Indonesia PANGKATAN PALM OIL MILL - RSPOControl Union (Malaysia) Sdn. Bhd. 150-A, 1st Floor,...

RSPO Principles & Criteria Annual Surveillance Assessment Report

Report Number CU820565

RSPOPC-SUM-REPORT.F01 JULY2013 of 37

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

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RSPO PRINCIPLES & CRITERIA PUBLIC SUMMARY REPORT

ANNUAL SURVEILLANCE ASSESSMENT 1

Indonesia

PANGKATAN PALM OIL MILL 2013

Report prepared by: Mr. Simon Selvaraj (Lead Assessor)

Certification decision by: Mr. Hari Naveen Christopher (Certifier)

Certifying Office

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

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

Tel: +603-3377 1600 / 1700

Control Union Certifications

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

international inspection and certification body. CUC performs assessments and

certification in many agricultural based fields such as FSC, RSPO, and Organic

production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP,

BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CUC Organic

program (according to the EU regulation 2092/91) and GLOBALGAP program. When requested a copy of the accreditation certificate can be obtained from CUC.

RSPO Membership Number

1-0027-06-000-00

RSPO Approval Date 19/10/2012

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

mailto:[email protected]

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





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Table of Contents

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

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

1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per year ........................................................ 5 1.7.3 6 Percentage of Planted Oil Palm by different Age Ranges ..................................................................................................... 6 17.4 Calculation of the Number of Production Units (N) to Sample for the Mill ............................................................... 6

17.5 PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS, IF APPLICABLE TO THIS ASSESSMENT ............................ 6 17.6 LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE APPENDIX 1) ......................................................................... 6

PART 2: PARTIAL CERTIFICATION ........................................................................................................ 7

2.1 MANAGEMENT STRUCTURE................................................................................................................................. 7 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ..................................................................................................... 7 2.3 SUMMARY OF THE TIME BOUND PLAN .................................................................................................................. 7 2.4 UN-CERTIFIED UNITS OR HOLDINGS...................................................................................................................... 8 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ....................................................................................... 14 2.6 PARTIAL CERTIFICATION AUDIT AGENDA.............................................................................................................. 14

PART 3: AUDIT PROCESS.................................................................................................................... 15

3.1 ABOUT THE CERTIFICATION BODY ....................................................................................................................... 15 3.2 AUDIT TEAM .................................................................................................................................................. 15 3.3 AUDIT METHODOLOGY .................................................................................................................................... 16

3.3.1 General Overview ..................................................................................................................................................... 16 3.3.2 Assessment agenda for this Audit ............................................................................................................................. 17

PART 4 ASSESSMENT FINDINGS ........................................................................................................ 19

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ................................................................ 19 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLES AND CRITERIA ...................................................................................... 19

Principle 1: Commitment to Transparency .......................................................................................................................... 19 Principle 2: Compliance with Applicable Laws and Regulations .......................................................................................... 20 Principle 3: Commitment to Long-Term Economic and Financial Viability .......................................................................... 21 Principle 4: Use of Appropriate Best Practices by Growers and Millers .............................................................................. 21 Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity .................................. 24 Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers .......... 26 Principle 7: Responsible Development of New Plantings ..................................................................................................... 28 Principle 8: Commitment to Continuous Improvement in Key Areas of Activity .................................................................. 28

4.3 NON-CONFORMITY RAISED DURING THIS AUDIT AND ANY FROM THE PREVIOUS YEAR, IF APPLICABLE ............................. 28 4.3.1 Non-Conformities Identified during this Audit ........................................................................................................... 28 4.3.2 Non-Conformity Identified during the last ASA .......................................................................................................... 29 4.3.3 Observations Raised During this Audit ....................................................................................................................... 30

4.4 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION, IF ANY ............................................................ 31

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ................................................................................... 31

5.1 POM INCLUDED IN THE SCOPE OF THE AUDIT ...................................................................................................... 31 5.2 CONFIRMATION OF THE COMPANY’S SUMMARY OF ANNUAL CERTIFIED VOLUME OF RSPO CERTIFIED PALM OIL AND PALM

KERNEL OVER A SPECIFIED PERIOD ................................................................................................................................ 31 5.3 SUMMARY REPORT INCLUDING A BRIEF DESCRIPTION OF THE SCOPE OF CERTIFICATION ................................................ 31 5.4 MONTHLY RECORDS OF CERTIFIED AND UNCERTIFIED FFB RECEIVED SINCE THE LAST AUDIT ............................................ 32 5.5 RECORDS OF CERTIFIED CPO & PK SOLD UNDER GREEN PALM TO BUYERS SINCE THE LAST AUDIT, IF ANY ......................... 32 5.6 RECORDS OF CERTIFIED CPO & PK SOLD UNDER UTZ ETRACE TO BUYERS SINCE THE LAST AUDIT, IF ANY .......................... 32 5.7 NON-CONFORMITIES IDENTIFIED DURING THIS AUDIT .............................................................................................. 32 5.8 DESCRIPTION OF THE ORGANIZATIONAL MANAGEMENT SYSTEMS............................................................................... 33 5.9 FINAL CERTIFICATION DECISION BY CONTROL UNION FOR THE RSPO SCCS AUDIT OF THE POM ...................................... 33

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ........... 33





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6.1 DATE OF NEXT ASA ......................................................................................................................................... 33 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES ........................................................................................................ 33 6.3 SIGNING BY THE CLIENT .................................................................................................................................... 33 6.4 SIGNING BY THE LEAD AUDITOR ......................................................................................................................... 33 6.5 SIGNING BY THE CERTIFIER ................................................................................................................................ 34

PART 7: APPENDICIES ........................................................................................................................ 35

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT ............................................................................................. 35





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PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT AUDIT

1.1 Company and Contact Details

Company Name: PT Evans Indonesia

Business Address: Gedung Graha Aktive Suite 1001, Jln. HR Rasuna said Kav 03, Blok X-1, Kuningan, Jakarta Selatan, Indonesia

Contact Person: Mr. Gunasekaran Uthiradam

Office Telephone: +621-529 20 338

E-Mail: [email protected]

Web Site: www.mpevans.co.uk

Other Certifications Held: -

1.2 RSPO Membership & Certification Details

RSPO Membership Number: 1-0027-06-000-00

Registered Client Name: MP Evans Group PLC

Certificate Number: C820565CU-RSPO.01.2013

Start Date Of Certificate: 19/10/2012

End Date Of Certificate: 18/10/2017

Date Of Original Certification: 19/10/2012

Scope: Certification of the Palm Oil Mill and Supply Bases

Type Of Certification: Single site

Duration Of Certificate: 5 Years from date of certification

1.3 Surveillance Assessment Details

Dates Of This Audit: 26/08/2013 to 30/08/2013

Audit Number: ASA1

1.4 Assessment Type

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

1.5 Location of the Palm Oil Mill

Name Palm Oil Mill

Mill Capacity

Location GPS Reference

(POM) MT/Hour Address Longitude Latitude

Pangkatan Palm Oil Mill

40 Kecamatan Pangkatan, Kabupaten

Labuhan Batu, North Sumatera, Indonesia.

99°56’44” E 02°06’44”S

1.6 Palm Oil Mill Output and Approximate Tonnages Certified

Figures below are from:

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

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

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

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

Projected Production from the last 12 Months (MT)

Actual Production for this Audit Year 2012/2013 (MT)

Projected 12 Months (MT) Forecast Certified in this Report

FFB CPO PK FFB CPO PK FFB CPO PK 153,297.00 35,718.20 8,431.34 147,704.14 34,557.59 8,199.45 155,692.00 36,554.54 8,632.64

mailto:[email protected]

http://www.mpevans.co.uk/





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1.7 General Description of Supply Base

The certification unit and the supply bases are the 3 estates [6,964 HA of planted area] and no external supply source identified during this audit. The mill with a processing capacity of thirty (40) metric tonnes of FFB per hour was commissioned in 2005 in Pangkatan Estate to process the FFB from Pangkatan, Bilah and Sennah Estates. Pangkatan Estate is situated approximately 300 KM from Medan. The nearest town is Rantau Prapat, which is about 19 KM. It is located in the District of Labuhan Batu (Sub District Pangkatan). This Estate was established circa 1900, MP. EVANS GROUP PLC reacquired the property in 1982. The early crop was rubber and Oil Palm was introduced in 1972. The Estate was fully converted to oil palm cultivation in 2007. Bilah Estate is located 36 KM from Pangkatan Estate, in the Sub District of Bilah Hilir. MP. Evans Group PLC acquired the property in 1983. Gradually the rubber was replaced with oil palm since 1984. The Estate was fully planted with oil palm in 1993. Sennah Estate is situated about 25 KM from Pangkatan Estate. MP. Evans Group PLC acquired this property in 2002. The rubber was fully phased out in 2006. Now the property is completely under oil palm cultivation.

