Stage-1 [ ] Stage-2 Surveillance [ ] Re-Assessment · 1.3.1 Scope of Assessment Rantau Palm Oil...

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

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

Plantation Management/Owner : SIME DARBY GROUP

Plantation Name : Rantau POM – PT LAGUNA MANDIRI

Location :

Rantau Village, Pamukan Utara Sub District,

Kotabaru District, South Kalimantan Province

Certificate Code : MUTU-RSPO/009

Date of certificate issue : December, 30th 2011

Date of expiry of certificate : December, 29th 2016

Assessment Assessment

Date PT. Mutuagung Lestari

Auditor Checked

by Approved

by

S-2 October, 1st-4th 2013

Oktovianus Rusmin (Lead Auditor),

Muardi Marwas, Steve Mualim, Sandra

Purba, Nanang Mualib, Brigitta Prita

Taufik Margani Tony

Arifiarachman

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

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

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

MUTU Certification • Approved by RSPO Secretariat on June 2008

Assessment Submitted

to RSPO on: Approved

by RSPO on: Approved

by MUTUAGUNG LESTARI on:

S-2 31 December 2013 - 26 December 2013

http://www.mutucertification.com/

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 ii Prepared by Mutuagung Lestari for Rantau POM – PT. Laguna Mandiri

TABLE OF CONTENT

FIGURE

Figure 1. Operational Map of Laguna Mandiri

2

1.0 SCOPE of the SURVEILLANCE ASSESSMENT

1.1 National Interpretation Used 3

1.2 Organization Information 3

1.3 Type of Assessment 3

1.4 Location of Plantations, Mill and Area Statement 3

1.5 Description of Supply Base 4

1.6 Dates of Plantings and Cycles 5

1.7 Tonnage Certified 5

1.8 Other Certifications 6

1.9 Time-Bound Plan for Other Management Units 6

2.0 ASSESSMENT PROCESS

2.1 Certification Body 8

2.2 Assessment Team 8

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 8

2.4 Stakeholder Consultation and List of Stakeholders Contacted 11

2.5 Date of Next Surveillance Visit 11

3.0 ASSESSMENT FINDINGS

3.1 3.2

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

12 37

3.3 Conformity Checklist of Certificate and Logo Use 42

3.4 Summary of RSPO Partial Certification 43

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

44

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 48

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Signing of Assessment Findings 53

APPENDICES

1. List of Stakeholders Contacted in the RSPO Certification Process 54

2. Assessment Program 55

3. Glossary 56

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 2 Prepared by Mutuagung Lestari for Rantau POM – PT. Laguna Mandiri

Figure 1. Operational Map of PT Laguna Mandiri

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 Page 3 Prepared by Mutuagung Lestari for Rantau POM – PT Laguna Mandiri

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and RSPO Supply Chain Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name SIME DARBY – Rantau POM (Laguna Mandiri)

1.2.2 Contact person

1.2.3 Company address and site address Head Office : The Plaza Office Tower, 36th Floor, Jl. M. H. Thamrin Kav. 28-30, Jakarta 10350

Site: District Kotabaru

1.2.4 Telephone +62-21-29926000

1.2.5 Fax +62-21-29922686

1.2.6 E-mail [email protected]

1.2.7 Web page address www.simedarby.com

1.2.8 Company status Foreign investment

1.2.9 Management Representative who completed the application for certification

Mohamad Pirabaharan (Head of PSQM Plantation)

1.2.10 Registered as RSPO member 8 September 2004 – 1-0008-04-000-00

1.3 Type of Assessment

1.3.1 Scope of Assessment

Rantau Palm Oil Mill and supply base from Rantau Estate and Matalok Estate

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate Rantau POM – PT Laguna Mandiri

1.3.4 Number of management unit 1 POM and 2 estate

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Rantau Rantau Buda Viilage, Sub District Pamukan Utara, Kotabaru District

2° 26' 21" LS 116°6' 51" BT

1.4.2 Location of Supply Base

Name of Supply Base Location

GPS

Latitude Longitude

Rantau Estate Rantau Buda Viilage, Sub District Pamukan Utara, Kotabaru District

2°28’49” - 2°23’51” 116°03’26” -116°07’43”

Matalok Estate Bepara Village, Sub District Pamukan Utara, Kotabaru District.

2°28’26” - 2°24’33” 116°06’03” - 116°10’25”

mailto:[email protected]

http://www.simedarby.com/


ASSESSMENT REPORT


1.4.3 Tenure

Private -

State 15.300 ha

Community -

1.4.7 Area Statement

Total area 7.720 Ha

Mature area 6.882.08 Ha

Immature area - Ha

Mill 34 Ha

Emplacement 319,20 Ha

Infrastructure 49,31 Ha

Nursery - Ha

Occupation 365,72 Ha

Others area - Ha

HCV 69.67 Ha

1.5 Description of Supply Base

1.5.1 Description of Mill

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Rantau 60 219.470 50.651 23,04 11.169 5,09 - -

*Source Production Data on October 2012 – September 2013

1.5.2 Description of Estate(s)

Name of Estate(s) Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)

Supplied to Mill

FFB (tonnes/year

) %

Rantau Estate 4.638 4.231,94 79.270,57 18.73 79.270,57 36,11

Matalok Estate 3.082 2.650,14 47.463,59 17.91 47.463,59 21,62

Total 7.720 6.882,08 126.734,16 18.41 126.734,16 57,73

***Source Production Data on October 2012 – September 2013

1.5.3 Smallholder(s) and other source

Name of source(s)

Member(s) Location Total Area

(Ha) FFB

(tonnes/year)

Supplied to Mill

FFB (tonnes/year)

%

Sekayu Estate* - Pamukan Utara - 10.740,89 10.740,89 4,89

Betung Estate* - Pamukan Utara - 6.196,71 6.196,71 2,82

Selabak Estate**

- Pamukan Utara - 35.590,46 35.590,46 16,21

Randi Estate** - Pamukan Utara - 31.951,75 31.951,75 14,55


ASSESSMENT REPORT


Sangkoh Estate**

- Pamukan Utara - 3.113,35 3.113,35 1,42

Lanting Estate** - Pamukan Utara - 2.899.02 2.899.02 1,32

KKPA Sungai Cengal

- Sakadoyan - 2.311,21 2.311,21 1,05

Total 92.803,39 92.803,39 42,27

*Source Production Data on October 2012 – September 2013

1.5.4 Product categories FFB/CPO/PK/PKO

1.6 Dates of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting Year

Hectare

Name of Estate (Ha)

Name of Estate (Ha)

Total (Ha)

1992 78.94 0 78.94

1993 873.67 229.06 1102.73

1994 641.64 0 641.64

1996 1388.76 528.25 1917.01

1997 603.36 142.9 746.26

1998 645.57 1404.93 2050.5

1999 0 237 237

2008 0 108 108

Total 4.231,94 2.650,14 6.882,08

1.6.2 New Planting area after November 2007

Ha

1.6.3 Planting Cycle 1st Cycle Years

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product

FFB Production 219.529 Tonnes/year

CPO Production 50.561 Tonnes/year

Palm Kernel (PK) Production 11.169 Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonnage of FFB

Name of Estate(s) Total Area

(Ha) Planted Area

(Ha) FFB

(tonnes/year) Yield

(tonnes/ha/year)

Rantau Estate 4.638 4.231,94 94.992,76 22,45

Matalok Estate 3.082 2.650,14 58.239,18 21,98

Total 7.720 6.882,08 153.231,94 22,21

*Source estate production estimation on 2013/2014

1.7.3 Claim Certified Tonnage of Palm Product


ASSESSMENT REPORT


Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Rantau Factory 60 263.375 62.946 23,90 13.168 5,00 - -

*Source POM production estimation on 2013/2014 Note: During period 2013/2014 Rantau POM projecting to receive FFB from external estate company (PT Swadaya Andika dan PT Langgeng Muara Makmur) that have gained RSPO Certification.

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Others Proper BIRU

1.9 Time Bound Plan for Other Management Units

Management Unit Address Hectare

(Ha) *) Time Status

PT. Indoturba Tengah District Seruyan Kotawaringin Barat – Kalimantan Tengah

7,734.60 2009

Certified

PT. Tunggal Mitra Plantations

District Rokan Hilir – Riau 13,836.00 2009 Certified

PT. Sime Indo Agro District Sanggau – Kalimantan Barat

11,652.00 2009 Certified

PT. Aneka Inti Persada District Pekanbaru, Siak – Riau

11,134.00 2010 Certified

PT. Bina Sains Cemerlang District Musi Rawas – Sumatera Selatan

6,513.00 2010 Certified

PT. Kridatama Lancar District Seruyan Kotawaringin Barat – Kalimantan Tengah

14,779.92 2010 Certified

PT. Teguh Sempurna District Seruyan Kotawaringin Barat – Kalimantan Tengah

16,601.66 2010 Certified

PT. Lahan Tani Sakti District Rokan Hilir – Riau 3,759.02 2010 Certified

PT. Bhumireksa Nusa Sejati – Teluk Bakau POM

District Indra Giri Hilir – Riau

25,662.00

2010 Certified

PT. Bhumireksa Nusa Sejati – Mandah POM

District Indra Giri Hilir – Riau 2013 Audited

PT. Sajang Heulang – Angsana Mini POM District Tanah Bumbu –

Kalimantan Selatan 7,794.00

2010 Certified

PT. Sajang Heulang – Mustika POM

2013 Certified

PT. Ladangrumpun Suburabadi

District Tanah Bumbu – Kalimantan Selatan

6,077.00

2010 Certified

Plasma SAP 2020 Not Yet

PT. Bersama Sejahtera Sakti

District Kotabaru – Kalimantan Selatan

12,704.54 2010 Certified

PT. Langgeng Muaramakmur

District Kotabaru – Kalimantan Selatan

16,361.77 2011 Certified


ASSESSMENT REPORT


KKPA - PT. Langgeng Muaramakmur

2015

PT. Paripurna Swakarsa District Kotabaru – Kalimantan Selatan

14,892.00 2011 Certified

PT. Swadaya Andika District Kotabaru – Kalimantan Selatan

10,361.18 2011 Certified

Laguna Mandiri – Rantau POM District Kotabaru –

Kalimantan Selatan 15,299.80

2011 Certified

Laguna Mandiri – Betung POM

2013 Audited

PT. Tamaco Graha Krida District Morowali – Sulawesi Tengah

4,145.00

2012 Certified

KKPA – PT Tamaco Graha Krida

2015 Not Yet

PT. Sandika Natapalma District Ketapang – Kalimantan Barat

8,406.21 2011 Audited

KKPA – PT Sandika Natapalma

2020 Not Yet

PT. Mitra Austral Sejahtera District Sanggau – Kalimantan Barat

8,741.29 2011 Audited

PT. Padang Palma Permai District Aceh Tamiang and Aceh Timur– Nanggroe Aceh Darussalam

6,451.99 2011 Audited

PT. Guthrie Pecconina Indonesia District Musi Banyuasin –

Sumatera Selatan 10,139.91

2011 Certified

KKPA – PT. Guthrie Pecconina Indonesia

2015 Not Yet

PT. Budidaya Agro Lestari District Ketapang – Kalimantan Barat

9,055 2018 Not Yet

PT. Bahari Gembira Ria

District Muaro Jambi - Jambi

1,202.04 2011 Crtified

KKPA – PT. Bahari Gembira Ria

2015 Not Yet

KKPA – PT Sime Indo Agro District Sanggau – Kalimantan Barat

2014 Not Yet

Sime Darby has 39 units of companies in Malaysia and 21 units of the company in Indonesia, which has obtained the Certificate of RSPO. There are Time Bound Plan changes that cause the company to postpone the certification process with the following explanation: 1. PT Mitra Austral Sejahtera. There is a problem (issue) that remain unresolved social, from Palm Oil Farmers Union (Load) Sanggau still not agreed to the demands of society and the improvement of conflict resolution in accordance with the principles and criteria of the RSPO. 2. PT Sandika Natapalma, PT Agro Lestari and PT Cultivation assessment has been carried out in June 2011, but there are some discrepancies that need to be resolved related to regulatory compliance. Sime Darby has been informed of the progress of Time Bound Plan to PT. Mutuagung Lestari, and considering that Sime Darby still meet the requirements of the RSPO.


ASSESSMENT REPORT


2.0 ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari

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

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

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

2.2 Assessment Team

2.2.1 Lead Assessor and Assessment Team

S-2 1. Oktovianus Rusmin (Lead Auditor). Bachelor’s Degree in Social & Political Sciences Department of Anthropology. Specialists in the field of Social and Cultural (Social Impact & Conflict Resolution) and HCVF. Already participated in Forest Management Auditor Training (FSC Standard), ISO 14001, ISO 9001:2008, Environmental Management System Training, SVLK (wood legality) Auditor, Indonesian Sustainable Palm Oil (ISPO) and RSPO Lead Auditor Training. He was several times involved in the assessment of Sustainable Forest Management Certification (Standard LEI) and Gap Analysis Audit (FSC Standard). Had worked at the Center for study of Anthropology University of Indonesia and Social Advisor at Tropical Forest Trust (TFT) Indonesia. He was numerously involved in Social Impact Assessment and HCV Identification in Palm Oil Plantations and Natural Forest concessions. Have been approved as HCV assessor by RSPO for Social Discipline Specialist.

2. Muardi Marwas (Auditor). Bachelor of Agriculture Bogor Agriculture Institute. Attended RSPO and ISPO Assessment in Indonesia. He had been trained Auditor/Lead auditor Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor, ISPO Lead auditor training, awareness green house gas and Witteness Distribution Quality Management Process (DQMP) APMEA. Currently he works for Independent Certification Body. He had involved activities RSPO and ISPO certification assessment as an auditor.

3. Steve Mualim (Auditor). Master in Environmental and natural resources management, Bogor Agricultural University. He has worked as a freelance in several consultants in the Environmental Impact Assessment. He has followed training of Lead Auditor training ISPO, RSPO awareness, Ecological Risk Assessment, Asian Network Update and Carbon, and Climate Change Mitigation and Adaptation for Agricultural Productivity and Auditor/Lead auditor Management System Certification (ISO 9001-2008).

4. Sandra Purba (Auditor). Bachelor of Forestry, Department of Forest Products Technology, Faculty of Agriculture, University of North Sumatra. Have experience working in oil palm plantations Company. She had attended such training: Training Expert of OHSAS General, Training ISPO Auditor and Auditor/Lead auditor Management System Certification (ISO 9001-2008).

5. Nanang Mualib (Auditor). Bachelor of Forestry Science, Forest Technology Department in Bogor Agriculture Institute. He had followed training such as Performance Evaluation in Sustainable Management of Natural Production Forest on Unit Management. Sustainable Natural Production Forest Management Assessor Training Course, Training Lead Assessor ISO 9001:2001/SNI 19-9001:2008. He worked in Forest Company in 2000 – 2004 as a technical assistant of Sustainable Forest Management Implementation, Joint program with Forest Faculty Bogor Agriculture Institute and WWF Indonesia in 2006 – 2010. As a professional, he was involved in HCV social study of Sustainable Forest Management, HCV Identification in 3 palm oil plantation in Indonesia. Currently, he works as professional HCV assessor. In Stage-1 activity he assessed legal, social, environment and HCV Identification.

