RSPO audit Report · listed in this report below. 1.5 Location of the Palm Oil Mill Name Palm Oil...

RSPO Principles & Criteria Annual Surveillance Assessment Report

Report Number CU821298

RSPOPC-SUM-REPORT.F01 JULY2013 of 38

Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa, Off Jalan Sg Bertih, Teluk Gadong, 41100, Klang, Selangor. Malaysia.

Tel: +603-3377 1600 / 1700

RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT

ANNUAL SURVEILLANCE ASSESSMENT 4

Malaysia

RIMMER PALM OIL MILL Kuala Lumpur-Kepong Berhad

2014

Report prepared by: Mahaswaran Maliyapan (Lead Assessor)

Certification decision by: Nur Hadi (Certifier)

Certifying Office

Control Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor, Persiaran Raja Muda Musa,

Off Jalan Sg Bertih, Teluk Gadong, 41100 Klang, Selangor, Malaysia [email protected]

Tel: +603-3377 1600 / 1700

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

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

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

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

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be

obtained from CUC.

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

RSPO Approval Date 12/01/2006

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

mailto:[email protected]

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





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Table of Contents

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

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

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

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

PART 2: PARTIAL CERTIFICATION ........................................................................................................ 6

2.1 MANAGEMENT STRUCTURE ............................................................................................................... 6 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ................................................................................... 6 2.3 SUMMARY OF THE TIME BOUND PLAN ................................................... ERROR! BOOKMARK NOT DEFINED. 2.4 UN-CERTIFIED UNITS OR HOLDINGS ...................................................... ERROR! BOOKMARK NOT DEFINED. 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ..................................................................... 11 2.6 PARTIAL CERTIFICATION AUDIT AGENDA ............................................................................................ 11

PART 3: AUDIT PROCESS ................................................................................................................... 11

3.1 ABOUT THE CERTIFICATION BODY ..................................................................................................... 11 3.2 AUDIT TEAM ................................................................................................................................. 11

3.2.1 Qualifications of the Lead Auditor ......................................................................................... 12 3.2.2 Qualifications of the Assessment Team ................................................................................. 12

3.3 AUDIT METHODOLOGY.................................................................................................................... 14 3.3.1 General Overview ............................................................................................................ 14 3.3.2 Assessment agenda for this Audit ....................................... Error! Bookmark not defined.

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

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

Principle 1: Commitment to Transparency ..................................................................................... 18 Principle 2: Compliance with Applicable Laws and Regulations .................................................... 19 Principle 3: Commitment to Long-Term Economic and Financial Viability ..................................... 20 Principle 4: Use of Appropriate Best Practices by Growers and Millers ......................................... 21 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity ........................................................................................................................................................ 26 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers ........................................................................................................................ 29 Principle 7: Responsible Development of New Plantings ................................................................ 32 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity ............................. 32

4.3 SAMPLE CRITERIA APPLIED DURING ANNUAL SURVEILLANCES ONLY & NOT APPLICABLE FOR THE MAIN

ASSESSMENT ............................................................................................... ERROR! BOOKMARK NOT DEFINED. 4.4 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE ......... 32

4.4.1 Non-Conformities Identified during this Audit ...................................................................... 33 Non-were raised during this audit. or................................................. Error! Bookmark not defined. 4.4.2 Non-Conformity Identified during the last ASA, not applicable for MA ................................ 33





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Non-were raised during the last audit as this is the Main Assessment. or ...... Error! Bookmark not defined.

THE FOLLOWING NC’S WERE RAISED DURING THE LAST AUDIT AND THE STATUS WAS REVIEWED AS INDICATED BELOW. 33 4.4.2 Observations Raised During this Audit ...................................... Error! Bookmark not defined.

4.5 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY ......................................... 33

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ................................................................................... 33

5.1 POM INCLUDED IN THE SCOPE OF THE AUDIT ......................................... ERROR! BOOKMARK NOT DEFINED. 5.2 CONFIRMATION OF THE COMPANY’S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM

OIL AND PALM KERNEL OVER A SPECIFIED PERIOD .......................................... ERROR! BOOKMARK NOT DEFINED. 5.3 SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION ............................. 34 5.4 MONTHLY RECORDS OF CERTIFIED AND UNCERTIFIED FFB RECEIVED SINCE THE LAST AUDIT ........................ 34 5.5 MONTHLY RECORDS OF CERTIFIED CPO AND PK PRODUCED SINCE THE LAST AUDIT ................................... 34 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREENPLAM TO BUYERS SINCE THE LAST AUDIT, IF ANY ...... 35 5.7 RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY ...... 35 5.8 NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT ............................................................................ 35 5.9 DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS ............................................................ 35 5.10 FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM .............. 36

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ........... 36

6.1 DATE OF NEXT ASA ........................................................................................................................ 36 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ...................................................................................... 36 6.3 SIGNING BY THE CLIENT ................................................................................................................... 36 6.4 SIGNING BY THE LEAD AUDITOR ........................................................................................................ 36 6.5 SIGNING BY THE CERTIFIER ............................................................................................................... 36

PART 7: APPENDICIES ........................................................................................................................ 37

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT .......................................................................... 37 FOR MALAYSIA ONLY. DELETE IF THIS AUDIT WAS DONE IN ANOTHER COUNTRY ..... ERROR! BOOKMARK NOT DEFINED. APPENDIX 2: LIST OF ABBREVIATIONS ............................................................... ERROR! BOOKMARK NOT DEFINED. FOR INDONESIA. DELETE IF THIS AUDIT WAS DONE IN ANOTHER COUNTRY ............ ERROR! BOOKMARK NOT DEFINED. APPENDIX 2: LIST OF ABBREVIATIONS ............................................................... ERROR! BOOKMARK NOT DEFINED.





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PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT

1.1 Company and Contact Details

Company Name: Kuala Lumpur Kepong Sabah, Sdn. Bhd

Business Address: KLK (Sabah), Lahad Datu Region, P.O.BOX 60999, 91118 Lahad Datu, Sabah.

Contact Person: Mr. Sin Chuan Eng

Office Telephone: +6089-887240

E-Mail: [email protected]

Web Site: www.klk.com.my

Other Certifications Held: ISCC

1.2 RSPO Membership & Certification Details

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

Registered Client Name: Kuala Lumpur Kepong Berhad

Certificate Number: CU-RSPO-821298

Start Date Of Certificate: 6 July 2010

End Date Of Certificate: 5 July 2015

Date Of Original Certification: 6 July 2010

Scope: Certification of the Palm Oil Mill and Supply Bases

Type Of Certification: Single site

Duration Of Certificate: 5 Years from date of certification

1.3 Annual Surveillance Assessment Details

Dates Of This Audit: 05th

– 09th

May 2014

Audit Number: ASA 4

1.4 Assessment Type

This is a RSPO Principles &Criteria Compliance assessment of the palm oil mill and its respective supply bases as listed in this report below.

1.5 Location of the Palm Oil Mill

Name Palm Oil Mill

Mill Capacity

Location GPS Reference

(POM) MT/Hour Address Longitude Latitude

Rimmer POM 60 KM 29, Jalan Lahad Datu – Tungku, Lahad Datu, Sabah

E 118.5715 N 5.0193

1.6 Palm Oil Mill Output and Approximate Tonnages Certified

Figures below are from:

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

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

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

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

Projected Production from the last 12 Months (MT)

May’13 to Apr’14

Actual Production for this Audit Year 2013 (MT)


Projected 12 Months (MT) Forecast Certified in this Report


FFB CPO PK FFB CPO PK FFB CPO PK

161,796 35,592 8,897 133,181 28,581 7,061 159,712 35,136 8,785

mailto:[email protected]

http://www.klk.com.my/





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1.7 General Description of Supply Base

Rimmer mill receives FFB from its own estates which are the Rimmer estate and Sungai Silabukan estate. But occasionally the mill do receive crops from Lungmanis estate, Bukit Tabin estate and Tungku estate. The mill no longer receive FFB from outsiders since September 2012. Sighted the crop distribution list [Oct'13 - Apr'14] from respective supply base. The mill management closely monitor the crop projections for the OER concern and during this audit, observed the SPDR [Summary of Production & Despatch Record] for justification of OER. Sighted the OER trend from Oct'13 to Mar'14 as 21.85, 20.96, 21.02, 20.52, 21.60, 22.08 respectively.

1.7.1 Location of the Supply Base

OPP

Oil Palm Plantation

Location GPS reference Area Summary (Ha)

Name Address Longitude Latitude Total Mature

OPP 1 Rimmer Estate Lahad Datu, Sabah, Malaysia

E 118.570151 N 5.020545 2,685 2,685

OPP 2 Sungai Silabukan Estate

Lahad Datu, Sabah, Malaysia

E 118.592053 N 5.003039 2,636 2,636

TOTAL 5,321 5,321

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

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

OPP 1 Rimmer Estate 75,228 90, 91, 95 25 to 30

OPP 2 Sungai Silabukan Estate 84,484 94, 97, 98 25 to 30

TOTAL 159,712 - -

1.7.3 Conservation and HCV Area (Ha)

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

OPP 1 Rimmer Estate - 25 Yes

OPP 2 Sungai Silabukan Estate - - Yes

TOTAL - 25 -

* Indicate if HCV area is part of the Conservation Area. If the HCV area is part of the Conservation Area, then “YES” otherwise, “No”

1.7.4 Percentage of Planted Oil Palm by different Age Ranges

OPP Planting Years by 5 year Ranges

1986-1990 1991 -1995 1996 – 2000 2001 – 2005 After 2005

OPP 1 30.95 % 30.99 % 38.06 % - -

OPP 2 - 35.66 % 64.34 % - -

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

N = 0.8√Y, where “Y” is the number of units, with the result always to be rounded “up” to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification program, are to be preferred over those more recently assessed

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

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

2 2 0 0

Explanation as to the selection of estates sampled

Both estates were assessed.





