RSPO ANNUAL SURVEILLANCE ASSESSMENT-4 PUBLIC SUMMARY … · Audit Report Form Title ... RSPO ANNUAL...

PT. TÜV NO.RD Indonesia

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RSPO ANNUAL SURVEILLANCE ASSESSMENT-4

PUBLIC SUMMARY REPORT

PT. TÜV NORD Indonesia

System Certification Management

Has assessed

PT. PP LONDON SUMATRA Tbk

< Gunung Melayu Mill and its Supply Bases>

for Compliance to RSPO Principles and Criteria

for Sustainable Palm Oil Production

Date of assessment for North Sumatera Region:

September 18, 2013

Report Number: P&C-I-135

Head Office

System Certification Management

Perkantoran Hijau Arkadia Tower F,

7th Fl Suite 706

Jl. Let. Jend. TB Simatupang Kav. 88

Jakarta 12520 – Indonesia

Tel : +6221 7883 7338

Fax : +6221 7883 7336

Laboratory Division

Jl. Jababeka XVII E Blok U No.. 27B

Kawasan Industri Jababeka I Cikarang Bekasi 17530 – Indonesia

Tel : +6221 898 403 18 – 19

Fax : +6221 898 403 20

Branch Office

Intiland Tower 11th

Fl, Suite 1E

Jl. Panglima Sudirman 101-103

Surabaya 60271 - Indonesia

Tel : +6231 53 444 54

Fax : +6231 53 4 44 82

President Director:

Mr. Robert Napitupulu

Email: [email protected]

Website: www.tuv-nord.com or www.tuev-nord.de

mailto:[email protected]

http://www.tuv-nord.com/

http://www.tuev-nord.de/


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List of Contents

1 Scope of Surveillance Assessment Report ........................................................................................................ 4

1.1 Type of Assessment (Mill, Estate and Mill, etc.) ................................................................................... 4

1.2 Location, mill, and or hectare statement ............................................................................................... 4

1.3. Production volume of all certfiied products........................................................................................................... 6

1.4. Certification detais ............................................................................................................................. 6

1.5. Description of Supply Base ................................................................................................................... 7

1.5.1. Description of Plantation (Fruit Sources)....................................................................................... 7

1.5.2 Age Profile of Palm............................................................................................................................ 8

1.6. Progress of Time-bound Plan (for other management units and justifications). ................................... 8

1.7. Organizational Information/Contact Person .......................................................................................... 8

2. Assessment Process .......................................................................................................................................... 9

2.1. Assessment Methodology (Program, Site Visits) .................................................................................. 9

2.1.1. General Overview................................................................................................................................ 9

2.1.2 Assessment Agenda ............................................................................................................................ 9

2.2. Assessment Team ............................................................................................................................... 19

2.2.1. Lead Assessor: Sudarmadjii ........................................................................................................ 19

2.2.2. Assessment Team Members ....................................................................................................... 19

2.3. Certification Body ................................................................................................................................ 20

3. Assessment Findings ....................................................................................................................................... 21

3.1. Summary of the Findings by Criteria ................................................................................................... 21

3.2. Identified Non Conformances and Noteworthy positive components. ................................................ 28

3.2.1. Detail of Non Conformity. ............................................................................................................ 29

3.2.2. Resume of Audit Results ............................................................................................................. 29

3.3. Status of non-conformities (both minor and major) previously identified ............................................ 30

3.4. Issues Raised by Stakeholders ........................................................................................................... 30

4. Certified Organization’s Acknowledgement of Internal Responsibility ............................................................. 30

4.1. Date of next surveillance visit .............................................................................................................. 30

4.2. Date of closing non-conformities (both major and minor) ................................................................... 30

4.3. Formal Sign-off of Surveillance Assessment Findings ........................................................................ 31


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List of Figures

Figure 1. Location Maps of Gunung Melayu Mill and Supply Bases ......................................................... 5

List of Tables Table 1-1 Location of the mill and supply bases .......................................................................................................................... 4

Table 1-2. Production volume of CPO and PK to be claimed................................................................................... 6

Table 1-3: Production volumes of FFB and its source.............................................................................................. 6

Table 1-4:. Statistic of supply base .............................................................................................................................................. 6

Table 1-5: Age Profile of Palms ...................................................................................................................................... 7

Table 1-6 Time bound plan for mills and estates under PT. PP London Sumatra Tbk ........................................... .7

Table 2-1 Audit Schedule ........................................................................................................................................... 9

Table 3-1 Summary of Findings by Criteria ......................................................................................................... 22

Table 3-2 Resume of Audit Results ......................................................................................................................... 29

List of Appendices

Appendix 1 List of Abbreviations ........................................................................................................................ 32

Appendix 2 Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver.

November 2011 .................................................................................................................................................. 33

Appendix 3. Detail of nonconformities ...................................................................................................................................36


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1 Scope of Surveillance Assessment Report

1.1 Type of Assessment (Mill, Estate and Mill, etc.)

PT. London Sumatra Tbk in North Sumatera Region operations consist of four mills and 12 estates, i.e:

Gunung Melayu Mill (GMM) which is supplied by two estates: Gunung Melayu Estate (GME), and Sei

Rumbiya Estate (SRE. The annual surveillance assessment 3 was done as per National Interpretation of

RSPO Principle and Criteria for Sustainable Palm Oil Production - Republic of Indonesia (RSPO

Indonesian National International <INA-NI. ver. May 2008 Standard), as well as RSPO Supply Chain

Standard for Mills (module E: Mass Balance) ver. November 2011.

The scope of this annual surveillance assessment 4 was for Gunung Melayu Mill (GMM) and its supply bases,.

Gunung Melayu Estate (GME), but for Sei Rumbiya Estate was not audited. The mill solely processes FFB from

their own estates.

1.2 Location, mill, and or hectare statement

. The detail of coordinate’s location can be seen in the table below:.

Table 1-1: Location of the mill and supply bases

Name of Mill and Plantation

Location

GPS Coordinates

Longitude

(E)

Latitude

(N)

Gunung Melayu POM (GMM)

Asahan Regency, Province of North Sumatra 99°34'26" 2°42'4"

Gunung Melayu Estate (GME)

Asahan Regency, Province of North Sumatra 99°33'39" 2°41'40"

Sei Rumbiya Estate (SRE)

Labuhan Batu Regency, Province of North Sumatra 100°5'5" 1°1'30"


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Figure 1. Location Maps of Gunung Melayu Mill and Supply Bases


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Figure 2. Maps of Gunung Melayu Estate


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1.3. Production volume of all certified products

The production tonnages for CPO and PK for period of certificate and projected output are listed in Table 1-2.

(These figures exclude any output product from non-certified suppliers).

Table 1-2. Production volume of CPO and PK to be claimed

Name of mill

Certification production 2009

(tonnes)

Actual production 2011

(tonnes)

Actual production 2012

(tonnes)

Projected production 2013

(tonnes)

CPO PK CPO PK CPO PK CPO PK

Gunung Melayu Mill Capacity

30 FFB/ hour 34,885 8,821 30,314 7,890 xxx xxx xxx xxx

*Source data: Based on production report 2011, 2012 and budget 2013

1.4. Certification details

PT. PP London Sumatra Tbk RSPO membership number 1-0015-04-000-00: since 11 April 2005.

Gunung Melayu Mill Unit Certificate number as part of Lonsum North Sumatra Region : TNI –RSPO 001.2008

Date of previous assessment: June 18 – 28, 2012

Date of certification approved/ issued: 30.04.2009 valid until 29.04.2014

1.5. Description of Supply Base

1.5.1. Description of Plantation (Fruit Sources)

Oil palm fruit is sourced solely from company owned estates. The certified FFB counted from 2 (two) company

owned estates is listed in Table 1-3.

Table 1-3: Production volumes of FFB and its source

Sources of FFB*

Actual Production volume of FFB

in 2011 (tonnes)

Actual production volume of FFB

in 2012 (tonnes)

Projected production volume of FFB

in 2013 (tonnes)

Gunung Melayu Estate (GME) 94,656 xxx xxxx

Sei Rumbiya Estate (SRE) 33,078 xxx xxxx

Total FFB own estates 127,734 xxx xxx

FFB from smallholder 0 0 0

FFB purchased 0 0 0

Total FFB Received 127,734 xxx xxx

* Source : Based on production report 2011, 2012 and budget 2013

Table 1-4. Statistic area summary of supply base.

