Sustainable Palm Oil Certification - RSPO BWL (NAGA SAKTI MILL)_English (12012012).pdf1.3 Type of...

PT MUTUAGUNG LESTARI

ASSESSEMENT REPORT

Sustainable Palm Oil Certification

Stage I [√] Stage II Surveillance Assessment Report

Plantation Manager/Owner : IVOMAS TUNGGAL

Mill and Estate Name : Naga Sakti POM, Naga Sakti Estate, Naga Mas Estate (PT Buana Wiralestari Mas) and Ramabakti Estate (PT Ramajaya Pramukti)

Country : Indonesia

Location : Tapung Hilir Sub district, Kampar District, Riau Province

Certificate Code : MUTU-RSPO/XXX

Date of certificate issue : -

Date of expiry of certificate : -

Assessment

Date Report

Completion Date PT Mutuagung Lestari

Auditor Checked by Approved by

ST2 04-07,

12/07/2011 12/08/2011

Aryo Gustomo; Nanang Mualib; Ibnu Satria. P; Octo

H.P.N Nainggolan Taufik Margani Tony Arifiarachman

Mutuagung Lestari • Jl Raya Bogor Km 33,5 No. 19 • Cimanggis • Depok 16953• Indonesia

Submitted to RSPO Reviewed by RSPO CB Responds on Approved by RSPO

14/10/2011 15/11/2011 08/12/2011 12/01/2012

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

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

MUTU Certification • Approved by RSPO Secretary on June 2008

http://www.mutucertification.com/


ASSESSEMENT REPORT

Prepared by Mutuagung Lestari for PT .Buana Wiralestari Mas and PT.Ramajaya Pramukti i

TABLE OF CONTENTS

1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation used 4

1.2 Organizational Information 4

1.3 Type of Assessment 4

1.4 Locations of Plantations, Mill and Hectare Statements 4

1.5 Description of Scheme Smallholders 5

1.6 Description of Land Use 5

1.7 Cycles and Planting Year 6

1.8 Approximate Tonnage Certified 6

1.9 Other Certifications 7

1.10 Time Bound Plans for Other Management Units 7

2.0 ASSESSMENT PROCESS

2.1 Certification Body 9

2.2 Lead Auditor and Auditor Team 9

2.3 Assessment Methodology, Progress, and Site Visit 9

2.4 Stakeholder Consultation and List of Stakeholder Contacted 13

2.5 Determination Next Visit 13

3.0 ASSESSMENT FINDING

3.1 Summary of Non Conformance, Corrective Action Required and Observation 14

3.2 Summary of Arising Issues from Public, Company and Auditor Responses 28

4.0 CERTIFIED COMPANY’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings 33

ANNEX

1 Checklist of Main Assessment Reports of the RSPO Certification 34

2 Checklist of Supply Chain 93

3 Peer Review Report 99

4 Result of RSPO Panel Committee – RSPO Certification (to be filled after the report is reviewed and approved by RSPO secretariat for certification to be issued)

100

5 List of Stakeholder Contacted in the RSPO Certification Process 101

6 Glossary 102

Figure

1 Location Map 1

2 Operational Map of PT.Buana Wiralestari Mas (Naga Mas Estate and Naga Sakti Estate) 2

3 Operational Map of PT.Ramajaya Pramukti (Ramabakti Estate) 3


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Prepared by Mutuagung Lestari for PT Buana Wiralestari Mas and PT.Ramajaya Pramukti Page 1 of 103

Figure 1. Location Map


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Figure 2. Operational Map of PT Buana Wiralestari (Naga Sakti Estate and Naga Mas Estate)


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Figure 3. Operational Map of PT Ramajaya Pramukti (Ramabakti Estate)


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1.0 SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation used National Interpretation, RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008 and Supply Chain Requirements.

1.2 Organizational Information

1.2.1 Company name IVO MAS TUNGGAL

1.2.2 Contact person Ismu Zulfikar

1.2.3 Business address Plaza BII Tower 2, 30th Floor JL. MH Thamrin No 51 Kav 22 Jakarta 10350 Indonesia

1.2.4 Telephone (+62-21) 318 1388

1.2.5 Fax (+62-21) 318 1389

1.2.6 E-mail [email protected]

1.2.7 Webpage address www.smart-tbk.com

1.2.8 Type of enterprise Private

1.2.9 Authorized representative completing certification application

Ismu Zulfikar (Head of Environmental Department)

1.2.10 RSPO member registration 17 June 2008

1.2.11 Number of Employees 1,706 People

1.2.12 Contractors/Community/other employees - Groups

1.3 Type of Assessment

1.3.1 Certification scope Mill and oil palm estate

1.3.2 Type of certificate Single

1.3.3 Name of the estate covered by the certificate PT. BUANA WIRALESTARI MAS (PT BWL) PT. RAMAJAYA PRAMUKTI (PT RJP)

1.3.4 Number of management units 1 (one) unit of Naga Sakti Palm Oil Mill which had FFB supply from Naga Mas Estate (PT BWL) unit, Naga Sakti Estate (PT BWL) and Ramabakti Estate (PT RJP).

1.4 Location of Plantations, Mill and Hectare Statements

1.4.1 Location of estate

Estate’s Name Location GPS Coordinate Total Area (Ha)

Planted Area (Ha)

FFB Production

(tones/year) *) Latitude Longitude

Naga Mas Estate (PT BWL)

Tapung Hilir Sub-district, Kampar District, Riau Province

00 47' 00.19” 1010 06' 14.70” 5,103.65 4,988.48 137.068,79

Naga Sakti Estate (PT BWL)


00 46' 12.69” 1010 02' 46.95” 5,083.19 5,037.51 140.437,16

mailto:[email protected]

http://www.smart-tbk.com/


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Estate Name Location GPS Coordinate Total Area (Ha)

Planted Area (Ha)

FFB Production

(tones/year)*)

Latitude Longitude

Ramabakti Estate (PT RJP)


00 50' 32.88” 1010 10' 19.56” 2,895.91 2,706.28 70.243,70

*) 2010/2011 period

1.4.2 Location of Mill

Mill Name Location GPS Coordinate Capacity (tones/ hour)

Annual Volumes (tones)

Latitude Longitude CPO Out put

PK Out put

PKO Out put

Naga Sakti Mill Tapung Hilir Sub-district, Kampar District, Riau Province

00 46' 59.58” 1010 03' 01.03” 60 69,480.83 15,356.89 -

1.4.3 Maps Figure 1

1.4.4 Village/Sub district/District/Province Sikijang Village, Tapung Hilir Sub-district, Kampar District, Riau Province

1.4.5 Country Indonesia

1.4.6 Region Southeast Asia

1.4.7 Tenure

State 13,113.69 Ha

- Naga Mas Estate 5,103.65 Ha*)

- Naga Sakti Estate 5,106.25 Ha**)

- Ramabakti Estate 2,903.79 Ha***)

*) Based on Land Use Permit (HGU) No. 02 year 1995

**) Based on HGU No. 02 year 1995 and

HGU No.01 year 1997

***) Based on HGU No. 146, 147 and 148 year 2001

1.5 Description of Scheme Smallholders*)

1.5.1 Smallholders Supplied - Tonnes/year

1.5.2 Approximately of FFB Processed by Mill - %/year

1.5.3 Number of Coopertaive Smallholders - Group

1.5.4 Number of Smallholders Members - Members

1.5.5 Total Area - Ha

1.5.6 Approximately certification Process (year)

*) Naga Sakti Mill do not get a supply from Smallholder

1.6 Description of Land Use

1.6.1 Total area 13,082.75 Ha

1.6.2 Mature Area 12,732.27 Ha

1.6.3 Immature Area - Ha

1.6.4 Mill/ Housing 69.1 Ha


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1.6.6 Infrastructure Area (nurseries, run way, road, etc ) 190.38 Ha

1.6.7 LC program plan - Ha

1.6.8 Occupation / reserve area - Ha

1.6.9 High Conservation Value (swamps, rivers, ditches) 498.21 Ha*)

- Naga Mas Estate 231.87 Ha

- Naga Sakti Estate 148.25 Ha

- Ramabakti Estate 118.09 Ha

*)The HCV`s area included in mature area

1.6.10 Product Categories: FFB/CPO/PKO/PK

1.6.11 Annual Yield –Average (2008 to January 2011) 28.16 Tonne/Ha/Year

1.6.12 Actual Yield 27.31 Tonne/Ha/Year

1.7 Cycles and Planting Year

1.7.1 Age profile of planted palms

NMAE (Naga Mas Estate – PT BWL)

Planting Year Area (hectares) Age (year)

1993 2,310.69 18

1994 2,151.07 17

2001 63.35 10

2002 463.37 9

TOTAL 4,988.48

NSAE (Naga Sakti Estate – PT BWL)


1993 773.61 18

1994 3,003.00 17

1995 1,069.00 16

2002 191.90 9

TOTAL 5,037.51

RBKE (Ramabakti Estate – PT RJP)


1995 1,256.48 16

1996 993.35 15

1997 456.45 14

TOTAL 2,706.28

1.7.2 Area restocked by replanting after 2005 - Ha

1.7.3 New planting area after November 2005 – extension

a. Program plan - Ha

b. Realization until 2011 - Ha

1.7.4 Cycle 7 Days

1.8 Approximate Tonnage Certified

1.8.1 Production recovery of FFB 24.5 %

1.8.2 Production recovery of Palm Kernel 5.5 %


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1.8.3 FFB 349,285 Tonne/Year*

1.8.4 Crude Palm Oil 85,574 Tonne/Year*

1.8.5 Palm Kernel 19,210 Tonne/Year*

*) source: Production Estimation of Naga Sakti Mill for the

next 5 years (2012-2016)

1.9 Other Certification

1.9.1 ISO 9001:2008/ISO 14001: 2004 None

1.9.2 OHSAS 18001:2007 None

1.9.3 HACCP None

1.9.4 Others

Occupational Health and Safety Management System based on decree of Transmigration and Labor Minister of Republic Indonesia (Kep.83/MEN/V/2010) dated 4 May 2010, for Naga Sakti Mill – PT BWL scope.

1.10 Time Bound Plans for Other Management Units

1.10.1 Time bound plan for other management units of IVOMAS TUNGGAL. IVO MAS TUNGGAL has committed to make time bound plan for all the other management units in implementing the P&C standard or to gain the RSPO certificate. The auditor team had put this plan into consideration in accordance with the RSPO Certification System for Partial Certification. The development and follow up of the plan will be verified and reported in the routine annual visits.

GROUP Mill Company

Region Mill Estate (FFB Supplier) Certification Remark (Estate Entity)

IMT PT. IVOMAS TUNGGAL

SIAK-RIAU SSMM Samsam Mill

SSME Samsam Estate 2009 PT. IVOMAS TUNGGAL

KNDE Kandista Estate 2009 PT. IVOMAS TUNGGAL

PLPE Palapa Estate 2009 PT. IVOMAS TUNGGAL


SIAK-RIAU LIBM Libo Mill LIBE Libo Estate 2009 PT. IVOMAS TUNGGAL

NGLE Nenggala Estate

2009 PT. IVOMAS TUNGGAL

SRKE Sungai Rokan Estate



SIAK-RIAU UTJM Ujung Tanjung Mill

UTNE Ujung Tanjung Estate


STPA Sungai Tapung Setate

2011 Smallholder

IMT PT. BUANA WIRA LESTARI MAS

KAMPAR- RIAU

NSAM

Nagasakti Mill

NMAE Nagamas Estate

2010 PT. BUANA WIRA LESTARI MAS

NSAE Nagasakti Estate

2010

PT. BUANA WIRA LESTARI MAS

RBKE Rama Bakti 2010 PT. RAMAJAYA PRAMUKTI

IMT PT. BUANA WIRA

KAMPAR- RIAU

KJNM Kijang Mill

KJGE Kijang Mas Inti Estate

2010 PT. BUANA WIRA LESTARI MAS


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LESTARI MAS

KJNP Kijang Kencana Scheme smallholder

2011 Smallholder

IMT PT. RAMAJAYA PRAMUKTI

KAMPAR- RIAU

RRMM Rama Rama Mill

RRME Rama Rama Estate

2010 PT. RAMAJAYA PRAMUKTI

AYJP Amartajaya Scheme smallholder

2011 Smallholder

IMT PT. BUANA WIRA LESTARI MAS

INDRAGIRI-RIAU

IDSM Indra Sakti Mill

IDLE Indra Lestari Estate

2011 PT. MEGANUSA INTI SAWIT

IDSE Indra Sakti Estate

2011 PT. MEGANUSA INTI SAWIT

INDA Indragiri Scheme smallholder

2011 Smallholder

IDSA Indrasakti Scheme smallholder

2011 Smallholder

IMT PT. BUMIPALMA LESTARI PERSADA

INDRAGIRI-RIAU

BPLM Bumipalma Mill

BPLE Bumi Lestari Estate

2012 PT. BUMIPALMA LESTARI PERSADA

BPME Bumi Palma Estate


BSNE Bumi Sentosa Estate



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2.0 ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari

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

Phone. +62-21-8740202

Fax +62-21-87740745/46

Website: www.mutucertification.com

Email: [email protected]

2.2 Lead Auditor and Auditor Team

2.2.1 Assessment Team

AssessmentTeam consisted of:

ST1-ST2 1) Aryo Gustomo (Lead Auditor). A bachelor of Agricultural Science, Department of Agronomy, Faculty of Agriculture, Bogor Agricultural University. A specialist of Oil Palm Plantation. He has a working experience in one of the largest oil palm seed producers in Malaysia as a Plant Breeder / Agronomist. And he had also worked as a Field Assistant in one of the oil palm plantation companies in Indonesia. The trainings attended namely: Lead Auditor 14001, Identification and Management of HCV Area, Lead Auditor of ISO 9001, and RSPO Lead Auditor. Currently he works at an independent certification agency and has been involved in a number of assessment activities within the framework of the RSPO certification as an auditor, namely 14 Stage-1 activities; 1 audit trial of RSPO scheme smallholder, and 6 Stage-2 activities. In the current Stage-2 activity, he conducted the assessment on aspects of legal, environment, labor, and OHS.

2) Nanang Mualib (Auditor). Bachelor of Forestry at Department of Forestry Technology, Faculty of Forestry, Bogor Agricultural University. He had a working experience in a forest company (HPH) from year 2000 to 2004 as technical assistance in the implementation of Sustainable Forest Management program, collaboration between the Faculty of Forestry and WWF-Indonesia since December 2006 to present. Professional experiences include: social studies of HCV in monitoring of the implementation of Sustainable Forest Management, involved in the identification of HCV in three oil palm plantation companies in Indonesia. Currently he works as a professional consultant and assessor of HCV. In the current Stage-2 activity, he conducted the assessment on the aspects of social, legal, management of HCV, and labor.

3) Ibnu Satria Prabudi (Auditor). Bachelor of Agriculture Majoring in Agro-technology, Agriculture Faculty of Instiper Yogyakarta. Currently he has been working with an independent certification agency as an auditor. Training he has followed are: Lead Auditor RSPO. He has followed several audit activities related to certification system of sustainable palm oil (RSPO certification) as observer and Auditor undertrained. In the current Stage-2 activity this time he conducted the assessment on aspects of agronomic practices and labor.

4) Octo Hombar P. N Nainggolan (Auditor). A bachelor of Agriculture, Department of Social Economics of Agriculture (Agribusiness), University of Udayana, Bali. He has a working experience from year 2004 to 2011 as a Field Staff in a private oil palm plantation company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program and he has attended several audit activities related to certification system of sustainable oil palm plantation as an observer. Currently, he works in an independent certification agency as an auditor. In the current Stage-2 activity he is accompanied by the lead auditor to conduct an assessment on aspect of labor.

Curriculum Vitae (CV) of the members of Auditor Team are available in the office of PT Mutuagung Lestari.

2.3 Assessment Methodology, Progress, and Site Visit

2.3.1 Assessment Dates

ST1 25-29 October 2010

This activity was done at the same time with the PT Ramajaya Pramukti

http://www.mutucertification.com/

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ST 2 4 – 7 July, and 12 July 2011

2.3.2 Estimate of person days to implement assessment

ST1 Number of auditors participating: 4 persons

Number of days for activity stage-1 at sites: 4 days

Number of person days for stage-1 activity at sites: 16 person days

ST 2 Number of auditors participating: 4 persons

Number of days for stage-2 activity at sites: 4 days

Number of person days for stage-2 activity at sites: 16 person days

2.3.3 Detail process of assessment

ST1 Stage-1 Activity aimed to measure the extent of readiness of the Company in implementing the RSPO standard, personal understanding related to the implementation of RSPO standards, site condition, the process approach to the aspects of certification, to identify stakeholders, to evaluate the internal audit and management in the planning and performance to the implementation of RSPO, and to see the Company's readiness in order to prepare Stage - 2. The scope of assessment at stage-1 activity is for Naga Sakti Mill and Kijang Mill which obtain FFB supply from Naga Mas Estate, Naga Sakti Estate, Ramabakti Estate and Kijang Estate so that the assessment is carried out using sampling method. The assessment was conducted by measuring the adequacy of implementation with the efforts done by the company 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). The assessment was conducted in three methods: Method I was documents review, aiming to observe the sufficiency of types or substances of required documents; Method II was interview, aiming to obtain more detailed information and cross check the information; Method III was field visitation, aiming to observe directly the adequacy of implementation on site. Some referrals for improvement of Stage-1 results were conveyed by MAL auditor to the management, and the results would be the verification material for the main assessment stage (Stage-2). All information obtained was recorded in Check List of PT Mutuagung Lestari and became the main annex of Assessment Report. The detailed assessment process is as follows:

25 October 2010. In the morning team of auditors travelled from Jakarta to Pekanbaru, then they continued the travel to the location (Kampar District). Arriving at the site, an Opening meeting was held at the Mess of Naga Mas Estate of PT Buana Wiralestari Mas, it was attended by DOM / VPM 5, PC Mill Kampar Region, RC Kampar Region, ENDV-Head Office, AVP Finance, Naga Sakti Estate Manager, Naga Mas Estate Manager, Kijang Estate Manager, Kijang Mill Manager, and several other related personnels. The opening meeting was conducted at the same time with PT Ramajaya Pramukti. After the opening meeting, Auditors Team conducted documents review of PT Buana Wiralestari Mas. Auditors focused on conducting a review of company documents concerning legal aspect, documentation of environmental governance, documentation of social governance, and documentation of plantation practices.

26 October 2010. The Auditor Team conducted documents study for PT Ramajaya Pramukti.

27 October 2010. The team conducted field visitation to sites that have been planned before. Auditors Team was divided into two teams: Team I (Nanang and Ibnu) visited the HCV area, boundaries pole, and some villages as well as conducted interviews with several communities around the estates. Team II (Aryo and Muardi) visited the estate workshops, warehouses, dams, fertilizing activities, spraying and harvesting, as well as the mill.


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28 October 2010. Auditor team conducted field visitation to PT Ramajaya Pramukti. After conducting field visitation, in the afternoon the team traveled back to Pekanbaru.

29 October 2010. In the morning, the Auditors Team conduct a Closing meeting held at Representative Office of Sinar Mas of Pekanbaru Region, which was attended by PC Mill of Kampar Region, RC of Kampar Region, ENDV-Head Office, AVP Finance, Naga Sakti Estate Manager, Naga Mas Estate Manager, Kijang Estate Manager, Nagasakti Mill Manager, Kijang Mill Manager, and several other related personnel’s. The closing meeting was conducted at the same time with PT Ramajaya Pramukti. Later in the afternoon the Auditor team travelled back to Jakarta.

ST 2 Stage - 2 activities aimed to observe the effectiveness of the company's performance against compliance with the standard of principles and criteria of sustainable oil palm plantations as well as to observe and assess the performance has been made to the findings in stage-1 activity.

The scope of assessment at the stage-2 activity changed from the scope of assessment at the stage-1 activity, the scope became Naga Sakti Mill that obtains supply of FFB from Naga Mas Estate, Naga Sakti Estate and Ramabakti Estate.

The assessment was done by measuring the adequacy of the implementation with the efforts that had been made by the company against the requirements of National Interpretation of the Republic of Indonesia from the RSPO Principles and Criteria (P&C) for the Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008) and supply chain requirements for CPO Mill. The assessment was done with three methods: Method I was a review of documents, aiming to look at the adequacy of the type and substance of the required documents, and Method II was the interviews, aiming to obtain more detailed information and cross check, and Method III is the field visitation, aiming to observe directly adequacy of implementation in the field.

All information obtained was recorded in Check List of PT Mutuagung Lestari and became the main annex of Assessment Report. The detailed assessment process is as follows:

04 July 2011. The team traveled to the site and when arrived noon conducted an opening meeting that were held in Naga Sakti Kijang Estate Mes, which was attended by ENDV-Head office Jakarta, PC Kampar Region, RC Kampar Plasma, RC Kampar Region, Naga Mas Estate Manager, Naga Sakti Estate Manager, Ramabakti Estate Manager, and some personnel representing each department.

After the opening meeting the auditor team conducted documents review related to social governance, production and environment. The team is divided into three team, namely:

Team I (Aryo and Octo – Assessment on legal, environment and OHS aspects): the team conducted assessments related to land concessions, environmental management, water and soil conservation measures, management of hazardous waste, labor system and implementation of OHS.

Team II (Ibnu – Assessment on Good Agriculture practices aspects): the team conducted assessment regarding the implementation of Integrated Pest Management, the use and control of chemicals, fertilization and harvesting practices. Team III (Nanang – Legal, Social HCV management, and Employment): the team conducted assessment regarding implementation of training for employees, conflict management, CSR (Corporate Social Responsibility) implementation, and handling of public complaints, HCV area management, Land Use Rights (HGU) boundaries pole maintenance, and employment system (wages).

05 July 2011. Auditor teams still continued to review the management of social, production and environment documents.

06 July 2011. In the morning team of auditors conducted public consultations with stakeholders from the provincial level to the village level, local NGOs (Non Governmental Company), etc. This was held at Sinarmas training center, Sei Rokan Estate. And in the afternoon the team verifies the results of public consultation with stakeholders and preparing the plan for the next day field visitation.

07 July 2011. The team conducted field visitation, the Auditor Team is divided into 3 teams. The team I visited the palm oil mill (POM) Naga Sakti. Team II visited the estates (Naga Mas Estate, Naga Sakti Estate and Ramabakti Estate), and team III visited the villages surrounding the estate. Locations visited by the auditor team are presented at 2.3.4.

08-11 July 2011. The team conducted an assessment for Kijang Mill which gets FFB supply from Kijang Estate unit (PT Buana Wiralestari Mas).


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12 July 2011. In the morning the auditor team composed the CAR, then in the afternoon the team held a closing meeting at the Kampar Regional Office; attended by ENDV-Head office Jakarta), PC Kampar Region, RC Kampar Plasma, RC Kampar Region, Naga Mas Estate Manager, Naga Sakti Estate Manager, Ramabakti Estate Manager, and some personnel representing each department.

13-16 July 2011. Auditor team assessed IvoMas Tunggal subsidiary company, which is located adjacent to the site, namely PT Ramajaya Pramukti (Ramarama Mill).

16-19 July 2011. Auditor team made an assessment report in Pekanbaru

19 July 2011. The team travelled back to Jakarta

2.3.4

Location of Assessment

ST1 The sampling locations which selected by Audit Team based on : 1. The number of locations is determined by the formula 0.8 √y., e.g: 12 villages around Estate and Mill, then the number

of villages visited based on such formula is 3-4 villages. 2. The selected sites represent each of working areas. 3. The consideration of issues arising from the document review that is fundamental and crucial. In detail, the locations visited are as follows:

Location 1. Naga Mas and Nagasakti Estate. Observations concerning the spraying, fertilizing and harvesting activities.

Location 2. B-34 and D-41 Naga Mas Estate. Observations concerning peat land management strategy in the block B-34 and sloping area in Block D-41.

Location 3. Nagasakti Estate. Observations concerning the hazardous waste storage room, workshop, used pesticide packaging washing house, as well as land applications treatment.

Location 4. Nagasakti Mill. Observations concerning to the FFB management process, mill water resources, hazardous waste storage room, workshops, warehouses of chemicals, WWTP (Waste Water Treatment Plant), OHS implementation, and land application management.

Location 5. Naga Mas Estate Office. Interviews with the chief of gender commission of PT Buana Wiralestari.

Location 6. Sikijang Village (Plasma). Interview with plasma smallholders concerning the relationship between company and farmers.

Location 7. BPN No.3 and T17 and T15 Boundaries Pole. Observations concerning the maintenance treatment of boundaries pole of PT Buana Wiralestari Land Use Right (HGU) area.

Location 8. Creek. Verification concerning the issues of function switches over Pijar river.

Location 9. HCV Area. Verification of HCV area signboards installation progress.

Location 10. Central Clinic (Naga Mas Estate). Observation concerning employee/operator medical screening on certain units as well as the clinic of hazardous waste treatment.

Location 11. Housing Complex. Verification concerning employees housing such as: water resources and landfills

Location 12. Public Facilities and Infrastructure (Naga Mas Estate). Visitations to the public facilities and infrastructure such as schools, daycare centers, places of worship and verification concerning the completeness of supporting tools.

ST 2 The sampling locations which selected by Audit Team based on : 1. The number of locations is determined by the formula 0.8 √y., e.g: 12 villages around Estate and Mill, then the number

of villages visited based on such formula is 3-4 villages. 2. The selected sites represent each of working areas. 3. The consideration of issues arising from the document review that is fundamental and crucial. In detail, the locations visited are as follows:

Location 1 –Sikijang Village. Conducting interviews with village officials and community leaders associated with the process of land acquisition compensation involving the village official and villagers.

Location 2 –Koto Aman Village. Conducting interviews with village officials and community leaders associated with the process of land acquisition compensation involving the village official and villagers.


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Location 3 – Land Use Right (HGU) Boundaries Pole No 10,11,12, III,IV,V,VI and VIII (Naga Mas Estate). Observing the treatment of Land Use Right (HGU) area boundaries pole maintenance of PT Buana Wiralestari together with communities surrounding the estate.

Location 4 – Land Use Right (HGU) Boundaries Pole No. 05, 06 and 07 (Naga Sakti Esate). Observing the treatment of Land Use Right (HGU) area boundaries pole maintenance of PT Buana Wiralestari together with communities surrounding the estate.

Location 5 – F 27 - F30 Lane. Conducting observations related to the observation path of protected animals (Flat Headed Cat (Felis Bengalensis) and Collared Kingfisher (Halcyon chloris), HCV 1.2

Location 6 – Perbadoran river Riparian Lane. Conducting observations related to the observation path of protected animals (Leopard Cat and White-throated Kingfisher) and as riparian area (HCV 1.1 and 4.1)

Location 7 – Naga Mas Estate. Conducting observations related to spray activities, harvesting, and implementation of IPM and implementation of OHS in the site.

Location 8 – Naga Sakti Estate. Conducting observations related to spray activities, harvesting, empty bunch applications, management of peat land areas, and implementation of IPM and the implementation of OHS in the site.

Location 9 – Housing Complex and Public Facilities at Naga Mas Estate, Naga Sakti Estate and Ramabakti Estate. Conducting observations related to facilities and infrastructure that the company provides to employees such as: housing, clean water, places of worship, schools, daycare centers, sports facilities, health facilities, etc.

Location 10 –Naga Mas Estate Central Clinic. Conducting observations related to medical waste management, health checks of employees, facilities and health infrastructure.

Location 11 – Chemical Warehouse, Fertilizer Warehouse, Hazardous Waste Warehouse, Workshop and Diesel Fuel Tank of Naga Sakti Estate. Conducting observations related to the management of agrochemicals, hazardous waste management, environmental pollution preventive measures, Companys preparedness in handling emergency situation etc.

Location 12 – Ramabakti Estate. Conducting observations concerned with the harvesting activities, spray activities, peat area management, implementation of IPM and the implementation of OHS in the site.