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

Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan, if applicable to this assessment

Not Applicable

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

PART 2: PARTIAL CERTIFICATION

The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure

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

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company?

No Section 2 is N/A

Go to 2.1.2

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

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

- Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

- Go to 2.4 Go to 2.2.2

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

Yes Go to 2.3 2.2.3

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

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category

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

- Major

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

- Major

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

- Major

2.2.4 No applicable membership of the RSPO. - Major





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2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

New inclusion of supply base and mill has been updated in below time bound plan.

Yes

2.3.2 Is the time bound plan challenging? Age of

plantations. Location. Mill

development. Infrastructure. Compliance

with applicable law.

Existing time bound plan has been included with new supply base and mill.

Yes

2.3.3 Have there been any changes since the last audit? Are they justified?

The time bound plan reviewed by CUC and changes such as new inclusion is updated and accepted.

Yes

2.3.4 If there have been changes, what circumstances have occurred?

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

Yes

2.3.5 Have there been any stakeholder comments?

Recent stakeholder comment on acquired land in Papua New Guinea on the credibility on land obtained has been raised by OCEAN-Program Officer Collingwood Bay Community Representative, Mr. Adelbert Gangai has sent comments to KLK on a letter dated 5

th December 2013 and

kept RSPO & other parties in copy. Currently, KLK has leased a piece of a land to park all the machineries temporarily. As of 09 December 2013, this matter is being handled with RSPO and currently KLK is in progress to reply to RSPO. Wild Asia had been appointed since April 2013 to undertake SEIA assessment and subsequently 1

st meeting

at Wanigela district on 25th

Nov 2013 and community and representative attended was recorded. Pending official assessment report.

On PT Menteng Jaya Sawit Perdana IUP for 7,400Ha approval no: 525.26/153/II/EKBANG/2007 dated on 13 February 2007 and Izin Lokasi(IL) is renewed and documented no: 188.45/359/HUK-BPN/2013 dated: 1

st

August 2013 which includes an approval clause 1a that this IL will remain in force until land swap process is finalised.

Yes

2.3.6 Have there been any newly acquired subsidiaries?

No new acquisition other than Papua New Guinea. Yes

2.3.7 Have there been any isolated lapses in the implementation of

No lapses. Yes





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the plan?

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?

No. Yes

2.3.9 General statement as to progress made since the last audit?

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

2.4 Un-Certified Units or Holdings

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and Palm Oil Mills)

Section Requirement Findings and any action required Compliance

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

The internal control points have included all the requirements to validate the compliance against uncertified units or holdings as per partial requirements and assurance statement has been generated by KLK has a list of subsidiaries inspected and dated 30

th Nov 2013.

Yes

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

The company has conducted HCV assessment by Jump Consulting in January – February 2012 for all subsidiaries where the assessment report confirms that there was no replacement of primary forest or containing HCV. The new mills and newly acquired land are still under consultant preliminary report.

Yes

2.4.3 Any new plantings since January 1

st

2010 must comply with the RSPO New Plantings Procedure.

PT Anugerah Surya Mandiri has undergone NPP and published in RSPO website on 1

st April 2013.

Yes

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4,

For PT Karya Makmur Abadi, a total land of 4,745.13Ha has been compensated. PT Adei Plantation land conflicts around 2,544Ha are still in progress of negotiation.

Yes





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7.5 and 7.6.

2.4.5 Any Labor disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

None noted.no stakeholder comments or complaints received Yes

2.4.6 Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

None noted. No stakeholder comments or complaints received. Yes

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

Palm Oil Mill Country Supply Bases (estates,

plantations, associations) Targeted RSPO

Certification Year Current Certification

Status as per this Audit

Batu Lintang Serdang, Kedah, Malaysia

Pelam Estate Batu Lintang Estate Subur Estate Buntar Estate

2013 Certified

Kekayaan Paloh, Johor, Malaysia

Landak Estate Kekayaan Estate Voules Estate Sg Penggeli Estate New Pogoh Estate Fraser Estate Paloh Estate Sg Bekok Estate Ban Heng Estate See Sun Estate

Oct 2011 Certified

Paloh Paloh, Johor, Malaysia

Supply base consisting of smallholders

2015 Pending

Jeram Padang Bahau, Negeri Sembilan, Malaysia

Ayer Hitam Estate Batang Jelai Estate Jeram Padang Estate Kombok Estate Ulu Pedas Estate Sg Pertanian Estate Sg Kawang Estate Renjok Estate Tuan Estate

Sept 2012 Certified

Tanjung Malim Tanjung Malim, Perak, Malaysia

Changkat Asa Estate Kerling Estate Sg Gapi Estate

2013 Certified

Tuan Mee Sungai Buloh, Selangor, Malaysia

Tuan Mee Estate 2013 Certified

Kuala Pertang Kuala Krai, Kelantan,

Kerilla Estate Pasir Gajah Estate

By 2013 Pending





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Malaysia Sg Sokor Estate

Mill 1 Tawau, Sabah, Malaysia

100% independent smallholders, not to be included in the scope of the certification

N/A N/A

Mill 2 Tawau, Sabah, Malaysia

Pang Burong Estate Sri Kunak Estate Tundong Estate Ringlet Estate

March 2009 Certified

Pinang Tawau, Sabah, Malaysia

Jatika Estate Sigalong Estate Pangeran Estate Pinang Estate

March 2009 Certified

Lungmanis Lahad Datu, Sabah, Malaysia

Tungku Estate Bukit Tabin Estate Lungmanis Estate

July 2010 Certified

Rimmer Lahad Datu, Sabah, Malaysia

Rimmer Estate Sg. Sibalukan

July 2010 Certified

Bornion Kinabatangan, Sabah, Malaysia

Bornion Estate Segar Usaha Estate

July 2010 Certified

Changkat Chermin

Manjung. Perak, Malaysia

Lekir Estate Changkat Chermin Estate Raja Hitam Estate Glenealy Estate Serapoh Estate Kuala Kangsar Estate Allagar Estate

2013 Certified

Berau 1 Berau, Kaltim, Indonesia

Kebun Malindomas Perkebunan, Kebun Hutan Hijau Mas, Kebun Jabontara Ekakarsa

By 2014 Pending

Steelindo Wahana Perkasa

Belitung, Indonesia

Kebun Steelindo Wahana Perkasa

By 2013 Audited on 30/9-04/10/2013. Pending.

Parit Sembada Belitung, Indonesia

Kebun Parit Sembada Kebun Alam Karya Sejahtera

By 2014 Pending

Mandau Riau, Sumatera, Indonesia

Kebun Mandau Oct 2012 Certified

Nilo 1 Riau, Sumatera, Indonesia

Kebun Nilo Timur By 2013 Approved by RSPO, pending certificate issuance.

NIlo 2 Riau, Sumatera, Indonesia

Kebun Nilo Barat By 2013 Approved by RSPO, pending certificate issuance.

Tapung Kanan Riau, Sumatera, Indonesia

Kebun Sekarbumi Alamlestari

By 2013 Certified.

Gohor Lama Langkat, Sumatera

Kebun Basilam Kebun Gohor Lama

By 2014 Pending





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Utara, Indonesia

Kebun Tanjung Beringin (New inclusion)

Padang Brahrang

Sumatera Utara, Indonesia

Kebun Padang Brahrang Kebun Bukit Lawang Kebun Tanjung Keliling Kebun Bekiun Kebun Maryke (New Inclusion)

By 2014 Pending

MAP March 2013

Kalimantan tengah, Indonesia

Kebun Karya Makmur Abadi Kebun MAP Kebun Menteng Jaya Sawit Perdana

By 2015 Pending

2.5 Summary of the findings for Partial Certification

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension.

Overall findings are satisfactory and a minor non-compliance raised has been closed with an assurance statement. The 6 estates which have been excluded from time bound plan previously is included now with a target date. Out of the two mill in Kalimantan Timur, a new palm oil mill named Berau 2 POM is yet to commission. Stabat POM in Medan & KMA POM in Sampit has not commissioned and will be included in the time bound plan once ready. The company has also made decision to include Paloh Mill into certification by year 2015. Mill 1 which consists of 100% of independent smallholders will be shut down within 3 years from 2012. For final conclusion, please refer to table 3.1.

2.6 Partial Certification Audit Agenda

Date Location Agenda

05/05/14 Rimmer POM Documentation review

PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group – an international inspection and certification body. CUC performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

3.2 Audit Team

Lead auditor: Mahaswaran Maliyapan

Team member 1: Selvanathan Grapragasem

Team member 2: Muhd. Jamalul Arif

Team member 3: Asidatorn Iamsirisangthong

Team member 4: Andreas Budi Rahutomo

Team member 5: Jaruwat Boonrod





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3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

A minimum of post high school (post-secondary school) training in either agriculture/forestry, environmental science or social sciences;

Certified ISO 14001:2004 and OHSAS 18001:2007 Lead Auditor.

At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science);

More than 15 years of working experience in various industries. Fully trained in similar agriculture certification programmes such as RSPO, SCCS and RFS2.

