Audit Report - RSPO

COMMERCIAL- IN – CONFIDENCE I The contents of this report must not be disclosed to a third party without the agreement of the SAI Global Client

Doc ID: 3843 / Issue Date May 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 of 194

Audit Report

Certification Audit for PT. PP London Sumatra Indonesia Tbk. Gunung Malayu Mill and Its Supply Base FMS40016 RSPO Membership number: 1-0015-04-000-00 Audited Address:

Gunung Malayu Mill:

Desa Perkebunan Gunung Malayu, Kecamatan Rahuning, Kabupaten Asahan, North Sumatera IDN

Its supply bases:

Gunung Malayu Estate:

Desa Perkebunan Gunung Malayu, Kecamatan Rahuning, Kabupaten Asahan, North Sumatera IDN Sei Rumbiya Estate:

Kecamatan Kota Pinang, Kabupaten Labuhanbatu Selatan, North Sumatera IDN Date of audit: 17/09/2014

Audit Report

WORK ITEM: Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 of 194

Table of contents Page Executive Overview 3 Abbreviations Used 4 1.0 SCOPE OF THE ASSESSMENT 1.1 Introduction 7 1.2 Audit Objective 7 1.3 Scope of Certification 8 1.3.1 Palm Oil Mill 8 1.3.2 Oil Palm Estate 8 1.4 Location of Mill and Estates 8 1.5 Description of Supply Base 12 1.6 Date of Plantings 12 1.7 Area of Plantation 13 1.8 Approximate Tonnages Offered for Certification (CPO and PK) 13 1.9 Other Certificates Held 17 1.10 Organisational Information/Contact Person 17 1.11 Time Bound Plan for Other Management Units 17 1.12 Partial Certification Requirements 18 1.13 Date of Issue of Certificate dan Date of Previous Assessment 19 2.0 AUDIT PROCESS 2.1 Certification Body 19 2.2 Audit Methodology 20 2.2.1 Pre-audit 20 2.2.2 Certification Audit 20 2.3 Qualification of the Lead Auditor and Audit Team Members 21 2.4 Stakeholder Consultation 21 2.5 Date of Next Surveillance Visit 23 3.0 AUDIT FINDINGS 3.1 Action taken on previous audit issues 23 3.2 Claim and use of certification mark and or logo 23 3.3 Description of audit findings 24 3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation 24 3.3.2 Mill Supply Chain Requirements 129 3.3.2.1 Supply Chain Certification Standard 129 3.3.2.2 Supply Chain Certification System 135 3.4 Recommendation 136 3.5 Environmental and social risk for this scope of certification for planning

of the surveillance audit 136

3.6

Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings

136

List of Tables

Page

1 Mill and Estates GPS Locations included in certification assessment 8 2 FFB Production of the supply base 12 3 Estate Age Profiles of Planted Palms 12 4 Land use description of Begerpang, Sei Merah and Rambong Sialang

Estate in 2014 13

5 Estates and Area Planted 2014 13 6 Begerpang, Sei Merah and Rambong Sialang Estate FFB 14

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Production Trend 2011 – 2013 7 Actual Production Figure 2013 14 8 Actual Gunung Malayu Mill Production of CPO and PK derived from

Gunung Malayu Estate and Sei Rumbiya Estate FFB in 2013* 15

9 Estimated Gunung Malayu Mill Production of CPO and PK derived from

Gunung Malayu Estate and Sei Rumbiya Estate FFB in 2014*

16

10 Certificates Held by Mill and Estates 17 11 RSPO Certification Time Bound Plan 17 12 List of internal and external stakeholder 22 List of Figures Page 1a Map of Mill and Estates Location 9 1b Map of Gunung Malayu Estate Location 10 1c Map of Sei Rumbiya Estate Location 11 List of Appendices Page A Audit Record 137 B Previous nonconformities, corrective actions and status 141 C Nonconformities, Corrective Actions and Observations Summary 144 D Stakeholder’s issues and comment 188 E Definition of, and action required with respect to audit findings RSPO

PC 194

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Executive Overview SAI Global has audited Gunung Malayu Mill PT. PP London Sumatra Indonesia Tbk. and its supply bases operations comprising one mill, two oil palm estates, support services and infrastructure. 15 Major Nonconformities were identified during this certification audit. Follow up audit was conducted on 24th of June and 17th of September 2014 to review the corrective action taken to the Major Nonconformities and objective evidences reviewed that Major Nonconformities could be closed out. At the conclusion of this audit, Gunung Malayu Mill PT. PP London Sumatra Indonesia Tbk. and its supply bases operation was found complies with the requirements of the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Segregation November 2011. Previously PT. PP London Sumatra Indonesia Tbk. Gunung Malayu Mill was certified to National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Segregation November 2011 by PT. TUV NORD Indonesia (Certificate # TNI –RSPO 001.2008, expiry date 29th of April 2014). Last surveillance audit was performed on 18th of September 2013. The report indicated that there were major and minor non-conformances and the report mentioned that all non-conformances have been corrected. The reason of moving to SAI Global was for refreshment and late report from the previous Certification Body. The recommendation from this audit is that certificate can proceed for PT. PP London Sumatra Indonesia Tbk. Gunung Malayu Mill as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel Segregation Model. Estimated tonnage of certified CPO produced 32,301.12 MT

Estimated tonnage of certified PK produced 8,174.16 MT

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Abbreviations Used AK3U Occupational Health and Safety Expert (Ahli K3 Umum) AMDAL Environmental Impact Analysis (Analisis Dampak Lingkungan) AME Area Manager Engineering BHL Daily worker (Buruh Harian Lepas) BKM Log book of group leader activity (Buku Kegiatan Mandor) BLH Environmental Agency (Badan Lingkungan Hidup) BLRS Bah Lias Research BOD Biological Oxygen Demand BPN National Land Agency (Badan Pertanahan Nasional) COD Chemical Oxygen Demand CPO Crude Palm Oil CSR Corporate Social Responsibility DO Delivery Order EFB Empty fruit bunch EMS Environmental Management System EWS Early Warning System FFB Fresh Fruit Bunch GAPKI Indonesian Palm Oil Association (Gabungan Pengusaha Kelapa Sawit

Indonesia) GPS Global Positioning System Ha Hectare HCV High Conservation Value HGU Land Use Title (Hak Guna Usaha) GHG Green House Gases HIPERKES Industrial Hygienist HO Head Office IDN Indonesia IPM Integrated Pest Management ISCC International Sustainability Carbon Certification ISO International Standards Organisation ISPO Indonesia on Sustainable Palm Oil Jamsostek Man Power Social Assurance (Jaminan Sosial Tenaga Kerja) Kepmen Degree of Man Power Ministry (Keputusan Menteri Tenaga Kerja) KTU Head of Administration (Kepala Tata Usaha) LA Land Application LD Lethal Dosage Lonsum London Sumatra LSU Leaf Sampling Unit LTI Loss Time Incident MCU Medical Check-Up MSDS Material Safety Data Sheet MT Metric Ton NCR Non Conformance Report NGO Non-Government Organisation OER Oil Extraction Rate OHS Occupational Health and Safety OHSAS Occupational Health and Safety Assurance Services P2K3 OHS Committee P&C Principle and Criteria

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PEL Environmental Evaluation Presentation (Penyajian Evaluasi Lingkungan) Permen/Permenaker Regulation of Man Power Ministry (Peraturan Menteri Tenaga Kerja) Permentan Regulation of Agricultural Ministry (Peraturan Menteri Pertanian) PK Palm Kernel PKB Joint Working Agreement (Perjanjian Kerja Bersama) PKWT Contracted worker (Pekerja Waktu Tertentu) POM Palm Oil Mill POME Palm Oil Mill Effluent PP Government Regulation (Peraturan Pemerintah) PPE Personal Protective Equipment PUK Caretaker Unit (Pengurus Unit Kerja) QC Quality Control R&D Research and Development RABQSA Quality Society of Australia RKH Daily Work Plan (Rencana Kerja Harian) RKL Environmental Management Plan (Rencana Pengelolaan Lingkungan) RPL Environmental Monitoring Plan (Rencana Pemantauan Lingkungan) RSPO Roundtable on Sustainable Palm Oil SCCS Supply Chain Certification System SG Segregation SIA Social Impact Assessment SIO Operator Lisence (Surai Ijin Operasi) SMK3 Occupational Health and Safety Management System (Sistem Manajemen

Kesehatan dan Keselamatan Kerja) SPSI Indonesian Worker Union (Serikat Pekerja Seluruh Indonesia) SOP Standard Operational Procedure UKL Environmental Management Effort (Upaya Pengelolaan Lingkungan) UPL Environmental Monitoring Effort (Upaya Pemantauan Lingkungan) Walhi (Wahana Lingkungan Hidup Indonesia) WWF World Wild Fund WWTP Waste Water Treatment Plant

Audit Report


1.0 SCOPE OF THE ASSESSMENT

1.1 Introduction SAI Global conducted an audit of PT. PP London Sumatra Indonesia Tbk. Gunung Malayu Mill and Its Supply Base on 24/03/2014 to 28/03/2014 with Major Nonconformities identified. Follow up audit has been conducted on 24 June and 17 September 2014 for verification of corrective action taken by the organisation. The purpose of this audit report is to summarise the degree of compliance with the relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the audit of your organisation. SAI Global audits are carried out within the requirements of SAI Global procedures which also reflected the requirements and guidance provided in the international standards relating to audit practice such as ISO/IEC 17021, ISO 19011, RSPO Certification System, relevant RSPO Supply Chain Certification System and other normative criteria. SAI Global Auditors are assigned to audits according to industry, standard or technical competencies appropriate to the organisation being audited. Details of such experience and competency are maintained in our records. The audit team is detailed in the attached audit record. In addition to the information contained in this audit report, SAI Global maintains files for each client. These files contain details of organisation size and personnel as well as evidence collected during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to the application for initial and continuing certification of your organisation. Details of your primary contact persons and their contact details and site addresses are also maintained. Please take care to advise us of any change that may affect the application/certification or may assist us to keep your contact information up to date, as required by SAI Global Terms and Conditions. Please note that this report is subject to independent review and approval. Should changes to the outcomes of this report be necessary as a result of the review, a revised report will be issued and will supersede this report. 1.2 Audit Objective The purpose of this audit was to determine compliance of your organisation’s management system with the audit criteria (National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Segregation November 2011) and its effectiveness in achieving continual improvement and system objectives.

It was also to verify the volume of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers, and the implementation of any processing controls (for example, if segregation is used).

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1.3 Scope of certification The scope of certification is the CPO production from one (1) Palm Oil Mill and two (2) FFB supply base owned by PT. PP London Sumatra Indonesia Tbk. 1.3.1 Palm Oil Mill Gunung Malayu Mill PT. PP London Sumatra Indonesia Tbk.

Location : Desa Perkebunan Gunung Malayu, Kecamatan Rahuning,

Kabupaten Asahan, North Sumatera Indonesia GPS Location : East 99o33’39.61” North 2o41’40.47” Mill capacity : 30 MT FFB/hour 1.3.2 Oil Palm Estate 1. Gunung Malayu Estate PT. PP London Sumatra Indonesia Tbk.

Location: Desa Perkebunan Gunung Malayu, Kecamatan Rahuning,

Kabupaten Asahan, North Sumatera Indonesia GPS Location: East 99o33’39.61” North 2o41’40.47” 2. Sei Rumbiya Estate PT. PP London Sumatra Indonesia Tbk.

Location: Kecamatan Kota Pinang,

Kabupaten Labuhanbatu Selatan, North Sumatera IDN GPS Location: East 100o5’5.49” North 1o55’31.84” 1.4 Location of mill and estates PT. PP London Sumatra Indonesia Tbk. mill and estates are located in North Sumatera Province, Indonesia. The geographical coordinate of the mill and estates are shown on Table 1.

Table 1: Mill and Estates GPS Locationsincluded in certification assessment

MILL AND ESTATE EASTING NORTHING

Gunung Malayu Mill 99o33’39.61” 2

o41’40.47”

Gunung Malayu Estate 99o33’39.61”” 2

o41’40.47”

Sei Rumbiya Estate 100o5’5.49” 1

o55’31.84”

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Figure 1a Map of Mill and Estates Location

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Figure 1b Map of Gunung Malayu Estate Location

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Figure 1c Map of Sei Rumbiya Estate Location

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1.5 Description of supply base The FFB sources are two (2) organisations owned by PT. PP London Sumatra Indonesia Tbk. and no FFB from the third party. The hectarage and FFB production of the plantation is shown on Table 2.