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Figure of person days to implement assessment

S-2 Number of auditors : 5 auditor Number of days for S-2 at site : 4 days Number of working days for S-2 at site : 20 Working days

http://www.mutucertification.com/

mailto:[email protected]


ASSESSMENT REPORT


2.3.2 Detail process of assessment

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

2.3.3 Locations of Assessment

S-2 Auditor determined that all estates were assessed and visited both estates and mills. The location of surveillance were completely presented below:

a. Rantau Estate 1. Spraying Activity D26-27 Block, Division 2. Observation and interview with workers at the spraying section

and supervisor at the spraying section showed that workers understood about the working procedure of spraying activity and workers also used proper PPE (Personal Protective Equipments). Based on the interview result, all workers have routinely checked their medical condition and there was no pregnant and breastfeeding worker who work as a team at the spraying section.

2. Application of Empty fruit bunches (Block G 019). Auditor team conducted an observation related with the use of solid waste such as empty fruit bunches at the estate. Based on the result of observation, it can be identified that empty fruit bunches application was quite effective to eliminate solid waste from POM and to decrease the use of fertilizer at the estate and the company has implemented empty fruit bunches application system in accordance with the valid procedure such as doze of fertilizer as much as 250 kg/tree.

3. Final Disposal Area (Block E025). Auditor team conducted an observation related with the activity at Final Disposal Area. Based on the result of observation, it can be identified that domestic waste collecting and filling activities have been conducted in accordance with the procedures determined by the company, such as waste management was conducted by collecting and transporting it periodically to the Final Disposal Area.

4. Water Reservoir at the Residential Area. Auditor team conducted an observation related with the water reservoir for the consumption of workers and POM. Based on the result of observation, it can be identified that the company has a well maintained water reservoir so its water availability in the dry season can be maintained.

5. Housing area Div. 2. Surveillance and interview with the workers at housing area showed that the workers have understood the mechanism of complaint submission and household waste management. They also have been trained for emergency situation simulation in case of fire.

6. Workshop. Observation and interview was conducted with the officers at the workshop. It can be identified that the officers wore standard Personal Protective Equipment/PPE; the officers have understood any possible risk during their activities and level of possible danger, the welder has been trained for the certification and conducted a routine medical checkups.

7. Chemical warehouse. Interview and observation with the workers at warehouse. It can be identified that workers have been protected with proper Personal Protective Equipment/PPE, routine medical checkups, and understood about the procedure of their jobs at the chemical warehouse.

8. Diesel fuel tank. Observation was conducted at the diesel fuel tank. The person in charge was responsible in the procedure of charging at the diesel fuel tank. Proper PPE and safety sign was available.

9. Rantau mill. Field observation and interview with the processing workers was conducted. It showed that workers have understood the procedure of each working coverage. The company has provided PPE and


ASSESSMENT REPORT


workers wore proper PPE at the working area. There were several proper safety signs at each processing station. Routine medical check up has been conducted and workers have been trained to get certificate and SIO.

10. Waste Water Treatment Plant (WWTP) at the Estate. Auditor team conducted an observation related with the waste management at the Rantau POM. Based on the result of observation, it can be identified that Waste Water Treatment Plant at Rantau POM was well functioned. Rantau POM also always monitor the quality of produced liquid waste such as daily monitoring of effluent and periodic measurement of liquid waste quality parameter.

11. Water Reservoir at the POM. Auditor team conducted an observation related with the Water Reservoir for the operational activities at the POM. Based on the result of observation, it can be identified that the company has a well maintained water reservoir so waters availability for POM in the dry season can be maintained.

b. Matalok Estate 12. Application of empty fruit bunches (Block D33). Auditor team conducted an observation related with the use

of solid waste such as empty fruit bunches at the estate. Based on the result of observation, it can be identified that the application of empty fruit bunches was quite effective to eliminate solid waste from POM and to decrease the use of fertilizer at the estate and the company has implemented empty fruit bunches application system in accordance with the valid procedure such as doze of fertilizer as much as 250 kg/tree.

13. Owl nests. Auditor team visited the location of owl nest boxes at B 31, B32, B33, and B34. Nests were occupied by owl babies and mature owls.

14. PHT. Beneficial plants were identified at the block of surveillance in Matalok Estate such as Block B31, Block B32, and Block B33. The realization of its development (up to June 2013) was 46 km. beneficial plants were planted along the Main Road and Collection Road.

15. Land Application (Block B24). Auditor team conducted an observation related with the application of liquid waste at the estate. Based on the result of observation, it can be identified that land application activity has been conducted in accordance with the proper procedure by making flat bed for land application. A routine monitoring has also been conducted.

16. BSS House. Proper safety signs were available. The officers understood about the SOP of PPE and knap sack. They have been trained with Occupational Health & Safety and routine medical check-up.

17. Housing area. Surveillance and interview was conducted with workers at the housing area. It showed that workers have understood the mechanism of complaint submission and household waste management. They also have been trained for emergency situation simulation in case of fire.

18. Workshop. Observation and interview was conducted with the officers at the workshop. It can be identified that the officers wore standard Personal Protective Equipment/PPE, the officers have understood any possible risk during their activities and level of possible danger, the welder has been trained for the certification and conducted a routine medical check up.

19. Chemical warehouse. Interview and observation with the workers at warehouse. It can be identified that workers have been protected with proper Personal Protective Equipment/PPE, routine medical check-up, and understood about the procedure of their jobs at the chemical warehouse.

20. Clinic. Based on the result of field observation, it can be identified that waste management at the clinic has been conducted in accordance with the valid regulation. Based on the result of interview with medical officers, it can be identified that the paramedic has been trained with Company Hygiene & Occupational Health and he has permit from the related institution.

21. Hazardous and Toxic Waste Warehouse at Traction. Auditor team conducted an observation related with the management of Hazardous and Toxic Waste warehouse at traction. Based on the result of observation, it can be identified that Hazardous and Toxic Waste warehouse has been well managed and its retention time was not more than its retention time as determined by valid regulation. Hazardous and Toxic Waste has been marked in accordance with the valid regulation. The company also has routinely sent Hazardous and Toxic Waste every month from the estate to the licensed Temporary Disposal Site of Hazardous and Toxic Waste at the POM

22. Used Agrochemical Warehouse. Auditor team conducted an observation related with the management of used agrochemical warehouse at the traction. Based on the result of observation, it can be identified that used agrochemical has been well managed and its retention time was not more than its retention time as determined by valid regulation. Hazardous and Toxic Waste has been marked in accordance with the valid regulation. The


ASSESSMENT REPORT


company also has routinely sent used agrochemical packaging to the licensed Temporary Disposal Site of Hazardous and Toxic Waste at the POM.

23. Boundaries Pole at the Land Use Title Division III Block G35 Boundary Pole LMI 04, Division III Block G37 Boundary Pole LMI 05, Division III Block G38 LMI 06, Division II Block B37 Boundary Pole LMI 14, Division II Block B35 Boundary Pole LMI 15, Division II Block B32 Boundary Pole LMI 16, the borders of PT LMI’s estate with the community’s estate, The condition of Boundary Poles were good and their signs can be clearly seen.

c. Hearing with Stakeholders 24. Rantau Buda Village. Interview was conducted with Village Head, Village Secretary, and several community

members about the social interaction between the company and local community members as well as cooperation program that has been conducted. Based on the result of interview, it can be identified that PT LMI has donated to Rantau Buda Village, such as: a donation for praying house construction, football court improvement, and rice procurement for elder people. Until now, there was no complaint from the local community related with the negative impact caused by the activities at the estate and mill.

25. Bakau Village: interview was conducted with the Head of Bina Swadaya Karya Production Cooperative. Based on the interview result, the implementation of cooperation between the village community and management of Minamas Group for Cooperative Credit Scheme program in Sungai Cengal has been completed with MoU between the cooperative and PT Paripurna Swakarsa & PT Swadaya Andika, while MoU with PT Laguna Mandiri has not been made yet. The management of this schemeholding program was fully conducted by the management of Cooperative Credit Scheme in Sungai Cengal.

26. Environmental Agency, Labor Agency, and Plantation Agency. Hearing related with the management of PT. Laguna Mandiri.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process.

Summary of stakeholder consultation process Consultation of stakeholders for PT Laguna Mandiri was held by public consultation meeting with internal stakeholders by interviews and local stakeholders conducted by visits to villages and interviews with local peoples. Numbers of input from stakeholders were clarified by PT Laguna Mandiri.

2.4.2 List of stakeholder contacted

Please find appendix 3

2.5 Determining Next Visiting

The next visit S-3 will be determined 6-9 months after this S-2 (July 2014).


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT 3.1. Summary of Assessment Report of the RSPO Certification MUTUAGUNG LESTARI has conducted an assessment of Rantau POM – PT Laguna Mandiri, Sime Darby Group operation consisting of one (1) mill and two (2) oil palm estates. During the assessment, there were three (3) Nonconformities were assigned against Major Compliance Indicators two (2) nonconformities were assigned against Minor Compliance Indicators and three (3) non-conformances against supply chain requirement for CPO mill and five (5) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in section 3.5. The company has already prepared and implemented the corrective actions that had been reviewed and accepted by Auditors in form of documentation evidences e.g. (document record) Those corrective actions taken that consist of three (3) Major non-conformities and one (1) Minor non-conformity had been closed out shall be verified during next assessment. MUTUAGUNG LESTARI found that Rantau POM – PT Laguna Mandiri, Sime Darby Group complied with the requirements of RSPO Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and/or Scheme Smallholders, October 2009*) . Therefore MUTUAGUNG LESTARI Recommends RSPO Certification of compliance is continued.

Ref Std.

VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

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

Information request was regulated in the SOP 012/LMI-PI/2010 and record of information request was available at the “document of information request and response”. In June – August 2013, Betung Estate received 6 incoming mails and 6 outgoing mails; Matalok Estate received 8 incoming mails and 8 outgoing mails, 2 of them in September 2013; Rantau Mill received 4 incoming mails and 4 outgoing mails. The sample of information request is letter number 34/003/KD-HB/III/2013 on March 25th, 2013 about excavator request to help the construction of water reservoir in Harapan Baru Village, a request by the Village Head of Harapan Baru Village (Mr. Maslin). The response of information was recorded in the document of information request and response, for example a request for Matalok Estate in 2013; responding a letter number: 001/DTS-MLE/07/2013 that there was a receipt dated August 25th, 2013 from PT LMI about the allocation of Road Grader for the reconstruction of road at RT 03 and RT 09 (RT is the lowest governance level) and it has been received by the Village Head of Terombongsari Village (Mr. Turisman). OFI 1. The company more consistent (update) in recording information request and response in incoming mail log book. There was an update of Revision of SOP of Record Management (051/LMI-PC/2012) on March 1st, 2012, the company has determined the retention time of document in accordance with the type and interest, for example:

a. Permit; its retention time is in accordance with the period of validity. b. Daily report: Document’s retention time is 1 year. c. Budget report; Document’s retention time is 5 years

Based on the result of field surveillance in Bakau Village and Rantau Buda Village, the company has provided related information, such as: information about an opportunity to receive Sime Darby scholarship for selected students and information about protected area through sign board installation.

Status: Full Compliance


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

The company has a list of document that can be given to stakeholders (public) as written in the SOP Answering (LMI) Number of document is AI 0900 in March 2012 as follow:

1. Wide area of land clearing, immature plants, mature plants, and facilities. 2. Evidence of Labour Social Assurance payment 3. Evidence of Workers’ Treatment payment 4. Public Facilities for Workers 5. Data of pest and disease attack 6. Data of light and heavy vehicles 7. Data of supporting machines 8. Data of CSR 9. Data of bridge 10. Data of road’s length 11. Data of building for work 12. Data of school building 13. Type of fertilizer 14. Type of agrochemical 15. Data of workers SKU 16. Data of student

Status: Status: Full Compliance

PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

There is a List of Regulations that must be met by PT Laguna Mandiri (up date 2013), Rantau Factory. These regulations are related with Land Autorization/Exploitation, Environment, Workers, and so on (there are 98 regulations). Based on the result of Regulation Compliance Evaluation (September 2013), all these regulations have been met. The sample of compliance to the applicable law, such as: - Decree of South Kalimantan Governor Number 188.44/0502/KUM/2012, on October 22nd, 2012 concerning the

Determination of Minimum Wage in South Kalimantan Province in 2013. - Decree of South Kalimantan Governor Number 188.44/0624/KUM/2012, on December 26th, 2012 concerning the

Determination of Sectoral Minimum Wage in South Kalimantan Province in 2013. - Decree number 560/092/Disosnakertrans, on January 16th, 2013 from the Head of Social, Labor, and Transmigration

Agency of Kotabaru Regency, on January 16th, 2013 concerning the Determination of of Sectoral Minimum Wage in South Kalimantan in 2013

Evaluation of compliance to the existing regulations (once a year). The sample of adjustment effort to workers’ wage according to the Decree of Governor and Letter from the Head of Social, Labor, and Transmigration Agency Kotabaru Regency in 2013. The results of consultation with several institutions in Kotabaru Regency were described below:

Plantation Agency The company had reported an obligation of routine activity reporting at the estate in the form of Plantation Business Activity Report (LKUP) and there was no issue related with land conflict problem in the area of PT LMI. The management of PT LMI’s estate was good.

Social and Labor Agency The company had met its obligations, for example: wage payment has been in accordance with the valid Sectoral Minimum Wage in the Regency as much as Rp. 1,365,000/month. Mandatory Report of Labor has been routinely reported. There was no dispute related with manpower.

Environmental Agency stated that the company has routinely reported the Environmental Management


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Plan/Environmental Monitoring Plan every semester.


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

Legal documents related with PT Laguna Mandiri’s land autorization and exploitation are listed below: 1. Land Appropriation Permit: Decree of South Kalimantan Governor Number SK.06/PL.84/1989/BPN-43 on May

31st, 1989 concerning Land Appropriation Permit in North Pamukan Sub District, Kotabaru Regency for various

plantation managed by PT Laguna Mandiri as many as 21,400 Ha.

2. Forest Area Releasing Permit: Forest area releasing was based on the Decree of Forestry Minister Number

07/Kpts-II/1995 concerning Releasing of Some Forest Area from Forest Group of Sungai Cengal and its

surrouding which situated in Kotabaru Regency, South Kalimantan Province for 16,852 Ha (Sixteen Thousand

Eight Hundred and Fifty Two) Hectare for rubber and palm oil plantation on behalf of PT Laguna Mandiri. on

January 5th, 1995.

3. Plantation Business Permit:

a. Letter of Plantation Business Registration Number 462/Menhutbun-VII/200 on April 25th, 2000 as many as

14,950 Ha and the maximum capasity of POM is 60 Ton FFB/hour.

b. Decree Kotabaru Regent Number 188.45/390/KUM/2009 on October 15th, 2009 concerning Agreement of

Repeat Registration of PT Laguna Mandiri’s Plantation Business Permit in Kotabaru Regency. Its wide area is

15,300 Ha and the capasity of mill is 60 Ton FFB/hour. Permit validity is 10 years or if there is additional area

or POM.

4. Land Use Title as many as 10 Land Use Titles, as follow:

- Land Use Title Number 13 of 1997 on November 22nd, 1997 in accordance with the Letter of Agrarian

Minister/Head of National Land Agency Number 138/HGU/BPN/1997 on October 31st, 1997, its wide area is

149,500,000 m2 and valid until November 22nd, 2032.

Certificate of Land Use Title Number 46 of 2004 on April 2nd, 2004 as many as 59,10 Ha valid until April 20th, 2039.

- Certificate of Land Use Title Number 47 of 2004 on April 2nd 2004 as many as 115,40 Ha, valid until April 20th,

2039.


