate and mill are assistant of human resources in estate and assistant of fi-nance and human resources in mill.

The company has list of stakeholder year 2016 where it has signed by manager of Aek Torop. Its stake-holders are community organisation, press, labour union, contractor, outgrower, government institution, NGO, etc. include of mobile number and address of each stakeholders.

The Company has a mechanism to receive and classify information required from and for stakeholders to know and understand the policy, situation, and development of the company and anticipate negative issues. The company has Working Procedures on Publication No. PK.3.00-06 Rev. 01 dated September 15, 2014, mechanism to receive complaints and resolve dispute in affective through Work Instruction No. IK-3.09-03/02 (6th revision) dated 15 February 2010 and circular letter no.3.12/SE/10/2011 regarding canal of infor-



of 59

RSPO v2 2009-10-09 34

mation will be use by stakeholder for submit information, suggestion and critical to the company include suggestion of boxes. These systems have been communicated to the local community. Based on inter-view with the community of Aek Batu and Pasir Tuntung Villages, they confirm that the company’s mecha-nism has been communicated to them, evidenced by the participant list and photograph.

Regarding internal workers, the company also has socialised the mechanism through Article 69 (Bab XIV) of Collective Employment Contract (PKB) on complaint mechanism. According to the labour union delega-tion, no complain has been found from the internal workers to date. If they have complain so they can di-rectly report to supervisor.

The company has mechanism of identification, calculation and compensation for the local of legal right or customary land right (Working Procedure Conflict Resolution No. PK.3-11.11.12 Rev. 0 dated February 25, 2015) point 7.24. The problem solving mechanism is: (1) information response from the company; (2) prob-lem investigation, and (3) resolving the problem with discussion or by court. During 2nd surveillance, to date there have been no cases of dispute with any parties that require compensation

Director of PN III issued a decision letter regarding the wages of employees in accordance with the decision of the governor of North Sumatra No. 188.44 / 88 / KPTS / 2016 dated February 25, 2016 on the minimum wage by sector. Minimum wage for plantation sector is IDR 2,250,000. Staff and workers receive salary payment receipts (monthly pay slips) in a timely manner. Management staffs are paid through bank transfer, while workers are paid in cash. By checking the payslips of 10 employees of class I and II both estate and mill employees, there are no paid employees under the Minimum Wage.

Aek Torop Estate Manager issued letter No. KATOR/X/12/2016 dated March 4, 2016 on payment of sec-toral minimum wages of South Labuhan Batu districts in 2016 that must be met by the contractor. The amount of the daily wage for work such as maintenance and fertilization, the contractor must pay its work-ers for IDR39.015. Interviews with workers of CV Anggi and CV Raja Gemilang obtained information that the contractor pays his worker at IDR39.100.

The company also has collective agreements such as Collective Employment Contract (Perjanjian Kerja Bersama) for period of 2016-2017 with all workers. Checking against the Letter Agreement Employ-ment/Appointment of employees Aek Torop Estate, explained about the rights and responsibilities of both parties such as terms of payment and conditions of employment (eg working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, provision for the female employee only and provision to the employees who live in the village. Those agreements in Indonesia language Because workers are Indonesian citizens. Employees who could not read are entitled to read out the entire contents of the letter of agreement prior to the signing of the document in Indonesian.

All workers have intensive access to water and electricity from the company. Based on information from in-terviewed workers, they have been provided with housing, sport facilities, religious facilities, auditorium of employee, polyclinic, babysitting room, water source, and electricity from the company. The company has provided all the facilities for their workers. Location of estate with traditional market is not far (5-10 km) and easily accessible by motorcycle or walk because condition of road can be passed. As part of the allowance, an employee is entitled to 15 kg of rice every month. While his wife and kids each got a rice allowance 9 kg and 7.5 kg every month.

The organization (POM & Estate) has a statement in local languages (Bahasa Indonesia) recognising the rights of employees to freedom of association, as documented in the Code of Conduct 3rd Edition. The code of conduct was signed by organization’s Prime Commissioner (Achmad Mangga Barani) and Prime Di-rector (Megananda Daryono) on December 2012. The code of conduct has been distribute to all unit and socialized to all workers within organization. Article 2 of the code of conduct, organization’s commitment to stakeholders, point l (Worker Union) said : - Worker union placed as organization’s partner in order to achieve organization’s objectives. - The aspiration of the worker union will be considered seriously and it is relationship with workers and or-

ganization’s interest. - The organization will provide all relevant information to worker union related to organization’s policies and

activities

The organization has collective work agreement (Perjanjian Kerja Bersama) or PKB that agreed by the or-ganization and the worker union (SP-BUN Aek Torop) and acknowledged by the comptent authority agency (head of labor and transmigration agency of North Sumatera Province) dated February 11, 2016. Article 5 (oganization’s acknowledgement) of the PKS said: “.. Worker Union of PTPN III is legal worker union by law in the organization”. And, in the article 6 (Worker Union Facilities) said, the organization provided office



of 59

RSPO v2 2009-10-09 35

room and its utilities for worker union activities.

The records of minutes of meetings between the company and workers union available and maintained. There is evidence that the records are readily available to employees upon request. For example, meeting between the organization’s management and worker union (SP-BUN) dated March 21, 2016. The meeting was attended by POM’s manager, worker union’s chairman and secretary, document controller, and etc. Is-sues discussed during meeting is worker insurance (BPJS).

The company has policy on age of employment, with 18 years as the minimum employment age. This is stated in Work Instruction No. IK-3.08-01/01 (8th revision) dated 6 May 2011 on Worker Recruitment and on article 11 of the company’s Joint Employment Contract (PKB) for period of 2016-2017. The commitment of company covering worker from third parties too which working in company areas so that agreement letter between the company with outsource company has included minimum age requirements.

Based on verification of document (list of “bezzeting” of employees and report of general problem events) and field in mill and estate that was not found workers who have age under requirements.

The organization has policy on non-discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age. The organization also has policy on equal opportunities within the organization. The policy has documented in the Code of Conduct Docu-ment 3rd edition. The code of conduct available for the relevant stakeholders. There is sufficient evidence that the policy has been implemented appropriately. Based on interview with some workers, there is no evi-dence that discrimination is exist.

There is evidence that employees and groups including local communities, women, and migrant workers have not been discriminated against and happy with the way the company is treating them. There is no evi-dence complaint against the organization on issues relating to discrimination. Based on employee’s data on March 2016, employee turn over rate very small (4 persons of new employee were resigned at March 2016).

Statement on equal opportunity policy under Article 11 & 14 of the Collective Work Agreement (PKB). The company has policy and mechanism for employee/workers promotion. The employee or workers will be as-sessed annually to get level promotion from the company. This policy is stated in employee assessment system, based on which all of employees have equal opportunities without discrimination.

The company has anti-sexual harassment policy that defines sexual harassment as ‘words, jokes and ac-tion’ that refer to sexual harassment. The company has also provided mechanism to solve this problem us-ing report to respective foreman, followed by investigation. There is a letter No. 3.08/SE/165/2009 dated 6 July 2009 on the communication of information on sexual harassment policy to all of workers and contractor workers. Refresh of anti-sexual harassment policy and flow process of reporting of sexual harassment as grievance to employees so the company has carried out socialization dated on March 22, 2016 in Employee Hall. Interviews with a number of employees and worker women obtained information that they had attend-ed the socialization of the sexual harassment policy.

Article 26 of the Collective Employment Contract (PKB) states that all workers have rights for leave. This in-cludes birth leave, menstrual leave, marriage leave, etc. Based on worker interview in Aek Torop mill and estate, they understood that they have right of childbirth leave during 3-month and menstruation leave.

Generally that average FFB price has determined by local government by periodically but the company has procedures to purchasing of Fresh Fruit Bunches (FFB) from third party No. PK-3.03-12 Rev 0, as technical guidance pricing on quality classification results of sorting and extraction of palm oil and palm kernel. Mill has Memorandum of District Manager Labuhan III No. DLAB 3 / HEAT / MO / 496/2015 dated April 6, the lowest extraction rate (20%) IDR.1,535 and highest extraction rate (23.50%) IDR 1,770 and Memorandum No. DLAB3 / HEAT / MO / 504/2015 April 7, 2015 the actual price of the lowest extraction rate (20%) IDR. 1, 510 and highest extraction rate (23.50%) IDR1,745. The FFB price displayed in front of Mill, and also text messaged to all regular suppliers daily. During this audit period there is no complaint related to FFB price.