Table 2: FFB Production of the supply base

ESTATE PLANTED AREA (HA) FFB (TON/YEAR) (BUDGET 2014)

Gunung Malayu Estate 4,775.40 94,842

Sei Rumbiya Estate 1,586.63 36,999

Total 6.362.03 131,841

Source: Lonsum, March 2014

1.6 Date of plantings

Table 3: Estate Age Profiles of Planted Palms 2014

Year Gunung Malayu Estate

Sei Rumbiya Estate

Total % of Planted Area

1984 166.14 166.14 2.64

1985 119.20 280.42 399.62 6.34

1986 152.26 501.84 654.10 10.38

1987 47.54 47.54 0.75

1988 25.05 25.05 0.40

1989 24.41 49.50 0.39

1991 222.68 103.75 326.43 5.18

1992 209.74 209.74 3.33

1993 436.74 436.74 6.93

1994 350.75 350.75 5.56

1995 317.25 34.85 352.10 5.59

1996 471.51 471.51 7.48

1997 532.86 80.59 613.45 9.73

1998 533.52 22.44 555.96 8.82

1999 233.71 233.71 3.71

2000 218.14 25.36 243.50 3.86

2002 174.60 174.60 2.77

2003 20.31 186.07 206.38 3.27

2004 108.65 197.86 306.51 4.86

2005*) 46.35 129.04 175.39 2.78

2007*) 34.42 34.42 0.55

2010*) 187.74 187.74 2.98

2011*) 107.65 107.65 1.17

Mature 4,716.81 1,586.63 6,303.44 100

2012*) 33.50 33.50 57.18

2013*) 25.09 25.09 42.82

Immature 58.59 58.59 100

Total 4,775.40 1,586.63 6,362.03

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Source: Lonsum, November 2013 Note: *) replanting Replanting program for period 2014 – 2019 in Gunung Malayu Estate and Sei Rumbiya Estate has been established. In 2014 total replanting program area is 522.43 Ha in Gunung Malayu Estate and no replanting program in Sei Rumbiya Estate. 1.7 Area of plantation The areas details for organisation owned estates are shown on Table 5. Review of estate boundary maps could be done.

Table 4: Land use description of Gunung Malayu and Sei Rumbiya Estate in 2014

AREA

HECTARES

GUNUNG MALAYU SEI RUMBIYA TOTAL

Mature area 4,716.81 1,586.63 6,303.44

Immature area 58.59 0 58.59

Total area planted 4,775.40 1,586.63 6,362.03

Emplacement and Mill 191.86 239.02 430.88

Rubber plantation 0 3,975.41 3,975.41

Other area (enclave, water ponds, land with slope >30%)

21.43 81.08 102.51

Total leased area 4,988,69 5,882.14 10,870.83

HCV Area (included in planted area_ 13.73 96.40 110.13

Source: Lonsum, September 2014

Table 5: Estates and Area Planted 2014

ESTATE MATURE (HA) IMMATURE (HA)

GUNUNG MALAYU 4,775.40 58.59

SEI RUMBIYA 1,586.63 0

Source: Lonsum, September 2014 1.8 Approximate tonnages offered for certification (CPO and PK) Approximate tonnages offered for certification is estimated based on the organisation last three

Audit Report


years actual FFB production of Gunung Malayu and Sei Rumbiya Estate as well as last year CPO and PK, OER and KER of Gunung Malayu Mill. The OER and KER of each supply bases were estimated based on laboratory analysis. The projection of FFB production in 2014 taken into account increase productivity of oil palm planted in 2000 – 2011, which estimated around 4 – 5%.

Table 6: Gunung Malayu and Sei Rumbiya Estate FFB Production Trend 2011 – 2013

YEAR Actual Production (MT)

Gunung Malayu Estate Sei Rumbiya Estate Total

2011 94,656.05 33,077.70 127,733.75

2012 98,698.12 36,143.220 134,841.34

2013 93,948.68 32,198.08 126,146.76

Source: Lonsum, November 2014

Table 7: Actual Production Figure 2013

Supply Base

FFB Processed

(MT)

CPO Production

(MT)

OER (%)

PK Production

(MT)

KER

(%)

Actual production 2013

Gunung Malayu Estate* 93,948.68

30,381.22 24.00** 7,790.96 6.00** Sei Rumbiya Estate* 32,198.08

Total 126,146.76

Estimate production 2014

Gunung Malayu Estate 94,841

32,301.12 24.5 8,174.16 6.20 Sei Rumbiya Estate 36,999

Total 131,841

Source: Lonsum, November 2014

*Detail see Table 8 **Actual OER The FFB from Gunung Malayu and Sei Rumbiya Estate are processed without FFB from other supply based, therefore Gunung Malayu Mill used RSPO Supply Chain Segregation Model – Module D.

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Table 8: Actual Gunung Malayu Mill Production of CPO and PK derived from Gunung Malayu Estate and Sei Rumbiya Estate FFB in 2013*

Month

FFB Production (ton) Palm Oil (MT) PK (MT)

Gunung Malayu

Sei Rumbiya

Total Gunung Malayu

Sei Rumbiya

Total Gunung Malayu

Sei Rumbiya

Total

January 6,113.10 2,143.97 8,257.07 1,472.31 516.37 1,988.68 374.44 131.32 505.76

February 6,610.31 2,048.25 8,658.56 1,603.53 496.86 2,100.39 408.95 126.72 535.67

March 6,893.66 2,261.81 9,155.47 1,677.11 550.26 2,227.37 423.49 138.95 562.44

April 5,812.73 2,092.90 7,905.63 1,412.65 508.63 1,921.28 355.45 127.98 483.43

May 5,702.76 2,242.65 7,945.41 1,365.70 537.07 1,902.77 346.48 136.26 482.74

June 8,076.53 3,138.34 11,214.87 1,931.17 750.41 2,681.58 491.57 191.01 682.58

July 8,452.45 2,639.87 11,092.32 2,035.69 635.79 2,671.48 525.71 164.19 689.90

August 8,718.02 2,587.98 11,306.00 2,105.27 624.96 2,730.23 534.02 158.53 692.55

September 10,260.11 3,435.00 13,695.11 2,418.04 809.54 3,227.58 642.36 215.06 857.42

October 9,227.48 3,071.66 12,299.14 2,192.19 729.74 2,921.93 556.16 185.13 741.29

November 8,722.68 3,094.38 11,817.06 2,103.01 746.05 2,849.06 537.15 190.56 727.71

December 9,358.85 3,441.27 12,800.12 2,309.62 849.25 3,158.87 606.47 223.00 829.47

Total 93,948.68 32,198.08 126,146.76 22,626.63 7,754.59 30,381.22 5,802.37 1,988.59 7,790.96 Source: Lonsum, November 2014

*Gunung Malayu and Sei Rumbiya Estate are the certified FFB sources

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Table 9: Estimated Gunung Malayu Mill Production of CPO and PK derived from Gunung Malayu Estate and Sei Rumbiya Estate FFB in 2014*

Month

FFB Production (ton) Palm Oil (MT) PK (MT)

Gunung Malayu

Sei Rumbiya

Total Gunung Malayu

Sei Rumbiya

Total Gunung Malayu

Sei Rumbiya

Total

January 6,197.36 2,721.73 8,919.09 1,518.76 666.82 2,185.18 384.24 168.75 552.98

February 6,701.43 2,284.22 8,985.64 1,641.85 559.63 2,201.48 415.49 141.62 557.11

March 7,624.35 2,935.69 10,560.04 1,728.76 665.64 2,394.40 437.48 168.45 605.93

April 5,892.86 2,686.78 8,579.64 1,443.75 658.26 2,102.01 365.36 166.58 531.94

May 5,781.37 2,602.61 8,383.98 1,416.44 637.24 2,054.08 358.45 161.36 519.81

June 8,839.17 3,020.58 11,859.75 2,165.60 740.04 2,905.64 548.03 187.28 735.30

July 8,091.81 3,434.28 11,526.08 1,982.49 841.40 2,823.89 501.69 212.93 714.62

August 8,103.42 2,813.88 10,917.30 1,985.34 689.40 2,674.74 502.41 174.46 676.87

September 11,905.08 3,605.14 15,510.22 2,916.74 883.26 3,800.00 738.11 223.52 961.63

October 8,702.53 3,724.97 12,427.51 2,132.12 912.62 3,044.74 539.56 230.95 770.51

November 7,910.46 3,582.48 11,492.94 1,938.06 877.71 2,815.77 490.45 222.11 712.56

December 9,727.67 3,738.44 13,466.12 2,383.28 915.92 3,299.20 603.12 231.78 834.90

Total 95,477.51 37,150.80 132,628.30 23,253.19 9,047.94 32,301.12 5,884.48 2,289.68 8,174.16 Source: Lonsum, November 2014

*Gunung Malayu and Sei Rumbiya Estate are the certified FFB sources

Based on the above figures, the estimated of certified CPO and PK offered in 2014 Segregation Model for certification are

Estimated tonnage of certified CPO produced 32,301.12 MT

Estimated tonnage of certified PK produced 8,174.16 MT

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1.9 Other certificates held

Table 10: Certificates Held by Mill and Estates

MILL/ESTATE OTHER CERTIFICATION HELD

Gunung Malayu Mill, Gunung Malayu Estate, Sei Rumbiya Estate

OHSAS 18001:2007, certificate BA-1311016 from Intertek, expired: 31st of

October 2014

SMK3, certificate 199/177/2011 from Sucofindo, expired 20th of May 2014

RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Segregation November 2011, certificate #TNI –RSPO 001.2008, expiry date 29

th of April

2014

Source: Lonsum, May 2014 1.10 Organizational information/contact person PT. PP London Sumatra Indonesia Tbk. Jl A. Yani No.2 Medan 20111 Phone : (+62-61) 4532300 Fax : (+62-61) 45504621 Contact person : Mr Muhammad Waras Head of Environmental and CSR Email : [email protected] 1.11 Time bound plan for other management units PT. PP London Sumatra Indonesia Tbk. is committed to RSPO certification of all its Management Units located in North Sumatera, South Sumatera and East Kalimantan. Time bound plan has been developed to achieve the RSPO certification for all its Management Units by 2016. There were some changes from the previous time bound plan due to several requirements of Management Units have not been ready (e.g. building of temporary storage of hazardous waste, permits have not been finished yet) and according to readiness of Unit Management. The time bound plan is realistic and challenging. The plan is detailed on Table 5.

Table 11: RSPO Certification Time Bound Plan

Name of Mill

Mill Address Name of Supply Base

Plantation

Estate Address

Proposed Time for

Certification

Revised Time

Bound Plan

Remarks

Gunung Bais

Musi Rawas, Sumatera Selatan

Gunung Bais Musi Rawas, Sumatera Selatan

December 2011

2016

Arta Kencana

Lahat, Sumatera Selatan

Arta Kencana Lahat, Sumatera Selatan

December 2012

2015 Audit in May 2015

Kencana Sari Lahat, Sumatera Selatan

mailto:[email protected]

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Name of Mill

Mill Address Name of Supply Base

Plantation

Estate Address

Proposed Time for

Certification

Revised Time

Bound Plan

Remarks

Belani Elok Musi Rawas, Sumatera Selatan

Belani Elok Musi Rawas, Sumatera Selatan

December 2013

2014 Final audit

Bukit Hijau Musi Rawas, Sumatera Selatan

Batu Cemerlang Musi Rawas, Sumatera Selatan

Ketapat Bening Musi Rawas, Sumatera Selatan

Sei Kepayang Musi Rawas, Sumatera Selatan

Sei Lakitan Musi Rawas, Sumatera Selatan

Sei Lakitan Musi Rawas, Sumatera Selatan

December 2014


Sei Gemang Musi Rawas, Sumatera Selatan

Sei Punjung*) Musi Banyuasin

-

2016

Bangun Harjo*) Musi Banyuasin

Suka Bangun*) Musi Banyuasin

Terawas Indah


Terawas Indah**)


December 2015


Pahu Makmur

Kutai Barat, Kalimantan Timur

Pahu Makmur Isuy Makmur Kedang Makmur*)


December 2016

2015 Audit in November 2014



Source: Lonsum, September 2014 Note: *) still development **) Terawang Estate only for seeding estate

1.12 Partial Certification Requirements . There was no evidence that uncertified management unit complied with partial certification requirements regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs), land conflicts, labour disputes and legal non-compliance. Major non-conformance against partial certification requirements was issued (NCR 2014-29).

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Major Non-conformance NCR 2014-29

There was no evidence that uncertified management unit complied with partial certification requirements regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs), land conflicts, labour disputes and legal non-compliance.