2039.

- Certificate of Land Use Title Number 49 of 2004 on April 2nd 2004 as many as 4 Ha, valid until April 20th,

2039.


2039.


2039.


2039.

- Certificate Land Use Title Number 53 of 2004 on April 2nd 2004 as many as 9,58 Ha, valid until April 20th,

2039.

- Certificate Land Use Title Number 54 of 2004 on April 2nd 2004 as many as 80,64 Ha, valid until April 20th,

2039.

There is a book of Boundaries Pole. Its content about the information of Boundaries Pole’s position (coordinate) at Land

Use Title owned by PT LMI, total existing Boundaries Pole of Land Use Title is 250 Boundary Poles (47 big Boundary


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Poles and 210 small Boundary Poles). There was also the monitoring result of Boundaries Pole owned by PT LMI –

Rantau Factory (Rantau Estate and Matalok Estate) in 2013. Based on the result of field surveillance for the checking of

Boundaries Pole presence (sampling), it can be identified that these Boundaries Poles were in good condition and well

maintained (signs were clearly seen).

The company has a mechanism of conflict resolution in the form of SOP of Conflict Management Number 059/LMI-PK/1.

The implementation of compensation payment was based on the result of land inventory, through deliberation process

by involving related parties (claiming party, village government and sub district government, as well as representative of

company such as Plantation Services Department and Estate). The measurement was conducted by Research

Department and its result was in the form of compensation amount agreement and Payment Implementation Plan. Until

the implementation of Second Surveillance, there was no newest data related with land problem resolution process.

Available data was similar with those which obtained during First Surveillance 1 such as Record of Land Compensation

Payment (Report of Occupation Land Clearing Phase-IV which include in the permit of Palm Plantation Area of PT

Laguna Mandiri) as many as 34 Ha in Mangka Village, North Pamukan Sub District, Kotabaru Regency in 1998 was

completed with the document of the result of Compensation Payment Deliberation Meeting of PT Laguna Mandiri with

farmers and noticed by Village Head of Mangka Village and Head of North Pamukan Sub District, Right on Land

Releasing, Statement Letter and evidence of compensation payment delivery (receipt).

Based on the notification from Village Head during field surveillance in Bakau Village and Rantau Buda Village, as well

as a consultation with several institutions in Kotabaru Regency, there was no information or issue related with land

problem in the area of PT Laguna Mandiri.


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

There is a sample of negotiation process record between the owner of traditional right and the company. It is completed with map of claimed area, for example: Record of Land Compensation Payment (Report of Occupation Land Clearing Phase-IV, which include in the permit of Palm Plantation Area of PT Laguna Mandiri) as many as 34 Ha in Mangka Village, North Pamukan Sub District, Kotabaru Regency in 1998. It was completed with the document of the result of Compensation Payment Deliberation Meeting of PT Laguna Mandiri with farmers and noticed by Village Head of Mangka Village and Head of North Pamukan Sub District, Right on Land Releasing, Statement Letter and evidence of compensation payment delivery (receipt)). There was also a Report of High Conservation Value Area Identification in the area of PT Laguna Mandiri. The assessment process of High Conservation Value presence area was conducted by involving community as the source of information and the report of identification result has been socialized to the several parties (including community). Based on the document report, there was no plantation area owned by PT Laguna Mandiri in the authorization of Traditional Right or categorized as NKT 6. Based on the notification from the Village Head/community during field surveillance in Bakau Village and Rantau Buda Village, that there was no area in the authorization of Traditional Right around the area of PT Laguna Mandiri. There was also information that community in surrounding still can do their daily activities such as fishing in the rivers near the estate. However, it is forbidden to conduct illegal activity such as use of toxic material for fishing.


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

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

Matalok Estate and Rantau Estate have a document of working plan and its budget for all the operational activities at the estates: maintenance of mature plants, fertilization, harvesting, transportation of FFB, and fixed cost (administration of estate, wage of workers, etc). Total cost for the operational activity at the estates in 2013/2014 is IDR 538.58/ kg FFB.


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Rantau Mill has the summary of budget for 2013/2014, for the operational activity at the mill such as processing cost, maintenance cost, and product loading cost. Total cost for the operational of mill in 2013/2014 is IDR 62.07/kg FFB The company has a document of budget projection and production for the next three years. Long term budget figure the projection of plantation activity, such as: investment cost of planted plants (Mature Plants and Immature Plants), other area (seedling, mill, emplacement, road, bridge, and drain), reserve area of land clearing, reserve area of land clearing planned area, occupation, and enclave. Budget for non-plant investment: procurement of facilities and infrastructure of workers (housing area, workers hall, school, meeting room, policlinic, etc), projection of workers number. It is completely presented as follow:

- In 2013/2014, The projection of production is 94.992.810 kg - In 2014/2015, The projection of production is 83.101.470 kg - In 2015/2016, The projection of production is 86.727.940 kg - In 2016/2017, The projection of production is 77.688.000 kg

Replanting at Rantau Estate will be started in 2015 for the planting in 1992 and 1996 as many as 249.62 ha. The company has composed a program for Rantau Estate in 2015 to 2028 as many as 4.195,88 ha. HCV Area in the form of riparian area will not be planted as many as 36.06 ha.


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

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

The company has estate procedures from land clearing activity to harvesting as well as estate operational activity which describe in these following document:

a. Agricultural Reference Manual Number of Policy: 110/EST-ARM/08 Minamas Plantation Indonesia which

distributed to management unit on December 22nd, 2008. This mechanism regulates activity since the

procurement of planting material to the protection of main plants.

b. Standard Operating Procedure Manual, Agronomic Practice – Oil Palm, Member of Guthrie Berhad Collection,

which legalized by Md Tahir Mohammed as the Group Head Plantation on December 1st, 2004. This document

contains agronomic practice guideline from seedling to transportation of fruit to mill.

c. Procedure of FFB receiving process to dispatch CPO and kernel, in the technical guideline of palm oil mill

Chapter I and II, Minamas Plantation which has been legalized by General Manager Mill of Sungai Durian

Area, PT. Laguna Mandiri, Mr. Vengata Subramaniam. This procedure contains the phase of FFB processing

into CPO, such as: receiving of fruit, sterilization/boiling, threshing, stirring, compression, purification,

separating kernel and fiber and kernel station. This procedure also regulates the mechanism of operation at

several stations.

As a part of monitoring on procedure, Minamas Plantation has internal team who supervise the operational activity at the estate, mill, and bulking. Monitoring period varies depend on the type of audit, such as: Monitoring by GCAD Department (Group Central Audit Department). The monitoring of this operational activity was conducted on September 4th, 2013. The monitoring was conducted on financial, warehouse stock, maintenance, fertilization, and harvesting. Monitoring by Plantation Advisory on June 21st, 2013 focused on the operational of estate. Internal team supervised the status of thinning out activity, seedling, replanting program, harvesting system, FFB evacuation, transportation, road/bridge reconstruction, and road reconstruction program. Monitoring by Mill Advisory on February 21st, 2013 focused on the operational of mill.


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


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sustained yield.

Research team analyzed the plant nutrients (Nitrogen, Phosphate, Kalium, Magnesium, Boron, and Carbon) for the recommendation of fertilization next year. Leaves sample unit at Matalok Estate and Rantau Estate have been taken, as many as 225 leaves sample have been delivered to the research team. At Matalok Estate: Division 1 as many as 14 sampling units, Division 2 as many as 39 sample, and Division 3 as many as 32 sample. At Rantau Estate: Division 1 as many as 16 sample, Division 2 as many as 40 sample, Division 3 as many as 41 sample, and Division 4 as many as 41 sample. The company has a record of soil sample which described in the document of survey result on observed soil, published by Research Department. Semi detail soil survey at Matalok Estate and Rantau Estate was conducted in 2005.

a. Detail survey at Rantau Estate was planned in 2011, but it has not been conducted yet.

b. Detail survey (ground survey) at Matalok Estate was conducted on May 9th – 13th, 2011 as many as 108 ha at

Block D45 – D48 has not showed its survey result report.

There was no evidence on periodic soil analysis for the recommendation of fertilization. There was no clear mechanism which regulates the requirement of soil analysis and its analysis period. Non-conformance Minor NC-2013.01. To maintain and increase soil fertility, it can be conducted through inorganic fertilization; empty fruit bunches and land application.

a. Fertilization by using inorganic fertilizer such as Urea, Rock Phosphate, MOP, Dolomite, Borate, and NK Blend. It was recommended by research team. Fertilization doze varies such as Rock Phosphate 1.52 kg/tree/year, Dolomite 1.58 kg/tree/year, Borat 0.05/kg/tree/year, and NK Blend 5.29 kg/tree/year.

Fertilizer has been applied in July 2012 – July 2013. However, it has not been entirely applied for all estates. In this period, the realization of fertilization: NK Blend 2.029.634 kg, Rock Phosphate 732.284 kg, and Borate 2.002 kg. Meanwhile, Dolomite has not been applied. Minamas Jakarta determined that it needed to stop fertilization by using inorganic fertilizer in April – May 2013. Now (at the time of audit), Re-Manuring was conducted to complete delayed fertilization.

Fertilizer Urea RP (kg) Dolomite (kg)

Borate NK Blend

Total Recommendation - 772,387 809,137 25,538 2,703,343

Realization until September - 732,284 137,868 2,002 2,625,251

b. Application of empty fruit bunches, as many as 3,580 ton was randomly spread at Rantau Estate. c. Land Application was conducted at Division I Matalok as many as 21 ha (July 2013). Prior land application:

total application of POME was 314.605 m3 for 345.80 ha (Data in July 2012 – June 2013). Doze of effluent was 80 m3/hole.

Status: Non Compliance

4.3 Practices minimize and control erosion and degradation of soils.

PT LMI had conducted Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Elaeis guineensis) at Matalok Estate and Rantau Estate in 2005. Its result was described in the Final Report of Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Elaeis guineensis) at Matalok Estate in 2005 and Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Elaeis guineensis) at Rantau Estate in 2005. This survey result in 2005 showed that Matalok Estate has less appropriate class for palm tree (S3) and non-appropriate for palm tree (N1). Its limited factor consists of physical factor (Argillan, blocked permeability, and silicate hardened soil with the depth <10 m); chemical factor (low C/N, low nutrient status, acid pH, and high Al-exch); and Climate and Physiographic Factor: dry month 2-4 months, high temperature, and quite high erosion). Meanwhile, for Rantau Estate area, based on the survey in 2005, showed that all area can be classified in S3 land


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conformance area (less appropriate for palm tree). Its limited factor consists of physical factor (Crack, Argillan, and blocked permeability), chemical factor (low C/N, low nutrient status except Ca with high nutrient status, very acid and high Al-exch); and Climate and Physiographic Factor: dry month 2-4 months, high temperature, and quite high erosion). Based on this document, it showed that there was no marginal land in the working area of Rantau Estate and Matalok

Estate. Non-conformance of land is more influenced by land sloping factor, low land permeability, and high rain fall.

Financial budget in 2012/2013 showed road maintenance program and realization in the form of road hardening and road maintenance as follow;

Document of road maintenance plan and realization was always updated in the Report of Meeting Committee Management (MCM) which published every month. Financial budget in 2013/2014 for road maintenance plan also has been composed, as follow:


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

Based on the field surveillance in the riparian area of Pangau River (Block D019 Fill D09, Div. IV) Rantau Estate and Block E 26 Div. IV, Rantau Estate showed that the company has consistently conducted water channel protection efforts such as riparian area sign boards installation, making border of riparian area: border of riparian area is yellow encircling palm tree, planting in empty area with forest tree or vertiver grass, prohibiting fertilization and spraying along riparian area, cleaning circle area manually, conducting river water quality test every semester, measurement result in January – March 2013, and the company also has conducted well water quality test in the housing area of workers;

Water management program has documented in Report of Implementation of Environmental Management Plan-Environmental Monitoring Plan which reported to the related institution every 6 months, for example Report of Implementation of Environmental Management Plan-Environmental Monitoring Plan in January – June 2013 that has not been reported to the Regional Environmental Agency of Kotabaru Regency, South Kalimantan Province. It is processed by the management for approval. Most PT LMI’s area has quite high land slopping (8 – 30%) and average slope length is 50 meter. Its soil infiltration and soil permeability was quite slow. Its rain fall is quite high (>200 mm/month). Therefore, in order to conduct water quality management, there are several efforts in this report, as follow:

a. To press erosion and water overflow through selective weeding and development of Neprolepsis sp., terrace or silpit making, U Shape front Staking, application of empty fruit bunches mulch and planting of strengthen plant (Vertiver zizanioides).

b. Water management by making water channel and building water gate. c. To maintain river water quality by conducting several efforts: weeds controlling by implementing ground

management concept, planting Nephrolepsis sp. and selective weeding. d. Pest and disease control by implementing integrated pest management for example owl breeding as natural

predator for rat and planting of beneficial plant for caterpillar controlling. e. Monitoring of river water quality and monitored well water quality in the residential area through water quality test

Mtr Rp. Mtr Rp. Mtr Rp.

1 Matalok 1.722.773.500 189 32.814.462 5.282 926.630.562 7.434 1.392.300.350 2.351.745.374

2 Rantau 2.936.216.066 1.726 698.879 1.826.071.738 132.407 2.739.107.607 4.565.179.345

Total 4.658.989.566 1.915 32.814.462 704.161 2.752.702.300 139.841 4.131.407.957 6.916.924.719

Total Realisasi

(Rp.)No. Budget (Rp)

Realisasi

Access Road Main Road Collection RoadEstate

Mtr Rp.

1 Matalok 1.046.483.279 313 70.126.316 s/d Juli 13

2 Rantau 2.861.723.165 28.497 700.004.512 s/d Agts 13

Total 3.908.206.444 28.810 770.130.828

Budget Thn

2013/2014 (Rp.)

RealisasiKeteranganNo. Estate


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at the laboratory that can be conducted every month. f. Liquid waste utilization from POM for land application.

The company has routinely tested liquid waste quality as written in the quarter report of environmental monitoring of the second period (April – June 2013). The company has had liquid waste quarter report and has reported this liquid waste quarter report of April-June 2013 to the Regional Environmental Agency of Kotabaru Regency, Environmental Agency of South Kalimantan, and Environmental Ministry on July 9th, 2013. Based on the result of liquid waste test in August 2013, there was no liquid waste parameter that exceeded its determined quality standard. Based on the result of water use efficiency analysis at Rantau POM in January - August 2013, Rantau POM has the efficiency of FFB use as many as 0.54 m3/Ton FFB, than its water use budget in 2013 as many as 1 m3/Ton FFB, Rantau POM has a quite good water use efficiency.


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

The level of pest and disease attack was monitored by performing early census as early warning efforts. Periodic census pests were conducted for caterpillar. Meanwhile, census of disease was conducted for ganoderma. Pests (rat, caterpillar, and termite) and disease (ganoderma) were effectively controlled by implementing adequate integrated pest management. Rat was controlled by using its natural enemy introduction (Tyto alba) and chemical. Caterpillar was controlled through beneficial plant introduction (Antigonon leptosus, Casia cobanensis, and Turnera subulata) and chemical. Termite was manually controlled. Monitoring of planting and maintenance of beneficial plants to control caterpillar attack is available. Beneficial plants such as Antigonon leptosus, Turnera subulata, and Casia cobanensis were planted in the Main Road and Connecting Road. Generally, it was only plant maintenance instead of new planting/development. Beneficial plants were planted at the block of surveillance at Matalok Estate: Block B31, Block B32, and Block B33. Realization of its development at Matalok Estate (until June 2013) was 46 km. Beneficial plants were planted along the Main Road and Collection Road. Auditor visited the locations of nest owl boxes at B 31, B32, B33, and B34. Nest was occupied by owl babies and mature.