As a State-Owned Enterprises, PN III has the obligation to organize the Partnership Program and Commu-nity Development (Program Kemitraan dan Bina LIngkungan (PKBL)). The program is planned each year based on proposals from partners / communities around the company. Among the programs are: provided a loan to communities in surrounding of estate that have a business; home improvement program for poor cit-izens. Realization of the program in 2015 is a soft loan for two small businesses valued at IDR90 million. As for the home improvement program there is no realization. In addition the company also fulfilled its obliga-tion to pay retribution to the local government.



of 59

RSPO v2 2009-10-09 36

PN III did not employ migrant workers. Checking against worker who works on contractors, they are mostly wives of employees. The rest are residents of communities around the company. The Contractor is obliged to report the identity of its employees to the company. Interviews with two contractors workers note that they sign a contract and fill the biodata along with photos. They were informed about the type of job and salary. The Company has not defined the concept of forced labour and human trafficking specifically.

PN III has a sustainability policy document issued in October 2015 and signed by the Director. Point No. 8 of the policy states that the PN III to respect human rights and avoid complicity in violations of human rights, respect for the rights and dignity of workers, treat workers fairly and free from all forms of discrimination in-cluding preventing all forms of abuse and sexual violence and to protect the rights of reproduction of all workers. There is evidence of human rights issues explanations to employees or contractors on 19 October 2015, 10-11 February 2016, 2 March 2016 and was attended by 159 people.

Compliance status : Full Compliance

Principle 7: Responsible development of new plantin gs

Criteria assessed: CR7.1 to 7.8 Criteria not assessed: - Findings:

Based on information of table 5 & explanation indicator 2.2.1 regarding land use right above and history that there is year planting 2006-2013 because the company has carried out replanting. Whereas, based on re-sult of remote sensing imagery (landsat) that condition before November 2005 is dominant of oil palm trees.

Compliance status : Not Applicable.

Principle 8: Commitment to continuous improvement i n key areas of activity

Criteria assessed: CR8.1 Criteria not assessed: - Findings:

SIA document has revised to include employees as stakeholders and recording of conflict resolution with communities from Pasir Tutung Village. All records meeting accompanied by the questionnaire, attendance list and photos of activities then realized in the social management and monitoring plan.

PTPN III – Aek Torop estate & mill regularly revised their social impact management plan. They also con-duct monitoring on implementation of program/project wether they completed or deferred to next year.

The company is consistency in implementation of QMS, EMS and monitoring of liquid waste, emission and pollution by third party laboratory (results of examination has informed on RKL/RPL report), land applica-tion, use of renewable energy and the action plan for continual improvement has conducted through man-agement review meeting mechanism and established quality objective, and internal audit.

Compliance status: Full Compliance.

• RSPO SCCS

E.1. Definition

Findings: The organization (PTPN III Aek Torop Mill) was implemented the RSPO-SCCS Mass Balance model since



of 59

RSPO v2 2009-10-09 37

July 2014. This SCCS model allowed to mixing of certified and uncertified product but shall be control by the Mass Balance record to ensure the quantity of certified product, and only certified product could be claim by the organization as certified palm oil product. Organization has identified the volume of certified and uncertified FFB supplied to the mill. Based on record of Mass Balance year 2015 (table 2 above) showed the amount of FFB certified and uncertified, when the certified FFB is come from own estate (Aek Torop Estate (KATOR) and other estate under PTPN III who have RSPO certificate i.e Aek Nabara Selatan Estate (KANAS), Sei Kebara Estate (KSKAR) period of January to August 2015 only, Sei Baruhur Estate (KSBAR) period of January to August 2015 only, Aek Nabara Utara estate (KANAU) since 15 October 2015 and Sei Sumut estate (Sisumut) since 15 October 2015 but year 2016, Aek Torop mill not receive FFB from Aek Nabara Selatan Estate (KANAS), Aek Nabara Utara estate (KANAU) and Sei Sumut estate (Sisumut) again. Whereas, uncertified FFB is come from other estates under PTPN III who have not RSPO certificate i.e Sei Sumut Estate & Aek Nabara Utara estate before 15 October 2015 and Sei Kebara estate & Sei Ba-ruhur estate since September 2015 and suppliers/traders i.e CV. Torgamba Raya, CV. Ravi Prima, UD. Mekar, CV. Awan Tech Mandiri, CV. Rata, CV. Paima Marhusor, UD. Roma Rezeki, UD. Winata Perdana and CV. Naga Tutur.

Based on Table 2 that Aek Torop Mill was received certified FFB year 2015 (Aek Torop estate, Aek Nabara Selatan estate, Sei Baruhur estate period of January to August 2015, Sei Kabara estate period of January to August 2015 and FFB from Sei Sumut estate and Aek Nabara Utara estate since 15 October 2015) is approximately 133,021.11 tons of FFB (56.18% from the total of FFB received in once year) and uncertified FFB is approximately 103,738.86 tons (43.82%). Whereas, in year 2016 (January to February) was re-ceived certified FFB are 8,438.46 tons (27.19%) and uncertified FFB are 22,597.98 tons (72.81%). Aek To-rop Mill only produced Crude Palm Oil (CPO) and Palm Kernel (PK). Mass balance record also showed the certified product. In year 2015 that certified CPO is 31,008.14 tonnes (58.11%) and uncertified CPO is 22,351.05 tonnes (41.89%). Whereas, certified PK is 5,391.25 tonnes (56,87%) and uncertified PK is 4,088.86 tonnes (43.13%). In year 2016 (per February 2016) that certified CPO is 1,967.85 tonnes (28.25%) and uncertified CPO is 4,998.07 tonnes (71.75%). Whereas, certified PK is 362.01 tonnes (28.17%) and uncertified PK is 923.24 tonnes (71.83%). Compliance status : Full Compliance

E.2. Explanation

Findings:

The company has estimated tonnage of CPO and PK product in form of distribution of FFB process and product – annual working plan year 2016. FFB from Aek Torop estate will processing in Aek Torop mill and Aek Raso mill amount of 42,782.40 mt and 64,173.60 mt. Whereas, projection of CPO & PK product year 2016 is 24,600 mt (9,840 mt in Aek Torop mill & 14,760 mt in Aek Raso mill) and 4,764 mt (1,908 mt in Aek Torop mill & 2,856 mt in Aek Raso mill) with extraction rate are 23% (OER) and 4.46% (KER).

FFB, CPO and PK production year 2015 & 2016 has explained on table 3 & 4. Whereas, certified CPO & PK year 2015 are 31.008.14 mt (CPO) and 5,391.25 mt (PK). Year 2016, certified CPO is 1,967.85 mt and certified PK is 362.01 mt.

The company has registered in eTrace as trading paltform for RSPO product on behalf Aek Torop POM – PT Perkebunan Nusantar III (Persero). Whereas, Greenpalm as trading platforn for RSPO product on be-half “Kantor Pemasaran Bersama (KPB) Nusantara” where it is subsidary from PT Perkebunan Nusantara III & PT Perkebunan Nusantara IV.

In the production report year 2015 was recorded that the company has sold certified CPO with Mass Bal-ance supply chain model by eTrace platform. The result of document check process has been found that all documentation production process from purchasing certified FFB until delivery note has stated that the certified CPO claimed with Mass Balance and transaction by the RSPO IT platform (eTrace) was available. Compliance status : Full Compliance

E.3. Documented procedures



of 59

RSPO v2 2009-10-09 38

Findings:

Organization (PTPN III Aek Torop Mill) has recorded and documentation owned procedure and work in-structions to ensure the implementation of RSPO SCCS Mass Balance. That procedures such as: - Working procedure no. PK-3.03-12 Rev. 00 issued on 25.02.2014 for Purchasing and determination of price for

FFB from third parties (Pembelian dan Penentuan Harga TBS Kelapa Sawit Pihak Ketiga).

- Work instruction no. IK-3.03-12/01 Rev. 01 issued on 30.05.2014 for Receiving and storage of FFB in the Palm

Oil Mill (Penerimaan TBS di Pabrik Kelapa Sawit).