1.7.1 Location of the Supply Base[s]

OPP

Oil Palm Plantation

Location GPS reference Area Summary

(Ha)

Name Address Longitude Latitude Total Mature

OPP 1 PT. Pangkatan Indonesia

Desa Perkebunan Pangkatan, Kecamatan Pangkatan, Kabupaten Labuhan Batu, North Sumatera, Indonesia

99°55”07”- 99°58”09” E

02°04’13”- 02°07’’54 S

2,586 2,427

OPP 2 PT. Bilah Plantindo

Desa Perkebunan Bilah, Kecamatan Bilah Hilir, Kabupaten Labuhan Batu, North Sumatera, Indonesia

100°05”25”- 100°07”30” E

02°18’23”- 02°12’’01” S

2,961 2,856

OPP 3 PT. Sembada SennahMaju

Desa Perkebunan Sennah, Kecamatan Bilah Hilir, Kabupaten Labuhan Batu, North Sumatera, Indonesia

100°02”44”- 100°04”17” E

02°18’31”- 02°12’57” S

1,813 1,681

TOTAL 7,360 6,964

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

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

OPP 1 PT. Pangkatan Indonesia 60,670 1986 - 2008 25

OPP 2 PT. Bilah Plantindo 53,496 1986 – 2009 25

OPP 3 PT. Sembada Sennah Maju 40,400 1995 - 2009 25

TOTAL 154,566 - -





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1.7.3 Percentage of Planted Oil Palm by different Age Ranges

OPP

Planting Years by 5 year Ranges

1977-1980

1981-1985

1986-1991

1992-1995

1996-2001

2002-2006

2007-2011

2012-2013

Total

OPP 1 - - 142 [6%]

- 458

[19%] 1,150 [47%]

209 [9%]

468 [19%]

2,427 [100%]

OPP 2 - - 924

[32,4%] 549

[19,2%] 148

[5,2%] 464

[16,2%] 684

[23,9%] 87

[3%] 2,856

[100%]

OPP 3 - - - 209

[12%] 306

[18%] 767

[46%] 399

[24%] -

1,681 [100%]

Total - - 1,066 [15%]

758 [11%]

912 [13%]

2,381 [34%]

1,292 [19%]

555 [8%]

6,964 [100%]

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

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

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

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

3 2 - -

Explanation as to the selection of estates sampled

As per main the assessment there is no exclusion in the supply base.

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

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

Not applicable

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





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PART 2: PARTIAL CERTIFICATION

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

2.1 Management Structure

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

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

No Section 2 is N/A

Go to 2.1.2

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

Yes Go to 2.1.5 Go to 2.1.3

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

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

- Go to 2.1.4

Go to 2.2.1

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

- Go to 2.4 Go to 2.2.2

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

Yes Go to 2.3 2.2.3

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

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category

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

- Major

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

- Major

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

- Major

2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

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

Yes, all subsidiaries, estates and mills are included. Yes

2.3.2 Is the time bound plan challenging? Age of

plantations. Location. Mill

development. Infrastructure. Compliance

There are no changes to the time bound plan since the last audit. The audit summarizes the status as follows: Indonesia PT Evans Indonesia currently owns 2 mills and several plantations in Indonesia. The mills:

1) PKS Pangkatan, Sumatera (RSPO Certified in 2012) 2) PKS Benua Puhun, Kalimantan (Main Assessment

currently in progress 2013)

Yes





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with applicable law.

A 3rd mill, PKS Tuing, Sumatera is scheduled to be commissioned in 2014, followed by certification, targeted to occur in 2015.

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

There are no changes to the time bound plan as mentioned above.

Yes

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

As above (2.3.2 and 2.3.3) Yes

2.3.5 Have there been any stakeholder comments?

No negative stakeholder comments were received during the 30-days consultation period either by CUC or the auditee prior to this main assessment or during the audit.

Yes

2.3.6 Have there been any newly acquired subsidiaries?

Yes. The new acquisition has taken place in Sumatera Selatan, known as PT Evans Lestari in Q4, 2012. See 2.4.3 below.

Yes

2.3.7 Have there been any isolated lapses in the implementation of the plan?

No, the company is on track to meeting its certification commitments as described below in the Time Bound Plan table.

Yes

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

No, there is no systematic failure. Yes

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

The audit findings for this main assessment, finds the company is on a realistic time bound plan to have their operations in Indonesia certified as planned and described above.

Yes

2.4 Un-Certified Units or Holdings

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

Section Requirement Findings and any action required Compliance

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

Yes. Yes

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

Primary forest.

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

No replacement and no primary forest sighted during the site visits.

Yes





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

2.4.3 Any new plantings since January 1st 2010 must comply with the RSPO New Plantings Procedure.

The audit team sighted documents housed in the PT Evans Indonesia head office in Jakarta. Document and interviews confirm the following actions were completed:

NPP Notification: PT Evans Indonesia – PT Teguh Jayaprima Abadi (PT TJA) was done on February 26 to March 25, 2013 with no negative comments.

NPP Notification: PT Evans Indonesia – PT Prima Mitrajaya Mandiri (PT PMM) was done on February 26 to March 25, 2013 with no negative comments.

Status of other land holdings: PT Gunung Palawan Lestari

The company obtained the Izin Lokasi (IL) dated October 27th 2004 from the Bupati Bangka.

Izin Usaha Perkebunan (IUP) dated September 20th 2004 from the Bupati Bangka

AMDAL was received on March 28th 2008 from the Bupati Bangka.

The Izin Lokasi (IL) was subsequently renewed and approved on May 5th 2010 and again on April 8th 2013 from the Bupati Bangka.

The company has plans in place to commission a 3rd palm oil mill in 2014, known as PKS Tuing with a target RSPO certification for 2015.

HCV assessments were carried out in May 2013 by Aksenta. PT Simpang Kiri

There is currently 1 operational estate with 2,654 Ha

HGU: 37/HGU/DA/88 for 1,504 Ha was obtained on April 19th 1988

HGU: 83/HGU/BPN/97 for 1,150 Ha was obtained on July 23rd 1997

There are no current plans to commission a mill for this location as all existing crop is being sold to an external mill not owned by PT. Evans Indonesia.

PT Evans Lestari

Izin Lokasi (IL) dated October 30th 2012 from the Bupati Musi Rawas for approximately 20,000 Ha was obtained.

Izin Usaha Perkebunan (IUP) dated November 21st 2012 from the Bupati Musi Rawas was obtained.

AMDAL dated February 14th 2013 from the Bupati Musi Rawas was obtained.

There are no current plans to commission a mill for this location.

HCV assessment by Fakultas Kehutanan Institut Pertanian

Yes





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Bogor was carried out in March 2013.

See also 2.3.6 above Proposed plans for future NPP notifications to take place for 2013/2014:

PT. Evans Lestari

PT. Gunung Pelawan Lestari

Both NPP is forecasted to take place either Q4, 2013 or Q1, 2014

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

No negative stakeholder comments were received during the 30-days consultation period either by CUC or the auditee prior to this main assessment or during the audit. However, the audit team has captured and followed up on 3 issues. Issue #1 In PT. Gunung Pelawan Lestari, no issues were recorded from any intrested parties during the ASA1 audit in PKS Pangkatan in August 2013. However the Koperasi Gunung Muda Sejahtera, not in favour for oil palm cultivation even the compensation process activated. The company is currently engaged in an on-going negotiation with the Koperasi to idenfied solutions. Issue #2 A grievance complaint against the parent company, MP Evans Group PLC, that was published on the RSPO website. The grievance was filed on February 13, 2013 and posted on the RSPO grievance and complaint website. See link: http://www.rspo.org/en/status_of_complaint&cpid=34 The nature of the complaint: Alleged breach of Principle 2. Synopsis of compliant, that the company has:

Carried out illegal logging on 540 Ha.

Planted on land outside the concession area.

Planted on land outside the HGU. The audit team sighted several key correspondences with the regard to this complaint as described below. The member had met with the RSPO on 26th July 2013 and the relevant documents pertaining to these allegations were made available. The member had officially responded to RSPO on several occasions between March 2013 to August 2013, providing clarification concerning their land holdings and steps taken to ensuring compliance with local regulatory requirements. The last communication to RSPO, dated August 13th 2013, explains its position and progress made.