Major Non-conformance NCR 2014-29 closed. The Environment and CS Staff of organisation conducted the internal audit and reviewing regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3, land conflict, labour disputes and legal non-compliance to all management units which have not been certified to ensure that partial certification requirements were fulfilled in July – October 2013. Site visit was conducted by the organisation for ensuring compliance against partial certification requirements according to RSPO Certification System clause 4.2.4:

Arta Kencana Estate on 21th of July 2013

Kencana Sari Estate on 23rd of July 2013

Pahu Makmur Estate on 10th of September 2013

Isuy Makmur Estate on 10th of September 2014

Riam Indah Estate on 22nd of October 2013

Sei Gemang Estate on 23rd of October 2013

Sei Lakitan on 25th of October 2013

Sei Punjung on 24th of October 2013

Gunung Bais Estate on 29th of October 2013 Based on the reviewing it was concluded that:

There was no new planting since January 2010 so there was no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

There were no land conflict and labour disputes.

There was no non-compliance with regulations. 1.13 Date of issue of certificate and date of previous assessment Date of issue of certificate will be the date on approval of this Assessment Report by the RSPO Secretariat.

2.0 AUDIT PROCESS 2.1 Certification body PT. SAI Global Indonesia Graha Iskandarsyah, 4th floor Jl. Iskandarsyah Raya No. 66 C Kebayoran Baru, Jakarta 12160, Indonesia Phone : +62 21 720 6186, 720 6460 Fax : +62 21 720 6207 Contact person : Ms Inge Triwulandari Technical Manager Email : [email protected]

mailto:[email protected]

Audit Report


SAI Global is one of the world’s leading business providers of independent assurance. SAI Global provides organisations around the world with information services and solutions for managing risk, achieving compliance and driving business improvement. We provide aggregated access services to Standards, Handbooks, Legislative and Property publications; we audit, certify and register your product, system or supply chain; we facilitate good governance and awareness of compliance, ethics and policy issues and provide training and improvement solutions to help individuals and organisations succeed. The SAI Global business is driven by two equally important client needs - the mandated need for organisations to conform to regulations, standards and legislation in all their locations, and the operational need for organisations to improve business processes and procedures as well as corporate culture. As we are a global company, we can meet these needs for any client - those operating within one country's borders and in one language or those operating across borders and in many languages.

There are three business units/divisions within SAI Global namely the Information Services Division, the Compliance Division, and the Assurance Division. The Assurance Division helps organisations manage risk, achieve process or product certification and drive improvement by providing training, registration audits and supplier management programs that can improve business performance. We provide independent audits, assessments and certification of your products or business processes to ensure they comply with industry standards or customer specific requirements. We understand how compliance with those standards can improve the efficiency, economy and profitability of your operation. With auditing and assessment staff located around the world, our clients include large global corporations as well as single site organisations. 2.2 Audit methodology 2.2.1 Pre-audit SAI Global planned the stage 2 certification audits based on review of the data given during stage-1 ISPO audit including: stakeholder, land title, etc. on 25th of November 2013. SAI Global already communicated with RSPO Secretariat and ASI and it was confirmed that stage-1 is not mandatory under RSPO Certification System. 2.2.2 Certification audit The Certification Audit was performed on 24th – 28th of March 2014 integrated with ISPO Peraturan Menteri Pertanian #19/Permentan/OT.140/3/2011. The audit programme was included in the body of report. The audit methodologies for collection of objective evidences are site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences from documentation/record review in one area may also be cross checked with other objective evidences in other areas and with the evidence of implementation on site during the audit. Inputs from stakeholders via letter, email, or other communication media were also considered for this certification audit. Audit plan is available in Appendix A of this report on page 126.

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2.3 Qualification of the lead auditor and audit team member Ria Gloria – Lead Auditor Ria Gloria graduated with Bachelor of Chemical Engineering from Bandung Institute of Technology in 1994. She has working experience as Environmental Consultant for many years. She has completed ISO 14001 (1995), ISO 9001 (2004), RSPO P&C (2009) lead auditor training courses, RSPO SCCS (2010) and ISPO (2012) lead auditor training courses. For the last 9 years she has been involved in quality (ISO 9001) and environmental (ISO 14001) management system audits for very broad industrial and in the palm oil sector since 2003 for several plantations and mills. She has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009). Anwarsyah Harahap – Audit Team Member Anwarsyah Harahap graduated with Bachelor of Natural Forest Resource Conservation from Bogor Agriculture Institute in 2004. He has working experience as biodiversity researcher at palm oil plantation on 2007. Since 2008 to 2013, He has working experiences in palm oil plantation on Sumatra as a team member of sustainable certification task force (such as: Biodiversity and HCV management, RSPO, ISCC, ISO 14001 and ISPO) and his last position as a sustainable and Environment Officer. He has completed ISO 9001 (2013), ISO 14000 (2013), RSPO (2013) and ISPO (2013) lead auditor training courses. He has also as an OSH auditor accredited by Labour and Transmigration Ministry of Indonesian (SMK3 Auditor based on PP No.50/2012). Edy Widodo – Audit Team Member Edy Widodo graduated with bachelor of the Faculty of Agriculture, Department of Agricultural Technology, University of Padjadjaran, Bandung. Earlier he worked as an Assistant Estates Manager in PT SMART Tbk. (1999 to 2005). He joined SAI Global in 2013 as a Lead Auditor for ISO 9001: 2008. He has working experience in the industrial sector and audit Plantation, and also the processing industry and agricultural mechanization. He is also the ISPO auditor who has obtained a certificate from the ISPO Commission, Ministry of Agriculture of Indonesia, in February 2013. He had got a certificate of training Understanding ISO 14001: 2004 & Auditing ISO 14001: 2004 in 2013. He has followed RSPO P&C training (2013). Dirgantara Bayu L – Audit Team Member Dirgantara Bayu L, owned a bachelor degree majoring in occupational health and safety from University of Indonesia. He had experienced in field of QHSE MS (Quality, Health, safety and Environment Management System) for several sectors of industry, such as: chemical manufacturing, construction and oil and gas exploration. Registered as lead auditor (ISO 9001, ISO 14001, OHSAS 18001 and ISPO) within the international professional auditor membership (IRCA & RABQSA) and also registered in local government ministry of manpower AK3U & HIMU (Safety officer & Industrial Hygienists) and ISPO Lead Training Auditor from ministry of Agriculture. He joined SAI Global Indonesia in 2012. 2.4 Stakeholder consultation Public notification was made on 3rd of March 2014 and was published on RSPO website as well as SAI Global website. Stakeholder consultation was performed to internal and external stakeholders. Internal stakeholders included staffs and workers. External stakeholders were selected by considering that they have an interest in the organisation activities, directly border with organisation, area which the workers live. External stakeholders included NGO, governments and civil societies.

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Letters were also sent to external stakeholders to invite for comment or individual / Group discussion. Group and Individual discussions with stakeholders (Table 12) were conducted during audit, to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. Surrounding village of estate and mill has been chosen to represent societies. For Sei Rumbiya Estate, group discussion was conducted for two sessions. First session was conducted especially for around stakeholder directly affected on Estate, i.e. head of village. Second session is especially for representative worker (Sprayer, Foreman of sprayer, Harvester and Nurse) and one on one interview with Childcare worker. It was conducted to verify compliance against relevant criteria and indicator related to infrastructure facility, labour, social aspect (discrimination and sexual harassment), environment and HCV. Interview was also conducted with Head of Worker Union and Head of worker cooperative. For Gunung Malayu Estate and Gunung Malayu Mill, one on one interview was conducted with Head of village, Local NGO (Pijar Keadilan), Contractor, Representative worker (Head of mill laboratory, Worker of weigh bridge, Mechanic, Sprayer, Harvester, Worker of care and Nurse) and also Religion leader, Christian leader. Moreover, email was also sent to National/International NGO to invite for comment to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. The result of stakeholder consultation was used to justify fulfilment of some indicators, e.g. criterion 2.2 indicator major 3, minor 1 and minor 2, criterion 2.3 indicator major 1, criterion 6.5 indicator minor 1, criterion 6.6 indicator minor 1, criterion 6.7 indicator minor 1, criterion 6.8 indicator minor 1, criterion 6.9 indicator minor 1, 2 and 3, criterion 6.10 indicator minor 1 and 2, criterion 6.11 indicator minor 1, etc. The result of these consultations was provided in Appendix D on page 178

Table 12: List of internal and external stakeholders

STAKEHOLDERS METHOD OF CONSULTATION

Internal stakeholders

SPSI and Worker cooperative head of Sei Rumbiya and Gunung Malayu

Individual discussion

Group Discussion

Representative of worker and nurse Gunung Malayu estate and mill


Representative of worker and nurse Sei Rumbiya Estate

Group Discussion

Care worker Sei Rumbiya and Gunung Malayu estate


External Stakeholders

Head of Village around Sei Rumbiya estate Individual discussion

Head of Village around Gunung Malayu estate and mill


Local NGO “ Pijar Keadilan” Individual discussion

Religion leader of Perkebunan Gunung Malayu Village


Christian leader of Gunung Malayu Individual discussion

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2.5 Date of next surveillance visit The next surveillance visit will be 9 – 12 months from the Initial certification.

3.0 AUDIT FINDINGS 3.1 Action taken on previous audits findings Last surveillance audit was performed on 18th of September 2013 by PT. TUV NORD Indonesia. The report indicated that there were major and minor non-conformances and the report mentioned that all non-conformances have been corrected. There were recurrence of the major and minor non-conformance during the audit in 4.6.3 major, 6.1.1 minor and 6.5.2 minor. RSPO certificate from TUV NORD was about to expired on April 29th, 2014, so this certification process is not continuing from the previous certification body. 3.2 Claim and use of certification mark and or logo CPO and PK were sold under Green Palm however sales document indicated that CPO and PK were sold under RSPO scheme. (Refer to NCR 2014-30).

Community leader of Perkebunan Gunung Malayu Village


CV. Rimba Perkasa Abadi (Contractor of Gunung Malayu estae)


Area planning board of South Labuhan Batu Regency

An invitation letter to comment was sent

Agriculture and Plantation Agency of South Labuhan Batu Regency


District Head (Camat) of Kota Pinang An invitation letter to comment was sent

District Police of Kota Pinang An invitation letter to comment was sent

District Head (Camat) of Pulau Rakyat An invitation letter to comment was sent

District Head (Camat) of Rahuning An invitation letter to comment was sent

Agriculture and Plantation Agency of Asahan Regency


Social and Labour Agency of Asahan Regency An invitation letter to comment was sent

District Police of Kota Pinang of Pulau Rakyat An invitation letter to comment was sent

District Police of Kota Pinang of Rahuning An invitation letter to comment was sent

Walhi-WahanaLingkunganHidup Indonesia of North Sumatera


GAPKI An invitation letter to comment was sent

AMAN (AliansiMasyarakatAdat Nusantara) An invitation letter to comment was sent

WWF Indonesia An invitation letter to comment was sent

Sawit Watch An invitation letter to comment was sent

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3.3 Description of audit findings 3.3.1 RSPO Principle and Criteria, Indonesian National Interpretation

PRINCIPLES 1: COMMITMENT TO TRANSPARENCY

REF CRITERION AND INDICATORS Reference Department in Charge

Audit Findings Status

1.1 Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making.

1.1.1

major

Are there any records of information requests?

Procedure EMS-P05– Communication, 10 August 2009

SPO - 01 Logbook “Record of information request and responses”.

Mill and Estate (Head of administration – KTU)

Information request and their respond were determined in a documented procedure. Communication procedure was established and implemented by the organisation. Communication procedure describes the method to follow up the information request from stakeholder. All information requests from stakeholder were listed and recorded by Mill and Estate on logbook SPO – 01. Several request information from stakeholder such as:

Circular letter from Forestry and Plantation local department #525/922, on 18

th of July 2013 to

Gunung Malayu Estate about fire anticipated of estate and area.

Letter from Regional Secretary- Sekretaris Daerah of South Labuhanbatu District #005/310/Ekon/2013, on 20

th of January 2013 to

Sei Rumbiya Estate about monitoring of organization assist to community.

Letter from Environmental local agency #800/0080/SPT/2013, on 2

nd of September 2013

to Gunung Malayu Mill about water waste sampling as a part of environment monitoring.

Compliant

1.1.2

major

Are there any records of responses to information requests?

SPO – 01 Logbook “Record of information request

Mill and Estate (Head of administration –

Records of information request from stakeholder were kept by Mill and Estate on logbook “Record of information request and responses”. Overall the requests from stakeholder were directly responded by

Compliant

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and responses”. KTU) the organization. Evidence of respond including: notes of tax payment and handover of report. Several records of responses to information requests such as:

Reporting fire protection equipment and system data to Forestry and Plantation local department in July 2013.

CSR program and its implementation records given to Regional Secretary- Sekretaris Daerah of South Labuhanbatu District on 7

th of February

2013.

1.1.3

major

Does records of information requests from stakeholders, and the responses given, be kept for a period determined in the applicable regulations and taking into account their relative importance?



Record of information request and its response was kept by the organization. Retention time for records was determined minimum 5 years.