Location 13 - Chemical Warehouse, Fertilizer Warehouse, Hazardous Waste Warehouse, Workshop and Diesel Fuel Tank of Ramabakti Estate. Conducting observations related to the management of agrochemicals, hazardous waste management, environmental pollution preventive measures, Companys preparedness in handling emergency situation etc.

Location 14 – Naga Sakti Mill. Conducting observations related to FFB management process, management of water resources for mill, hazardous waste storage room, workshops, chemicals warehouses, WWTP ponds, land applications management, implementation of OHS, and implementation of supply chain requirements

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process

Public consultation process was carried out through two ways, namely: 1) Conducting a public announcement on RSPO website (www.rspo.org) 30 days at minimum prior to the Stage-2 audit

implementation. 2) Holding public consultation meetings with stakeholders in Sei Rokan Training Centre on 6 July 2011. This meeting

was conducted simultaneously to receive input on the assessment process in PT Ramajaya Pramukti. The number of stakeholders attended was 41 parties from 65 parties invited. A number of verbal inputs from stakeholders both positive and negative ones were received by the audit team as a material of consideration in the assessment of the stage-2 audit.

2.5 Determination Next Visit

Next visitation would be determined after the report approved by RSPO Secretariat or 12 months after the certificate is published.


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Prepared by Mutuagung Lestari for PT.Buana Wiralestari Mas and PT.Ramajaya Pramukti Page 14 of 103

3.0 ASSESSMENT FINDINGS 3.1. Summary of Non Conformance, Corrective Action Required, and Observation

No. Ref Std/ Indicator

Non-conformance Grade Location Requests for Corrective Actions

Time Limit Observation and Date Status Closed date

2010.01 2.1.1 The evidence of compliance with regulation – The evidence that the company has not complied with some regulations was found. E.g.: Minister of Agriculture Regulation No 7 year 2007 Article 7 concerning spray workers training in using limited pesticide (Paraquat); Occupational Health and Safety (OHS) license for tractor operator in the estate in accordance with Minister of Labor Regulation No.9 year 2010 article 3, 4, 5, 11, and 13 concerning Operator and Personnel of Lifting and Conveyance Machine.

NC Mill and

Estate

The company must provide evidence of compliance with all relevant regulations, including but not limited to: Minister of Agriculture Regulation No 7 year 2007 Article 7; and Minister of Labor Regulation No.9 year 2010 articles 3, 4, 5, 11, and 13.

Before Stage-2

The Company has shown evidence of compliance with the following, for example: spray workers using Paraquat pesticide have been trained by the commission of pesticide, and the company provided OHS license evidence for heavy-duty equipment operator which was acquired in 2011.

Closed 12/07/2011

2010.02 2.1.2 The evidence of adjustment to regulation change – The evidence that the company has not done efforts to adjust to the regulation change is available, e.g.: hazardous material symbol installation in accordance with Minister of Environment Regulation No 3 year 2008.

CFA Mill and

Estate

The company is suggested to do efforts to adjust to the regulation change related to mill and plantation activities.

Before Stage-2

Based on field visits the Company has installed hazardous material signs at chemical storage places such as chemical warehouse; in accordance with the regulations.

Closed 12/07/2011


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2010.03 2.1.3 Regulation list – The company has got list of the regulations concerning the activities in mill and plantation. However, the list has not covered all of the relevant regional regulations, for example: Governor of Riau Regulation No. 95 year 2009 about district and municipality minimum wage in Riau Province; Governor Regulation No 35 year 2007 about quality standard of liquid waste.

CFA Mill and

Estate

It is suggested to complete the list of regulation concerning the mill and plantation activities with all the valid regulations including regional regulation.

Before Stage-2

The Company has completed the list of regulation with local regulations associated with oil palm plantation.

Closed 12/07/2011

2010.04 2.1.4 Regulation fulfillment Evaluation – The company has had the document of Regulation and its compliance list. However, it has not covered the evaluation of all articles which have to be complied in the regulation related to activities in plantation and mill.

CFA Mill and Estate

It is suggested to do evaluation to the articles which have to be fulfilled in the related regulation.

Before Stage-2

The Company has shown the evidence of evaluation of entire regulations includes evaluation of related articles. Evidence record: List of Regulation and Compliance.

Closed 12/07/2011

2010.05 3.1.1 Long term plan – The company has had long term work plan in The Company Work Plan document of PT Buana Wiralestari Mas year 2010 - 2017. However, the evidence of endorsement from the management has not been available.

CFA Mill and Estate

It is suggested to endorse documents of long term work plan owned.

Before Stage-2

The Company has shown evidence of the long-term work plan 2010-2017 which has been approved by top management (CEO PSM 5).

Closed 12/07/2011


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2010.06 3.1.2 Re-planting program plan – There is replanting program plan which will start in 2017. However, annual study evidence of the replanting program has not been available.

CFA Estate It is suggested to provide annual review evidence of replanting program planned.

Before Stage-2

While the stage-1 activity was being done, the company already had replanting plan which will be done in 2017. This replanting program plan is still a plan submission from estate management unit and has not been validated by the top management. While the stage-2 activity was being done, replanting plan was reviewed with the result of the change of the year of program 2017 became 2016. This change of plan was the result of annual study which has been done by the company related to replanting activity. The study itself was done based on criteria of plants age, plants length and production estimation (in accordance with one of the replanting criteria in existing SOP).

Closed 12/07/2011

2010.07 4.1.2 Mill’s SOP – The company has had mill’s SOP in form of document of Palm Oil Mill Management SOP, PT SMART Tbk. However, it has not explained the procedure of

CFA Mill It is suggested to revise Mill’s SOP and explain the procedure of supply chain product traceability system, in the

Before Stage-2

The company has established procedures in the form of SOP Supply Chain, PT.Buana Wiralestari Mas (SOP/BWL/


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supply chain product traceability system in the mechanism of fruit reception until palm oil dispatch; because there are mills that received fruit outside the certification scope.

mechanism of fruit reception until palm oil dispatch, for mills that receive fruit supply outside the certification scope.

SC), ratified on July 12, 2011. This SOP details the recording mechanism of FFB receipt (either from the nucleus or Scheme smallholder), processing, storage of CPO and palm kernel in the storage tank, and the shipping of the products (CPO and palm kernel) to Dumai Bulking station. This procedure also establishes the supply chain system that is applied based on the principle of Mass Balance.

2010.08 4.4.1 Water flow Management – Based on field visits, it is found evidence of inadequate effort to protect the water flow. For example: Tapung watercourse riparian in block D-41.

CFA Estate It is suggested to make adequate efforts of water flow area management. For example: adequate management in Tapung watercourse riparian in block D-41.

Before Stage-2

Based on field visit (Tapung watercourse) in block D-41, the company has conducted adequate efforts to protect the riparian and prevent erosion. For example: planting vetiver grass along the riparian, making sign board of riparian conservation, and forbidding improper fishing (electric shock, poison).

Closed 12/07/2011

2010.09 4.4.2 Water quality monitoring evaluation – The company has provided record of water quality

CFA Mill and

Estate

It is suggested to do evaluation of water quality monitoring data of

Before Stage-2

The evaluation of monitoring well water quality test result is stated

Closed 12/07/2011


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test result done by SMARTRI laboratory; however the evaluation evidence of the tested parameter in accordance with the quality standard decided has not been available.

tested parameters in accordance with the quality standard decided

in POM Liquid Waste Application Implementation to Oil Palm Plantation Land Monitoring Report document; this report is arranged every 6 months as reporting material to Environmental Agency (BLH) of Kampar District.

2010.10 4.4.3 BOD of liquid waste Monitoring Evaluation – The company has provided liquid waste’s BOD monitoring report, however evaluation evidence to the tested parameter in accordance with existing quality standard has not been available.

CFA Mill It is suggested to conduct evaluation of BOD monitoring data and the tested parameters in accordance with existing quality standard.

Before Stage-2

The Company has conducted liquid waste BOD test results evaluation toward parameters set in applicable regulation.

Closed 12/07/2011

2010.11 4.4.4 Monitoring evaluation of water Use per ton FFB– The company has provided monitoring record of water use per ton FFB in the mill, however the monitoring data evaluation evidence of water used and budget allocated has not been available.

CFA Mill It is suggested to conduct monitoring data evaluation of the of water use per ton FFB in the mill against the budget allocated

Before Stage-2

The Company has conducted the evaluation of results data of the water usage monitoring in M3 per ton FFB for the mill, toward the allocated budget.

Closed 12/07/2011

2010.12 4.6.4 Pesticide packaging waste – Based on the waste management SOP and official report on hazardous material, obtained information that pesticide

NC Mill and

Estate

To provide the evidence of communication with relevant agencies regarding approval of the pesticide packaging

Before Stage-2

The Company has not performed any pesticide packaging burial since November 2010. The Company also has revised

Closed 12/07/2011


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packaging waste management performed with buried in the soil, and there is not enough evidence the company has communicated with relevant agencies regarding approval of the pesticide packaging accumulation in the soil due to applicable regulations.

accumulation in the soil due to applicable regulations.

the SOP (SOP/BWL/LBH revision 01) and SOP/RJP/LBH revisi 01 concerning waste management, particularly on pesticide used packaging waste. In the SOP, pesticide used packaging waste management is not performed by burial, substituted by sending back the packaging to its vendor/supplier. The SOP was revised on 1 November 2010 by VPA, VPM, RC and PC.

2010.13 4.7.5 Risk Analysis document – Based on field visits, it is found evidence that harvest and spray workers were not equipped with adequate Personal Protection Equipment (PPE). For example: helmet for harvest workers and long-sleeved clothing for spray workers in Naga Sakti Estate, although the company has defined the PPE recommendation for harvest and spray workers is upon risk assessment.

CFA Estate Consideration should be given to review the risk assessment have been made so that the recommendation for PPE use is appropriate

Before Stage-2

The company has revised the risk assessment for FFB harvest and spray activities, particularly for PPE use recommendation in protective helmet harvester heads and long-sleeved clothing for spray workers. Based on the field visit, the harvest workers have been equipped with protective helmets and the spray workers have been equipped with long-sleeved clothing.

Closed 12/07/2011


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2010.14 4.7.8 Fire extinguisher tube – The company has had adequate fire extinguisher equipment and it has done periodic examination to that equipment. However, based on the field visit, the evidence that the fire extinguisher tube has not been completed with validation period information was found.

CFA Mill and

Estate

It is suggested to complete the validation period information of each fire extinguisher tube available.

Before Stage-2

Based on field visit, the Company has equipped fire extinguisher tube with fire extinguisher expired date information.

Closed 12/07/2011

2010.15 5.1.2 Environmental Management Plan Environmental Monitoring Plan (RKL/RPL) Implementation Report - RKL/RPL implementation report of PT Buana Wiralestari Mas is available every 6 months, however the content of the report has not explained all parameters of the environmental impact management based on RKL/RPL document year 1996, e.g.: management and monitoring of disturbance to and by elephant; observation and estimation of canal water surface height in peat land.

CFA Mill and

Estate

It is suggested to revise the document of RKL/RPL implementation report and adjust the report content with all parameters of the environmental impact management based on RKL/RPL documents year 1996

Before Stage-2

The company has revised the content of RKL/RPL Report by adding all parameters of the environmental impact management based on RKL/RPL document year 1996 including management and monitoring of disruption to and by elephant; observation and estimation of canal water surface height in peat land. In RKL/RPL Report semester period II (July to December) year 2010, it is stated that management and monitoring of disruption to and by elephant has not been done anymore because it has been a long time (10

Closed 12/07/2011


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years) since the last disruption by elephant.

2010.16 5.2.1 HCV Identification Document – HCV Identification document for PT BWL and RJP area were available, however the compiling process and the document content has not been entirely correspond to HCV Identification Toolkit issued by Indonesia HCV Toolkit Consortium in May 2008. For instance: report compiling outline, supporting data used, document legalization by the management, public consultation implementation evidence, scale of map was not in accordance with the document print out, there is no peer review report process conducted, and competency of the compiling team.

NC Estate The company has to revise HCV Identification document by conforming whole compiling process and the document content to be correspond to HCV Identification Toolkit issued by Indonesia HCV Toolkit Consortium in May 2008.

Before Stage-2

HCV identification documents are available for PT.BWL and PT.RJP, compiled by HCV Identification Internal Compiling Team consists of 5 persons (Norman Faried Mustakim; approved RSPO HCV Assessor, Kusuma Widya Rochmah; approved RSPO HCV Assessor, Tomi Herdartomo, Nazlya Syahputri, Firmasnsyah and Bambang Setyaji) validated in February 2011. Peer review was conducted by external party (Dwi Rahman Muhtaman) in October 2010.

Closed 12/07/2011

2010.17 5.2.2 5.2.3

HCV Area Management Program – HCV management and monitoring plan has not been available.

NC Estate The company has to provide HCV management and monitoring plan.

Before Stage-2

The HCV Identification Document Report has explained actions to protect the rare species, for instance; 1. The making of warning

board about the species conservation.

2. The socialization about the species

Closed 12/07/2011


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conservation to all employees and residents surrounding the area.

2010.18 5.2.5 Trained Officers – The company has assigned special officers to manage HCV area, however there was not enough evidence that the officers have been trained based on their function.

NC Estate The company must show the evidence that the special officers assigned to manage HCV area have been trained based on their function.

Before Stage-2

The Company has assigned special officers to manage and monitor HCV for example ; a. Mr.Amin (Naga Sakti

Estate) based on Senior Estate Manager Letter dated 03 January 2011 who has been trained internally on 28 October 2010 and 26 May 2011.

b. Mr.Nurcahyo Adhi Saputro (Naga Mas Estate) based on Senior Estate Manager Letter dated 03 January 2011 about Assignment of PIC of HCV NMAE who has been trained internally on 28 October 2010 and 26 May 2011.

Closed 12/07/2011

2010.19 5.3.3 Hazardous waste management - Based on the field visit, the evidence was found that hazardous waste management has not done

NC Mill and Estate

The company must store all hazardous waste in the licensed temporary storage in accordance

Before Stage-2

Hazardous waste (used oil and diesel fuel filter waste) has been collected in licensed storage.

Closed 12/07/2011


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in accordance with Government Regulation no. 18 year 1999 (Hazardous waste management). For instances: used oil and diesel fuel filter waste storage in Naga Sakti Estate was stored in hazardous waste temporary storage which has not been licensed, and the reporting of hazardous waste monitoring has been submitted to the related agencies.

with Government Regulation no. 18 year 1999 about hazardous waste management.

Hazardous waste monitoring has also been done and reported to the related institution.

2010.20 5.3.3 Hazardous waste management – The evidence was found that selling the hazardous waste in October 2010 was done to hazardous waste collector with the expired license and has no transportation license, in accordance with the regulation (Government Regulation no. 18 year 1999).

NC Estate The company has to provide the evidence that the hazardous waste collector has validated license and was equipped with the transportation license as prescribed by the regulation (Government Regulation no. 18 year 1999)

Before Stage-2

The Company has shown the complete documents evidence of hazardous waste transferring to the licensed collector. For example: the license of collector, the license of transporter, etc.

Closed 12/07/2011

2010.21 5.4.1 Renewable energy Monitoring – There is not enough record evidence of the use of renewable energy (energy per ton FFB or energy per ton oil palm product) and the efficiency analysis.

NC Mill The company must show the record evidence of the use of renewable energy (energy per ton FFB or energy per ton oil palm product) and the efficiency analysis.

Before Stage-2

There is monitoring record of the use of fiber and shell in Fiber and Shell Production Data Unit NSAM year 2006 until May 2011. There was also efficiency analysis record evidence of the use of fiber

Closed 12/07/2011


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and shell fuel as power plant sources compared to the use of diesel fuel for power plant generator.

2010.22 5.4.2 Fossil fuel use Monitoring – There was not enough monitoring record evidence of fossil fuel use and the efficiency analysis.

NC Mill The company must show the monitoring record evidence of fossil fuel use and the efficiency analysis.

Before Stage-2

The company has monitored the diesel fuel use for generator each month; there is monitoring data of Diesel Fuel Consumption Rate 2011 (January-May). The diesel fuel consumption rate could be minimized by optimizing the use of fiber and shell as fuel for boilers.

Closed 12/07/2011

2010.23 6.1.1 Social impact analysis document – There was social impact analysis document besides EIA (Environmental Impact Assessment) document. It was SIA (Social Impact Analysis) document of PT Buana Wiralestari Mas which covered positive and negative impacts. However, the document content still has minuses, for instances: document legalization, document supporting data, involvement evidence of parties who get the impact, and the competency of document compiling team.

NC Mill and Estate

The company has to revise social impact assessment document by completing the lacks of the document content with these things: document legalization, document supporting data, involvement evidence of parties who get the impact, and the competency of document compiling team, etc.

Before Stage-2

There were document of Social, Economic, and Cultural conditions as well as perception of people around the plantation / Mill of PT.BWL and PT RJP, which is taken into account in the Social Impact Assessment document prepared internally by the company (Tomi Hendartomo, Yosaphat Ardhilla Renato and Nazlya Syahputri) in November 2010 in which the parties affected either positively or

Closed 12/07/2011


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negatively by the company’s palm oil mill and estate operations are identified. This document details the type, source, management action, management parameters, management location, period / schedule of management, detailed management, and parties affected by the impacts.

2010.24 6.1.2 Social impact management and monitoring plan record – The company has not been able to provide the social impact management and monitoring plan with the participation of the community periodically based on the SIA documents of PT Buana Wiralestari Mas

NC Mill and Estate

The company must provide the social impact management and monitoring plan periodically with the participation of the community

Before Stage-2

The company has been providing document Management Plan and Social Impact Monitoring consisting of management and monitoring. Based on the interview result with the Head of Village of Sekijang and Koto Aman, It was clarified that the village party was involved by the company in arranging the environment management and monitoring plan through communication/input from village party or company’s involvement in Consultative Meeting of the Village Development Plan (Musrenbang-Des).

Closed 12/07/2011


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Non-conformance appeared during stage-2

2011.25 4.7.4 Audiometric Test Examination – The Company has not conducted the audiometric test and the evaluation result for workers at station with the noise intensity over the threshold set by the regulation to ensure OHS for the workers.

CFA Mill It is suggested to provide audiometric test and evaluation result evidence for workers at station with the high noise intensity the threshold set by the regulation.

S1 July, 15, 2011 The Company has done audiometric test to workers who work at station with the noise intensity over the limit set by the regulation. The Company has also evaluated the audiometric test result.

Closed 15/07/2011

2011.26 5.2.2 HCV management program – The company has arranged HCV monitoring and management plan. However, there was evidence that HCV socialization to the community which was planned to be held in May 2011 has not been done. It is strongly suggested to do socialization of HCV to the community as planned.

CFA Estate The company has to provide evidence of HCV socialization to the community

S1 July, 25, 2011 The Company has provided evidence of HCV socialization to the public around the estate on July 18, 2011 in the form of socialization HCV letter invitation to the Sekijang Village head, village officials and Sekijang villagers; minutes of the HCV socialization; attendance list of activities and documentation (in the form of photographs of events).

Closed 25/07/2011

2011.27 5.3.3 Hazardous waste management – Based on the field visit, hazardous waste that has not collected in permitted place was still found. For instance: chemical material’s used

CFA Mill It is suggested the waste of chemical material’s used packaging was collected in licensed places.

S1 Not applicable during the audit

Open


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packaging waste in Naga Sakti POM. The company explained that the collection was only temporary before the waste was returned to the supplier. However, the company needs to consider collecting chemical material’s used packaging waste in the permitted place as required by the regulation (Government Regulation no 18 year 1999).

2011.28 5.3.3 Hazardous Waste Monitoring Reporting – The company has not conducted the advance action related to hazardous waste storage which has been stored over the retention time which is of 90 days, (e.g.: the waste of Erkafuron pesticide used packaging in hazardous waste storage of Naga Sakti Estate); and the company also suggested to report hazardous waste monitoring result (e.g.: chemical material’s used packaging in Naga Sakti POM and the waste of pesticide used packaging in hazardous waste storage of Naga Sakti estate) to the related agencies.

CFA Mill and Estate

The company is suggested to conduct the advance action related to hazardous waste management which has been stored over 90 days has been treated based on the regulation; the company also has to provide the reporting evidence of chemical material’s used packaging to the related agencies.

S1 Not applicable during the audit

Open


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3.2 Summary of Arising Issues from Public, Company and Auditor Responses

Public issues

Company Responses Auditor Responses

1 Capital Investment Coordination Board (BKPM) of Riau Province

The company has not submitted the LKPM report year 2010 term II and year 2011 term I. The company also has not submitted the charity program report to Capital Investment Coordination Board (BKPM). However, the relationship between the company and the community surrounding is considered very well. The company could give advantages to the community.

Capital Investment Action Report (LKPM) is arranged by Central Management Jakarta and delivered to Central Capital Investment Coordination Board (BKPM) in Jakarta. The file copies go to BKPM of province and district, and Plantation Agency of Riau Province. LKPM term II year 2010 has been submitted to Central BKPM. LKPM term I year 2011 is being arranged and will be reported soon.

The Company is able to show the evidence of LKPM document which is made every semester (6 months) and the evidence of LKPM report submission to the relevant agencies.

2 Head of Kota Baru village

The company has done guidance system to plasma smallholder since 1994. This partnership relationship goes well until now. Partnership with KKPA system is considered very beneficial to the smallholders as assistance partner.

The company has commitment to keep developing the plasma smallholder by giving assistance in management and techniques of cultivation of oil palm plantation. The company has done partnership with the smallholder in terms of fertilizer supply, company’s staff placement in Village Unit Cooperative and technological transfer by counseling and training.

Based on the field visit and direct interview with some smallholders of Village Unit Cooperative, auditor team got the information that the relationship between the company and the smallholders has gone well; the smallholder felt assisted by the company, and the company guidance system to the smallholder has is considered well.

3 Plantation Agency of Riau Province

An assessment has been done to estate class for the whole estates in PT Buana Wiralestari Mas and PT Ramajaya Pramukti with the result of class I, however there are some notes related to legality such as: IUP, Building Use Rights (HGB), and Occupational

Health and Safety (OHS) were not available. The company also has not done the socialization of vision and mission to the

The company is very proud to get class I (first class) predicate based on the classification of estate class assessment which has been done by Plantation Agency of Province and District. Related documents such as IUP, Building Use Rights (HGB),

The Company has shown the documents of estate class assessment result which has been done by related institution, and the result stated class I predicate. Legality documents (e.g.: Land Use


ASSESSEMENT REPORT

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Public issues


stakeholders. The company also has not submitted the plantation operation development report to The Plantation Agency. The company has not had job description for staffs. The company has not had commitment to transparency, for instance report of the company loss/profit balance, taxation (e.g.: income tax), data of investment, credit facility, cost price sale data, CPO production data, shell, fiber and other solid wastes. The company also has not reported environmental management to the plantation agency. However, the relationship between the company and the community surrounding the area is considered well.

Occupational Health and Safety (OHS), the plantation operation progress report for the Plantation Agency, and other related documents were available and checked when assessment was being done. In the plantation assessment, job description for staff has been mentioned.

The company has commitment to transparency in the same manner as principle and criteria of RSPO. Public documents such as company loss/profit balance, taxation (e.g.: tax on income), data of investment, credit facility, cost price sale data, CPO production data, shell, fiber and waste, report of environmental management, have been available and reported periodically to the stakeholders according to the rules. The company always maintains good relationship with the community surrounding the estate area and gives positive contribution.

Rights/HGU, IUP), Occupational

Health and Safety (OHS) documents, and other reports were also available. Documents mentioned by Plantation Agency have been checked by the auditor, and the company could show evidence of all documents reported.

4 Employee Social Security, Riau Province

The company has complied with the regulation related to labor (in this matter: insurance/social security for employee). According to the records, 42 cases of work accidents have occurred 172 persons have been laid off, and 22 persons have passed away (not caused by work accident) during the period of January – June 2011. However, the company is expected to take note of the social security for the partnership smallholders who have got relation with the company until this time. The company also has to require contractor to include its workers in Employee Social Security program.

The company has committed to protect all its workers through Employee Social Security program. Employee Social Security report of each worker is notified to Employee Social Security party periodically by the company, related to both work accident and termination of employment (by any reasons such as; passed away, resign, etc.). The company has done the socialization of Employee Social Security to the partnership smallholders and contractor so that it includes all their workers in Employee Social Security program. In the mutual working agreements with the contractor. The company has required contractor to include its workers in Employee Social Security program.

The company has provided evidence that all the workers have been registered as Employee Social Security members. The company reports the details of Employee Social Security activities to Employee Social Security office every month. The company has made effort to give an understanding of the importance of Employee Social Security to the smallholders and contractor.


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Public issues


5 Plantation Agency of Kampar District

The company is considered less transparent related to the request for information. The company has tendency to disregard the letter of request for information from Plantation Agency of Kampar District, the information needed such as production data.

The company has committed to the transparency in the same manner as principle and criteria of RSPO. The requests for information delivered by relevant party are always followed up in accordance with existing procedure. The letter of requests for information and the responses are well documented.

Based on document inspection, the company could show evidence of records of the information request and the response of the request from the stakeholders. All the records were controlled and well taken care of.

6 Head of Sari Galuh village Sari Galuh Village is the village located adjacent to PT RJP. Village Unit Cooperative in Sari Galuh Village is not the one under supervision of PT RJP. However, in term of relationship with the community, PT RJP has a better commitment in acts such as donation for the orphans and mass medical treatment. If the company allows, the surrounding community which are members of Village Unit Cooperative want to have partnership with PT RJP as partners in managing the estate. However, the villagers want to know the percentage of CSR fund which is distributed to the community surrounding the estate area and the distribution area of the fund.

The company is pleased to keep the relationship with the community of Sari Galuh Village even though the Village Unit Cooperative of Galuh Sari is not the one under guidance of the company. The company welcomes the request of Galuh Sari residents to be partner smallholders. However, all the regulation aspects need to be considered. The company always gives CSR donation periodically every year with the priority to the community surrounding the estate area.

The auditor team considers the company has maintained good relationship with the community and smallholders from Village Unit Cooperative so that the Village Unit Cooperative of neighboring company wanted to join the company. The company has had CSR program and has implemented it.

7 Environmental Agency (BLH) of Kampar District The company has conducted emission source evaluation and hazardous waste treatment. The company also has had the license to keep hazardous waste. However, related to the management of riparian, the company still plants the oil palm on the area.

The company has committed to manage the environment in accordance with the applicable regulations such as the management and storage license of hazardous waste, emission test, ground and surface water quality test, utilization license and management of liquid waste, and many others. On the riparian area which has been planted,

Based on the document inspection and the field visit, the auditor team considers that environmental management and monitoring have been done well by the company. The company has had program to manage the riparian which has been planted


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Public issues


management considering environmental aspects must be conducted, for instance; not to use herbicide, not to do fertilization mechanically in riparian area and to plant plants for preventing erosion such as vertiver grass on the riparian. Environmental management and monitoring activities report is submitted periodically to the related institution through Environmental Management Plan (RKL)/ Environmental Monitoring Plan (RPL) according to the regulation.

with oil palm and the company has committed to take care of that area.

8 Kijang Makmur Head of Village The company has good relationship with surrounding communities. Generally, the presence of company is highly influence the economy of local people. And on behalf of the community of Kijang Makmur village, the Head of Village highly supports the company to obtain the RSPO certification.

The company has always maintained good relationship with the surrounding communities and provided positive contributions. The company is thankful for the support from the communities in order to obtain the RSPO certification and expects the good relationship might be continued as well.

The auditor team considered the company’s efforts in welfare of surrounding communities has gone well.

9 Head of Indonesian Labor Union (SPSI) of Naga Mas Estate The company has responsibilities to workers in providing facilities such as: education, wages above Regional Minimum Wage, healthcare, scholarship for workers’ outstanding children to the college.