Estates

Area Summary*

Total (Ha)

Planted with Oil Palm

(Ha)

Mature (Ha)

Immature (Ha)

Gunung Melayu Estate (GME) 4,988.69 4,750.82 4,455.43 295.39

Sei Rumbiya Estate (SRE) 5,882.14 1,598.22 1,598.22 0

Total 10,870.83 6,349.04 6,053.65 295.39

*Source : Hectare statement in September 2013


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1.5.2 Palm Age Profile

Table 1-5. Palm Age Profile

Estates 0 – 5 (Ha)

% 6 – 10 (Ha)

% 11 – 15

(Ha) %

16 – 20 (Ha)

% 21 – 28

(Ha) %

Total (Ha)

Gunung Melayu 329.81 6.94 349.91 7.37 1,989.74 41.88 1,538.61 32.39 542.75 11.42 4,750.82

Sungai Rumbiya 0 - 512.97 32.10 139.98 8.76 138.60 8.67 806.67 50.47 1,598.22

Total 329.81 5.20 862.88 13.59 2,129.72 33.54 1,677.21 26.42 1,349.42 21.25 6,349.04

Source: Hectare statement in January 2013

1.6. Progress of Time-bound Plan (for other management units and justifications).

The company will use the experience obtained in the main assessment to ensure that the other

management units conform to the RSPO principles and criteria. Progress of this plan of time-bound

certification has been verified. There were some changes made from the previous time bound plan due to

technical condition in each management unit. The updated time bound plan is can be seen below.

Table 1-6. Time bound plan for mills and estates under PT.PP London Sumtra Tbk:

No Mills Location Proposed Time for

Certification Revised Time Bound

Plan

1 Gunung Bais Musi Rawas, Sumatera Selatan December 2011 December 2014

2 Arta Kencana Lahat, Sumatera Selatan December 2012 December 2013

3 Belani Elok Musi Rawas, Sumatera Selatan December 2013 December 2014

4 Sei Lakitan Musi Rawas, Sumatera Selatan December 2014 December 2015

5 Terawas Musi Rawas, Sumatera Selatan December 2015 December 2015

6 Pahu Makmur Kutai Barat, Sumatera Selatan December 2016 December 2016

No Estates Location

Proposed Time for Certification Revised Time Bound

Plan

1 Gunung Bais Musi Rawas, Sumatera Selatan December 2011 December 2014

2 Arta Kencana Lahat, Sumatera Selatan December 2012 December 2013

3 Kencana Sari Lahat, Sumatera Selatan December 2012 December 2013

4 Sei Kepayang Musi Rawas, Sumatera Selatan December 2013 December 2014

5 Bukit Hijau Musi Rawas, Sumatera Selatan December 2013 December 2014

6 Ketapat Bening Musi Rawas, Sumatera Selatan December 2013 December 2014

7 Belani Elok Musi Rawas, Sumatera Selatan December 2013 December 2014

8 Batu Cemerlang Musi Rawas, Sumatera Selatan December 2014 December 2014

9 Sei Lakitan Musi Rawas, Sumatera Selatan December 2014 December 2015

10 Riam Indah Musi Rawas, Sumatera Selatan December 2014 December 2015

11 Sei Gemang Musi Rawas, Sumatera Selatan December 2014 December 2015

12 Terawas* Musi Rawas, Sumatera Selatan December 2015 December 2015

13 Issuy Makmur Kutai Barat, Kalimantan Timur December 2016 December 2016

14 Pahu Makmur Kutai Barat, Kalimantan Timur December 2016 December 2016

*Note : Terawas Estate only for seedling estate

1.7. Organizational Information/Contact Person

Contact Person Mr.Muhammad Waras

Position Head of Environment and CSR Co-ordination Department

Organization name PT PP London Sumatra Indonesia Tbk

Address Jl. Ahmad Yani No.2

Postal code, city PO Box 1154, Medan 20111 North Sumatra

Country Indonesia

Telephone Nr +62 61 4532300

Fax Nr +62 61 4159211

Email [email protected]

mailto:[email protected]


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2. Assessment Process

2.1. Assessment Methodology (Program, Site Visits)

2.1.1. General Overview

The assessment was carried out by referring to TÜV NORD Indonesia Certification Procedure, PRSPO-TNI-01

Rev. 0.

2.1.2 Assessment Agenda

The annual surveillance assessment 4 was conducted on September 16 to 27, 2013 for all North Sumatera

Region, was led by Ms. Wieke Savitri (WS), Ms.Karlina Bone (KB) as auditors team member and was assisted by

Mr. Dr. Supijatna (SUP) as Agronomy expert, Mr Dr.Sahruddin and Mr. Fahroby Faletehan as socio-economic

expert and. The audit schedule available as below.

Table 2-1 Audit Schedule

Client: PT. PP London Sumatra Indonesia Tbk

Address: Jl. Jend. A. Yani No. 2 PO Box 1154, Medan

MR Name, Pos.: Mr. Adi Bastomi, Env. Manager/ Mr. Muhammad Waras

Number of Mills: 4 Number of

estate(s): 8 Order No. - Business No. -

Standard: RSPO P&C (Principles & Criteria) May 2008

Type of audit: Annual Surveillance Audit 4

(ASA-3)

Audit date: Septemeber 16 – 27, 2013

Lead Auditor: Wieke Savitri (WS) Trainee/Expert: Dr. Supijatna (SUP), Fahroby

Falatehan (FF), Dr. Saharuddin.

Auditor(s): Karlina Bone (KB), Dede (DD) Audit days on-site: 11 work days

Name/ location of Mills

Name/ location of Estates

Audit date

1. Gunung Melayu

2. Dolok

3. Begerpang

4. Turangie

1. Gunung Melayu,

2. Dolok, Bah Lias

3. Begerpang, Rambong Sialang.

4. Turangie, Bungara, Pulo Rambong

Date / Time1)

Site / Shift /

Organizational Unit Auditor

(Abbrev.) Interview-

partner Requirements

Day -1: 16.09.2013 Begerpang POM & Estate

10.30 – 11.00 Opening meeting All auditor team All team Introduction auditor team and confirmation of audit schedule


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Date / Time1)

Site / Shift /


(Abbrev.) Interview-

partner Requirements

11.00-17.00 Begerpang POM

KB, WS RSPO team, contractors, employees, labour union. other stakeholers

- Verification of last ASA corrective action

- General issues for RSPO certification assessment

- The SPO documentations and records

- Justification for RSPO principles and criteria

- Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1

- Quality, SM-K3 and Environmental Management System including EHS policy

- Involved personnel and responsibilities

- Chemical stores.

- Monitoring and measurement of environmental performance of waste water treatment plant.

- Mill operation including inspection of incoming FFB, FFB transport, road maintenance and workshops for heavy trucks, loaders, etc.

- Principle - 4 : 4.1, 4.4, 4.7, 4.8

- Principle – 5 : 5.3, 5.4, 5.6

- Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11

- Principle – 8 : 8.1

- Supply Chain of FFB & CPO

-

11.00-17.00 Begerpang Estate

DD, SP RSPO team, contractors, employees, labour union,

- Verification of last ASA corrective action

- Land and conversion planting - Replanting program - Good Agricultural Practices - IPM (Integrated Pest Management) - Decreased paraquat use and handling

of chemical packaging wastes - HCV identification, Flora, fauna,

ecology and biodiversity - Zero burning

- Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5,

4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.3, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.4,, 6.5,

6.6, 6.7, 6.8, 6.9, 6.10, 6.11 - Principle – 8 : 8.1

End of audit Day 1


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 2 : 17.09.2013 : Rambong Sialang Estate

09.00-12.00 Pergulaan Village for public consultation

WS, SH Local Ccmmunity

Site visit to nearby villages to meet stakeholders and checking: progress of CSR programs and resolution of conflicts (if any)

09.00 -16.00 Rambong Sialang Estate

KB, DD, SP, - - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1, 2.2,2.3 - Principle – 3: 3.1 - Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5,

4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2,5.3, 5.5, 5.6 - Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.6.5,

6.6, 6.7, 6.8,6.9, 6.10, 6.11 - Principle – 8 : 8.1 - Verification of last ASA corrective

action - Land and conversion planting - Replanting program - Good Agricultural Practices - IPM (Integrated Pest Management) - Decreased paraquat use and handling of

chemical packaging wastes - HCV identification, Flora, fauna, ecology

and biodiversity - Zero burning - Continous improvement

16.00 – 17.00 Auditor review and prepare reporting

17.00 Closing meeting

End of audit day 2 and travelling to Gunung Melayu


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 3 : 18.09.2013 : Gunung Melayu POM & Estate

08.00-16.00 Gunung Melayu POM

KB,DD, SH

RSPO team, contractors, employees, labour union

- Verification of last ASA corrective action - General issues for RSPO certification

assessment - The SPO documentations and records - Justification for RSPO principles and criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1



- Chemical stores.