Compliant

Guidance Growers and millers should respond constructively and promptly to request for information from stakeholders. See criterion 1.2 for requirements relating to publicly available documentation. See also criterion 6.2 relating to consultation.

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

1.2.1

major

Are management documents available and are publicly available? Note: Information request and responses shall include any relevant or required documentation, in accordance with applicable national laws, such as:

Legal: Land titles/user rights (Site Permit (Izin Lokasi)), plantation operation permit (Ijin Usaha Perkebunan), land use title (Hak Guna Usaha) or other documentation relating to application for Land Use Title in accordance with relevant procedures.



Organisation documents are generally available by the organisation. List of management documents is publicly available. The coverage of request on information as stated in the procedure including:

Land Legality, such as: Site Permit (IzinLokasi), Land Use Title (HGU), Plantation Operation Permit (IUP),

Environment document such as: Environmental and Environment Impact Analysis document (AMDAL)/, environmental management and monitoring report (RKL and RPL implementation reports), environment policy, environment impact aspect analyses, hazardous waste permit,

Social document:

Compliant

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Environmental: Environmental and social impact assessment (AMDAL/UKL-UPL) and elated monitoring reports (RKL-RPL).

Social: Documentation of social activities of social and community programs.

Health and Safety Plan

Continuous improvement plan

Occupational Health and Safety Management Plan, OHS Policy, Corporate Social Responsibility (CSR), management program of OHS, environment and social impact management.

Continuous Improvement Plan including minimize chemical use.

The documented procedure was established, it mentioned the process and responsibilities and authorities in regards responding the request on information from the public.

1.2.2

major

Are records of information requests from stakeholders, and the responses given, kept for a period determined in the applicable regulations and taking into account their relative importance?


SPO – 01 Logbook “Record of information request and responses”.


A documented procedure was established to respond the request from interested parties. The form to record the respond and associated follow up on respond has been established. It was shown that the records have been well documented. The retention time for record is 5 years.

Compliant

Guidance Examples of commercially confidential information include financial data such as costs and income, and details relating to customers and/or suppliers. Data that affects personal privacy should also be confidential. Examples of information where disclosure could result in potential negative environmental or social outcomes include information on sites of rare species where disclosure could increase the risk of hunting or capture for trade, or sacred sites which a community wishes to maintain as private.

PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS



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

2.1.1

major

Is there evidence of compliance with laws and regulations, which concern the operation of oil palm plantations?

Form EMS f-02a- Register of SPO regulation

Safety Officer in charge

Environmental

Evidence of compliance with applicable local, national and ratified international laws and regulations of Gunung Malayu Mill and Estate and Sei Rumbiya

Compliant (Major Non- conformance

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Form EMS IA-C6- Evaluation of Compliance with Laws and Regulations

Ministry of manpower certificates and inspection results

MSDS

Hazardous waste manifest

Result of environmental monitoring and measurement

Memorandum internal of HR Director No.# 008/HRD/C-SAL/III/2013, on 13 March 2013 about provisions of salary increase 2013 and internal memo No. No.001/HRD/C-SAL/III/2014, on3 March 2014 about provisions of salary increase 2014

Employee pay list on March 2014

Officer

Head of Administration

Estate have been provided, including:

- valid permits: waste water discharge permit, river water and ground water abstraction permits, hazardous waste storage permit, boiler and pressurised vessel permits, lifting equipment, personnel who conducted lifting equipment, electrical - provision of required infrastructure waste water treatment ponds, hazardous waste storage, availability of MSDS, - environmental: periodic environmental parameter monitoring (stationary emission, ambient emission and ambient noise, moving source emission, waste water discharge quality, and ground water quality), - system of plant cultivation, oil palm plantation, - list of flora and fauna protected, - management of protected area, - paramedic and company doctor, medical check-up, safety committee, - Minimum wage, labour law, occupational safety, employee social benefit.

Status of compliance with laws and regulations was evaluated, and evaluation of compliance result indicated that compliance status was justified with reference to the objective evidence of compliance.

NCR 2014-01 closed)

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Example: social security, training programs, employment list, CSR program and its implementation, payroll and over time calculations, menstruation leave, valid permits of boiler and pressurised vessel permits, lifting equipment, personnel who conduct lifting equipment and electrical, availability of MSDS, transport and lifting equipment, medical check-up, safety committee and occupational safety, result of environmental monitoring and measurement, hazardous waste manifest, etc. The compliance with regulation was evaluated in January 2014

However there was no evidence of compliance with several relevant legal requirements, e.g. Per.MenLH 14/2013, Permenaker No.15/2008, Kepmenakertrans No. KEP.102/MEN/VI/2004, Permenaker No.2/1980, Permenaker No.1/1981, Kep Menaker No. 186/1999, Kepres Np.32 tahun 1990, UU No.13 tahun 2013, Kepmenakertrans No.KEP.100/MEN/VI/2004, Kep Dirjen BW No 311/BW/2002, Permenaker No.5/1985.

Major Non-conformance

Sei Rumbiya Estate

1. Medical waste bins in clinic have not been completed with hazard symbol against Per.MenLH 14/2013.

2. It was observed several first aid bags/boxes that deployed in several areas and Supervisors (mandor) were not completed wisth first aid box and some first aids box only contain antiseptic and plaster. It was also noted that one supervisor is not provided with first aid bag.The first aid kits contents and deployment are not compliance to local regulation Permen 15/2008.

3. Overtime letter showed preparedness of worker to

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conduct overtime was not available in according to Transmigration and Labour Ministry Decision of Indonesian No. KEP.102/MEN/VI/2004 about over time and pay of overtime.

4. From the last MCU result summary dated February 2013 was found several employees had discrepancies from the result of audiometry and Spiro metric. While there is no further diagnose to follow up and investigate whether it is occupational disease or not. No follow up/investigation regarding MCU result (audiometry, spirometer). As it is defined within the regulation of Permenaker No.2 / 1980 Junction to Permenaker No.1/1981.

5. The fire fighter personnel were not provided with training certificates as required by the regulation. The competencies of fire fighter personnel are not evident based on defined within the regulation of Kep Menaker 186/1999.

6. Determination of riparian zone in the related procedure was noncompliance with President Decision No.32/1990 about environmental management. In the related procedure was described as follow:

a. Width of the river is 5-10 meters, than the riparian zone is 5 meters

b. Width of the river is 10-25 meters, than the riparian zone is 15 meters,

c. Width of the river more than 25 meters, than the riparian zone is 25 meters

Gunung Malayu Estate


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2. It was found noncompliance between working agreement of daily worker with Indonesian Laws No. 13/2003 about Employment, among others:

There was temporary worker contract/agreement of upkeep (pruning, wedding, manuring, spraying, and other upkeep activities). It was represented by group leader however there was no evidence that every worker has approved with contract.

Contract expiry was not clearly described. Example: Group employee contract No.100/GME/Cont-PKHL/XII/2013, on 17/12/2013.

3. It was found noncompliance work agreement of temporary worker against Transmigration and Labour Ministry Decision of Indonesian No. KEP.102/MEN/VI/2004 about over time and pay of overtime, among others:

One of harvester Division II has been work more than 20 days since December 2013 up to February 2014. Based on temporary worker data base per 28

th of March 2014, this

employee has been worked since 1st of June

2012. However, employee status is still temporary worker.

It was observed that the sustainable main job (harvester) was conducted by temporary worker. Example: Harvester Division II on 28

th

of March 2014 in Block 93112005.

4. Determination of riparian zone in the related procedure was noncompliance with President Decision No.32/1990 about environmental management. In the related procedure was

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described as follow:




5. It was observed that the usage of pressurized air compressor capacity 9 bars workshop is not provided with approval certifications from the local Ministry of Manpower as required regulation of Permenaker No.1/1982.

Gunung Malayu Mill

1. There is no certificate of electrical safety technician for technician personnel as required regulation of Kep Dirjen BW No 311/BW/2002.

2. The fire hydrant pumps were not provided with pressure gauge and also there is no evidence of periodical maintenance records as required regulation of Ins Dirjen Naker No. BW/11/ 1997 Regarding fire safety prevention attachment paragraph IV.i.

Gunung Malayu Mill and Estate


2. It was observed several heavy lifting equipments

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were utilized such as wheel loader and excavator. All of the equipment was not provided with approval certifications from the local Ministry of Manpower as required regulation of Permenaker No.5 1985.

2.1.2

major

Is there evidence of efforts made to comply with changes in the regulations?

Identification of regulation procedure (EMS-P02)

Evaluation of compliance procedure (EMS-P09)



Environmental and CSR Officer

Estate and Mill Manager

Established procedure described mechanism for updating latest laws and regulations and required regular access to regulatory bodies to update information of laws and regulations. Update and compliance review against change of law and regulation was conducted periodically by Environment and CSR Department use internet access and communicate with local and national department. Applicable laws and regulations were registered in Form f-02a. Evaluation result of compliance with laws and regulations was recorded in Form EMS IA-C6. And communicated to Mill and Estate. Organization has reviewed and updated regulation on 6

th of January

2014. However several regulations have not been registered, e.g. Permentan 98/Permentan/OT.140/9/2013, Per.MenLH 14/2013, RKL RPL Nomor: 660/05/SET-KOMISI/I/2009, Permenaker No. 13/2011 treshold limit value of chemical and physical factor, Permenaker No. 2/1980 medical check-up, Permenaker No. 1/1981 Occupational disease reporting, Permenaker No. 3/1982 assurance of occupational health, Permenaker No. 25/2008 Occupational disease diagnose.

Major non-conformance:

Sei Rumbiya Estate

1. Several regulations have not been updated, registered and evaluated their compliance, e.g. Permentan 98/Permentan/OT.140/9/2013, Per.MenLH 14/2013, RKL RPL Nomor:

Compliant (Major Non- conformance NCR 2014-02

closed)

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660/05/SET-KOMISI/I/2009, Permenaker No. 13/2011 regarding chemical and physical factor threshold limit value, Permenaker No. 2/1980 regarding employee medical check up, Permenaker No. 1/1981 regarding occupational disease reporting, Permenaker No. 3/1982 regarding occupational health, Permenaker No. 25/2008 regarding occupational disease diagnose.


1. Several regulations have not been updated, registered and evaluated their compliance, e.g. Permentan 98/Permentan/OT.140/9/2013, Per.MenLH 14/2013, Permenperind No 23/M-IND/PER/4/2013, Permenaker No. 13/2011 regarding chemical and physical factor threshold limit value, Permenaker No. 2/1980 regarding employee medical check up, Permenaker No. 1/1981 regarding occupational disease reporting, Permenaker No. 3/1982 regarding occupational health, Permenaker No. 25/2008 regarding occupational disease diagnose.

2.1.1 minor

Is there a documented system, which includes written information on legal requirements that the palm oil company should comply with?




Form EMS IA-C6- Evaluation of



Applicable laws and regulations were registered including detail requirement applied. Update and compliance review against change of law and regulation is conducted periodically by Environment and CSR Department use internet access and communicate with local and national department. Applicable laws and regulations were registered in Form f-02a. Evaluation result of compliance with laws and regulations was recorded in Form EMS IA-C6 and communicated to Mill and Estate.

Updating of law and regulations change activities

Compliant

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Compliance with Laws and Regulations

were well documented and last update was performed on 6

th of January 2014. Information on applicable legal

and other requirements have been reviewed and summarised.

2.1.2 minor

Is there a mechanism for ensuring that compliance with relevant legal requirements is implemented?



Regulation register dated 6 January 2014



A documented procedure has been established to describe method to identify new/revised law and regulation including awareness and implementation of those laws within the company.

As defined within the procedure that the mechanism for ensuring compliance with all applicable local, national and ratified international laws and regulations was described in procedure. Evaluation of compliance with regulation was conducted by Environmental and CSR Department.

Compliant

Guidance Identifying inconsistencies between national, regional and local regulations. Implementing all legal requirements is an essential baseline requirement for all growers whatever their location or size. Relevant legislation includes, but is not limited to, regulations governing land tenure and land-use rights (including customary rights), labour, agricultural practices (e.g. chemical use), environment (e.g. wildlife laws, pollution, environmental management and forestry laws), storage, transportation and processing practices. It also includes laws made pursuant to a country’s obligations under international laws or conventions (e.g. the Convention on Biodiversity, CBD). Furthermore where countries have provisions to respect customary law, these must be taken into account. For small-scale produces the focus should be on the grower having adequate knowledge of the main legal requirements and implementing them.

Key international laws and conventions are set out in Annex List of Related Laws and Regulations

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

2.2.1

major

Are there documents showing ownership or lease of the land in accordance with relevant laws?

Land use title permit:SK HGU No. SK.4/HGU/DA/1978, issued 10 July 1997. Total area: 4,988.69 Ha

Decision of the Head of BPN no. 89/HGU/BPN/2005, date 20 October 2005.