The company is committed to protect workers’ right according to applicable regulations. Adequate facilities have been granted for workers. The company continuously coordinating with the workers’ representatives on the right of workers.

Based on field visits and interviews with several workers, the auditor team considered that the company has provided adequate infrastructure and facilities such as: wages are in accordance to the Regional Minimum Wage, housing and healthcare facilities, etc.


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Public issues


10 Head of Indonesian Labor Union (SPSI) of Naga Sakti Estate PUK Indonesian Labor Union (SPSI) Naga Sakti Estate is very supportive to the RSPO certification in the work environment of the company. The company is regarded as benefits to workers.

The company thanked for the support of the union, and expected the RSPO certification achieved soon to grant positive impacts on the welfare of workers.

The auditor team considered the company has sought to implement the RSPO principles and criteria.

11 Head of Branch Representative Board of Indonesian Labor Union (DPC SPSI) of Kampar District Compared to the other companies, especially companies in Kampar District, Sinarmas (PT BWL and PT RJP) is much better. The existence of the company gives positive impacts to the community surrounding the area. The company also has had good commitment in terms of worker protection.

The company always maintains good relationship with the community surrounding the estates and gives positive contribution. The company commits to protect the workers’ rights in accordance with applicable regulations. The company has given proper facilities to the workers. The company always does the coordination with the representative of workers related to the workers’ rights.

The company has maintained good relationship with the community

surrounding the area.


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4.0 CERTIFIED COMPANY'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal sign-off of Assessment Findings

Here undersigned is Management Representative from inspected company to acknowledge the assessment result and agreed on all the descriptions on the assessment result, including non-conformance findings.

Signed on behalf of:

Head of Environmental Department Lead Auditor

Ivomas Tunggal PT Mutuagung Lestari

Ismu Zulfikar Aryo Gustomo

Tuesday, 12 July 2011 Tuesday, 12 July 2011


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Annex 1. Checklist of Main Assessment Reports of the RSPO Certification

RSPO Ref. MUTU-Certification VERIFICATION RESULT

Status

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.

1.1.1 Records of information request

ST1 Information request procedure in forms of communication and consultation SOP (SOP/BWL/KOM) is available where information request is conducted by delivering it directly to PT BWL in written. However, until the implementation of Stage-1 activity, there has been no information request submitted to Head of PT BWL. NSAE Communication Book is available which contains the incoming letter registration, responses and its last status.

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ST2 Information request procedure in forms of communication and consultation SOP (SOP/BWL/KOM) is available dated 05 February 2010 where information request is conducted by delivering it directly to PT BWL in written. The documents related to the SOP are Communication and Information Book, Communication and Information Book of Response, Information List and Stakeholder. Information’s SOP for Stakeholder (SOP/BWL/LIUS) dated 05 February 2010 is available; the documents related to the SOP are Communication and Consultation Book, Communication Tools Inventory List, Incoming Mail List and Suggestion Box and Disposition Sheet.

a. Letter from Head of Kampar District Residential Office Number 800/DKPS-SET/2010/724 dated 18 October 2010 concerning Residence List Updating.

b. Letter of Demand from The Principal of YLPM private vocational school, Garo city Number 327/SMK.S/KG/2011 dated 15 April 2011 concerning industrial work practice proposal continuation (Prakerin).

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1.1.2

Records of responses to information requests

ST1 Until Stage-1 activity has been done, there has been no information request received by PT BWL from stakeholders. See indicator 1.1.1 above.

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ST2 Information request is documented on Communication Book containing information/aid from the stakeholder consists of Number, date, Letter Number, Applicant’s Name, agency, Request, necessitate, Decision Maker signature, Disposition, Reference Number/receipt and status. Information book for stakeholder in a form of a letter sent to stakeholders is usually a regular report based on current regulation consists of Number, date, Letter Number, Applicant’s name, agency, Application, Purpose, Decision Maker Signature, disposition, Ref Numb/receipt and status, for example; Advisory Committee of Occupational Health and Safety Report Letter, Environmental Management Plan/Monitoring Management Plan report and Labor report. For example:

a. Letter from Head of Kampar district Residential Office Number 800/DKPS-SET/2010/724 18 October 2010 concerning Residence List Updating followed by employees list submission on 5 November 2010 by the company (Ruslan) to head of Residential Office which was received by Ms. Riskani, Ramlan K and Herizal based on Minutes of Handover of Coklit Data Base

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Development for Residential Activities result in Kampar district Fiscal Year 2010. b. Letter of Demand from The Principal of YLPM private vocational school, Garo city Number

327/SMK.S/KG/2011 dated 15 April 2011 concerning Industrial work Practice Proposal (Prakerin) followed by Letter Number 332/SMK.S/KG/2011 dated 3 May 2011 on Industrial Work Practice Proposal Continuation (Prakerin) which has been responded by the company by sending letter number 07/NMAE/05/2011 dated 25 May 2011 on Industrial Work Practice confirmation stated that the company agreed on students mentioned on the proposal of working at Naga Mas Estate.

1.1.3 Records of information requests and response towards them are held with storage periods given by the company in accordance with the importance of each document.

ST1 Control and Document Retention time SOP (SOP/BWL/DOK) dated 05 February 2010 is available, which contains: a. 3 year SOP validity period and, b. 5 year document retention time

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ST2 In additional to documents seen at ST1. Based on the management’s information (Mr. Hendi), the document validity and retention time is for RSPO related document outside of either legal document or license, kept as long as legal document and license are still valid.

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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.

1.2.1 Information requests and responses must include any relevant or required documentation, in accordance to applicable national regulations.

ST1 There are two land use rights license (HGU) which are under BWL, they are; a. Land use rights (HGU) certificate Number 01 dated 29 September 1997 equipped with Letter

of Measurement Number 6036/SLN/1997 which is valid until 29 September 2032 with 3,016 Ha of area.

b. Land use rights (HGU) Number 02 dated 4 February 1994 equipped with Specific Situation Map Image Number 04/1991 with 7,193.809 Ha of area dated 22 April 1994 valid for 35 years, until 31 December 2029.

c. Forest Area Acquisition License from The Minister of Forestry Number 108/Kpts-II/1991 dated 20 February 1991 concerning The Acquisition of Some Sungai Tapung Kanan Forest cluster with 23,312 Ha of area located in Kampar district, Riau province for plantation farming on behalf of PT Buana Wiralestari Mas.

Environmental Impact Assessment document is available which has been approved through Letter Number IRC.220/888/B/V/1994 dated 19 May 1994, while Environmental Management/Monitoring Plan was approved through Letter Number 090/RKL-RPL/BA/IV/1996 dated 30 April 1996. Environmental Management/Monitoring Plan report is written in each semester and sent to district Regional Environmental Agency (BLHD)

CSR document and payment receipt of local levy, Local mutual work agreement (SPK) recapitulation, Local Purchase and Social Aid.

Occupational Health and Safety Management System (SMK3) document is available consisting of Work Standard Procedure, SMK3 manual, OHS Communication and Consultation, SMK3 program,

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documentation and SMK3 documentation controlling, skill and ability development, Emergency Situation Handling, Evacuation, Work Accident Treatment, Advisory Committee of Occupational Health and safety Company Structure, Emergency Preparedness and Response, Emergency Situation Evacuation Map, Material Safety Data Sheet (MSDS), Support Form, Announcement and Procedure, Work Instruction (IK) which contains work phases, Result Standard, Work Equipment, controlled Environmental Aspect and Occupational Health and Safety and PPE (Personal Protective Equipment).

The report of monitoring result on Environmental Management/Monitoring Plan and further improvement recommendation is available.

ST2 In additional to documents seen at ST1. Legal document is available consisting: 1. The Governor of Riau Decree Number Kpts.559/K/1990 on Land Reservation with approximate

7,000 Ha of area in Siak Hulu sub district, Kampar district, Riau province for Oil Palm Plantation on behalf of PT BWL.

2. Land use rights (HGU) certificate Number 02 (Sikijang village) dated 04 February 1995 equipped with Specific Situation Map Image Number 09/1995 with 7,193.809 Ha of area dated 4 February 1995, valid for 35 years until 31 December 2029.

3. Raw material supplier area distribution of Naga Sakti Mill FFB based on land use rights license as on the table below;

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No HGU No Year HGU Area Estate Estate Area in HGU

1 HGU No 02 1995 7,193.81 Ha Nagamas Estate 5,103.65

Nagasakti Estate 2.090.25

2 HGU No 01 1997 3,016 Ha Nagasakti Estate 3.016.00

3 HGU No 146 2001 805.31 Ha Ramabhakti Estate 805.31

4 HGU No 147 2001 1,365.41 Ha Ramabhakti Estate 1,365.41

5 HGU No 148 2001 733.07 Ha Ramabhakti Estate 733.07

Total 13,113.69 Ha 13,113.69

4. Building Permit; Head of Kampar sub district decree Number 640/PU-Kimp/IMB/0556 concerning Building Permit Kampar Head of District dated 29 December 2008 to build Staff house, Assistant house, employees house, guard post, G.10 house, G2 staff house, prayer room, parking lot, tennis court at PT Buana Wiralestari Mas (Naga Mas Estate).

5. Naga Sakti Mill building use rights (HGB); building use rights Number 2 year 2004 dated 26 August 2004 which is equipped with Letter of Measure Number 179/22.02/HGB/2004 valid until 26 August 2034 with 65,945 M2 building area.

6. License of Disturbance; Naga Sakti Mill; based on The Head of Integrated Service Office, kampar district Number 503/Kpt-HO/696 concerning Business License Based on Acts of Disturbance, The Head of Kampar district Integrated Service Office dated 23 March 2011 with 5 year validity period.

7. Operational License/Business License; a. Naga Sakti Mill; based on The Head of Integrated Service Office Kampar district Number

503/Kpt-OP/694 on operational license/business license, The Head of Kampar district Integrated Service Office dated 23 March 2011 with 5 year validity period.

b. Naga Mas Estate; based on The Head of Integrated Service Office Kampar district Number 503/Kpt-OP/692 on operational license/business license, The Head of Kampar district Integrated Service Office dated 23 March 2011 with 5 year validity period.

c. Naga Sakti Estate; based on The Head of Integrated Service Office Kampar district Number 503/Kpt-OP/686 on operational license/business license, The Head of Kampar district Integrated Service Office dated 23 March 2011 with 5 year validity period.


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8. Land use permit; a. Naga Sakti Mill; based on The Head of Integrated Service Office Kampar district Number

503/Kpt-PPT/695 on land use license, The Head of Kampar district Integrated Service Office dated 23 march 2011 with validity period as long as the company operates.

b. Naga Mas Estate; based on The Head of Integrated Service Office Kampar district Number 503/Kpt-PPT/693 on land use license, The Head of Kampar district Integrated Service Office dated 23 March 2011 with validity period as long as the company operates.

c. Naga Sakti Estate; based on The Head of Integrated Service Office Kampar district Number 503/Kpt-OP/686 on land use license, The Head of Kampar district Integrated Service Office dated 23 march 2011 with validity period as long as the company operates.

9. There are 21 types of Naga Sakti Mill Machines license such as; a. Steam Vessel (Back Pressure Vessel) Number 03/B.0314 which was issued by The Labor

Service dated 17 January 2002 with 4 year re-inspection period, the last inspection was done on 10 June 2010.

b. Steam vessel (Sterilizer no 1) Number 03/B.0315 which was issued by The Labor Service dated 17 January 2002 with 4 year re-inspection period, the last inspection was done on 10 June 2010.

c. Steam vessel (Sterilizer no 2) Number 03/B.0316 which was issued by The Labor Service dated 17 January 2002 with 4 year re-inspection period, the last inspection was done on 10 June 2010.

d. Steam Vessel (Sterilizer no 3) Number 03/B.0319 which was issued by The Labor Service dated 22 March 2002 with 4 year re-inspection period, the last inspection was done on 8 June 2010.

e. Steam Vessel (Sterilizer no 4) Number 03/B.0320 which was issued by The Labor Service dated 22 March 2002 with 4 year re-inspection period, the last inspection was done on 8 June 2010.

f. Water Heater Vessel (Deaerator) Number 503/DTK/BPA/2002/02 which was issued by The Labor Service dated 24 April 2002 with 4 years re-inspection period, the last inspection was done on 24 April 2008

g. Compressor Number 1 through license Number B.322/BT-MW4/VI/2001 which was issued by The Labor Service dated 20 June 2001 with 5 year re-inspection period, the last inspection was done on 8 June 2011

h. Compressor No. 2. through license Number B.323/BT-MW4/VI/2001 which was issued by The Labor Service dated 20 June 2001 with 5 year re-inspection period, the last inspection was done on 8 June 2011

i. Compressor (Air Pressure) through license Number B.422/BT-MTK/PK/2005 which was issued by The Labor Service dated 11 May 2005 with 5 year re-inspection period, the last inspection was done on 11 May 2010

j. Electrical Installation through license Number B.152/INST/W4/VI/2001 which was issued by The Labor Service dated 8 June 2001 with 1 year re-inspection period, the last inspection was done on 8 June 2011

k. Boiler (Boiler No 1) through license Number 03/B.0323 which was issued by The Labor Service dated 8 January 2002 with 2 year re-inspection period, the last inspection was done on 8 June 2010

l. Boiler (Boiler No 2) through license Number 03/B.0324 which was issued by The Labor Service dated 3 January 2002 with 2 year re-inspection period, the last inspection was done on 8 June 2010

10. Stay Permit for foreign workers, for example; Limited Stay Permit Number 2C11 BL 0080-K Mr.


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Sasi Kumar B. Surendran, Malaysian employee working at PT Buana Wiralestari. Allowed to stay

until 5 June 2012

Environment Impact Assessment:

1. Naga Sakti Mill; KA- EIA Number 183/EIA/VI/1993 dated 18 June 1993 concerning KA-EIA establishment PT BWL. Environmental Impact Assessment document is available which has been approved through Letter Number IRC.220/888/B/V/1994 on 19 May 1994 while Environmental Management Plan/Environmental Monitoring Plan approved through Letter Number 090/Environmental Management Plan-Environmental Monitoring Plan/BA/IV/1996 on 30 April 1996. Environmental Management/Monitoring Plan is prepared every semester and sent to Regional Environmental Agency (BLHD) Kampar district.

2. Land Application Permit; Naga Sakti Mill Number 660/Bapedalda/2007/19 dated 15 November 2007 issued by Head of Bapedalda Kampar district, valid from 2007 until 2012 with yearly re-registration. Re-registration deadline was 13 January 2011 in accordance with Reg. Number 660/BLH-WAS/DU-LIA/04. LA License Volume is 1,080 M3/Ha.

3. Hazardous Waste Temporary Storage License; Number 660/BLH-WAS/13 concerning hazardous waste temporary storage license PT BWL Naga Sakti POM which was issued by Head of Environmental Agency Kampar district dated 5 July 2010 consisting types of waste; used lubricant, used filter, used battery, cotton fabric waste, used fluorescent lamp, chemical material packaging, etc.; Mill Source and palm oil mill – 5 year validity period and must be re-registered every year. Waste Temporary Storage Locations are; a. Naga Sakti Mill; ranging 2x4x3.5 m with N 00° 46’ 56” and E 101° 03’ 08,4” coordinate. b. Naga Mas Estate; ranging 4x8x3.5 m with N 00° 47’ 06” and E 101° 06’ 10,7” coordinate. c. Naga Sakti Estate; 7x8x4 m with N 00° 46’ 10,7” and E 101° 02’ 47,6” coordinate.

Available CSR document; a. Survey of Social condition, Economic, Cultural and Community Perception around the plantation/

mill of PT Buana Wiralestari Mas in November 2010 is available, prepared by the company's internal team consisted of 3 people (Mr. Tomi Hendartomo, Yosaphat Ardhilla R and Nazlya Syahputri) as an Environmental Impact Assessment to the surrounding community (external).

b. Document of PT BWL management and monitoring plan of social impact is available c. CSR activity recapitulation document is available, for example, Naga Sakti Estate until June 2011

has conducted CSR activity worth IDR 136,792,244.00 d. Local SPK and SPK Recapitulation documents are available, for example, Naga Sakti Estate 2010

period worth IDR 99,755,000.00 and IDR 4,179,159,708.00. Kijang Estate until June period worth IDR 19,443,200.00 and IDR 90,381,481.00 in 2010 IDR 530,600,000.00

e. Tax payment document is available for example Value Added Tax (VAT)/Income Tax (PPh), Ground Water Exploitation and Utilization Tax, etc.

Occupational Health and Safety (OHS) policy and Advisory Committee of Occupational Health and Safety Company structure which have been approved by relevant agencies are available. Advisory Committee of Occupational Health and Safety report prepared by each estate and mill and reported to the relevant agency quarterly. Environmental Management/Monitoring Plan sustainable improvement document is available;

a. Environmental Management and Monitoring Plan (RKL/RPL) document which has been approved by The Minister of Agriculture through Letter Number 090/RKL-RPL/BA/IV/1996 dated 30 April 1996

b. Environmental Management/Monitoring Plan report semester II Naga Sakti Palm Oil Mill year 2011 which was received by the relevant agency (Kampar district Environmental Agency)


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dated 19 April 2011 by Mr. Adrian. On the report, evaluation on the monitored parameter on Environmental Management/Monitoring Plan is available.

1.2.2 Records of information requests and response towards them are held with storage periods given by the company in accordance with the importance of each document.

ST1 The document retention time is decided for 5 years. (document’s retention time and control SOP), SOP/BWT/DOK dated 5 February 2010)

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ST2 Document retention time is determined in accordance with RSPO documents, it was decided for 5 years (document’s retention time and control SOP, SOP/BWT/DOK dated 5 February 2010 and/for legal document or regulation is kept based on the document’s validity period.

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PRINCIPLE # 2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

2.1.1 Evidence of compliance with relevant legal requirements

ST1 The company has done efforts to comply with listing of laws with plantation and mill activities. Such as:

− To hold land use rights certificate with the requirement of Act 18 Year 2004 on plantation.

− Has done riparian conservation delineation ranging 50 m based on Presidential Decree 32/1990 on conservation area.

− To own hazardous waste temporary storage license at the mill area based on Government Regulation 18/1999 on hazardous and dangerous waste management.

− To test river water quality based on Government Regulation 82/2001 on water quality management and water contamination control.

However, based on the observation result conducted by auditor team at the field, it was found that the company had not complied with some related regulations. For example; The Minister of Agriculture Regulation (Permentan) Number 7 year 2007 Article 7 on spray workers training in operating limited pesticide (Paraquat); OHS license for tractor operator at the estate (for example Naga Sakti Estate) based on The Minister of Labor Regulation Number 9 year 2010 Article 3, 4, 5, 11 and 13 concerning Operator and Officers of Lifting and Transport Instruments.

The Company has to provide the compliance of all related regulations evidence, including, but not limited to: The Minister of Agriculture regulation Number 7 year 2007 Article 7; and The Minister of Labor Regulation Number 9 year 2010 Article 3, 4, 5, 11, and 13. The non-conformance in this indicator is NC-2010.01.

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ST2 On the ST 2 implementation, the company has conducted training on limited pesticide (Paraquat) spray worker done by Plantation Agency of Pesticide Commission, Riau province (Mr. Suratmo, SP) on 8 February 2011 followed by Kijang Estate officials, Naga Mas Estate, Ramabakti Estate, Rama-rama Estate and Naga Sakti Estate. Heavy equipment operators at the company possess Operator License (SIO);

a. 17 people at Naga Sakti Estate, for example; Mr. Sumardiono has owned Lifting and Transport Instruments operator certificate type Overhead Traveling Crane level III with certificate number 09.2119/Otc/KK/XI/2009 9 November 2009 valid until 9 November 2014 issued by Director General of Labor Inspection and Guidance, The Minister of Labor and Transmigration.

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b. Naga Sakti Mill; Operation License document is available to all NSAM operators are in possession of valid Licenses;

- Boiler Operator : 5 Person (1st class)

- Lifting and Transport Instrument : 2 Person (Wheel Loader)

- Power and Production Instrument Ops. : 1 Person (Diesel/Genset)

- Power and Production Instrument Ops. : 1 Person (Steam Vessel)

- Welder : 1 Person (2nd class)

- OHS expert : 1 Person (AK3 General) The company has prepared Investment Activity Report (LKPM) to Headquarter of Investment Coordination Agency (BKPM);

a. Investment Activity Report (LKPM) PT BWL reported through Letter Number 29/VI-II/AB.V/BWLM dated 20 June 2011 on National Investment Activity Report for semester II year 2010 received by related agency (central Investment Coordination Agency/BKPM) on 21 June (Moh. Horib)

b. Based on the management information, Investment Activity Report (LKPM) semester I year 2011 is still in progress of preparation conducted by central management. The non-conformance status of NC-2010.01 is declared as closed.

2.1.2 Evidence of efforts made to comply with changes in the regulations

ST1 The Company has track changes to the regulations (see indicator 2.1.3. and 2.1.4). However, based on field inspection, it was found that the company had not done adjustment efforts on the regulation revisions, for example: hazardous waste symbol is appropriate with The Ministry of Environment Regulation Number 3 year 2008. Hazardous waste symbol used by the company on Stage-2 activity was the outdated one referred to Environmental Impact Control Agency (Bapeddal) decree Number 5/1995. The Company is advised to conduct adjustment on the regulation changes related to all mill and plantation activities. The non-conformance in this indicator is CFA-2010.02.

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ST2 The Company has owned regulation and other Requirements SOP to comply with changes in the regulations which contain in SOP/BWL/PPL dated 5 February 2010. This procedure contains:

− Mechanism to identify, define and get the laws related to the principles and criteria for sustainable palm oil production

− To arrange each other’s task and responsibility in mechanism of regulation compliance.

− Mechanisms to maintain currency of the regulation by developing relationship and monitoring the institution / agency activities that issued the regulation. To ensure the currency, each regulation / requirement’s legal compliance is always being updated which done at least once in a year.

− Document control, in this section, the division which is responsible is Document Unit Controller that exists in every unit coordinating with regional document controller.

The company has evaluated every article on related regulation or the regulation implementation which was documented on Evaluation Document of Compliance with Regulation, laws and other requirements. Based on the field inspection, the Company has completed chemical material storage rooms with hazardous waste symbol in accordance with The Minister of Environment Regulation Number 3 year 2008, for example; lubricant storage room at Naga Sakti POM, Naga Sakti Estate chemical store room and Ramabakti Estate. The non-conformance status of CFA-2010.02 is declared as closed.

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2.1.3 A documented system, which includes written information on legal requirements that the palm oil company should comply with.

ST1 The company has owned related regulation list on plantation and mill activity, however it has not covered the whole related local regulations, for example; The Governor of Riau regulation Number 95 year 2009 on district or city of Riau minimum wage; The Governor regulation Number 35 year 2007 on liquid waste raw material. The company is advised to revised the related regulations of plantation and mill activity list with all the listing of laws including the local ones The non-conformance in this indicator is CFA-2010.03.

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ST2 The company has revised the list of related regulation with plantation and mill activity, for example; a. Company has list of The Governor Regulation Number 95 year 2009 concerning minimum wage of

Riau province/district has been replaced with The Governor Regulation Number 10 year 2011 on minimum wage of sub sector of agriculture/coconut and oil palm plantation and Rubber Plants of Riau Province Year 2011 dated 1 February 2011, which is IDR 1,234,000,00/month.

b. Company has list of The Governor of Riau Regulation Number 35 year 2007 concerning quality standard of liquid waste related with mill activity. The non-conformance status CFA-2010.03 is declared as closed.

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2.1.4 A mechanism for ensuring that compliance with relevant legal requirements is implemented.

ST1 The Company has a mechanism for ensuring that compliance with relevant legal requirements that contained in the SOP of “Daftar Peraturan & Pemenuhan, PT Buana Wiralestari Mas” (SOP/BWL/PPL) dated 5 February 2010. This SOP contains:

− Mechanisms of identification, establishing and designing laws related on sustainable palm oil production principles and criteria.

− Managing each department’s tasks and responsibility on regulation compliance mechanism.

− Mechanisms of maintenance of updating regulation by creating interaction and monitoring institution/agency activity which issue the regulation. To ensure the regulation update, each regulation/requirement has to be renewed its valid legality done at least once a year.

− Document control, Document Control Unit which exists in each unit is responsible for this that coordinating with regional document controller.

The Company has owned current and relevant law requirement compliance implementation evaluation in a file “Daftar Peraturan & Pemenuhan, PT Buana Wiralestari Mas”. This document covers all lists of regulation, related articles, compliance level and its evidence. However, not all relevant articles being evaluated its compliance level; it is recommended to evaluate all the articles which must be complied in related regulations. The non-conformance in this indicator is NC-2010.04

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ST2 On the regulation Compliance Evaluation Document, laws and other requirements, has been conducted evaluation on each related articles and compliance implementation at the company. In additional to document seen at ST1 the company has evaluated on each article on the related regulation or the regulation implementation documented on Evaluation Document of Compliance of Regulations, laws and other requirements. The Non-conformance status NC-2010.04 is declared as closed.

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


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2.2.1 Documents showing legal ownership or lease of the land in accordance to relevant laws.

ST1 1. Area Acquisition document is available based on The Minister of Forestry decree Number 108/Kpts-II/1991 on 20 February 1991 on the acquisition of some forest group of Sungai Tapung Kanan with 23,312 Ha of area located in Kampar district, Riau for plantation farming on behalf of PT Buana Wiralestari Mas;

2. Land use rights (HGU) certificate Number 01 dated 29 September 1997 which is completed The Letter of Measurement Number 6036/SLN/1997 which is valid until 29 September 2032 with 3,016 Ha of area;

3. Land use rights (HGU) certificate Number 02 dated 4 February 1994 equipped with Specific Situation Map Image Number 04/1991 with 7,193.809 of area dated 22 April 1994 which is valid for 35 years until 31 December 2029. Compensatory Payment Receipt (Exploited Land Acquisition and Sikijing Village Plant - Grow) as many as 184 pieces of land with 424.25 Ha of area dated 21 March 1991. The minutes of Sekijang village Plantation Land Area Acquisition Number BA: 10/580/PPT/1992 dated 17 March 1992. Waiver statement from each compensation recipient along with the receipt.

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ST2 In land/area ownership, the company has provided the document evidence; a. The Governor of Riau decree Number Kpts.08 P.T_VI/1990 on land reserve with an

approximate 22,000 Ha of area in Sekijang village, Siak Hulu sub district, Kampar district for oil palm plantation PIR Pattern Trans on behalf of PT Buana Wiralestari dated 12 June 1990.

b. The Head of Kampar district Land Office decree number Kpts.42/KP/VI/1995 on location approval license on 6 June 1995.

c. Plantation Business License (IUP); 1. Principle Approval Number KB.320/222/Mentan/VI/1998 on oil palm PIR-TRANS pattern

development principle approval dated 8 June 1988 with 15,000 Ha of area, covering 10,000 Ha of estate and 5,000 Ha of infrastructure, housing, yard and crops, valid for 12 months.