- Work instruction no. IK-3.03-03/11 Rev. 00 issued on 25.02.2014 for Sorting process for FFB (Sortasi Tandan

Buah Segar Kelapa Sawit)

- Working procedure no. PK-3.03-03 Rev. 00 issued on 25.02.2014 for Planning and Controlling of Processing Pro-

cess (Perencanaan & Pengendalian Proses Pengolahan)

- Working procedure no. PK-3.03-11 Rev. 01 issued on 01.07.2014 for Supply Chain Certification System Mecha-

nism (Mekanisme Rantai Pasok (SCCS))

- Work instruction no. IK-3.03-03/08 Rev. 00 issued on 25.02.2014 for Palm Oil Processing (Pengolahan Kelapa

Sawit)

- Work instruction no. IK-3.03-03/10 Rev. 00 issued on 25.02.2014 for Loss Analysis of Palm Oil and Kernel (Anali-

sa Kehilangan Minyak dan Inti Sawit).

- Work instruction no. IK-3.03-03/09 Rev. 00 issued on 25.02.2014 for Quality Control Production Process in Palm

Oil Mill (Pengendalian Proses dan Mutu Produksi Pabrik Kelapa Sawit.

- Working procedure no. PK-3.03-08 Rev. 01 issued on 01.07.2014 for Finished Goods Delivery (Pengiriman

Produksi Jadi Pabrik ke Instalasi Belawan, PT. Sarana Agro Nusantara, PT. IKN, PKSMK dan Pihak Swasta)

- Working procedure no.PK-3.07-33 rev.01 issued on 17.04.2015 for selling CPO – CSPO (Penjualan CPO – CSPO)

include to ensure that the request of certified products start from received order in KPB Nusantara, the produc-

tion process until delivery of certified products form mill is in accordance with the request.

Refers to the Decision Letter from Manager of Aek Torop Mill PTPN III No. PATOR/SKPTS/02/2015 issued on February 17, 2015 the company has assigned the person in charge for implementation of RSPO SCCS, the company appointed trained person Mr Anggiat Mangasi Sihombing acting as the person who having overall responsibility for and authority over the implementation of requirements and compliance with all ap-plicable requirements of RSPS SCCS standard.

The last refreshment training for SCCS conducted on February 17, 2015 with evidenced is attendant list and also certificate, attended by 14 persons and on March 19 to 20, 2015 attended by 26 persons.

In associated with the sales of finished goods, the PTPN III has different mechanism, which the procure-ment contract with the customer is not done directly by the Mill, but conducted by Joint Marketing Office (KPB) located in Medan. Mill only delivered the finished goods to customer.

Procedure for receiving and processing certified and non-certified FFB was available above. Compliance Status : Full Compliance

E.4. Purchasing and good in

Findings:

The organization has regulated the receiving and storage of certified and non-certified FFB at the Palm Oil Mill in Work instruction no. IK-3.03-12/01 Rev. 01 issued on 30.05.2014, beside that the organization also issued the Circular Letter No. 3.12/SE/2.3/2014 regarding the identification of certified product during the Receipt of FFB and Delivery product of CPO and PK.

In the procedure and Circular Letter regulated that the Marking of certified FFB receipt will be use stamp CSPO only in form PB-25.01 (FFB Incoming Delivery Note) and stamp CPSO or CSPK Mass Balance in form PB-33.01 (CSPO/CSPK Delivery Note) and during 2nd surveillance audit, it is implemented or applied properly.

Aek Torop mill was conducted verification of raw material source as certified and non-certified status not properly because based on mass balance report that FFB receipt from Aek Nabara Utara estate and Sisu-mut estate on September 2015 amount of 1,798.13 mt & 2,236.09 mt has claimed as certified FFB however



of 59

RSPO v2 2009-10-09 39

RSPO certificate (no. RSPO 00011) valid since date on 15 October 2015. It condition was raised as non-conformity (NCR No. RSPO00209).

During year 2015 & 2016 (per February 2016), there is not overproduction of certified tonnage so that audi-tee not inform to CB. Compliance status: Non Compliance

NCR No. RSPO00209

Aek Torop mill was conducted verification of raw material source as certified and non-certified status not properly because based on mass balance report that FFB receipt from Aek Nabara Utara estate and Sisu-mut estate on September 2015 amount of 1,798.13 mt & 2,236.09 mt has claimed as certified FFB however RSPO certificate (no. RSPO 00011) valid since date on 15 October 2015.

E.5. Record keeping

Findings:

Aek Torop mill has recorded and balance receipts all if RSPO certified and uncertified in to mass balance record and also for palm oil production such as CPO and PK with basis three months and evaluated in eve-ry month.

During the surveillance audit, mill has evaluated of volume the CPO and PK certified quantity year 2015 and 2016. The annual balance records including the incoming certified FFB and non-certified FFB, the pro-duction process, the finished goods of certified and non-certified CSPO and CSPK, sales and end stock.

Based explanation on indicator above so that mass balance report not correct where volume of incoming raw material on September 2015 include of FFB from Sisumut estate and Aek Nabara Utara estate which not certified. It condition was raised as non-conformity (NCR No. RSPO00210).

In the Sales record has separated between the sales of certified CSPO and non-certified CPO so in the balance records can be seen the material accounting system according to conversion ratios stated by RSPO and transaction was available on the RSPO IT platform (eTrace) i.e sell transaction dated on 14 & 29 March 2016 amount of 2,500 mt with buyer’s eTrace ID no.RSPO_P01000002300). Contract, reference letter, weighbridge ticket, delivery instruction, delivery order and statement letter for delivery/hand over of CPO product was available.

Result of verification on PT Sarana Agro Nusantara (PT SAN) are :

• PT SAN is subsidary company from PT Perkebunan Nusantara III (Persero), PT Perkebunan Nusantara IV (Persero) and PT Perkebunan Nusantara V (Persero) based on notary act no.7 dated on 3 January 2014 by notary of Safnil Gani,SH.

• There is agreement of storage tank for CPO product between PT SAN and PTPN III (no.03/SAN-N.III/UB-UD/CPO/XII/2015 dated on 28 December 2015 with valid until 31 December 2016. Scope of agreement are using storage tank in Dumai and Belawan – Riau and South Sumatera Province for kept CPO product with capacity of 15,500 mt (Belalawan) and 15,000 mt (Dumai).

• PT SAN have stock daily report, receive & delivery daily report for CPO product each ownership.

• PiC on PT SAN has understood regarding certified product based on substation/content and document.

• Weighbridge ticket from POM, delivery instruction, delivery order and statement letter of deliv-ery/handover CPO was available, correct and easy access.

Compliance status: Non Compliance NCR No.RSPO00210

Mass balance report year 2015 & 2016 (till February) not appropriate with actual condition because FFB from Aek Nabara Utara estate & Sisumut estate on September 2015 has claimed as certified FFB however RSPO certificate valid since 15 October 2015.



of 59

RSPO v2 2009-10-09 40

3.2. Status of previously identified non-conformiti es

All 18 non-compliances have been identified during the 1st surveillance assessment again RSPO P & C and RSPO SCCS. They consist of 16 major non-compliances and 2 minor non-compliances to RSPO P & C and RSPO SCCS. The company has taken corrective action to respond these as well, and closure for these minor non-compliances will be verified during the next surveillance audit. Below is summary of all identified non-compliances, corrective actions taken and auditor conclusions. • RSPO P&C

RSPO Certification System 4.2.4;

NCR No. 2015- 01 of 18 (MAJOR) PT Perkebunan Nusantara III (Persero) as holding company and RSPO membership holder has no submit evi-dence of partial certification year 2015. Evidence of correction and corrective action taken :

Company provide self-assessment report for all uncertified companies and revised the time bond plan accord-ing to the readiness to comply with RSPO requirements. Detail information can be show in section 1.10.