- Principle - 4 : 4.1, 4.4, 4.7, 4.8

- Principle – 5 : 5.3, 5.4, 5.6

- Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11



08.00-16.00 Gunung Melayu Estate

WS, SP. RSPO team, contractors, employees, labour union,


assessment - The SPO documentations and records - Justification for RSPO principles and criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1 - Land and conversion planting - Replanting program


- Good Agricultural Practices - IPM (Integrated Pest Management) - Decreased paraquat use and handling of

chemical packaging wastes - HCV identification, Flora, fauna, ecology and

biodiversity - Zero burning - Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.7,

4.8 - Principle – 5 : 5.1, 5.2, 5.3, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.4,, 6.5, 6.6, 6.7,

6.8, 6.9, 6.10, 6.11 - Principle – 8 : 8.1


17.00-18.00 Closing meeting

End of Day 3


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 4- : 19.09.2013 : Bah Lias Estate

08.00 -16.00 Bah Lias Estate WS, KB, DD, SP, SH

stakeholders - - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1, 2.2,2.3 - Principle – 3: 3.1 - Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5, 4.6,

4.7, 4.8 - Principle – 5 : 5.1, 5.2,5.3, 5.5, 5.6 - Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.6.5,

6.6, 6.7, 6.8,6.9, 6.10, 6.11 - Principle – 8 : 8.1 - Verification of last ASA corrective action - Land and conversion planting - Replanting program - Good Agricultural Practices - IPM (Integrated Pest Management) - Decreased paraquat use and handling of


and biodiversity - Zero burning - Continous improvement


17.00-18.00 Closing meeting

End of audit day 4, Dr. Supijatna & Dr. Saharuddin back to Medan


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 5-: 20.09.2013 : Dolok POM & Estate

08.00-16.00 Dolok POM

KB

RSPO team, contractors, employees, labour union


assessment - The SPO documentations and records - Justification for RSPO principles and

criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1



- Chemical stores.



- Principle - 4 : 4.1, 4.4, 4.7, 4.8

- Principle – 5 : 5.3, 5.4, 5.6

- Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11




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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

08.00-16.00 Dolok Estate

WS, DD RSPO team, contractors, employees, labour union,



criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1 - Land and conversion planting - Replanting program




and biodiversity - Zero burning - Principle - 4 : 4.1, 4.2, 4.3, 4.4, 4.5, 4.6,

4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.3, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.4,, 6.5,

6.6, 6.7, 6.8, 6.9, 6.10, 6.11 - Principle – 8 : 8.1

16.00-17.00 Auditor review and preparing report

WS, KB, DD

End of audit day 5 and travelling to Medan

Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 6-: 21.09.2013 : Head Office

07.30-09.00 Closing meeting WS, KB, DD

End of audit day 6 and back to Jakarta


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day -7: 23.09.2013 travelinng from Medan to Langkat

Day 8 : 24.09.2013 : Pulo Rambong Estate

08.00-17.00 Pulo Rambong Estate

WS, KB SP, FF

RSPO team, contractors, employees, labour union and other stakeholders,









6.6, 6.7, 6.8, 6.9, 6.10, 6.11 - Principle – 8 : 8.1

End of audit day 8


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 9 : 25.09.2013 : Bungara Estate & Turangie Estate

08.00-17.00 1. Bungara Estate

2. Turangie Estate

KB, SP WS, FF

RSPO team, contractors, employees, labour union and other stakeholders, RSPO team, contractors, employees, labour union and other stakeholders









6.6, 6.7, 6.8, 6.9, 6.10, 6.11 - Principle – 8 : 8.1

End of audit day 9 : Dr. Supijatna and Mr. Fahroby back to Jakarta


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Date / Time1)

Site / Shift /


(Abbrev.)

Interview-

partner 2)

Requirements

Day 10 : 26.09.2013 : Turangie POM

08.00-16.00 Turangie POM

WS, KB RSPO team, contractors, employees, labour union. other stakeholers



criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1. 2.2.2.3 - Principle – 3: 3.1



- Chemical stores.



- Principle - 4 : 4.1, 4.4, 4.7, 4.8

- Principle – 5 : 5.3, 5.4, 5.6

- Principle – 6 : 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11


- Supply Chain of FFB & CPO 16.00 -17.00 Auditor review and

preparing report

WS, KB

End of audit day 10 and traveling to Medan

Day 11: 27.09.2013 : Head Office

07.30 -09.00 Closing meeting WS, KB

End of audit day 11 and back to Jakarta

09.09.2013 Wieke Savitri

Place, Date Lead Auditor


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2.2. Assessment Team

2.2.1. Lead Assessor: Wieke Savitri

Qualification Compliance

Educational Background

Has a bachelor degree from Agriculture Faculty, Bogor Agricultural University Yes

Working Experience

1995-1997: PUPUK Foundation (Perkumpulan Untuk Peningkatan Usaha Kecil,

A Non Government Organization for promoting small scale enterprises supported and financed by GTZ-Germany and Swiss Contact, as Management Consultant. Responsibilities : To arrange projects regarding business management, human resources, marketing and IT to promote small scale enterprises.

1997-2004: PT. Varia Industri Tirta and PT.Tirta Investama.

Bottled water companies under DaNo.ne management as Quality Control Manager/ Quality Assurance Manager/ Internal Auditor and Trainer. Responsibilities : deliver training and implementing management systems for ISO 9001, ISO 14001, HACCP, GMP, ISO 22000, 5S, QCC, SPC

1997-2004: Danone-Aqua Foundation as Associate Representative in factory.

Responsibilities: to develop community development programs for people living around factory.

2004- 2005: PT. Tribina Mediartha Sarana. A consulting company, as a Consultant and Trainer. Responsibilities : deliver training and consultancy for companies and organizations for ISO 9001, ISO 14001, SMK3, HACCP, GMP, ISO 22000, 5S, QCC, SPC

2005-2006: PT. Global Certification Indonesia. Certification Body based in UK as Operations Manager. Responsibilities: Running daily operation and reporting to Head Office in UK.

2006-Now: PT. TUV NO.RD Indonesia as ISO 9001/RSPO/ISPO Lead Auditor. Branch Manager Surabaya Office. Responsibilities : Running daily operation in Branch Office, conduct audit and reporting.

Yes

RSPO Training

Certified RSPO Lead Auditor Training by ProForest-Wild Asia on July 7-11, 2008, Indonesia. Yes

Other Training

Internal Auditor Training of Environmental Management System (ISO 14001:1996) EARA -RIET – REDECON, 2000, Indonesia.

Internal training SMK3, Indonesia

Workshop for Community-based Environmental Educators by the United Nations of Environmental Program, 2002, Thailand

Process based audit ISO 9001;2000 by PSB Certification, 2002, Indonesia

ISO 22000 by SAI Global, 2005, Indonesia

ISO 9001:2000 Advanced Lead Auditor Training Course, by IQCS International Certification Services, 2006, Indonesia

ISO 9001:2008 upgrading training, by TUV NORD Indonesia

ISPO training in 2011

Yes

Experience related to RSPO

RSPO to date (Aug 2010 -May 2013) More than 25 x pre-assessments and main assessment of RSPO P&C in Indonesia, (RSPO P&C)

1 x NPP assessments in Indonesia

3 x RSPO SCC assessments in Indonesia

Yes

2.2.2. Assessment Team Members

RSPO REQUIREMENT

ASSESSOR QUALIFICATIONS COMPLIA

NCE

Fluent in main local languages and English.

Wieke Saviitri (WS), Karlina Bone (KB),Supijatna (SUP), Saharuddin (SH), Fahroby Falatehan (FF), Dede (DD)

Indonesian citizen, fluent both in Bahasa and English Yes

Field working experience in the palm oil sector, or a

SUP He holds a doctorate in Environmental and Natural Resources Management from Bogor Agricultural University (IPB), and has a strong background and experience in Agronomy aspects. He

Yes


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demonstrable equivalent.

has been working in IPB since 1986 as a lecturer in Agronomy, including Palm Oil Plantation subject.

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

SUP

He has extensive experiences in research, such as in plant water and nutrient requirements, irrigation and fertilizer application, seedling selection and Integrated Pest Management; Several research subjects that had been done, for example: Research of high grow fertilizer effect on growth and production of oil palm,

Yes

WS She has a bachelor degree in Agricultural Faculty from Bogor Agricultural University (IPB)

Yes

KB

She has a bachelor degree in Biological Science, in ecology major from Instiitute Techlology of Bandung (ITB) . Done a research in a nitrification and denitrification in a recirculation water treatment project.

Yes

DD He has bachelor degree in Forestry Faculty from Bogor Agricultural University( IPB ).

Yes

Health and Safety assessment on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

WS As audit team member in some OHSAS audit such as Bakrie Sumatra Plantation Group in North Sumatera and South Sumatera.

Yes

KB

Observed audit in OHSAS Audit as a trainee for Indonesian contractors, such as PT. Inti Indah, PT. Virajaya Riauputra, etc. Other than that, observed as a trainee as well RSPO P&C for PT. Inti Indo Sawit - Tungkal Ulu (CA), PT. London Sumatra (ASA III), UPOIC (CA stage 1 and stage 2), PT. Sahabat Mewah Makmur (ASA I), etc.