2. Plantation Business Approval Principle Number HK.350/E5.286/05.95 on Oil Palm Plantation Business Expansion Approval 2,700 Ha in Siak Hulu sub district, Kampar district, Riau province dated 1 May 1995 (Naga Sakti Estate). a. The Governor of Riau decree Number Kpts.559/K/1990 on Land Reserve with an

approximate area of 7,000 ha in Siak Huku sub district, Kampar district, Riau province for Oil Palm Plantation Expansion on behalf of PT BWL.

b. Forest area land acquisition license from The Minister of Forestry Number 108/Kpts-II/1991 dated 20 February 1991 on the acquisition of some Forest Group of Sungai Terapung Kanan with 23,312 Ha of area located in Kampar district, Riau province for plantation farming on behalf of PT Buana Wiralestari Mas.

c. Land use rights certificate Number 02 (Sekijang village) dated 4 February 1995 equipped with Specific Situation Map Image Number 09/1995 with 7,193.809 dated 4 February 1995, valid for 35 years until 31 December 2029.

d. Land use rights certificate Number 01 dated 29 September 1997 equipped with The Letter of Measurement Number 6036/SLN/1997 which is valid until 29 September 2032 with 3,016 Ha of area.

e. The document of complete land acquisition is available on the company’s legal document containing Waiver Statement, Minutes of Sekijang village Land Acquisition and land compensation receipt by each compensation recipient witnessed by Kampar’s Head of Land Office, 1st Assistant Kampar district office, Siak Hulu sub district and Sikijang head of village. Land owner/tenant recapitulation

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list is available, Plants and Building which their compensation are going to be paid by PT Buana Wiralestari based on the result of The Court Committee of Land Acquisition, Kampar district dated 17 March 1992 in Bangkinang, mentioning Name of Owner/Tenant, Land Dimension, Land Location, compensation/m2 value, Compensation value, Type of Compensation/gifts, Plants Type, Building Compensation, Total Amount of Compensation and compensation recipient signature.

2.2.2 Evidence that legal boundaries are clearly demarcated and visibly maintained.

ST1 Legal evidence on land use rights area border and has been measured by National Land Affairs Agency (BPN); 1. The Letter of Measurement Number No 6036/SLN/1997 which is valid until 29 September 2032

with 3,016 Ha of area for land use rights certificate Number 01 dated 29 September 1997. 2. Specific Situation Map Image Number 04/1991 with 7,193.809 on 22 April 1994 valid for 35 years

until 31 December 2029 for land use rights certificate Number 02 dated 4 February 1994. Boundaries pole maintenance-in a form of boundary checking- document is available, pole boundaries maintenance and maintenance implementation.

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ST2 Land use right pole maintenance program plan and National Land Affairs Agency pole maintenance implementation (2010 and 2011) are available consisting identification activity, painting. Naga Mas; National Land Affairs Agency (BPN) pole Maintenance Program Plan and National Land Affairs Agency Pole Maintenance Implementation (2010 and 2011) consisting identification activity, painting. Based on the field visit at Naga Sakti Estate (National Land Affairs Agency Pole Number III, 05, 06, 07, 10, 11 and 12) or at Naga Mas Estate (National Land Affairs Agency Pole Number V, VI and VII) has enough evidence that the Company has implemented maintenance activity with pole painting, numbering and path cleaning.

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2.2.3 Where there are, or have been, disputes, proof of resolution or progress towards resolutions processes acceptable to all parties are implemented.

ST1 Based on Mr. Wisnu O. Suharto (Legal Department – PT Ivomas Tunggal), there has been no land/boundary dispute.

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ST2 Based on interviews with head of Sekijang and Koto Aman village which are the native villages of local people claimed that up to the implementation of the ST-2, there has never been a dispute on boundaries / land between the company and surrounding communities, there has never been a claim of land by the public in the work area of PT BWL. Likewise, they have already known exactly the boundaries of PT Buana Wiralestari Mas land use rights (HGU) with the surrounding community.

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2.2.4

Evidence of legal acquisition of land with free prior and informed consent

ST1 Complete land acquisition document is available in the company’s legal document containing Waiver Letter, Minutes of Plantation Land Acquisition of Sikijang village and receipt of land compensation by each recipient of compensation which was witnessed by Head of the Kampar District Land Office, Assistant I Kampar District Head, Siak Hulu sub-district Head and the Head of Sikijang village.

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ST2 It was the same as the implementation of ST1, when the company provided a complete document of land acquisition in the Company's legal document, which contains a Statement of Waiver, Minutes of

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Sikijang Plantation Land Acquisition and land compensation receipt of by each recipient of compensation which was witnessed by the Kampar's Head of Land Office, Assistant I Kampar District Head, Siak Hulu sub-district Head and the Head of Sikijang village. Recapitulation of land owner/tenant is available, Plants and Buildings which their compensation will be paid by PT Buana Wiralestari based on The Court of Committee Land Acquisition of Kampar district 17 March 1992 in Bangkinang mentions the name of owner/tenant, land dimension, compensation value/m2, amount of compensation, compensation type/gifts, Plants Type, building compensation, total compensation and compensation recipients signature; In this record there are 707 farmers with 2,467.2 Ha of area with the compensation amount of IDR 287,604.300.00, signed by Kampar Land Acquisition which consists of ;

1. National Land Affairs Agency 2. Kampar district local government 3. Kampar district Plantation Office 4. Siak Hulu sub district Head 5. Sekijang village 6. Acknowledged by Head of Kampar district.

The compensation available are in forms of; 1. Waiver Statement signed by related parties and witnessed by Head of Kampar National Land

Affairs Agency, Kampar district office assistant, Head of sub district, and The Head of Sekijang village.

2. Legitimated Compensatory Payment Receipt. List of Land, Plants, and other Business inventory in terms of areal acquisition which signed by land owner, company and Committee of Inventory of Kampar district, for example; Mr. Diba / Liman, residence of Sekijang village, received IDR 300,000 as compensation on an area with 6 Ha, implemented on 9 November 1992.

2.2.5 A mechanism to resolve conflict which is accepted by all parties.

ST1 Land Dispute Resolution Mechanism (SOP/BWL/PKL) is available dated 05 February 2010 which involved parties in resolving conflict.

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ST2 In additional to documents seen at ST1. For example;

a. D&L staff must ensure all documents of ownership and land ownership are complete, valid and legally correct in accordance with the regulations.

b. Tenure should be socialized to the surrounding community so that there is clarity of rights owned by the company

c. If there are land claims from the surrounding communities with or without clear evidence of ownership, then the D&L should open a dialogue / giving verbal or written explanation of the purpose that he claim may be canceled / aborted.

d. If the point c above does not succeed, then the solution will be assisted in a form if assistance / facilitation from the local government. The local government can involve community leaders, Head of Village, Head of sub district, Head of district, NGOs and Local House of Representatives, The agreed results must be documented such as Minutes of Agreement as evidence of an agreement achieved between the parties.

e. If the local government assistance does not succeed, then it is necessary to bring it to the court in order to get legal assurance.

f. Moreover documenting BA agreement, resolution process by involving local government and community leaders can also be documented with audio-visual recording (video).

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Based on interview with The Head of Koto Aman and Sekijang village, the compensation implementation has been finished conducted by the company, they know land use rights boundaries and there has been no land claim in land use rights.

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.

2.3.1 Records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale

ST1 Based on Mr. Wisnu O. Suharto statement; there are no traditional rights in the PT BWL (N / A). Based on field inspection of the Community Leaders of Sikijang village, there is no evidence that the traditional rights exist in the PT BWL. Thus, the audit team considered that this indicator does not apply in the assessment process (Not Applicable).

N/A

ST2 In additional to documents seen at ST1. Based on the information from PT BWL management as well as interviews with the Head of Sekijang and Koto Aman Village Head / Village Community leaders and Koto Sekijang Safe which are the native villages stated that:

a. There is no ownership of traditional rights (Indigenous Land / Communal Land) in PT BWL land use rights area.

b. In the process of land acquisition at the time of the estate inauguration, the company involved community leaders and tribe leaders (Nini Mamak) through village meetings.

N/A

2.3.2 Maps of any appropriate scale showing extent of recognized customary rights.

ST1 Not Applicable; See indicator 2.3.1 above N/A


2.3.3 Copies of negotiated agreements detailing process of consent.



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.

3.1.1 A documented working plan of the company for a minimum of 3 years period.

ST1 The Company has owned PT Buana Wiralestari Mas Work Plan document, Period Year of 2010 until 2017. The document is still a draft that has not been approved by the board management and suggested to approve the long-term work plan document. This document of which includes: production forecasts, FFB cost, Mill cost, palm product cost/kg, the recapitulation of mill production (OER and

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KER), and other financial parameters. This will be verified further when the stage-2 activity is being implemented. The non-conformance in this indicator is CFA-2010.05.

ST2 The Company has made ratification on company’s long-term work plan document of PT Buana Wiralestari Mas-year period 2010 to 2017 covering production forecasts, fresh fruit bunch cost, Mill cost, palm product cost / kg, the recapitulation of mill production (OER and KER), and other financial parameters. The document ratification was made by the CEO PSM 5 (Franciscus Costan). CFA-2010.05 status is declared as closed

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3.1.2 Annual replanting program, where applicable, projected for a minimum of 5 years with yearly review.

ST1 Replanting policy set by the company is referring to SMA/MCAR/01/05-07 on planning and planting, namely: plant age > 25 years, plant height> 13 m, production per year <14 tons / Ha, and the number of stands <100 stakes / Ha. The Company already has a plan of replanting activities, which will begin in 2017. But the annual review evidence of the replanting program is not yet available; evidence of an annual review of the plans that have been made replanting activities suggested to be provided. The non-conformance in this indicator is CFA-2010.06

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ST2 During the implementation of stage-1, the Company has owned replanting plans that will start in 2017. The replanting program plan is still in the form of plan submission from estate management unit and has not been ratified by the top management. During the implementation of stage-2, the replanting plan is being reviewed and the replanting plan in 2017 has been revised into 2016. The change in the plan is an annual study conducted by the Company related to the replanting activities. The review itself is carried out based on criteria of the plant age, production estimation, and plant height (according to one of the criteria based on SOP has been owned) Status CFA-2010.06 is declared closed.

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

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

4.1.1 Standard Operating Procedures (SOPs) for estates, from land clearing to harvesting.

ST1 Estate SOP in a form of Oil Palm Planting Technical Guideline document is available, prepared by MCAR team (Management Committee Agronomy and Research), approved on 5 May 2007. The SOP consists of: - Preface (SMA/MCAR/00/05-07) - Plants Planning (SMA/MCAR/02/01/05-07) - Seedling (SMA/MCAR/02/05-07) - Before Planting Preparation (SMA/MCAR/03/05-07) - Bridge Pathways (SMA/MCAR/04/05-07) - Land Clearing and Planting (SMA/MCAR/05/05-07) - Pest and Weed (SMA/MCAR/06/05-07) - Fertilizing (SMA/MCAR/07/05-07) - Immature Plant Maintenance (SMA/MCAR/08/05-07)

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- Harvest Activities (SMA/MCAR/09/05-07) - Mature Plants Maintenance (SMA/MCAR/10/05-07) - Harvest and Transport (SMA/MCAR/11/05-07) - Environmental Management (SMA/MCAR/12/05-07) Based on the field inspection, this estate SOP has been distributed to each estate office and comprehended by the employees.

ST2 Similiar to stage-1 audit. √

4.1.2 Standard Operating Procedures (SOPs) for mills, from reception of FFB to dispatch of Crude Palm Oil and Palm Kernel Oil.

ST1 The company has owned factories SOP in the form of SOP documents of Processing of Palm Oil Mill of PT SMART Tbk, but has not explained the procedure of product supply chain traceability system in the mechanism of fruit reception until palm oil dispatch; because there are factories that received fruit supply outside the scope of certification. Example: fruit reception procedure at Kijang Mill which received a supply of fruit from the farmer’s plantation. It is advised to review and explain the procedure of supply chain traceability system in the mechanism of fruit reception until palm oil dispatch, for mills which receive a supply of fruit outside the scope of certification. The non-conformance in this indicator is NC-2010.07

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ST2 The Company has developed a product traceability procedure in form of Supply Chain SOP (SOP / BWLM / SC) ratified on 12/07/2011. This procedure describes the palm oil production process system and kernel with the Mass Balance Supply Chain System. The non-conformance status CFA-2010.07 is declared as closed.

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4.1.3 Records of checking or monitoring of operations. Minimum requirement: once a year.

ST1 Operational examination activity is available, such as:

− Operational inspection by the Vice President of Agronomy (VPA), which is performed every 3 months. Things checked include harvesting, maintenance, fertilizing, workshops, and other farming operations. A document report of VPA visit of PT BWL - Kijang Mas Estate Year 2010 is available.

− Operational inspection by the Regional Controller (RC) performed every 3 months. Things checked include the entire estate operations. An RC Kampar Report dated 20 August 2010 is available.

− Inspection by the Department of Agronomy Audit & Advisory (AAA), which includes crop production, maintenance, heavy equipment, polyclinics, and others. The AAA report of Kampar Inti Region Semester 1 Year 2010 is available. Date of visit 21 - 22 April 2010, Kijang Estate.

The Company also has conducted internal audits for implementation of standard RSPO P&C, which was conducted in January 2010 by the Department of Environment / SMARTRI Division. Checklist report of RSPO P&C, PSMS of Kampar Region, and edition January 2010 is available.

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ST2 In additional to documents seen at ST1. The company has inspection or monitoring operational activity mechanism as follows:

- Agronomy Audit & Advisory (AAA). The scope of this AAA activity is: Areal statement, Human Resources, Rainfall, Production, Production Quality, Harvest Standard, Maintenance of Mature Plant, Fertilizing, Heavy Equipment, Trucks, Workshops, and Warehouses, Estate Security, Production Costs. Performed once a year conducted by the Internal Audit Department.

- Operations Internal Audit (OIA). The scopes of examination in this OIA activity are: Bank and cash administration and memorial, inventory, maintenance of plantation and crops, crop production, wage and personnel. Conducted once every 6 months performed by the Internal Audit Department. Last evaluation performed in January 2011 (Nagasakti Estate).

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- Mill Audit Advisory (MAA). The scope of this examination in MAA activities are: Production, Processing Planning, Power Use and Consumable, Control Process, Quality Control, Maintenance, Safety Equipment, Grading, Laboratory. Conducted once every 6 months by the Internal Audit Department. Last evaluation was in June 2011.

- Internal Audit related to the implementation of RSPO principles and criteria. Last evaluation conducted in June 2011. The RSPO internal audit is programmed at least once a year.

4.1.4 Records of operational results.

ST1 Estate operational activities are recorded in the report document for each work item which covers production activity, plants maintenance, pest and disease control and fertilizing.

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ST2 The company has operational activity record either at the estate or at the mill, for example:

- Record result of operational activities in Naga Sakti Mill, Monthly Processing Report that includes: FFB Intake Statement, Production Record, production & extraction statistical summary, production stock, summary of monthly reports, monthly laboratory reports, water treatment & chemical boiler, ripple mill efficiency, staff & work effort unit (SKU) labor, etc.

- Record result of operational activity in Naga Mas Estate in the form of Agronomy Monthly Report that includes: FFB safety report, estate security report, Security unit report (Security Guard), Sprouts / Oil Palm Seed reception report, Seedling Report, Insertion, Fertilizer’s Order and Supply, fertilizer application, empty bunch application, Liquid Waste application, Tyto Alba Monitoring, Heavy Equipment utilization, Non-Plant Capital, Work Day, Man Power, fertilizer Spreader, Progress of Land Clearing, Progress of Planting.

- Record result of operational activity at Naga Sakti Estate in a form of Monthly Agronomy Report that includes: FFB security report, estate security report, Security personnel unit (security guard), Sprouts/Oil Palm seed reception report, seedling report, Insertion, Fertilizer’s order and supply, fertilizing application, empty bunch application, liquid waste application, Tyto Alba Monitoring, heavy equipment utilization, non-plant capital, work day, man power, Fertilizer Spreader, Progress of Land Clearing, Progress of Planting.

- Record of result of operational activity at Ramabakti Estate in a form of Monthly Agronomy Report that includes: FFB security report, estate security report, Security personnel unit (security guard), Sprouts/Oil Palm seed reception report, seedling report, Insertion, Fertilizer’s order and supply, fertilizing application, empty bunch application, liquid waste application, Tyto Alba Monitoring, heavy equipment utilization, non-plant capital, work day, man power, Fertilizer Spreader, Progress of Land Clearing, Progress of Planting.

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

4.2.1 Records of regular soil, leaf and visual analysis.

ST1 The Company has owned a soil analysis record for each estate, which is done every 3 (three) years. For example: Land Suitability Classes document Naga Sakti Estate - PT Buana Wiralestari Mas, Regional Kampar Buana - PSM V, Kampar District, Riau Province, 2010 edition; made by Plantation Monitoring and Planning Division, March 2010. Will be further verified during stage-2.

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ST2 The Company has owned a soil analysis record for each estate, which is conducted every 3 years. However, based on the explanation from one of the SMARTRI (Smart Research Institute) staff that the implementation of soil analysis is done once in 5 years and adjusted with the year of crops planting.

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Changes in activities of soil analysis period are done so that the soil fertility monitoring can be done more effectively and better. Recording activity includes the analysis of physical fertility (texture) and chemical such as pH, C-organic, total N, P and K stock elements, available P element, Cation Exchange Capacity (KTK), etc. Soil sampling is conducted in accordance with existing standard operating procedures (Soil Sampling Unit (SSU) Work Instruction) namely 1 soil sample (soil sampling unit) represents 60 ha. From 1 soil sample unit, soil sampling is conducted at three points in the example that every point consists of 15 sample points. The company has also conducted regular leaf analysis. Leaf analysis is done once a year. Leaf Sampling Unit is conducted in accordance with sampling method on soil analysis activity.

4.2.2 Records of efforts to maintained and increase soil fertility (e.g. the use of fertilizer, legume cover crops, compost, and land applications of POME or EFB) based on the results of analysis carried out as in point 1 above.

ST1 Record of activities to maintain and improve soil fertility is available, for example:

− Program and fertilization implementation document titled Material Requirement Program: Quantity of Mature Plant Fertilizer Semester 1 and 2.

− Naga Mas Estate Fertilization Recommendation Document year 2010. The fertilizer type recommended such as: Urea, RP, TSP, MOP, S. Dol Gresik, Kieserite Powder, Kaptan, HGFB, CuSO4, and MnSO4. Each fertilizer has 2 application rotations in each year. Fertilizer mechanical application is using tractor.

− Land application monitoring 2010, Naga Sakti Estate. Land application area is 490.04 Ha located at Naga Sakti Estate area, with recapitulation.

Will be further verified during stage-2.

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ST2 The Company has fertilization activity record, empty bunch application at Naga Mas Estate Ramabakti and Naga Sakti Estate and land applications at Naga Sakti Estate. Fertilization activities, empty bunch applications, and land application are conducted based on the results of soil analysis and marginal soil maps which is owned by the company. For example: empty bunch application activities in Block E 42 Naga Sakti Estate, empty bunch is applied at of 60 tons / Ha dose. Based on the results of field inspection to the block E 42 Naga Sakti Estate, the application was conducted at the mentioned block.

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4.3 Practices minimize and control erosion and degradation of soils.

4.3.1 Maps of fragile soils must be available

ST1 The Company has owned land maps for each estate that became an integral part of the Land Suitability Classes (Land suitability class) document, Naga Sakti Estate - PT Buana Wiralestari Mas, Kampar Buana regional - PSM V, Kampar District, Riau Province, and 2010 edition. Will be further verified during stage-2.

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ST2 The Company has owned land maps for each estate (Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate) that became an integral part of the Land Suitability Classes (Land suitability class) document. In the document obtained information about of land suitability Class, slope, texture, the limiting factor, area and soil classification. The Land Map has also been equipped with a scale of 1: 40,000 and legend. For example for the Naga Sakti Estate SPT 179: the type of soil is Typical

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Haplosaprists; slope 0-3%; Saprik peat maturity level; depth (solum) > 120 cm, peat depth 150-300 cm; poor drainage level; S3 land (in accordance with marginal); drainage limiting factor and peat thickness; 234.71 Ha (4.6% of total area).

4.3.2 A management strategy should exist for planting on slopes above a certain limit (needs to be soils and climate specific).

ST1 Slope area management strategy conducted by the company is by building horse shoe (individual terrace). The document that describes this is SOP of Planting. Preparation before Planting (SMA/MCAR/03/05-07) refers to table 3.1.1 slope classification and terrace necessity. Recommendation given for slope area planting is at area with 9-40% slope level. While for the area with >40% is not recommended to be planted. Based on the inspection to the field (Block D-41), found that the company has applied individual terrace in the area; the company has also let the ferns (Nephrolepis) grow around the area to reduce erosion rate. Designing the midrib on the terrace bank was also meant to reduce erosion. Will be further verified during stage-2

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ST2 Management strategy on slope area conducted by the company was adjusted with the available SOP on Preparation Before Planting (SMA/MCAR/03/05-07) referring to table 3.1.1 slope classification and terrace necessity. Based on the SOP, an area with >40% slope is not recommended to be planted, Based on the results of field inspection at block P 22 Ramabakti Estate, the Company has made efforts on slope land management, by applying the method of el shape design (perpendicular to the slope), silvit and vertiver grass planting on the roadside.

4.3.3 Presence of a road maintenance program.

ST1 The Company has designed a road maintenance program. Road maintenance performed at PT BWL was by street hoarding using sandstone (sirtu), which aims to make the road surface hardening. The PT BWL’s sandstone material demand document 2010 is available. Will be further verified during the stage-2.

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ST2 - Naga Sakti Estate Documents of plan and realization of road maintenance program are available. Road maintenance program plan for budget year 2011 is 804 m3 and the realization until February 2011 is 799.15 m3.

- Naga Mas Estate Documents of plan and realization of road maintenance program are available in form of sandstone (sirtu) insertion. Road maintenance program plan for budget year 2011 is 1,304 m3 and the realization until January 2011 is 1,306.61 m3.

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4.3.4 Subsidence of peat soils should be minimized under an effective and documented water management program

ST1 For area identified as peat area, the company has conducted water management monitoring of peat soil surface. Monitoring Piezometer document is available (tool used for monitoring peat water levels) - Naga Sakti Estate, PT BWL, Division 1, Period 2010. This measurement is done every week by officers who had been appointed by the assistant division. Based on the document, it is obtained information that the peat water surface level during September-October 2010 in Piezometer Number 7 was 50-89

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cm. Based on field inspection (Block B-34), there were 10 units Piezometer tools installed in the area, and each data recording device is available, and there was also a water gate installed in the trench which aims to set the water in and out so that the water surface level can be maintained at 50-70 cm.

ST2 Based on the identification results of land suitability class, there are peat areas in Naga Mas Estate, Ramabakti and Naga Sakti Estate with <3 meters peat depth status. For the area identified as a peat area, the company already has had a strategy in peat area management such as: water management monitoring of the peat water surface. The company has been constructing main road trench, main drain, collection drain, dam, as well as in the block where has also been carried out water surface level monitoring using piezometer method (2-3 piezometer within 1 block), water surface level monitoring with a water level. Soil ground water surface level kept with 50 – 70 cm of height. Based on the water level monitoring record (dated June 27, 2011) at Ramabakti Estate (Block P 12, 13, and 14) known the average height of water level is of 78.6 cm. Due to the condition, the company conducts an intensive management by closing the water channels. According to information from a SMARTRI (Smart Research Institute) staff, this is due to low rainfall within ± 2 months.

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4.3.5 A management strategy should be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils)

ST1 Will be further verified stage-2.

ST2 Based on the land suitability class activities, it was identified the existence of areas such as sandy soil and low organic matter content. Based on these results, the company has made efforts to conduct empty bunch application on areas identified in the category of sandy soil and low organic matter content. (See indicator 4.2.2). Based on the results of field inspection to block E 42 - Naga Sakti Estate, the application was conducted at the block.

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

4.4.1 Protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting.

ST1 The Company has made efforts to protect waterways and wetlands, riparian area, through the management development policy based on a letter from the Vice President of Agronomy PSM 5 (Letter Number: 002/SE-VPA-5/RSPO/BWL/01/2010) dated 5 January 2010 on the Surrounding River areal Management. The contents of the letter technically sets the crop farming for plants located around the river, they are 5 oil palm stakes on the left and right of the river to be guided by the following: 1) Not using chemicals in plants treatment (chemical), but it has to be done manually; 2) fertilization is not done mechanically (instruments or emdeks), but it is done manually; 3) On the cliff that is prone to landslide, should be planted with plants that can prevent erosion . Based on field inspection (Block D-41), the audit team found that there had been no considerable effort in the Tapung riparian located on the block. It was also found that at the riparian area that there was noticeable trace of chemical spray, there was also erosion at the riverside area and there have been no erosion-preventing plants. Companys are strongly advised to make more efforts in managing the riparian Tapung watercourse area in accordance with the management policy that has been made. The non-conformance in this indicator is CFA-2010.08

X

ST2 Based on field verification, the company has made efforts to preserve and maintain the riparian area (Perbadoran riparian / Tapung watercourses), for example; a. Board sign installation on the fish poisoning restriction at the river. b. Vertifer Grass planting, Guatemala Grass and bamboo along the riparian line. c. Riparian line installation by installing pole boundaries or marking with red cross sign at the oil palm

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stakes. d. Not conducting herbicide spraying implementation and other chemical matters 50 meters on the

right-left of the river radius e. Fertilizing and plate construction at riparian area done manually.

The non-conformance status CFA-2010.08 is declared as closed.

4.4.2 An implementation water management plan

ST1 Water management program conducted by the mill, with water treatment method, which is expected to get clean water for fresh fruit bunch processing at the mill and to supply water to the employee housing. The Company has conducted the examination or testing of clean water, which is performed every 6 (six) months in which samples of water taken from the treated water (water that has being treated at the mill’s water tank). Water samples were sent to the Regional Integrated Service Unit (UPTD) of Water Quality Examination Laboratory, Department of Health, Pekanbaru; quality standard used is The Minister of Health regulation (Permenkes) 416 Year 1990 on Terms and Water Quality Monitoring. Records results of water quality examination On 22 February 2010, the parameters tested include: TDS, Turbidity, color, Iron, Hardness, Chloride, and Sulfate levels. The test result showed that the parameters tested have met the quality standard has been determined.

The company has also conducted monitoring wells water quality testing located around the area of land application; the testing is done every 6 (six) months by Analytical Laboratory SMARTRI, Libo Estate, Kandus, Siak district. This laboratory is owned by Sinar Mas, which is the holding of the PT BWL. SMARTRI laboratory is also accredited by National Accreditation Committee since September 2006. Parameters tested are based on the quality standard of PP 82/2001. However, the company has not been able to provide evidence of the Monitoring Wells water quality test, it is recommended for the company to provide evidence of Monitoring wells parameter test result in accordance with quality standards set by regulation. The non-conformance in this indicator is CFA-2010.09.

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ST2 Clean water quality testing from water treatment result at the mill by UPTD of Pekanbaru Health Department Laboratory with the appropriate parameters based on The Minister of Health Regulation 416 year 1990, test date 24 May 2011. Parameters (odor, turbidity, taste, arsenic, nitrate, pH, timbale, organic chemistry, and total of coliform). The results indicate that they meet quality standards been set. Testing of the monitoring well water has been conducted once every 6 months by SMARTRI Laboratory. Well water testing result evidence is available dated 9 March 2011. The test result shows that all parameters have met quality standard set (Appendix II The Minister of Health regulation 416 year 1990). Evaluation on test result of monitoring well water quality is listed in the document of Report of Implementation Monitoring on the Liquid Waste Application of POM to the Oil Palm Plantation Area; this report is prepared every 6 months as reported document to The Environmental Agency of Kampar district. The non-conformance status CFA-2010.09 is declared as closed.

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4.4.3 Monitoring of effluent BOD


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ST1 BOD liquid waste monitoring conducted once a month. Waste samples were taken from seven waste ponds in the area of Waste Water Treatment Plant (WWTP), and from land application pond in the estate area. This liquid waste test was conducted by the SMARTRI Analytical Laboratory, Libo Estate, Kandus, Siak district. This laboratory is owned by Sinar Mas, which is also a holding of the PT BWL. SMARTRI laboratory is also accredited by National Accreditation Committee since September 2006. BOD recording liquid waste monitoring period January 2010 - October 2010 is available. Parameters tested include: pH, TS, O&G, BOD, COD, VFA, A, N, P, K, Mg, Ca, Cu, Zn, and Mn, whereas the quality standard used was the Governor Regulation Number 35 Year 2007 on liquid waste quality standards for land application. Based on data from the test results in October 2010, noted that some parameters have met the quality standards set by the regulations, such as for average BOD for seven ponds: 1,700-1,995 mg/I (BOD quality standard is <5,000 mg/l), while pH ranged from 7.30 to 7.40 (pH quality standard is 6 – 9); For the COD parameter still exceeds the quality standard, which is about 12,000-15,000 mg / l (COD quality standard is 10,000 mg / l). The Company has not made an evaluation of test results that have been made especially for parameters that exceed the quality standards and advised companies to provide the evaluation evidence. The non-conformance in this indicator is NC-2010.10.