Yes

http://www.rspo.org/en/status_of_complaint&cpid=34





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Background and History Several estates make up this main assessment audit for PKS Benua Puhun. These estates went through the NPP notification under 2 groups:

PT Teguh Jayaprima Abadi (PT TJA) o Rantau Hempang Estate, o Mahakam Estate

PT Prima Mitrajaya Mandiri (PT PMM) o Bukit Jering Estate, o Kaman Hilir Estate, o Loleng Estate, o Benua Puhun Estate, o Muara Wis Estate

Both PT TJA and PT PMM obtained their respective “Izin Lokasi (IL)”, “Izin Usaha Perkebunan (IUP)” and AMDAL as follows: PT TJA

Izin Lokasi: Obtained June 27th 2006 for 5,100 Ha’s and September 6th 2007 for 13,550 Ha from the Bupati Kutai Kartanegara

Izin Usaha Perkebunan: Obtained January 16th 2007 and December 4th 2007 from the Bupati Kutai Kartanegara.

AMDAL: Obtained September 24th 2008 and March 16th 2009 from the Bupati Kutai Kartanegara.

PT PMM

Izin Lokasi: Obtained June 26th 2007 for 21,500 Ha’s from the Bupati Kutai Kartanegara.

Izin Usaha Perkebunan: Obtained July 26th 2007 from the Bupati Kutai Kartanegara.

AMDAL: Obtained September 24th 2008 from the Bupati Kutai Kartanegara.

All these documents had approved concession areas as KBNK (Kawasan Budidaya Non-Kehutanan), meaning Non-Forest Land.

However, in 2011, the Forestry Ministry came out with a new map, zoning forest areas. There was a conflict with the governmental regulations between the local government (Kalimantan Timur Province) and the central government (Forestry Ministry of Republic Indonesia) over different map zoning of forest areas by the respective authorities. Based on survey done by the Forestry authorities in 2011, some of the land area that make-up PT. TJA and PT. PMM are not classified as non-forest area and are now within forest areas or Hutan Produksi (HP) as opposed to the IL, IUP and AMDAL listed above. The company was advised by Central Government Forestry Ministry authorities that approximately 1,140 Ha’s are in forest area. The company had followed up the matter with the Forestry Ministry (Kementerian Kehutanan) and were advised that there are several stages in the process before the





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land is finally classified as forestland. On 6th July 2012, The President of The Republic of Indonesia issued the amendment of The Peraturan Pemerintah no. 10 year 2010, namely Peraturan Pemerintah no. 60 year 2012.

From the flow chart of PP no. 60 of 2012, any company affected by this, differences in map zoning of forest areas, has a limited time to initiate forestland release through a process, starting with an application.

On September 10th 2012, the company proactively made their application based on PP no. 60/2012 for both PT. PMM and PT. TJA for 1,140 Ha. A partial approval for 616 Ha’s was received followed by another revised application dated March 20th 2013 for the remaining area. On September 19th, the RSPO has written back to the member, MP Evans, with recommendations from the Grievance Panel. At the time of this audit, the process for land swap according to PP No. 60 year 2012 is still an on going process. However, the audit team sighted an official document from the Forestry Ministry, dated August 2nd 2013, where approximately 276,240 Ha’s in Kalimantan Timur has been classified as “Perubahan Fungsi Kawasan hutan”. Under this category, there is approximately 199,402 Ha’s or Hutan Produksi (HP) which is forestland, has been converted to HPK (Hutan Produksi Konversi) which is forestland that is allowed to be converted. The concession areas that make-up PT. TJA and PT. PMM fall under this category. The company had subsequently made the necessary application for the entire 1,140 Ha on August 29th 2013; confirmed receipt by the Forestry Ministry on August 30th 2013. The application is a process to help change the status of HPK (Convertible Forest Area) to APL (Areal Pengunaan Lain) or “Area for Other Land Use” for the 1,140 Ha’s and is currently under review. Note: Non-Forest Areas are typically called APL or KBNK. In addition, the audit lead to a meeting with RSPO Indonesia office, Ibu Kusumadewi, who had also reviewed the documents presented by MP Evans Group PLC and believed the latest information favours the company in addressing the recommendations made by the grievance panel. The management will be officially responding to RSPO’s letter dated September 19th 2013 and it is hoped the evidence provided, will help close the grievance complaint. Issue #3 Also, in 2012, during the main assessment for PKS Pangkatan, the audit team identified a complaint that involved the minority shareholder partner.





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The local partner lodged the complaint to RSPO, local authorities and the police. The complaint highlights that the company’s East Kalimantan operations (PT Prima Mitrajaya Mandiri) was planted on forest area, impacting approximately 762 Ha’s. This compliant, closely follows the compliant received by RSPO in February 2013 discussed above. Although the izin (permit) provided did not fall into forest category, MP Evans has taken the 762 ha’s in question out of their application for HGU and is not part of PT Prima Mitrajaya Mandiri (PT. PMM). The Kadastral map of HGU for PT Prima Mitrajaya Mandiri shows the exclusion of the forest areas which are logged over / degraded forests and amounts to about 762 ha’s. Again, this area although included in the Ijin Lokasi map but has been excluded from HGU. Given the latest information and findings in Issue #2, the company’s actions in making the necessary application to the Forestry Ministry dated August 29th 2013, where it is clear that 1,140 Ha’s between PT. TJA and PT. PMM is now categorized as HPK land, will help address both complaints (Issue #2 and Issue #3). In addition, based on sighted correspondences and interviews, the company is in the process of closing the complaint and concerns raised by the minority partner. The audit team concluded that significant progress has been made in resolving and closing this particular grievance complaint and the established process in resolving such matters is working. The progress of this issue will be reviewed during the next surveillance audit in 2014.

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

There are a few open cases currently being dealt between the company and the respective Dinas Ketenagakerjaan (Manpower Department) for the respective operational units. The company has implemented standard operation procedures (SOPs) to handle such matters. A documented process in resolving labour disputes was reviewed. Evidence of complaints lodged, reviewed, and closed by mutual agreement were sighted. Interview with the local labour union and gender committee representative for the Benua Puhun operations, revealed that there was no labour dispute during the audit period with the exception of a few on-going complaints that’s being handled through the established process.

Yes

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

Yes. See also 2.3 and 2.4 above. Yes





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

Palm Oil Mill Country Supply Bases (estates,

plantations, associations) Targeted RSPO

Certification Year Current Certification

Status as per this Audit

PKS Pangkatan Indonesia

PT.Pangkatan Indonesia

PT.Bilah Plantindo

PT. Sembada Sennah Maju

2012 Certified, 2012

PKS Benua Pohon Indonesia

PT Teguh Jayaprima Abadi (PT TJA)

Rantau Hempang Estate

Mahakam Estate PT Prima Mitrajaya Mandiri (PT PMM)

Bukit Jering Estate

Kaman Hilir Estate

Loleng Estate

Benua Puhun Estate

Muara Wis Estate

2013

In-Progress (Main assessment to take place in September 2013)

PKS Tuing Indonesia PT. Gunung Palawan Lestari

2015 Pending, mill to be commissioned in 2014

2.5 Summary of the findings for Partial Certification

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension. The company had its first operation certified in 2012 and continues to take a very responsible approach to all of their plantation developments with regards to land, social, and labour issues. Clear procedures have been established and implemented. The processes to handle issues such as land conflicts and dealing with complaints in general are working based on both document audits and field interviews where such concerns are being resolved through a mutually agreed process. The audit team highlights that several key issues were reviewed and the company has taken the necessary positive steps and are currently being handled through clear and transparent procedures as indicated above, the implemented system is working effectively and allows for continuous feedback for improvement and resolutions. In terms of the time bound plan, it is concluded that the company is still within their proposed forecast to complete certification activities for their operations in Indonesia by 2015. The company shall continue to monitor the status of these on-going situations regularly and the certification body will review the outcome during the next annual surveillance assessment, which is forecasted to take place in Q3, 2014.

2.6 Partial Certification Audit Agenda

Date Location Agenda August 27th 2013 PKS Pangkatan,

Sumatera - Document review and field interviews

September 16th to 18th, 2013 PKS Benua Puhun, Kalimantan

- Document review and field interviews

September 19th, 2013 Jakarta, Indonesia - Document review (PT Evan’s Office) - Interviews with RSPO (RILO) Indonesia representative





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PART 3: AUDIT PROCESS

3.1 About the Certification Body

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

3.2 Audit Team

Lead auditor: Simon Selvaraj Subramaniam

Team member 1: Muhd Jamalul Arif

Team member 2: Mahaswaran Maliyapan

Team member 3: Selvanathan Grapragasem

3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

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

Post graduate qualification in agriculture with more than 5 years working experience in plantation.