- Census of Setosea assigna at C36, May 2013 showed 8 worms/frond. The attack of caterpillar has exceeded its economical limit border so it was controlled by using chemical material (Matador).

- Census of Setosea assigna at B17, June 2013 showed 3.74 worms/frond. - Census of Setosea assigna at B27, June 2013 showed 0.16 worm/frond - Census of Setosea assigna at C36, June 2013 showed 5.9 worms/frond. - Census of Setosea assigna at E33, June 2013 showed 1 worm/frond

However, there was no enough evidence on early warning system such as census of rat attack at Matalok Estate has been run and documented. Non-conformance NC-2013.02 Observation 07 October 2013 Census of rat attack has been conducted at several blocks in Division I, II & III. This census was intended to identify the indication of rat attack on harvested FFB on October 5th and 7th, 2013. The percentage of attack range 0 – 0.61 %, it indicates that its attack was still below its economical border. NC-2013.02 is closed.


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

There was no change on the used chemical material. Chemical materials used for this activity were Isopropyl glyphosate (name of brand was Prima up), Methyl metsulfuron (name of brand was Metafuron), Trichlopyr butoksil ethyl ester (name of brand was Kenlon), fluroxipir (name of brand


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was De Javu/Starane) which registered and can be circulated in Indonesia The company recorded all chemical materials application at the estate. All chemical materials application at Matalok Estate (delthametrin, isoproilamina glyphosate, trichlopyr butoksil ester, and methyl metsulfuron) was 293.48 gram, while its FFB production was 5,443.09 ton. Total application of chemical material was 0.05 gram/Ton FFB. Detail of chemical materials used at Matalok Estate in July – August 2013, are listed below:

a. Isopropilamina glyphosate, total application was 324.50 liter, total pesticide was 155.76 liter, b. Trichlopyr butosil ethyl ester, total application was 277.50 liter, total pesticide was 133.20 liter c. Methyl metsulfuron, total application was 14.45 kg, total pesticide was 2.89 kg d. Delthametrin, total application was 6.50 liter, total pesticide was 1.63 liter.

Waste of used pesticide packaging was managed according to the valid regulation. Used pesticide packaging at Matalok Estate was delivered to the packaging warehouse at Rantau Mill and it was delivered to the licensed collector. The company monitored the used pesticide packaging well. The package has been delivered to PT MAJU as licensed collector. The delivery was conducted on June 15th, 2013 as many as 103 pieces and 9 drums, and on September 11th, 2013 as many as 48 big jerry cans and 8 small drums. Now (September 2013), the stock is 146 used jerry cans and 256 small cans. The result of surveillance and interview with workers at spraying sections Matalok Estate showed that they have understood about the application technique of chemical material use. Every worker was completed with complete personal protective equipment such as apron, safety shoes, glasses, and gloves. They have been supervised on the proper use of chemical material by the Manager. Medical check up for workers was planned on January 13th – 29th, 2014. The company showed the result of periodic medical check up for workers at the spraying section and fertilization in 2012 - 2013 at Matalok Estate and Rantau Estate. The last medical check up was conducted on October 20th, 2012, for example:

- On behalf of Siti Jumantiah (worker at the spraying section in MLE) was checked on October 20th, 2012. Medical check up was conducted for physical, eyes, ENT, Head, Thorax, Abdomen and extremity, the results was good and decent to work

- Medical check up was conducted for workers at the spraying section and fertilization in RTE on July 10th-11th, 2013, Medical check up was conducted for Spirometer, physical and Cholinesterase, for example, on behalf of Sriwiji, the results was good and decent to work

The company does not allow pregnant woman and breastfeeding woman to work in activity which related with chemical material. Sprayer (Suyatmi) was transferred to the manual maintenance because she was pregnant and/or breastfeeding. In addition, Sedepwati was also transferred from spraying section to the manual maintenance because of her high Cholinesterase.


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

The policy of Occupational Health & Safety was written in the SOP of Occupational Health & Safety. The number of Policy is 711/TQEMS-P2K3/07. It stated that Minamas Plantation was committed to be a responsible company to conduct Occupational Health & Safety program in all the operation activities at the estate and mill. . The company already has an organization of Guiding Committee of Occupational Safety & Health for the estate and mill. It has been legalized by Social, Labour, and Transmigration Agency Kotabaru Regency, South Kalimantan. The compositions of Guiding Committee of Occupational Safety & Health consist of Protector (advisor), Chairman, Vice Chairman, Secretary, Deputy Secretary, and members. For example: Decree of the Head of Social, Labour, and Transmigration Agency of Kotabaru Regency Number of Decree is KEP – 1011/P2K3/VII/Dinsosnakertrans concerning the Ratification of Guiding Committee of Occupational Safety & Health of PT LMI at Matalok Estate on July 22nd, 2013. Person in Charge in Occupational Health & Safety Program at MLE is Mr. Agus Rumoko. He has been trained with Occupational Health & Safety and now his certificate and appointment letter from the Manpower Ministry of the Republic


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of Indonesia still being processed. The company showed a notification letter from Delta number 135/DIP/X/2013 on October 3rd, 2013 which stated that the certificate of training participant on behalf of Mr. Agus Rumoko still being processed. Meeting of Guiding Committee of Occupational Safety & Health is conducted every month. The company showed a report of Meeting of Guiding Committee of Occupational Safety & Health at MLE, RTE, and RTF, for example meeting of Guiding Committee of Occupational Safety & Health at RTF (August) was conducted on September 7th, 2013. It discussed about the findings of Guiding Committee of Occupational Safety & Health and its finding progress report in August and discussion of Guiding Committee of Occupational Safety & Health problems in or out of mill to avoid any working accident. The company has registered its workers for Labour Social Assurance program. The company showed the evidence of Labour Social Assurance payment in June – August 2013, for example, the detail of Labour Social Assurance payment for Rantau Estate in August 2013 for 686 workers as much as IDR 67,322,892.11,-, Voucher Bank number BVK/08/IX/2013 was available and saving receipt through BRI Bank was also available on August 30th, 2013. The company showed the result of periodic medical check up for workers at the spraying section and fertilization section in 2012-2013 at Matalok Estate and Rantau Estate. The last medical check up was conducted on October 20th, 2012 by company’s doctor namely dr. Irwan Kertajaya, who has been trained with Company Hygiene & Occupational Health. His certificate number is 14.313/DH-I/05 and his Practice License Number is 445/104/IP-TMD/YK-Dinkes, for example Rantau POM was cooperated with Mandiri Healthy Care Clinic in Kotabaru Regency-South Kalimantan. On May 10th, 2013 medical check up was conducted for 48 workers and RTF operators. The result of medical check up showed that Supriyanto (Operator of Boiler) had moderate restrictive and he was in fit condition with notes. The company already has hirac document. This document is reviewed every month. For example Hirac RTE and MLE. It contains information about the type of activity, potency of hazard, risk, recommendation, and current status. For example, harvesting activity has several hazard potencies, such as frond crush, type of risk of injury, it is recommended to use helmet and boats. The company can add office and housing area in the report of risk analysis (HIRAC). OFI 2 The company showed the evidence of Occupational Health & Safety training program both internal report and external report. For example:

- Report of First Aid Emergency License training on July 31st - August 3rd, 2013 for Minamas plantation was submitted by Social, Labour, and Transmigration Agency at BBE Sport Stadium. There were 19 participants from MLE, RTE, and RTF.

- Report of Fire Prevention Simulation at MLE and RTE on July 19th, 2013, there was presented material, documentation, and training list of attendance which attended by 38 participants.

- Report of Fire Prevention Simulation at RTF on June 3rd, 2013, there was presented material, documentation, and training list of attendance.

- Certificate of Occupational Health & Safety Coaching for Grader Operator on behalf of Yohannes Nardy, number of registration is 25406-OPK3-PAA/VIII/2013 on August 30th, 2013

- Certificate of Occupational Health & Safety technical coaching for personnel and aircraft production on behalf of Mr. Kastalani (Diesel Operator of Occupational Health & Safety), number of registration is 13.339-OPM.K3/PTP/IX/2013 from the Labour and Transmigration Ministry of the Republic of Indonesia on September 2nd, 2013.

The company has a SOP of readiness and response as well as emergency situation recovery (021/LMI-KRSPKD/2010), valid on December 16th, 2010. It regulates about steps that can be conducted in case of fire. The company has conducted a compliance to provide First Aid Emergency boxes at the buildings and fields. The company showed a layout document of First Aid Emergency boxes locations and the evidence of First Aid Emergency boxes delivery to the supervisors at the fields. The company also provided PPE for workers according to the type of job risk, for example, the company showed the minutes of meeting of PPE delivery for 24 workers (helmets, masks, and boats) on June 28th, 2013 at Division 2 RTE and 13 operators at RTE on August 24th, 2013 (helmets and masks). The minutes of meeting of PPE delivery at MLE on July 6th, 2013 showed that there was a hand over of safety shoes for 32 workers. The company can evaluate the use of PPE by workers. OFI 3


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Training for person in charge to manage First Aid Emergency at the field was conducted by company’s doctor who has attending a training of Company Hygiene & Occupational Health on behalf of dr. Irwan Kertajaya. The company has conducted monitoring and reporting every working accident every month, for example, monitoring and working accident evaluation at MLE in July and August 2013. In August 2013, there were 6 accidents such as thorn (4 accidents) and palm flower fall (2 accidents).


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

The company has composed competence improvement training program for workers. The company showed the identification of training implementation program for RTE and MLE in 2013/2014 for example First Aid Emergency program to be conducted in August 2013, simulation of fire, terrace lining training and SAP training. The company has provided funds for workers training in 2013, for example, it was showed in the RTE budget for 2012-2013, and training cost was in the budget of fixed cost estate administration. The company showed training report and competence improvement, for example:

- Training of First Aid Emergency at Rantau Estate on November 6th, 2012 presented by dr. Irwan Kertajaya, the participants were 26 supervisors of RTE and MLE.

- Training of First Aid Emergency Rantau POM on November 8th, 2012 by dr. Irwan Kertajaya at the meeting room of RTF, the participants were 10 people.

- The schedule and training material of Company Hygiene & Occupational Health for paramedic at Minamas Plantation on August 28th – 30th, 2013, there was a list of attendance of certification training. There were 3 participants from RTE and 3 participants from MLE.

- First Aid Emergency license training report on July 31st - August 3rd, 2013 for Minamas Plantation presented by Social, Labour and Transmigration Agency, at BBE Sport Stadium. There were 19 participants from MLE, RTE, and RTF.

The company was committed to use skilled contractor. The company showed the memorandum from GM of Sungai Durian Estate, the number of memorandum was GM-est/008/SD/VII/2013/M on July 11th, 2013 concerning local bidding process. It stated that in point 1; chosen contractor must be registered and has good performance.


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

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

The company has EIA Document (EIS, Environmental Management Plan & Environmental Monitoring Plan), approved by the Assessor Commission and Technical Team of EIA/Environmental Management Efforts - Environmental Monitoring Efforts of Kotabaru Regency Number 660/22/BLHD-AMDAL, on August 20th, 2010, composed by Faculty of Forestry, University of Lambung Mangkurat, South Kalimantan for the Plan of Palm Oil Processing Mill Development Activity at the Plantation Area of PT. Laguna Mandiri, its wide area was 20 Ha, the capacity was 60 Ton FFB/hour.

The company has also composed EIA Document for the development of POM at Betung through the Decree of Kotabaru Regent Number 188.45/293/KUM/2010 concerning Environmental Feasibility of Palm Oil Processing Mill Development Activity at North Pamukan Sub District, Kotabaru Regency, South Kalimantan Province by PT. LAGUNA MANDIRI.

PT LMI has composed the Report of Implementation of Environmental Management Plan-Environmental Monitoring

Plan in January –June 2013 and it has been reported to the Environmental Agency of Kotabaru Regency on October

4th, 2013 in accordance with the evidence of receipt of Implementation Report of Environmental Management Plan-

Environmental Monitoring Plan by the officer of Regional Environmental Agency of Kotabaru Regency (Mr. Syahrudin).


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

The company has identified High Conservation Value area in December 2009 by Yayasan Kelapa Sawit Berkelanjutan

Indonesia (YASBI) and referred to the Guideline of High Conservation Value Identification in Indonesia which published

by the Revision Consortium of HCV Toolkit Indonesia, June 2008.

The company has determined the recommendation in High Conservation Value Identification Document in determining the type of plant used in the enrichment effort in HCV area with local species around the working area, such as tropical almond (Terminalia catapa), Ash (Peronema canescens) and Kadam (Anthocephalus cadamba) planted at Block D 15 Matalok Estate. There were 100 ash trees, 20 tropical almond trees, and 40 Coral tree trees in December 2012. The company has monitored the species of flora and fauna once a month by appointed officer. For example, a monitoring in June 2013 showed that there were 3 species of birds (A spotted turtle dove/Streptopelia chinensis, Sooty-headed Bulbul /Copsychus saularis, white stork, bay coucal/Centropus sp.), 2 species of reptiles (Lizard/Varanus sp., python/Phyton sp.) and 1 mammal (skunk/Paradoxurus hermaphroditus). The company can increase the performance of flora and fauna monitoring by composing a report as regulated in the working instruction of flora and fauna inventory method. OFI 4 The company has composed working instruction: Flora and Fauna Inventory Method, the number of policy is: 700/IK-PSQM-HCV/12 on February 6th, 2012 which regulates about the mechanism of flora and fauna monitoring, including the path of observation, frequency of observation, working equipments, data processing, documentation, and monitoring of report. The company still consistent to protect area/protected species, by conducting several efforts, as follow:

- Rehabilitation of HCV area by planting wooden trees (at Block D 15 Matalok Estate, there were 100 ash tree,

20 tropical almond trees, 40 Coral trees in December 2012).

- HCV area was marked by using Information Board and yellow encircling palm tree.

- Monitoring of species of flora and fauna in the company’s area

- Socialization about the type of flora and fauna and HCV area to the community in surrounding such as a

socialization to the community members in Rantau Jaya Village on September 10th, 2013, a socialization to the

community members in Mangka Village on September 9th, 2013, and a distribution of leaflets in Rantau Buda

Village on September 27th, 2013.

The company consistently conducted a socialization about the species of flora and fauna and HCV area to the

community in surrounding for example through a direct socialization to the community in Rantau Jaya Village on

September 10th, 2013, and to the community in Mangka Village on September 9th, 2013 and a distribution of leaflets in

Rantau Buda Village on September 27th, 2013.

The company has appointed a person in charge who responsible in the management of HCV, namely:

Taslim through a letter Number RTE-Int/317/XII/2010 on December 1st, 2010 concerning Appointment of

Taslim (Employee Number 10677) as the supervisor of HCV at Rantau Estate

Budi Setiawan through a letter Number MLE-Int/86/XII/2010 on December 1st, 2010 concerning Appointment

of Budi Setyawan (Employee Number 66903) as the supervisor of HCV at Matalok Estate.

Mr. Suroso has been appointed as the coordinator and he has been trained for HCV by Indonesia Palm Oil Commission on July 2nd, 2006, while Sholeh has been transferred to other area/department.