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ST2 BOD Liquid waste measurement test results performed by SMARTRI Laboratory period of January-June 2011 (conducted every month) are available. The quality standard is in accordance with The Governor of Riau Regulation Number 35 year 2007. Samples taken from the seven ponds at WWTP and one sample point taken from LA pipe. Based on the measurement result, the average monthly BOD at the IPAL pond and the pipes drawn to LA have met the quality standard (<5,000 mg / L). For example: In June 2011 is of 1,754 mg/L; May 2011 is of 2,605 mg/L; April 2011 is of 1,503 mg/L; March 2011 is of 2,255 mg/L; Feb 2011 is of 2,405 mg/L; January 2011 is of 3,590 mg/L. BOD liquid waste quality monitoring evaluation result in the form of Liquid Land Application Study document 2011 is available, the evaluation results indicate the testing Jan-June 2011, there is a parameter that exceeds the quality standard of COD, which is in January, February, March 2011, and June 2011, while for the April and May 2011 period, meet the quality standard. The Company found that there were problems in Stirrer system (the stirring) at WWTP pond, so for future maintenance, it will be performed periodically on Stirrer tools at WWTP pond. Liquid waste testing result period Jan-Jun 2011 has been submitted on Environmental Management/Monitoring Plan Report Draft, Semester I year 2011, and will be reported to related agency. For testing period of Jan-Dec 2010, it has been reported in April 2011, on Environmental management/Monitoring report Semester 1 and 2 year 2010. The non-conformance status NC 2010.10 is declared as closed.

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4.4.4 Monitoring of mill water use per ton of FFB

ST1 The Company has provided water consumption for factory monitoring in a form of a Naga Sakti Mill Water Use and Distribution Recapitulation document, period 2008, 2009, and 2010. The company has noted the monthly water consumption. For example. The last 3 months water consumption in 2010, they are: - July 2010 of 0.80 M3/ton FFB - August 2010 of 0.82 M3/ton FFB - September 2010 of 0.87 M3/ton FFB However, the company has not been able to provide the result of budgeted water consumption evaluation. It is recommended to the company to evaluate the water consumption record at the mill to the budget that has been determined to see whether the use of actual water consumption exceeds the budget, and also to see whether it can be improved or efficiency over its use. The non-conformance in this indicator is CFA-2010.11.

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ST2 The result of water consumption monitoring for the mill in a form of Water Use Per Ton fresh fruit bunch document is available. The monitoring is conducted every month (M3/ton FFB). The Company has also conducted water consumption evaluation comparing with the agreed budget. The result showed that during the period from January to May 2011 water consumption was still below the budget. For example: May 2011 is of 0.81 M3/ton FFB was lower from budget 1.06 M3/ton. The Non-conformance status NC-2010.11 is declared as closed.

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

4.5.1 An IPM plan is documented and current

ST1 The Company has integrated pest management program, they are:

− Planting Beneficial Plant as efforts to control the nettle caterpillar attack, as for the type of plant used is Turnera subulata and Antigonon leptosus. Based on interviews with Kijang Estate Maintenance Assistant, the company does not plant beneficial plants anymore because of all the blocks at Kijang estate have been planted in accordance with assistant’s work instructions. Antigonon leptosus standard planting is 6 (six) points per block with an area of 30 hectares. The Beneficial Plant work program is in the form of maintenance activities.

− Gupon (nest box) maintenance as an effort to control rat pest.

− Rat census. If rats monitoring indicates exceeding above normal >5% then chemical control is implemented.

− Barn owl monitoring until October 2010; the number of barn owl breeders of Kijang estate is 276 heads, there are 107 eggs; and 53 barn owl hatchlings.

− Caterpillar census. The budget of Beneficial Plant and Gupon maintenance implementation is available on company’s budget plan.

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ST2 The Company has IPM program at each estate (Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate) and has been included in the company’s operational budget. They are: 1. Pest and Disease Control Work Program year 2011 of Naga Sakti Estate in the forms of: Nettle

Caterpillar detection, rats attack census, host plants maintenance, Gupon (nest box) of Tyto Alba checking.

2. Pest and Disease Control Work Program year 2011 of Naga Mas Estate in the forms of: Nettle Caterpillar detection, rats attack census, host plants maintenance, Gupon (nest box) of Tyto Alba checking.

3. Pest and Disease Control Work Program year 2011 of Ramabakti Estate in the forms of: Nettle Caterpillar detection, rats attack census, host plants maintenance, Gupon (nest box) of Tyto Alba checking.

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4.5.2 Monitoring extent of IPM implementation including training

ST1 The integrated pest management area monitoring record is available in the form of Kijang Estate integrated pest control document 2010 with details as follows: beneficial plant maintenance area. The number of Antigonon leptosus planted was 409 spots with an area of 2,163.53 Ha; The number of Turnera subulata planted was of 2,183.36 ha of area. The number of Gupon monitoring was 201 pieces, The monitoring rats and nettle caterpillar attack. The company has conducted integrated pest control training at Naga Sakti Estate building (NSAE) on 8 February 2010. The training was conducted by SMART Research Institute of Riau region.

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ST2 The company has conducted recapitulation of integrated pest management area monitoring record at Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate in 2011. In the recapitulation, obtained information about beneficial plant and maintenance / gupon check tyto alba maintenance area. For example: IPM area monitoring record at Ramabakti Estate; biological control agent 1 block 6 spots (Antigonon leptopus) with an area of 30 ha of blocks, the number of gupon until June 2011 was 237 units. Based on field inspection to Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate, there have enough evidence that the Company has been implementing IPM. In every corner of the block, Antigonon leptosus has been planted, as well as in the block with Nephrolepis. The Company has conducted integrated pest management training at Naga Sakti Estate Building (NSAE) on 8 February 2010. The training was conducted by SMART Research Institute of Riau region. The training was conducted to all estates (Naga Mas, Naga Sakti, and Ramabakti Estate).

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4.5.3 Monitoring of pesticide toxicity units (a.i. /LD 50 per ton of FFB or per hectare)

ST1 Pesticide Toxicity monitoring record is available in a form of pesticide use document 2010, they are:

− Ally 20 WP use at 0.00025 mg/kg of FFB

− Starane 200 EC use at 0.02 mg/kg of FFB

− Roll up 480 SL use at 5.71 mg/kg of FFB

− Rolixone 276 SL use at 3.59 mg/kg of FFB In 2010, the Company did not conduct chemical pest control since census based rats attack was still below normal (<5%) Will be further verified during stage-2.

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ST2

Pesticide Toxicity monitoring record is available in each estate (Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate) year 2011. 1. Naga Sakti Estate.

Pesticide toxicity monitoring has been conducted (active material/LD50 per ton FFB. For example: for Roll Up type toxicity active material/LD50 per ton FFB is 0.000010273 litter/ton FFB.

2. Naga Mas Estate Pesticide toxicity monitoring has been conducted (active material/LD50 per ton FFB. For example: for Roll Up type toxicity active material/LD50 per ton FFB is 0.0000725 litter/ton FFB.

3. Ramabakti Estate Pesticide toxicity monitoring has been conducted (active material/LD50 per ton FFB. For example: for Roll Up type toxicity active material/LD50 per ton FFB is 0.0000425 litter/ton FFB.

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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 Company Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.

4.6.1 Evidence of use of only approved and registered agrochemicals permitted by the relevant authorities

ST1 The Company has agrochemical material use which is registered and licensed. Will be further verified during stage-2

ST2 Pesticide list is available at each estate (Naga Mas Estate, Naga Sakti Estate and Ramabakti Estate) √


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year 2011. Naga Mas Estate:

1. Roll up. Glyphosate isopropylamine. RI. 2133/4-2009/T. License valid until 30 April 2014. 2. Rolixone. Paraquat dichloride. RI. 2467/5-2006/T. License valid until 27 June 2011. 3. Starane 250 EC. Fluroxypyr methylhepty ester. RI. 3155/3-2008/T. License valid until 10

August 2014. 4. Erkafuron. Metsulfuron Methyl. RI. 2450/5-2006/T. License valid until 27 June 2011. 5. Regent Fipronil. RI. 2188/3-2006/T. License valid until 30 April 2014.

Naga Sakti Estate: 1. Roll up. Active material: Glyphosate isopropylamine. RI. 2133/4-2009/T. License valid until 30

April 2014. 2. Rolixone. Active material: Paraquat dichloride. RI. 2467/5-2006/T. License valid until 27 June

2011. 3. Starane 250 EC. Active material: Fluroxypyr methylhepty ester. RI. 3155/3-2008/T. License

valid until 10 August 2014. 4. Erkafuron. Active material: Metsulfuron Methyl. RI. 2450/5-2006/T. License valid until 27 June

2011. Ramabakti Estate:

1. Rolixone. Active material: Paraquat dichloride. RI. 2667/5-2006/T. License valid until 27 June 2011.

2. Erkafuron. Active material: Metsulfuron Metyl. RI. 2405/5-2006/T. License valid until 27 June 2011.

3. Garlon. Active material: Triklofir TEA salt. RI. 695/9-2008/T. License valid until 16 October 2013.

4. Roll up. Active material: Glyphosate isopropylamine. RI. 2133/4/2009/T. License valid until 30 April 2014

To Rolioxone and Erkafuron pesticide which have been known their license expired date, the company has shown evidence in a form of The Minister of Agriculture decree Number 3079/Kpts/SR.140/6/2011 on Registration and Pesticide Permanent License. In the ministerial decree, Rolioxone and Erkafuron type are in the process of license extending and have had registration number.

4.6.2 Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications).

ST1 Pesticide use record in a form of pesticide use monitoring is available. Will be further verified during stage-2.

ST2 Pesticide use record in each estate (Naga Mas Estate, Naga Sakti Estate and Ramabakti Estate) is available in a form of agrochemical use recapitulation. For example: 1. Pesticide use record year 2011 at Naga Sakti Estate.

- Roll up; Dosage: 0.2413 litter/ha; active material: glyphosate; rotation twice/year; applied area 5,037.51 ha.

- Rolioxone; dosage: 0.2138 liter/ha; active material: paraquat; rotation once/year; applied 5,037.51 ha

- Erkafuron; dosage: 0.0222 liter/ha; active material: metyl metsulfuron; rotation twice/year; applied area 5,037.51 ha

- Starane; dosage 0.0003 liter/ha; active material: Floroksifir; rotation once/year; applied area 24 ha. 2. Pesticide use record year 2011 at Naga Mas Estate.

- Roll up; Dosage: 0.239 liter/ha; active material: Glyphosate; rotation twice/year; applied area

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4,988.48 ha.

- Rolixone; Dosage: 0.123 liter/ha; active material: paraquat; rotation once/year; applied area 4,988.48 ha.

- Erkafuron; Dosage: 0.025 liter/ha; active material: metyl metsulfuron; rotation twice/year; applied area 4,988.48 ha.

- Regent; Dosage: 0.007 liter/ha; active material: Fipronyl; rotation once/year; applied area 4,988.48 ha.

3. Pesticide use record year 2011 year 2011 at Ramabakti Estate.

- Roll up. Dosage: 0.2413 liter/ha active material: Glyphosate Isopropylamine; rotation twice/year; applied area: 2,706.28 ha

- Rolioxone; Dosage 0.2138 liter/ha; active material: paraquat; rotation once/year; applied area 2,706.28 ha

- Erkafuron; dosage: 0.0222 liter/ha; active material: metyl metsulfuron; rotation three times/year; applied area 2,706.28 ha

- Garlon ; Dosage: 0.19 liter/ha ; active material: paraquat; rotation once /year; applied area 15.2 ha

4.6.3 Documentary evidence that usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions.

ST1 See 4.6.1 The Company has conducted internal training for maintenance employees including spray workers held by Smart Research Institute (SMARTRI) on 11 February 2010. The certificate and attendance list are available.

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ST2 The company has owned agrochemical material use documentation informed the species target and dosage used at each estate. Such as: 1. Agrochemical use documentation year 2011 Naga Sakti Estate.

Roll up; active material: Glyphosate; dosage: 0.2413 liter/ha; target weed: Weeds with wide and narrow leaf. Rolixone ; active material: Paraquat; dosage: 0.2138 liter/ha; target weed: Weeds with wide leaf and fern. Erkafuron; active material: Metil metsulfuron; dosage: 0.0222 liter/ha; target weed: Weeds with wide leaf and wooden.

2. Naga Mas Estate.

- Roll up; Dosage: 0.239 liter/ha; active material: Glyphosate; target weed: Weeds with narrow leaf.

- Rolixone; Dosage: 0.123 liter/ha; active material: paraquat; target weed: Weeds with wide leaf.

- Erkafuron; Dosage: 0.025 liter/ha; active material: methyl metsulfuron; target weed: Weeds with wide leaf

- Regent; Dosage: 0.007 liter/ha; active material: Fipronyl; rotation once/year; Pest target: termites. 3. Ramabakti Estate.

- Roll up; active material: Glyphosate Isopropylamine; Dosage: 0.2413 liter/ha Target weed: Weeds with narrow leaf

- Rolioxone; active material: Paraquat; Dosage: 0.2138 liter/ha; target weed: Weeds with wide leaf.

- Erkafuron; active material: methyl metsulfuron; dosage: 0.0222 liter/ha; target weed: Weeds with wide leaf

- Garlon; active material: paraquat; Dosage: 0.19 liter/ha; target weed: Weeds with wide leaf.

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The company has conducted training using agrochemical material. This has been proved by the attendance list and delivered materials.

4.6.4 Waste materials from agrochemicals including pesticides containers are properly disposed in accordance with laws and regulations.

ST1 The company has owned used pesticide packaging disposal procedure in a form of Waste Management SOP (SOP/BWL/LBH) approved on 5 February 2010. Minutes of hazardous waste stockpiling is available (used herbicide packaging) at Block E37 of 108 (one hundred and eight) units on 1 October 2010 Based on waste management SOP and minutes of hazardous waste dumping, it is obtained information that pesticide packaging waste conducted by burying it beneath the ground, and there was insufficient evidence the company has communicated with related agency on pesticide packaging waste burying agreement based on current regulation (The Government Regulation 18 year 1999 – on hazardous waste management). The non-conformance in this indicator is NC-2010.12

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ST2 The Company has owned used pesticide packaging waste dumping procedure in a form of Waste Management SOP (SOP/BWL/LBH) approved on 5 February 2010. In the SOP, hazardous waste management, especially pesticide packaging waste conducted by burying it underground. On the founding of stage-1 activity related to pesticide packaging waste treatment conducted by burying it beneath the ground, the company has not performed the pesticide packaging burying since November 2010. The company has also revised the SOP (SOP/BWL/LBH) on waste management especially pesticide packaging waste. In the SOP, the pesticide packaging waste is no longer buried but returning it to its agrochemical vendor/supplier. The SOP was revised and approved on 1 November 2010 by VPA, VPM, RC and PC. Used pesticide packaging waste delivery letter is available for 24 cans erkafuron type and 68 pcs of Rolixone for June 2011 period. The waste was sent to PT Ivomas Tunggal (Libo Estate) which was later on sent to the supplier. Based on the information from one of PT BWL staff, the delivery to Libo estate is due to the supplier request to collect the waste at one spot in each province. The non-conformance status NC-2010.12 is declared as closed.

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4.6.5 Documentary evidence that use of chemicals categorized as World Health Company Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated.

ST1 The Company is still using paraquat which is included in limited pesticide and has done efforts to reduce the amount of paraquat chemical material to 25% each year based on the Vice President Agronomy policy-PSM 5 dated 5 January 2010.

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ST2 The Company is still using paraquat active material pesticide. Related to paraquat active material, the company has done efforts: 1. The Company has a policy on the reduction of paraquat active material pesticide use to 25% per

year issued by the Vice President Agronomy PSM 5 dated 5 January 2010. 2. Records on limited pesticide use like paraquat – is available –since 2007 until 2011 at Naga Mas

Estate, Naga Sakti estate, and Ramabakti Estate and has conducted use monitoring by making paraquat active material pesticide usage graphic. The company has also conducted studies on paraquat material usage. Based on analysis, the company has reduced the paraquat usage to 4-37% until 2011 (until June 2011). For example: paraquat usage graphic at Naga Sakti estate in 2007 was 2,149 Liter; 2008 was 2,022 liter; 2009 was 1,923 liter; 2010 was 1,504 liter; 2011 (until June) was 1,077 liter.

3. The Company has also conducted limited pesticide Paraquaat usage training on 8 February 2011 at SMP Naga Sakti estate building held by Pesticide Commission/Riau Plantation Agency attended by 60 participants from each estate (12 participants from each estate).

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4.6.6 Records of the results of health check-up for those who apply agrochemicals.

ST1 Spray Workers medical screening result record is available in a form of Kijang Estate Spray workers medical screening. The medical screening for spray workers is done periodically every 4 months which are in April, August, and December at the company’s central clinic based on PKPS letter, 11 January 2010 Number 01/SE/ RC-Kampar/Jan/2010. Agus Laila and Ajis Silalahi have been examined on 9 April and 30 August 2010.

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ST2 Record of medical screening for spray operators written on the minutes of periodic spray employees medical screening in each estate is available (Naga Mas, Naga Sakti and Ramabakti Estate) conducted every four months. For budget year 2011, it has been carried out 2 times they were on 4 February 2011 and 7 June 2011. Based on the results of field inspection at Naga Mas Estate Block C22, the spray workers admitted that health examination had been carried out by the company for 2 times. For example: Mr. Muardi (foreman spray worker) admitted that medical screening had been conducted by a doctor at the Central Clinic Naga Mas Estate. Then based on the results of the inspection to Central Clinic of Naga Mas Estate and after conducting interviews with the doctor (dr. Noverma) said that it had carried been out medical screening for employees in February and June. There are also results of employee’s medical screening in the clinic.

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4.6.7 Records showing that no work with pesticides for pregnant and breastfeeding women.

ST1 Based on the periodic medical screening document for each spray worker at central clinic, there has no evidence of spray workers being pregnant and or breastfeeding.

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ST2 The company has owned policies on the female spray worker restriction with pregnancy or breastfeeding issued by Vice President Agronomy PSM V Number 001/SE/VPA5/12/08. Based on the periodic medical screening document for each spray worker at central clinic, there has no evidence of spray workers being pregnant and or breastfeeding. The company has searched pregnant female workers and if through the examination found there were pregnant workers then would be transferred to non chemical work area. Based on field inspection at Block C 22 and conducting interview with spray workers (5 members) that the spray workers, especially women, have understood the company policy on the restriction of female spray workers related to chemical material. Furthermore, based on the interview with dr. Noverma at Central Clinic at Naga Mas Estate admitted that the examination conducted to female workers (spray workers), a test pack pregnancy test was also conducted.

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

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

ST1 The Company has Occupational Health and Safety policy on Naga Sakti Mill scope. This policy was signed by Naga Sakti Mill Advisory Committee of Occupational Health and Safety board on 12 March 2009. Based on auditor team observation in the field that the policy has been well implemented by all the workers, and as evidence that Naga Sakti Mill has also implemented and received Occupational health and Safety Management System (SMK3) certificate from The Indonesian Minister of Labor and Transmigration on 4 May 2010.

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ST2 In additional to document seen at Stage-1 OHS policy has been arranged by the company on 12 March 2009, they are: the company conducts the activity with full of social and ethics responsibility and gives

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the same priority between work safety and health with other work disciplines. The Company has also arranged estate’s OHS on 1 March 2010 containing the board responsibility and the employees like planning, distributing, reporting and implementing Occupational Health and Safety in the company. The Company has conducted Occupational Health and Safety socialization to the workers through meetings and board sign installation at several places such as Estate office, division office, workshop, chemical store rooms. Based on field inspection at Naga Mas estate, Naga Sakti estate, and Ramabakti estate, the Company has implemented Occupational Health and Safety policies such as PPE use, hazardous material board sign installation, etc.

4.7.2 Responsible person for health and safety programs are to be identified and records of regular meetings to discuss health, safety and welfare issues must be kept.

ST1 The person responsible in Occupational Health and Safety program has been identified, which is by establishing Advisory Committee of Occupational Health and Safety board (P2K3) approved by Kampar district Social and Labor Agency, Riau province, in accordance with decree Number KPTS.700/DSTK-PHI/2010/01 on Advisory Committee of Occupational Health and Safety board (P2K3) approval. The periodic meeting conducted monthly. Will be further verified during stage-2.

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ST2 The company is able to show Advisory Committee of Occupational Health and Safety structure by Social and Labor Agency of Kampar district based on decree Number KPTS.700/DSTK-PHI/2011/010, dated 1 July 2011. This decree is a revision to the previous letter Number KPTS.700/DSTK-PHI/2010/01 on 1 April 2010. The change occurred on Advisory Committee of Occupational Health and Safety president, vice president, evaluation coordinator, counseling, monitoring, and health. Advisory Committee of Occupational Health and Safety Work Plan year 2011 record is available; the program was arranged based on types of activity for each field in Advisory Committee of Occupational Health and Safety structure. Advisory Committee of Occupational Health and Safety monthly meeting planned to be conducted once a month. Advisory Committee of Occupational Health and Safety meeting record evidence is available, for example; on 4 June 2011, located in Naga Sakti Mill meeting room, the issue discussed among others were PPE use for workers, each station routine cleaning, mill machines repair in relation to the performance, operator safety and mill hygiene. Advisory Committee of Occupational Health and Safety report record to Kampar district Labor Agency is available conducted every 3 months. For example: NSAM Advisory Committee of Occupational Health and Safety quarterly report – February until April 2011, reported on 5 May 2011. For estate unit, the Company has also been able to show Advisory Committee of Occupational Health and Safety structure that has been approved by related agency (for each of the Estate) and records the Advisory Committee of Occupational Health and Safety Minutes of the meeting records is also available, for example: On 26 January 2011 a joint meeting of PT. RJP and PT. BWL and was attended by 72 people discussing about the First Aid implementation evaluation ; on 20 June 2011 the Advisory Committee of Occupational Health and Safety board from all scopes of Naga Sakti Mill held a meeting to discuss the preparation of the Fire Fighting Training.

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4.7.3 Provision for accident insurance for workers.

ST1 Work accident insurance given to workers is Employee Social Security (JAMSOSTEK) √

ST2 Employee Social Security membership record of Naga Sakti Mill employees is available, for example for June 2011, the number of employees became members were 144 (8 female and 136 male). The company has given Employee Social Security report every month to Employee Social Security office, Pekanbaru branch. (Record evidence: Employee Social Security Fee payment Report of May 2011).

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4.7.4 Regular health examination by a doctor for workers in station or exposed to high risk work.

ST1 Periodic health examination, especially for mill workers, conducted once a year, except for workers at WTP (water treatment process) station and Laboratory, conducted once every 6 months. The health examination for each employee result document is available. Will be further verified during stage-2 activity.

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ST2 Medical screening needs identification record for each employee at high-potential station is available. Medical screening program is planned in increments each month for mill workers while for estate conducted every four months. For example: For periodic examination for chemicals and fertilizer spray workers conducted every four months; the last inspection conducted on 3 June 2011 to the maintenance workers at Rama Bakti Estate 39 people, Naga Mas Estate 40 people, Naga Sakti estate 71 people. For mill work area, the results of medical screening conducted by the Company Hygiene and Health certified doctor, for example: March 2011 examination, a total of 7 workers (operators loading ramp, threshers, workshop, security, wheel loader drivers, and engine room operator). The company has not conducted the audimetric test and the evaluation for workers at high noise intensity station which had been arranged by regulations to ensure OHS for the workers. For example : Engine room operator; and Boiler operator etc. The non-conformance in this indicator is CFA-2011.25. On July, 15, 2011 the company has conducted the audiometric test for 12 person to work at high noise intensity station which had been arranged by regulations. The test result showed there were 2 workers suffered low hearing impairment. The Company has conducted an evaluation of audiometric test results of the evaluation of the use of PPE or recommended to be moved to another section. The results of the examination and evaluation are available at Naga Sakti POM office. The non-conformance status NC-2010.12 is declared as closed.

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4.7.5 A documented risk assessment for Occupational Health and Safety (OHS).

ST1 The available document is the records of OHS risk analysis for the estate and mill area, for instance: The identification of Hazard, Risk Assessment, and Risk Management of PT Buana WiraLestari Mas – Naga Sakti Mill, this document covers work station, work description, hazard potential, risk assessment (consists of chance, consequences and risk), and risk management. Will be further verified during stage-2. However, based on field inspection, found evidence that permanent worker and spray worker were not equipped by adequate PPE. For example: harvest worker helmet and long sleeve outfit for spray workers at Naga Sakti estate, eventhough the company has explained that PPE recommendation for spray workers and harvest workers were based on risk analysis (risk assessment). It is necessary to re-consider risk analysis made so that PPE recommendation for workers is proper. The non-conformance in this indicator is CFA-2010.13.

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ST2 The Company has composed a risk analysis document in a form of ISBPR (identification of hazard, Risk Assessment and Risk Management) for estate and mill area. Based on the field inspection during stage-1 on Personal Protection Equipment for harvest and spray workers. Based in risk analysis document and field inspection result to Naga Mas estate and Naga Sakti estate, the harvest workers has used helmet and spray workers have worn long sleeves (apron). The non-conformance status CFA-2010.13 is declared as closed.

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4.7.6 Record of OHS Training.

ST1 OHS training program record is available, for example:

− Training Plan and Training identification period 2010 Naga Sakti Mill. This document includes each position training needs by considering the employee’s tenure.

− Naga Sakti Mill SMK3 work plan year 2010 which includes training/counseling (introduction and Socialization of SMK3, training SOP at all stations, fire extinguisher training, etc.)

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ST2 The Company has arranged OHS training program based on training needs identification result for each job description year 2011. Mill operator training result record evidence for boiler station, wheel loader, steam turbine, motor diesel, and welder is available: - Class I Boiler Operator license for Noor Huda, issued on 13 November 2010, valid until 2012

(conforming with The Minister of Labor Regulation Number 01 year 1988) - Lifting and Conveyance Instrument (wheel loader) Operator License for Sabral, issued on 10 June

2008, valid until 2013 (conforming to The Minister of Labor Regulation Number 05 year 1985). - Class II welder certificate for Parman Hadengganan, issued on 15 September 2009. - First Aid training for estate on 26 January 2011 trained by the company’s doctor with 72

participants. The evidence of First Aid training implementation for workers is available, dated 25 January 2010; the trainer was company’s doctor, there were 12 participants involved (WTP operator, engine room operator, head of warehouse, workshop clerk).

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4.7.7 Accident and emergency preparedness procedure.

ST1 The Company has had emergency response procedures, such as Land Fire emergency response SOP (SOP/BWL/KBR) which was signed on 5 February 2010. These procedures include: the formation of fire fighting squad and its training, land fire handling procedures in case of fire occurs. And SOP of Prevention, Response, and Recovery Emergency Condition (SOP / BWL / PKD), which was ratified on 5 February 2010, this procedure includes: the establishment of an emergency squad, the identification of emergency situation causes, as well as steps to overcome emergency situations. There is an available evidence of Land fire emergency response simulation conducted on 25 July 2010. Will be further verified during stage-2.