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

More than 5 years working experience in plantation. Involved in RSPO auditing since November 2010. Fully trained in similar agriculture certification programme such as RSPO SCCS, Global Gap, ISCC and GMP.

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

Involved in RSPO assessment since November 2010. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia.

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

Completed ISO 9001:2008 lead auditor course in July 2011. Successfully completed RSPO Lead Auditor Course.

Training in the practical application of RSPO certification systems.


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


RSPO endorsed lead auditors course. Completed RSPO Lead Auditor training in 2011

Signed code of conduct. Signed with CUC

General knowledge of:

RSPO P&C standards. Sound knowledge of the P&Cs, Nis and Local Interpretations.

CUC organizational structure. Sound understanding and has prepared training documents for others.

CUC quality systems. Sound understanding and has prepared training documents for others.

Lead auditor role. ISO 9001. Prepared an ISO 19011 training course and conducts internal training on auditing techniques.

Report writing. Extensive experience in report writing.

Stakeholder consultation. The process and need for this is fully understood.

Certification decision process. Full understanding.

RSPO SCCS program manual. Full understanding.

CUC filing systems. Full understanding.





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Correct use of RSPO trademarks. Full understanding.

History and objectives of RSPO. Full understanding.

CV available. Upon request.

Completion of CUC RSPO lead auditor training. Completed & Passed RSPO Lead Auditor training in 2011

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

Fluent in main local languages and English.

Selvanathan Fluent in Malay and English

Muhd Jamalul Arif Fluent in Malay and English

Mahaswaran Fluent in Malay and English

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

Muhd Jamalul Arif Involve in RSPO auditing since Jan 2011

Mahaswaran Quality, environment and OHSAS Lead auditor. Working experience in various industries. Auditing since 2007.

Selvanathan Working experience in palm oil plantation. Involve in RSPO auditing since March 2010.

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




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




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




Economic issues. Muhd Jamalul Arif Involve in RSPO auditing since Jan 2011



3.3 Audit Methodology

3.3.1 General Overview

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

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





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

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

Re-planting sites. Zero burn.

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

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

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

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

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

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

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

Mill and workshop inspections. Documentation review & worker interviews.

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

OSH. Training. Management structure. First aiders.

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

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

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

3.3.2 Assessment agenda for this Audit

Date Location Auditors Main activities

25/08/2013 (Sun)

KL Medan All

There will be 4 auditors

Jamal & Simon from Klang -> LCCT

Selva & Mahas from JB -> LCCT At Medan, driver pick-up from airport and accommodation on site arranged by client.

26/08/2013 (Mon)

Pangkatan POM

Simon 08.30 Opening meeting Chaired by the audit team leader

Introduction by team leader

Presentation by respective managers

Presentation of Palm Oil Mill source of FFB by respective managers

Simon

Jamal Selva

Mahas

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

Workshops

Stores

POM application

Document review

27/08/2013 Pangkatan Simon Partial Certification Review with client





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(Tues) POM

Pangkatan Estate

Jamal Selva

Mahas

representatives Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

28/08/2013 (Wed)

Bilah Estate Jamal & Mahas

Selva Simon

Field operations.

Worker interviews

Chemical stores

Workshops

Housing

Medical

Schools

Local communities

Environmental

29/08/2013 (Thurs)

Pangkatan POM

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

Welcome and introduction by the team leader

Presentation of findings by the audit team

Questions and answers

Final summary by team leader End of assessment

30/08/2013 (Fri)

Medan KL All Self-arrangement by auditors





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PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The mill and supply base visited (as per the above Tables 1.5 and 1.7.1) and were assessed at field, office, facilities, stores and a document review was carried out in accordance to the RSPO principles and criteria. The subscribed RSPO management system’s documentations seen with minor changes that due to internal external influenced factors that in relation to scope of certification. Specific evidence was recorded for estate and mill. Interviews with Estate Manager, Mill Manager, members of workers union and committee took place in both formal and informal environments and worker interviews were conducted at the supply base and the mill. The management is highly committed in maintaining the RSPO system by adopting to continuous improvement programs.

There was no complaint or feedback received during the field assessment and when interviewing with the external stakeholders. Under partial certification rules, it is found that all its subsidiaries have been certified with the exception of their operations in Indonesia that has a time-bound plan for certification commencing 2015 onwards. For further clarification on Partial Certification, see PART 2 above.

The management continually monitoring the established KPI / objectives that significantly rules the achievement of company’s corporate policy on RSPO. The mill is fully verified for RSPO SCCS system verification and it is found to be in full compliance. See PART 5 below

It is therefore the recommendation of the lead assessor that a certificate of compliance is maintained. Signed:

Name: Simon Selvaraj Subramaniam Date: 29/08/2013

4.2 Summary of the findings by Principles and Criteria

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

Identified Non-Conformities and noteworthy Positive and Negative Observations.

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

Principle 1: Commitment to Transparency

Criterion by Audit

Summary Requests made by stakeholder were responded to and all these are well documented. Relevant documents are made publicly available. The mill and estates have demonstrated full compliance to Principal 1.

ASA 1 1.1 Records of information requests available and updated regularly. Request and response information recorded in log book information. There were 7 requests from stakeholder during 2012 July till to date. Observed request from TUV Rhineland requesting for official HGU documentation and on 19.7.2013 from Proper Team Audit requesting for official Environmental related documentation that was assisted by Mr. Sinambela and Mill Manager Mr. Eri Purnomo.

Socialization on the procedure was made on 28.12.2012, attended by 5 villagers, governmental officers [external and internal stakeholders] Representative from NGO were called but not attended, local community, government reps, school teacher, employees, Union leader).

Publically available documents were generally informed as per BP/SOP/Umum-02; to be more effective the actual documents to be listed together with the retention time for better control of it though generally said 10 years retention time in BP/SOP/Umum-08.

ASA 1 1.2 All the management documents which related to local national laws are available





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publicly for all stakeholders upon request except of confidential financial documents and following document available for stakeholders:

HGU, IMB (license to build building)

APU (License to use water)

ABT (underground water use permit)

IUP, DPPL,RKL, RPL, AMDAL, HCV report

Manager Annual reports, environment report, social documents (identification and management), continuous improvement plans, employment (regulation and implementations)

Annual agronomist report, advisors visit reports, etc.

At the estate office, notice boards are available with HGU details, which can be seen by any stakeholders and visitors. Estate and mill have a list of all legal permits required under Legal Document Register (Daftar isi documents legal). There are more than 10 main items with sub-main legal documents available. Documents related to the mill operation are available upon request from stakeholders. A list of permits are available for verification which include weigh bridge permit, crane, sterilizer, compressor, boiler, turbine, generator, electrical, effluent pond etc.

Safety and health plan with specifically identified training requirement with training records. Documented continuous improvement plan has identified improvement for environment, social, OSH (Occupational Safety and Health) and waste management. No changes in Land operation permit (Izin Usaha), Location permits (Izin Lokasi), Land use title (Hak Guna Usaha). List of all the licenses and permit were kept on the Evaluation of the License for machinery were listed separated with the beginning year, license number and expiry date altogether 16 permits.

Observed TUV Rhineland [Mr. Fadli] dated 24.4.2013 requesting for official ISPO audit documentation which was assisted by Estate Manager Mr. Dwi Lukito. Documents are kept in average 10 years based on their issuance date as per the SOP as stated in 1.1.3 above

Principle 2: Compliance with Applicable Laws and Regulations

Criterion by Audit

Summary

The company has a comprehensive system for ensuring all estates and mill managers are up to date with the applicable laws and they have an internal monitoring system to ensure compliance. The boundary stones inspected in the fields confirmed that these have been maintained. The company has procedures to handle land disputes and compensation. Land purchased from land owners are handled via the free prior informed consent (FPIC) process.