During 2nd surveillance audit, the company has submitted evidence of partial certification year 2016. Auditor Conclusions : Closed Indicator 1.2.1 Publicly available documents shall include, but are not nec essarily limited to:• Land ti-tles/user rights (Criterion 2.2);• Occupational hea lth and safety plans (Criterion 4.7);• Plans and im pact assessments relating to environmental and social im pacts(Criteria 5.1, 6.1, 7.1 and 7.8);• HCV docu-mentation (Criteria 5.2 and 7.3);• Pollution preven tion and reduction plans (Criterion 5.6);• Details of complaints and grievances (Criterion 6.3);• Negotia tion procedures (Criterion 6.4);• Continual im-provement plans (Criterion 8.1);• Public summary of certification assessment report;• Human Rights Policy (Criterion 6.13) NCR No.2015-02 of 18 (Major) In the circular letter from PTPN III Director No. 3.00/SE/01/2012 issued on January 24, 2012 regarding the listed document that can be published still not include the HCV documentation (criteria 5.2 and 7.3), details process of complaint procedure (criteria 6.3), final report public summary of certification result and human rights policy (criteria 6.13) as required by RSPO P&C. Evidence of correction and corrective action taken : The company has provided circular letter no.3.00/SE/01/2015 dated on April 8, 2015 from Director of market-ing and planning developing regarding publication of company data (publish and not publish). In appendix from circular letter no.3.00/SE/01/2015 dated on April 8, 2015 that the listed document that can be published include HCV documentation (no.24), flow process of complaint/conflict procedure (no.26), RSPO public sum-mary report (no.27) and human right policy (no.22).

The circular letter above is revision of previous circular letter from Director (no.3.00/SE/01/2012 dated on 24 January 2012).

Aek Torop estate has informed to assistant of division (no. KATOR/INT/81/2015 dated on 16 April 2015) re-garding circular letter no.3.00/SE/01/2015.

During 2nd surveillance audit, circular letter no.3.00/SE/01/2015 dated on April 8, 2015 was available in mill and estate.

Auditor Conclusions : Closed Indicator 1.3.1 There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be doc umented and communicated to all levels of the workforce and operations

NCR No.2015-03 of 18 (Minor) No evidence Code of Conduct PT Perkebunan Nusantara III (Persero) has communicated/socialized to prod-



of 59

RSPO v2 2009-10-09 41

uct transport company.

Evidence of correction and corrective action taken :

The socialization of code of conduct to transport of product company by letter dated on 20 April 2015 and website. On the letter has informed that company have code of conduct where it has published on website too. Auditor Conclusions : Closed

Indicator 2.1.1 Evidence of compliance with relevant legal requirements sha ll be available

NCR No.2015-04 of 18 (Major)

Some evidences of non-compliance with relevant legal requirements such as: • There are hazardous and toxic waste (type of used chemical/pesticide container) are 176 unit in Aek To-

rop estate have been kept more than period time on requirement/permit and • PT Putra Tunas Sejati (as hazardous and toxic waste transporter) have not evidence that it has cooperat-

ed with the beneficiaries ot the hazardous and toxic waste for used chemical/pesticide container, used oil and used oil filter

• The company has socialized to outsource company regarding minimum salary amount Rp 32,176 with 3 (three) working hour (8-11 o’clock) per day but salary for workers from outsource company (CV Jefri) in afdeling III amount Rp 30,000 so that it is under minimum salary regulation.


The company has provided letter no. 3.03/X/50/2015 dated on April 13, 2015 to PT Putra Tunas Sejati regard-ing remind of period time to taking of hazardous waste (March to June 2015). If outside of time limit which has been determined so it is not justified and will not be served.

The company has provided schedule of taking hazardous waste in PT Perkebunan Nusantara III (all estate and mill) too where Aek Torop estate has taken dated on April 4, 2015 (round I) and round II will be conducted on 2nd week in June 2015 with type of waste is used agrochemical/pesticide container (176 unit).

The company has provided agreement between PT Putra Tunas Sejati (as hazardous and toxic waste trans-porter) with PT Tanang Jaya Sejahtera (as beneficiaries, processing for liquid phase, transporter of the haz-ardous and toxic waste) no. 04/MS-TJS/V/2015 dated on 07 June 2015 and agreement between PT Putra Tu-nas Sejati with PT Triguna Pratama Abadi no.119/TPA-MOU/III/2015 dated on 09 March 2015 (as collecting, processing and beneficiaries of the hazardous and toxic waste for liquid and solid). Used oil can be processed in PT Tanang Jaya Sejahtera and PT Triguna Pratama Abadi, whereas used oil filter and used agrochemi-cal/pesticide waste can be processed in PT Triguna Pratama Abadi only.

The company has provided minute of meeting for socialization of minimum wage regulation again dated on April 17, 2015 in Aek Torop estate office where based on Governor decree no.188.44/1120/KPTS/TAHUN 2014 that minimum wage/salary in Labuhanbatu Selatan District amount Rp 1,870,000/month and letter no. KATOR/X/01A/2015 dated on January 5, 2015 from Aek Torop estate to subcontractor company that sala-ry/wage during 3-hours/day amounts Rp 32,427 for manual maintenance, spraying, and fertilizing activities. All subcontractor company in Aek Torop estate so is guided to local government decree. Subcontractor company who attended is 9 (nine) company one of them is CV Jefri. CV Jefri has paid salary/wage in May 2015 accord-ance with the regulation.

During 2nd surveillance audit, there are hazardous and toxic wastes (type of used chemical/pesticide container) in Aek Torop estate & mill have been kept more than period time on requirement/permit again. It condition was re-raised non-conformity again (NCR No.2016-01 of 12 ). Auditor Conclusions : Open (NCR No.2016-01 of 12)

Indicator 2.2.1 Documents showing legal ownership or lease, history of land tenure and the actual le-gal use of the land shall be available



of 59

RSPO v2 2009-10-09 42


There is part of Aek Torop estate areas (block W3 and X3) on outside of renewal legal land (based on map no.26/12/2009). Evidence of correction and corrective action taken :

The company has provided working plan for completion of block W3 & X3 (afdeling V) are re-measurement in May 2015, create of map in June 2015 and coordination/consultation between legal departments with relevant government agencies in July 2015. The next step will be created after being known the results of consultation with relevant party because to revise of map no.26/12/2009 only where block W3 and X3 has included or to apply new application of cultivation right tittle or land use right (HGU) as additional areas so that the company will start from the first stage of the concession request. Re-measurement and create of map has finished and those evidence has submitted.

During 2nd surveillance audit that there are not evidences regarding the result of coordination/consultation be-tween legal departments with relevant government agencies so that not appropriate with handling plan which has stated by company and there is not respond for memorandum of manager district of Labuhanbatu II to Head of Law department dated on 19 February 2016 (no. DLAB2/3.11/MO/127/2016) regarding block W3/X3 include of land use right map. It condition was re-raised non-conformity again (NCR No.2016-02 of 12 )

Auditor Conclusions : Open (NCR no.2016-02 of 12)

Indicator 3.1.1 A business or management plan (minimum three years) shall be documented that in-cludes, where appropriate, a business case for sche me smallholders


In the Long Term Plan (RFP) for 2014-2018 still not consolidated between mill and estate, so information about the profit and loss for mill and estate and forecasts of the product price not available. Evidence of correction and corrective action taken :

The company (Aek torop estate and mill) has provided long-term plan year 2014 to 2018 appendix 6.1.1 about profit and loss section so that profit and loss information has available. Aek Torop estate and mill will be fore-casted are profit. Forecast of the product price information has available in profit and loss of mill i.e. CPO: Rp 6,800 to 7,800/tons and PK: Rp 3,500 to 4,000/tons.

During 2nd surveillance audit, still use long term plan it so that this is indicator has complied.

Auditor Conclusions : Closed

Indicator 4.6.11 Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demons trated


Spraying workers from outsource company has not been carried out annual medical surveillance year 2014 for cholinesterase parameter. Evidence of correction and corrective action taken :

The company has provided the results of laboratory analysis (no.541E/LHU-KES/BK3-MDN/V/2015) from spraying workers (subcontractor workers) for cholinesterase parameter with sampling date on May 12, 2015 where there is 1 employee indicated poisoning because under reference value. Whereas year 2015, medical check-up has implemented on August 2015 for all workers such as harvesting, maintenance, administration, infrastructure, administration in office and spraying and fertilizing from subcontractor. The results of check-up are all employees normal include of 1 employee which previous check-up is under reference value.


Indicator 4.6.12 No work with pesticides shall be undertaken by preg nant or breast-feeding women



of 59

RSPO v2 2009-10-09 43


Aek Torop Estate do not have evidence that all spraying workers especially women not pregnant or breast-feeding on working. Evidence of correction and corrective action taken : Aek Torop Estate has provided statement letter dated on April 21, 2015 from spraying workers especially women workers that they are not pregnant or breastfeeding on working. Statement letter has signed by em-ployee and Director of subcontractor company. Furthermore, the company has carried out check-up for wom-en workers which handling of agrochemical. Based on statement letter and results of check-up that all spray-ing employees not pregnant or breastfeeding now.