Yes

Social-economic issues

SH

He holds doctorate in Social Economic Science from Bogor Agricultural University and has been working in IPB as a lecturer in Social Economic Science. He has experience to handle social –economic issues, particularly to handle conflict.

Yes

FF

He has a bachelor degree in Agriculture Social Economy from Bogor Agricultural University (IPB) and from University of Indonesia (UI), Master of Planning and Public Policy, Faculty of Economics (2003 - 2005). Has been working as a lecturer in Agriculture Social Economy Department, Bogor Agricultural University. And involved in numerous researches for social economic projects, etc

Yes

WS

She She has a bachelor degree from Bogor Agricultural University. which has subjects in Agricultural and Rural Sociology, Social Research Methodology. She has experience as an enumerator/ data processing for socio-economic projects researches during her study in university. She also has experience in Danone-Aqua Foundation as Associate Representative with responsibilities to develop community development programs..

Yes

Environmental and ecological assessmenting. (For example experience with organic agriculture, ISO 14001)

SUP

He qualifies in biodiversity assessment and biodiversity science. Underwent auditor training in oil palm estates and palm oil mill in EMS and RSPO P & C. Member of the team in RSPO assessment of PT. Perkebunan Nusantara IV, and many more.

Yes

WS She has experience in implementing ISO 14000 and also as internal auditor for other factories in PT Tirta Investama..

Yes

KB She has a bachelor degree in Biological Science, in ecology major. Done a research in a nitrification and denitrification in a recirculation water treatment project.

Yes

2.3. Certification Body

PT. TÜV NO.RD Indonesia is a subsidiary of the German TÜV NORD Group. Our company is a market

leader in Indonesia for inspection, testing and certification services. We offer not just a high added value

service but also the trust and confidence embedded in our issued certificates/reports. We satisfy not only

our direct customers but also other stakeholders, like regulators and interested society including

NGOs, through our competent auditors, inspectors and analysts.

PT. TÜV NORD Indonesia, under its HQ in Germany, is a member of International Accreditation Forum

(IAF) and accredited by DAAK–German and by the Indonesian Accreditation Committee (KAN). Services

provided by the Strategic Business Unit Systems Certifications are: Food Safety Management System ISO


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22000, Information Security Management System ISO 27001, Social Accountability SA 8000, Food

Hygiene HACCP, Medical Device Directive MDD, ISO 13485, Occupational Health and Safety OHSAS

18001, Product Certification: GS-Mark, CE-Mark, SNI Mark, Inspection for ISPS Code, Clean Development

Mechanism (CDM) Validation & Verification, British Retail Consortium, BRC Issue 5 and ISCC.

3. Assessment Findings

3.1. Summary of the Findings by Criteria

Objective evidences were obtained separately for each of the indicators for mills and estates in the annual

surveillance assessment. The results for each indicator from the different operational areas were

aggregated to assess the overall conformances of the company’s operations to each criterion. A statement

is made for each indicator on the finding. A summary of the Non-Conformities is given in Section 3.2.1

During the annual surveillance assessment-4, 3 (three) major non-conformities and 6 (six) minor non-

conformities have been raised against RSPO Principals and criteria, whilst 0 (zero) major non-conformities

have been raised against RSPO Supply Chain Standard –module E (mass balance).

Gunung Melayu Mill (GMM) and its supply bases have prepared a Corrective Active Plan which each date

for implementation has been accepted by PT. TÜV NORD Indonesia. Thus, Gunung Melayu Mill (GMM)

and its supply bases are still recommended to extend the certification of RSPO Principal and

Criteria which valid until 29 April 2014.

The following is a summary of the findings for compliance with the RSPO Principles & Criteria for

Indonesian National International <INA-NI ver. May 2008 Standard). While a summary of the findings for

compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011 is attached in

Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass

Balance) ver. November 2011.

.


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Table 3-1 Summary of Findings by Criteria

FINDINGS/COMMENTS

Criterion 1.1 (C.1.1) Provide adequate information to other stakeholders on environmental social and legal issues relevant with RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision-making

GMM has a procedure for communicating with stakeholders as decribed in “Prosedur Komunikasi”, or “Communication Procedure”, (EMS-P05 Rev.4 dated on 10 August 2009). All the heads in the mill / estates are required to provide adequate information as required by the RSPO criteria. The requests for information are recorded in the „Daftar Permintaan dan Tanggapan dari Pemangku Kepentingan“ or “List of information and response from Stakeholder” (Form No. SPO-01) for each mill/ estate. The response(s) are prepared by the heads of mill / estates or by the Area Manager Agronomy depending on their importance. Stakeholders aspiration, especially for asking donation will be transfered to Area Manager Agronomy before reported monthly to Environment & CSR Dept Department in Head Office and approved by BOD . As said by interviewed Estate Manager, donation less than Rp 250.000,- could be approved by Estate Manager without forwarded to AMA . The records of requests / responses will be kept for 5 (five) years as stated in “Procedure Control of Records”. Compliance Status : Full.

Criterion 1.2 (C.1.2) Management documents are publicly available, except where these are prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes

All management documents on legal, environmental, health safety and social issues are publicly available upon request. The legal documents are : • Izin Lokasi (Site Permit), • Izin Usaha Perkebunan (Plantation Operation Permit) • HGU (Land Use Title The environmental documents for AMDAL (Environmental Impact Analysis) was approved by Badan Lingkungan Hidup Daerah (BAPEDALDA). Various environmental parameters and also social impact are measured and reported six-monthly in Laporan Pelaksanaan Rencana Pengelolaan Lingkungan Hidup dan Rencana Pemantauan Lingkungan Hidup (RKL & RPL). Since GMM is a labour-intensive company, it is required to comply with the mandatory SMK3 (Occupational Health and Safety Management System). Progress on the Health and Safety Program (K3 program) is reported regularly to the Ministry of Labour of Republic of Indonesia .

All the records are properly kept for the proper periods as stated in “Procedure Control of Records” dated on 10.08.2009, e.g., safety, health and environment reports for 5 years, social records 5 years and legal records indefinitely , and are available on request. Notwithstanding this, environmental and social data are presented during the yearly public consultation with stakeholders as part of its CSR program, e.g., Posyandu (integrated healthcare service post and health education to promote human hygiene), sanitation and nutrition intake for infants, pregnant and breast-feeding women, agricultural skills training for the locals (estate workers and smallholders), honor for school teachers, scholarships available, renovation aid for schools, roads, worship buildings. Compliance Status : Full.

Criterion 2.1 (C.2.1)

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

GMM keeps copies of all the legislations / regulations applicable to it from the applicable regulation list in “Prosedur EMS-PO2 rev.4 “Legal Requirements“ dated on 10.08.2009, compiled by Environmental & CSR Departrment in Head Office which has to keep track of its (LONSUM’s) legal requirements and makes sure that they are complied with., that covers Legislation (Perundangan), Regulation (Peraturan), Decree (Keputusan) & Directives (Pedoman) , Permit (Perijinan), Treaties (Pakta), Convention (Konvensi) and Protocol; Judgement of Court (Putusan pengadilan). The Legal Department in Head Office is responsible for validating / renewing licenses and permits, especially land permit, while Head of Engineering & Processing responsible for license/ of mill operation since GMM has ISO 14001 certification for its environmental management and also SM-K3 for Health Safety Environment. for keeping the mill / estates operating within the national laws / regulations, and is required to keep up to date with any changes in the laws / regulations.

However, it was found that : Company Registration Permit from Regent of Asahan No. 503/SITU/BPP/1385/IX/2008 valid from 26 September 2008 that requires permit holders to re-register each year, however, re-registration. in 2013 was not available. A major nonconformity has been raised. (See NCR-GM-01). Compliance Status : Comply after correction and corrective action


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

Currently, there are no claims on GMM land by anyone. General Affairs department and Legal department are responsible to solve if there is a conflict of land acquired, however, if the land conflict can not be resolved by negotiation, the last option is to bring it into court. Mills manager and estates manager have registered properly for the certificate of HGU in land acquiring register list. The whole land use for oil palm planted by identification and demarcated by stone boundary shall be managed. There was evidence that legal boundary periodically monitored There is mechanism to monitor the boundary stones periodically, to ensure that they are not broken, had been moved or missing, if this case happens, an action plan should be carried out to fix the boundary stone accordingly. Compliance status : Full.


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

It was confirmed during surveillance assessment as well as during interview with stakeholders that there was no customary right of other users.

Compliance status: Full


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

GMM has 5 years’ projection (2011 – 2015) for its crop, including key performance data for its mill and estates as part of its long term economic planning for all corporate of PT. PP London Sumatra Tbk (Lonsum). For GMM (Gunung Melayu Mill, Gunung Melayu Estate, and Sei Rumbiya Estate) there is 10 years projection from 2010 – 2020 including mill allocation, production of FFB (tonnage) FFB/ ha (yield); OER, by predicting inflation rate; exchange rate; interest rate; portion cash; dividen; non deductible expensive; working hours; turnover; a% allowance for doubtful accounts, age of asset; price of FFB purchase; cost to build a mill. Compliance Status : Full.