Training in the practical application of the RSPO criteria, and RSPO certification systems;

Involved in RSPO assessment since 2012. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia.

Successfully completion of an ISO 9000:19011 lead auditors course;

Completed ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007 lead auditor course in June 2007.

Training in the practical application of RSPO certification systems.

Involved in RSPO assessment since 2012. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia.

A supervised period of training in practical auditing against the RSPO criteria or similar sustainability standards, with a minimum of 15 days audit experience and at least 3 audits at different organizations.

Involved in audits conducted in for many different companies in Malaysia and Indonesia.

RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in Oct 2013 Signed code of conduct. Yes

General knowledge of: Yes RSPO P&C standards. Yes CUC organizational structure. Yes CUC quality systems. Yes Lead auditor role. Yes Report writing. Yes Stakeholder consultation. Yes Certification decision process. Yes RSPO SCCS program manual. Yes CUC filing systems. Yes Correct use of RSPO trademarks. Yes History and objectives of RSPO. Yes CV available. Yes Completion of CUC RSPO lead auditor training. Yes

3.2.2 Qualifications of the Assessment Team RSPO Requirement Team Member Name Qualifications

Fluent in main local languages and English.

Selvanathan Grapragasem Fluent in both English and Bahasa Malaysia

Muhd. Jamalul Arif Fluent in both English and Bahasa Malaysia

Asidatorn Iamsirisangthong Fluent in English. Has understanding of Bahasa Malaysia

Jaruwat Boonrod Fluent in English. Has understanding of Bahasa Malaysia

Andreas Budi Rahutomo Fluent in both English and Bahasa Malaysia





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Field working experience in the palm oil sector, or a demonstrable equivalent.

Selvanathan Grapragasem SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation.

Muhd. Jamalul Arif Involved in RSPO auditing since November 2010. Auditing experience in GMP and Globalgap.

Asidatorn Iamsirisangthong Global gap experience and agriculture background

Jaruwat Boonrod Working in Quality laboratory for produce minimal process vegetable and fresh fruit for control fruits shelf life.

Andreas Budi Rahutomo Forest Carbon Partnership Facility Project with the Ministry of Forestry Republic of Indonesia. Involved in RSPO auditing since 2014.

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



Asidatorn Iamsirisangthong Global gap experience and agriculture background

Jaruwat Boonrod Performed audit observation of GMP+FSA, USDA-NOP and EU organic, Global-GAP standard.


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



Asidatorn Iamsirisangthong Complete lead auditor ISO 14001

Jaruwat Boonrod Certified Lead Auditor for ISO 9001 and ISO 14001.


Workers welfare issues and social auditing experience. (For example with SA8000 or related social or ethical accountability codes).



Asidatorn Iamsirisangthong Involved in group audit in organic farming since 2010. Global GAP in 2011 and RSPO in early 2012

Jaruwat Boonrod Nil





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Andreas Budi Rahutomo Nil

Environmental and ecological auditing. (For example experience with organic agriculture, ISO 14001 or environmental management systems).



Asidatorn Iamsirisangthong Complete lead auditor 14001

Jaruwat Boonrod Certified Lead Auditor for ISO 9001 and ISO 14001.

Andreas Budi Rahutomo Bachelor of Forestry. Forest Carbon Partnership Facility Project with the Ministry of Forestry Republic of Indonesia. Involved in RSPO auditing since 2014.

Economic issues. Muhd. Jamalul Arif Involved in RSPO auditing since November 2010. Auditing experience in GMP and Global gap.

Selvanathan SA 8000 advanced auditor, QMS, EMS & OHSAS Lead Auditor, Working experience in oil palm plantation.

3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the auditors and Certifier. During the Audit the qualified CUC auditors used the RSPO standard as endorsed for the country in which the audit took place and recorded their findings. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

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

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

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

Re-planting sites. Zero burn.

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

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

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

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

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

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

Documentation review. The Palm Oil Mill audit verification included the following activities:

Mill and workshop inspections. Documentation review & worker interviews.

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





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OSH. Training. Management structure. First aiders.

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

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

Compliance against the RSPO SCCS certification scheme. Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarized above.

3.3.2 Assessment agenda for this Audit

Date Location Auditors Main activities

05/05/2014 [Mon]

Lahad Datu Regional

Office Mahas

08.30 Opening meeting Chaired by the audit team leader

Introduction by team leader

Presentation by respective managers

Presentation of Palm Oil Mill source of FFB by respective managers

Rimmer POM

Andreas Mahas

Selva

Mill inspection

Workshops

Stores

POM application

Document review Field operations

Worker interviews

Housing

Medical

Schools

Local communities

Environmental

Silabukan Estate

Jamal

Asidatorn Jaruwat

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

06/05/2014 [Tue]

Lungmanis POM

Mahas

Andreas Mahas

Selva

Supply Chain Certification Assessment of the POM (RSPO SCCS) Mill inspection

Workshops

Stores

POM application


Worker interviews





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Housing

Medical

Schools

Local communities

Environmental

Tungku Estate

Jamal

Asidatorn Jaruwat

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

07/05/2014 [Wed]

Bornion POM

Mahas

Andreas

Mahas

Partial Certification Review with client representatives Mill inspection

Workshops

Stores

POM application


Worker interviews

Housing

Medical

Schools

Local communities

Environmental

Bornion Estate

Jamal Asidatorn

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

Segar Usaha Estate

Selva Jaruwat

08/05/2014 [Thu]

Bukit Tabin Estate

Jamal Simon

Jaruwat Asidatorn

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

Rimmer Estate

Mahas Selva

Andreas





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09/05/2014 [Fri]

Lahad Datu Regional

Office

All auditors

Preparation for closing meeting Additional field visits and meetings with managers as necessary Closing meeting Chaired by the audit team leader

Welcome and introduction by the team leader

Presentation of findings by the audit team

Questions and answers

Final summary by team leader End of assessment

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The mill and supply bases visited (as per the above Tables 1.5 and 1.7.1) and were assessed at field, office, facilities, stores and a document review was carried out in accordance to the RSPO principles and criteria. The subscribed RSPO management system’s documentations seen with minor changes that due to internal external influenced factors that in relation to scope of certification. Specific evidence was recorded for estates and mill. Interviews with Estate Managers, Mill Manager, members of workers union and committee took place in both formal and informal environments and worker interviews were conducted at the supply base and the mill. The management is highly committed in maintaining the RSPO system by adopting to continuous improvement programs. There was no complaint or feedback received during the audit or during the field assessment when interviewing with the external stakeholders. Under partial certification rules, there is a time-bound plan established. For further clarification on Partial Certification, see PART 2 above. The management continually monitoring the established KPI / objectives that significantly rules the achievement of company’s corporate policy on RSPO. The mill is fully verified for RSPO SCCS system verification and it is found to be in full compliance. See PART 5 below.

It is therefore the recommendation of the lead assessor that:

A certificate of compliance is maintained. Signed:

Name: Mahaswaran Maliyapan Date: 09/05/2014

4.2 Summary of the findings by Principles and Criteria

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

Identified Non-Conformities and noteworthy Positive and Negative Observations.

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





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Principle 1: Commitment to Transparency

Criterion by Audit Summary

Requests made by stakeholder were responded to and all these are well documented. Adequate information available for confidential information that being listed as publicly available.

ASA4 1.1 Mr.Madasila who is the estate Manager is responsible for conveying

adequate information to stakeholders. Master SOP document issue no. 4 (10-

04-2011), SOP no. 24 Stakeholder Requests and Response. Request and

response lock book shown the requests and response. Request from

University Malaysia Sabah for visiting and training in the estate on 23-

25/04/2014, response from the estate and actions had been recorded.

Request from MPOB for estate data concerning profile, FFB, harvesting. The

response was done on 16-02-2013. Request from Borneo Rhino Alliance

(BORA) for grass to feed rhinos. The response was made on 12-12-2013. All

requests had been attended promptly and recorded.

ASA4 1.2 In the mill seen 23 request for 2013 and 7 request recorded for 2014. Request

are basically from government dept Ex: DOE, DOSH, University etc. Last

registered on 29.4.2014; from DOSH Mr. Hisham Abd Rahman asks

permission to join the internal DOSH meeting and to perform Boiler test

which was accepted by the Mill Manager Mr. Samsuddin. In mill the OHS Plan

available included objectives, programmes and implementations & reviewed

every year.

Ex: 1. Zero serious accident

- Usage of PPE

- Road Safety training

2. Increase awareness of health in workplace and residential area

- Abuse drug & Alcohol

3. Increase Awareness of PPE in workplace

- Usage of PPE

In estate the Hazard identification has been carried out and valid for period of

20/03/2014 to 24/03/2015. OSH regulation also publicly available. Seen the

OHS objectives such as to maintain zero accident rat, - to create more

awareness on PPE, and to comply with OSH act. All OHS documents are

available and the summary list of applicable law & regulations is in place. OSH

plan has been established for 2014, training programs conducted according to

plan, such as safety training on spraying (20-01-14), safety training on

manuring (21-02-2014), safety training on harvesting (22-03-2014), safety

training on drivers (10-04-2014).

Other programs in the plan are : safety training on fire drill, training on CPR,

emergency and accident/first aid. Risk assessment is in place, including

mitigation measures, established for 23/08/2014 - 24/03/2015. EIA in place

which the assessment done in participation of stakeholders. The documents

are publicly available on request and the EIA assessment weighted on 3R

which associated with schedule waste management plan.