ASA 1 2.1 All the rules that the company need to be followed listed on the file named Regulasi. Listed by List of Legal Requirement for PT Evans, Indonesia. Regional autonomy in this region, anything to do with the agriculture has to ask for permission from the authority. Law from president of Indonesia. Document number 5, Year 2006. Apart others as listed below for PT Pangkatan Mill:

1. Ijin Mendirikan Bangunan (IMB) for building of the factory referred #503.648/461/PEM/2003 from Bupati Labuhan Batu.

2. Ijin Lokasi (Location permit) No. 593/464/Hukum/2003, dated 6.11.2003 from Head of District Labuhan Batu.

3. Ijin Prinsip (Principle permit) No. 593/464/Hukum/2003, dated 6.11.2003 from Head of District Labuhan Batu

4. HGU (Land Titles) No 2 issued on 1997 & expires on 2023.

5. Tanda Daftar Perusahaan (TDP)-Company Register No.09.03.1.01.63861, dated 26.3.2010, expiry 26.3.2015.

Rules are followed according to UU13, & PKB is endorsed by Kepala Dinas Tenaga Kerja dan Transmigrasi (Transmigration and Labour Department). Humas (public relation department) from HQ keep up date of the applicable laws. If any new law





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being enforce, it will be evaluated if it is applicable and the HQ will send details for implementation. The master list last was updated in July 2013 and next update expected for “Surat Keterangan Domisili Perusahaan” due on Oct 2013.

ASA 1 2.2 Sighted the land ownership of Pangkatan Estate; HGU (Land Title) No. 2 issued on 1997 & expires on 2023; 258603 Hectare. The land leasing license permit for estates are, HGU (Land Titles) No. 31 issued on 9.12.2010 & expires on 31.12.2036 for 1315 HA and HGU (Land Titles) No. 1 issued on 29.11.1988 & expires on 31.12.2018 for 1641 HA. HGU monitoring map & records of maintaining boundary stones have been carry out periodically (once / 3 months). This report contains photos the boundary stone being maintained in estates; there are 24 boundary stone in Pangkatan Estate and 49 in Bilah Estate. Last verified June 2013.

ASA 1 2.3 There isn’t any legal or customary right issue since previous assessment. However a procedure on land compensation is in place which detailed the free prior and informed consent [FPIC] process. The certification unit has flow chart to make a negotiation to resolve any land conflict.

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

Criterion by Audit

Summary A documented operational plan and budget covered operational strategies to meet the plan and budget have been prepared by the estates and mill. Replanting programme in the near future made available in proper records.

ASA 1 3.1 Budget for production plan for CPO and PK for 3 year (2013-2016) available. The budget includes POM processing and maintenance cost, vehicle/machinery expenditure summary report, running cost. Observed the below: CPO Production:

2014 - 33, 662 MT

2015 – 34, 416 MT

2016 – 34, 439 MT PK Production:

2014 – 7,946 MT

2015 – 8,124 MT

2016 – 8, 129 MT

PT. Pangkatan projection working plan Version 9.3 where the budget is includes all estates in this complex. The plan has the details about agricultural assumptions, financial assumptions, cash flow, loans, cash flow chart, income statement etc. Details of estate such as estate hectare, production, costs, yields projection and depreciation. As for Pangkatan a replanting programme is available until year 2024.

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

Criterion by Audit

Summary

The company has established the relevant SOPs for all stages of operations in the estates and mill and there was evidence that these have been implemented. Risk assessments are conducted and the necessary attention to OSH is given. Training is conducted for all workers and contractors.

ASA 1 4.1 SOP covering all stages from land preparation until harvesting and other supporting activities in estates are available and documented. There are 14 sections for agronomy, 24 general work including committees and 16 on Health and Safety.

15 SOP is maintained and well implemented starting from FFB receiving until CPO and PK was dispatch. Some of the SOP’s sighted as:

SOP/4.1/1 – FFB receiving

SOP/4.1/2 - Sterilization

SOP/4.1/3 – Threshing

SOP/4.1/4 – Press Station

SOP/4.1/5 – Clarification

ASA 1 4.2 Soil and foliar analysis carried out by third party laboratory, Central Plantation





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Services. Soil and soil analysis carried out every year. Each blocks approximately 40 samples taken to determined nutrient for fertilizer recommendation every year. Sighted report of foliar analysis dated on Nov 2012 for 52 samples with reference to no. CPS/191/XI/2012 using Parameter NPK, Mg, Ca, B (ppm), Cu (ppm) and Zink (ppm). Report of soil analysis also was carried out on April 2014 (ref. 376/CPS/IV/2013) and reports are available and verified. Land application for compost EFB and land irrigations available in tonnes and hectare was applied.

Various types of maps are available, such as general soil map,slope classes and elevation. These are used to provide general recommendations for soil and water management practices and to identify solutions to overcome soil limitations.

ASA 1 4.3 No fragile soil and no slopes area identified during site visit. Road maintenance programme is available until October 2013. Actual realization of the road maintenance programme is updated once the work is completed and recorded every month. Machinery available, such as: Motor Garder (1 unit), Compactor (1 unit), Wheel loader (1 unit) and Dump truck (2 unit).

Bilah Estate has 1501 Ha peat soil in total area of the estate. SOP for water and soil conservation (BP/SOP/AGRO-05) is highlight procedure to conserve the peat soil by maintaining the water level with silt and water gate.

ASA 1 4.4 Pangkatan Estate is maintaining Kundur River as HCV that based on HCV assessment report [refer to principle 5.2]. As for Bilah Estate, there is no river passes through the estate. Mill is using water sources from nearby river to processing where the water is pumped into water treatment located in mill. Raw water then will be treated using Soda Ash, Aluminum Sulphate and Malco 8173. Water mainly use at 2 boilers, turbine and press station in the mill. Effluent water from processing then drained into 2 POME ponds located nearby. Water analysis is carried out at planned intervals.

Mill uses the effluent water from pond to compose the EFB as additional fertilizer and land application to their estates. SOP for water and soil conservation (BP/SOP/AGRO-05) is to conserve the peat soil by maintaining the water level with silt and water gate. Record of analysis effluent is available every semester as per UKL/UPL requirement by local authority. Analysis including BOD and COD. Results sighted for Jan 2013 – 6220 mg/l and in June 2013 – 2580 mg/l. Records of water use is available per day include m3/MT FFB processing.

ASA 1 4.5 Standard operating procedure no. PI/SOP/AGRO-07 for Pest management is covering all aspect as census, monitoring and action plan to be taken. All monitoring are well documented and necessary records well maintained. Estate well maintained beneficial plant such as Tunera and Antigonon in the field to attract the natural predator for worm. For rat control, estate use biological method such as barn owl as natural predator.

Total 52 units of barn were maintained so far. Record of monitoring available and found 45 units is occupied. Training of IPM done on 18 July 2013 for 31 workers in estate office. List of attendance verified. IPM training is included in the training programme for every year. Monitoring of liter per Ha is done in monthly. All chemicals are available including chemical usage quantity and hectare of application.

The locations where barn owl cages are built are also mapped in each field and monitoring carried out by census where it records the division, area size, block no, month erected, box no, development stages of the owls(eggs, immature, mature), box condition, condition around the box. The establishment of beneficial plants and barn owl breeding as measures to assist in the control of leaf pest and rat populations.

ASA 1 4.6 Records of active ingredients, area treated a.i per hectare, cost and operator name





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are well managed and documented. List of chemicals are available including the usage quantity and hectare of application. All document and record is complete from stock of chemicals arrive until record of area treated in the field. Application of chemicals is in accordance to SOP. It was verified with the genuine documentation and verbal interview with the workers.

All chemicals and fertilizer container are recycled in field for same activities. Balance of container triple rinsed and disposed by authorized buyer. During the interview with the workers in fields, most of them are able to understand the content of SOP. During the inspection the store seen in proper condition that complete with bund, good ventilation, sufficient spillage kits such as saw dust, rags, mop, bilingual [English/Malay]MSDS or CSDS in place at suitable locations.

Record of Parquets usage is reduced from 2012- 1271 liter and 2013 -149 liter. Memorandum from Group manager to all estate on Dec 2011 to reduce the usage of chemical class I (Ref. 001/GMSUMUT/VI/2011). Yearly record of Parquets on 2011 and 2012 is reduced from 4226 liter to 3040.62 liter. 58 workers who exposed to high risk work were sent to medical surveillance every year. Last check up on Jan 2013 by Anugerah Ibu Clinic. All the checked workers are verified fit to work. 42 workers sent to medical checkup on 22 Jan 2013. Result is available and verified. No women sprayers.

ASA 1 4.7 Group Company Policy dated on 02 Jan 2011 include in Safety & Health to be implement in all activities in mill. In the mill the responsible person is the mill manager, Mr. Eri Purnomo. OSH meeting carried out every month. Minutes of meeting and attendees available. Issue discussed in meeting such review of accidents records, management programmed for OSH, risk analysis review, last month pending issue and others. Minutes of meeting is well maintained. Last meeting on 20 August 2013.