Criterion 4.1 (C.4.1) Operating Procedures are appropriately documented and consistently implemented and monitored

GMM has Standard Operating Procedures with the best practices for its mill and estate operations. The mill and estates have been certified to, EMS ISO 14001 and HSE management SMK3 by the Ministry of Labour of Indonesia. Most of the Standard Operation Procedures are incorporated in the SM-K3 management system. The following procedures have been implemented for sustainable palm oil production a. SOP for Oil Palm (containing aspects from nursery, land preparation, planting, upkeep, harvesting, waste

management, HCV, emergency preparedness and response, and environmental monitoring). b. SOP for Palm Oil Mill (containing stages of process, boiler, power generation, water treatment, land application,

electrical system, quality (inc monitoring of CPO parameters), dispatch and laboratory). c. Manual and SOP for Environment Management System, Health & Safety and SPO (containing application of

pesticides, use of PPE , emergency preparadness) .

Daily Implementation and Monitoring of the SOP is documented in reported in LPF (Lonsum Procedure Form). The LPF report should be approved by Acting Assistant Manager and verified by Assistant. The results of the daily reports are summarized in monthly report. Monthly report contains figures of crop protection activities, fertilizer application, climate data, block list and hectares, nurseries statemnt, field upkeep, crop harvest and statistics, personal data, stores and fixed asset. Other kind of Monitoring kinds include site visit, monthly meeting. Compliance Status : Full.

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

There are some agronomic practice to improve and maintain soil fertility implemented in LONSUM/ GMM : 1. Plant Legume Cover Crops 2. Pruning and frond stacking 3. Weeding, especially wild fern (Stenochlaena palustris)

4. Fertilizing

Recommendation of fertilizing dosage is prepared by BLRS (Bah Lias Research Station/ Sumatera BioScience), its own laboratory in Medan, North Sumatera. After taking sample of Leaf Sampling Unit of in ratio area of 5% of 17th leaf of 28 trees in a row in February each year, BLRS analyses the leaf samples and recommends the dosage of fertilizer application. Each sample represents every 25 ha area. The recommendation will be submitted to the estate by September the same year. The fertilization frecuency is once or twice a year. Compliance Status : Full.

Criterion 4.3 (C.4.3) Practices to minimize and control erosion and degradation of soils

As there are no fragile soils (including peat) according to a HCV assessment, GMM does not have any plan to manage them. Practices to minimise and control erosion in GMM are : 1. Plant Legume Cover Crops, one year before planting time, the legume cover crop is planted for increase the soil

fertility and control soil erosion. 2. Pruning and frond stacking. Road maintenance. Regular road maintenance is carried out (grading, compacting

and cambering) and also ditch maintenance according to annual program.

Compliance Status : Full.

Criterion 4.4 (C.4.4) Practices to maintain the quality and availability of surface and ground water


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GMM has facilitated provision of water in storage tanks consume daily operation mills and estates and employee’s housing. The water for industrial use is supplied from the river and for households. Record of BOD and record of water using per ton FFB, was available which during 2012 the average was below the LONSUM’ standard 1.25 m3/ ton FFB processed. The BOD levels and other parameters refers to with the local requirements in the Liquid Waste regulations in environmental decree by Province of South Sumatra . The BOD data are submitted six-monthly in RKL/ RPL to BAPEDALDA (Regional Environmental Monitoring Body). Checks on records show that all the data are comply with regulation.

To avoid the contamination of river water, GMM installing HCV area along the riparian zones – a 50 meter belt along the river banks - and no replanting of oil palm will be done along all river banks as stated in SOP OP5.10 : HCV.

Compliance status : Full

Criterion 4.5 (C.4.5) Pests, diseases, weeds and invasively-introduced species are effectively managed using appropriate Integrated Pest Management (IPM) Techniques

GMM has formulated an Integrated Pest Management (IPM), practiced incorporating cultural, biological, mechanical or physical methods, by : 1. Identification of pests, diseases and weeds before it become an outbreak of maximum level 2. Introducing of beneficial plants for hosts of pests. 3. Introduction Barn Owl (Tyto alba) 4. Planting LCC 5. Frond stacking 6. Minimise use of agrochemicals.

Oil Palm Leaf Eater Control includes detection, cencus, examination, treatments, evaluation, monitoring and organisation. Planting beneficial plants, such as Bunga pukul delapan (Turnera subulata) and air mata pengantin (Antigonom leptosus) to harbour predators of the crop pests. MRF (Monthly Requisition for Fund) reported the use of benefecial plants (Antigonon leptopus, Turnera subulata). Eradication of outbreaks of leaf-eating bagworm (ulat api, especially Setora nitens) is by biological control using a virus taken from the insects themselves. GMM conduct monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare.

The barn owl (Burung hantu, scientifically Tyto alba) is protected and encouraged as a natural predator of rats. The use of pesticides has to be minimised by only implementing for severe infestation in selected area instead of blanket method, Compliance Status : Full.

Criterion 4.6 (C.4.6) Agrochemicals are used in a way that does No.t endanger health or the environment. There is No. prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorized as World Health Organization Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

There is a List of pesticides used and pesticides stocks is listed in the”Balance Stock Agrochemical in 2011 and 2012”., those can be bought for application are in accordance with the Permentan No 1/2001, WHO and Rotterdam

convention, are issued and distributed to Procurement division. Only procurement division can buy and supply the matter. GMM has a procedure on how to apply agrochemicals, refers to Peraturan Menteri Pertanian No. 07/Permentan /SR.140/ /2007, or Regulation No. 07/ Permentan /SR.140/ 2/2007 Ministry of Agriculture Republic of Indonesia.. All the agrochemicals used are registered and approved by Pusat Perizinan dan Investasi Sekertariat Jenderal Departemen Pertanian 2008, or Invesation and Permit Center, Agriculture Department, Republic of Indonesia The application of pesticides refers to “SOP OP 5.2.2. Guide to the safe use of Pesticides “(March 2008). Checks on the records of agrochemicals used found that they complied with the regulation.

However, it was founf that :

Certificate for workers who handle restricted pesticides such as paraquat were.not available. This is not in accordance with Kepmentan 949-1998 Article 5. A Major nonconformity has been raised (See NCR-GM-02).

GMM has a procedure to store agrochemical wastes and empty containers in a secured area – a B3 (hazardous and toxic materials) waste warehouse - before collection by a licensed contractor. Records of the hazardous wastes stored are kept properly and in compliance with the Material Safety Data Sheet (MSDS) in Government Regulation (PP) No. 74 of 2001. GMM has policy that pregnant and breast-feeding women are prohibited from working with pesticides. There was evidence of regular medical check-ups for workers involved in handling hazardous chemicals.for permanent workers, however, it was found that: There were no records of medical check-up which conducted in February 2013 for daily workers exposed to hazardous chemicals in the Division II e.g: Mr. Sumarjan Sinaga, Karsan, Amru Faisal. A Minor nonconformity has been raised (See NCR-GM-03). Compliance Status : Comply after correction and corrective action for major nonconformity.

Compliance Status : Open minor nonconformity.

Criterion 4.7 (C.4.7) An occupational health and safety plan is documented, effectively communicated and implemented.

GMM has established a safety, health and environment policy and certified SMK3. The organisation structure of Panitia Pembina Keselamatan dan Kesehatan Kerja (P2K3), or Guiding Committee on Occupational Health and Safety, has been established. Explanation and communication of the policy is the responsibility of the safety engineer (SM-P2K3) who daily monitors and inspects all facilities in the mill and estates for emergencies. There are regular monthly meetings between the management and workers on health and safety issues. All the permanent employees and contract workers are insured under JAMSOSTEK A record of JAMSOSTEK payment installment was sighted. Employee above 55 years old have pension . However, it was found that:


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All daily workers have not been included in the JAMSOSTEK/Social Security insurance, employee data per August 2013 showed more than 10 people, for example in the Division VI were 63 people, as required by Peraturan Kementerian Sosial, Tenaga Kerja dan Transmigrasi No: 150 tahun 1999. A minor nonconformity has been raised (See NCR-GM-04).