During 2nd surveillance audit, there are statement letters year 2016 regarding spraying “women” worker not pregnant and breastfeeding. Auditor Conclusions : Closed Indicator 4.7.2 All operations where health and safety is an issue shall be risk assessed, and proce-dures and actions shall be documented and implement ed to address the identified issues. All precau-tions attached to products shall be properly observ ed and applied to the workers


• The risk assessment was conducted on February 2014 but one of the results of identification of hazardous source, assessment and risk management not implemented to outsource workers (section fertilization and maintenance) i.e. annual medical surveillance and extra fooding.

• One of accident not carried out investigation and corrective action (accident recapitulation report on Octo-ber 2014 on behalf Mr Sugeng)

• The company has conducted regular examination on 18 November 2014 but there is no sufficient follow up regarding to abnormality result as shown in laboratory analysis results No: 119/A/LHU-KES/BK3/-MDNXII/2014 (there are 11 employees in mill which reduced hearing).

Evidence of correction and corrective action taken : The company has provided the results of laboratory analysis from fertilizing and maintenance workers (sub-contractor workers) dated on May 12, 2015 with general parameter and photograph of extra fooding in each afdeling. Whereas year 2015, it will be implemented on August 2015.

Investigation activities and corrective action has conducted on October 09, 2014. All document relate of acci-dent on behalf Mr Sugeng has available such as accident report (memorandum no. KATOR/MO/3.08/374/2014 dated on 08 October 2014) where include information of date of accident, location of accident, time of accident and accident summary chronological; investigation report relate of OHS; reference letter no. RSTOR/S.Ket/024/X/2014 dated 14 October 2014 from Torgamba hospital regarding time period of care and treatment; and OHS problem report. Dated 09 October 2014.

The company has provided reference letter regarding results of health examination in Torgamba hospital for 11 employees. Five of them are normal and the rest shall be used of earplug and hygiene of ear shall be im-proved.

During 2nd surveillance audit that annual medical surveillance and extra fooding has been implemented, has carried out investigation and corrective action for accident and six employees has been used earplug and im-prove of hygiene of ear.

Auditor Conclusions : Closed Indicator 4.8.1 A formal training programme shall be in place that covers all aspects of the RSPO Prin-ciples and Criteria, and that includes regular asse ssments of training needs and documentation of the programme

NCR No.2015-10 of 18 (Major) The training related with RSPO principles and Criteria still not provided and training plan for outsource work-ers not provide too.



of 59

RSPO v2 2009-10-09 44

Evidence of correction and corrective action taken : The company has provided results of human resource development program identification year 2015 (FM-3.08/03) in estate and mill where one of them is RSPO P&C example HCV monitoring training (July), conserva-tion of environment training (August), using agrochemical training (June), emergency response training, first aid training (June), IPM training (April), basic welder operator training, SCCS (June). Whereas, training plan for outsource workers are using and handling agrochemical training (June), emergency response training (June), and first aid training (June).

During 2nd surveillance audit that training plan above has carried out by company except is basic welder opera-tor training because not yet schedule on provider training company.


Indicator 4.8.2 Records of training for each employ ee shall be maintained

NCR No.2015-11 of 18 (Minor) The training documentation used only evaluation form and attendance list but other documentations that re-quired in procedure of Human Resource Development No. PK-3.08-08 Rev. 00 is not available


Record of training year 2015 above (explanation on indicator 4.8.1) have available such as evaluation of par-ticipant, training report and summary report of post implementation/training evaluation where accordance with working instruction no. PK-3.08-08 Rev.00 Auditor Conclusions : Closed Indicator 5.1.2 Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change s hall be developed and implemented within a com-prehensive management plan. The management plan sha ll identify the responsible person/persons

NCR No.2015-12 of 18 (Minor) There are 2 (two) type of impact not carried out monitored i.e level of erosion in field with slope 40% and index of biodiversity so that results of monitoring not available on environmental management and monitoring plan report semester I & II year 2014


Based on environment management and monitoring (RKL/RPL) report (1st and 2nd semester) year 2015 where it is not include information of monitoring of erosion level on slope 40% and biodiversity index. Aek Torop es-tate has submitted memorandum letter to head of technology department (no.KATOR/3.03/MO/136/2015) but there is not respond. Auditor Conclusions : Open (NCR No.2016-09 of 12)

Indicator 5.6.1 An assessment of all polluting acti vities shall be conducted, including gaseous emis-sions, particulate/soot emissions and effluent


• Working plan of efficiency of using fossil fuel and optimization of using renewable energy not available

• One of source GHG emission is fuel consumption from transportation activities and genzet in mill but vol-ume of fuel consumption not included from FFB transportation which using vehicle’s contractor and FFB transportation from suppliers on the calculate of GHG year 2014




of 59

RSPO v2 2009-10-09 45

Working plan of efficiency of using fossil fuel such as maintenance of vehicle machine, installing the barrier height of truck, optimization of using shell, road maintenance, develop of the methane capture, strategy of har-vesting, etc.

Working plan of optimization renewable energy are stock of FFB continuity assured, maintenance of boiler, etc.

The company has provided revision of calculate GHG year 2014 where fossil fuel consumption information from vehicle’s third parties year 2014 are 31,480.71 litres and FFB transport from suppliers are 131,539 litres has included.

During 2nd surveillance audit that calculate GHG year 2015 has involved fossil fuel consumption information from vehicle’s third parties and FFB transport from suppliers.


Indicator 6.5.1 Documentation of pay and conditions shall be available

NCR No.2015-14 of 18 (Major) The company has socialized to outsource company regarding minimum salary amount Rp 32,176 with 3 (three) working hour (8-11 o’clock) per day but salary for workers from outsource company (CV Jefri) in afdeling III amount Rp 30,000 so that it is under minimum salary regulation Evidence of correction and corrective action taken :

The company has provided minute of meeting for socialization of minimum wage regulation again dated on April 17, 2015 in Aek Torop estate office where based on Governor decree no.188.44/1120/KPTS/TAHUN 2014 that minimum wage/salary in Labuhanbatu Selatan District amount Rp 1,870,000/month and letter no. KATOR/X/01A/2015 dated on January 5, 2015 from Aek Torop estate to subcontractor company that sala-ry/wage during 3-hours/day amounts Rp 32,427 for manual maintenance, spraying, and fertilizing activities. All subcontractor company in Aek Torop estate so is guided to local government decree. Subcontractor company who attended is 9 (nine) company one of them is CV Jefri. CV Jefri has paid salary/wage in May 2015 accord-ance with the regulation.

During 2nd surveillance audit that CV Jefri has paid salary/wage in May 2015 to February 2016 accordance with the regulation. Auditor Conclusions : Closed

• RSPO SCCS

E.2.2 The mill must also meet all registration and reporting requirements for the appropriate supply chain through the RSPO supply chain managing organi zation (RSPO IT Platform or book and claim)

NCR 2015 - 15 of 18 (Major) The company has claimed and stamped the certified CPO and PK with Mass Balance in all production records and delivery documentation, however the Sales of certified product that claimed as Mass Balance still not transact by the RSPO IT platform Evidence of correction and corrective action taken :

Based on information on eTrace that value in volume sold is null so that no certified transaction with physic from year 2014 till now.

Based on information above so that the company has provided circular letter to buyer/customer that all dis-patch CPO and PK year 2014 and 2015 (per March) not claim as certified, revision of mass balance year 2014 and 2015 for categorize of dispatch and revision of work instruction about SCCS mechanism.

During 2nd surveillance audit that Aek Torop mill has stamped the certified CPO with Mass Balance on weigh-bridge ticket dated on 14 & 29 March 2016 because it is certified product and there are transaction on eTrace



of 59

RSPO v2 2009-10-09 46

too. Whereas, other weighbridge ticket no stamp of certified CPO because it is non-certified product.


E.3.1.a Complete and up to date procedures covering the implementation of all the elements in the re-quirements

NCR 2015 - 16 of 18 The organization not have procedure or work instruction to ensure that the request of certified products start from received order in KPB, the production process until delivery of certified products from Mill is in accord-ance with the request. This regulation should be created to ensure that the certified products can be traced the suitability between incoming order and supply source including the records of order fulfilment Evidence of correction and corrective action taken : Company provided revised SOP traceability for certified product. The procedure has been inform about mech-anism for incoming order for certified product from KPB and order processing on head office then to the re-spective mill.