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

Generally, the company managed Hazardous and Toxic Waste and Non-Hazardous and Toxic Waste according to the identification result of waste source and type by the estate and mill, and it has been documented. The waste was


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managed by conducting several ways, such as:

Hazardous and Toxic Waste was placed at the Temporary Disposal Area of Hazardous and Toxic Waste.

Waste from the housing area was disposed to the Final Disposal Area.

Used pesticide packaging was collected at the Temporary Disposal Area of Hazardous and Toxic Waste and then delivered to the licensed collector.

Liquid waste from the processing at mill was used for land application.

Solid waste (shells and fiber) was used for the substitution of diesel fuel.

The company stored all Hazardous and Toxic Wastes at the licensed temporary storage area as regulated in the Decree of Kotabaru Regent number 188.45/124/KUM/2011 which approved on March 8th, 2011. This Temporary Disposal Area of Hazardous and Toxic Waste were located at Rantau POM. Related with the medical waste, the company has cooperated with the Community Health Center at Sengayam Pamukan Barat as regulated in the decree number SPK 001/450/Limbah M/VII/2012 which approved on July 16th, 2012 and valid for 2 years. The company showed the Minutes of Meeting of Hazardous and Toxic Waste handover to the contractor namely PT. Maju Asri Jaya Utama, for example:

On June 15th, 2013; the detail was: used oil as much as 1800 liter, used battery as many as 7 pieces, used

filter as many as 115 pieces, and used agrochemical packaging as many as 9 drums. The number of vehicle:

DA 9451 AV

On September 11th; the detail was: used oil as much as 3000 liter, used battery as many as 5 used filter as

many as 159 pieces, and used agrochemical packaging as many as 3 drums. The number of vehicle: DA 9815

AP

The company showed minutes of meeting of medical waste delivery to the Community Health Center of Sengayam for example:

In March-May 2013 on May 31st, 2013; the detail was: spuit as many as 6060 pieces, vial as many as 12

pieces, infuse bottle as many as 25 pieces.

In January-March 2013 on February 14th, 2013; the detail was: spuit as many as 6326 pieces, vial as many as

29 kg, infuse bottle as many as 31 pieces.

All monitoring and management of Hazardous and Toxic Waste has been reported to the company in the routine quarterly report of Hazardous and Toxic Waste, for example second quarter report about the management of Hazardous and Toxic Waste (April-June 2013) and its evidence of report to the Regional Environmental Agency of Kotabaru Regency on July 9th, 2013. Based on the field surveillance at Matalok Estate (housing area Division 1 and 2) and Rantau Estate (housing area Division 1), there was a pesticide packaging which used for water container. Non-conformance NC-2013.04 with minor category. Observation on October 6th, 2013 Improvement actions on Non-conformance NCR 2013.04 (Minor)

The company has conducted socialization to related workers that it was forbidden to use used pesticide

packaging from any area for water container. After the socialization, the company confiscated the former

pesticide containers.

Preventive action by the company so similar incident will not be happened in the future:

1. Field memorandum will be composed not to store used pesticide packaging at the housing area in any

form.

2. A continues socialization will be conducted to workers about the danger of Hazardous and Toxic

Waste

3. Checking will be conducted to the housing area of workers and if there is a used pesticide packaging,


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it will be taken and sent to the warehouse of Hazardous and Toxic Waste

4. Signboard will be installed at the housing area of workers about the restriction in the use of used

pesticide packaging.

The company can show the evidence of used pesticide packaging delivery (attached with its picture) from the

housing area of workers on Thursday October 3rd, 2013 at the housing area of workers. Delivery was

conducted together with the socialization to workers that it was not allowed to reuse used pesticide packaging.

The company has composed a memorandum number MLE/026/X/2013/M for all workers of PT. LMI-MLE on

October 4th, 2013 concerning the restriction in the use of used hazardous and toxic waste material. It was

approved by Manager of Matalok Estate. Generally, this memorandum contains a restriction for all workers not

to use used Hazardous and Toxic Waste packaging for daily activity.

The company has composed a memorandum number MLE/027/X/2013/M for all workers of PT. LMI-MLE on

October 4th, 2013 concerning the action in the use of used hazardous and toxic waste material. It was

approved by in charge Manager of Matalok Estate. Generally, this memorandum contain an instruction for

supervisor to collect all Hazardous and Toxic Wastes at the central warehouse to be destructed and then sent

to the licensed Temporary Disposal Area of Hazardous and Toxic Waste at Rantau POM.

Based on the improvement evidences as showed by the company, so Non-conformance NCR 2013.04 Minor is closed


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

The company has provided a monitoring on the use of renewable energy and its efficiency analysis, as presented in the following table:

Month CPO

production (ton)

Use of shell (ton)

Use of fiber (ton)

Efficiency of shell’s energy

(MJ/ton CPO)

Efficiency of fiber energy

(MJ/ton CPO)

January 5418 1201 3185 3746.20 5408.27

February 3600 793.5 2126 3725.04 5433.11

March 3167 661.1 1873 3527.81 5440.99

April 3168 692.1 1920 3692.07 5575.76

May 2311 529.5 1411 3872.15 5617.14

June 2154 516.5 1359 4052.39 5804.46

July 1973 477.2 1286 4087.52 5996.55

August 2626 722 1687 4646.53 5910.28

Average 3052.13 699.11 1855.88 3918.72 5648.32

Based on the result of analysis, it can be identified that in January-August 2013, the energy efficiency at Rantau POM was 3918.72 MJ/ton CPO on the use of shells and 5648.32 MJ/ton CPO on the use of fiber. The company has provided the record on the use of fossil fuel monitoring for the operational activity and its efficiency analysis for January – August 2013 as presented in this following table:

Month CPO (ton)

Use of diesel (l)

Used power (Kwh)

Efficiency on the use of diesel (l/ton CPO)

Efficiency on the use of electricity (Kwh/ton CPO)

January 5418 13990 19408 2.58 3.58

February 3600 20313 23913 5.64 6.64

March 3167 22150 25317 6.99 7.99

April 3168 18906 22074 5.97 6.97

May 2311 21286 23597 9.21 10.21


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June 2154 22305 24459 10.36 11.36

July 1973 21565 23538 10.93 11.93

August 2626 21905 24531 8.34 9.34

Average 3052.13 20302.50 23354.63 7.50 8.50

In January – August 2013, the average production at Rantau POM was 3052.13 ton CPO. The average of diesel use and power at Rantau POM was 20302 liter and 23354 KWH. The average efficiency of diesel use at POM STP during this period was 7.50 liter/ton CPO and the average efficiency of power use was 8.50 KWH/ton CPO


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

The company has a policy of zero burning (a land clearing with no burning) which described in the procedure of land preparation. This policy was strengthening with the Standard Operating Procedure Manual; Number of Policy is 2xx/PTK-LPG/2004 Index number II/04, on December 1st, 2004. The company is planning to conduct a replanting activity in 2015/2016 (according to the letter from the Senior Manager of Rantau Estate to GM of Sungai Durian Estate Number RTE/GM/061/IX/2013/S concerning Map Master of Replanting Program in 2013/2014). As a preparation for fire extinguishers and the company has done a Simulation/Training of Fire Prevention Practice by emergency (Fire Extinguisher) PT LMI on July 19th, 2013 at Matalok Estate and Rantau Estate. The company has composed a SOP of fire prevention Number 034/LMI-PK/2010 on December 16th, 2010 as the mechanism of fire prevention response. Based on the document of Environmental Management Plan-Environmental Monitoring Plan Implementation on the second semester of 2012 and Implementation Report of Environmental Management Plan-Environmental Monitoring Plan on the first semester of 2013, it showed that there was no land fire at the working area of PT LMI. The company has an organization structure of Land Fire Prevention Team and facilities and infrastructure of fire prevention at each Estate.


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

There were several efforts conducted by the company to decrease pollution and emission, as follow:

Location Source of emission

Type of emission

Management

Rantau POM

Boiler CO2, particulate, NO2, SO2, dust

Routine monitoring and measurement of air quality and preventive maintenance.

Generator CO2 Monitoring of exhaust preventive maintenance, reforestation of POM area, monitoring of fuel.

Rantau Estate and

Matalok Estate

Land clearing CO2 Zero burning for all land activities. Fertilization CO2 and NO2 Decreasing on the use of fertilizer and

application of empty fruit bunches to decrease the use of fertilizer.

Use of fuel CO2 Decreasing of fuel Transportation CO2 Periodic emission test POME CH2 Plan of methane trap use Industrial waste CO2 Zero burning Domestic waste CO2 Zero burning


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To decrease liquid waste from POM, the company implement land application for liquid waste at the estate in accordance with the permit of liquid waste from Kotabaru Regent number 188.45/448/KUM/2011 which determined by Kotabaru Regent on December 15th, 2011. Permitted area for waste water was 345.8 ha situated at block A24, A25, B25, B20, B21, B22, B23, B24, C22, C23, C24, C25, and C26. All liquid waste was previously managed at Waste Water Treatment Plant. Before use, waste was previously processed so it reached its quality standard of waste water at palm estate, pH. 6-9 and BOD ≤ 5000 mg/l. The management of Waste Water Treatment Plant was conducted by using biological system through anaerobic process, facultative, aerobic, and control pond. The company has conducted a routine test on liquid waste quality as presented in the quarter report of liquid waste, for the second period (April – June 2013). Based on the result of liquid waste test in August 2013, there was no parameter that exceeded its quality standard. As one of the effort to decrease a pollution caused by the operational activity at the POM, the company has conducted empty fruit bunches application in order to decrease the use of fertilizer. The monitoring record of empty fruit bunches application at Rantau Estate and Matalok Estate was available.


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

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

PT Laguna Mandiri has several documents related with environmental and social impact: 1. Environmental Impact Analysis (EIS) that has been approved by the Letter Number 008/ANDAL/BA/II/95 on

February 27th, 1995. The wide area of the study area was 77.290 Ha; consist of 4 companies (PT. Langgeng

Muara Makmur, PT. Laguna Mandiri, PT. Paripurna Swakarsa and PT. Swadaya Andika). The wide area of PT.

Laguna Mandiri in the study area was 21.400 Ha. The capacity of each mill in the EIA was 60 Ton FFB/hour

2. Report of Social Impact Analysis by PT LMI which conducted by Yayasan Kelapa Sawit Berkelanjutan Indonesia

(YASBI) in 2010 and there were several recommendations, as follow:

a. To deliver person in charge to communicate with stakeholders. b. To compose a SOP of External Communication that can be used as a reference for public relation to

communicate with stakeholders. c. To make a division or special staff to handle CD/CSR. d. To make more participative and sustainable CSR programs. In the composing of Social Impact Analysis document, community in surrounding has been involved in Focus Group Discussion (FGD).

3. Management/Monitoring Plan of Social Impact Analysis by considering impacted parties to compose this social management plan.

The implementation of Environmental Management Plan/Environmental Monitoring Plan by PT Laguna Mandiri – Rantau Factory has been routinely reported. There was a report in the form of receipt Environmental Management Plan/Environmental Monitoring Plan Implementation Report by PT LMI First Semester of 2013 by Environmental Agency Kotabaru Regency on October 4th, 2013.


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

The company has procedure of communication and consultation record with the community which recorded in the information request and response document for the period of June to August 2013 for example at Rantau Estate, on September 9th, 2013 about the socialization of HCV (High Conservation Value) at Rantau Jaya Village and Mangka Village. It was attended by Village Head, community members and social team from RTE (Mr. David SW). This


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socialization was completed with list of attendance. The evidences of realization of leaflets provision for Rantau Jaya Village and Mangka Village as well as picture of HCV socialization were available. The record of community aspirations and follow up by the company was recorded in the “Document of Information Request and Response” in 2013. The sample of response by the company for Rantau POM, Letter from Village Head of Harapan Baru Village Number 34/003/KD-HB/III/2013 concerning an assistantship for Excavator bouquet repairing on March 25th, 2013 and it has been responded by the company. The company agreed with this request by providing weld. It was written in the letter number 214/RTF/III/2013 on March 27th, 2013. The company has a list of stakeholder in 2012, which consist of Mangka Village; Rantau Jaya Village; Rantau Budha Village, sub districts, Kota Baru Regency. The partners were Rantau Estate (21 stakeholders), Rantau POM (22 stakeholders), Matalok Estate (22 stakeholders) and Matalok Contractor (26 stakeholders). Person in charge was responsible to conduct a consultation and communication with the community as written in the structure of RSPO-ISPO committee in 2013. Social committee consists of Mr. David Sina Werang (Rantau Estate), Mr. Agus Rumoko (Matalok Estate), and Mr. Sudiawan (Rantau POM). Based on the result of consultation with several institutions, such as: Social, Labour, and Transmigration Agency, Plantation Agency and Environmental Agency in Kotabaru Regency, there was information that the company has conducted its obligations related with reporting and also other several information to the institution. Based on the information from the Village Head/community around the plantation area of PT Laguna Mandiri, the company has been open to receive aspiration from the community including several complaints that ever been submitted to the management of PT LMI.


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

PT LMI has a SOP of Complaint Management Mechanism for all parties (009/LMI-MPKTP/2010) - (Revision I) page 4, flow chart of stakeholder complaint management by involving impacted parties. There were several sample community complain management records at Bakau Village concerning a prediction of pollution in Bakau River, such as:

- Minutes of meeting and appendix of field surveillance in North Pamukan and West Pamukan related with the Case of Pollution Prediction in Sungai Cengal, Kotabaru Regency. These minutes of meeting was composed by Environmental Agency of Kotabaru Regency on December 4th, 2012 as the follow up of complaint from the community related with the pollution prediction in Sungai Cengal.

- Letter number 4769-E/BPKIMI/BRSBB/12/2012 on December 26th, 2012 by Research and Industrial Standardization Agency – Laboratory of Commodity and Environmental Assessment– South Kalimantan to the Regional Environmental Agency of Kotabaru Regency concerning the Result of Laboratory Test and Appendix about the Result of Test concerning River Water Quality in Mangka River.

- Minutes of meeting about the Completion of Community Complaint concerning Pollution Indication in Bakau River that signed by several parties (Regional Environmental Agency of Kotabaru Regency, representative of village community and representative of PT LMI), on January 10th, 2013.

- List of attendance about the socialization of Community Complaint Resolution Concerning Pollution Indication in Bakau River, on January 10th 2013 and pictures of meeting.

- A letter from Kasiani on behalf of community members in Bakau Village, on January 27th, 2013 concerning aspiration from the community in Bakau Village.

- Letter number 004/LGL-S/LMI/II/2013 on February 11th, 2013 concerning Response on Demand from Community in Bakau Village to the Rantau POM PT LMI.

- Letter number 252/LMI-RTF/V/2013 on May 12th, 2013 from Senior Factory Manager to the GM of Mill Operation Area Sungai Durian and Pamukan concerning Ponds Development Program in Bakau Village, Kalian Village, and Harapan Baru Village. This pond development is a follow up from the result of agreement between the company and community members in the surrounding area related with the assistantship of clean water facilities development.


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The company also has a SOP of Conflict Management (059/LMI-PK/2012) which approved by the Head of SOU 08, Manager Estate and Manager of Mill. This procedure was used as the reference to solve land conflict cases between the community (the owner of traditional right) and the management of plantation area (the company). Based on the result of consultation with several institution, such as Social, Labour, and Transmigration Agency, Plantation Agency, and Environmental Agency in Kotabaru Regency, there was information that the company has conducted its obligations related with reporting and also other several information to the institution. Based on the information from the Village Head/community around the plantation area of PT Laguna Mandiri, the company has been open to receive aspiration from the community including several complaints that ever been submitted to the management of PT LMI.