All employees, especially those in high risk work, undergo an annual health examination with the results submitted in Laporan Hasil Pemeriksaan Kesehatan Berkala Tenaga Kerja to Dinas Tenaga Kerja – Balai Hiperkes Dan Keselamatan Kerja Provinsi Sumatera Utara (Department of Labor, Province of North Sumatra). Record of healthy employee available . The point check were : Cholinesterase (pesticide), Audiometric ( hearing), Spirometri (lung), Work Environmental tested were : Noisy, Dusty, Vibrations at work place, Luminosity,. All the operations have been risk assessed for obtaining SMK3 certification. The P2K3 team identified and analysed the risks for all routine and non-routine activities. The records of risk analysis are documented properly. GMM has developed procedures for accidents and emergency preparadness The effectiveness of this procedure is tested every year. Workers in hazardous areas are provided training to minimize their risk in an annual training program on safety and health issues including training for boiler operators, K3 regulations and legislations of the Republic of Indonesia, elevation equipment (crane / gondola). A record of work accidents was compiled by the company physician every month. Records of work accidents are kept 5 years and regularly submitted to DISNAKER, the Regional Labor Department, and JAMSOSTEK for insurance claims. In a work accident, the P2K3 team will meet immediately to investigate the cause and recommend corrective and preventive action. The P2K3 team has assigned to assure that all P2K3 and K3

equipment, such as fire extinguishers, PPE, hydrants, P3K tool kits (medical box) are available on worksites by regular checking in the mill and estates. However, it was found that:

Appointed personnel in emergency response organization structure has not been completely received training related to emergency response training, for example Pak Suheri A Minor NonConformity was raised. (See NCR-GM-05).

Compliance status : Open minor non-conformity

Criterion 4.8 (C.4.8) All staff, workers, smallholders and contractors are appropriately trained.

GMM has developed training procedure that require the Mill / estate managers have to identified the training needs in each section / department to organize an annual training program which also covers contractors and farmers eventhough in North Sumatera Region LONSUM do not received FFB from smallholders. However, it was found that:

Training programs in 2013 and personnel training records are not available

A Major NonConformity was raised. (See NCR-GM-06).

Compliance Status : Comply after correction and corrective action

Criterion 5.1 (C.5.1) Environment aspects of plantation and mill management, including replanting, that have environmental

impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

GMM has developed criteria to determinate methods to replanting oil palms in Impact of plantation and mill which is identified in AMDAL Document, AMDAL/RKL/RPL of Oil Palm Plantation and Palm Oil Mill. GMM conducted an environmental impact assessment (ANDAL) of its mill and estates operations in 2004 which has not been revised because there has been no change in its operations that could have differently affected the environmental and socio-economic issues. Any adverse impacts identified will be studied for mitigation. Assessment is also being carried out on the environmental management and monitoring (RKL/RPL). GMM had previously assessed its environmental impact in obtaining ISO 14001 certification (for environmental management) for its mill and estates. Six-monthly reports of RKL/RPL are submitted to BAPEDALDA (local environmental controlling body) available for Semester II

2012 and Semester I 2013.


Criterion 5.2 (C.5.2) The status of rare, threatened or endangered species and High Conservation Value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their

conservation taken into account in management plans and operations.

GMM has prepared and developed all information as well for flora and fauna which a are comprehensively identified in “Executive Summary of High Conservation Value Report 2009”. The HCV’s areas are recognized with HCV’s 4.1, 4.2, and 6, which most of HCV’s are available in the whole of the plantations. The HCV’s area at the field is well identified with signboards.

Identification of HCV’s was updated for 2010 and its accordance government regulation No. 07 Tahun 1999. The identification of HCV’s whole in LONSUM was documented in” List of Protected Species”.

Compliance status : Full.

Criterion 5.3 (C.5.3) Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner GMM has identified all waste and pollutions sources in the mill and estates and listed them in accordance with its

related procedure SOP OP “Identification of waste sources”, ,The records of actual wastes in the mill and estates are

documented properly. Suitable methods have been established to minimize the production of wastes and to minimize

their environmental impacts. GMM has, in fact, already implemented waste management and disposal to avoid /

reduce pollution and developed SOP OP 5.8. “Waste Management”.to obtain its ISO 14001 certification. EFB is used

to mulch young palms in the field near mill in Gunung Melayu Estate liquid wastes treated as in Instalasi Pengolah Air

Limbah /IPAL (waste water treatment) to reduce their BOD and COD, with their pH monitored to the requisite

standards. Analyses of POME for BOD, COD and pH are done regularly to ensure the parameters meet the

standards, the report in Semester II 2012 and Semester I 2013 showing compliance.

GMM has a licence to store the wastes in accordance with decree before collection by a licensed waste collector. The


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records of waste and hazardous material disposal were checked, and the evidence of hazardous waste disposal

found to be well documented, such as used grease waste collected by licensed contractor/ transporter recorded in

hazardous waste manifest.



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

GMM has a renewable energy program in which it continually strives to improve energy efficiency and use more renewable vis-à-vis fossil fuels. The generator set is only used as backup to generate electricity when the main turbine is down. Regular maintenance of mill engines ( e.g: boiler, sterilizer, BPV, Steam separator, Motor Compressor, turbine) and motor vehicles also contribute to increase energy efficiency rate.

Monitoring of renewable energy and fossil fuels used have been recorded (EMS F16 – Pemantauan bahan bakar fossil dan non fossil) .

Compliance status: Full

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

The use of fire with any reason is strictly prohibited, such as activities in land preparation of new developments and replanting. GMM has a zero burning policy, and established procedure SOP OP 2.8. “Land preparation-strategies and parameter” (March 2008). GMM has installed fire protection systems and training for preparedness in fighting fire at all estates and other infrastructure.

Compliance Status : Full

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

GMM has identified pollution and emission sources, which comes mainly from boilers, generator sets and motor vehicles, e.g., dump trucks, backhoe loader, excavators. Monitoring of their exhaust emissions is done regularly by Dinas Tenaga Kerja dan Transmigrasi – UPTD Balai Hiperkes dan Keselamatan Kerja, an external independent laboratory - every 6 months for boiler and yearly for vehicles. The smoke opacity results are recorded as part of its RKL-RPL (Environment Management and Monitoring) Semester Report. The parameters tested for are SO2, NO2, H2S and particulates as per the Ministry of Environment, Republic of Indonesia, regulation Peraturan Menteri Lingkungan Hidup No. 07 Tahun 2007. A check on the reports found that the levels complied with the standards. GMM has a pollution and emission reduction program in which is prohibited the burning of EFB and domestic wastes in the mill, estates and housing complex; tree planting is encouraged around the mill and housing complex instead, and also planting LCC to subtitute Nitrogren demand by manufactured fertilizer. A procedure to treat POME has been established and the records of monitoring POME are kept properly and were sighted. Organisastion has implemented ISO 14001/ enviromental management system and annually assessed by third party Certification Body and by Government for yearly monitoring of environmental aspect-impact.


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

GMM has a method to monitor social information from the locals and its employees. The information is assessed and

the results reported to the Environment Manager and concerned parties, such as the environmental impact-controlling

agency, as a part of RKL/ RPL. However, it was found that:

No specific programs to handling social aspects with management methods and regular monitoring in the area with

potential conflict. A minor non conformity has been raised (See NCR-GM-07).

Compliance Status : Open minor nonconformity

Criterion 6.2

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

GMM has an effective communication and consultation procedure with plasma smallholders and its local communities (Prosedur Komunikasi),. It has also drawn up an external communication procedure. Consultation with stakeholders is done at least yearly, and minutes of the meeting in 2013 were sighted. Adjacent estate officers are responsible for communication with the respective parties on estate activities, while the Environment and CSR Department assumes overall responsibility for communication and consultation with stakeholders and to ensure that community programs are run effectively. A list of GMM stakeholders includes the local communities, NGOs, labour union, contractors and local government: Camat, Police, Military (Muspika: Camat, Kapolsek, Danramil), environmental agency (Bapedalda), Ministry of Labour. Compliance Status : Full.

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

GMM has a complaints, grievance and dispute procedure integrated in its communication procedure. (Internal complaints and grievances are resolved according the Mutual Working Agreement (Perjanjian Kerja Bersama). These procedures have been communicated to all stakeholders at each mill / estates. It was noted that the responses from stakeholders have been positive. During visits to stakeholders, the audit team confirmed that there were no serious complaints, grievances and disputes at the moment. Local communities and stakeholders obey and respect the


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company legal rights, reciprocated by the company’s respect for their traditional rights. Compliance Status : Full.

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

GMM has developed OP Land Acquisition and Compensation. (OP2.2). In this certification assessment, the audit

team studied the whole compensation mechanism, and found it satisfactory with no legal action being taken by any

party against another. The mechanism has been communicated to the stakeholders. Checks on the records and

interviews with the local communities confirmed that there is no current claim on any land. Based on HCV studies and

AMDAL report there is no customary rights of local community. Inteviews with the Chief of Local Community confirmed

that they have no customary rights.


Criterion 6.5

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

A policy on pay and working conditions in LONSUM was established in Internal Memorandum. The salary scales and

conditions of work are described in detail for all the positions of employment. GMM follows all the legislations on

working days, working time, salary levels, regional minimum pay and employee insurance. HRD staff inform the

workers before-hand of their salary adjustments whenever any are in the offing. The policy about wages is also

socialized in agreements with contractors.