Risk assessment was including pollution prevention plan. The document is

publicly available on request. Plans are available for land, water and air

pollution that linked to the aspect and impact assessment record as well to

the list of legal & other requirements. EIA and risk assessment include





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pollution and occupational hazard prevention plan which is publicly available

on request. Negotiation procedures are included in the complaint

procedures. There are no indigenous peoples in the area and land use rights

are established long time ago.

Reference to Silabukan Estate: Land title no.: 116291859, 01/01/1981 -

31/12/2079 and 115356208, 01/01/1981 - 31/12/2079. as for Rimmer Estate

land # 115363472 dated 24, 10.1987 till 2085. Under Kuala Lumpur Kepong

Berhad approved by Land Department, Negeri Sabah. Sighted Golden Sphere

Sdn Bhd [ original land owner ] transfer name to Kepong Sabah Sdn Bhd.

Sited RSPO Master list for Estate indicating 4 type of confidentialities:

Controlled, Confidential, Publically available and Publically available [ read

only ]. In mill there were 6 complain registered in 2013. 10 were registered in

2014. Last entry for complain dated 30.4.2013 regarding parking area. Which

were built and completed by 2.5.2014. Action was taken by responsible

person and will acknowledge to the complainer back. No grievance registered

as per this audit period. Continuous improvement plan 2014 established with

type of activities to be improved, activity, person responsible, target date and

status. The plan includes improvement on social, environmental, pollution

control and reduction of waste by creating recycling awareness available.

Principle 2: Compliance with Applicable Laws and Regulations

Criterion by Audit

Summary

The mill and estates have demonstrated compliance to all applicable local, national and international laws with the exception of the implementation of the USECHH 2000 Regulations and the Scheduled Wastes Regulations 2005. Legal ownership of land and its land use is clearly demonstrated through the respective land titles. Boundaries have been clearly demarcated. There have been no land disputes or claims involving the mill and estate.

ASA4 2.1 Sighted a list of laws applicable that inclusive:

-OSHA and regulations 1994 (Act 514)

-Factories and Machinery Act with regulations (Act 139)

-Pesticides Act and Regulations (Act 149)

-Poison Act and Regulations 1952 (Act 366)

- Ministry of Trade and Consumer

-MPOB

-Road Transport Act 1987 (Act 333)

-Employees Social Security Act and Regulations (Act 4)

-Food Act and Regulations (Act 281)

-Industrial Relations Act and Regulations (Act 177)

- Trade Union Act and Regulations

-Employees Provident Fund Act 1991

-Human Rights Commission of Malaysian Act.

-Wetlands and climate Change 1999

List of laws available included name of laws, regulatory authority/summary,

license/permit/certificate and current status. Person in charge for any laws

traceability is the Mill Asst Manager, Mr Samson. Matrix showed what the

permit/license with expiry date available. All applicable permits were

monitored. No customary land issues and The HQ will sent the notifications if

any changes of laws and regulations.





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Land titles available at the mill office . Evidence of land tax payment verified

during the assessment. Ex: Dated 12.02.2014 ref 115363472 for Land Tax

payment to Local government of Sabah State. As for estate, person in charge:

Chin Tong Lai, Hasrin Abidin, and Md. Faidullah. List of license is available,e.g.

Jabatan tenaga kerja with expiry dates 13/1/2015. Noted that the license for

Pemadam Api (Bomba) is already expired, and there is documented updated

license for it until 2015. There is an evaluation mechanism taking place for

workers understanding of the rules and SOPs. Last done on 10/4.2014. There

is law book register to track any changes of legal system, last reviewed 10

March 2014. The person in charge is the Estate Manager.

ASA4 2.2 There is a documented legal ownership of land from Negeri Sabah. Indicating also the hectarage of the area. There is no costumary law community exist within the area of the estate. There are boundary stones document available. The map shows the boundary stones location that adjacent to Tambin Wildlife Reserve. There is fence built within the estate area that close to the boundary to limit the estate avtivity.

ASA4 2.3 There is no customary land in or surrounding all the estates. There are also no land disputes or claims involving these estates. The SIA document is available. The SIA involves workers from all element, there are minutes of the meeting and also questionare. Since there is no customary law community exist, so there is no assessment to address the issue.

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

Criterion by Audit Summary

The annual budget and 10 years projections for the mill and estate that details revenue and costs are available. Replanting programme for the estates for the next five years is also available.

ASA4 3.1 For the KLK there is a KLK Sustainability Department to oversee all the RSPO implementation and continuous RSPO plan. Seen annual financial plan 2013/2014 “ Estimate Crop Intake & Production For Year 2013/2014” for mill as below.

Year FFB to received

2015 133887

2016 118270

2017 106749 * Rimmer estate replanting

Year OER %projection KER % projection

2015 22.0 5.5

2016 22.0 5.5

2017 22.0 5.5

Year Milling cost RM @ tonne CPO

2015 172.16

2016 189.38

2017 208.32

Rimmer Estate has only matured area of 2,685Ha with 3 division that

consisted of 29 blocks. Sighted annual budget 2013/14 that as below:

cost/Ha : RM 4,974.24

cost/MT: RM 186.91

yield/Ha: RM 28.02MT

total yield FFB: 75,228MT





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Observed the annual forecast of 2012/13 and 2013/14 has some differences

in the crop projection due to the annual agronomist [AAR] report. Sighted the

latest GPS Mapping 01/2007/Fz, updated on 02/2013/4RSPO13. Replanting

calendar sighted for the period from 2015 - 2021. Sighted the worksheet on

"Proposed Replanting Programme 2015/2016" reviewed by the Regional

Director on 17/02/2014. The 1st replanting programme is planned on 112Ha

at field no.1990B that the felling process planned by Sept 2015.

Interviewed the estate manager for the justification for replanting that was

produced with evidence of report from agronomist. However the projection

information need for replanting not captured in the annual budget of 2013/14

as it falls in next financial year of 2015/16. Observed the 6 months "Oil Palm

Census for Replanting" and "Ganoderma Census' for field 1990B. sighted also

the yield statistic for all the 3 divisions and particularly for field no 1990B,

where the yield at 1.13 against the target of 2.5.

In the Silabukan estate, sighted the annual budget 2013-2014 documented,

annual budget progress 2012-2019. As for 2013/2014:

Hectarage (matured) 2636

Hectarage (immature) 0

FFB yield (mt/ha) 32.05

FFB crop (mt) 84,484

Production cost (RM/mt FFB) 186.59

Revenue (RM) 16,910,154

No replanting program currently available for Silabukan estate.

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

Criterion by Audit

Summary

The mill and estate have a complete set of SOPs which is being strictly adhered to and continuously monitored. Soil fertility is being maintained in the fields and erosion prevention is continuously carried out. IPM is being implemented in all the estate and the use of chemicals are in accordance with the regulations. There is a comprehensive OSH policy being implemented throughout the estate and mill. Trainings are being carried out as per the Annual Training Plan.

ASA4 4.1 Safe operating procedure June 2002, 2008, latest one is 2010. For black smoke monitoring, it is done by 3rd party consultant (Chemsain Consultant). It is done annually, and the 2014 report is already available. Report reference number: CK/MO407/231(iv)-1/14. In estate Directory of Master SOP document issue no. 4 (10-04-2011) established. Estate has furnished SOP for all stage of operations and in accordance with RSPO requirements. Group SOP for GAP: GAP/AGRIC/OP manual (issued 29-03-2010) and is covering operations from land clearing, replanting, harvesting, up keeping. This manual cover all agricultural practices implemented.

OP1= harvesting,

OP2= field upkeep,

OP3= Nutrition,

OP4= Pests & diseases,

OP5=conservation,

OP6= by product

SOP are kept and updated periodically. For monitoring records the retention

period is 7 years.





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ASA4 4.2 The "Oil Palm Manuring Recommendations 2013/14" established for all the

plantations that includes the fertilizing activities. There are also records of

fertilizers used for each blocks. There is sampling analysis results done by the

KDC Laboratory, e.g. Block IPM1995B1 analysed for pH, Organic C, N, P, K, Mg,

C.E.C. the samples are taken from palm circle (PC), and Inter row (IC). There is

records showing EFB usage the lates 2013/14, devided into blocks, total of

203/14 program is 13992.01 ton for Rimmer estate.

In Silabukan estate, sighted fertilizer usage per field at PM1994D1/116= 102

ha, PM1994E1/75=70ha, PM1994E2/53=10ha, PM1997A1/59=54. the soil

sampling had been done by AAR and result issued dated 2013/2014 in the AA

report. Soil analysis results from 5 fields with summary of current soil nutrient

status. pH levels were satisfactory, total N and total P are medium range.

Seen the group SOP for GAP: GAP/AGRIC/OP [Maintenance of soil fertility and

optimum level for production].

Sighted records of EFB application for field PM1994D1/116= 102 ha,

PM1994E1/75=39.98ha, PM1994E2/53=10ha and PM1997A1/59=54, where

the EFB were applied according to recommendation from AAR. Manuring

program seen for Oct13-Aug14 for division A,B,C, field no. 94G1/94ha,

application was conducted as following: AS 04-12-13, 693bags, BRP 22-03-14

504 bags, MOP 26-04-14= 504 bags, AS 630 bags at rate 2.50/point.

ASA4 4.3 Erosion control done by using mulch, terrace, tree planting at the riparian

zones. There are procedures available, e.g. construction of teraces policy no:

GP/AGRIC/OP5. Per 3 june 2005. Seen on field that leaves from the palms are

pilled in such a way that it can minimised the exposed soil. There is also

mulching procedure exist. Road maintanance program is applied (documents

available). The latest is in March 2014. In the document stated the length

maintained is 6KM and accumulated from october 2013 is 29 km.