All workers are covered by Jamsostek insurance. Deduction is made by workers pay slip monthly for compulsory. Evidence of all 65 employer was pay for insurance available document date on 5 August 2012 (No. 120/PGM/VIII/2013. 17 workers were sent to medical surveillance every year for external and in house check up every 6 months. Last check up on Jan 2013 by Anugerah Ibu Clinic. 58 workers who exposed to high risk work were sent to medical surveillance every year. Last check up on Jan 2013 by Anugerah Ibu Clinic. All the checked workers are verified fit to work.

All activities in mill and estates have been analyzed on what, where, level of risk, hazards, risk assessment, action plan and target to complete. HIRARC seen reviewed in every monthly safety meeting and last update seen on July 2013. Assessment is carried out based on workplace such as sterilizer area, engine room, press and digester area, water treatment, workshop, laboratory, boiler station and warehouse.

Analysis in estates is divided by 3 section/workplace including nursery, replanting, up keeping, harvesting, transportation, chemical application, manuring, chemical application, warehouse area etc. Basic safety training to mill workers sighted on 20/08/2013. List of attendance available and training was carried out to all level of workers. Sample for up keeping workers on 22 July 2013 attended by 15 workers and for 39 harvesters on 13 July 2013.

Type of potential accidents as per HIRARC assessment is well monitored. Mill was provided accident form as internal case record. No accident reported from year 2009. Inspection to all operating sites found with basic first aid kit and spillage kit provided at store to prevent uncontrolled spillage. First aid training on 14 January 2013 for 45 workers in the field. Estate and mill has to send report (form K3 no.14) to local authorities and HQ if any accident happens.

ASA 1 4.8 Training Programme is developed annually to all mill workers. For year 2013, 15





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training was programme including all related work in the mill. Training such as safety and health, HCV, operation activities and administration. Each worker has the “Employee Training List Form” which contains all training was attended by them. The form is maintained in workers file include date, location and trainer name.

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

Criterion by Audit

Summary

The company has DPPL-Dokumen Pengelolaan and Pemantauan Lingkungan (Environmental and Social Impact assessment), monitoring and management of environmental impacts were carried out based on per semester and reported to the local authority regularly. The management, monitoring and mitigation action of HCV areas are derived from the HCV assessment findings. The sources of pollution and emissions were identified and analyses of measurement were conducted regularly.

ASA 1 5.1 PT Pangkatan commissioned an SEIA (AMDAL) in March 2005, from local authority body (Badan Lingkungan Hidup). Report number 660/274/BLH-LB/AM/2010 last revision on June 2010. The AMDAL includes the ANDAL, RKL, RPL and an executive summary, and was approved by the relevant authorities. UKL and UPL is updated every semester to government and last updated on June 2013 for first semester of 2013 report. Upaya Pengelolaan Lingkungan Hidup [UKL] and Upaya Pemantauan Lingkungan Hidup [UPL] for the 2.961 Ha [660/216/BLH-LB/AM/2012].

The assessment covers the schedule waste area, offices, chemical & fertilizer stores, workshop, spent oil drum storage area, clinic and workers quarters. Rencana Pengelolaan Lingkungan dan Rencana Pemantauan Lingkungan, Period Jan – Jun 2013. These reports were sent to agencies mentioned in the RPL [BLH Labuhan Batu, Pusat Pengelolaan Ekoregion Sumatra etc. Receipts of the above documents were available and current during the audit. The operations for this company are all but complete.

The HGU is in place and there is no expected expansion. No changes have been made to the relevant procedures, operating areas and activities since the approval of the AMDAL. SOPs are in place to document operational activities, and the current activities are conforming the procedures identified in AMDAL. Based on the UKL / UPL, there are no changes in operations for this company.

ASA 1 5.2 The RSPO approved HCV assessor [EnviroLogic Consulting] commissioned of HCV assessment dated on 29/10/2011. Based on interview, the identification of two HCVs [HCV 1.3 is for areas that contain habitat for viable populations of endangered, restricted range or protected species and HCV 6 is for critical area for maintaining the cultural identity of local communities are present] requires specific management options and monitoring indicators.

Based on interview with stakeholders and discussion with villagers, the HCV assessment identifies at least 2 individual’s possible nesting site of Sunda Gharial [Tomistoma schlegelii] / Buaya Senyulong / Buaya Supit, an endangered species and protected by law in Indonesia, was present in the river Sei Kundur. The HCV assessment revealed sightings of Honey Bear [Helarctos malayanus] and Oriental Pied Hornbill.

The company works with various parties to identify best practices in preserving endangered species and habitats. These include to secure individuals of critically threatened flora and fauna species from extinction, providing clear message to staff and stakeholders of no killing, hunting, keeping, sale, purchase, trading of protected species. A management plan been prepared and is being well monitor by the sustainability team. There are 7 programs listed in the management plan.

The company identifies best practices in preserving endangered species and habitats that include flora and fauna species. A management plan been prepared and is being well monitor by the sustainability team. The work to protect the HCV's is monitored by the sustainability department officer in charge of improvement of the





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environment.

Signages are maintained and some strategic location has been erected with new signage to create awareness. Patrolling by the security personnel carried regularly in high risk area and boundaries. Regular spot checks in workers and staff quarters for presence of wildlife that is protected. HCV environment care takers are trained on HCV criteria, type assessment details and monitoring control. Sighted training records for: • Ronny Gunawan [Field Head Assistant] • Subatino [Security] • Romy Syahputra [Sustainability member]

ASA 1 5.3 Mill has identified relevant waste from the operation and identified source of the waste and actions to reduce. The identification resources are divided by operation place starting from mill office to POME site. Pollution sources identified and documented such as used oil, filter, battery etc.

Record of all schedule waste is reviewed. The schedule waste collection is centralized at TPS “Tempat Penyimpanan Sementara” [ref: Bupati Labuhan Batu, Nombor 503.660/148/BLH-LB/WAS/2010]. Documented records of registering into the TPS observed in the Schedule Waste Activity Log Sheet. Waste management is available include sources of waste in order to avoid or reduce pollution. Sample as to place “gas capture” in boiler flair to reduce dust emission to environment. Emission from boiler also is analyzed using parameter So2, No2, HCI, CI2, NII3 and HF.

Estate is well implemented recycle programme in the estate by do the segregation in landfill for organic and inorganic waste. Schedule waste is collected by CV. Arum (permit no. AJ.309/63/006/DJPD/2012/12013009). Schedule waste generated is used oil, use battery, bulb, oil filter and rags. Berita Acara Pengambilan Limbah – Schedule Waste Collection sighted for used oil container, filters and empty chemical containers to waste collector CV. ARUM [Kementerian Lingkungan Hidup, No. B-10151/Dep.IV/LH/PDAL/10/2012. Sighted collection record for above items dated on 14/06/13. Observed records of Document No. 000089, 000047, 000048 and 000008 [Hazardous Waste Manifest].

Empty chemical container after triple rinse is recycled for chemical usage in the field. The balance was collected by CV. Arum and record of inventory available. A clear management plan dated on 04/01/2013 and SOP [BP/SOP/K3-11] for the use of hazardous waste and agrochemicals. Practices observed were in line with the plan and instructions. Relevant documentation of agro-chemicals is well established, maintained and implemented.

POM effluent water is regularly monitored by monthly using parameters pH, Zinc, Copper, Cadmium, Lead, Oil and grease, COD & BOD. Last certificate of analysis on July 2013 reference no. 39/KPP-PGM/VII/2013 is verified not exceed the limit as per local authority regulations. Water analysis for river is carried out by per semester. Last analysis report available (ref. no. 11/KPP-PGE/III/2013) for inlet and outlet. Detailed records were available on the waste management. All the identified schedule waste is managed and monitored with proper record and there is one designated staff taking care of these activities.

ASA 1 5.4 Daily record of shell and fiber is available and the tonnage of FFB processed per day is known. Renewable energy tonnes used per tonne of CPO to date. At mill development of biogas plant to capture methane and use for power generation in planning stage by consultant Biotec on March 2014. Renewable energy use and its efficiency analysis id documented. Fuel usage is monitored by monthly basis include diesel usage (liter), FFB processing and diesel usage liter per tonne FFB. July 2013 14, 610 liter diesel for 16, 205.91 Mt FFB equal to 0.92 liter/mt.