Records were sighted that the pay rate for GMM complied with the regional minimum pay rate for North Sumatra in

year 2012. as per Governor of North Sumatera Decision Letter no. No.188.44/57/KPT/2012 regarding Upah Minimum

Provinsi Sumatra Utara, was 1.320.000 IDR per month. For Daily Rate Person with rice alowance per month which

given in a form of money. Single worker also provided with rice allowance, for single worker is 15 kg rice,.while for

head of family is 15 kg plus 9 kg for wife and 7.5 kg for each children (maximum 3 children). Records in June 2012

shown that the price of rice given was 7,300 IDR per kg (based on internal memorandum refers to Badan Kerja Sama

Perusahaan Perkebunan Sumatera (BKS-PPS).

All GMM permanent employees are insured under JAMSOSTEK. All workers, if heads of families, are provided a housing unit with piped potable water which is tested regularly to the required standard.

There are company clinics in each housing site where sick employees / dependents get free treatment. The more serious cases are referred to the regional hospital and they are allowed to seek alternative medical care for which they are reimbursed. However, it was found that:

Mr. Harianto the new paramedics who has been working for 3 months prescribed hard drugs (Amoxicillin) without a doctor's consent to the child patients and no records of weighing evidence to ensure the correct dosage. A minor nonconformity was raised (See NCR-GM-08).

There are nearby state schools which have been renovated and extended by donation from LONSUM. Scholarships to students and teachers are offered, and also book aid and learning kits under the company CSR program.

However, it was found that:

In the employment contract to a third party (PT Paluta Hijau Lestari) no clause outlining the contractor obligation to comply with the Labour Law 13/2003, such as the minimum age of workers, minimum wage, Social Security/ JAMSOSTEK, etc. A minor nonconformity was raised (See NCR-GM-09). Compliance Status : Open minor nonconformity.

Criterion 6.6

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

GMM has an agreement with the workers and management staff to allow them to establish a labour union in

accordance with national legislation UU No. 13 year 2003. However, only non-staff employees can be Union officers

to obviate any conflict of interest. The Union and management of GMM negotiate the Perjanjian Kerja Bersama, or

Mutual Working Agreement, every 5 years. The minutes of some meetings were checked and the meetings found to

be properly conducted.


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

GMM has a policy on child and female workers as stated in “Code of Conduct” signed by a Director and socialized in

agreements with suppliers / contractors. No one under 18 years of age is to be employed. Records of personal data

of employees - age, marital status, position and rank, location of work, date of commencing employment - are kept.

Checking the records confirmed that no one under 18 years old has been employed - in compliance with Indonesian

national legislation UU RI No. 13 Tahun 2003, article 68.

Compliance Status : Full


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Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual

orientation, union membership, political affiliation, or age, is prohibited.

A policy on equal rights regardless of race, caste, national origin, religion has been established as stated in “Code of

Conduct” and also socialized in agreements with suppliers/ contractors. GMM is an equal opportunity employer, with

promotion mainly based on merit. The Human Resources Regional Head identifies and recommends candidates for

promotion to a selection board at LONSUM Head Office. GMM is also committed to providing jobs for the locals, even

though they are reluctant to accept due to their increased affluence brought about by the operation of GMM.

Vacancies are posted on notice boards in the mill / estates, and also advertised in the local newspaper or in website

stated equal job vacancies for men and women for position Mill Assistant trainee, Transport Machinery Assistant,

Field Assistant Trainee.


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

GMM has established a policy on prevention of sexual harassment and protection of reproductive rights of its female

workers as stated in “Code of Conduct “. The policy was socialized to the workers. The policy on sexual harassment

and reproductive rights of women are imposed on contractors by being included in their contractual agreements.

Female employees are entitled to menstrual leave for 2 days a month, pregnant and childbirth leave for total 3 months

for each instance and also allowed to breastfeed for up to 9 months at least 30 minutes a day as stated in Perjanjian

Kerja Bersama (PKB) or Mutual Working Agreement in Article 13. GMM has policy stated that pregnant and

breastfeeding women can’t not employed related with agrochemicals/ pesticides. Checks in the field

concluded no pregnant and breast-feeding women working with agrochemicals. Interviews with female

workers confirmed that they already understood the policy.


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

There was no transaction and has no contract purchase for the agreement with smallholder or local business private companies regarding the sales and purchase of the FFB after last certification assessment. Other purchasing activity of the FFB transaction does not exist, instead for a project service or maintenance and repairs of mill equipments, which are contracted. List of approval contractors has been inspected to ensure that, the SPO management use only qualified contracted whole of area concerned.


Criterion 6.11 Grower and mills contribute to local sustainable development wherever appropriate.

GMM is committed to support sustainable development of the local communities through its Corporate Social Responsibility/ Community Development programs which are presented in its Stakeholder meeting. Identification of projects is based on community needs, the priorities of each mill / estates and the budget available. The CSR/ CD programs usually are classified in educational program, health program, religious program, social-economic program, or other uncategorized such as donation or aid. Compliance Status : Full.

Criterion7.0

No new planting planned on any estate included in the scope of this assessment.

Not Applicable..

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

GMM has committed to a process of continuous improvement by adopting the RSPO P & C and getting certified for its integrated management system – by obtaining EMS ISO 14001 for mill and all three estates and SMK3 for Gunung Melayu Estate and Sei Rumbiya Estate. An internal audit and management review is done at least yearly to evaluate the systems. Action plans have been developed for the next one to three years for continuous improvement in key operations through quality and environmental objectives for the mill and estates. Compliance Status : Full.

3.2. Identified Non Conformances and Noteworthy positive components.

This section gives an over view of new or revised non-conformities raised during this assessment and of

action taken to close out non-conformities rose during the previous assessments.


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3.2.1. Detail of Non Conformity.

All raised non conformities are summarized and attached in Error! Reference source not found.

3.2.2. Resume of Audit Results

Table 3-2 Resume of Audit Results

Indonesian National Interpretation of RSPO Principles and Criteria

P&C 1.1 1.2 2.1 2.2 2.3 3.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8

Status

1 1 3 1 1 1 1 1 1 1 1 3;2 2 3

#NC 0 0 1 0 0 0 0 0 0 0 0 1;1 2 1

Indonesian National Interpretation of RSPO Principles and Criteria

P&C 5.1 5.2 5.3 5.4 5.5 5.6 6.1 6.2 6.3 6.4 6.5 6.7 6.8 6.9 6.10 6.11 7 8.1

Status

1 1 1 1 1 1 2 1 1 1 2;2 1 1 1 1 1 NA 1

#NC 0 0 0 0 0 0 1 0 0 0 1;1 0 0 0 0 0 - 0

RSPO Supply Chain Certification Standard: Module E – Mass Balance

SCC 1.1 a 1.1 b 1.2 2.1 2.2 3.1 3.2 3.3 a 3.3 b 3.3 c 3.4 4.1 5.1 6.1

Status

1 1 1 1 1 1 1 1 1 1 1 1 1 1

#NC 0 0 0 0 0 0 0 0 0 0 0 0 0 0

NO.TE: Audited: “1” Conforming; “2” Minor Non-Conformity; “3” Major Non-Conformity; “NA” Not applicable, “#NC” : Number of Non-Conformities found

AUDIT OUTCOME

P&C audit, 3 Non-Conformities MAJOR

6 Non-Conformities MINOR

SCC audit

3.3module E 0 Non-Conformities MAJOR


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3.3. Status of non-conformities (both minor and major) previously identified

There was 2 Major nonconformities and 8 Minor nonconformities issued for Gunung Melayu Mill and supply base (Gunung Melayu Estate and Sei Rumbiya Estate) from Annual Surveillance Assessment 3. : Both corrections and corrective actions have been verified and accepted by auditor.

3.4. Issues Raised by Stakeholders

During Annual surveillance assessment-4 in GMM and supply bases the Assesor team did not perform specific stakeholder meeting but by interviewing in personal with employees, contractors, labour union, gender representative, or village chiefs near the plantation and reviewed againts previous minute meeting of Stakeholders conducted by GMM. The report of Public Consultation for Desa Pergulaan has been submitted separately to RSPO Grievance Manager. Subjects discussed during the consultation and interview with stakeholders were:

1. Knowledge of RSPO; 2. Benefits of the existence of palm oil plantation on the community; 3. Problems experienced related to the presence / activities of the plantation; 4. The solution to address the problems that occur.

The results of interview with stakeholders are as follows:

1. In general, mostly stakeholders were briefed on issues regarding RSPO, though their understandings were observed to be variable. Participants who were relatively more aware of RSPO were mainly participants living close to plantations, such as labor union, the village chief, and thecommunity leader. They knew this RSPO information from the management/ staff during the socialization of RSPO.