There is also expenditure spent for the maintanance. E.g march 2014 107,800

RM. No peat land in the estate. There is an analysis done by the

agronomist showing all the soil types, no mention of peat. Done in 2010-

2013. Types of soil exist: bengawat, buyan, Koyah, Kumansi, Local Alluvium,

Luba, Lumerau, Lumpangan, Lumparai, Masaum. There is soil types map

covering all the estate area. So far there is no special management applied for

specific soil types. In Silabukan estate seen the soil map stated each type of

soil for each field.

Topography map AAR/12/04/2012, last update 05/2010/3 Soil Topo.wor/Lyn,

Flat area=615.8 ha + 129.2 ha + 161ha+169.4ha / Rolling area

701.6ha+28.9ha+860.8ha. As to prevent erosion along the river, jungle trees

were planted. And in the field area, Nephrolepis have been planted and

marking of the area planted. Sighted the SOP 8 for erosion control dated on

01-01-2011. Frond staging and EFB mulching are also applied. Seen SOP 5 for

road maintenance and map of the areas performed the maintenance work

established and updated. Maintenance programs include the grading,

compacting, gravelling and pothole. The record shows the program and

status.





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ASA4 4.4 There are trees planted at the riparian buffer zones (seen on field). The

matamba river has 20 meter of buffer zone which planted by forest trees and

bamboo. The water from the river is not used as irrigation, for irrigation the

estate uses effluent from Rimmer POM. No constructions taking place, other

than bridge at Matamba River. (seen on field) The rainfall monitoring is done

everyday with 1 rainfall station near the office. Mr. Kamarudin is the person

in charge for rainfall monitoring.

The matamba river is not directly flows from the Bukit Tabin Reserve, it is just

the sub river. The estate doesn’t use the water from the river for irrigation,

only for subsistent daily need, e.g. drinking, washing. Water sampling is done

in 7 sampling spots within the estate nera by the rivers. There is water

sampling analysis results from KDC laboratory. Latest is 18 April 2014. Analysis

covers BOD, COD, Suspended Solids, Ammoniacal Nitrogen. Treated water for

irrigating the estates are seperated lines from the river. 3 monthly visit by the

DOE makes sure it is up to the rules.

The mill does water sampling every 3 months for e-coli and also does BOD

sampling monthly. The tests are conducted by 3rd party laboratory. Seen on

map and on field that no mentioned construction taking place. Effluent

treatment is done by the mill (seen at mill and explained on the diagram).

Rainfall records are maintained each month in a yearly basis. A document

showing water usage monitoring is avaliable. It is monitored monthly and the

record includes 2009-2014 monitoring. Seen on field that there are signs of

crocodiles dwellings (crocodiles eat fish, fish live from good water quality,

means good ecosystem).

Water management plan document is available, including persons in charge.

Aside, there are 3 rivers, and 20 meters riparian zones have been established

in Silabukan estate.

1. Sungai Pangaruan

2. Sungai Silabukan

3. Sungai Matamba

There are old palms in the Riparian zone in 1997. There is no harvesting from

these palms. Verified during site visit, the zone has been marked and signs are

put along the river. No construction of any bunds or dam in this water way.

Water sampling points from 4 areas

1. upstream S. Silabukan

2. downstream S. Pangaruan

3. Line site waste water

4. Water tank for mill (drinking water)

Results from KDC laboratory, found on Point 1 &2, BOD1, clean, pH 6.7-6.8,

report no. R13/12/80, 10/01/14, Point 3 line site, BOD 16, Point 4 e-coli =0,

report no R14/3/36, 05/03/14. Rain fall record March 2014= 379.5 mm, 14

days and Apr 2014= 233.5 mm, 14 days. The minimum requirement for oil

palm for rain fall average 250 mm per month.





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ASA4 4.5 The IPM document is available, it is done by the agronomist from the holding.

E.g. rat damage control in oil palm policy no: GP/AGRIC/OP4. So far the major

pest is rat. There is a documented assessment/census indicating location and

the event of damage done by rat. There is also a documented census of

caterpilat attack, but so far no damage has been found. There is recording

areas where the pesticides have been used, the records cover from October

2013- recently. For example filed 95A 83 ha programed in may 2014, but if

there is less than 5% of the rat population then there will be no pesticides

application taking place.

There is record shows how many hactare applied and pieces of pesticides

given. E.g. 10 March 2014 had 25,000 pieces applied for field 90B of 92 ha. In

Silabukan estate no barn owl box. This area seem not to be suitable for owls

to live naturally in this area. Rat is the critical pest. Rat bating program for

infested area with more than 5%, will conduct rat bating. Rat bating in field

98D, on 06-04-2014, result after first bating= 52%. Checking at all palms in

every 20th row for fresh rat damage. This represent a 5% census. If census

result shows rat damage exceed 5% of the sampled palm, rat bating should

start/continue. Replace the missing baits at 4-5 days intervals until the

acceptance level fall below 20%. Use second generation baits.

Under normal circumstance effective control can be achieve after 3-5 rounds

of bating per cycle. If despite 5 rounds of baiting and the u-take still exceed

20%, seek AARSB's advice. Spot spraying monitoring record, April 2014 in field

98C, with details of man-day, labour cost, hectarage treated, labour cost per

ha, a.i. (lit), material cost and total cost, with status. Spot spraying monitoring

record, April 2014 in field 98B, with details of man-day, labour cost, hectarage

treated, labour cost per ha, a.i. (lit), material cost and total cost, with status.

ASA4 4.6 Chemical records including in and out flow are maintained and up to dated.

Noted that during the visit to the chemical storage there is “Activator” which

is used as the catalyst for other chemical. The pesticides used contains

Flocoumafen 0.005% and Broadifaccoum 0.003%, cross checked with

Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in

accordance with USECHH Regulations (2000). Ms. Kabiana is one of the

person in charge for chemical handling whom attended the training from G-

Planter as the supplier. The training was conducted on 2 February 2014.

There is annual medical surveilance taking place for workers exposed to the

chemical. There are records of medical survailance done by the Clinipath

Malaysia Clinic. There is certificate of fitness issued after the medical

surveillance. So far there is no pregnant woman working, if there is any, the

management will move her to another post which is not chemically exposed.

No Paraquat procurement (seen on the pesticides input document from the

supplier). Seen the annual agrochemicals recommendation from AA (Applied

agricultural resources) dated 2013/2014.

Sighted the SOP 2: Safe use of agrochemicals, 01-02-2012, justification of

agrochemicals used. According to chemical store visit, sited class 3 & 4

chemicals. Pesticides list according to WHO with classification and other

agrochemicals according to Approved list of pesticides registered for use in





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this estate. Also letter from MPOA 29/10/2007 circular no. 32/2007. Storage

of chemicals are classified per class and type and location. PPE are applied to

the store clerk and visitors. CSDS available.

Safety training on spraying (21-01-14), Training record of Ms. Hasnani Halide

and Ms. Ramatang verified. Where else the SOP 2: Safe use of agrochemicals,

01-02-2012, justification of agrochemicals used. Annually medical surveillance

on 28-05-2013, of Ms. Hasnani Halide and Ms. Ramatang verified. The next

surveillance will be conducted within this May 2014.

Most of the workers are foreigner and female worker dealing with chemical

in the fields. Ms. Ramatang, non citizen, received medical surveillance and

test result report no. 00916 was healthy and fit to work and work expose to

pesticides. Mrs. Biana Bandu-manuring reported pregnant on 22-02-12. The

daily work has been changed to upkeep beneficial plant. Document issued

from clinic KL-Kepong (Sabah), Rimmer Estate Clinic. No paraquat used since

2008. Record of approved pesticides established. Chemical store identified

the classification with color code. Inventory of chemicals record balance

in/out checked.

ASA4 4.7 There is documented OSH plan and training made available. The trainings cover several topics which involve relevant personnels. The trainer could be from the management or other party,e.g St John Ambulance for emergency and first aid and TCIM for driver safety. The safety and health policy is available, Policy Number: GP/OSH5-Health & Safety. The risk assessment document is available dated 29/04/2014, next review will be 16/01/2015. The person in charge is Mr. Imran Hasan as OSH Safety Supervisor. The document of the training activities is available, including the attendance list.

PPE is available including notifications (seen on field) to use the PPE. There is also a monitoring document of PPE maintanance, e.g. rubber boots maintained on 6/5/2015. Ms. Hasni is the person in charge for PPE in Rimmer Estate, and each division has person in charge for PPE monitoring coordinated by “mandor”. The documented signature form is available for PPE disbursement among staffs. No regular meetings, but there are records of complaints from the workers done by the management in response of any complaints raised. E.g. housing damage and handled by the management. Emergency procedures exist on site (seen) so workers can acknowledge. In the office there is simple procedure for emergency escape. There are also documented procedures, e.g. Fire, chemical spill.

The first aid training program involves personnel from each division. So far no accidents ever happened, however there is recording system available if there is any accidents happen in the future. All workers are covered by AXA Insurance. OSH plan has been established for 2014, training programs conducted according to plan are: safety training on spraying (20-01-14), safety training on manuring (21-02-2014), safety training on harvesting (22-03-2014), safety training on drivers (10-04-2014), Other programs in the plan are, fire drill, training on CPR, emergency and accident/first aid.