ASA 1 5.5 No burning policy is well implemented. Replanting use felled chipping and shredding





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method. Progress of latest replanting at blocks O1, O2 and O3 including 248 Ha process is reviewed. Emergency responses to land burning are well prepared (SOP no. PI/SOP/Umu-10). Risk assessment is defined low risk of burning in replanting area. However, emergency responses to land burning are well prepared (SOP no. PI/SOP/Umu-10)

ASA 1 5.6 Mill has identified relevant waste from the operation and also was recognized source of the waste to reduce and further handling method to be taken. The identification resources are divided by each operation place starting from mill office to POME site. POM effluent water is regularly monitored by monthly using parameters pH, Zinc, Copper, Cadmium, Lead, Oil and grease, COD & BOD. Last certificate of analysis on July 2013 reference no. 39/KPP-PGM/VII/2013 is verified not exceed the limit as per local authority regulations.

Also mill take initiative to place “gas capture” in boiler flair to reduce dust emission to environment. Emission from boiler also is analyzed using parameter So2, No2, HCI, CI2, NII3 and HF. Waste management is available include sources of waste in order to avoid or reduce pollution. Sample as to place “gas capture” in boiler flair to reduce dust emission to environment. Emission from boiler also is analyzed using parameter So2, No2, HCI, CI2, NII3 and HF. POM effluent water is regularly monitored by monthly using parameters pH, Zinc, Copper, Cadmium, Lead, Oil and grease, COD & BOD. Last certificate of analysis on July 2013 reference no. 39/KPP-PGM/VII/2013 is verified not exceed the limit as per local authority regulations.

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

Criterion by Audit

Summary

A Social Impact Assessment was conducted by an independent consultant and the findings are acted upon by developing management and monitoring plans. Housing and other facilities for workers are provided by the company and these are being upgraded via the continual improvement programme. Procedures for complains and grievances are in place and all complaints and grievances are handled adhering to these procedures.

ASA 1 6.1 Sighted SIA done by RSPO Certified personnel, Dr. Sanath [EnviroLogic Consulting] dated July 2011. Positive impact and negative impact derived. PI/SOP-Umum-12 derived for CSR activities and Management Plan for all the negative impact has been derived. Ex:

1. CSR reviewed by Nov 2011 2. House renovation March 2012 3. Well for water usage by July 2012

All action to eliminate the negative impact has been conducted and reviewed, sighted monitoring & implementation SIA report dated 14.11.2011. Review of the action plan sighted in the “Laporan & Review of SIA for period 1 – November 2011 to October 2013”. Monitoring by meeting back with the local community on the impact of the company’s action.

Sighted feedback review from local community Ex: Dec 2012, for the help of cement, feedback from community is satisfactory. Mill capacity remains at 40 ton/hr; no changes to the impact to environment. Monitoring and management plan of the environment has done twice per year and put on the report latest on Jan to July 2013 [UKL & UPL] ref 660/216/BLH-LB/AM/2012 dated 10.5.2012.

ASA 1 6.2 Established procedure for communication still lacking significant communication against women, village head, governmental officers, NGO`s and disinterested parties. To include also on consultation processes. List of stakeholders from the nearby villages’ altogether 4 villages Ex: Village Sidorukun Mr Rahmad Jainuddin;, from the government provincial and district level. Ex: District officer Mr Abdul Syarif Police, Army, Bank, In house worker union, suppliers, contractor, hospital, insurance, university and research.





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1. BP/SOP/Umum-02 Transparency Informasi 2. BP/SOP/Umum-05 Complain Internal & External 3. BP/SOP/Umum-19 Communication with Society

Socialisation on the procedure was made on 28.12.2012, attended by 5 villagers head, governmental officers [ external and internal stakeholders ] Representative from NGO were called but not attended, local community, government reps, school teacher, employees, Union leader). Mr. Yudi Prasetyanto, Head of Representative for North Sumatera, for PT Evans Indonesia

ASA 1 6.3 Procedure BP/SOP/Umum-05 is established for Internal & External complain refereed. Internal and External complain log book were prepared under SHE/1.1/4. 10 complain from July 2012 till to date. Last entry on 17.7.2013 by Neno [Harvester] complained on house repairs. Repaired immediately.

ASA 1 6.4 Procedure PI/SOP-Umum -21 dated 28.12.2011 for Land Compensation established. The responsible party is the Humas (Industrial Relation) Dept.

ASA 1 6.5 Mr. Jetro sampled for MA Tarmimi [processing Operator ]month of July 2013; (staff ID. 0010), Gross total Rp. 6,360, 686 Deducted for Jamsostek, Advance, Unpaid Leave etc: Rp 3594,796 Net salary Rp. 2,765,890. Payslip need further awareness to the employee on the itinerary of it. M. Jasudi - Harvester sampled for June 2013; (staff ID. PW80), Gross total Rp.3, 257,664. Deducted for Jamsostek: Rp 69734, Koperasi 270500. Net salary Rp. 22556905. The estate have contractual agreement with local contractor for fertilizing; but no proper pay documentation available to ensure pay and conditions for employees of contractors whether meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Collective agreement between management with worker union for period 2014 to 2015 sign by the management. Right and duties of the workers; The worker contract include every details of the worker, housing contract, and acknowledge of the first training consisted of OHS, PPE usage, SOP for emergency. The company provide housing for both staff and workers. All of them have free water and 24 hour electricity. There are Masjid, crèche, clinic, school bus for children to go to school. Work agreement with CV Tecknik Jaya for fertilizing job. The contractor must provide insurance to their worker as per Indonesian law clause sighted, apart from to follow labour law “Undang Undang Ketenagakerjaan”.

ASA 1 6.6 Policy for freedom of association sighted dated 2.1.2011. Displayed and communicated. Minutes of meeting between management and worker union committee on 28.2.2013, 30 people attended. Issue discussed on wages for 2013 were acknowledged by Mill Manager. Minutes of meeting between management and worker union committee on 14.9.2012, 20 person attended.[3 from management & 17 from workers]. Issue discussed on the new set of agreement for the collective Agreement 2013.

ASA 1 6.7 SOP for age restriction sighted PI/Sop/Umum-23 dated 30.7.2012. Requirement of the staff and employee recruitment minimum age is 18 yrs. old. Sampled Mr. Medo Sudarmaji, born on 10.10.1990 and he entered work on 1.6.2013 at age of 22 yrs. 8 mths.

ASA 1 6.8 Policy for equal opportunities sighted dated 2.1.2011. Displayed and communicated Mr. Sugi Hartono promoted from the security personnel to become Head of Security; reflecting on good working performance. Same for Mr. Adenan Pane from Mechanic to Head of Mechanic.

ASA 1 6.9 Policy for sexual harassment sighted dated 2.1.2011. Displayed and communicated. Policy for protection of reproductive rights sighted dated 2.1.2011. Displayed and communicated. From committee gender interview. Gender Head is Ms. Sumiati [House wife]. Minutes on 26.7.2013 and 23.5.2013; seen agenda on Sex Education; Pregnancy & Breastfeeding. A SOP derived ref to PI/SOP/Umum-04 &





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BP/SOP/Umum-04 for Gender Committee explaining procedures of sexual harassment by identifying type of harassment & report to Gender committee within 24 hours & an investigation will be conducted by management team & if found guilty, discipline action will be taken

ASA 1 6.10 FFB collected and send to mill from their own estate, no prices displayed. The pricing mechanism is not needed, memo from government notice however available for reference purposes. Agreement sighted for CV Amira. Contractor for house& facilities repairs. Sighted “Factur pajak” dated 10.12.2012 from contractor for payment upon completion of job. Sighted Mr. Irwanshah [Head of Mill Assitant, confirmed the job completed, thus payment dated 20.11.2012. Payment release 18.1.2013 for the amount of Rp 34,832,592; cheque sighted.

ASA 1 6.11 A procedure PI/SOP-Umum-12 for Community Development is established dated 2.5.2011. CSR seen carried and as a monthly activity. Till June there were Rp 114,739,803 supported to the local activities. Ex:

1. Immunization for children – Rp 94600 2. Road repair at Sidorukun village – Rp 4215892 3. Rubbish bin T.Tinngi village – Rp 500,000

Apart from 1. Bus transporting children to school from all estate and mill. 2. Creche – Nanny is provided. 3. Masjid and provided 4. Facilities such as tennis court, futsal etc is provided.

Principle 7: Responsible Development of New Plantings

Criterion by Audit

Summary

Not applicable as there is no new plantings.

ASA 1 7.1 – 7.7 Not applicable for this assessment as no new planting programe

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

Criterion by Audit

Summary

ASA 1 8.1 The continuous improvement plan contains what, why, how, where, when and who matrix table for 12 continuous improvement is prepared. IPM enhancement is continuously practised by increasing the beneficial plant area and providing barn owl. From the social aspect, estate is committed to provide RSPO awareness and this plan actually receives good response from the people. Estate also in progress to build new workers house include with water supply and electricity.