Head of administration


Copy of land use title (HGU) of Gunung Malayu Estate was sighted and legally owned by PT. PP London Sumatere Indonesia Tbk. Copy of land use title was available. Land use title of Gunung Malayu Estate was located at Asahan District, Province of North Sumatera.

Based on Decree Letter of Interior Minister #Sk.4/HGU/DA/78, Gunung Malayu Estate was Concessie rightwhich consisted of Gunung Malayu,

Compliant

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HGU certificate no. 2/1997. Total area: 5,882.14 ha

State Minister for Agrarian Affairs / Head of National Land Agency dated 27 June 1997, Decree No. 53/HGU/BPN/97.

Simpang Toba, Nagaga, Sei Piring. This was given based on agreement between Zelf bestuur Asahan and N.V. United Serdang (Sumatra) Rubber Plantation Ltd on 5

th of May 1906, legalled by decision of Resident

Sumatra Timur on 28th of September 1918. Erfpacht

right was given through official document on 19th of

February 1927 on behalf of N.V. Vereinigde Plantage Mij and valid through 75 years. The Concessive Right was converted to HGU based on letter of Agriculture and Agrarian Minister #Ka.13/7/1 on 1

st of March 1962.

During period 1964 – 1967, the company was under authority and controlling the government until availability of agreement between Government of Republic of Indonesia and Harison & Crosfield Ltd. On 20

th of March 1968, government will give HGU during

30 years implicatly on 1st of April 1968.

Plantation Operation Permit/Surat Pendaftaran Usaha Perkebunan (SPUP) #HK.350/197/Bun.5/III/2001, dated 16

th of March 2001.

Plantation Business Assessment (Penilaian Usaha Perkebunan (PUP)); Class II, based on the Decree #525/038.q/F

The first of HGU was issued by decree Interior Minister dated 1

st of February 1978, no.

SK.4/HGU/DA/1978, Area: 4,988.69 Ha, and Decree State Agrarian / Head of BPN dated 10

th of July 1997,

no. 63/HGU/BPN/97, whose term of expire in 2005.

Further extension was done in 2005, by decision of the Head of BPN no. 89/HGU/BPN/2005. After a through examination of Soil Investigation Committee (Panitia Pemerikasaan Tanah), Region Office of BPN,

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South Sumatra Province, dated 20th of October 2004,

no. 62/PPT/KR/2004, covering an area of 4,988.69 hectares by-Risalah Panitia Pemeriksaan Tanah.

Building Permit (IMB):

No.503/IMB/BPP/0554/V/2009 for mill

No. 503/IMB/BPP/0425/III/2012 for housing

Total Gunung Malayu Estate area is 4,988.69 Ha inline with HGU.

Sei Rumbiya Estate

Copy of land use title (HGU) of Sei Rumbiya Estate was sighted and legally owned by PT. PP London Sumatere Indonesia Tbk. Copy of land use title was available. Land use title of Sei Rumbiya Estate was located at Sei Rumbiya Village, Kota Pinang Subdistrict, Labuhan Batu District, Province of North Sumatera.

Based on Decree Letter of Interior Minister #Sk.12/HGU/DA/77, Sei Rumbiya Estate, Sei Rumbia Oost and Nagodang was Concessie right based on agreement between Zelf bestuur Kota Pinang and Namoe Tongan Rubber Est. Ltd. on 17

th of May 1917,

legalled by decision of Resident Sumatra Timur on 2nd

of December 1922. Erfpacht right was given through official document #180 on 2

nd of December 1922 on

behalf of Nagodang Rubber Mij and valid through 75 years. The Concessive Right was converted to HGU based on letter of Agriculture and Agrarian Minister #Ka.13/7/1 on 1

st of March 1962. During period 1964 –

1967, the company was under authority and controlling the government until availability of agreement between

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Government of Republic of Indonesia and Harison & Crosfield Ltd. On 20

th of March 1968, government will

give HGU during 30 years implicatly on 1st of April

1968.

Plantation Operation Permit/Surat Pendaftaran Usaha Perkebunan (SPUP) #HK.350/196/Bun.5/III/2001, dated 16 March 2001, area: 5,882.14 Ha.

Plantation Business Assessment (Penilaian Usaha Perkebunan (PUP)); Class I, based on the Decree #505/105/HUTBUN/2013.

Sei Rumbiya Estate has had the concession, by the State Minister for Agrarian Affairs / Head of National Land Agency dated 27

th of June 1997, Decree No.

53/HGU/BPN/97. This decree is an extension of the provision of leasehold land Sei Rumbiya Estate located in Labuan Batu District, North Sumatra Province area of 5,882.14 ha.

HGU certificate no. 2/1997 held Sei Rumbiya Estate is a proof of the right to the land area of 5,882.14 ha, which is issued by the National Land Agency of North Sumatera Province, Labuhan Batu District, Sub District Pinang in Sei Rumbiya village.

Total Gunung Malayu Estate area is 5,882.14 ha inline with HGU.

2.2.2

major

Is there evidence that legal boundaries are clearly demarcated and visibly maintained?

Map of Land title use dated 1 January 2013

Checklist of Pegs

Estate Legal boundaries marker were sighted during audit and maintained along the perimeters of estate lands which were mapped with Global Positioning System (GPS).

Closed

(Major Non- conformance NCR 2014-03

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Weekly Monitoring.

Map of Soil Investigation Committee (Panitia Pemerikasaan Tanah)

Realization of sight on maintenance pegs Weekly Checklist Monitoring conducted by the Assistant Division and Estate Security Unit (Satpam), noted that the peg monitoring done every week with items checked are the identity, condition and position pegs.

All activities were carried out inside the legal boundaries, no activities conducted outside the boundaries.


Field observation was conducted to pegs number:

BPN peg no. LXXIV, N: 02°40.936'; E: 99°34.883', the location on the block 91112001 Division 2, is bordered by PTPN III and Kebun Bambu Village.

BPN peg no. LXXVI, N: 02°40.936'; E: 99°34.883', the location on the block 8611012 Division 3, is bordered by PTPN III.

BPN peg no. LXIX, N: 02°41.279'; E: 99°33.859', the location on the block 8611012 Division 2, is bordered by Penggantian Village.

BPN peg no. XXXIV, N: 02°43.677'; E: 99°36.294', the location on the block 8611012 Division 5, is bordered by Rahuni I Village.

Sei Rumbiya Estate

Field observation was conducted to pegs number:

BPN peg no. 6, N: 01°54.581'; E: 100°05.356', the location on block 04111002 Division 1, is bordered by Kogen village and Sidodadi Village.

BPN peg no. 4, N: 01°53.877'; E: 99°59.764', the

closed)

Audit Report




location on the block 86117002 Division 2, is bordered by Raya Mambang village.

Major Non-conformance:

Peg BPN in Division 1 and Division 7 blocks 8611702 have not been maintained in accordance with the peg number HGU map (the observation of the field).

2.2.3

major

Where there are, or have been disputes – are there proof of resolution or progress towards resolution processes acceptable to all parties are implemented?

Group discussion with village head as well as religion and community leader around Sei Rumbiya Estate on 24 March 2014

Interview with with village head as well as religion and community leader around Gunung Malayu Estate on 27 March 2014

HGU Map of Sei Rumbiya and Gunung Malayu Estate

Estate Planted areas of the estates are wholly on Government’s land, leased under HGU as indicated above. Maps have been developed for estate indicating Legal demarcation and planted areas. It was confirmed from the group discussion with village head as well as religion and community leader around Sei Rumbiya Estate (Community Leader of Sisumut Village, Religion Leader of Sisumut Village, Head of Sisumut Village, Head of Nagadang Village and Head of Sei Rumbiya Village) on 24

th of March

2014 and also confirmed at the interview with village head as well as religion and community leader around Gunung Malayu Estate (Community Leader of Perkebunan Gunung Malayu Village, Religion Leader of Perkebunan Gunung Malayu Village, Head of Aek Songsongan Village, Head of Gunung Malayu Village, Head of Perkebunan Aek Nagaga Village, Head of Rahuning I Village, Head of Rahuning Village and Head of Perkebunan Gunung Malayu Village) on 27

th

of March 2014 that there were no land conflict on all lands within estate and mill.

Not Applicable

2.2.1 minor

Is there evidence of land acquisition resolution with free prior and informed consent?

Group discussion with village head as well as religion and

Legal HO

Estate

Based on group discussion village head as well as religion and community leader around Sei Rumbiya Estate on 24

th of March 2014 and also confirmed at

the interview with village head as well as religion and

Not Applicable

Audit Report




community leader around Sei Rumbiya Estate on 24 March 2014


Interview with Head asisten of Sei Rum biya Estate and Estate Manager of Gunung Malayu

Legal entities of PT. PP London Sumatra Indonesia Tbk. #93/1962

community leader around Gunung Malayu Estate on 27

th of March 2014 as well as Interview with Head

asisten of Sei Rumbiya Estate and Estate Manager of Gunung Malayu, no land acquisition after 2005. Concession area of PT. PP Lonsum Indonesia Tbk. is a former concession of PT. Harrisons & Crossfield (H&C). In 1908, H&C established Harrison & Crossfiled Plantation Ltd. H&C bought Gunung Malayu Estate in 1926. At the 1928 H&C bought Tjong Ah Fie Plantation including Rambong Sialang, Egaharap, Bengambing, Tanjoeng Poteri, Bandar Teloe, Suka Radjin, Nagaga, Maligas, Bolok, Bah Lias, Bah Hilang and Mardjandi. Based on Legal entities of PT. PP London Sumatra Indonesia Tbk. No.# 93/1962 concession area including:

Asahan Rubber Estate Limited is a Gunung Melayu Estate.

The Bah Lias Rubber Estate Limited is a Bah Lias Estate

Central Sumatra Rubber Estate Limited is a Turangi, Bungara and Pulau Rambung Estate.

Namoe Tonga Rubber Estate Limited is a Turangi Estate

The Sialang Rubber Estate Limited is a Rambong Sialang Estate

The Soengei Rampah Rubber and Coconut Plantations Company Limited is a Rambong Sialang Estate

The Tandjung Rubber Company Limited is a Sungai Merah Estate

Audit Report




Toerangie (Sumatra) Rubber and Produce Estate Limited is a Turangi Estate

The United Langkat Plantation Company Limited is a Turangi, Bungara and Pulau Rambung Estae

The United Serdang (Sumatera) Rubber Plan Limited is Bagerpang, Sungai Merah and Dolok Estate.

2.2.2 minor

Is there a mechanism to resolve conflict which is accepted by all parties?


Procedure OP 2.2 Land Acquisition and Compensation, December 2012.

Legal HO

Estate

Mechanisms to resolve conflict was described in the procedure communication and in the procedure land acquisition and compensation to identify and determine calculation method to provide fair compensation due to loss of land and customary rights were identified. Though the organization has been conducted stakeholder meeting (Sei Rumbiya Estate was conducted on 26

th of Mei 2011 and Gunung Malayu

Estate was conducted on 17th of September 2013,

However there was no evidence of communication procedure (EMS-P05, Communication) arranged in collaboration with local communities and other affected or interested parties. Stakeholder meeting in Sei Rumbiya only discussed following issues: a. Land legality : HGU

b. Environment management aspect, including: PEL

No RC.220/699/B/IV/94, RKL & RPL No.

RC.220/948/B/V/1994, and also environment

policy.

c. Social aspect including: CSR programme and OHS

policy.

d. Continuous Improvement Program: Audit internal,

Minor Non-conformance – Refers to 6.3.1

Audit Report




pesticide use, EFB application, identification and

evaluation of environment impact.

Stakeholder meeting in Gunung Malayu only discussed limited against CSR management.

Guidance Where there is a conflict on the condition of land use as per land title, growers should show evidence that necessary action has been taken to resolve the conflict with relevant parties.

For any conflict or disputes over the land, the extent of the disputed area should be mapped out in participatory way.

Ensure a mechanism to solve the conflict (Criteria 6.3 and 6.4).

All operations should cease on land planted beyond the legal boundary.

Any customary land use rights or disputes which are likely to be relevant should be identified.

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

2.3.1

major

Are there records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale?



HGU Map of Sei Rumbiya and Gunung Malayu Estate.

Legal entities of PT. PP London Sumatra

Estate Maps have been developed for each estate indicating Legal demarcation and planted areas. Planted areas of the Estate are wholly on Government land, leased under HGU. It was confirmed from the group discussion with village head as well as religion and community leader around Sei Rumbiya Estate (Community Leader of Sisumut Village, Religion Leader of Sisumut Village, Head of Sisumut Village, Head of Nagadang Village and Head of Sei Rumbiya Village) on 24

th of March

2014 and also confirmed at the interview with village head as well as religion and community leader around Gunung Malayu Estate (Community Leader of Perkebunan Gunung Malayu Village, Religion Leader of Perkebunan Gunung Malayu Village, Head of Aek Songsongan Village, Head of Gunung Malayu Village, Head of Perkebunan Aek Nagaga Village, Head of Rahuning I Village, Head of Rahuning Village and Head of Perkebunan Gunung Malayu Village) on 27

th

of March 2014 that no land within mill and estates are encumbered by legal or customary rights

Not Applicable

2.3.2

major

Are there maps of an appropriate scale showing extent of recognised customary rights?