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

PT. Laguna Mandiri has a SOP of Complaint Management (059/LMI-PK/2012) which approved by the Head of SOU 08, Manager Estate and Manager of Mill. This procedure was used as the reference to solve land conflict cases between the community (the owner of traditional right) and the company. Until the implementation of Surveillance 2, there was no new compensation payment process for cleared land. The record of beneficiaries was similar with the Surveillance 2 namely a Report of Occupied Land Clearing, phase 5 in Bepara Village, North Pamukan Sub District, Kotabaru Regency as many as 24.50 Ha on August 30th, 1999 (6 beneficiaries; Daruni, Jaruput, Syamsul Bahri, Suandi K, Duwihel/Siti Norjanah, and Dume’en). The appendix of compensated area location map was available. Based on the notification from the Village Head/community surveillance during field surveillance in Bakau Village and Rantau Buda Village, that there was no area in the authorization of Traditional Right around the area of PT Laguna Mandiri. There was also information that community in surrounding still can do their daily activities such as fishing in the rivers near the estate. However, it is forbidden to conduct illegal activity such as use of toxic material for fishing.


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

The company paid workers’ wage in accordance with the minimum wage as regulated by the government through the Decree of South Kalimantan Governor Number 188.44/0624/KUM/2012 concerning the Determination of Sectoral Minimum Wage in South Kalimantan Province 2013, it states that the minimum wage in palm plantation sector is IDR 1.365.000,-. The company showed the list document of workers’ wage for example, a list in August 2013: List of big wage for MTE in August 2013, showed the information of wage, bonus, back pay, deduction of Labour Social Assurance charge of company, allowance for rice, total gross wage, income tax, discount of small wage, total deduction of Labour Social Assurance, total deduction, and total paid wage. Based on the document study, workers’ wage was paid in accordance with the mini mum wage as determined by the government. It has been verified during the implementation of field surveillance. Interview was conducted with workers at workshop, housing area, and mill. They stated that earned wage was in accordance with the wage as determined by the government. Based on the interview with local contractor (FFB delivery) who also works as the driver of FFB vehicle, it can be identified that the contractor did not employ underage worker and wage was paid according to the regulation of government. The company has a regulation that has been agreed and signed together with workers union. At the time of surveillance 2, there was no Decree of Legalization from the related institution. The company showed the letter number 025/HRM-KPW/MGG/VIII/2013 concerning registration of collective labour agreement of Minamas Gemilang Business Group on August 16th, 2013 to Social, Labour, and Transmigration Agency. There was evidence on one set collective labour agreement delivery of Minamas Gemilang Business Group and Minamas application letter from Social, Labour, and Transmigration Agency on August 19th, 2013.


ASSESSMENT REPORT


In the document of Manager Report, there is a list of facility and infrastructure such as housing area, praying house, kindergarten until Junior High School, policlinic, and sport hall. The company showed the sample of agreement letter with the contractor number RTE/SPK-LKL/2013/VII/011 for the transportation rocks from quarry plant to the block. Point 6 clause 6.5 stated that the contractor must complete its workers with safety equipments and to obey occupational health and safety.


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

In the document of the Guideline of Sustainable Plantation Management (Number POLICY: 724/TQEM-SPM/09) that has published by the Management of Minamas Plantation on November 8th, 2010 concerning Social Policy point 5, that the company should be able to appreciate all workers right so they can establish and join with the community of Worker Union in accordance with their interest and they can negotiate together. The company also showed the record evidence of Minamas Plantation Worker Union RTF No: 568/91/SP/Dissosnakertrans on May 7th, 2012, the record evidence of Worker Union at RTE Number 568/33/II/Disnakertrans on April 4th, 2005, and the legalization of worker union at MLE No 568/31/II/Disnakertrans on March 7th, 2005. The company showed the document of worker union meeting report, such as a minutes of meeting of SPMM management meeting on August 19th, 2013 concerning a request of bonus for workers, plan of chairs purchasing, sport equipments procurement, and report of worker union meeting at Rantau Estate on March 28th, 2013, discussion about the draft of collective labor agreement that will be submitted to the management, input and suggestion from several parties will be followed up. Based on the result of interview with workers at the field, it can be identified that workers have understood about the company policy concerning organization union.


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

The company has a policy about minimum age requirement for worker as written in the policy Number 028/PSQM-UM/VII/2012 which approved by Mohd Ghozali Yahaya as the Head of Plantation Upstream Indonesia in December 2011 concerning social policy. It stated that the Plantation Upstream Indonesia does not allow employing workers by forcing them or underage workers. In addition, there was also a memorandum about the policy of children protection. Its number is PUD-UM-121/VI/2010 on June 7th, 2010. This policy regulates about the restriction to employ underage workers in accordance with the Law of Manpower in the Republic of Indonesia. Based on the data of workers at Rantau Estate and Matalok Estate in 2013, the youngest workers was Zaini who worked in the harvesting section on March 1st, 1993. He was 19 years old when he started to work at the company (May 1st, 2013) so according to the company regulation, the company did not employ underage worker. Based on the result of observation at the field, there was no worker under 18 years old. The workers understood about the policy of company not to employ worker under 18 years old.


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

There is a policy by the company concerning opportunity and equal treatment in worker recruitment. It is regulated in the book of policy number 028/PSQM-UM/VII/2012 which approved by Mohd Ghozali Yahaya as the Head of Plantation Upstream Indonesia concerning social policy that each staff/worker must be equally treated during the recruitment process, promotion, job limitation and condition without pay attention to the personal problem such as race, degree,


ASSESSMENT REPORT


ethnic group, sex, skin colour, physical condition (disable), membership of organization, politic view, religion, and age. Based on the data of workers in August 2013, it can be seen that workers who work at PT LMI varies. It can be seen from the percentage of ethnic group at Rantau POM. Most of the workers (53,66 %) come from Kalimantan (local workers). However, there are also non-local workers such as Javanese and Balinese (31,71 %); Sumatera (3,25%); NTB and NTT 0,813% and Maluku (10,57%). Interview with workers showed that there was no discrimination from the company at work, facility, and worker recruitment process.


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

The company has gender policy which signed by the Head of Plantation Upstream Indonesia in April 2011, stated concerning sexual harassment prevention and criminality for female, to compose a procedure and special mechanism for female complaint, to held a training of gender, to provide opportunity for female to be active in decision making, to establish a gender committee and to explain the policy of gender policy. The company does not allow pregnant woman and breastfeeding worker work in any activity related with chemical material. The company has a policy that regulate pregnant woman and breastfeeding worker not to work in any activity related with chemical material as written in the procedure of block spraying system and its station use Number 066/RSPO-BSSPSS/2011. Based on the interview with workers, the policy of sexual harassment restriction has been socialized to the workers. There was a structure of gender committee at Rantau Estate as the place to deliver aspiration and special complaint. It consists of protector (estate manager), advisor (female staff), health department, occupational safety and security department, domestic violence department, female empowerment department, and social economy community department. There is evidence about the implementation of reproduction right protection such as maternity leave, period leave, restriction for workers at spraying section especially pregnant woman and breastfeeding woman. Socialization and public hearing about female health to the workers has been conducted. Public hearing about female organ condition, female, disease, pregnancy/delivery process, and female preparation for menopause process. The company showed a monitoring book of H1 (period leave) at MLE and RTE, for example on behalf of Wasita who got permit for period leave for on June 8th-9th, 2013. The company showed standard operating procedure about the mechanism of complains management for all parties at PT Laguna Mandiri, which valid in March 2013. This procedure regulate that all incoming complaints were addressed to the Manager of Operational Unit through the assistant/the Head of Administration Unit. All complaints will be responded within 2 weeks (14 days) since its complaint date submission. There is also a SOP of gender committee policy implementation; number of policy is 700/PD-KG/10. It stated that the mechanism of special complaint submission which related with gender, sexual harassment, domestic violence, child abuse and protection against reproduction. Until the implementation of surveillance 2, there was no special complaint at Matalok Estate and Rantau Estate.


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

Until now, PT LMI does not have a direct contract cooperation with local farmers. So far, FFB come from small schemeholder through a contract between the Management of Schemeholding of Sungai Cengal with Bina Swadaya Karya Cooperative. The determination of FFB price was not controlled by PT Laguna Mandiri but Plantation Agency of South Kalimantan Province. There was a price of FFB in September 2013 based on the Decree of Plantation Agency, South Kalimantan Province number 525/1633/PUPPH-2 on September 18th, 2013. This FFB price was determined according to the meeting with several parties, such as: the management of estate units (company), representative of farmers (cooperative), and related institution. The company has conducted a cooperation with local contractor from


ASSESSMENT REPORT


surrounding villages. There was a working agreement between PT LMI and local contractor. The receipts of payment were also available: Rantau Estate

- Agreement Letter Number EST/RTE/SPK-LKL/2013/IV/088 on April 9th, 2013, between PT LMI (Rantau Estate) and Reyvel Victor Bella. First party – PT LMI give job to the second party (contractor) to build a building and its facilities (mini box measure 1 x 1 x 6 Meter). This agreement also describe about Occupational Health & Safety aspect and a regulation related with valid Manpower Law.

- Minutes of meeting of Job Supervision on July 12th, 2013 (Appendix of Minutes of meeting form on job supervision, map of job location, and pictures of job result).

- Minutes of meeting of supervision and payment on July 12th, 2013, as much as IDR 36.718.150 Matalok Estate

- Agreement Letter Number MLE/SPK-LKL/VI/2013/067 (Local) on June 18th, 2013, between PT LMI (Matalok Estatae) with CV Catur Batu Mulia. First party – PT LMI give job to the second party (contractor) to deliver Quarry rocks from Quarry Plant second party in Km 18 of Sungai Durian to the block of First party in accordance with the table of delivery distance as determined by the first party. This agreement also describe about the Occupational Health & Safety aspect and a regulation related with valid Manpower Law.

- Minutes of meeting of Job Supervision on July 31st, 2013 (Appendix of Job Location Map, pictures of job, recapitulation of quarry rock delivery, detail of diesel payment deduction).

- Minutes of meeting of supervision and payment on July 31st, 2013, as much as IDR 42.583.860


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

Based on the final consultation with stakeholder, for example with Village Head/community in Rantau Buda Village, there were several CD/CSR activities that have been conducted in surrounding area such as a donation for the reconstruction of praying house. Now, this praying house can be used by community in surrounding. Based on the result of consultation with the Head of Bina Swadaya Karya Production Cooperative in Bakau Village, there was also an information about the presence of Cooperative Credit Scheme program which conducted by the management of Minamas Group in Sungai Cengal, the community start to earn additional income despite in small amount. The contribution of company to the local development was conducted in the implementation of CD/CSR. There was an evidence of CD/CSR implementation at each estate. Rantau Estate

- Budget of Corporate Social Responsibility (CSR) in 2013/2014, total IDR 221.860.090, in several sections, such as:

Education

Health

Social, Cultural, and Sport

- Recapitulation of CSR realization at Rantau Estate, in 2012 – 2013, IDR 301.965.971, in several sections, such as:

Education

Health


Governance

Non routine donations for the community

Matalok Estate

- Budget of Corporate Social Responsibility (CSR) in 2013/2014, total IDR 205.314.500, in several sections, such as:

Education

Health

Economy


ASSESSMENT REPORT



- Recapitulation of CSR realization at Rantau Estate, in 2012 – 2013, IDR 110.355.298, in several sections, such as:

Education

Health

Religion

Economy


Governance

Non routine donations for the community The company can evaluate and conduct CD/CSR program in accordance with the basic need of local community. OFI 5


PRINCIPLE #7 Responsible development of new plantings

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

The company has EIA document which consist of Environmental Impact Statement (EIS) or document of Environmental

Management Plan-Environmental Monitoring Plan which approved by Agricultural Department, Agricultural Agency

Number 008/ANDAL/BA/II/1995, on February 27th, 1995, PT Laguna Mandiri has a coverage area as much as 21,400

Ha and its capacity of POM is 60 Ton FFB/hour.


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

There was a planting area before 2007. The company has conducted Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Alaeis guineensis) at Matalok Estate and Rantau Estate in 2005. Its result was written in the Final Report of Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Alaeis guineensis) at Matalok Estate in 2005 Semi Detail Land Survey and Evaluation of Land Conformance Class for palm tree (Alaeis guineensis) at Rantau Estate in 2005. At Matalok Estate, there were several plant development areas in 2008 as many as 108 Ha and semi detail land survey has been conducted on May 9th -13th for 108 ha at D019 covering Block D45 until D48. However, until the implementation of second surveillance, report of semi detail land survey cannot be showed yet by the company. Observation on November 25th, 2013 The company has showed the report of reviewed land survey result in 107,49 Ha in the planting area in 2008 at Block D45 s/d D48. Based on the survey, the type of soil was ultisol order in the type of MM08 typic plinthudults and afisol order in the type of MM09 lithic hapludults.


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

Based on the Document of Environmental Impact Analysis (EIA Number 660/22/BLHD.AMDAL on August 20th, 2010), it

stated that according to the Map of Spatial Map of Kota Baru Regency in 2002 and Spatial Planning of South

Kalimantan PT LMI area was situated in the Food Crops Cultivation Area (KBTTP).

New planting was started in November 2007 at Matalok Estate as many as 108 Ha and 2008 at block D019 in the outside area of HCV. Until now, there was no working area development for Rantau Estate and Matalok Estate. According to the Master Map of Replanting Program in 2013/2014 (Decree of Senior Manager of Rantau Estate to the


ASSESSMENT REPORT


GM of Sungai Durian Estate Number RTE-GM/061/IX/2013/S on September 6th, 2013), replanting activity will be started in 2015/2016, as follow;


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

At Matalok Estate, there was a plant development area in 2008 as many as 108 Ha and semi detail land survey has been conducted on May 9th -13th, 2011 as many as 108 ha at field D019. It covered Block D45 to D48. However, until the implementation of second surveillance, related report with this semi detail survey cannot be shown by the company. Non-conformance 2013.04 Observation, November 25th, 2013 The company showed the report of reviewed land survey result in 107,49 Ha in the planting area in 2008 at Block D45

s/d D48. Based on the survey, the type of soil was ultisol order in the type of MM08 typic plintudults and afisol order in

the type of MM09 lithic hapludults. Non-conformance 2013.04 has been confirmed.


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

Until the implementation of this Second Surveillance, there was no new land area opening in accordance with the owned Certificate of Land Use Title. The available document of socialization of plantation business area clearing plan was the record of land clearing at the beginning, for example: a record of plantation business area clearing socialization at Block D 019 at Matalok Estate (MLE). This socialization was attended by many parties such as Plantation Services Department (PSD), village government from North Pamukan Sub District and Rohadi Group on May 1st, 2007. There was also a minutes of meeting of implementation and list of attendance. There was also a record of negotiation and the result of compensation payment agreement which documented in the Document of Occupied Land Clearing Area Report which contain the minutes of meeting of deliberation process, Notification Letter of Right on Land Releasing, Notification Letter of deliberation result receiving and map of area location which has been paid with some compensations in accordance with the measurement.