During 2nd surveillance audit that SOP traceability for certified product was available and implemented.


E.4.1 The site shall verify and document the volume s of certified and non-certified FFBs received

NCR 2015 - 17 of 18 In the procedure and Circular Letter regulated that the Marking of certified FFB receipt will be use stamp CSPO only in form PB-25.01 (FFB Incoming Delivery Note) and stamp CPSO or CSPK Mass Balance in form PB-33.01 (CSPO/CSPK Delivery Note), however in PB-33.01 No. TTP/IS/PKSMS.44/2015 and No. TTP/IS/PKSMK.43/2015 there are two mark of stamp CSPO Mass Balance and CSPK Mass Balance, where-as the product that sold is Palm Kernel Evidence of correction and corrective action taken :

The company has provided correction PB-33.01 No. TTP/IS/PKSMS.44/2015 and No. TTP/IS/PKSMK.43/2015 with delete CSPO mass balance mark/stamp.

During 2nd surveillance audit that there is not two mark of stamp on delivery note/weighbridge ticket again.

Auditor Conclusions: closed

E.5.1 Record keeping

NCR 2015 – 18 of 18 In the Sales record still not separated between the sales of certified CSPO and CSPK and non-certified CPO and PK, so in the balance records cannot be seen the material accounting system according to conversion ra-tios stated by RSPO Evidence of correction and corrective action taken : The company has provided revision of mass balance report, which it has separated between the sales of certi-fied CSPO and CSPK and non-certified CPO and PK.

During 2nd surveillance audit that the company has consistent separated between the sales of certified CSPO and CSPK and non-certified CPO & PK on mass balance report. Auditor Conclusions : Closed



of 59

RSPO v2 2009-10-09 47

3.3. Identified Non-conformances, Corrective Action s Taken and Auditors Conclusions

All 12 non-compliances have been identified during the 1st surveillance audit again RSPO P & C and RSPO SCCS. They consist of 7 major non-compliances and 5 minor non-compliances to RSPO certification system, RSPO P & C and RSPO SCCS. The company has taken corrective action to respond these as well, and closure for these minor non-compliances will be verified during the next surveillance audit. Below is summary of all iden-tified non-compliances, corrective actions taken and auditor conclusions.

Indicator 2.1.1 Evidence of compliance with relevant legal requirem ents shall be available

NCR No. RSPO00199 (Major where escalation from prev ious audit so that potential suspend)

• The Government Regulation on Social Responsibility Environment (PP No 47 of 2012) and the decision of the Minister of SOEs on the implementation of the Partnership Program and Community Development (PER-09 / MBU / 07/2015) was not included on list of legal and other requirements.

• There are hazardous and toxic waste (type of used chemical/pesticide container) in Aek Torop estate has been kept more than period time on requirement/permit.

Corrections:

• To identify and evaluation of new laws and regulations such as government regulation no.47 year 2012 and the Minister of SOEs on the implementation of the Partnership Program and Community Development (PER-09 / MBU / 07/2015).

• Fill in result of identification and evaluation new laws and regulations are government regulation no.47 year 2012 and PER-09 / MBU / 07/2015 to law and regulation register.

• Pick up all hazardous and toxic waste in estate and mill

• Submit letter to local government regarding request of change kept time period be 180 days or more ac-cordance update regulation.

Corrective Action:

• Law department and district manager shall identify and evaluation overall and their result will distribution to estate and mill

• Technology department will starting bidding process to appoint of third party early year

• Estate and mill will be remainder to head office that their hazardous and toxic waste will be more than 90 days or 180 days.

Auditor Conclusions : Closed Date of closure : 02 June 2016 Verification results :

The company has provided list of laws and regulations of 1st semester in mill and estate that PP No 47 of 2012 and PER-09 / MBU / 07/2015 has involved or included. Source for both of law and regulation is law online, government ministry and local government secretary and control location is administration supervisor. List of law and regulation has signed by mill and estate manager. Furthermore, the company has provided evaluation of laws and regulations of 1st semester in mill and estate. Based on results of evaluation that company has compliance for both law and regulation.

The Aek Torop mill has provided statement letter of hand over of hazardous and toxic waste (no.PATOR/BA/01/2016) dated on 18 May 2016 for ex waste/agrochemical container (jerigen, bottle and sack), ink toner or cartridge, used filter oil, used accu, used lamp and used oil by truck with police number BK 8798 MN own CV Amindy Barokah. CV Amindy Barokah has recommendation of hazardous and toxic waste transport from Environment Ministry (letter no.B-9802/dep.IV/LH/PDAL/09/2014 dated on 3 September 2014) and Governor of South Sumatera Province decree no.188.44/452/Kpts/2014 regarding collecting hazardous and toxic waste license with scale of province. Hazardous waste manifest for all wastes has available such as no.ZF 0009127 (contaminated container), ZF 0009124 (used oil filter), ZF 0009126 (used ink toner or car-tridge), ZF 0009108 (used accu), ZF 0009125 (used lamp), and ZF 0009122 (used oil).



of 59

RSPO v2 2009-10-09 48

The Aek Torop estate has provided statement letter of hand over of hazardous and toxic waste (no.KATOR/BA/01/2016) dated on 18 May 2016 for ex waste/agrochemical container (jerigen, sack and inner of fertilizer sack), ink toner or cartridge, used filter oil, used accu, used lamp and used oil by truck with police number BK 8080 MB & BK 9552 MN own CV Amindy Barokah. CV Amindy Barokah has recommendation of hazardous and toxic waste transport from Environment Ministry (letter no.B-9802/dep.IV/LH/PDAL/09/2014 dated on 3 September 2014) and Governor of South Sumatera Province decree no.188.44/452/Kpts/2014 re-garding collecting hazardous and toxic waste license with scale of province. Hazardous waste manifest for all wastes has available such as no. ZF 0009115 (used oil), ZF 0009116 (used oil filter), ZF 0009117 (used accu), ZF 0009118 (used lamp), ZF 0009119 (contaminated goods) and ZF 0009120 (contaminated containers).

Indicator 2.2.1 Documents showing legal ownership or lease, history of land tenure and the actual le-gal use of the land shall be available

NCR No. RSPO00200 (Major where escalation from prev ious audit so that potential suspend)

Based on previous audit that there are part of Aek Torop estate areas (block W3 and X3) on outside of re-newal legal land (based on map no.26/12/2009) but no evidence sufficient for handling areas it until 2nd sur-veillance audit.

Corrections:

• The company will issue decree regarding excluding block W3 & X3 areas (division V) from scope of RSPO audit until finalized of land use right process.

• Revision of statement areas and projection of FFB production year 2016

• Create of memorandum letter to relevant department, Labuhanbatu 2 district and estate manager regarding status of FFB from block W3 and X3 non-certified

• Revision of previous action plan regarding finalization of block W3 and X3 cases.

Corrective Action:

To ensure all areas has covered inside land use right and implement of program, which has made.

Verification results :

Auditor Conclusions: Open (Suspend)

Result of 1 st verification :

The company has provided memorandum letter from head of information technology & management rep-resentative (CMR) to head of department of 3.01, 3.03, 3.07, 3.11, manager of Labuhanbatu 2 district, Aek Torop estate & mill manager dated on 3 May 2016 (no.3.12/MO/Kebun/609/2016) regarding change of status FFB certified to non-certified for FFB from block X3 and W3. It is valid since 10 April 2016 and head of department of 3.01 & 3.11 will create of time bond or action plan to finalize cases it but until 60 days after closing meeting that it was not available. However, revision of areas statement and projection of FFB production year 2016 was not available too.

Date of closure : June 5, 2016


Result of 2 nd verification :

The company has provided additional of evidences such as revision of FFB production projection year 2016, revision of area statement year 2016 and ta-ble time of processing areas which not in-clude/involved on renew land use right request.

Total areas of block W3 & X3 in division V is 15.70 ha (year planted 2008 : 12.95 ha and infrastructure (road & drain) : 2.75 ha). Projection of FFB produc-tion year 2016 from block W3 and X3 is 240.44 mt and table time of processing areas which not in-clude/involved on renew land use right request.