2.3.3

major

Are there copies of negotiated agreements detailing process of consent?

Audit Report




Indonesia Tbk. #93/1962

Concession area of PT. PP London Sumatra Indonesia Tbk. is a former concession of PT. Harrisons & Crossfield (H&C). In 1908, H&C established Harrison & Crossfiled Plantation Ltd. H&C bought Gunung Malayu Estate in 1926. At the 1928 H&C bought Tjong Ah Fie Plantation including Rambong Sialang, Egaharap, Bengambing, Tanjoeng Poteri, Bandar Teloe, Suka Radjin, Nagaga, Maligas, Bolok, Bah Lias, Bah Hilang and Mardjandi.

Guidance Where lands area encumbered by legal or customary fights, the grower must demonstrate that these rights are understood and are not being threatened or reduced. This criterion should be considered in conjunction with criteria 6.4, 7.5 and 7.6. Where customary rights areas are unclear these are best established through participatory mapping exercises involving affected and neighbouring communities. This criterion allows for sales and negotiated agreements to compensate other users for lost benefits and/or relinquished rights. Negotiated agreements should be non-coercive and entered into voluntarily, carried out prior to new investments or operations and based on an open sharing of all relevant information in appropriate forms and languages, including assessments of impacts, proposed benefit sharing and legal arrangements. Communities must be permitted to seek legal counsel if they so choose. Communities must be represented through institutions or representatives of their own choosing, operating transparently and in open communication with other community members. Adequate time must be given for customary decision-making and iterative negotiations allowed for, where requested. Negotiated agreements should be binding on all parties and enforceable in the courts. Establishing certainty in land negotiations is of long-term benefit for all parties.

For definition of “customary rights”, see definitions.

PRINCIPLES 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY

Ref. CRITERION AND INDICATORS Reference Department in Charge


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

3.1.1 major

Is there a documented working plan of minimum of 3 years period?

Note: documented working plan shall include plan for new acquisition which have not replaced primary forests or HCVs to comply with RSPO requirements.

Management Plan period 2014 – 2020.

Annual Budget period 2014.

Draft of Management Plan period 2014 – 2017.

Head of administration

Top Management policy & principles

Management plan for the period 2012 - 2021 was used to achieve economic viability and long-term financial captured on "Oil Palm Forward Study 2012 - 2021". The plan was approved by the Director of Principle. The parameters dindn’t only list the management plan that includes projected FFB production each year of planting, production and yield of CPO OER, PK kernel extraction rate, but it also

Compliant

Audit Report




Harvesting and Production Year 2014-2020

estimates the cost of opreasional plantation / estate including (therein upkeep costs, research and development, harvesting, processing, packing, transportation, depreciation) as well as mill cost (processing, repair and maintenance). This plan was prepared by taking into account the parameters of CPO prices, and the price of TBS and trends that have sub-standard production (15 tonnes / ha) to do rejuvenation. The achievement of the management plan is reviewed every year for management review.

Gunung Malayu and Sei Rumbiya Estate has set short-and long-term plans to keep ongoing the plantation business, including:

Short Term Plan is an annual plan drawn up in the form annual Budget (maintenance, production and infrastructure development).

Replanting plan explained in criterion 3.1.1 minor.

3.1.1 minor

Is there annual replanting programme, where applicable, projected for a minimum of 5 years with yearly review?

Replanting Program for 5 years Gunung Malayu Estate period 2014 – 2019.

Replanting Program for 5 years Sei Rumbiya Estate period 2014 – 2017.

Estate


Replanting programs planned for 2014 - 2019 and has been in accordance with company policy, which is: the allocation of activities replanting / planting per year is not more than 5% and the consideration of the trend production FFB per hectare minimum 15 tons / ha. Total replanting plan amounted to 457.15 hectares, in 2014 covering an area of 169.57 hectares.

Replanting program 2014

Block Area (Ha)

86111000 21.18

92115000 33.34

Compliant

Audit Report




94115001 25.81

84114000 35.70

93114004 35.70

91115010 20.86

94115011 35.29

Total 522.43

Sei Rumbiya Estate

The oil palm replanting, accordance with management policies, with FFB production was still above 15 tonnes per hectare and the actual production until January 2014 was 24.8 tons / ha per year, it has not been done replanting program yet.

Realization of replanting rubber trees in division 6 in 2013 covering an area of 103 hectares and plans in 2014 covering an area of 214.9 ha

Replanting programs planned in accordance with company policy, which is: the allocation of activities replanting / planting per year is not more than 5% and the consideration of the trend production FFB per hectare minimum 15 tons / ha.

Guidance Whilst it is recognised that long-term profitability is also affected by factors outside their direct control, top management must be able to demonstrate attention to economic and financial viability through long-term management planning. The business or management plan may contain:

Attention to quality of planting materials

Crop projection = FFB yield trends

Mill extraction rates = OER trends

Cost of Production = cost per tonne of CPO trends.

Forecast prices.

Audit Report




Financial indicators.

Suggested calculation – trends in 3-year running mean over the last decade (FFB trends may need to allow for low yield during major replanting programmes). Growers should have a system to improve practices in line with new information and techniques.

PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS



4.1 Operating procedure are appropriately documented and consistently implemented and monitored

4.1.1

major

Are there Standard Operating Procedures (SOPs) for estates, from land clearing to harvesting?

Standard Operating Procedure Oil Palm-Development Procedures, LONSUM, March 2008

Estate

The company has established the procedure (SOP) for plantation cultivation best practices include land clearing, seeding, planting, maintenance, harvesting and transporting of FFB. Generally Estate has already implementing best management farming practices SOP that has been set. Procedures have been established in March 2008 in Oil Palm Procedure document, that is:

OP-1 Nursery Preparation and Upkeep

OP-2 Land Preparation and Planting (Land Clearing)

OP-3 Immature Upkeep

OP-3.1 Weeding Management

OP-5.2 Pest and Disease (Integrated Pest Management)

OP-3.3 Fertilizer Schedule for Development Oil Palm

OP-0.4 Harvesting (Crop Potentials, Crop Forecasting, Harvesting Task, Harvesting Standard, Fruit Handling and Transportation)

Compliant

Audit Report




OP-5 Mature Upkeep (Weeding, Pest & Disease, pruning, Census & survey operation, Fertilizer Management, Empty bunch & POME application).

Hardcopies of procedure were available and controlled.

4.1.2

major

Are there Standard Operating Procedures (SOPs) for mills, from reception of FFB to dispatch of CPO and PK?

POM Documented procedures

Mill Head Assistance

The documented procedures regarding processing activities of palm oil are already described for each processing station and available at POM (Palm Oil Mill) start from FFB (Fresh Fruit Bunch) receiver until the delivery of CPO and Kernel also include the procedure of machineries preventive maintenance, utilities and quality control.

Generally the procedures that currently existing was within the revision 01 that officially published in 2006 (dated 01/10/2006). Herewith the procedures available at POM Gunung Malayu such as:

Weigh Bridge Procedure (POM-WI/01)

Loading ramp & FFB Shortage Procedure (POM-WI/02)

IK Sterilization station Procedure (POM-WI/03)

Threshing Procedure (POM-WI/04)

Pressing Procedure (POM-WI/05)

Clarification Procedure (POM-WI/06)

Depericarping Procedure (POM-WI/07)

Kernel Recovery Procedure (POM-WI/08)

Boiler Procedure (POM-WI/09)

Power Generation Procedure (POM-WI/10)

Water Treatment Procedure (POM-WI/11)

Compliant

Audit Report




Empty Fruit Bunch Handling Procedure (POM-WI/13)

Workshop equipment Procedure (POM-WI/14)

Electrical System Procedure (POM-WI/15)

Quality Procedure (POM-WI/16)

Dispatch COP and Kernel Procedure (POM-WI/17)

Laboratory Equipment and Reagents Procedure (POM-WI/18.1)

Care & Use of the analytical Balance Procedure (POM-WI/18.3)

Low Producing of FFA oil Procedure (POM-WI/19)

SOP no. OP-5.6.2; Field Application of POME Enriched Mulch

POM-SOP/12 – Effluent Treatment – LA

4.1.1 minor

Are there records of at least yearly checking and monitoring of operations?

Report of LKBM (Lembar Kerja Blok Management) periods 23 October 2013.

Monthly Report Gunung Malayu Estate and Sei Rumbiya Estate periods October 2013.

AME visit reports minutes of meeting

Mill and Estate Head assistance

The organization monitors and inspects all Estates activities through periodic visits of LKBM (Lembar Kerja Blok Management) from BLRS Researches & Development. The last visit was made in October 2013. Contents include an evaluation report including harvesting operations, maintenance, pest control, replanting process, mature & immature maintenance, and deficiency of fertilizer. The report includes recommendations for follow-up and BLRS Researches & Development follows the progress of previous visits.

Visit LKBM of BLRS R & D is an inspection of the operational activities of the field (minimum once a month).

It was noted that the Area Manager Engineering (AME-A) were periodically conducted mill visit, which

Compliant

Audit Report




last visit was conducted on 27th

– 28th of January

2014. The visit report was sighted, which within the report defined that the area engineering manager visited each stations of mills, such as loading ramps, FFB sortation, sterilizer, thresher, digester, boiler, etc. The last improvement regarding the projects of boiler feed tank installation that until now project is still on progress to finishing installation stages.

4.1.2 minor

Are there records of operational results? Monthly Report of

Gunung Malayu Estate and Sei Rumbiya, periods December 2013

Daily record of activities, e.g.: Foreman Book (BKM=Buku Kerja Mandor),

Records of:

FFB shortage

Sterilizer station

Press and digest station records

Clarifier station

Report Laboratory

Machineries preventive maintenance

Mill and Estate Head assistance

Each stations operators/ officers

Plantation Operation

The records of operational performance and result were well maintained in Gunung Malayu Estate and Sei Rumbiya Estate in Monthly Report.

Estate activities were programmed in annual program and distributed in Monthly Work Guidelines. Activities program consist of pest and diseases census, fertilising, spraying circle and path, cleaning of trench and road maintenance

Head Assistant and Division Assistant check and monitor the activities at site regularly. Site observation was performed during audit to some activities: harvesting, spraying, pruning, handpicking. Activities have been performed at defined interval. The record covered activities type, number of worker, quantity of agro chemical use, quantity of activities output and area of activities.

In daily activities Estate foreman would make Daily Work Plan (RKH= Rencana Kerja Harian), then further will be noted that the realization of the activities in the Book Mandor (BKM: Buku Kerja Mandor), which contains a record of the type of activity (maintenance / weeding, harvesting, census, spraying etc.), number of employees, number of agro-chemical use, the amount of output and activity location (block).

Checking harvesting activities are conducted by the

Compliant

Audit Report




harvest foremen and foremen-I, in daily foremen harvest recorded the inspection harvest (Monitoring Ancak Panen), inspection items: preparing the midrib, ripe fruit is not harvested, the fruit lagged (not harvested) and cut raw fruit. The examination and transport of FFB performed by Adm. Harvest (Kerani Panen), inspection items: TBS maturity and amount of fruits (berondolan) including cutting the fruit stalk (V = mouth frog system) and recorded in the form of transport and the quality of the fruit (FFB Transports form).

Checking of harvesting activities was conducted by harvesting foreman and first foreman daily, while Division Assistant and Head Assistant conducted the checking by sampling. Items checked e.g. maturity of FFB, preparation of midrib and loose fruit.

Results of the daily activities in the field will always be recorded in BKM (Foreman workbook) which is the basis for the calculation of operational costs per hectare and input the data in the SAP program.

Observation has been made:


Harvesting activities in block 91112001, division 2 years of planting 1991.

Sei Rumbiya Estate

Harvesting activities in block 04111000, division 1 year of planting 2004.

Activities spray (Circle Spraying) in blocks 91112001, division 02 years planting 1991. Herbicides used are glyposat (Smart 486 SL) and dimetil amina (Lindomin

Audit Report




865 SL)

Mill Operation

The received FFB weighing records were sighted and demonstrated as defined within the procedure. Regarding the records of sterilizer station showed that the implementation of sterilizing was conducted according to defined procedure. The digesting and pressing process were reviewed during the audit and showed that the processes were conducted according to the defined procedure. The records were sighted at daily log book pressing station operators.