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

Until the implementation of this Second Surveillance, there was no new land compensation payment process. The record of There was a record of beneficiaries on occupied land clearing phase 5 at Bepara Village, North Pamukan Sub District, Kotabaru Regency in24,50 Ha on August 30th, 1999 (There were 6 beneficiaries namely Daruni, Jaruput, Syamsul Bahri, Suandi K, Duwihel/Siti Norjanah, and Dume’en). There was also appendix of compensated area map which completed with the document of the deliberation meeting result between PT Laguna Mandiri and scheme holder, which notified by the Village Head of Mangka Village and the Head of North Pamukan Sub District, Right on Land Releasing, Notification Letter, and the receipt of hand over. Based on the result of interview in Rantau Buda Village and the Management of Farmers Cooperative in Bakau Village, it can be identified that the company can feel the effects of estate, such as:

- Opened access road from surrounding villages to other area.

- Job vacancies for community in surrounding (estate and mill).

15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29

1992 78,94 78,21 - - - - - - - - - - - - - 78,21

1993 873,67 - 56,42 - - 86,89 121,20 92,00 126,98 - 63,91 - 317,72 - - 865,12

1994 641,64 - - - - 90,99 72,83 127,96 81,99 88,87 - 91,89 - 82,71 - 637,24

1996 1388,78 171,41 125,00 121,38 - 142,96 83,66 120,86 - - 111,24 205,80 - 176,60 108,48 1.367,39

1997 603,36 - - 115,78 116,79 - - - 91,52 88,31 83,70 - - - 106,65 602,75

1998 645,57 - 77,71 - 129,81 - - - - 123,75 71,58 81,53 50,55 - 110,25 645,18

Total 4231,96 249,62 259,13 237,16 246,60 320,84 277,69 340,82 300,49 300,93 330,43 379,22 368,27 259,31 325,38 4.195,89

36,06

Rencana Replanting (Ha)Total (Ha)

Tahun

tanam

Luas TM

(Ha)

Buffer Zone


ASSESSMENT REPORT


- Several donations from the community for road reconstruction, praying house development, and religious day.

- Job for local contractor. Since 2009, partnership program has been started between the company and cooperative (farmers) in the form of Cooperative Credit Scheme program in Sungai Cengal. Until today, small schemeholding program has been conducted in 2.385,50 Ha in Sungai Cengal. In area around PT Laguna Mandiri, small schemeholding program has been conducted in Bepara Village for 157, 57 Ha out of 585 Ha planned area.


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

The company has composed zero burning area policy (land clearing with no burning). It was written in the procedure of land preparation. This policy was strengthen in the Standard Operating Procedure Manual, Number of Policy is 2xx/PTK-LPG/2004 number of index is II/04, on December 1st, 2004. The company plan to conduct replanting area in 2015/2016 (based on the letter from the Senior Manager of Rantau to the GM of Sungai Durian Estate Number RTE/GM/061/IX/2013/S concerning Master of Replanting Program 2013/2014), the detail of replanting program is described as follow:

The company has composed zero burning area policy (land clearing with no burning). It was written in the procedure of land preparation. This policy was strengthen in the Standard Operating Procedure Manual, Number of Policy is 2xx/PTK-LPG/2004 number of index is II/04, on December 1st, 2004. For the preparation of land fire, the company has conducted a simulation/training of fire prevention by emergency (fire extinguisher) of PT LMI on July 19th, 2013 at Matalok Estate and Rantau Estate. The company has zero burning area policy (land clearing with no burning). It was written in the procedure of land preparation. This policy was strengthen in the Standard Operating Procedure Manual, Number of Policy is 2xx/PTK-LPG/2004 number of index is II/04, on December 1st, 2004. The company has an organization structure of Land Fire Extinguisher Team, facilities, and infrastructure of land fire

prevention at each Estate.


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

8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Social Impact There was a Management/Monitoring Plan according to the result of Social Impact Analysis in 2011 and it has considered impacted parties. This social management plan was composed through the involvement of company in Development Plan Deliberation in the village and sub district of Sungai Durian. Based on the interview result to the Head Rantau Buda Village, the company has been invited and participated at each implementation of Development Plan Deliberation in the village and sub district. Its result will be proposed to the Kotabaru Regency. There was also a Report of Internal Audit RSPO PT LMI SoU 8 Rantau which conducted by the Assistant of PSQM SoU 8 Rantau. 19 Non-conformance, 19 on this non-conformance has been followed up and completed. At the time of field surveillance in Rantau Buda Village, there was information from the Village Head and the secretary that the follow up of Development Plan Deliberation was the implementation of praying house construction in this village and most of the material for this development was donated by PT Laguna Mandiri.

15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 24/25 25/26 26/27 27/28 28/29

1992 78,94 78,21 - - - - - - - - - - - - - 78,21

1993 873,67 - 56,42 - - 86,89 121,20 92,00 126,98 - 63,91 - 317,72 - - 865,12

1994 641,64 - - - - 90,99 72,83 127,96 81,99 88,87 - 91,89 - 82,71 - 637,24

1996 1388,78 171,41 125,00 121,38 - 142,96 83,66 120,86 - - 111,24 205,80 - 176,60 108,48 1.367,39

1997 603,36 - - 115,78 116,79 - - - 91,52 88,31 83,70 - - - 106,65 602,75

1998 645,57 - 77,71 - 129,81 - - - - 123,75 71,58 81,53 50,55 - 110,25 645,18

Total 4231,96 249,62 259,13 237,16 246,60 320,84 277,69 340,82 300,49 300,93 330,43 379,22 368,27 259,31 325,38 4.195,89

36,06

Rencana Replanting (Ha)Total (Ha)

Tahun

tanam

Luas TM

(Ha)

Buffer Zone


ASSESSMENT REPORT


Occupational Health & Safety Management System The company has provided SIME Card. This card can be used for monitoring and suggestion for Occupational Health & Safety Management System from the visitor of POM or estate for the company so the company has the opportunity to always conduct sustainable improvement at Occupational Health & Safety Management System.



ASSESSMENT REPORT


3.2. Summary of Assessment Report of Supply Chain

Clause (Module D) CPO Mills - Segregation Requirements

1 Documented Procedures

1.1

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

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

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

Rantau POM has the SOP of Supply Chain Certification System (Doc RSPO/065/SCPP/PSA) on January 14th, 2013. This

document contains:

a. Coverage: This procedure valid from the receiving of FFB, production process, bulking station, and product delivery to the buyers; supply chain formation which implemented in this procedure is segregation (SG).

b. General information:

- Description of segregation

- Diagram flow of segregation supply chain

- Requirement of supply chain

c. Identification of Raw Material: Cover Letter of Fruit; Fruit Quality Inspection; and Product Browsing Ability.

d. Specific condition, if the company receive FFB from the outside area and processed in 1 line mill, then:

- Document of weight ticket was separated for certified FFB and non-certified FFB from the outside area.

- To make a balance sheet every three months about the production of certified and non-certified CPO and kernel.

Rantau Mill receives FFB from its own estate (Rantau Estate, Matalok Estate, Sekayu Estate, and Betung estate) and outside estate (Selabak Estate, Randi Estate, Sangkoh Estate, Lanting Estate and Cooperative Credit Scheme Sungai Cengal). The company has attached all SCCS requirement elements in the SOP and its implementation.

The officers are responsible to implement valid requirements.

a. Manager of Mill:

- To keep and maintain all documents and records related with the use of material in the production process.

- Verification of delivered product to the buyer in accordance with the document (invoice, delivery order, selling contract, minutes of meeting of product delivery).

- To provide training of supply chain certification requirement for all related staffs.

b. Assistant of PSQM:

- To check the quality of FFB at POM and make a daily recapitulation.

- To supervise the delivery and loading/unloading of product.

c. Assistant of laboratory:

- To analyze and check the quality of material and product at all production process phases.

- To keep, maintain, and distribute the result of material and product analysis and test.

d. Assistant/Senior Assistant/Manager of Bulking:

- Transportation of CPO and Palm Kernel product from POM to Bulking Station

- Handling and storage of CPO/Palm Kernel at Bulking Station


ASSESSMENT REPORT



1.2

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

Rantau Mill receives FFB from its owned estates (Rantau Estate, Matalok Estate, Sekayu Estate, and Betung Estate) and the outside estates (Selabak Estate, Randi Estate, Sangkoh Estate, Lanting Estate, and Cooperative Credit Scheme of Sungai Cengal). FFB receiving and delivery of certified and non-certified CPO/PK has been differentiated at the beginning.

For example:

- To mark with certified RSPO at the Cover Letter of Fruit at Selabak Estate and to mark with certificated RSPO at the weigh card of FFB receiving (Number of ticket 148518, October 2nd, 2013)

- To mark with certified RSPO at the weigh card of CPO delivery (Number of ticket 029117, October 2nd, 2013).

- To mark with non-certificated RSPO at the weigh card of FFB receiving from Cooperative Credit Scheme at Sungai Cengal (Number of ticket 148481, October 1st, 2013).

- To mark with certificated RSPO at the weigh card of FFB receiving from Randi Estate (Number of ticket 143250, on August 12th, 2013)


2 Purchasing and goods in

2.1

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

The company received certified RSPO FFB from the main estate and affiliate estate as well as other non-certified estate from Cooperative Credit Scheme. Certified RSPO and Non-certified RSPO marking has been conducted in the document of Weight Letter of FFB Delivery and Cover Letter of CPO and Kernel Delivery.

For example:

- To mark with certified RSPO at the Cover Letter of Fruit at Selabak Estate and to mark with certificated RSPO at the weigh card of FFB receiving (Number of ticket 148518, October 2nd, 2013)

- To mark with certified RSPO at the weigh card of CPO delivery (Number of ticket 029117, October 2nd, 2013).

- To mark with non-certificated RSPO at the weigh card of FFB receiving from Cooperative Credit Scheme at Sungai Cengal (Number of ticket 148481, October 1st, 2013).

- To mark with certificated RSPO at the weigh card of FFB receiving from Randi Estate (Number of ticket 143250, on August 12th, 2013)


2.2

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

Rantau Mill received FFB from certified RSPO from owned estates (Rantau Estate, Matalok Estate, Sekayu Estate, and Betung Estate), affiliated estates (Selabak Estate, Randi Estate, Sangkoh Estate, and Lanting Estate); and non-certified RSPO namely Cooperative Credit Scheme of Sungai Cengal. The company has attached all SCCS requirement elements in the SOP and its implementation. The production of certified product (FFB/CPO/PK) in January – September 2013 did not exceed its prediction that has been determined.

Certified product Prediction in January – December 2013 (ton)

Realization in January – September 2013 (kg)

Processed FFB 277,224 123,407,730

CPO 63,861 28,090,364

Kernel 13,861 6,007,049 kg


ASSESSMENT REPORT



3 Record keeping

3.1

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

- The record of FFB product receiving to the selling of product was composed in daily/weekly/monthly/annual production report. It covers the information of supplier estate, amount of received FFB, fruit quality, amount of CPO and PK, and its quality.

- The monthly recapitulation of production in 2013-2014 covered the history of incoming FFB, processed FFB, CPO production, kernel production, Stock of CPO, delivery and selling (CSPO and Non-certified).

- Monthly crop report contains input of FFB, CPO, and PK from group estate and external.

- Daily summary of sustainable FFB, CPO, and Kernel by separating RSPO product and Non RSPO product.

All records were kept and documented in the system.


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

The company has not regulated the retention time of all records and reports that have been implemented in the supply chain certification. Non-conformance CAR.2013.06 Verification on October 6th, 2013. The company has regulated the retention time of document related with the requirement of SCCS for at least five years in the procedure of RSPO/65/SCPP/LMI. Non-conformance CAR.2013.06 is confirmed.


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

The company has recorded all certified RSPO FFB delivery and CPO/PK delivery, the base is every day, every month, every three months, and every year. All records were kept and documented in the system.


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

The company cannot show the evidence of purchasing and selling contract which show about the clear model of supply chain. Non-conformance CAR.2013.07 Verification on October 6th, 2013. The company can show the evidence of purchasing and selling contract to Tunas Baru Lampung which use segregated supply chain model. Non-conformance CAR.2013.07 is confirmed.


4 Sales and goods out

4.1

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

(a) The name and address of the buyer

(b) The date on which the invoice was issued

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


ASSESSMENT REPORT


(d) The quantity of the product delivered

(e) Reference to related transport documentation

The company cannot show invoice for the selling of CPO and certified PK which attached the information of name/address of buyer, date of issued invoice, description of product, amount of delivered product, and reference of the related transportation document. Non-conformance CAR 2013.08 Verification on October 6th, 2013. The company can show the sample of selling contract record to:

a. Name and address of buyer: Tunas Baru Lampung, address South Jakarta b. Date of issued invoice: June 20th, 2013 c. Product: attach CPO product and the quality of its CPO. d. Amount of delivered product: 700.000 kg e. Valid Supply Chain Model: Segregated.

Non-conformance CAR 2013.08 is confirmed.


5 Processing

5.1

The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100 % segregated material to be reached. The systems should guarantee the minimum standard of 95 % segregated physical material9; up to 5 % contamination is allowed.

All storage of certified RSPO palm oil processing was clearly conducted by separating the recording of certified and non-certified product. Even though receiving FFB from outside estate that has not been certified yet, the amount does not more than 5% of contamination.

The amount of certified FFB that received by the company was 122,094,267 kg while non-certified FFB was 1,307,129 kg, based on the receiving data and processed FFB at Rantau Mill 2013.


5.2

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

All certified RSPO palm oil processing was clearly kept, by separating certified and non-certified product. Even though, the company received FFB from outside estate that has not been certified yet, its amount does not more than 5% of contamination.

Based on the receiving document and processed FFB at Rantau Mill 2013, it can be identified that certified FFB come from own estate and other estates (PT Swadaya Andika and Langgengmuara Makmur) as many as 122,094,267 kg and non-certificate as many as 1,307,129 kg not more than 5% of contamination. The result of processed CPO and OK product can be traced to the selling.


5.3

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

The crush operator conforms to these requirements for segregation

The crush is covered through a signed and enforceable agreement

The mill did not conduct an outsourcing activity to the independent palm kernel crusher. The company sold palm kernel to the buyers who are not in the responsibility of the company. The document of palm kernel selling on August 16th, 2013.

- Kernel selling as many as 9.036 kg (number of ticket was 028479)



ASSESSMENT REPORT





6 Training

6.1

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

Assistant of plantation sustainable and quality management has provided an understanding for workers at the estate and mill concerning supply chain certification system and segregation pattern. Socialization was conducted on June 15th, 2013 by involving manager, assistant of safety officer, and security officers.


7 Claims

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

The company only claimed on certified product that obedient to the RSPO. The mill received FFB from the estate and other company that has been certified. Product from the outside area can be well traced.



ASSESSMENT REPORT


3.3. Conformity Checklist of Certificate and Logo Use (Only apply for Surveillance Assessment Report)

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

S-2 The company is not using logo on their product N/A

Status: N/A

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


Status: N/A

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


Status: N/A

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


Status: N/A


ASSESSMENT REPORT


3.4. Summary of RSPO Partial Certification.

Total companies observed (0.5 √Y) Where Y is the total of uncertified RSPO registered company The Management Unit name : PT Mitra Austral Sejahtera Date of Observation: October 14th 2013

2.1

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

Prefer to time bound plan in ref 1.9

Status: N/A

2.2

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


Status: N/A

6.3

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


Status: N/A

6.4

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


Status: N/A

7.3

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


Status: N/A

7.5

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


Status: N/A

7.6

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


Status: N/A


ASSESSMENT REPORT


CAR No

Ref Std

Finding Area Grade Limited Area Action Observation Status Closing

Date

2013.01 Minor 4.2.1

Regular soil and leaf analysis Research team has analyzed the content of plant nutrient (Nitrogen, Phosphate, Kalium, Magnesium, Boron, and Carbon) through sampling unit for the recommendation of fertilization in the next period. There was no evidence of regular soil analysis for the need of fertilization recommendation.