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

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

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

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

4.3.1 Non-Conformities Identified during this Audit

The following 1 Minor NC was raised for this audit.

NON CONFORMITY REPORT

NC number: 2013-NC-01

Client name: Pangkatan POM

Date raised: 28/08/2013

Major or Minor: Minor





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Raised by: Simon

Aspect of standard: - 2.1:

RSPO, PARTIAL CERTIFICATION - UN-CERTIFIED UNITS OR HOLDINGS, SECTION 2.4.2 –

Requirements of documented procedures. Any new plantings since January 1st 2010 must comply with the RSPO New

Plantings Procedure.

Evidence of non-conformity:

New planting activities started since 2006 at Gunung Pelawan Estate and Tuing Estate, but documented evidence

proofed the AMDAL was only carried out in 28/03/08 [ref: 188.44/195.A/BAPEDALDA/2008] and the HCV

assessment in May 2013 by Aksanta. Where else the NPP was not done since to date.

Auditors signature:

Date: 28/08/2013

Proposed corrective action / improvement action by company. Timeline for conformance: Next surveillance audit

4.3.2 Non-Conformity Identified during the last ASA

The following NC’s were raised during the last audit and the status was reviewed as indicated below.

NC number: 01/2012

Client name: PT Evans Indonesia

Date raised: 15th May 2012

Major or Minor: Minor

Raised by: David Ogg.

Aspect of standard:

6.8. Evidence of equal treatment in working opportunities for workers.

Evidence of non-conformity:

There is a procedure for engaging workers which stipulates a maximum age of 45.

Auditors signature:

Date: 15th May 2012.

Proposed corrective action / improvement action by company. Company proposed to review the procedure.

Timeline for conformance: Next surveillance audit

Review of corrective /improvement action:

There is no age limit in the said procedure and interview confirms that workers are appointed regardless of age within

labour law. Therefore this NC is closed.

Assessors signature:

Date: 28/8/13





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4.3.3 Observations Raised During this Audit

Observations 1:

Principle 1

Client name: PT Evans Indonesia [Pangkatan Mill & Pangkatan Estate & Bilah Estate]

Date raised: 28.8.2013

Raised by:

Publically available documents were generally informed as per PI/SOP/Umum-02; to be more effective the actual documents to be listed together with the retention time for better control of it though generally said 10 years retention time in PI/SOP/Umum-08

Observations 2:

Principle 6



Raised by: Established procedure for communication still lacking significant communication against women, village head, governmental officers, Ngo`s and disinterested parties. To include also on consultation processes.

Observations 3:

Principle 6



Raised by: Pay slip need further awareness to the employee on the itinerary of it.

Observations 4:

Principle 6



Raised by: The mill & estate have contractual agreement with local contractor; but no proper pay documentation available to ensure pay and conditions for employees of contractors whether meet at least legal or industry minimum standards and are sufficient to provide decent living wages.

Observations 5:

Principle 6



Raised by: Work contract made for Mr. MA Tarmimi and Mr. Yuswanto were not available. These workers are transited from PT Tolan Tiga Indonesia. [SIPEF]. Need to establish throughout Pangkatan and Bilah Estate also.

Observations 6:

Principle 6



Raised by: Lowongan Kerja still included restriction through gender & age. The understanding of what is discrimination still lacking.





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

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

For Main Assessments, a 30 day Stakeholder consultation announcement is published on the RSPO website prior to the audit. The same announcement is circulated by the client prior to the audit.

For subsequent Annual Assessments, it is based on stakeholders reading the approved public summary reports available on the RSPO website, the client’s procedures in receiving on-going feedback or if feedback was sent directly to Control Union prior to an audit or thorough RSPO complaints procedures.

During each assessment, the audit team will review the company’s implemented procedures in receiving feedback and will execute field visits and interviews.

Not limited to the following questions, any feedback received is reviewed and summarized in this summary report for either Part 2 – Partial Certification or Part 4 – Assessment Findings above or noted below, if applicable:

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

2. What is your relation with the applicant?

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

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

5. Do you have any suggestions for management?

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

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

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

9. Additional comments?

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

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

Subject raised Company response and proposed action to be taken

Audit team findings

Nil or refer to PART 2 and PART 4 Nil or refer to PART 2 and PART 4 Nil or refer to PART 2 and PART 4

PART 5: RSPO SUPPLY CHAIN CERTIFICATION

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

5.1 POM Included In The Scope Of The Audit

Name Palm Oil Mill

Mill Capacity

Location Supply Chain Model

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

Pangkatan POM 40 Kecamatan Pangkatan, Kabupaten Labuhan Batu, North Sumatera, Indonesia.

IP

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

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

CU Code

POM 1 34,557.588 8,199.447 Actual volumes between July 2012 to June 2013. Please also see 1.6 above.

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

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





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

If this is the 1st Main Assessment, the figures used are from the last 12 months. If this is an Annual Surveillance Assessment, the figures used are since the last audit.

No MONTH-YEAR Certified Supply Bases (MT) Certified CPO (MT) Certified PK (MT)

1 July’12 16,452.17 3,669.165 907.285

2 August’12 13,089.33 3,011.882 708.719

3 Sept’12 16,385.93 3,807.656 908.446

4 Oct’12 14,135.04 3,179.063 791.614

5 Nov’12 10,193.67 2,345.890 579.230

6 Dec’12 12,057.57 2,772.409 666.643

7 January’13 11,065.50 2,620.785 617.319

8 Feb’13 9,570.88 2,291.238 533.708

9 Mar’13 10,020.39 2,449.941 554.253

10 Apr’13 11,457.92 2,818.342 638.615

11 May’13 11,912.01 2,877.726 661.050

12 June’13 11,363.79 2,713.491 632.565

TOTAL 147,704.14 34,557.588 8,199.447

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

No Buyers Name Green Palm Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 No Transaction

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

No Buyers Name UTZ eTrace Trading No Certified CPO

(MT) Sold Certified PK (MT) Sold

1 No Transaction

5.7 Non-Conformities Identified during this Audit

Timeline for compliance:

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

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

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

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

No NC’s were raised.





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5.8 Description of the Organizational Management Systems

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

In term of the system implementation, since its introduction in 2010, the key staff and stakeholders are generally well understand of the RSPO requirements and the implementation seen objectively achieved. The management has allocated sufficient resources to manage the system and sighted RSPO competence personals, such as RSPO executives and RSPO Manager Pak Abdul Aziz Muhshi for Sumatera region and RSPO Manager Pak Hamdianas for Kaltim region. The RSPO team performs regular internal audits at specified interval respectively at each region. The conclusion is that the company is in compliance with the rules for partial certification.

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

Recommendations made: Yes

Summary of non-compliances:

Non raised with regards supply chain module.

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

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA

The provisional date for the next ASA is: Jun – Aug 2014

6.2 Date for Closure of Non-Conformities

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

All major NCs to be closed by: NA

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

6.3 Signing by the Client

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

Acceptance of liability in execution of the instructions given.

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

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

Acknowledged by:

Name: Gunasekaran Uthiradam

Position: Head of Operation Agronomy (SUMUT)

Date: 19 September 2013 Signature

6.4 Signing by the Lead Auditor

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

Acknowledged by:

Name: Simon Selvaraj Subramaniam

Position: Lead Auditor

Date: 19 September 2013 Signature





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6.5 Signing by the Certifier

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

Acknowledged by:

Name: Mr. Hari Naveen Christopher

Position: Certifier

Date: 17 January 2014 Signature





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PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit

From 1.9, the location map(s)





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Appendix 2: List of Abbreviations AMDAL Analisis Mengenai Dampak Lingkungan

BOD Biological Oxygen Demand

BRC British Retail Consortium

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

HGU Hak Guna Usaha

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OER Oil Extraction Rate. (CPO as a % of the mass of FFB).

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PET Polyethylene Terephthalate

PK Palm Kernel

POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RKL Rencana Pengelolaan Lingkungan Hidup

RPL Rencana Pemantauan Lingkungan Hidup

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

RTE Rare, Threatened, and Endangered

SA8000 Social Accountability 8000

SEIA Social Environmental Impact Assessment.

SIA Social Impact Assessment

SOCSO Social Security Organisation

SOP Standard Operating Procedure

UKL/UPL Upaya Pengelolaan lingkungan (UKL) / Upaya Pemantauan Lingkungan (UPL)

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

MT Metric Tonnes

WHO World Health Organization

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