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ST2 The Company has arranged emergency response in forms of: - Fire Fighting Flowchart. - Earthquake Diagram. - Work Accident Handling Flowchart. The company has conducted fire fighting simulation in cooperation with Kampar district Fire Fighting Agency on 26 February 2011 located at Naga Sakti and Naga Mas estate. The participants involved were 65 people (estate and mill managers, assistants, estate and mill employees). The company has conducted simulation on 21 June 2011 conducted by the internal company; participants involved were 48 people (estate and mill managers, assistants, mill and estate employees). The company has also arranged emergency response structure approved by Kampar district Head of Social and Labor Agency on 1 July 2011.

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4.7.8 Evidence of OHS and first aid equipments available at worksites.

ST1 OHS equipments owned by the company are as follows:

− Fire extinguisher placed at accessible places and has high potential fire incidents, such as the X


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whole mill area, chemical material warehouse, diesel fuel tank, and employee settlement.

− Fire Hydrant, which is available at mill area and also equipped with hose.

− First Aid Kits is available at every building, such as: workshop, employee settlement, office, mill area, and warehouse.

The company has also conducted routine inspection towards the equipment. However, based on field inspection found the evidence that all fire extinguisher tubes installed were not equipped with their expired date, and it is advised for the company to inform the expired date for each tube. The non-conformance in this indicator is CFA-2010.14.

ST2 The Company has provided OHS and First Aid Kits for workers and emergency condition, for example: - Fire Extinguisher (APAR), 37 units in the mill area, inspected once in a month. - Hydrant, 10 units; inspected once in a month - First Aid Kits, 7 units (Mill’s Grand Office, laboratory, security guard post, WTP station, central

warehouse, workshop and mill processing office). Based on field inspection, Fire Extinguisher and hydrant has been well maintained and in a ready-to-use condition for emergency condition, for example Fire Extinguisher Number 17 and 18 at engine room, Hydrant number 6 at boiler station, and Fire Extinguisher number 32 at hazardous waste store room. Fire Extinguisher is also equipped with its expired date. The non-conformance status CFA-2010.14 is declared as closed.

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4.7.9 Workers trained in first aid should be present in both field and mill operations.

ST1 The Company has given first aid training to workers, for example; first aid training result evidence is available for Naga Sakti mill workers; and the company has also arranged training program for workers who haven’t been trained, written on Naga Sakti Mill Training Program Implementation and Plan. Will be further verified during stage-2.

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ST2 The Company has conducted first aid training for mill and estate workers (see explanation in indicator 4.7.6).

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4.7.10 Records of occurrence of any work accidents are maintained and regularly reviewed.

ST1 The work incident/accident record has been well recorded by the company, for example: work accident report (1x24 hours) document of PT Buana Wiralestari Mas year 2010. Will be further verified during stage-2

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ST2 The Company has monitored work accident, documented, and conducted study properly since 2009, 2010 until June 2011, the record samples: - Work accident report (1x24 hours) year 2009 in the name of Endik Bustain (boiler operator), burn

injury accident, the accident occurred on 29 September 2009, the cause of the accident due to valve condensate blockage which caused steam heat explode right to the face, left arm, and both feet. The company has investigated on the case (Work Accident Investigation Appendix Form), based on the accident investigation, the accident was categorized as minor and needed to be followed up, the prediction of days lost was 11 days. The follow up action from the accident, the worker was immediately taken to the central clinic to get intensive treatments.

- The workers accident report is available at each estate. Until June 2011, there has not any work accidents occurred. The document contains work accidents data has been reported to Kampar district Labor Agency along with the Advisory Committee Occupational Health and Safety Activity report.

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

4.8.1 A documented training program for staff, employee and scheme smallholders in accordance with workers' positions and competence.

ST1 There are continuous training program for staffs and employees conforming with their each competency, for example:

− OHS training for diesel engine operator, programmed to be conducted in October 2010.

− Welder training for workshop workers, programmed to be conducted in May 2010. It has been implemented on 10-11 May 2010.

− OHS training for first foreman, harvest foreman, maintenance foreman, and teachers, programmed to be conducted in February 2010 and has been implemented on 26-27 January 2010.

− Fire fighter training for warehouse clerk, security guards, water operators, programmed to be conducted in February 2010 and has been implemented on 22 February 2010.

− Occupational Health, Safety and Company Hygiene training for nurses, spray foreman, coordinator and head of warehouse foreman, programmed to be conducted in October 2010 and has been implemented on 12-14 October 2010.

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ST2 Same as Stage-1 The Company has made continuous training program for staffs, employees, in a form of training needs matrix and the implementation time for 2011 requirement at each estate (Naga Mas Estate, Naga Sakti Estate, and Ramabakti Estate) such as:

- AK3 staff training

- Fire Extinguisher operational training

- Training for Heavy equipment mechanics

- Hazardous waste handling training

- Integrated Pest Management training Naga Sakti Mill doesn’t receive fruit supply from plasma farmers so there was no training for plasma farmers.

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4.8.2 Records of training for each employee are kept.

ST1 Training record for each employee is available in a form of training materials and attendance list. For example, integrated pest management training implemented at SMP NSAE building on 8 February 2010, in cooperation with Smart Research Institute (SMARTRI), attended by 37 participants.

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ST2 The Company has implemented the training and the records have been compiled, such as:

- On 8 February 2010, there was an Integrated Pest Management training attended by IPM officer in the name of Kasiyanto.

- On 18 May 2010, there was a Hazardous Waste Prevention training and attended by staff, foreman, and head of warehouses.

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4.8.3 Evidence that the company uses experienced or trained contractors.

ST1 The company has procedures in a form of Contractor Control SOP document Number SOP/BWL/KTR dated 5 February 2010 which regulates the contractor work performance evaluation system in order to ensure environmental aspects and OHS compliance. The evaluation type is in a form of contractor work performance document in implementing OHS.

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ST2 The Company has had evidence using trained contractor written on Work Agreement Letter which requires the agreed conditions for each type of job, for example: Work Agreement Letter Number 03/RBKE/04/2011/KBN for oil palm FFB transportation implementation conducted by PT. Starindo Agro Palma as the second party. In Article 5 stated that the second party is not allowed to deviate from the requirements, and has to conform to the work plan and technical specification given by the company.

− The second party is obligated to put a Site Manager in charge or an execution manager working full time, having the skills and experience needed as well as approved by the first party.

− The second party states the capability to fulfill the Acts regulations on employment, especially with the workers’ wage payment and age.

The second party ensures occupational health and safety to all workers. The company has also an evaluation mechanism of contractor work performance including the assessment of the fulfillment of OHS (Occupational Health and Safety) aspect implementation.

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PRINCIPLE #5 ENVIROMENTAL RESPONSIBILITY AND NATURAL RESOURCES AND BIODIVERSITY.

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

5.1.1 Documentation of Impact Analysis.

ST1 The Environmental Impact Assessment (EIA) document of PT. BWL consists of : 1. The EIA document of PT. BWL for Naga Mas Estate and Naga Sakti Estate No

IRC.220/888/B/V/1994 on 19 May 1994 with the mill capacity of 60 Ton FFB/Hour. 2. Environmental Management Plan/Environmental Monitoring Plan of PT. BWL for Naga Mas Estate

and Naga Sakti Estate No. 090/RKL-RPL/BA/IV/1996 on 30 April 1996.

Will be verified further at Stage-2.

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ST2 The EIA document of PT Buana Wiralestari (Naga Sakti Mill) consists of : 1. KA EIA No 183/AMDAL/VI/1993 on 18 June 1993 regarding the stablishment of KA-EIA of PT

BWL. 2. Environmental Impact Assessment (EIA) document which was approved by Letter No

IRC.220/888/B/V/1994 on 19 May 1994 with the mill capacity of 60 Ton FFB/Hour. 3. Environmental Management Plan/Environmental Monitoring Plan (RKL/RPL) which was

approved by Letter No. 090/RKL-RPL/BA/IV/1996 on 30 April 1996 which inside included the monitored parameters such as the Management and Monitoring to and by the Elephants; Monitoring and Measurement of water level in the peatland canals. In the Report of Environmental Management Plan/Environmental Monitoring Plan period II (July – December ) year 2010, it was stated that the management of disturbance to and by the elephants was no longer been conducted since it has been a long time (In the last 10 years), there was no disturbance caused by the Elephants.

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5.1.2 Records of regular report on environment management in accordance with the relevant regulations.

ST1 Available, such as : − Report of Environmental Management Plan/Environmental Monitoring Plan report semester I year

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2010 for Naga Mas Estate & Naga Sakti Estate was delivered through Letter No.92/DL-PKU/X/10 on 07 October 2010.

− Report of Environmental Management Plan/Environmental Monitoring Plan report semester I year 2010 for Kijang Estate was delivered through Letter No.93/DL-PKU/X/10 on 07 October 2010.

Contents of Environmental Management Plan/Environmental Monitoring Plan report compiled by PT. BWL has not been fully described all parameters of environmental impact management in accordance with Environmental Management Plan/Environmental Monitoring Plan in year 1996. Such as the Management and Monitoring to and by the Elephants; Monitoring and Measurement of water level in the peatland canals. It is suggested to the company to review the document of Environmental Management Plan/Environmental Monitoring Plan Implementation Report and customize the entire contents of the report with all parameters of environmental impact management based on Environmental Management Plan/Environmental Monitoring Plan year 1996. The Non-conformance in this indicator is NC-2010.15.

ST2 The company has incorporated all parameters of environmental management and monitoring contained in the Document of Environmental Management and Monitoring Plan which includes the Management and Monitoring of disturbance to and by the Elephants; Monitoring and Measurement of water level in the peatland canals. In the Report of Environmental Management Plan/Environmental Monitoring Plan period II (July – December ), it was stated that the management of disturbance to and by the elephants was no longer been conducted since it has been a long time (In the last 10 years), there was no disturbance caused by the Elephants.The Non-conformance status of NC-2010.15 is declared as closed.

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5.1.3 Revision to Environment Management document if there are changes in companies operating area or activities.

ST1 There were no changes in terms of operational areas or activities of the company (Capacity of each Palm Oil Mill has not changed with what was written in EIA document).

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ST2 Same as stage-1. Where there were no changes in terms of operational areas or activities of the company (Capacity of each Palm Oil Mill has not changed with what was written in the EIA document which was 60 FFB/Hour). ).

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5.2 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.

5.2.1 Records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat.

ST1 HCV Identification Document is available , however the process of its content preparation has not been fully adjusted to the HCV Identification Guidelines issued by the Consortium of Indonesian Toolkit HCV Revision, May 2008, such as the lack of the using supporting datas (the base map, legalization of documents by Management, the Document’s Constituent Team, evidence of the implementation of Public Consultation, maps were not adjusted to the scale listed in the documenst and document peer review has not been implemented yet). HCV Identification has been covering the entire area of PT. BWL and there were 2 HCV attributes that being identified which were HCV 1.2 (type of Collared Kingfisher [Cekakak Sungai] and Leopard Cat [Macan Akar]) and HCV 4.1 Riparian area. Result of identification of protected species and species that are included in Appendix II (Collared Kingfisher and Leopard Cat) is available, but it has not been presented as a measurable data. The Non-conformance in this indicator is CFA-2010.16.

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ST2 HCV Identification document of PT. BWL composed by the Internal Constituent Team of HCV Identification which consists of 5 person (Norman Faried Mustakim; approved RSPO HCV Assessor, Kusuma Widya Rochmah; approved RSPO HCV Assessor, Tomi Herdartomo, Nazlya Syahputri and Bambang Setyaji) and endorsed in February 2011 is available. Peer review has been conducted by external party (Dwi Rahman Muhtaman) on October 2010. Based on that document, High Conservation Value 1.1, 1.2 and 4.1 with the total KBKT area of 411.55 Ha were identified. The presence of types of protected Fauna was also identified such as White-throated Kingfisher (Halcyon smyrnensis) and Leopard Cat (Felis bengalensis). This document also outlined the Management and Monitoring Plan of HCV area. The Non-conformance status of CFA-2010.16 is declared as closed.

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5.2.2 If, rare, threatened or endangered species, or high conservation

Value habitats are present, appropriate measures to preserve them are to be taken.

ST1 Recommendation has been drafted in HCV Identification Document but not yet described into HCV Management and Monitoring Plan. The Non-conformance in this indicator is CFA-2010.17.

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ST2 Steps to protect types of endangered species have been described in the Document of HCV Identification Report, such as : 1. Installation of warning boards regarding the preservation of the species. 2. Socialization to the employes and surrounding community regading the preservation of the

species. The company has conducted the HCV monitoring activities including the monitoring of the presence of protected widllife activities, which implemented every week at the same track, for example at Naga Mas Estate, there were 2 tracks for each species, track F30 – 27 and D08 – 10 Bounders (Leopard Cat) and the riparian area of Perbadoran and Pijar rivers (White-throated Kingfisher). Results of the monitoring were recapitulated in HCV Monitoring Recapitulation Form in order to determine the frequency of encounters for each protected species on each monitoring track. Based on the results of field visit (Riparian of Perbadoran River), The company has installed information boards, prohibition boards on hunting the protected species, fish poisoning and land burning. In the document of HCV management plan in year 2011, socialization has been planned to be conducted around May 2011, but until the implementation of stage-2 (July 2011), it has not been realized yet. The Non-conformance status of CFA-2010.17 is declared as closed, but the new Non-conformance of CFA-2011.26 is arised. On July, 25, 2011, the Company has provided evidence of HCV socialization to the public around the estate on July 18, 2011 in the form of socialization HCV letter invitation to the Sekijang Village head, village officials and Sekijang villagers; minutes of the HCV socialization; attendance list of activities and documentation (in the form of photographs of events). Based on observation above status of CFA-2011.26 is declared closed.

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5.2.3 Measures taken for protecting species and their habitats must be in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities.

ST1 Monitoring to the presence of protected fauna has been implemented but it has not been presented in measured data. See indicator 5.2.2 above. The Non-conformance in this indicator is CFA-2010.17.

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ST2 Steps that were taken by the company, are ; 1. In accordance with the Circular of SMD Operations No. 002/SE-SMD OPS/IX/2010 in 20

September 2010 regarding the protected species, then the company prohibits all Staff and Non Staff employees for; a. Capturing, Injuring, keeping, transporting and trading the protected species alive. b. Storing, possesing, nursering, transporting and trading the protected species in a state of

death.

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2. The company has installed waning boards in the form of HCV Identification Boards, Prohibition Boards on agrochemicals application in the riparian area, and boards of protected species.

3. The company has made posters of protected species placed in offices, Sekijang Elementary School, clinics and daycare (Pamong).

4. The company has conducted socialization of HCV to Employees and surrounding community (year 2010) as many as 3 times on 28 July 2010 (Community), 27 July 2010 (Employee), and 19 July 2010. Based on the management document of HCV management in year 2011, socialization to the commnity has been planned to be done in May 2011, but until the implementation of stage-2 (July 2011) , it has not been realized yet.

5. Based on information form the management, socialization of HCV to the employees is often done together with the morning briefing.

6. Based on the interview with the Head of Sekijang village, that under the rules of the village, activity of fish poisoning is baned, and a fine of IDR 10,000,000.00 will be charged to those who violate this ban. The Nonconformace of CFA-2010.17 is declared as closed, but a new Non-conformance of CFA-2011.26 is arised.

5.2.4 Posters and signs warning of the presence of protected species are to be produced, distributed, and made visible to all workers and the community, including guidelines in handling them

ST1 Warning boards and image leaflets of protected species are available, and socialization regarding this matter has been both internally and externally conducted in the company.

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ST2 a. The company has installed waning boards in the form of HCV Identification Boards, Prohibition Boards on agrochemicals application in the riparian area, and boards of protected species.

b. The company has made posters of protected species placed in offices, Sekijang Elementary School, clynics and daycare (Pamong).

c. The company has conducted socialization of HCV to Employees and surrounding community (year 2010) as many as 3 times on 28 July 2010 (Community), 27 July 2010 (Employee), and 19 July 2010.

d. Based on information form the management, socialization of HCV to the employees is often done together with the morning briefing.

e. The company has installed information boards of protected species which placed in the riparian of Perbadoran river.

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5.2.5 Companies are to appoint dedicated and trained officers to monitor any plans and activities as

above.

ST1 The assigment of Mr. Amin as a special officer who will be responsibe for the monitoring of protected species is available but no training has been conducted for this officer. The Non-conformance status in this indicator is CFA-2010.18.

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ST2 The company has assigned special officers to perform the management and monitoring of HCV area, namely; a. Mr. Amin (Naga Sakti Estate) in accordance with the Letter of Senior Estate Manager on 03

January 2011, who has been internally trained on 28 October 2010 and 26 May 2011. b. Mr. Nurcahyo Adhi Saputro (Naga Mas Estate) in accordance with the Letter of Senior Estate

Manager on 03 January 2011, regarding the assigment of NMAE HCV PIC who has been internally trained on 28 October 2010 and 26 May 2011. The Non-conformance status of CFA-2010.18 is declared as closed.

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

5.3.1 All waste and pollutions sources are identified and documented.

ST1 The company has provided the records of sources of waste identification for estate and mill area, such as :

− Document of Estate Environmental Aspects List that consists of code of aspects, arised environmental aspects, potential of impacts, related fields and related procedures.

− Document of POM Waste Management Activities of PT Buana Wiralestari Mas - Naga Sakti Mill, Semester I/2010. This document includes Types of Aspect, the Regulation reffered to, Management Program, Applied Policies and related documents. Policies. Types of waste identified in the mill area including, Solid and Liquid domestic waste, Solid and Liquid Mill waste, Mill’s Gas waste, Hazardous waste, Noise, Vibration and Lighting, and used materials waste. Management Plan/Program has been made for each identified waste.

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ST2 In additional to document seen at stage-1 The company has been able to show the document of source of waste identification (For example: Activities of Palm Oil Mill waste management).

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5.3.2 Estates and mills waste management and disposal are implemented to avoid or reduce pollution.

ST1 Waste Management Plan has been available (see also major indicator 5.3.1 above), this plan is listed in the document of POM waste management activities, PT Buana Wiralestari Mas - Naga Sakti Mill. For example :

− Plan of Mill’s solid waste management is by the utilization of excess fiber and shells as the saving of fosil fuel, the applied policy is done through the operation of Boiler and Turbine which use fiber and shells fuel.

− Plan of Mill’s Liquid waste management is done through the utilization of mill’s effluent for application through Land Application System into estate areas and conducted the analysis of waste sample routinely.

− Plan of Hazardous waste management is by temporarily accomodating and stroring it in a special place and establishing the hazardous waste Landfills, recording and submitting it to Hazardous waste collector.

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ST2 In additional to document seen at stage-1 The company has been able to show the evidence of the records of waste management plan in accordance with its identification result (See indicator 5.3.1).

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5.3.3 Management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance with the product label and existing regulations.

ST1 The company has identified the types of hazardous waste that being generated, such as : Used storage batteries (Accumulator), used oil (lube), used filters, used bulbs, hazardous waste packages and cotton waste. Its management plan is by collecting them into a place that already has license of temporary storage from the Regent of Kampar District (reffered to the documents of the Regent of Kampar District Decree on 5 July 2010 No: 660/BLH-WAS/13 regarding the License of Hazardous Waste Temporary Storage of PT Buana Wiralestari Mas). The scope of this license is PT Buana Wiralestari Mas Palm Oil Mill with a determined coordinate point and size of storage, and source of hazardous waste derived from activities at mill and estate. Based on observation of auditor team to the warehouse of Hazardous waste storage at Naga Sakti Mill,

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the auditor team evaluated that storage location has been in accordance with the issued license, and the company has conducted the recording of the monitoring of hazardous waste that in and out that temporary storage.However, the auditor team found some hazardous waste that still being stored in the temporary location that doesn’t have license, such as during the visit of auditor team to Hazardous waste storage warehouse in Naga Sakti Estate area, that non-licensed warehouse was used to store some Hazardous waste such as used grease, used diesel filters, etc. Based on the information from one of company’s staff, who acknowledged that hazardous waste that generated from the estate were not collected in the licensed temporary storage, because the size of the storage is insufficient and the staff also added that storage warehouse that located in the estate was only temporary, until the collector took it. However the auditor team considered that this is not in accordance with the license issued by the Regent of Kampar District that stated that Hazardous waste may not be retained in any places other than the place specified in the license.It also has violated the rules set by the Goverment in PP 18/1999 regarding the Management of Hazardous waste. The auditor team also found that the recording of Hazardous waste monitoring has been conducted by the company, but it hasn’t been reported to the relevant authorities as required in the storage license from the Regent. The company is required to store all generated hazardous waste in a storage location that already has license. The Non-conformance in this indicator is CFA-2010.19 Result of auditor team observation also found that Hazardous waste was sold or handed over to Hazardous waste collector whose license has been expired (Evidence of record, Minutes of Hazardous waste submission to collector on October 2010). This is not in accordance with Goverment Regulation 18/1999 which required collector to have its collecting license. The Non-conformance in this indicator is CFA-2010.20.

ST2 The company has been able to show the revision of Hazardous waste storage license which has been issued in prior. The revision document of Hazardous waste storage icense is still issued in the same number 660/BLH-WAS/13, on 5 July 2010. Revision of the license has included three points of Hazardous waste storage location, namely at Naga Sakti POM, Naga Sakti Estate and Naga Mas Estate. Results of Hazardous waste monitoring were in the form of Log Book of used oil (lube), used filters, used cotton waste, and used bulbs. Monitoring was conducted every time an item entered the hazardous waste storage and being recapitulated every month. Such as :

- April 2011; Stock in the early of April 2011 as much as 784 liter, used oil (lube) that entered the storage from 7 to 26 April 2011 as much as 100 L, the company submitted that used grease to the collector on 28 April 2011;

Evidence of the the complete document of used grease submission process to the third party is available, including : Hazardous Waste Document (Manifest) No:0022008, types of waste that being transpoted are used grease, grease waste was taken from the location of Naga Sakti POM, Naga Mas Estate, and Naga Sakti Estate; on 28 April 2011; number of of grease quantity was 18 pcs drum (each drum 200 L) or around 3,600 L, consisting of Naga Sakti POM as much as 800 L, Naga Mas Estate 1,400 L and Naga Sakti estate 1,440 L.The company has submitted that hazardous waste to PT. Nirmala Tipar Sesama who already has the Hazardous Waste collecting license in accordance with the Decree of Environment Minister No: 128 year 2010; Valid licensed of Hazardous waste transportation is also available. The Non-conformance of CFA-2010.20 is declared as closed.

Log book of Herbicide packages in Naga Sakti estate, Period April-June 2011 is available; Stock of April 2011: Packages of Eukafuron bottle as many as 50 pieces, on May 2011, there was an addition of 49 pieces of Eukafuron bottles, so that the stock at the end of May 2011 was as many as 99 bottles.

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On June 2011, there was an addition of 25 pieces of Eukafuron bottles that made the stock at the end of June was as many as 124 bottles. During the implementation of stage-2, retention time of Eukafuron bottle has exceeded the 90 days maximum time set by the company. The company is strongly suggested to take further actions regarding the retention time of hazardous waste that has exceeded the 90 days of retention time. The company is also advised to submit the report of chemicals waste packages at Naga Sakti POM and Pesticides waste packages at Naga Sakti Estate to the relevant authorities. Evidence of the reporting of Hazardous waste monitoring in quarter I (Jan-March 2011) to the Environment Body of Kampar District, Riau Province is available. The reported documents are Loog Book and Balance of hazardous waste on 6 April 2011. For quarter II (April-June 2011) will be reported in July 2011. Types of reported haxardous waste were: used grease, used filters and used batteries. The Non-conformance status of CFA-2010.19 is declared as closed. Based on field visits, evidence of chemicals packages in Naga Sakti POM which were not placed in the licensed hazardous waste storage was found. The company explained that it was because the insufficient size of the strorage that couldnt accomodate those entire chemicals packages; and those chemicals packages were only stored temporarily waiting for the supplier to took them. However, the auditor team suggested to collect all chemicals packages in Naga Sakti POM into the licensed storage. The Non-conformance of CFA-2011.27 with Comment For Action category.. It is strongly advised to take further action regarding the retention time of hazardous waste that has already exceeded the 90 days retention time (For example : Waste of used Eukafuron packages in the hazardous waste warehouse at Naga Sakti Estate); and it is suggested to convey the result of hazardous waste monitoring (For example : used chemicals packages at Naga Sakti POM and waste of used pesticides packages at hazardous waste warehouse at Naga Sakti estate) to the relevant authorities. The Non-conformance of CFA-2011.28 with Comment For Action category.

5.3.4 Records of waste monitoring/analysis.

ST1 The company has provided the records of waste monitoring, such as : − Monitoring of liquid waste BOD (See Indicator 4.4.3)

− Monitoring of Hazardous waste, for example the document of Used Grease Log Book in January – September 2010.

Will be verified further at stage-2.

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ST2 In additional to document seen at stage-1 The Company has provided the evidence of waste monitoring (See indicator 4.4.3 .)

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

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

ST1 The Company has conducted the monitoring of fiber and sheels utilization in period of year 2010, however there was no sufficient evidence that the analysis of its data has been implemented. (Energy/ton CPO or energy/ton of Oil Palm products. Will be verified further at stage-2. The Non-conformance in this indicator is CFA-2010.21

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ST2 Record of the monitoring of fiber and shells utilization in the form of Production data of Fiber and Shells in year 2006 until May 2011 is available. Evidence of the record of fiber and shells fuel utilization analysis as the source of electric generator compared to the use of diesel fuel for electric generator.

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Based on conversion data of Fiber and Shells to Diesel, it was obtained that the use of Fiber and Shell in year 2010 could save as much as 60,776 liter diesel or around IDR 313,206,635,-. The Non-conformance status of CFA-2010.21 is declared as closed.

5.4.2 Records of monitoring of fossil fuels use for operational reason and its efficiency analysis.

ST1 The Company has conducted the monitoring of fosil fuel utilization (diesel fuel) period of year 2010, but there was no sufficient evidence that its eficiency analysis has been implemented. The Non-conformance in ithis indicator is CFA-2010.22. Will be verified further at stage-2.

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ST2 Record of the monitoring of fosil fuel (diesel fuel) utilization in the form of BBM (Diesel fuel) usage in the period of January-May 2011 is available; average of use per month as much as 13,840.4 liter; budget per month 8,975.4 L. The company explained that the use of diesel fuel that exceeded the budget was caused by the unreachable mill utility; processed FFB was lower that the determined budget (Caused by climate condition in the beginning of dry season), so that the use of turbine was lower and the use of diesel for generators was increased.The company gave an information that it has been predicted that in August 2011 (in the beginning of rainy season), the condition of FFB will be increased, so that the use of diesel fuel for generator can be pressed in order to optimize turbines which use fiber and shells fuel. The Non-conformance of CFA-2010.22 is declared as closed.

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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.

5.5.1 Documented assessment where fire has been used for preparing land for replanting.

ST1 The Company has commited not to perform burning at the time of land clearing for new opening areas or replanting. This is realized by the establishment of Non-burning land Clearing SOP. Will be verified further at stage-2.

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ST2 The Company has commited not to perform burning at the time of land clearing for new opening areas or replanting. This is realized by the establishment of Non-burning land Clearing SOP that listed on Management Committee Agronomy and Research concerning on Land Clearing and Planting (SMA/MCAR/05/05-07) Chapter V.

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5.5.2 Records of implementation of zero burning policy.

ST1 The company always commited not to perform burning at the time of land clearing; based on field visits, there were no new opening areas. However based on informations from one of BWL staff, if BWL wants to perform land clearing , they will implemented methods which are listed in the SOP, which is by method of shredding (merumpuk) harvested tress into one track and planing beans in that area. To anticipate accidental fires, BWL has prepared Firefigters team and performed regular trainings to that team.

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ST2 The company always commited not to perform burning at the time of land clearing; based on field visits, there were no new opening areas. Based on the current SOP of Land Clearing and planting, the company has implemented it (land clearing) into steps, such as : management of spatial, path-blocking, frond stacking (imas), felling (tumbang), mechanical perun, staking (pancang) and hashing (cincang).