List of HIRARC metric has been updated and valid for HIRARC 20/03/2014 to 24/03/2015, for every stage of work operations. First aid training on 22-02-2014, by internal competence trainer Mr. Ishak Polli. HIRARC document the risks in all with type of PPE applied. Individual PPE issue record of Ms. Bintang, mandor verified. OSH committee members, Chairman Mr. MAD SADAT MADASILA. The committees consist of 12 management and 12 from





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workers members OSHA committee meeting with minutes of meeting on 25-04-2014. Meeting to be held once every three months.

HIRARC training programs covering Safety, first aids, PPE, fire drill. There is a clinic is in Rimmer estate is about 5 km. from this estate. First aid training on 22-02-2014, by internal competence trainer Mr. Ishak Polli. First aid training on 22-02-2014, by internal competence trainer Mr. Ishak Polli. Accident record according to JKKP, zero accident in 2013. Insurance coverage for workers policy no. LWX/91077962/37/09/HHT, coverage period 01/10/2013 to 30/09/2014.

ASA4 4.8 There is a documented training activities for all workers. E.g. the next training

program will be CSDS/MSDS training attended by all staffs. Training plan for

202-2013 according to HIRAC established and documented. Training record

and attendance records are kept and maintained. The topics trained are

conformed according to the plan. Individual training record of Ms. Aulia

verified.

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

Criterion by Audit

Summary

Environmental Impact Assessment has been carried out by the mill and estates. A comprehensive identification of all waste has been recorded and disposal of scheduled waste has been carried out by an approved and registered collector. Monitoring and analysis of waste is carried out regularly. Landfills were filled with non-biodegradable wastes such as plastics and an observation was raised for this matter.

ASA4 5.1 Sighted the latest EIA dated on 24/03/14, rev 01. there is no changes in the format used. The annual review process by mill manager done as part of continuous improvement. The risk level indicated with low, medium and high well linked to the management programmes, target of completion and personal in charge. Among those activities which carries the high rating is steam generation [boiler house]. The mitigation measures well associated with training programmes and surveillance monitoring on routine works in the mill. most of the mitigation measures expires in Nov 2014.

As for in the estate, seen the "Environmental impact Assessment & Pollution Prevention plan" lat reviewed on 29/02/14 by the estate manager. There was a memorandum dated on 13/03/14 been approved by the Regional Director on a request by estate manager to conduct EIA by 3rd party before the replanting programme. There is no changes in the format used. All processes / activities involved in this estate seen effectively covered in the EIA. The EIA matrix also consisted of existing measures and mitigation measures. Those negative environmental impacts that identified by risk level associated with mitigation measures. Observed the spraying process that creates negative impact on water and land. Training is the existing measure and ceasing all road side spraying and conducting manual weeding is the mitigation measure. Sighted the training record dated on 20/02/14.

ASA4 5.2 SOP-11.0 [High Conservation Value / Conservation Area Management] established. based on the HCV assessment, it was determined Water Catchment Pond at block 90H, Sungai Muar and Sungai Matamba and Sungai Silabukan categorized as conservation area / riparian zone. Demarcation of riparian zone was made, strictly no manuring, spraying or poaching allowed together with appropriate signage display. There is no areas/subject matter of HCV. Sighted the management plan for HCV habitats [including ERTs] and their conservation. Sighted an objective "To conserve and enhance biodiversity for HCV habitats" established.





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Activities that register in the plans are:

Demarcate boundary: boundary stones at 95I & 95J which border to Bukit Tabin wildlife reserve.

Report any illegal activities [poaching logging]: observed the "Buku Log Pemeriksaan Sempadan / Hutan". the recent visit done on 13/05/14.

Erect and maintain warning signages - no hunting: Sighted the training record for riparion zone on 15/12/13. Sighted the recent checklist dated on 21/04/14 for the signage census.

Monitoring using HCV checklist on quarterly basis: Sighted the checklist dated on 14/02/14 for block 95K, 95L, 95D, 90G, 90F, 90H, 90B and 90A. Sighted the training record for riparion zone on 15/12/13 attended by sprayers, weeders and staff. There also a training conducted for all management staff on "The Law, Wildlife Protection and Protection of Forest" by Dr. Zainal from BORA. During the field visit, observed best practices along riparion zone as well sufficient signages made available. Sighted the planting programme and records of jungle trees [Binuang 76, Albazia 2932, Khaya 80, Raja Sungai 985, Bintanggor 330, Laran 364 and Manuggal 330] planting along riparion zone.

ASA4 5.3 Sighted the evaluation of maximizing recycling and reducing pollution in

"Identification of all waste products and operational plan to reduce

pollution". There are 11 types waste products identified and effectively linked

to the sources of waste and type of pollution. The landfill area is identified in

estate land that allows waste that according to a memo that was circulated.

Wastes are identified with type, source, amount generated. Inventory of

schedule waste well maintain by the store in charger. As the collection of

schedule waste by license contractor is centralised in Rimmer POM, therefore

the estate only use the Transfer Slip during transferring from estate to POM.

The plan identifies the waste products as spent lubricating oil, spent oil filter

& batteries, empty pesticide/chemical containers, domestic waste, scrap

irons, used tires, empty fertilizer bags and clinical waste.

The recycle items are the used pesticide / chemical containers which needs to

be triple rinse before disposed. Where else empty gallons are used as pre-mix

containers for pesticide. The recycle of rinsed water container used in

premixing. Besides, the management promote to recycle the used tires and

scrap irons for beatification of estate. Sighted the "Identification of all waste

products and operational plan to reduce pollution" last reviewed on

26/04/14. This plan Among the waste product management observed were

spent lubricating oil, spent oil filter & batteries, domestic & line site waste,

black smoke from boiler and dust from chimney. As for schedule waste, there

is a appointed contractor assigned. Disposal of line site and domestic waste, it

being well disposed at dumpsite twice weekly.

The "Identification of all waste products and operational plan to reduce

pollution" well contained with details such as waste type and source of

generation. During the mill visit, observed the schedule waste area well taken

care with proper signages, spillage kit, fire extinguishers and good

housekeeping. Also observed the effluent test report as part of monitoring

line site waste water. The objective established is "To maximise recycling and

minimize pollution". Those under the recycle categories are the used vehicle

tyres that used for beautifying line sites, pressed cake to use as fertiliser 100%





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in Silabukan estates. The solid produced by belt press is about 24-26 MT per

day with an operating hours of 16-18hrs.as below:

Month Total [MT]

Oct'13 647.75

Nov'13 680.93

Dec'13 414.41

Jan'14 504.78

Feb'14 657.30

Mar'14 564.41

ASA4 5.4 Sighted the daily record of the diesel and petrol usage in the "Stores Receipts and Issues Sheet" for the month of Jan - Apr 2014. Sampled the records in Apr 2014.

Diesel: Purchased: 24,000Lt / Used: 21,562Lt / Mainly used for FFB transportation Petrol: Purchased: 800Lt / Used: 790Lt / Mainly used for motorcycles operates by the estate assistance for field visiting.

Sighted the records of the renewable energy use per tonne of CPO in the mill.

Month kWHR turbine FFB [MT] kWHR /MT

Oct'13 295,200 12,934 22.82

Nov'13 356,900 15,005 23.78

Dec'13 334,700 13,939 24.01

Jan'14 273,000 11,365 24.02

Feb'14 168,900 8,989 18.79

The baseline for diesel usage in the mill is 22,000Lit on monthly. Sighted the record of diesel incoming and usage in the "Stores Receipts and Issues Sheet". Sighted the records of the fossil fuel use per tonne of CPO in the mill.

Month kWHR Genset FFB [MT] kWHR /MT

Oct'13 64,600 12,934 4.99

Nov'13 56,900 15,005 3,79

Dec'13 64,500 13,939 4.63

Jan'14 62,802 11,365 5.53

Feb'14 66,600 8,989 7.41

ASA4 5.5 Zero Burning Policy dated on 04/12/13 sighted in the estate office. During the estate visit sited no evidence of open burning either in line site nor in the plantation. There is a booklet [Guidelines for the Implementation of the ASEAN Policy on Zero burning] maintained in the manager's office. Sighted the Group Agriculture Practice Work Book - GP/AGRIC/OP7 [Replanting] effectively covers the required processes. Current practice of root-bole excavation [1.5mx1.5mx1.5m] is dug to expose all roots in the areas where the previous crop or stand is highly diseased with Ganoderma and there is a significant risk of disease spread or continuation into the next crop. Line site visit by auditor proved no open burning activities. sufficient signages were made available at line site and training records observed for 09/04/14.

ASA4 5.6 Sighted the "Identification of all waste products and operational plan to reduce pollution" last reviewed on 26/04/14. Mitigation plans are also associated in the identification matrix. Sighted the 2014 continuous improvement plan that dated on 27/04/2014. This master list consisting of environmental, social and safety improvements. As for environmental, observed the solid removal machine to reduce the BOD, construction of septic tank and schedule waste management. Constructing playground facilities is among observed as social improvement and monitoring of treated





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water on quarterly as OHS improvement activities.

Sighted the water, soil and air pollution identified in the EIA & Pollution Prevention Plan. the main activities, such as spraying, weeding and pre-mixing that contributing to pollution well linked to the mitigation measures. Sighted a few training plans were executed in relation to the pollution prevention programme. Observed a training record with photos taken during training session dated on 20/02/14 for sprayers. This estate does not have any peat land. Found in the soil map that, Masaum [clay] and Local Alluvium [Silty Clay] covers the matured areas.