Indicator 2.2.2 legal boundaries shall be clearly demarcated and vi sibly maintained



of 59

RSPO v2 2009-10-09 49

NCR No. RSPO00201 (Minor)

During 2nd surveillance audit that evidence of follow up or correction action on letter no.KATOR/DLAB2/MO/83/2015 dated on 2 April 2015 regarding repair or re-develop the pillars boundary not available.

Corrections:

• Submit memorandum to Labuhanbatu 2 district office again regarding request of approval budget for repair and re-develop the pillar boundary.

• Conducting repair and re-develop the pillar boundary accordance time schedule has approved by Labuhanbatu 2 District manager and working procedure no.PK-3.11-10

Corrective Action:

To ensure all pillar boundary monitored and coordinating with Labuhanbatu 2 district by properly.

Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of implementa-tion to verified at next audit

Indicator 4.1.2 A mechanism to check consistent implementation of p rocedures shall be in place


Special working permit has not been signed by person have authority for activity has done example mainte-nance of crane on 18-23 March 2016 so that it is not compliance/consistent to procedure special working per-mit (PK-3.12-09).

Corrections: • Special working permit signed by person have authority for maintenance of crane on 18-23 March 2016

• Create of route cause, correction and corrective action on non-conformity form

Corrective Action:

• Mill manager shall ensuring that all activities have high risk shall get special working permit from mill man-ager before staring activity accordance working procedure no.PK-3.12-09 point 7.1.3.

• All head of section shall understand regarding type of high risk activity in mill accordance working proce-dure no.PK-3.12-09

Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of implementa-tion to verified at next audit Indicator 4.7.2 All operations where health and safety is an issue shall be risk assessed, and proce-dures and actions shall be documented and implement ed to address the identified issues. All precau-tions attached to products shall be properly observ ed and applied to the workers

NCR No. RSPO00203 (Major)

• There is lack and inconsistency when determined occurrence and severity values and risk control in the hazard identification, risk assessment and risk control example are risk assessment of Hoisting Crane Sta-tion in POM and risk assessment of harvesting under high voltage wire in estate.

• FM-3.12.02/12 (form of risk assessment or hazard identification) has not included risk control information which has implemented existing so that risk control effectiveness assessment currently and next time could not determine further correction action

Corrections:

• Revision of hazardous source identification, risk assessment and risk control and shall appropriate with working procedure no.PK-3.12-02 point 7.2.8, 7.2.9, 7.2.10 and 7.2.13



of 59

RSPO v2 2009-10-09 50

• Revision of form no.FM-3.12-02/11 where risk control which needed be current controlling, evaluation of effectively for current risk control and correction action which needed

Corrective Action:

To ensure determined occurrence and severity values and risk control and form no.FM-3.12.02/12 appropriate with working procedure no.PK-3.12-02 by estate & mill manager and MR from Labuhanbatu 2 district office. Auditor Conclusions : Closed Date of closure: 02 June 2016 Verification results : The company has provided revision of occurrence and severity values and risk control in the hazard identifica-tion, risk assessment and risk control example are risk assessment of Hoisting Crane Station in POM and risk assessment of harvesting under high voltage wire in estate. Whereas, FM-3.12-02/12 has revised too where it has included risk control information which has implemented existing, risk control effectiveness assessment currently and correction action for next time.

All revision above has approved by head of information technology and MR (CMR) department on 26 April 2016.

Indicator 4.7.3 All workers involved in the operation shall be adeq uately trained in safe working pratices. Adequate and appropriate protective equi pment shall be available to all workers at the plac e of work to cover all potentially hazardous operatio ns such as pesticide application, machine opera-tions and land preparation, harvesting and if it is used, burning.

NCR No. RSPO00204 (Major)

• Worker & supervisor/foreman at ripple mill not use earplug and masker as PPE although there have been sign of warning mandatory using PPE..

• one sprayer not using boot shoes as PPE based on record/documentation from assistant

Corrections:

• The company monitoring regarding complete of PPE in all working areas and employee using PPE on working hour

• Substitute of spraying‘s booth shoes accordance standard

• Re-socialization of using PPE is mandatory

Corrective Action:

• To ensure all employees using PPE by daily patrol

• To ensure PPE condition from spraying employee Auditor Conclusions : Closed Date of closure : 06 May 2016 Verification results : Aek Torop mill has provided record of PPE monitoring on 6 & 20 April 2016 (shift I & II) that earplug and masker was provided by company and used by employees in ripple mill where inspector and employee was signed on inspector form. Whereas, switching old to new booth shoes was carried out by Aek Torop estate to spraying employees at division V where employee and officer was signed on hand over of PPE form. Re-socialization was conducted on 29 April 2016 in division V by head of division V. Minute of socialization, at-tendant list and photograph was available.



of 59

RSPO v2 2009-10-09 51

Indicator 4.7.5 Accident and emergency procedures s hall exist and instruction shall be clearly under-stood by all workers. Accident procedures shall be available in the appropriate language of the work-force. Assigned operatives trained in first aid sh ould be present in both field and other operations and first aid equipment shall be available at worksites . Records of all accidents shall be kept and perio di-cally reviewed.

NCR No. RSPO00205 (Minor) Based on observation result to Chemical Storage and estate’s temporary hazardous waste storage (TPS-LB3) found some nonconformities, i.e. hazardous materials and PPE ‘s to be used symbols has not complete and standard, design of emergency eyes shower has not appropriate and water has not available and first aid box at TPS-LB3 has not available and there is only 1 (one) licensed person as first aider officer for estate (License No. DTK-TR/SU/IX/2015) valid until September 22, 2017.

Corrections:

• To complete hazardous materials and PPE ‘s to be used symbols appropriate standard. • Re-design of emergencu eyes shower and repair water machine • Completing first aid box in temporary hazardous waste storage • Request to Labuhanbatu 2 district office regarding first aider officer training

Corrective Action:

To ensure that OHS requirement on RSPO standard was compiled on RSPO internal audit

Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of implementa-tion to verified at next audit

Indicator 4.7.7 Occupational injuries shall be reco rded using Lost Time Accident (LTA) metrics

NCR No. RSPO00206 (Minor) Records of accident year 2015 were available in estate and POM but not included information of Lost Time Accident (LTA)

Corrections:

• To complete accident record with lost time accident information. • Officer shall understand how to calculate lost time accident and fill in on accident record

Corrective Action:

To ensure that OHS requirement on RSPO standard was compiled on RSPO internal audit

Auditor Conclusions: Evidence of immediate action t aken was accepted. Effectiveness of implementa-tion to verified at next audit

Criterion 5.1.2 Records of regular report on enviro nmental management in accordance with relevant regulations

NCR No. RSPO00207 (Major escalation from previous a udit) 2nd surveillance audit that there are 2 (two) type of impact not carried out monitored i.e level of erosion in field with slope 40% and index of biodiversity so that results of monitoring not available on environmental man-agement and monitoring plan report semester I & II year 2015

Corrections: The company carried out monitor of level of erosion in field with slope 40% and index of biodiversity on envi-ronmental management and monitoring plan report.



of 59

RSPO v2 2009-10-09 52

Corrective Action:

To ensure all environmental management & monitoring activities on matrix was carried out and their result shall stated on report. Auditor Conclusions : Closed Date of closure : 02 June 2016 Verification results :

The company was provided environmental monitoring and management report semester I year 2015 where in-side report has informed about biodiversity of vegetation/flora (table 2.10) and aquatic fauna i.e plankton on river (table 2.11) and benthos (table 2.12) and calculate of erosion using MUSLE method i.e 111.13 tonnes/ha/year (middle level) so that their preventive action is develop of tracing on areas with slope of C-E class. 1st semester year 2015 report has not showed by Aek Torop estate during surveillance audit. Indicator 5.2.4 Where a management plan has been cr eated there shall be ongoing monitoring : the status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported and outcomes of monitoring shall be fe d back into the management plan


• Monitoring of flora and fauna status/population for protected and rare status with permanent sample plot (PSP) method has not been used by company where It is accordance with HCV monitoring plan.

• One of activity on HCV monitoring plan has not been implemented/carried out i.e measurement of water volume/debit on river/drain.

• All division shall carried out HCV monitoring but division I, II, VI & VII have not evidence that they has car-ried out HCV monitoring year 2015.

• Result of HCV management and monitoring activities shall be evaluated but the company not evaluating it period year 2015.