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5.5.3 Procedures and records of emergency responses to land burning emergency response (Tanggap Darurat Kebakaran Lahan).

ST1 The Company has owned the procedure of land fire emergency response which is the SOP of Land Fire Management at Estate Area (SOP/BWL/KBR) which endorsed on 5 February 2010. The company has also conducted the simulation of Land Fire on 19 July 2010 by involving all employees from level of staff to worker. This simulation was planned to be done every year. During the visit of auditor team that performed observations to the established firefigter team and seeing the practices of Fire extinguishers owned by the company, the Auditor Team evaluated that that firefighter team has been good enough to master and understand the handling of emergency response procedure.

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ST2 The Company has owned the procedure of land fire emergency response which is the SOP of Land Fire Management at Estate Area (SOP/BWL/KBR) endorsed on 5 February 2010. Based on field visit at Division 1 Rama Bati estate, auditor team evaluated that the established firefighter team has been good enough in acknowledging the procedure of emergency response.

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5.5.4 Presence of appropriate fire extinguishers and facilities, depending on the risks assessment.

ST1 Facilities and Infrastructure to cope with fires which have been provided by the company , were: Fire Extinguishers, water tankers, hose, wet sacks, hook, first aid box, firefighter team, evacuation team and medical team. At a practice on the field in front of Naga Sakti estate office, those used equipments were functioned properly. The company has also conducted inspection towards land fire extinguishers to ensure that those equipments will work properly in time of emergency. Will be verified further at main assessment.

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ST2 The Company has conducted the Identification of Emergency Response Equipments needs which conducted by the Experts of OHS and the Head of Advisory Commitee of Occupational Health and Safety of Rama-rama Estate, such as : Fire Extinguisher, Bakortiba Box, First Aid Box, and hook. Based on the result of field visits at the warehouse of Hazardous waste at Rama Bakti Estate, the auditor team also performed inspections on fire extinguishers which were in a proper condition and ready to use.

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

5.6.1 Evidence of identification of pollution and emissions sources at mills.

ST1 The Company has conducted the identification of pollution and emission sources at Mill as listed in the document of Palm Oil Mill Waste Management Activities, PT Buana Wiralestari Mas, Naga Sakti Mill, which are:

− Mill’s Gas waste in the form of Boiler and Generator emission.

− Noise, Vibration and Lighting.

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ST2 Same as stage-1 The Company has conducted the identification of pollution and emission sources at Mill as listed in the document of Palm Oil Mill Waste Management Activities, PT Buana Wiralestari Mas, Naga Sakti Mill, which are:

− Mill’s Gas waste in the form of Boiler and Generator emission.

− Noise, Vibration and Lighting.

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5.6.2 Monitoring of pollution and emission quality of the sources identified.

ST1 The monitoring of Emission quality has been conducted by the company every 6 months. The result document of Measurement/Testing of stable emission sources and ambient, which performed by Department of Labor and Transmigration, General Secretary of Occupational Health and Safety Centre, Medan. Measurement was conducted on 18 May 2010. The measured parameters were : Particulate, SO2 content, NO2, HCl, Cl2, Opacity, NH3, and HF; the measured pollution sources were Boiler No. 1 and No.2 and Generator No. 1 and 2. Results of the measurement showed all measured parameters below the determined threshold. Result of Noise measurement which conducted on 18 May 2010 is also available, measured locations were engine room station, boiler station and kernel station. Result of measurement showed the value of noise above the threshold, for example the value of noise in the engine room ranged from 97.2 – 97.6 dB (threshold 85 dB);The company has made prevention efforts in order to protect workers who work in that station so they won’t be exposed to noise, by the provision of PPE in the form of ear plug to minimize the workers’ impaired hearing.

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ST2 The company has provided the evidence of air quality measurement conducted on 7 May 2011. The measured pollution sources were : Boiler No. 1 and 2 in accordance with the Regulation of the Minister of Environment No. 07 Year 2007; Generator No. 1 and 2 in accordance with the Regulation of the Minister of Environment No. 21 Year 2008; Residence (Offices, Housing complex) in accordance with Government Regulation No. 41 Year 1999. Measurement was conducted by Department of Labor and Transmigration, General Secretary of Occupational Health and Safety Centre, Medan. The measurement results showed all parameters measured still meet the threshold set by the regulations. Record of the result of Noise level measurement at working area in accordance with Minister of Labor Regulation No. 51 Year 1999 is also available. Sample was taken on 7 May 2011. Result showed value that above the threshold which ranged form 79.2 – 96.2 dBA (threshold 85 dBA). The company gave the provision of PPE in the form of ear plug to workers who work around the mill especially in areas that have high noise level. This aims to protect the workers’ hearing impaired system.

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5.6.3 Records of efforts and strategies employed to reduce pollution and emissions.

ST1 Records of the efforts and plans to reduce pollution and emissions owned by the company were listed in the Document of Palm Oil Mill Waste Management Activities, PT Buana Wiralestari Mas, Naga Sakti Mill. Those efforts were

− Conducting periodic measurement at twice in a year for boiler and generator emission.

− Engine Check-up Program - Boiler and generator engines periodically.

− Installation of 3-element program at boilers.

− Noise and Vibration measurement at twice in a year.

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ST2 In additional to document seen at stage-1 the company has established the 3-element control in Boiler which aims to monitor the needs of fuel with boiler steam so that the use of fuel will be automatically adjusted to the steam pressure and as its effect was the low level of smoke density from boiler’s chimney. This 3-element concept has been applied since 2007. Based on the result of air quality measurement, 27.2 % of opacity for Boiler No. 1 and 27.4 % of opacity for Boiler no. 2 were obtained, these are still under the threshold determined by the regulation which is 30%.

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5.6.4 Records of identification, monitoring, and treatment methodology for POME.

ST1 Methodology of Palm Oil Mill Effluent (POME) management is arranged in the document of mill Management SOP of PT. SMART Tbk Chapter IX concerning on Final Effluent. Effluent that generated from mill were collected at WWTP (Waste Water Treatment Plant) to have treatments so that waste’s BOD will not be so high. From WWTP pond, effluent flows into land application area. Monitorng and Measurement of waste’s BOD is implemented every month by SMATRI Laboratory. Will be verified further at stage-2.

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ST2 Effluent was utilized for Land Application at Naga Sakti Estate. Evidence of Effluent Utilization License for Land Application frmm the Environment Body of Kampar District in year 2007 is available (Valid until 2012). Evidence of the monitoring of effluent volume which has been applied to land in the form of LA Flow Meter Recapitulation in period of Jan-Jun 2011 is also available. Average of effluent’s flow rate which being applied to land on June 2011 was 638.5 M3/Day; this still under the allowed effluent’s flow rate (1,080 M3/Day).

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PRINCIPLE #6 RESPONSIBLE CONSIDERATIONS OF EMPLOYEES AND INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS 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 impacts are made, implemented and monitored to demonstrate continuous improvement.

6.1.1 Documentation environmental and social impact assessment, including details of positive and negative effect that may be caused by plantations and mills, and documented participation of affected parties and local communities.

ST1 Document of Environmental Impact Assessment beside the EIA document in the form of Social Impact Assessment document of PT Buana Wiralestari Mas which includes the positive and negative impacts is available. However there were lacks in the contents of the document, such as: legalization of document, document supporting datas, evidence of the imvolvement of parties affected and competency of its constituent team.The company must review the social impact analysis document by completing the lack of the document’s content with these following points, but not limited to: legalization of document, document supporting datas, evidence of the imvolvement of parties affected and competency of its constituent team. The Non-conformance in this indicator is NC-2010.23.

X

ST2 Survey document of the condition of Social, Economy, Culture and the perception of community around estate/mill of PT Buana Wiralestari Mas on November 2010 which was compiled by the company’s internal team that consists of 3 members (Tomi Hendartomo, Yosaphat Ardhilla R and Nazlya Syahputri) as the analysis of the company’s social impacts to the surrounding community (External) is available, while internal social impact has been accomodated in the Environmental Management Plan/Environmental Monitoring Plan report. The involvement of parties that were exposed by the impacts is implemented by the process of study arrangement through secondary data sampling, primary data sampling (FGD and respondents data sampling) and socialization of the study result. The Non-conformance of NC-2010.23 is declared as closed.

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6.1.2 Regular monitoring and management of social impact, with the participation of local communities.

ST1 The Company has not been able to provide the plan of social impact management and monitoring with periodic participation of the community in accordance with The document of Social Impact Analysis of PT Buana Wiralestari Mas. The Non-conformance in this indicator is CFA-2010.24.

X

ST2 There’s a document of Social Impact Management and Monitoring Plan which consists of the management and monitoring of:

1. Damaged Road (Plasma Area) 2. Flood due to drainage problems during rainy season. 3. Heath problems that caused by improper environment condition. 4. Uneven employment absorption

Based on on the result of interview with the Head of Sekijang and Koto Aman villages, stated that villagers have been involved by the company the arrangement of environmental management and monitoring plan through communication/feedback for villagers or the involvement of the company in the Consultative Meeting of Village Development Plan (Musrenbang-Des). The Noncorformance status of CFA-2010.24 is declared as closed.

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6.1.3 Results of revision of environmental management document that encompasses social impact assessment in the event there are changes to company’s operational scope, in accordance with existing regulations.

ST1 There were no changes in the company’s operational scope. √

ST2 As listed in indicators 5.1.3 where there were no changes in the company’s operational scope as listed in the EIA document year 1994 endorsed by Letter No IRC.220/888/B/V/1994 on 19 May 1994. However, the company has arranged the document of survey result to the condition of Social, Economy, Culture and the perception of the community around the estate/mill of PT Buana Wiralestari Mas on November 2010 as the analysis of the company’s social impacts towards surrounding community (External).

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6.1.4 A regular and scheduled environmental management and monitoring Report.

ST1 Reports of Environmental Management and Monitoring Plan which being reported periodically (Per semester) to the Regional Environment Agency of Kampar District is available, namely :

1. Report of Environmental Management Plan/Environmental Monitoring Plan in semester I year 2010 of Naga Mas Estate & Naga Sakti Estate was delivered through Letter No.92/DL-PKU/X/10 on 07 October 2010.

2. Report of Environmental Management Plan/Environmental Monitoring Plan in semester I year 2010 of Sikijang Estate was delivered through Letter No. 93/DL-PKU/X/10 on 07 October 2010.

Will be verified further at stage-2

ST2 In additional to document seen at stage-1 where the company has arranged the Report of Environmental Management Plan/Environmental Monitoring Plan period II (July to December) which inside includes the social parameters that are needed to be managed and have been reported to the relevant authorities (Environment Body of Kampar District), evidence was in the form of the receipt of Environmental Management Plan/Environmental Monitoring Plan Report Document period II year 2010 of PT Buana Wiralestari Mas by the officer of Kampar District Environment Agency on 19 April 2011 is available. Based on informations from the management (Ms. Nazlya Syahputri), the company has established the period of social impact monitoring based on the result of the survey of the condition of Social, Economy, Culture and Perception of the community around the estate/mill of PT Buana

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Wiralestari Mas as the analysis of the company’s social impacts towars the surrounding community (External) in 1 year so that its management report couldn’t be compiled yet.

6.1.5 Particular attention paid to the impacts of outgrower schemes (where the plantation includes such a scheme).

ST1 Social Impact Assessment document that received special attention towards the management and monitoring of social impact monitoring against plasma smallholders is available. PT Buana Wiralestari Mas has plasma assisted smallholders with the pattern of PIR Trans. Smallholders cooperate with BWL as the nucleus estate through the smallholders cooperative unit. BWL receiving and processing the fruit from the smallholders. Will be verified further at stage-2.

ST2 During ST-2 implementation, scope of evaluation was based on supply of FFB to Naga Sakti Mill. Naga Sakti Mill didn’t received supply of FFB from outside of core estate (Smallholder/Plasma).

N/A

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.

6.2.1 Documented procedures and records of communication and consultation with the communities.

ST1 SOP of communication and consultation with Stakeholder (SOP/BWL/KOM) is available and record of its communication is documented in the Book of Communication and Consultation. Record of the Socialization of the communication and consultation SOP implementation with Stakeholder to the community is available.

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ST2 Same as the time of ST 1 implementation, where ; a. Procedure and information request in the form Communication and Consultation SOP

(SOP/BWL/KOM) on 05 February 2010 where information requests were done directly to PT.BWL in written is available. Documents that related with this SOP are the Book of Communication and Information, Boof ok Communication and and Information Feedback; List of Information and Stakeholder.

b. SOP of Information for stakeholder (SOP/BWL/IUS) on 05 February 2010, documents that related to this SOP are the Book of Communication and Consultation, List of Communication Equipments Inventory. List of Incoming letter from suggesion box and disposition sheet.

c. Record of communication with stakeholder in the form of Book of Communication and Information and also Book of Communication and Consultation which equipped by physical evidence of information requests or information deliverance also feedback process and current status of that information request or deliverance, such as:

- Letter From the Head of Demography Service of Kampar District No. 800/DKPS-SET/2010/724 on 18 October 2010 regarding the update of the residents data was follow up through the submission of Employee’s Data on 5 November 2010 by the company (Ruslan) to Demography Service which received by Mr. Riskani, Ramlan K and Herizal in accordance with the Minutes of hand over of Demography Data Base Development Activities Coklit Result at Kampar District for budget year 2010.

- Letter of request from the Head of Private Vocational School (SMK) YLPM Kota Garo No. 327/SMK.S/KG/2011 on 15 April 2011 regarding the request of Industrial Work Practices Application (Prakerin) which followed by letter No. 332/SMK.S/KG/2011 on 3 May 2011

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regarding the Continuation of Industrial Work Practices Application (Prakerin) which responded by the company by sending the letter No. 07/NMAE/05/2011 on 25 May 2011 regarding the confirmation of Industrial Work Practices which stated that the company agrees to accept students who are mentioned in the application letter of work practices at Naga Mas Estate.

6.2.2 Maintenance of a list of stakeholders.

ST1 List of stakeholders is available. Will be verified furher at stage-2

ST2 List of stakeholders is available, such as; Naga Sakt Mill consists of Statutory Body (15 agencies), Indigenous peoples (11 person), Local Communities (3 person), Workers Company (8 person), Smallholders (9 KUD), Independent Suppliers of FFB and services (7 Institutions) and NGO (2 institutions).

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6.2.3 Records of local communities’ aspiration and responses or follow up actions by companies to these requirements.

ST1 Record of community aspirations is available (mostly for funding) which are documented in the Book of Communication and Consultation completed with information and feedback letter concerning its final status.

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ST2 In additional to document seen at stage-1 where most of community aspirations were accepted by the company in the form of provision requests either the provision of heavy equipments or participation in the implementation of religious/national holidays or other activities required by the stakeholders for example letter of request from the Head of Private Vocational School (SMK) YLPM Kota Garo No. 327/SMK.S/KG/2011 on 15 April 2011 regarding the request of Industrial Work Practices Application (Prakerin) which followed by letter No. 332/SMK.S/KG/2011 on 3 May 2011 regarding the Continuation of Industrial Work Practices Application (Prakerin) which responded by the company by sending the letter No. 07/NMAE/05/2011 on 25 May 2011 regarding the confirmation of Industrial Work Practices that stated that the company agrees to accept students who are mentioned in the application letter of work practices at Naga Mas Estate.

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6.2.4 A dedicated person responsible for consulting and communicating with local communities.

ST1 The assigned officers who responsible for the implementation of communication and consultation with the community are availble, namely ;

1. Naga Mas Estate: Mr. Kurnia Parlagutan Based on letter of Kampar RC No. 001/RC-Kampar/RSPO/10/2010 on 01 October 2010.

2. Naga Sakti Estate: Mr.r. H. Sukirman Based on letter of Kampar RC No. 002/RC-Kampar/RSPO/10/2010 on 01 October 2010.

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ST2 In additional to document seen at stage-1 the Company has assigned officers who are responsible for the implementation of communication and consultation with the company, namely;

1. Ramabakti Estate: Mr. Agung Tri Purwantoro (Letter of ad interim Kampar RC. No. 005/RC-Kampar/RSPO/01/2011 on 01 January 2011 regarding Socially Responsible Person.

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


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6.3.1 An open system, which is accepted by affected parties, to receive complaints and to resolve dispute in an effective, timely and appropriate manner.

ST1 SOP of complaints and dissatisfactions (SOP/BWL/PKK) on 05 February 2010 is available and the evidence that SOP has been socialized to stakeholder on 3 July 2010 is also available. SOP of land conflicts compliance that involved the participation of the third parties (Regional Government, Community leaders, NGO) is available. Based on result of verification in the field (Interview with The Head of Berkat Rido Village Unit Cooperative (KUD), Kijang Makmur village) stated that in case of problems between KUD and BWL the the solution will be done through consensus between both parties fairly.

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ST2 Land Preparation Technical Guideline (Oil Palm) Chapter XII regarding the handling of complaints and dissatisfaction (Document No.: SOP/NP/SMART/XII/MCAR001 on 01 July 2010) which consists of the handling of internal and external complaints and complaints from female workers so that the SOP of Complaints and Dissatisfaction Handling (SOP/BWL/PKK) on 05 February 2010 is stated as no longer valid (expired) is available. Flowchart of each complaint handling is available in the annex. Based on results of field visits at Sekijang and Koto Aman villages, both of the village’s Heads stated that in terms of problems that associated with the company, they will present it orally or in witten in accordance with the contex of the problem and so far the company has always responded any complaints from the community according to the type of complaints submitted quickly. The compliance of complaints always give priority to discussion with related parties, adjusted to the ability of the company and conducted openly.

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6.3.2 Records of handling of the complaints.

ST1 Record of complaints handling is documented in the Book of Communication and Consultation that contains complaint/information received, answer and its final status.

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ST2 In additional to document seen at stage-1 where all records of information requests and complaints are documented in the Book of Communication that lists No, Date, No of letter, Sender name, the origin of institution, petition, purpose, initial of decision-maker, disposition, No reff/receipts and its final status.

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6.3.3 Procedures for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available.

ST1 SOP of Land Conflict Handling (SOP/BWL/PKL) on 05 February 2010 that involved the participation of the related community and institutions in the compliance of land conflict problems is available.

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ST2 In additional to document seen at stage-1 where the SOP of Land Conflict Handling (SOP/BWL/PKL) on 05 February 2010 that involved the participation of the related community and institutions in the compliance of land conflict problems is available. Based on the result of interviews with the Community Leaders of Sekijang and Koto Aman vilages who mentioned that:

1. The process of compensation has been completely done by the company (period of year 1991 until 1994) towards the entire of Land Use Rights areas which owned by the company which at the time of those lands acquisition implementatio, there were steps that should be done such as: socialization to the community, identification of affected parties and area of land, negotiation/agreement of compensation amount and also the involvement of the related parties in process of compensation (Village officials, Leaders of Community/Tribe and Regional Goverments

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2. Beside receiving the compensation of land/crops, the community is also included in Plasma Program.

3. Until the implementation of stage-2, no claims of land derived from the community towards the Land Use Rights areas which owned by the company.

4. The community certainly know the borders of Land Use Rights’ area which owned by the company.

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.

6.4.1 Procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies.

ST1 The process of compensation has been done for the entire area of PT BWL, Boundaries pole of Land Use Rights area were installed and up to the Pre Assessment activities, there are no conflicts of land. Based on the results of field verification to the residents of Sekijang village (H. Rum and Salman), stated that each party has known the borders and no land claims ever happened again.

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ST2 As listed in indicator 6.3.3 that the company already has the procedure of Land Conflicts Handling (SOP/BWL/PKL) on 05 February 2010 which inside contains a mechanism to identify and calculate land compensation, however at the time of ST 2, the process of compensation has been done by the company towards Land Use Rights areas owned by it since 1994 dan based on the interviews with community leaders of Sekijang and Koto Aman villages which are the the native villages stated that previously, land acquitition has been conducted by involving community leaders, village officials, Land Acquisition Commitee (consists of village officials, BPN officers and District officers) dan other relevant parties in accordance with the current applicable regulations.

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6.4.2 Records of identification of people entitled to receive compensation.

ST1 The document of compensation recipients list and its process is available (Minutes of handover, Waiver Statement and receipt of compensation). Will be verified further at stage-2.

ST2 Records of identification to parties that received the compensation is available in the document of compensation process, namely; Owner List Recapitulation/Land Cultivator, Lands and buildings which compensation will be paid by PT Buana Wiralestari based on the result of the decisions of land acqusition committee meeting, Kampar District on 17 March 1992 in Bangkinang which outlines Name of Owner/cultivator, Area of Land, Location of land, price of compensation/m2, amount of compensation, Types of compensation/gift, Types of plants, Buildings compensation, total of compensation and signatures of the recipients. In this record, there are 707 smallholders on the area of 2,467.2 Ha with total of compensation as much as IDR 287,604,300.00 signed by the Committee of the land acqusition, Kampar District which consists of ; 1. National Land Affairs Agency 2. Regional Goverment of Kampar District. 3. Plantation Service of Kampar District. 4. Head of Siak Hulu Subdistrict. 5. Sekijang village 6. And acknowledged by the Regent of Kampar District.

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6.4.3 Records of negotiations processes and/or the details of compensation settlements.

ST1 Complete document of the process of compensatory payment agreement (Minutes of handover, Waive statement and Evidence of compensatory payment receipts) is available. Will be verified further at stage 2

ST2 Complete document of land acquisition in the company’s legal document which contains the Letter of waiver statement, Minutes of Sekijang village plants land acquisition and receipts of land compensatory payment by each recipients which was witnessed by the Head of Land Agency of Kampar District, 1st assistant of Kampar Regent Office, Head of Siak Sulu Subdistrict and Head of Sekijang village is available, such as ; Recapitulation Document of the list of owners/land cultivators, Land, Plants and Buildings which compensatory payment will be paid by PT. Buana Wiralestari based on the result of the decisions of land acqusition commitee meeting, Kampar District on 17 March 1992 in Bangkinang which outlines Name of Owner/cultivator, Area of Land, Location of land, price of compensation/m2, amount of compensation, Types of compensation/gifts, Types of plants, Buildings compensation, total of compensation and signatures of the recipients. In this record, there are 707 smallholders on the area of 2,467.2 ha with total of compensation as much as IDR 287,604,300.00. Signed by the Committee of land acqusition, Kampar District which consists of:

1. National Land Affairs Agency 2. Regional Goverment of Kampar District. 3. Plantation Service of Kampar District. 4. Head of Siak Hulu Subdistrict. 5. Sekijang village 6. And acknowledged by the Regent of ampar District.

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6.4.4 Records of the implementation of compensation payment.

ST1 The complete document of compensatory payment is available (Minutes of hanover, Waiver statement and receipts of compensatory payment). Will be verified further at stage-2.

ST2 Compensatory paymet documents are available, namely ; 1. Letter of waiver statement signed by related parties and witnessesed by the Head of National

Land Affairs Agency Kampar District, Assistant of Kampar Regent Office, Head of subdistrict and Head of Sekijang village.

2. Stamped Compensatory Payment Letter. 3. List of Land Inventory. Plans and other Efforts associated with Land Acqusition which signed

by the land owner, the company and The Level II Regional Inventory Commitee, Kampar. For example; Mr. Diba/Liman, residents of Sekijang village got compensatory payment of IDR 300,000 over an area of 6 ha which realized on 09 November 1992.

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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.

6.5.1 Documentation of employees’ pay rates

ST1 The company’s wages and working conditions for the employees refer to the regulation of Riau Governor No. 95 year 2009 which regulates the minimum amount of wage for District/City of Riau Province in 2010. Minimum wage for Kampar District is IDR1,122,000. Based on that regulation, then

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The Decree of Permanent Daily Worker Wage in 2010 of PT BWL-Riau Province that includes the amount received by the employee, with details is as follow : Employees of daily Work Effort Unit (SKU) whose working period are less than 1 year is as much as IDR 1,038,000 added by the provision of rice supply. Employees of monthly Work Unit Effort whose working period are more than year is as much as IDR 1,039,000 added by the provision of rice supply. The company has the List of Employyes wages for Nagasakti Estate in September 2010 : For example : Andi Wagino (Harvest Worker). Basic Wages IDR 1,039,000 and allowance IDR 237,968,- Hermansyah (Harvest Worker) Basic Wage of IDR 1,039,000 and allowance of IDR 285,554,-.

ST2 List of Employee Wages at Kijang Mill in period of June 2010 is available, also the allowances, overtime and pemiums earned by the employee. Based on The Governor Regulation No. 10 year 2011 which valid since 1 January 2011, the minimum wages for Plantation Sector in Kampar District is IDR 1,234,000. Based on the results of studies document, the amount of wages received by the employee is greater than the existing regulation. For example: Salary of Work Effort Unit employee (spray worker) is IDR 1,226,000 plus a premium of IDR 450.000,-/month and other basic needs.,

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6.5.2 A company working regulations and work contracts, in accordance with existing regulations

ST1 The company is bound by the collective agreement between Sumatera Plantation Company Cooperation Agency (BKS-PBS) and Central Board of Federation of Agriculture and Plantation Labor Union, Indonesian Labor Union (Pengurus Pusat Federasi Serikat Pekerja Pertanian dan Perkebunan Serikat Pekerja/PP.FSP. PP. SPSI) year 2010 based on Act No. 13 year 2003. The company’s regulations for the employees which athorized by Directorate General of Industrial Relations Development and Employee Social Security No. B.140/PHIJSK-PKKAD/PP&PKB/III/2009.

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ST2 In additional to document seen at stage-1 the company has a collective agreement between Sumatera Plantation Company Cooperation Agency (BKS-PBS) including PT BWL and Central Board of Federation of Agriculture and Plantation Labor Union, Indonesian Labor Union (PP.FSP. PP. SPSI) year 2010 based on Act No. 13 year 2003 regarding Employment.

The company also has Company Regulation (PP) of PT. SMART year 2010-2011 which authorized by Directorate General of Industrial Relations Development and Employee Social Security No. 808/PHIJSK-PKKAD/PP /XII/2010.

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6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational, and other

facilities for employees where such facilities are not available or accessible.

ST1 The company has provided housing facilities and other public facilities for employees at Nagasakti Estate (NSAE) such as sources of clean water, religious facilities (mosques, churches and MDA), Employees hall, educational facilities (Kindergarten, Elementary School, Junior High School, School Bus), and football field.

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ST2 In additional to document seen at stage-1 the Company has provided sufficent facilities and infrastructures in each estate. For example : facilities at Naga Mas estate which include: Type of G2 house for employes as many as 261 doors, mosque, sport field, medical clinic which are supported by doctors and nurses, daycare (TPA), education and the provision of electricity which sourced from generators. Based on the result of filed visit at Division I Naga Mas Estate, G2 houses for employees, clean water tanks, religious facilities, as well as clinics are provided in proper condition.

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6.5.4 Agreements entered into with contractors are to specify that contractors abide by labor laws.


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ST1 The company has required contactors to comply with the applicable regulations in terms of employment as listed in the document of Work Agreement Letter of Public Facilities Development No. 004/NSAE/05/2009-BGN Article 5. Specifications and Requirements of work point 6 that states the second party is willing to comply with the regulations in terms of employment, especially that relates to wages payment and age of worker.

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ST2 The company has required contactors to comply with the applicable regulations in terms of employment such as agreement with PT. Satrindo Agro Palma as the second party for oil palm FFB transportation work listed in work agreement letter between the company and contractor Article 5, which is: The second party is willing to comply with the regulations of employment, especially which relates to wages payment and age of worker – The second party garrants the occupational health and safety of its workers. In another article (Article 9) there is also an agreement of regulatory compliance requirements for contractors where the second party guarantees the Occupational Health and sfety of all workers and must equip those workers with PPE in accordance with the applicable regulations.

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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.