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

Criterion by Audit

Summary

The mill and estate have conducted the social impact assessment. The relevant policies are in place and are fully implemented across the board. Communication and consultation as well complaints and grievances procedure are well communicated and adhered to. There are evidences of workers not been discriminated against in any way and all are being paid their fair wages.

ASA4 6.1 A document for Social Impact Assessment Report is continued form 2013 assessment. Last SIA conducted in 01.10.2013 and reviewed on 24.3.2014. For 2013; the survey form has been distributed to staff and the issue are on newly built parking area and Pondok Makan dusty issue assessed, working policy of 18 years above and minimum wage impact. For 2013/14; SIA conducted for Suluk Intrusion and in progress ISA for concrete road. Evidently assessment done with affected parties. Minutes of minutes evident for the meeting held with stakeholders; attended by people from local community, head of workers, workers etc.

ASA4 6.2 Procedure SOP 1 Stakeholder Engagement / Negotiation dated 1.1.2014

sighted as Consultation and Communication that the mechanisms were

designed in collaboration with local communities and other affected or

interested parties evident. The communication took into account differential

access to information of women as compared to men, village leaders as

compared to day workers, new versus established community groups, and

different ethnic groups was evident. Consideration given to involving third

parties, such as disinterested community groups, NGOs, or government was

evident. Mill and estate Managers are responsible for the communication &

consultation issues respectively. Sighted Mr. Samsudin, the Mill Manager’s

letter of responsibility to communicate and consult with the society. List of

stakeholder evident that was updated on 1.10.2013. 55 name list listed Ex:

Supplier – AgriHood Trading Sdn Bhd; Community – Village Head Kg Keramat,

and others like KKP, Balai Polis etc.

ASA4 6.3 Procedure SOP 1 Stakeholder Engagement / Negotiation dated 1.1.2014 is

shown as a documented grievance procedure. In the mill the Complaint and

Grievances record in Stakeholder Logbook was maintained, sighted 6

complain registered in 2013. 10 were registered in 2014. Last entry for

complain dated 30.4.2013 regarding parking area. Which were built and

completed by 2.5.2014. Action was taken by responsible person and will

acknowledge to the complainer back. No grievance registered as per this

audit period as well no consultation registered as per this audit period. Mill

Manager usually handles grievances and complains; stated time to solve it.

The system resolves disputes in an effective, timely and appropriate manner.





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ASA4 6.4 Both at mill and estate, no negotiations concerning compensation for loss of

legal or customary rights are as per this assessment period [the land belongs

to KL-Kepong Sabah].History and documents of the development of this mill

under KLK do not show any evidence that there was a loss of legal or

customary rights which would have lead to a necessary, consequent

compensation or that any compensational claims would be open and/or

evident.

ASA4 6.5 Sampled and interviewed Grader [Foreigner-Female] Husnayanti– RM

1401.98 for March 2014; low season; [Daily paid] 66 hrs OT, deduction for

electric only]; Sterilizer Operator [Foreigner – Male] Reski Awan; Apprentice

[Malaysia-Male] John Sunga - RM 1252.64 for August 2013; peak season;

[Daily paid] 40 hrs OT, deduction for KWSP, Perkeso, Socso, Electric, School

Bus. Pay wages & slip evident; employee understood the salary itinerary.

Contract verified for local staffs & foreigners, exp: Husnyanti #4149 continued

for new contract after serving 5 years of work. Contract dated 13.4.2013

sighted; Annual leave, Sick leave and term & Condition evident according to

Sabah Labor Ordinance.

Minimum pay of RM 800/= as per the government regulation for monthly

paid worker sighted and verified. Ex: Daily rate of RM 30.77 for workdays of

26. 81 workers as of April, 2014 Female – 26; Male 55 workers. Local- 19,

Foreigner-62. Contract verified; local staff. Also verified the pay slips of

Kabiana Habe [Foreigner-Female] Sprayer – RM 1221.92 for March 2014; low

season; [Daily paid] 70 hrs OT, deduction for Permit activities RM 50/= &

Electricity only] and Bakri Lanawi [Malaysia-Male] Harvester - RM 1219.48 for

August 2013; peak season; [Bunches – 1607 FFB - Aug], deduction for KWSP,

Perkeso, Socso, Electric . Verified Harvester Crop Summary for Aug 2013 and

found tally.

ASA4 6.6 No labour union established. However there is OSH Meeting for Safety &

Health related meeting. Social & Environmental Meeting; for social related

issue last dated on 15.2.2014 attended by foreign and local workers.

Discussed issue on worker's right and their welfare. The policy of freedom

association statement mentioned clearly in policy of “the right of freedom

association of employees”. Policy publicly displayed in office and at line-site.

En Samson Lee – Asst Manager; understand the policy.

ASA4 6.7 Children are not employed or exploited. Minimum age indicated at 18 years

old. The recently appointed worker is Ms. Darma Barahima birth on date

23.11.1985) [start work on 2.7.2013] at age of 27 years 8 months as General

Worker.

ASA4 6.8 A policy of “Equal Opportunities” is established, communicated, displayed and publically available at all assessed operations. Interviews with several workers did show that they were able to explain appropriately. Wage records show that wages are the same and interviews confirmed that there is no discrimination. No advertisement sighted on discrimination against age and gender noticed.

ASA4 6.9 The company has policy regarding sexual harassment and violence. The

policy to protect their reproductive rights is developed and applied. According

interview with workers and document review of monthly checklist for women

workers, not any sex harassment and violance which has been happened. A





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grievance mechanism evident through women’s meeting. Pn. Rosmah Anton

work as Account Clerk in the Mill and act as Chairwoman is interviewed.

Sighted appointment letter dated 1.7.2013 as representative for Woman

[Gender] Committee. Noticed meeting with women committee dated

21.2.2014. Agenda sighted for sexual harassment – No case of harassment,

pregnancy leave, clinical bill claim. It is still evidence Ex: Report dated

15.4.2014 in the family verified by Ms. Aminah [AJK] that sexual harassment,

violence in domestic doesn’t exist.

ASA4 6.10 Pricing is followed by actual HQ pricing system. However, the mill do not

receive outside crop, thus pricing is not a need. Every month HQ will send a

memo the pricing. However, the mill do not receive outside crop, thus price

display is not a need. The contract between Mill and contractor/ supplier

evident.

1. Sighted quotation from Tenaga Tiub Sdn Bhd for Plugging of Super heater

Tiub for Boiler #2.

2. Sighted approval from Mill Advisor for Contract award to Tenaga Tiub Sdn

Bhd. Ref MA/RPOM/2014/07 dated 7.4.2014 raised.

3. Contract for Tenaga Tiub Sdn Bhd; sighted agreement dated 8.4.2014, #

PO 168355 for “Replacement of Super heater Tiub – 16pcs x 2” x 3.6 mm

diameter for 1 UT 20 TN / HR VICKERS –Drum Boiler # 2”.

4. Sighted Permit to work and notification of OHS to the supplier dated

21.4.2014.

5. Invoice dated 25.4.2014 # TTINV/171/14 with PO TT TT14089 raised by

contractor to Rimmer Mill.

6. Sighted “paid” in the invoice dated 2.5.2014 in General Ledger posting in

May 2014.

ASA4 6.11 Sighted CSR 2013 [for mill]:

1. Blood Donation Campaign

2. Re-painting of BORA [NGO] house – RM 1356

3. Humana Education Support including School Bus Transport – RM 6000

Sample taken for the month of Sept 2013

Sighted Budgeted for CSR activities established for year 2014; RM 31000/=

such as:

1. Humana school student still paid by the Mill [ 40 student @ RM 40/=]

2. Kindergarten School RM 3,000/=

3. Donation to Charitable Organization RM 3000/=

4. Community Service RM 5000; etc

The record of CSR in by calendar year Oct 2012/ Sept 2013 is stated [for

estates]:

- Housing project; 40 unit [RM 1.14 million].

- Donation – 1 Hilux to BORA – Rhino conservation.

- Sports allocation of RM 25 per month.

- Firmament Road RM 156250

- RM 40 for Humana school per student subsidized.





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Principle 7: Responsible Development of New Plantings

Criterion by Audit

Summary There were no new plantings carried out.

ASA4 Summary There were no new plantings involving forest land.

ASA4 7.1 Sighted the EIA and SIA covering the socio economy; culture and health of surrounding people who may be affected by plantation activities by company either from negative or positive impact.

ASA4 7.2 There is no new land surveyed for the growing of oil palm. However there are sufficient SOPs available for the soil and land type that being implemented at all operating units. A general soil map, slope classes map and elevation map, to provide a general recommendation for soil and water management practices to overcome soil limitations are available.

ASA4 7.3 Maps are available to show that land clearing avoided identified HCVs. There was no forest areas converted since November 2005.

ASA4 7.4 The company has prepared soil maps. SOPs are in place to protect fragile and marginal soils. Terracing implemented above 15° as per the topographic map. Field inspection confirmed on the implementations.

ASA4 7.5 SIAs and EIAs developed with participation form affected parties and include an analysis of both positive and negative impacts.

ASA4 7.6 The company has a procedure to identify the people who may be entitled to receive compensation.

Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

Criterion by Audit

Summary

Sighted a regular monitoring and review of activities and development and implemented action plans that allow demonstrable continual improvement in key operations such as in minimizing use of certain pesticides, environmental impacts, maximizing recycling and minimizing waste or by-products generation, pollution prevention plans.