2. Mosty the stakeholders interviewed stated that the existence of oil palm plantation has provided benefits to society. The perceived benefits include:

a. Provision of employment, both directly related to maintenance activities and the cultivation of oil palm. Indirectly through partnership such as procurement of equipment, workmanship maintenance of facilities (roads, bridges, building / office). It is also recognized by the representatives of the Social Service and the local Labor.

b. Improving the economic prosperity and status of the community.

c. Corporate Social Responsibility (CSR) Program

Improvement of road infrastructure.

Improvement of the health service.

Improvement of education.

Contributions for celebrating the national and religious festivals or other grand activities. The company provides assistance in cash or in kind for religious activities (Eid al-Fitr, Eid al-Adha) and national holidays (Independence Day). Assistance is generally provided based on public requests through proposals.

3. Problems experienced related to the presence / activities of the plantation

There was no significant issue raised during interviews with stakeholders in Guniung Melayu mill

and its supply bases.

4. Certified Organization’s Acknowledgement of Internal Responsibility

4.1. Date of next surveillance visit

None.

4.2. Date of closing non-conformities (both major and minor)

All the major nonconformities have been closed, but there are open minor nonconformities .


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4.3. Formal Sign-off of Surveillance Assessment Findings

I the undersigned, being the legal representative of the inspected company, agree with the contents of this

report and accept the liability in execution of the instructions given in the report.

Signed for and on behalf of

PT.PP LONDON SUMATRA Tbk

.

Medan – December 2013

Head of Sustainability Department

(Mr. Muhammad Waras)

Signed for and on behalf of PT. TÜV NORD Indonesia – System Certification Management

Jakarta – December, 2013

Lead Auditor

(Wieke Savitri)

zahedi

Placed Image


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Appendix 1 List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

(Environmental Impact Assessment)

OER Oil Extraction Rate

BOD Biological Oxygen Demand OHS Occupational Health and Safety

BPN Badan Pertanahan Nasional (National Land Body)

OHSAS Occupational Health and Safety Assessment Scheme

CPO Crude Palm Oil P&C Principle and Criteria

CSR Corporate Social Responsibility PK Palm Kernel

EFB Empty Fruit Bunch PKB Perjanjian Kerja Bersama (Collective Agreement)

EMS Environmental Management System POM Palm Oil Mill

FFB Fresh Fruit Bunch POME Palm Oil Mill Effluent

GME Gunung Melayu Estate PPE Personal Protective Equipment

GMM Gunung Melayu Mill PT Perseroan Terbatas (Limited Company)

GPS Global Positioning System R&D Research and Development

HCV High Conservation Value RKL Rencana Pengelolaan Lingkungan Hidup

(Environmental Management Plan)

HGU Hak Guna Usaha (Land Right/ Land Use Title) RPL Rencana Pemantauan Lingkungan Hidup

(Environmental Monitoring Plan)

HIRA Hazard identification and risk assessment RSPO Roundtable on Sustainable Palm Oil

IPM Integrated Pest Management RSPO NI

Roundtable on Sustainable Palm Oil National Interpretation

IUP Ijin Usaha Perkebunan (Land use permit) SA8000 Social Accountability 8000

Jamsostek Jaminan Sosial Tenaga Kerja (Social Insurance for Employees)

SIA Social Impact Assessment

Kapospol Kepala Pos Polisi (Head of Police Station) SOP Standard Operating Procedure

Lonsum London Sumatra UKL Upaya Pengelolaan Lingkungan Hidup

(Environmental Management Effort)

MOU Memorandum of Understanding UPL Upaya Pemantauan Lingkungan Hidup

(Environmental Monitoring Effort)

K3 Kesehatan dan Keselamatan Kerja

(Occupational Health and Safety)

SEL Studi Evaluasi Lingkungan

Evaluation of Environmental Study

SER Sei Rumbiya Estate

KER Kernel Extraction Rate

KUD Koperasi Unit Desa (Village Cooperatives)

LONSUM London Sumatra

MSDS Material Safety Data Sheet

NC Non Conformity


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Appendix 2. Summary of the findings for compliance with the RSPO Supply Chain Module E (Mass Balance) ver. November 2011

STANDARD SG MB RESULT

1. DOCUMENTED PROCEDURES

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

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

√ √ As per SOP User Manual WB Operator/ Rev 0/ 4 October 2011

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

√ √ The Mill Manager, was appointed to be a person who is

responsible over SCC requirement’s implementation.

1.2

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

√ √

As per SOP User Manual WB Operator/ Rev 0/ 4 October 2011. There is no non-certified FFB in GMM, all FFB supplied by company-own estates.

Plasma PKSMT-TS

2. PURCHASING AND GOODS IN

2.1 The facility shall verify and document the volumes of certified and No.n-certified FFBs received.


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

√ √ . As per SOP User Manual WB Operator/ Rev 0/ 4 October 2011

3. RECORD KEEPING

3.1

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



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

√ √ The records will be kept for at least 5 years.

3.3

a. The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.


b. All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

x √ As per User Manual WB Operator/ Rev 0/ 4 October 2011

c. The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

x √ No. transaction has been made, will be verified in the next surveillance audit .

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase

√ √ Actual implementation could only be verified if any transaction has been made in the next surveillance audit.

4. SALES AND GOOD OUT

4.1

The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated) d) The quantity of the products delivered; e) Reference to related transport documentation.


5. PROCESSING

5.1

The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from No.n-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that conGMMination is avoided. The objective is for 100 % segregated material to be reached. The systems should guarantee the minimum standard of 95 % segregated physical material9; up to 5 % conGMMination is allowed.

√ x N/A for Mass Balance


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5.2

The facility shall provide documented proof that the RSPO certified palm oil can be traced backto only certified segregated material.


5.3

In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does No.t need to be separately certified. The mill has to ensure that: ·The crush operator conforms to these requirements for segregation·The crush is covered through a signed and enforceable agreement


6. TRAINING

6.1

The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

√ √ Procedure for training is described in SOP Training Human Resources

7. CLAIMS

7.1

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

√ √

A procedure/mechanism of claim as per RSPO Rules for communication and claims are stated in the procedure of supply chain SOP User Manual WB Operator/ Rev 0/ 4 October 2011recited from RSPO Rules for Communication and Claims. The implementation will be further verified during the next surveillance audit, after the certification is approved


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Appendix 3. Detail of NonNoconformities

A. Major Non-Conformities (NC)

Major NC:

A certificate of conformance with the RSPO Criteria cannot be issued while any major non-conformities are outstanding.

Major nonconformities raised during surveillance assessments must be addressed within 60 days, or the certificate will be suspended.

Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn.

NCR No.

Criterion No

NCR Correction Root Cause Corrective Action Conclusion

1. NCR-GM-01

2.1 MJ 1 Company Registration Permit from Regent of Asahan No. 503/SITU/BPP/1385/IX/2008 valid from 26 September 2008 that requires permit holders to re-register each year, however, re-registration. in 2013 was not available.

Closed

2. NCR-GM-02

4.6 MJ 3 Certificate for workers who handle restricted pesticides such as paraquat were.not available. This is not in accordance with Kepmentan 949-1998 Article 5.

Closed

3. NCR-GM-06

4.8 MJ 1. Training programs in 2013 and personnel training records are not available.


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B. Minor Non-Conformities (NC)

Minor NCR: Minor nonconformities will be raised to major if they are not addressed by the following surveillance assessment

NCR No.

Criterion No

NCR Correction Root Cause Corrective Action Conclusion

4..NCR-GM-03

4.6 MN 2

During audit it was found that there were no records of medical check-up which conducted in February 2013 for daily workers exposed to hazardous chemicals in the Division II e.g: Mr. Sumarjan Sinaga, Karsan, Amru Faisal.

Open non conformity

5..NCR-GM-04

4.7 MN 1

All daily workers have not been included in the JAMSOSTEK/Social Security insurance, employee data per August 2013 showed more than 10 people, for example in the Division VI were 63 people, as required by Peraturan Kementerian Sosial, Tenaga Kerja dan Transmigrasi No: 150 tahun 1999.

Open non conformity

6.NCR-GM-05

4.7 MN 4

Appointed personnel in emergency response organization structure has not been completely received training related to emergency response training, for example Pak Suheri

Open non conformity

7.NCR-GM-07

6.1 MN 1

No specific programs to handling social aspects with management methods and regular monitoring in the area with potential conflict.

Open non conformity

8.NCR-GM-08

6.5 MN 1

Mr. Harianto the new paramedics who has been working for 3 months prescribed hard drugs (Amoxicillin) without a doctor's consent to the child patients and no records of weighing evidence to ensure the correct dosage.

Open non conformity

9.NCR-GM-09

6.5 MN 2

In the employment contract to a third party (PT Paluta Hijau Lestari) no clause outlining the contractor obligation to comply with the Labour Law 13/2003, such as the minimum age of workers, minimum wage, Social Security/ JAMSOSTEK, etc.

Open non conformity

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