• Based on condition above so that the company creating HCV management and monitoring year 2016 not referring to result of HCV management and monitoring evaluation year 2015

Corrections: • The company carry out HCV monitoring in division I, II, VI and VII accordance PK-3.01-08 and measure-

ment of water volume/debit on river/drain and their result inform to estate assistant manager in order to compilation.

• The company evaluating HCV monitoring and their result used as baseline to create of HCV management and next monitoring plan.

Corrective Action:

To ensure that all requirement about HCV on RSPO standard was compiled and the officer understand about it Auditor Conclusions : Evidence of immediate action taken was accepted. Effectiveness of implementa-tion to verified at next audit

E.4.1 The site shall verify and document the volume s of certified and non-certified FFBs received

NCR No.RSPO00209 (Major) Aek Torop mill was conducted verification of raw material source as certified and non-certified status not properly because based on mass balance report that FFB receipt from Aek Nabara Utara estate and Sisumut estate on September 2015 amount of 1,798.13 mt & 2,236.09 mt has claimed as certified FFB however RSPO certificate (no. RSPO 00011) valid since date on 15 October 2015



of 59

RSPO v2 2009-10-09 53

Corrections:

• Revision of FFB receipt report and CPO & PK production report period of September & October 2015 where raw material and product from Sisumut estate and Aek Nabara Utara estate switching be non-certified sta-tus.

• Create of memorandum from Aek Torop mill to head of technology department and information technology and MR (CRM) department to technology department regarding change of production data from Aek Torop mill and revision of production daily report by online/intranet (http://10.3.5.220)

Corrective Action:

To ensure all FFB certified claim starting since certificate issued date.

Verification results :



The company has provided record pf CSPO/Non CSPO production distribution on September 2015 from Aek Nabara Utara estate and Sisumut estate. Inside of record has informed that FFB and product status has changed from CSPO to non CSPO with amount of FFB from Aek Nabara Utara estate : 1,798.13 mt & Sisumut : 2,236.09 mt and CPO & PK from Aek Nabara Utara estate : 443.12 mt and 84.72 mt & Sisumut : 536.66 mt & 104.31 mt.

There are not distribution information to others par-ties example technology department, commercial department and or KPB Nusantara so that still non-compliance.




Aek Torop mill has provided memorandum to tech-nology department (no.PATOR/3.03/MO/314/2016 dated on 1 May 2016) regarding change of produc-tion data period of January to 14 October 2015 and Memorandum to technology department from head of information technology and MR (CRM) depart-ment (no.3.11/3.16/MO/20/2016 dated on 27 May 2016) regarding revision of annual production report by online/intranet .

Momorandum from Aek Torop mill has submitted to technology department again, Labuhanbatu 2 district office and commercial department by email on 8 June 2016.

Both memorandums were attached appendix i.e FFB process, CPO & PK production report in Aek Torop mill from Aek Nabara Utara estate and Sisumut es-tate period of January to 14 October 2015. On Oco-tober 2015, Aek Torop mill was received FFB from both suppliers ater 14 October 2015 so that it has certified status.

During closing NCR that information on intra-net/online has not been revised because need long time.


E.5.1 Record keeping

NCR No. RSPO00210 (Major) Mass balance report year 2015 & 2016 (till February) not appropriate with actual condition because FFB from Aek Nabara Utara estate & Sisumut estate on September 2015 has claimed as certified FFB however RSPO certificate valid since 15 October 2015

Corrections:

The company will revision of mass balance report year 2015

Corrective Action: To ensure all FFB certified claim starting since certificate issued date and communicate to head office if any



of 59

RSPO v2 2009-10-09 54

condition need discussion Verification results :



The company was provided memorandum to tech-nology department from head of information tech-nology and MR (CRM) department (no.3.11/3.16/MO/20/2016 dated on 27 May 2016) regarding revision of annual production report by online/intranet and their attachment and recapitula-tion of FFB receipt in Aek Torop mill period of Sep-tember 2015.

The company has not provided revision of mass balance report basis intranet/online and mass bal-ance report period January to October 2015 and in-form to other relevant parties




The company was provided Momorandum from Aek Torop mill has submitted to technology department again, Labuhanbatu 2 district office and commercial department by email on 8 June 2016 and their at-tached appendix i.e FFB process, CPO & PK pro-duction report in Aek Torop mill from Aek Nabara Utara estate and Sisumut estate period of January to 14 October 2015. On Ocotober 2015, Aek Torop mill was received FFB from both suppliers ater 14 October 2015 so that it has certified status.

Moreover, the company was provided mass balance report period of January to December 2015 where all information has correct and connect between in-formation


3.4. Noteworthy Positive Components -

3.5. Conclusions and Recommendation for RSPO P & C and Supply Chain Certification

The audit team has confirmed through the audit process that the company has established and maintains an effec-tive system to ensure compliance with the RSPO P & C and Supply Chain Certification System requirements. PT TUV Rheinland Indonesia recommends that Aek Torop palm oil mill be approved for certification of compliance to the RSPO P & C and Supply Chain Certification System requirements.

3.6. Issues Raised by Stakeholders and Findings Per taining to Issues Issues Raised during Stakeholder Interviews On-site

No. Issues Raised Audit Verification

1. Replanting activities has affected oil palm trees own community broken

The company has repair condition and replanting oil palm trees again



of 59

RSPO v2 2009-10-09 55

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 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 Perkebunan Nusantara III

Tio Handoko Head of Management System Date: July 11, 2016

Signed on behalf of PT TUV Rheinland Indonesia Hendra Fachrurozy Lead Auditor Date: July 11, 2016



of 59

RSPO v2 2009-10-09 56

APPENDICES

Appendix 1: Details of Certificate



of 59

RSPO v2 2009-10-09 57



of 59

RSPO v2 2009-10-09 58

Appendix 2: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment)

APL Areal Penggunaan Lain (Non-forested Land Use) APU Air Permukaan Umum (Public water surface) BPD Badan Penasehat Desa (villages advisory body) BPN Badan Pertanahan Nasional (National Land Agency) CD Community Development CPO Crude Palm Oil CSR Corporate Social Responsibility EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species ESH Environmental Safety & Health FFB Fresh Fruit Bunches EFB Empty Fruit Bunches GIS Geographic Information System HCV High Conservation Value HGU Hak Guna Usaha (Land Use Rights) HPK Hutan Produksi Konversi (Converted Production Forest) Hyperkes Hygiene Perusahaan & Kesehatan Kerja (Company Hygiene & Occupational

Health) HRD Human Resource Department IDR Indonesian Rupiah (Indonesian currency) IPM Integrated Pest Management IUP Izin Usaha Perkebunan (Agriculture Use Permit) KUD Koperasi Unit Desa (Village Unit Cooperative) LKS Lembaga Kerja Bersama (Cooperation Institute) LTA Lost Time Accident MOU Memorandum of Understanding MSDS Material Safety Data Sheets NGO Non-Government Organization OKI Ogan Komerang Ilir (district name) OSH Occupational Safety & Health PAD Pendapatan Asli Daerah (Regional Original Income) PBB Pajak Bumi & Bangunan (Land and Building Tax) PHT Pekerja Harian Tetap (Permanent Workers) 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) RTRWP Rencana Tata Ruang Wilayah Propinsi (Provincial Land Use Plan) RUTR Rencana Umum Tata Ruang Wilayah (Area landscape planning) SIA Social Impact Assessment SOP Standard Operating Procedure SPPI Serikat Pekerja Perkebunan Indonesia (Indonesian Estate Workers Union) SPSI Serikat Pekerja Seluruh Indonesia (Indonesian Workers Union_ UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPTD Unit Pelaksana Teknis Daerah (Regional Technical Implementation Unit)



of 59

RSPO v2 2009-10-09 59

Appendix 3: List of Stakeholders Interviewed and Co ntacted

No. Name of Stakeholder Institution / Position Remarks Stakeholders Interviewed On-Site 1 Idham Matondang PTPN 3 Staff 2 Ramot Lumban Tobing Estate Manager 3 Ridho Syahputra H APK 4 H. Syahril N Askep A 5 Berlin Marpaung Askep B 6 Buso Community 7 Hendrik Harvesting – Afd V 8 Saefudin Supervisor of harvesting – Afd V

Roundtable on Sustainable Palm Oil · Roundtable on Sustainable Palm Oil Public Summary Report...

Documents

Transcript of Roundtable on Sustainable Palm Oil · Roundtable on Sustainable Palm Oil Public Summary Report...