ASA4 8.1 Program for Continuous improvement plan for 2014, consist of type of

improvement, activities, person in charge, target date and status.SIA, sighted

done and updated on 24.3.2014 Ex: Pondok makan (negative impact) which is

dirty due to dust. Social Improvement such as new playground; re-painting of

warning signs etc. Program for Continuous improvement plan for estates,

consist of type of improvement, activities, person in charge, target date and

status. A timetable of the action; which is positive seen. Humana school built;

firmament road is completed.

Apart from new improvement made, project for new workers housing were

continuously carry on. For this year, 12 units houses was completed and in

next year another 20 units houses will started to changes all the wooden

house into concrete houses. Environmental & maximizing recycling and

minimize waste- EFB mulching, empty pesticide containers collect and sell,

spent lubricating oil. Pollution prevention plans: Zero burning, Prevent

Spillage, planting jungle tress along line-site and planting of beneficial plants.

4.3 Non-conformity Raised During this Audit and Any from the Previous Year, if applicable

This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits, if applicable

If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.

The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number.





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4.3.1 Non-Conformities Identified during this Audit

Non-Conformities Identified.

4.3.2 Non-Conformity Identified during the last ASA, not applicable for MA

Non-Conformities Identified for previous audit.

4.3.3 Observations Identified during this audit

No observation found in this audit.

Client name:

Date raised:

Raised by:

Aspect of standard:

Observations:

Assessors Signature Date

4.4 Issues that were raised during the Stakeholder Consultation, if any

Stakeholders were either informed by the client or by Control Union via the RSPO website.

For Main Assessments, a 30 day Stakeholder consultation announcement is published on the RSPO website

prior to the audit. The same announcement is circulated by the client prior to the audit

For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary

reports available on the RSPO website, the client’s procedures in receiving on-going feedback or if feedback

was sent directly to Control Union prior to an audit or thorough RSPO complaints procedures.

During each assessment, the audit team will review the company’s implemented procedures in receiving

feedback and will execute field visits and interviews. Not limited to the following questions, any feedback

received is reviewed and summarized in this summary report for either Part 2 – Partial Certification or Part 4 –

Assessment Findings above or noted below, if applicable:

1. Do you have any remarks on the RSPO standard?

2. What is your relation with the applicant?

3. Are there any plantation or mill management practices that affect you?

4. Do you consider any management is in conflict with the RSPO principles and criteria?

5. Do you have any suggestions for management?

6. Are you aware of any HCV in the plantations or in adjacent land?

7. Are you aware of any endangered or rare species?

8. Are there any adverse (or positive) effects on local communities?

9. Additional comments?

11. Do you have any comments about the assessment team and would you like to meet with them?

12. Do you have any comments for the client’s management of any other plantations?

Subject raised Company response and proposed action to be taken

Audit team findings

refer to PART 2 and PART 4 refer to PART 2 and PART 4 refer to PART 2 and PART 4

PART 5: RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011 RSPO Supply Chain Certification Standard. November 2011





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5.1 POM Included In The Scope Of The Audit

Name Palm Oil Mill

Mill Capacity

Location Supply Chain Model

(POM) MT/Hour Address (IP or SG or MB)

Rimmer POM 60 KM 29, Jalan Lahad Datu – Tungku, Lahad Datu, Sabah

SG

5.2 Confirmation Of The Company’s Summary Of Annual Certified Volume Of RSPO Certified Palm Oil And Palm Kernel Over A Specified Period

Product CPO (MT) PK (MT) Specified 12 month period

CU Code

POM 1 28,581 7,061 May 2013 to April 2014. See also 1.6 above.

5.3 Summary Report Including A Brief Description Of The Scope Of Certification

A full RSPO SCCS certification audit was used during this annual assessment and the findings support the certification based on supply chain model listed above.

5.4 Monthly Records of Certified and Uncertified FFB Received Since the Last Audit

If this is the 1st

Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit.

No MONTH-YEAR Certified Supply Bases (MT) Uncertified Supply Bases (MT), if any Total (MT)

1 May 2013 6,243.08 - 6,243.08

2 June 2013 10,627.63 - 10,627.63

3 July 2013 9,667.30 - 9,667.30

4 Aug 2013 12,094.66 - 12,094.66

5 Sept 2013 12,659.93 - 12,659.93

6 Oct 2013 12,934.19 - 12,934.19

7 Nov 2013 15,005.61 - 15,005.61

8 Dec 2013 13,939.31 - 13,939.31

9 Jan 2014 11,365.02 - 11,365.02

10 Feb 2014 8,989.66 - 8,989.66

11 Mar 2014 10,221.29 - 10,221.29

12 Apr 2014 9,433.64 - 9,433.64

TOTAL 133,181.32 - 133,181.32

5.5 Monthly Records of Certified CPO and PK Produced Since the Last Audit

If this is the 1st

Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit.

No MONTH-YEAR Certified CPO (MT) Certified PK Total (MT)

1 May 2013 1,304.02 326.31 1,630.33

2 June 2013 2,281.75 554.21 2,835.96

3 July 2013 1,999.37 477.04 2,476.41

4 Aug 2013 2,552.89 615.02 3,167.91

5 Sept 2013 2,915.40 675.36 3,590.76

6 Oct 2013 2,825.98 700.53 3,526.51

7 Nov 2013 3,144.96 824.06 3,969.02

8 Dec 2013 2,929.99 747.96 3,677.95

9 Jan 2014 2,332.00 607.78 2,939.78

10 Feb 2014 1,941.42 479.71 2,421.13

11 Mar 2014 2,257.00 551.71 2,808.71

12 Apr 2014 2,096.66 501.09 2,597.75

TOTAL 28,581.44 7,060.78 35,642.22





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5.6 Records of Certified CPO & PK Sold under Green Palm to Buyers since the Last Audit, if Any

If this is the 1st

Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered Green Palm Account.

No Buyers Name Green Palm Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 - - -

5.7 Records of Certified CPO & PK Sold under UTZ eTrace to Buyers since the Last Audit, if Any

If this is the 1st

Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit. The transactions were sighted form the clients registered UTZ eTrace Account.

No Buyers Name UTZ eTrace Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 - - - -

5.8 Non-Conformities Identified during this Audit

Timeline for compliance:

1. All non-conformances observed during an audit shall be classified as ‘major’ since all requirements for Supply Chain certification have to be met before granting certification.

2. For Main Assessments, all non-conformances shall be addressed satisfactorily by the operation before certification may be granted by the certification body. If non-conformances are not addressed within three (3) months of the audit, a full re-audit shall be required. The certification body shall assess the effectiveness of the corrective and/or preventive actions taken before closing out the non-conformances.

3. For Annual Surveillance Assessments, non-conformances raised after the certification are serious (i.e. must be considered as a major) and the integrity of the RSPO Supply Chain Certification is at risk. A maximum of one month is to be given to the certified client to satisfactorily address the non-conformance. The certification body shall assess the effectiveness of the corrective and/or or preventive actions taken. Should the nonconformance not be addressed within the one-month maximum timeframe, a suspension or withdrawal of the certificate and a full re-audit may be necessary.

4. If no non-conformances are observed at an audit or when the corrective action plan has satisfactorily addressed raised non-conformance(s), the client shall be recommended for (re-) certification.

Non-were raised during this audit.

NC Number: NA

Date:

Reference to standard:

Standard requirement:

Evidence of non-compliance:

5.9 Description of the Organizational Management Systems

Including organizations, management and operational systems to ensure compliance with the RSPO Supply Chain Certification Systems and Standards as detailed above

Rimmer palm oil mill and its supply base is Rimmer and Silabukan estate was audited against RSPO SCCS. The mill processing capacity is 60 ton FFB per hour with throughput of 38 to 48 ton. The mill is capable of handling SG supply chain model. However, downgrading to a lesser supply chain model is done by internal system where linking of both FFB purchasing and weigh bridge were carried out automatically.





Tel: +603-3377 1600 / 1700

5.10 Final Certification decision by Control Union for the RSPO SCCS Audit of the POM

Recommendations made: Yes

Summary of non-compliances:

None Found

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA

The provisional date for the next ASA is: April 2015

6.2 Date for Closure of Non-Conformities

See sections above for details of NC’s, if any

All major NCs to be closed by: 60 days from the issuance date

All minor NCs to be closed by: Before next surveillance audit

6.3 Signing by the Client

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by:

Name: Sin Chuan Eng

Position: Head of Sustainability

Date: 09/05/2014 Signature

6.4 Signing by the Lead Auditor

I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by:

Name: Mahaswaran Maliyapan

Position: Lead Auditor


6.5 Signing by the Certifier

I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by:

Name: Nurhadi

Position: Certifier






Tel: +603-3377 1600 / 1700

PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit

From 1.9, the location map(s)





Tel: +603-3377 1600 / 1700

Appendix 2: List of Abbreviations

BRC British Retail Consortium

BOD Biochemical oxygen demand

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

COD Chemical oxygen demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

DOSH Department of Safety and Health

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HIRARC Hazard Identification, Risk Assessment and Risk Control

HCV High Conservation Value

HCVF High Conservation Value Forest

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

LTI Lost Time Injury

MDC MDC Publishers Sdn Bhd ( Company Name)

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

SA8000 Social Accountability 8000

Sdn Bhd Sendirian Berhad

SIA Social Impact Assessment

SOCSO Social Security Organization

SOP Standard Operating Procedure

USDA/NOP United States Department of Agriculture – National Organic Program

MT Metric Tones

WHO World Health Organization

RSPO audit Report · listed in this report below. 1.5 Location of the Palm Oil Mill Name Palm Oil...

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