The records of clarification station process were conducted according to the defined procedure. The records were sighted at daily log book clarification station operators.

Generally the processing at kernel station was controlled as required within the procedure such as the silo temperature is established within 70 degrees Celsius.

CPO storage process were conducted based on define procedure of CPO and Kernel dispatch. The storage temperatures of CPO were kept between 45-55 degrees Celsius. It was observed that the storage temperatures were within the range. Also the tank cleaning was conducted based on the standard once a year as the notification plates embedded on the body of tanks.

The delivery of CPO and Kernel were conducted by the officers based on approved delivery order (DO) coordinated with sales officer at the head office that had separated several DO as a guidance to conduct products loads. The products loadings were supervised by the security to conduct the sealing and

Audit Report




embedded the seal tag number on each tanks truck also listed in the weigh slip / delivery orders. The delivery transporters were conducted by internal organizations.

Calibration of laboratory measuring equipment was conducted by head office QC Supervisor include weight balance, microwave oven, etc. The results of calibration within the certificates that internally issued were recorded. Last calibrations were conducted on May 2013 that sighted within the identity tags embedded on the body of the equipment.

The preventive maintenance for processing machineries was conducted based on the schedule established for weekly, monthly and yearly also based on operating hours. The results for maintenance were recorded in to the log book of the each machinery.

The calibrations of measuring equipment at processing machineries were conducted internally by certified calibrator personnel using comparisons method; however there are no any records available as evident of implementation internal calibration.

It was observed during the audit that the records were reviewed within the period of November-2013 until March-2014 in accordance to the processing control demonstration were in good implementation based on procedure defined.

Opportunity for Improvement:

It coud be considered to improve system in regard with calibration status, tracebility and acceptance criteria.

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

Audit Report




4.2.1 minor

Are there records of regular soil, leaf, and visual analysis?

Reports leaf sample unit collection and delivery month January 2014 Bah Lias Resources and Development.

Memo no. 311/BLRS/OP/IV/2014, dated 22 April 2014 from the Research Department.

Operational Estate (Assistant, Head of Assistant and Manager)

Soil and leaf sampling was analysed regularly to determine the nutritional status of soil, to assist and to be guided in the preparation of annual fertilising programme recommendation.

Procedure of leaf sampling mentioned that leaf is analysed annually two months after the first application. Method of sample taken and preparation of analysis was described in the procedure no. RTD 5.1, by Research and Technology Development February 2006: Making Oil Palm Fertilizer Recommendations. Procedure of soil analysis mentioned that soil was analysed every 5 years.

Gunung Malayu Estate and Sei Rumbiya Estate have had a record Fertilization Recommendations that has been determined based on LSU (leaf sampling unit) which was performed by Bah Lias Research Station, the last held was on 2

nd of January 2014 by taking a

block sampling in all divisions in Gunung Malayu Estate and on 21

st of January 2014 by taking a block

sampling in all divisions in Sei Rumbiya Estate, while making soil sampling is planned to be conducted in 2014. Based on Internal Memo no. 311/BLRS/OP/IV/2014, dated 22

nd of April 2014 from

the Research Department. Coordinator, that: soil sampling activities are performed routinely on each sample blocks (block monitors) contained in the entire estate of PT. PP London Sumatra Indonesia Tbk. conducted every 2 years, these activities are done by a team of Agronomy Services Sumbio. In the 2014 soil sampling program will be conducted in the entire block in the PT London Sumatra Indonesia Tbk. Plantations.

Diagnosis / leaf visual observations done by considering the following criteria:

Comparison of green leaf with standard green

Compliant

Audit Report




colour (dark green).

The signs and symptoms (symptom) nutrient deficiency.

Symptoms of pests and plant diseases.

4.2.2 minor

Are there records of efforts to maintain and increase soil fertility (through use of fertiliser, planting of legume cover crops, compost, and land applications of POME or EFB) based on the result of analysis carried out as in point 4.2.1 minor above?

Fertilizer recommendation 2014 by Bah Lias Resources and Development.

Memo no. 311/BLRS/OP/IV/2014, dated 22 April 2014 from the Research Department.

SOP no. OP-5.6.2; Field Application of POME Enriched Mulch.


Estates maintain and increase soil fertility through fertilizer application as well as land application of EFB and composite and also planting legume cover crops in replanting area.

Manuring activity was conducted based on procedure of Manuring, that is:

Empty Fruit Bunch application recommendations (EFB) and wastewater / land applications (POEM), in accordance with SOP no. OP-5.6.2; Field Application of POME Enriched Mulch. Dose of empty bunch (EFB) on mature; 40 tons / ha or 285 kg per tree and Land Application (LA) Dose: 750 tons / ha per year. Or 250 tons / plot.

And the recommended type of fertilizer applied to mature plants (crop yield / TM) using a single fertilizer, while immature plants (immature / TBM) is a compound fertilizer.

Application of fertilizer recorded properly on the "Monitoring Pemupukan" includes the date of application, type and dose of fertilizer, block applied and the amount of material used. No fertilization was observed during the audit, but the estate has a system to monitor whether the application meets the actual fertilizer recommendation. It was noted that the actual fertilizer application Estates conducted in accordance with the recommendation of fertilizer in 2013.

Compliant

Guidance Long term fertility depends on maintaining the structure, organic matter content, nutrient status and microbiological health of the soil. Managers should ensure that best agricultural practice is followed. Nutrient efficiency must take account of the age of plantations and soil conditions.

Audit Report




4.3 Practices minimise and control erosion and degradation of soils.

4.3.1 minor

Are there maps of fragile soils? Soil map and soil types map (Satuan Peta Tanah Semi Detail) period 2013.

Soil Structure Maps 2013


The organisation has a detailed soil map showing gradients and soil types and Satuan Peta Tanah Semi Detail. The soil map available in Gunung Malayu Estate Office. The latest version of soil map was issued by Bah Lias Resources.


Map of soil mentioned that there were no fragile soils in Gunung Malayu Estate, there was only 5% of area is poorly drainage or low land and also only 5,17% of

areas (255,30 Ha) has slopes 16 - 30.

Map soil types; Alluvial, grey alluvial, grey hydromorphic, hydromorphic, red podsolic, yellow brown podsolic, yellow podsolic, yellow red podsolic

Soil Structure Maps: Clay, loam, sandy clay, sandy clay loam, sandy loam.

Sei Rumbiya Estate

Map of soil mentioned that there were no fragile soils in Sei Rumbiya Estate, there was above 5% of area is poorly drainage or low land and also only 4,5% of areas

(71,92 Ha) has slopes 16 - 30.

Soil Map (Soil Map / Soil Type), Sei Rumbiya Estate own soil types: Alluvial, Regosol, Podsolic Yellow and Red Yelow Podsolic.

Compliant

4.3.2 minor

Is a management strategy exists for plantings on slopes above a certain limit (needs to be soil and climate specific)?

Soil map and soil types map (Satuan Peta Tanah Semi Detail) period 2013.

Soil Structure Maps


The organisation has management strategy for planting on slopes above certain limit such as terracing, as referred to company’s SOP and work instructions. The Work instruction described preparation for planting including planting on slopes

Compliant

Audit Report




2013

area has been developed by organisation. System for planting on slopes area is provided through terracing, levelling of terrace, planting legume cover crops and determining of planting space.


Based on topographic Maps, the slope are;

< 3 3.261,48 Ha

3 - 8 649,10 Ha

8 - 16 770,59 Ha

16 - 30 255,30 Ha

Total 4.936,47 Ha

Sei Rumbiya Estate

Based on topographic map the slope are <30%.

Some actions to reduce the rate of erosion on slopes 16-30°, those are by:

Making terracing

Making Tapak Kuda and Rorak

Making Pungguhan platform

4.3.3 minor

Is a road maintenance program presence?

Road hardening program year 2013-2014

Monthly Report of Gunung Malayu Estate and Sei Rumbiya, periods December 2013.


Estates have established an annual program of road maintenance both colection and main road. Besides according to the annual program, road maintenance activities are also conducted in accordance with the road conditions and road maintenance manual.

Maintenance was performed well, as long as the field observations, it appears that all roads, culverts and bridges are in a satisfactory condition.

Compliant

Audit Report




Gunung Malayu Estate has made hardening road program using the rock padas (batu padas) by contractors CV Bintang Fortuna. Realization of roads hardening in 2013 was recorded in the "Program dan Progress Penerimaan Batu Padas". Hardening in 2013 was 11,121 meters and 4,813 cubic meters of rock padas, and programs in 2014, is 238 meters with the rocks padas 186.4 cubic meters.

Sei Rumbiya Estate’s contractors have made hardening road program using the rock padas (batu padas) and the realization of roads hardening in 2014 recorded in the "Program dan Progress Penerimaan Batu Padas". Hardening in 2014 was 4,508 of Main Road and 21,685 meters of collection road.

The use of rock Padas is using the standard budget 0.3 m

3 per meter road.

4.3.4 minor

Is subsidence of peat soils minimised under an effective and documented water management programme?



Operational Estate (Assistant, Askep and Manager)

Based on the location map, soil type map and topographical map Gunung Malayu Estate and Sei Rumbiya Estate, there is no peat land.

Not Applicable

4.3.5 minor

Is a management strategy in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils)?




Map of soil mentioned that there were no fragile soils in Gunung Malayu Estate and Sei Rumbiya Estate.

.

Not Applicable

Guidance Techniques that minimise soil erosion are well-known and should be adopted, wherever appropriate. This may include practices such as ground cover management, biomass recycling, terracing, and natural regeneration or restoration instead of replanting.

For existing plantings on peat, water table should be maintained at a mean o 60cm (within a range of 50-75cm) below ground surface through a network of appropriate water control structures e.g. weirs, sandbags, etc. in fields, and Watergates at the discharge points of main drains (see also Criteria 4.4 and 7.4).

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

Audit Report




4.4.1

major

Is there protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting?

Procedure SOP-OP.13 -Management of Riparian Strips.

Field observation on Riparian zone of Bengkala in Block 93112002 Gunung Malayu Estate and Riparian zone in Block 04111012 Sei Rumbiya Estate.

Estate Policy of riparian buffer zone management at or before replanting was provided in related procedure. Procedure mentioned that riparian buffer zone is planted with monoculture plants (woody trees) to minimize land claim, communicate management and protection of riparian zone to employee and surrounding community and setting up sign of riparian protection, also manual maintenance oil palm in the riparian area. There were several river travers at Gunung Malayu including Pasir-pasir River, Bengkala River, Pemandian Tempel River, Tributery of Asahan and Sakur River. Rumbiya River is a main river in Sei Rumbiya Estate. During the audit, field observation was conducted in observation on Riparian zone of Bengkala in Block 93112002 Gunung Malayu Estate and Riparian zone in Block 04111012 Sei Rumbiya Estate to verify procedure implementation. Riparian zone of Bengkala in Block 93112002 Gunung Malayu Estate and Riparian zone in Block 04111012 Sei Rumbiya Estate was enriched with woody trees, such as: Gmelina arborea, Artocarpus sp., Durio sp. Moreover Vetiver was planted on riverbank erosion prone. It was sighted only manual control conducted in the riparian buffer zone of Bengkala. Pollution prevented by means of a > 50 meters buffer zone where the application of agrochemicals was prohibited. However, it was observed pesticide application up to riverside.on riparian zone Block 04111012 Sei

Compliant (Major Non-conformance NCR 2014-04

closed)

Audit Report




Rumbiya Estate. Moreover, record of dissemination riparian protection to worker in appropriate with related procedure was not available. During the interview with sprayer and spraying foreman on 25

th of March 2014, it was confirmed that

dissemination riparian protection has not been done. Major Non-conformance:

Sei Rumbiya Estate

1. Field observation on Riparian zone Divisi I, Block 04111012 observed pesticide application up to riverside. Record of dissemination of riparian protection to worker in appropriate with related procedure was not available. During interview with sprayer and spraying foreman on 25

th of March

2014, it was confirmed that dissemination of riparian protection has not been done.

4.4.1 minor

Is there an implemented water management plan?

Permit of surface water abstraction from Keputusan Kepala Badan Pelayanan Perizinan Terpadu Propinsi Sumatera Utara #610/164/BPPT SU/2/12.1/XI/2013 dated 12 November 2013

Certificate of analysis of surface water quality

Mill

Estate

The main source of water for Mill activity is surface water – Sungai Asahan. Permit of water abstraction from surface water has been obtained on 12

th of

November 2013 and valid through 3 years. Flow meters were installed to monitor water usage. The volume of water usage is monitored monthly both for process and domestic usage. Water consumption data July – December 2013 and January – February 2014 was sighted. The organisation has program to reduce water consumption, e.g. reuse water from oil cooler turbine for cleaning in clarification and improve employee awareness regarding water consumption. Surface water quality is monitored annually (Sungai Aek Sakur, Sungai Asahan, Sungai Bengkala, Sungai Pasir-pasir dan Sungai Pemandian Tempel) both for upstream and downstream in Gunung Malayu Estate and Sungai Pangling Hulu, Sungai Baungan Hilir dan

Compliant

Audit Report




Sungai Senapan Hilir in Sei Rumbiya Estate). Monitoring result of surface water quality was review for 2

nd semester 2013 against Government Regulation

#82/2001 class II. Quality of river water was inline with Government Regulation #82/2001 class II.