6.6.1 Documented company policy recognizing freedom of association.

ST1 The company refers to Collective Work Agreement between Sumatera Plantation Company Cooperation Agency (BKS-PBS) and Central Board of Federation of Agriculture and Plantation Labor Union, Indonesian Labor Union (PP.FSP. PP. SPSI) year 2010 which in Article II there is a recognition of employer to ensure the freedom of association for each employee who involved in that forum. Evidence of its compliance, in the form of the Decre of Establishment Approval of Work Unit Management (PUK) at each estate and mill. For example SKP Work Unit Management (PUK) Nagasakti Estate No. KP-001/DPC-FSPPP/SPSI/KPR/01/07 on 12 January 2007 which Headed by Mr. Ramadhan Barus and Mr. Pujiono as his Deputy.

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ST2 Based on Circular Letter No.045/CEO5-SE/11/2010 on 16 November 2010 regarding the freedom of assosiation in the workers’ Company made by CEO5 Franciscus Costan. The Board of SPSI Work Unit at PT. BWL namely : - It has also been established at Naga Sakti Estate since 1 July 2011 and authorized as the member

of Plantation Labor Union Forum of Kampar District with Decree

No.Kep.251/DPC-FSPP-SPSI/2011/03.

- It has also been established at Naga Mas Estate since 16 September 2011 ad authorized as the member of Plantation Labor Union Forum of Kampar District with Decree No.Kep.046/DPC-FSPP-SPSI/KPR/09/2011.

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6.6.2 Documented company policy recognizing freedom of association.

ST1 The company is able to show the record evidence of meeting with the workers’ union, namely : − Meeting with Work Unit Management (PUK) SPSI PT. BWL with the company’s management on 15

January 2010 which was attended by 10 participants. List of participants is available.

− Meeting of Work Unit Management (PUK) SPSI PT. BWL on 04 March 2010 located at the office’s room of Nagamas Estate which was attendedby 13 participants. List of participants is available.

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ST2 Records of the meeting with the worker’s union in the form of PT RJP SPSI, namely ;

- On 25 October 2010 to discuss about the coordination of work unit board partnership SPSI PT. BWL and the company.

- On 26 April 2011, a meeting about the socialization of Labor Acts to employees performed by the Labor Agency of Kampar district and attended by 18 participants.

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

6.7.1 Documented company policy on worker age requirement, in accordance with national laws.

ST1 Policy of the company regarding the requirements of worker’s age is set in the circular letter of HR Director No. 002/SE-HRDV//03/09 on 31 March 2009 that the limit of the worker’s minimum age is 18 years old.

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ST2 In additional to document seen at stage-1 policy of the company regarding the requirements of worker’s age is set in the circular letter of HR Director No. 002/SE-HRDV//03/09 on 31 March 2009 that the limit of the worker’s minimum age is 18 years old.

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6.7.2 Records of implementation of company policy on worker age requirements.

ST1 Nagasakti estate employees data updated on 1 October 2010 which contains Name of employee, Date of birth, Date of work, origin and religion is listed. Based on that document, there is not any employee under 18 year olds. Will be verified at main assessment.

ST2 The company has provided the record of the implementation of policy concerning on the requirements of worker’s age, in the form of :

- WARNINGS or appeal board on the subject on minimum age restriction of 18 years old, accepted to be working in PT. BWL scope at Estate Office, employee housing.

- Age of the youngest employee at Naga Sakti Estate on behalf of Dedi who is 21 years old

- Age of the youngest employee at Naga Sakti Mill on behalf of Agusnan who is 22 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.

6.8.1 A documented equal opportunities policy.

ST1 It is stated in Circular Letter No. 003/CE05-SE/06/2009 on 24 June 2009 which regulates the implementation of industrial relations in the unit, one of them is the company gives employees the freedom to work in all kinds of work without any discrimination of race, religion, race and gender.

√

ST2 Company policy regarding the provision of opportunities and equal treatment contained in circular No. 003/CE05-SE/06/2009 24 June 2009 which arranges the implementation of industrial relations in the unit, one of them is the company gives employees the freedom to work in all kinds of work without any discrimination of race, religion, race and gender.

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6.8.2 Evidence of equal treatment in working opportunities for workers.

ST1 Evidence of opportunities and equal treatment at work, for example job vacancy for employees of Nagamas Estate from various ethnic and religious backgrounds. At current conditions the company employs staff from various groups, among others: Mr. Abili (Nias tribe; Christian), Mr. Agus salim (Javanese; Christian), and Mr. Amin Wakidah (Javanese; Moslem).

√

ST2 The Company has provided evidence of the provision of the opportunities and equal treatment in employment opportunities, it can be seen in terms of employee data in PT. BWL which contains employee's name, race, education level, religion, date of birth, names of family members (wive and children).

√

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

6.9.1 A documented company policy on sexual harassment and violence.

ST1 It is arranged in the circular of Agronomy Unit Head No.001/CEO5-SE/02/2009 on 20 February 2009 authorized by Fransiscus Costa concerning Sexual Harassment which arranges socialization efforts of prevention and handling of sexual harassment issues against all employees.

√

ST2 The company’s policy regarding the prevention of sexual harassment and violence contained in the circular of Agronomy Unit Head No.001/CEO5-SE/02/2009 on 20 February 2009 authorized by Fransiscus Costan which arranges socialization efforts of prevention and handling of sexual harassment issues against all employees.

√

6.9.2 A documented company policy on the protection of reproductive rights.

ST1 Policies on the protection of reproductive rights contained in circular No. 001/SE/VPA5/12/08, authorized by B. Vijayakumaran on 20 December 2008: pregnant and lactating workers women are prohibited from working in the spraying activities.

√

ST2 Policies on the protection of reproductive rights contained in circular No. 001/SE-VPA5/SPO/07/2011, authorized by B. Vijayakumaran dated 8 July 2011: pregnant and breastfeeding workers are prohibited from working in the spraying activities and jobs that relate directly to the management of hazardous chemicals in accordance with the applicable regulations. There is also Circular No. 002/CEO5-SE/03/2009 on 2 March 2009 regarding the provision of H1 period for 2 days.

√

6.9.3 Proof of implementation of sexual harassment policy.

ST1 Sexual harassment prevention policies were implemented by forming the Committee of Women Workers and IKISTRA (Association of Wives of Riau II Staff) which becomes the socialization efforts of prevention and response to sexual violence. For example: The women Commission of Indonesian Labour Union of Nagasakti Estate (NSAE) chaired by Umi Kalsum and Nurmaslaini as vice chairman. Based on interviews with Mrs. Umi Kalsum, dissemination of prevention of sexual violence is implemented at the time of posyandu (integrated health service unit) activities and family’s health education each month.

√

ST2 The Company has formed the Comittee of Women. - Naga Mas Estate which is chaired by Suwanti since 3 January 2011. - Naga Sakti Estate which is chaired by Umi Kalsum since 1 February 2010

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The Company has also conducted the training of sexual harassment and knowledge of cervical cancer that was held on 1 February 2010 by Dr. Manik attended by 31 participants. Lit of participants is available. In addition, the Company has also conducted the socialization of sexual harassment which was held on 13 January 2010 at Naga Sakti Estate (NSAE) Junior High School, attended by 40 participants from PT. RJP and PT.BWL. List of participants is available.

6.9.4 Proof of implementation of reproductive rights policy.

ST1 Evidence of implementation of reproductive rights protection policy in the form of menstrual (H1) and maternity (H2) leave NSAE. For employees who are pregnant and menstruating are given opportunity to apply for a work break. For example, maternity leave petition on February 2010 on behalf of Mrs. Nellyrawati. There was also menstrual leave on behalf of Mrs. Sriani, Masraini, and Iriani (September 2010).

√

ST2 The Company has provided the evidence of reproductive rights implementation record in in the workers’ monitoring document through daily absence and information letter from clinic officers. Based on result of interviews with Doctors of Naga Mas Estate Polyclinics, there were no pregnant and breastfeeding women work on activities of herbicide spraying and fertilizing.

√

6.9.5 Specific grievance mechanism is available.

ST1 Mechanism of complaint handling is available in the form of letter (written) and direct verbal. Verbal complaints were conveyed directly, either through direct supervisor or through meetings which are conducted by the Commission. The company also provides the Human Research Learning Centre (HRLC) to accomodate complaints from employees. Will be verified further at stage-2.

√

ST2 Employees complaints are submitted orally and in writing. Complaints in writing are submitted through Human Research Learning Centre (HRLC) while verbal (oral) complaints are directly conveyed in the meetings or to supervisors. The mechanism of complaints handling, specifically at the Commission of women has been available which contains of sexual harassment complaints to the management of women commission and followed up with inspections until the resolution stage.

√

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

6.10.1 Current and past prices paid for FFB shall be publicly available.

ST1 Based on the results verification at Berkat Ridho Village Unit Cooperative, Kijang Makmur village that stated that price of FFB is determined by Commitee of price which consists of representatives from the company, plasma smallholder dan facilitated by the Plantation Service of Riau Province. Pricing is valid for 1 week starts on every Tuesday. Meeting of price commitee is held on every Sunday. The valid price is shown at notification board at Village Unit Cooperative office and continuously be updated.

ST2 During the implementation of ST 2, the scope assessment which based on the supply of FFB to Naga Sakti Mill is conducted. Naga Sakti Mill did not receive supply of FFB from outside of core estate (Smallholder/Plasma).

N/A

6.10.2 Pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation)

ST1 Mechanism of pricing is implemented through the commite of price as the representative of Oil Palm Company, Plasma Smallholders and Plantation Agency of Riau Province. Will be verified furher at stage-2.


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ST2 During the implementation of stage-2, the scope assessment which is based on the supply of FFB to Naga Sakti Mill is conducted. Naga Sakti Mill did not receive supply of FFB from outside of core estate (Smallholder/Plasma).

N/A

6.10.3 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent.

ST1 The Board of Berkat Ridho Village Unit Cooperative understands its contract with PT. BWL including its changes.


N/A

6.10.4 Agreed payments must be made in a timely manner.

ST1 Based on information from the Board fo Berkat Ridho Village Unit Cooperative, FFB payment is done per period of once in a month, an in average was realized in accordance with the agreement.


N/A

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

6.11.1 Records of company’s contribution to the local development.

ST1 Available; Will be verified further at stage-2

ST2 Available documents; a. Recapitulation of CSR activities, for example Naga Sakti Estate until June 2011 has

implemented CSR activities amounting to IDR 136,792,244.00. b. Local SPK recaptitulation and Local SPK, for example Naga Sakti Estate Period of year 2010

amounting to IDR 99,755,000.00 and IDR 4,179,159,708.00. Kijang Estate until June amounting to 19,443,200.00 and IDR 90,381,481.00. While in 2010 the amount was IDR 530,600,000.00.

c. Documents of tax payments such as Value Added Tax (VAT/PPN) / Income Tax (PPh), Tax of Ground Water Collection and Utilization, etc.

√

PRINCIPLE #7 RESPONSIBLE DEVELOPMENTS OF NEW PLANTINGS.

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

7.1.1 Social and environmental impact assessments (AMDAL), which include details of both positive and negative social and environmental impacts, made with the participation of affected parties (local communities).


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ST1 Not Applicable; the company has not perform any new land clearing/expansion of oil palm estate since November 2005.

N/A

ST2 Similar to stage-1 audit. N/A

7.1.2 Appropriate management plan and operational procedures (RKL/RPL).


N/A


7.1.3 Where there are schemed smallholders, records of development program for smallholders are kept, in accordance with the scheme and relevant laws.


N/A


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.

7.2.1 Results of land surveys to determine suitability of soil are to be provided, including information on topography, climate, soil type, soil fertility, water table depth and drainage.


N/A


7.2.2 Evidence that plantations are developed in accordance with the suitability of the land.


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

7.3.1 New plantings within Nov 05 and Nov 07 must be in compliance with existing regulatory requirements that relate to social and environmental impacts management, and with the legalized land spatial planning.


N/A



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7.3.2 Maps showing plan and realization of land clearing in accordance with HCV identification.


N/A


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

7.4.1 Maps identifying marginal and fragile soils, including excessive gradients and peat soils, should be available.


N/A


7.4.2 Where limited planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them without incurring adverse impacts.


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.

7.5.1 Social and environmental impact assessment document which include analysis of both positive and negative environmental and social impacts, and made with the participation of affected parties.


N/A


7.5.2 Documented socialization programs prior to new plantings.


N/A


7.5.3 Proof of payment to land owners and proper handing-over of the land for new plantings.


N/A



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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 agreement

7.6.1 Documented identification and assessment of customary and legal rights with the involvement of relevant government agencies and local communities.


N/A


7.6.2 Procedures to identify people entitled to receive compensation.


N/A


7.6.3 Records of negotiation process and/or compensation settlements are available.


N/A


7.6.4 Documentation of calculation and payment for compensation.


N/A


7.6.5 Communities that have lost access and rights to land for plantation expansion are given opportunities to benefit from plantation development.


N/A


7.6.6 The process and outcome of any compensation claims should be documented and made publicly available.


N/A


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


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7.7.1 Documented assessment where fire has been used for preparing land for planting.


N/A


7.7.2 Records of implementation of zero burning policy.


N/A


7.7.3 Procedures and records of emergency responses to land burning emergency response (Tanggap Darurat Kebakaran Lahan).


N/A


7.7.4 Presence of appropriate fire extinguishers and facilities, depending on the fire risks.


N/A


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.

8.1.1 A monitoring action plan based on the social environmental impact assessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to: - Reduction in use of certain chemicals (criterion 4.6). - Environmental Impacts (criterion 5.1). - Waste Reduction (criterion 5.3). - Pollution and Emission (criterion 5.6). - Social Impacts (criterion 6.1).

ST1 The monitoring action plan towards the social and environmental impacts assessment is presented in the Environmental Management Plan/Environmental Monitoring Plan document and Environmental Management Plan/Environmental Monitoring Plan Implementation Report. Will be verified further on main assessment.

√

ST2 The Company has provided evidence of evaluation results from the social and environmental parameters analysis, such as:

- Action plan and evaluation of liquid waste BOD test results.

- Evaluation of air quality test results (emission and ambient).

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- Evaluation of the result from monitor wells water quality test and river water quality test.

- Monitoring on Social impact activities. The Company has also composed an implementation report of Environmental Management Plan/Environmental Monitoring Plan which is reported periodically to related agencies.

8.1.2 Records of follow-up actions taken against RSPO audit findings, if any.

ST1 Not Applicable; BWL has never conducted RSPO audit before. Will be verified further on main assessment.

N/A

ST2 The Company has conducted efforts to follow up the findings of the previous RSPO audit (Stage-1). The Company created follow up matrix from the findings of the previous RSPO audit (Stage-1). In the record, the following are written: the conducted efforts, achievement target, person in charge and the achievement progress.

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Annex 2. Checklist of Supply Chain

Naga Sakti POM is doing some efforts to comply with the supply chain system procedures as required in the RSPO certification. During Stage-2 activity, several things are conducted in relation to the Supply Chain requirements. The company has set the supply chain system applied in Naga Sakti POM called Mass Balance. The actual on-site condition reveals that Naga Sakti POM only accepts FFB from its core estates (Naga Sakti, Naga Mas dan Ramabakti Estate).

Clause Requirements Supply Chain Model

IP SG MB

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 Yes Yes Yes

ST2 The company has composed product traceability procedure in form of Supply Chain SOP (SOP/BWLM/SC) signed on 12 July 2011. The procedure covers the FFB reception at the weighing bridge station, grading, FFB processing up to palm oil and kernel dispatching. The procedure also explains the reception system in the event of FFB not from the core estate, with a different system in the documentation or FFB reception documentation at the weighing bridge.

This procedure describes the processing system for palm oil and kernel production using the Mass Balance Supply Chain system.

- - √

b) Complete and up to date records and reports that demonstrate compliance with these requirements (See 5 for more details) and that are 100% verifiable by the auditor.

Yes Yes Yes

ST2 Records and reports of CPO and kernel production process and processing are presented in the forms of daily, monthly, and annual reports, such as:

- Daily Report of CPO Production Physical Stock Naga Sakti POM. This report consists of: processed FFB, CPO production, previous stock, previous delivery and OER.

- - √

c) 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.

Yes Yes Yes

ST2 The person in charge is Mr. Elviator Sinaga as the Manager of Naga Sakti POM and Mr. Rahmad Hasibuan as the Administration Division Head of Naga Sakti POM.

- - √


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IP SG MB

2 Purchasing and goods in

2.1 The facility shall ensure that purchases and deliveries of RSPO certified palm oil and palm oil products are done in conformance with the following requirements:

a) Purchase orders for RSPO certified palm oil or palm oil product shall specify the material category (Identity Preserved, Segregated or Mass Balance).

Yes Yes No

ST2 Note Applicable; this indicator is not applicable for the system of Mass Balance Supply Chain

- - N/A

b) When receiving RSPO certified palm oil the facility shall check if the material category/applicable supply chain model (Identity Preserved, Segregated or Mass Balance, see also req. 5.4) is clearly stated in the accompanying documentation and the Supply Chain Certification number of its suppliers is mentioned.

Yes Yes No

ST2 Not Applicable; this indicator does not apply to the Mass Balance Supply Chain System.

- - N/A

c) The facility receiving RSPO certified palm oil or palm oil products shall ensure that the validity of accompanying trade and shipping documentation is verified prior to accepting the RSPO certified palm oil

Yes Yes Yes

ST2 The verification of trade documents is conducted by the Marketing and Bulking Station at Dumai.

2.2 The facility shall have a mechanism in place for handling nonconforming material/documents. This mechanism should also be used to declassify the RSPO material when the Supply Chain certification of a supplier is found to be invalid. See also req. 4.1

Yes Yes No


- - N/A


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IP SG MB

3 Sales and goods out

3.1 RSPO certified palm oil delivered include the following information

a) The name and address of the buyer; Yes Yes Yes

b) The date on which the invoice was issued; Yes Yes Yes

c) A description of the product, including the material category: Identity Preserved, Segregated or Mass Balance see also req 5.4.);

Yes Yes Yes

d) The quantity of the products delivered. Yes Yes Yes

e) Reference to related transport documentation Yes Yes Yes

ST2 The CPO released from Naga Sakti POM is delivered to Bulking Station owned by IVOMAS Tunggal, located at Dumai Municipality, Riau Province. Meanwhile the kernel is delivered to Kernel Crushing Plant at Ramarama KCP, Tapung Sub-District, Kampar District, Riau to be processed to produce palm kernel oil; and/or to Libo KCP located at Kandis Sub-District, Siak District, Riau. In certain condition, the kernel is sold directly to third party (other companies).

The available evidence is the invoice of oil delivery in form of Delivery Order (DO) document issued for every oil delivery. The information written on the Delivery Order document are: the invoice issue date, name and address of buyer, ordered product details, and the transportation system for product transportation.

- - √

4 Processing

4.1 The facility can only use the same supply chain model as its seller or go to a less strict system. Declassification is done in the following order: Identity Preserved -> Segregated -> Mass Balance -> Non RSPO Certified Palm Oil

Yes Yes Yes

ST2 The Company has established the Mass Balance Supply Chain model in the FFB reception system up to palm oil dispatch.

- - √

4.2 The facility shall assure that the RSPO certified palm oil is uniquely identifiable to the mill and its supply base and is kept physically isolated from all other oil palm sources in its facility

Yes No No


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IP SG MB


- - N/A

4.3 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 and necessary measures to ensure the objective of 100 % segregated material is reached. The systems should guarantee the minimum standard of 95 % segregated physical material*.

Yes, See

4.2

Yes No


- - N/A

5 Record keeping

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

Yes Yes Yes

ST2 All records and reports are completely composed and kept by the company. The document archiving system are in the form of soft copy and hard copy (print out) stored in a cupboard in the administration room of Naga Sakti POM.

- - √

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

ST2 The company has established the retention period of records related with FFB reception until the oil storage in the storage tank. For instance: Monthly Report of Naga Sakti POM, Oil Stock Report, weighing ticket, delivery order (DO) document, Product Delivery Letter, etc. are established for 5 years.

- - √

5.3 a) The facility shall record and balance all receipts and deliveries of RSPO certified palm oil on a three-monthly basis

Yes Yes Yes

b) When the Mass Balance model is used, a facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short

NA NA Yes

ST2 FFB processed at the Naga Sakti POM are originated from the core estate, so that the palm oil output produced is 100% product which can be claimed as

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IP SG MB

RSPO-certified oil. However the Naga Sakti POM has established the Mass Balance system to anticipate if there would be FFB reception from another estate (not from the core estate).

5.4 The following trade names should be used and specified in purchase and sales contracts.

Product Name

/IP

Product Name /SG

Product Name /MB

ST2 Buying contract is signed at Dumai Bulking Station. The Naga Sakti POM is only responsible for the CPO delivery to Bulking Station at Dumai, while Kernel is delivered to Ramarama KCP to be processed in to PKO.

- - √

5.5 The facility shall provide documented proof that the RSPO certified palm oil can be traced back entirely to the palm oil mill

Yes No No


- - N/A

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

No Yes No


- - N/A

6 Training

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

Yes Yes Yes

ST2 The Company has prepared a training plan on supply chain model comprehension starting from the FFB reception until the palm oil dispatch in form of Supply Chain Mill Training Program of Kampar Region for Naga Sakti POM, planned to be conducted on 9 August 2011.

- - √

6.2 The facility shall keep records of the training provided to staff in relation to Yes Yes Yes


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IP SG MB

implementation of these requirements.

ST2 See indicator 6.1; the Company has composed supply chain training program for the mill staff.

√

7 Claims

7.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Guidelines for Communication and Claims (see Annex 10)

Yes Yes Yes

ST2 The Company shall comply with the mechanism of RSPO Guidelines for Communication and Claims in submitting a claim for certificated palm oil products after the certificate is issued.

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Annex 3. Peer Review Report

Name of Reviewer:

I. General comments for evaluation

No Issues and comments Clarification / Explanation To be filled by MUTU

II. General comments on assessment report

No Issues and comments Clarification / Explanation To be filled by MUTU

III. Special comments on the process of certification decisiion making, including some impriovements, conditions or recommendations -.

No Issues and comments Issues and comments


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Annex 4. Result of RSPO Panel Committee – RSPO Certification (to be filled after the report is reviewed and approved by RSPO secretariat for certification to be issued)

No Inputs and responses


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Annex 5. List of Stakeholder Contacted in the RSPO Certification Process

No Agency/Institution No Agency/Institution

1 Riau Province Governor Office 34 Youth Leader of Kijang Makmur Village

2 Regional Secretariat of Riau Province 35 PUK SPSI NMAE

3 Riau Province Regional Development Planning Agency 36 PUK SPSI NSAE

4 Riau Province Environmental Agency 37 PUK SPSI NSAM

5 Riau Province Capital Investment and Regional Promotion Coordinating Board

38 PUK SPSI KJGE

6 Riau Province Health Agency 39 PUK SPSI KJGM

7 Riau Province Labor, Transmigration, and Demography Agency

40 DPC Kampar

8 Riau Province Industry and Trade Agency 41 Head of Makarti Buana Jaya Village Unit Cooperative (SP-1Buana)

9 Riau Province Plantation Agency 42 Head of Berkat Ridho Village Unit Cooperative (SP 2 Buana)

10 Riau Province Revenue Agency 43 Head of Kijang Mas Village Unit Cooperative (SP 3 Buana)

11 Riau Natural Resources Conservation Center 44 Head of Makmur Sejahtera Village Unit Cooperative (SP 4 Buana)

12 WALHI (Indonesian Environmental Forum) Riau 45 FFB Agent of Tapung Hilir

13 WWF Indonesia - Pekanbaru 46 FFB Agent of Tapung Hilir

14 Scale Up 47 FFB Transporter

15 Riau University 48 Head of Petapahan Village

16 JAMSOSTEK Branch Office I 49 Head of Sari Galuh Village

17 Kampar Regent Office 50 Head of Kota Baru Village

18 Kampar District Environmental Agency 51 Head of Bangun Desa Village

19 Kampar District Investment Coordinating Board 52 Community Leaders of Petapahan Village

20 Kampar District Health Agency 53 Community Leaders of Sari Galuh Village

21 Kampar District Labor and Social Agency 54 Community Leaders of Suka Maju Village

22 Kampar District Plantation Agency 55 Head of Sibuak Jaya Village Unit Cooperative

23 Kampar District Revenue Agency 56 Head of Mekar Jaya Village Unit Cooperative

24 Tapung Hilir Police Chief 57 Head of Cinta damai Village Unit Cooperative

25 Head of Tapung Hilir Sub-district 58 Head of Karya Tani Village Unit Cooperative

26 Head of Tapung Sub-district 59 PUK SPSI Rama-Rama Est

27 Head of Sekijang Village 60 PUK SPSI Rama Bakti

28 Head of Kijang Makmur Village 61 PUK SPSI Rama-Rama Mill

29 Head of Desa Kijang Rejo Village 62 Plasma smallholders of Sei Lembu Makmur Village

30 Community Leaders of Sekijang Village 63 Plasma smallholders of Sei Lembu Makmur Village

31 Community Leaders of Desa Village 64 Plasma smallholders of Sukamaju Village

32 Community Leaders of Tapung Hilir (Deputy Chairman of Parliament Commission of Kampar District)

65 Plasma smallholders of Suka Maju Village

33 Youth Leader of Sekijang Village


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Annex 6. Glossary

AAA : Agronomy Audit and Advisory

AMDAL : Analisis Mengenai Dampak Lingkungan (Social and Environmental Impact Assessment)

APD / PPE : Alat Pelindungan Diri (Personal Protection Equipment)

ASEAN : Association of South East Asian Nations

AVP : Assisstant Vice President

B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste)

BWL : Buana Wiralestari Mas

BOD : Biological Oxygen Demand

CEO : Chief Executive Officer

CFA : Comment For Action

CPO : Crude Palm Oil

CBD : Convention on Biodiversity

ENDV : Environment Division

HCV : High Conservation Value

HGU : Hak Guna Usaha. (Land Use Permit)

ISBPR / HIRARC :

Identifikasi Sumber Bahaya, Penilaian, dan Pengendalian Resiko / Hazard Identification Risk Assessment and Risk Control

IUP : Izin Usaha Perkebunan. (Plantation Operation Licence)

IP : Identity Preserved

IPAL / WWTP : Instalasi Penyaluran Air Limbah / Waste Water Treatment Plant

JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor)

Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch

K3 / OHS : Keselamatan dan Kesehatan Kerja / Occupational Health and safety

KER : Kernel Extarction Rate

LC : Land Clearing

MAA : Mill Audit Advisory

MB : Mass Balance

NC : Non Comformance

NMAE : Naga Mas Estate

NSAE : Naga Sakti Estate

NSAM : Naga Sakti Mill

OIA : Operations Internal Audit

OER : Oil Extarction Rate

P2K3 :

Panitia Pembina Keselamatan dan Kesehatan Kerja (Occupational Safety and Health Committee)

PC : Production Controller

PHT / IPM : Pengendalian Hama Terpadu / Integrated Pest Management

PK : Palm Kernel

PKS / POM : Pabrik Kelapa Sawit / Palm Oil Mill

PSM : Perkebunan Sinarmas

RBKE : Ramabakti Estate

RJP : Ramajaya Pramukti

RC : Region Controller

RKL/RPL : Rencana Kelola Lingkungan/ Rencana Pemantauan Lingkungan. (Environmental Management Plan/ Environment Monitoring Plan)


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S1 : Surveillance 1

S2 : Surveillance 2

S3 : Surveillance 3

S4 : Surveillance 4

SG : Segregation

SMARTRI : Smart Reseach Institute

SOP : Standart Operational and Procedure

ST 1 : Stage 1

ST 2 : Stage 2

TBS / FFB : Tandan Buah Segar / Fresh Fruit Bunches

UKL/UPL : Upaya Kelola Lingkungan/ Upaya Pemantauan Lingkungan. (Environmental Management Efforts/ Environmental Monitoring Efforts)

VPA : Vice President Agronomy

VPM : Vice President Manufacture

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