Estate Minor Surveillance 3

Open -

2013.02 Major 4.5.1

Documented and latest IPM program. Pest management (rat, caterpillar, and termite) and disease management (ganoderma) has been manually conducted, control of cultivation, natural, and chemical. There was no enough evidence that early warning system in the form of rat attack census at Matalok Estate has been conducted and documented.

Estate Major December 4th, 2013

October 7th, 2013 Census of rat attack has been conducted at several harvesting blocks at Division I, II & III. This census was aimed to identify rat attack indication at harvested FFB on October 5th – 7th, 2013. The percentage of attack was 0 – 0,61 %, it indicated that attack was still below its economical measuring standard.

Closed October 7th, 2013

2013.03 Major 5.1.2

Minor 6.1.3

Report of Environmental Management Plan/Environmental Monitoring Plan gradually and scheduled. There was no enough evidence that

Estate &

Mill

Major December 4th, 2013

October 7th, 2013 There was enough evidence about the receiving of Implementation Report of Environmental Management Plan/Environmental Monitoring Plan in the


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

3.5.1 Identification of Findings, Corrective Actions and Observations at Surveillance 2


ASSESSMENT REPORT


CAR No

Ref Std


Date

the company has reported the implementation of Environmental Management Plan/Environmental Monitoring Plan in the First Semester of 2013 to the related institution.

First Semester of 2013 by PT LMI (SoU Rantau) which received by the officer at Regional Environmental Agency of Kotabaru Regency on October 4th, 2013.

2013.04 Minor 5.3.1

The Management of Hazardous and Toxic Waste The company has conducted the management of Hazardous and Toxic Waste (agro chemical used packaging). However, according to the field surveillance at Matalok Estate and Rantau Estate, there was still used agrochemical packaging at the housing area.

Estate Minor Before the implementati

on of third surveillance

October 6th, 2013 The company has conducted an identification to the root cause, corrective action, and preventive action that will be conducted to avoid recurrence incident.


2013.05 Major 7.2.1

Minor 7.2.1

Minor 7.4.1

Record of Land Suitability There was a plant development area in 2008 at Matalok Estate as many as 108 ha and the company has conducted semi detail survey and land suitability in this area. However, the company cannot show the evidence of semi detail land survey and land suitability survey result.

Estate Major December 4th, 2013

October 25th, 2013 The company has showed the report of reviewed land survey result for 107,49 Ha in the planting area in 2008 at Block D45 until D48. Based on the survey, the type of soil was ultisol order in the type of MM08 typic plintudults and afisol order in the type of MM09 lithic hapludults.

Closed November 25th, 2013

2013.06 SCCS 3.2

Retention of Document The company has not regulated the retention time of all records and reports that have been implemented in the certification of supply chain.

Mill Major December 4th, 2013

October 6th, 2013 The company has regulated the retention time of document related with SCCS requirement for at least five years in the procedure number RSPO/65/SCPP/LMI.


2013.07 SCCS 3.4

Supply Chain Model The company cannot show the evidences of selling and purchasing


October 6th, 2013 The company can show the evidences of selling contract to Tunas Baru Lampung



ASSESSMENT REPORT


CAR No

Ref Std


Date

contract which attached the clear model of supply chain.

which used segregated supply chain model.

2013.08 SCCS 4.1

Material Sales and Expenses The company cannot show invoice for the selling of CPO and certified PK which attached the information of name/address of buyer, date of issued invoice, description of product, amount of delivered product, and reference of the related transportation document.


October 6th, 2013 The company can show the evidences of selling contract to Tunas Baru Lampung which attach CPO product and quality of CPO. The volume of sold CPO is 700.000 kg on June 20th, 2013



ASSESSMENT REPORT


3.5.2

Opportunity for Improvement

No Ref Std Note

1 Major 1.1.2

The company should be more consistent (update) in recording information request and its response in the log book of incoming mail.

2 Minor 4.7.3

The company can add office and housing area aspects in the report of risk analysis (HIRAC)

3 Minor 4.7.6

The company can evaluate the socialization on the use of PPE for workers

4 Major 5.2.2

The company can increase the performance of flora and fauna monitoring by composing report as regulated in the instruction of flora and fauna inventory method.

5 Minor 6.11.1

The company can evaluate and conduct CD/CSR program in accordance with the basic need of local community.

3.5.3 Noteworthy Positive Components

No Ref Std Note

1 - The commitment of company to implement the principles of sustainable palm oil management.

2 - Personal competence (staff) at each department.

3 - Certificate of RSPO and ISPO have been received.

4 - Certificate of Company Performance Rating Program in Environmental Management has been received (Proper Biru)


ASSESSMENT REPORT


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

Issue from the Stakeholder Company’s response Auditor’s response

Plantation Agency Kotabaru Regency Processing Business Development and Result Monitoring Unit (PUPPH)

Positive Aspect - PT Laguna Mandiri (PT LMI) has routinely reported

management activities at the estate. - Plantation Business Activity Report (LKUP) in the Second

Semester of 2012 has been reported. - There was no issue related with land conflict at the area of PT

Laguna Mandiri, both from community in surrounding or other sources. On June 11th-12th, 2013 monitoring has been conducted by the Plantation Agency.

- The management of estate by PT Laguna Mandiri was good.

Positive activities have been conducted by the company such as management report of plantation and management of estate will be maintained by the company consistently and sustainably.

The company must ensure that the company has met the requirements and regulations which related with the management of sustainable palm oil plantation.

Environmental Agency of Kotabaru Regency

Positive Aspect - PT Laguna Mandiri has reported the implementation of

Environmental Management Plan/Environmental Monitoring Plan in the First Semester and Second Semester of 2012 (there was a receipt of Report of Environmental Management Plan/Environmental Monitoring Plan by PT LMI Second Semester , on March 21st, 2013.

- Palm Oil Mill at Betung has reported Environmental Monitoring in January – March 2013 (Quarterly Report), receipt on June 25th, 2013 was available

- PT Laguna Mandiri has received the result of PROPER assesment (Company Performance Rating Program in Environmental Management) with Blue category.

Positive activities which conducted by the company related with environmental management around the company will be maintained and improved. It also similar with the PROPER assessment with blue category will be always maintained and improved so it can reach green category.

Anything related with the agreement with several parties related with the completion of complaint from the community will be immediately conducted by making a well for the community in Bakau Village and it will be immediately conducted.


The company must consistent in the implementation of agreements that have been signed by several parties.


ASSESSMENT REPORT


- PT Laguna Mandiri should pay attention and consistent wit the agreement that has been signed by several parties, related with the Completion of Complain from the Community concerning Indication of Pollution in Bakau River.

Labor Agency dan Transmigrasi Kotabaru Regency Manpower Monitoring Unit

Positive Aspect - PT Laguna Mandiri has routinely conducted Manpower

Obligatory Report. - Until now, there was no report related with labor disputes or

complaints relating to industrial relations between the company and workers of Laguna PT Mandiri.

- Wage payment which conducted by the company to workers has been in accordance with the regulation (the Decree of South Kalimantan Governor related with the Minimum Wage in the Province and/or Sectoral Minimum Wage in the Regency).

Positive activities which conducted by the company related with manpowe will be more noticed and improved. The company must commit to follow all regulations that have been determined by the company especially related with manpower.


Sekayu Baru Village Village Head & Village Secretary

Positive Aspect • Impact caused by the presence of estate and mill, such

as: • Open new horizons for the citizens of rural

communities due to social interactions with migrant workers from other areas.

• The existence of some assistance, such as: road repair, construction of houses of worship, help on the religious days.

• Open the access road from the surrounding villages to other places

• Open jobs for the surrounding communities (Estate and Mill)

Keep a good relationship that has happened so far, especially with patronage village (Sekayu Baru Village) both with Public Officials and District Leaders Deliberation/Muspika, and keep hear the aspiration/complaint from the community around the company.

Routine help will be continuously conducted in the form of CD/CSR as previously conducted through Development Planning Meeting and Regional Environment Impact Control Agency so there will be no overlap in the provision of assistance from the government and company.

Sekayu Estate still involved community in surrounding (Sekayu Baru Village) as workers both direct daily

The implementation of CD/CSR should be adjusted with the basic need of local community in surrounding.


ASSESSMENT REPORT


• There were several donations that have been provided by the company, such as:

• Well for praying house. • Construction of village road. • Clean water procurement. • Routine funds for teacher’s payroll in the Junior High

School (Rp. 500.000)

• Until now, there was no land claim and conflict between the community in Sekayu Baru with the company.

• Aspirations: • The company expected for electricity through a

relationship between the company and local government. • A routine CD/CSR program and donation of sacrified

animal during Idhul Adha • There were several area in Sekayu Village, especially at

Division I, which closer to Betung Estate, should be better become the part of CD/CSR target village at Betung Estate

Negative Issue • Several community members ever stated about bad odor

from the activity at the mill. However, according to the local village head, it never been submitted to the management of palm oil mill at Betung.

worker at SKU and supervisor at monthly SKU which adjusted with the ability and new workers has not been adjusted with the current company needs.

Keep to conduct community empowerment in surrounding villages in the Development of Infrastructure at the Company such as by involving them in bidding process with clear regulation which written in the agreement letter and approved by both parties and its payment system as the contractor in the making of Mini Box, Culvert Box, Flagstone Procurement, etc.

The company should ensure that the mechanism of aspiration or complaint has been known by the village head and the representative of community in surrounding.

Betung Vilage Village Head

Positive Aspect • Impact caused by the presence of estate and mill, such as:

• Open the access road between the subdistric and surrounding villages.

• Community in the village can follow the development of information etc.

The implementation of CD/CSR should be adjusted with the basic need of community in surrounding.


ASSESSMENT REPORT


• Helps from the company to the community. • Open jobs for the surrounding communities

• There were several helps that ever been provided by the

company: • Water reservoir (water spring) contruction in the village. • Donation for the reconstruction of village road. • Routine donation as much as Rp. 500.000/month (it is

used to buy diesel fuel for lighting in the village. • Heavy equipment loan for the reconstruction of village

road. • School bus facility to pick and drop students in the Junior

High School and Senior High School from Betung Vilage to Bakau Village,. However, it was stopped two years ago.

Negative Issue

Until now, there was no problem in the social interaction between the community in the village and the company. However, there were several community members who felt that land compensation has not been paid in the past and it has not met their expectation, especially during the use of military force. However, now, the can accept and let it because it has passed and the most important thing is the company contribution for local village..

• Several community members ever stated about bad odor caused by the activities at the mill.

Aspirations: • The company expect that they can work at the estate and

mill in accordance with their skills. • Mentoring from the company for human resources in the

local village so they can get opportunities to work at the estate and mill.

• Transparancy in the relationship between the community

The number of workers (Workers at SKUfrom surrounding villages (Betung Village, Sekayu Village, and Bakau Village) was 152 people (35.68%) out of 426 workers at Betung Estate.

Community in surrounding also involved in the wholesale job (fruit bunches picker) and racking.


ASSESSMENT REPORT


members and company especially related with the implementation of CSR program.

• Opportunity for local residents/local contractors to cooperate with the company in for wholesale jobs such as road reconstruction and plat decker (small bridge) construction. There was no follow up or response by the company to the several project biddings by community members (local contractors). The Village Head expected a direct clarification from the management of company to the community members so there will be no misunderstanding in the community members.

Local contractors have been involved in the rock outspreading job (road reconstruction activity) and FFB transportation to Rantau POM.

The realization of bidding process in this October was the submission in August 2013 which conducted by the community in Bakau Village and Pamukan Indah Village. Meanwhile, a submission from the community in Betung was registered in September and it will be processed if there is a need in the field. This has been confirmed directly to the contractor.


ASSESSMENT REPORT


4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

PT Laguna Mandiri

Mutuagung Lestari

Head of PSQM

Lead Auditor

Mohamad Pirabaharan

Oktovianus Rusmin

Friday, October 04th 2013

Friday, October 04th 2013


ASSESSMENT REPORT


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

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

Date of Contact

1. Agency Labour and

transmigration, Kotabaru District Kotabaru District, South Kalimantan

- Meeting Oct, 01st

2013

2. Agency Environmental Kotabaru

District Kotabaru District, South Kalimantan

- Meeting Oct, 01st

2013

3. Agency Agricultural Kotabaru

District Kotabaru District, South Kalimantan

- Meeting Oct, 01st

2013

4 Head and secretary of Rantau

Buda Village Rantau Buda Village - Interview

Oct,02nd

2013

5 Head of “”Koperasi Produksi

Bina Swadaya Karya” Bakau

Village

Bakau Village - Interview Oct,03rd

2013


ASSESSMENT REPORT


Appendix 2. Assessment Program

DATE September 30, 2013

ACTUAL PROGRAM PROCESSES / CLAUSES TO BE AUDITED AUDITOR

Monday, September 30th 2013

06.00-08.00 09.00-17.00

Traveling from Jakarta to Balikpapan Travelling from Balikpapan to Estate

ALL AUDITOR

Tuesday, October 01st 2013 08.00-09.00 09.00-12.00 14.00-17.00

Opening meeting Document Observations, in e.g.

Documentation review e.g. Commitment to transparency (1.1; 1.2),

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

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

Use of appropriate best practices by growers and millers (4.5; 4.6; 4.7; 4.8)

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

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

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

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

Responsible development of new plantings (7.2; 7.3; 7.4) Responsible development of new plantings (7.1; 7.3; 7.5; 7.7) Continuous Improvement (8.1) Supply Chain verification for CPO Mill

ALL AUDITOR

Wednesday, October 02nd 2013

08.00-12.00

14.00-17.00

Field Visit to estate and POM Continuing field visit

NM/BP SM/SP

MM

Thursday, 03rd 2013 08.00-12.00

14.00-17.00

Continuing field visit Verification of field visit findings and completing checklist

NM/BP/SM/SP

MM

Friday, 04th 2013 09.00-11.00

Closing Meeting

ALL AUDITOR


ASSESSMENT REPORT


Appendix 3. Glossary

EIA : Environmental Impact Analysis

PPE : Personal Protective Equipment

B3 : Hazardous Waste

BOD : Biological Oxygen Demand

BPN : National Land Agency

CITES : Convention On International Trade Endanger Species

COD : Chemical Oxygen Demand

CPO : Crude Palm Oil

CSR/CD : Corporate Social Responsibility/ Community Development

FFB : Fresh Fruit Bunches

FIRST AID : First Aid

HCV : High Conservation Value

OER : Oil Extraction Rate

HGU : Land Exploitation Rights

HIRAC : Hazard Identification Risk Assessment Control

IPM : Integrated Pest Management

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Security for Workers)

OHS : Occupational Health & Safety

NGO : Non-Governmental Organization

P2K3 : Committee for Occupational Health and Safety Development

PK : Palm Kernel

POM : Palm Oil Mill

POME : Palm Oil Mill Effluent

RKL : Environmental Management Plan

RPL : Environmental Monitoring Plan

S1 : Surveillance 1

SOP : Standard Operating Procedures

ST1 : Stage 1

ST2 : Stage 2 (Main Assessment)

UMR : Regional Minimum Wage

UU : Laws

LMI : Laguna Mandiri

RKL : Environmental Management Plan

RPL : Environmental Monitoring Plan

MTE : Matalok Estate

RTE : Rantau Estate

RSPO : Roundtable on Sustainable Palm Oil

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