4.4.2 minor

Is there monitoring of effluent BOD? Permit of Land

Application from Bupati Asahan #660.1/358/2010 on 12 Agustus 2010

Analysis Report of Waste Water Quality

Mill POME is monitored monthly as required by permit of land application on 12

th of Agustus 2010. The permit

was valid through 5 years. The result of POME monitoring was reviewed including measurement of BOD for period July – December 2013 and January – February 2014. The Ministry of Environment Decree #29/2003 and permit of land application required that BOD of POME flowed to land application is less than 5,000 mg/litre. The result of POME quality during this period was under 5,000 mg/litre.

Compliant

4.4.3 minor

Is there monitoring of mill water use per tonne of FFB?

Key Performance Indicator

Mill Mill water use per tonne of FFB is monitored monthly. Result of monitoring of mill water use per tonne of FFB was sighted for period July – December 2013 and January – February 2014. It was noted that mill water use per tonne of FFB period July – December 2013 and January – February 2014 was decreased being compared with budget.

The organisation has program to reduce water consumption, e.g. reuse water from oil cooler turbine for cleaning in clarification and improve employee awareness regarding water consumption.

Compliant

Guidance Growers and millers should address the effect of their use of water and the effects of their activities on local water resources. The Water Management Plan may include:

Taking account of the efficiency of use and renewability of sources.

Ensuring that the use of water does not result in adverse impacts on other users.

Avoiding contamination of surface and ground water through run-off of soil, nutrients or chemicals, or as a result of inadequate disposal of waste including POME.

Appropriate treatment of mill effluent and regular monitoring of discharge quality, which should be in compliance with national regulations.

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

Audit Report




4.5.1

major

Is IPM plan documented and current? Procedure OP-5.2 Pest and Disease

Monthly Report of Gunung Malayu Estate and Sei Rumbiya, period December 2013

Daily record of activities, e.g.: Foreman Book (BKM=Buku Kerja Mandor)

Monthly Upkeep Report Gunung Malayu Estate and Sei Rumbiya Estate, March 2014

Notulen Review Pest & Diseases GME 15 March 2014


The organization has documented and implemented an IPM system includes setting out of technique to be implemented, chemical to be used, locations to be applied, and time frame for implementation.

Programme for IPM was established annually. IPM programme includes pest and diseases detection, census and controlling, use of pesticide and herbicide.

IPM program of oil palm plantations has been prepared within the budget in 2013 and 2014, and base on the SOP.

Stages program 'Pest and Disease Control, are:

Visual observation (visual plant e.g. leaves or broken stems and fruit rot)

Conducting a census (to determine the distribution and level of attack)

Control (manual, biological or chemical).

Census of evaluation (to see the effect of control).

Compliant

4.5.1 minor

Is there monitoring extent of IPM implementation including training?

Procedure OP-5.2 Pest and Disease

Monthly Report of Gunung Malayu Estate and Sei Rumbiya, period December 2013

Daily record of activities, e.g.: Foreman Book (BKM=Buku Kerja Mandor)

Monthly Upkeep


The implementation of Integrated Pest Management was monitored. Census of caterpillar, Oryctes (beetle), Ganoderma and rodent was conducted regularly to determine its controlling. Controlling is performed based on level of attack. There are three levels of attack: low, medium and high. Result of census was recorded including area of census, type of caterpillar, quantity of caterpillar and level of attack. Material used, dosage and concentration of agro chemical was recorded when controlling pest and disease using agro chemical spraying. So far there were no medium and high attacks of caterpillar and rodent.

Recording observations and implementation of pest

Minor Non- conformance NCR 2014-05

Audit Report




Report Gunung Malayu Estate and Sei Rumbiya Estate, March 2014

Notulen Review Pest & Diseases GME 15 March 2014

control was shown in: Program and Realization Census Leaf Eater Pest, Rat Attack Calculations and ganoderma, Census Results Owl and others.

Based on the schedule of recording control leaf-eating caterpillars (leaf eater), rotation detection was performed 4 times per year, while the census ganoderma was conducted in 2 rotations per treatment. Monitoring ganoderma (Ganoderma treatments Summary) Gunung Malayu Estate is included with the control method used: the manufacture of sanitary holes, mounding and granting / application trychoderma.

Leaf-eating caterpillars detection program palm oil has been established in all divisions, per 3 months (4 rotations per year).

Rat census was conducted monthly. Report was sighted. Pesticide was applied when there was rat attact.

Programme for planting beneficial plants (Turnera subulatta, Casia cobanensis and Antigonon leptopus) had been carried out. These beneficial plants can be seen along the main road and collection road.


Example: Detection is done in Division 5 blocks / fields’ no. 10115011 (planting year 2010) areas 16.51 Ha, conducted in January 2014, the results: there is a fire worm attack type setora nitens by 3.7%, or still below the threshold.

Ganoderma detection programs have been established in all divisions, per 6 months (2 rotations per year).

Example: Detection of ganoderma in division 7, conducted in February 2014 on the block: 98117013 broad 24.42 ha (1606 trees). Stages of Control:

Audit Report




mounding, hole sanitation, disassemble the stump

Some training has been followed by Gunung Malayu Estate, that is: Management Control of Pests and Diseases Plants organized by Bah Lias Resources (e.g. on 15

th of March 2014 held by Bah Lias

Technology Transfers).

Sei Rumbiya Estate

Example: Detection of a fire worm attack type setora nitens was done in Division 7 areas 806.67 Ha, on several block, that is:

Block 85117050; with an attack rate of 16%.



Ganoderma detection programs have been established in all divisions, per 6 months (2 rotations per year).

Example: Detection of ganoderma in division 7, conducted in January - February 2014 on the block: 04111001, 04111003 and 05111101. Stages of Control: mounding, hole sanitation, disassemble the stump and prevention of ganoderma with applications trycoderma, 1600 gram doses per tree in January 2014.

Minor Non-conformance:

Sei Rumbiya Estate

1. There was no evidence that IPM training has been conducted.


Audit Report




1. IPM training was only attended by 1 group leader (mandor) and Coordinator of Pest and Diseases. There is 6 Divisions in Gunung Malayu Estate.

4.5.2 minor

Is there monitoring of pesticide toxicity units (a.i. / LD50 per tonne of FFB or per hectare)?

Monthly Report of Gunung Malayu Estate and Sei Rumbiya Estate, period December 2013

List of chemical use Gunung Malayu Estate and Sei Rumbiya Estate 2013-2014.


The company has monitored and recorded pesticides use in 2012 and 2013. Usage quantity of pesticides was within the recommended levels. However, monitoring the toxicity of the pesticide and the counting unit LD50/tonne FFB has not been done. Minor Non-conformance:

Sei Rumbiya Estate and Gunung Malayu Estate

1. Record of calculation and monitoring of toxicity of pesticide unit use could not be shown.


Guidance Growers should apply recognised IPM techniques, incorporating cultural, biological, mechanical or physical methods to minimise use of chemicals. Native species should be used in biological control wherever possible.

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

4.6.1

major

Is there evidence of use of only approved and registered agrochemicals permitted by the relevant authorities?

Monitoring of Pesticides Use period 2011, 2012 and 2013.

The Green Book of Pesticides, 2011.


The company only used approved and registered agrochemical, permitted by the relevant authority, based on “The Green Book of Pesticides” issued by The Pesticides Commission of the Agricultural Ministry of the Republic of Indonesia. As seen on the records, agrochemicals used by Estates were include the following:

Elang 480 SL, license RI.01030119941170, expired on 9

th of January 2017.

Ally 20 WDG, license RI. 1257/4-2009/T, expired on 30

th of April 2014.

Metsulindo 20 WP, license RI.01030119991484, expired on 23

rd of June 2016.


closed)

Audit Report




Starane 290 EC, license RI. 854/7-2009/T, expired on 10

th of August 2014.

Starlon 665 EC, license RI. 2899/8-2007/T, expired on 6

th of Julie 2016.

Smart 486 AS license RI. 1313/7-2008/T, expired on 7

th of August 2013.

Gramoxone, license RI. 010301197436, expired on 18

th of March 2016.

Garlon 670 EC, license RI. 695/9-2008/T, expired on 6

th of October 2013.

Agrochemical materials those have expired permit of governments:

Smart 486 AS license RI. 1313/7-2008/T, expired on 7

th of August 2013.

Garlon 670 EC, license RI. 695/9-2008/T, expired on 6

th of October 2013.


Sei Rumbiya Estate

1. There was no evidence that only registered and permitted agrochemical was used, e.g. SMART 486 SL.


1. Copy of valid permit has not been provided for several expired permits of agrochemical, e.g. Garlon 480 EC (6

th of October 2013) and SMART

486 AS (7th of August 2013).

4.6.2 Are there records of pesticide use (including active ingredients used, area

Monitoring of Operational Estate (Assistant,

Pesticides were used based on annual work Compliant

Audit Report




Major treated, amount applied per ha and number of applications)?

Pesticides Use period 2011, 2012 and 2013.

The Green Book of Pesticides, 2011.

Askep and Manager)

programme. Activities using pesticides among others circle and path spraying, selective spraying etc. Records of pesticides use have been recorded including active ingredient, area treated, amount applied per ha, use of selective product and rotation number of applications. Several records of pesticide used were sighted, e.g. application schedule, list of pesticide use in oil palm estate, work achievement and pesticide use, stock card of agrochemicals. The records covered date of application, quantity of pesticide use and name of sprayers. The records were sighted in Division office. It was noted that dosage applied was according to annual programme.

Bah Lias Resources (BLRS) constantly monitors the agrochemical type list, containing the active ingredients, effectiveness trials / applications, the deadline the government's permission, field applications, the recommended dose and concentration.

4.6.3

major

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


Monthly Upkeep Rreport Gunung Malayu Estate and Sei Rumbiya Estate, March 2014

Notulen Review Pest & Diseases GME 15 March 2014.


Records of pesticides uses were well documented including active ingredient used, applied area and use per hectare and number of application rotation.

Spraying record “Work achievement and pesticide use” of weed spraying using agrochemicals was sighted. Dosage of pesticides use and target weed were in-line with the company Work Instruction and instruction on the label and storage instruction. It was noted that agrochemicals used were in-line with target pest, weed or disease, determined dosage.

The training programs that have been followed by team / spraying workers regarding the use of herbicides in the Gunung Malayu Estate could not be shown at the audit time. Training Herbisida Terbatas by Topzone in Rambong Sialang Training Centre on


closed)

Audit Report




Certificate training HerbisidaTerbatas, by the Komisi Pengawasan Pupuk dan Pestisida.

6th of February 2014 was only attended by foreman.


Field observation conducted to Block 91112001 (year of planting 1991) Division II to activity spraying circle and path. Dosage / concentration used was 200 cc/20 letters water; smart 486 AS (glyphosate) and 100 cc/20 letters water metsulindo (metil metsulfuron).

Not all pesticide applicator have training certificate, therefore Major NCR 2014-08 is raised.

Sei Rumbiya Estate

Field observation conducted to Block 91112001 (year of planting 1991) Division II to activity spraying circle and path. Dosage / concentration used was 200 cc/20 letters water; smart 486 AS (glyphosate) and 100 cc/20 letters water metsulindo (metil metsulfuron).


Sei Rumbiya Estate

1. Training regarding agrochemical use was only attended by group leader (mandor)


1. Training regarding agrochemical use was only attended by several spraying operators, group leader and Coordinator of Pest & Diseases

4.6.4

major

Are waste material from agrochemicals including pesticides containers are properly disposed in accordance with laws and regulations?

Management of Hazardous and Toxic Material and Waste Procedure - EMSP-14

Estate All agrochemical containers were triple rinsed and then managed by licensed vendor: CV. Amindy Barokah for transporter and PT. Wahana Pamunah Limbah Industri as processor. Hazardous waste

Compliant

Audit Report





Balance of hazardous waste

manifests were sighted for handling of agrochemical containers on 16

th of December 2013. Liquid waste

from agrochemical was reused for the next spraying application.

4.6.1 minor

Is there documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated?


Monthly Upkeep Rreport Gunung Malayu Estate and Sei Rumbiya Estate, March 2014

Notulen Review Pest & Diseases GME 15 March 2014.

Certificate training HerbisidaTerbatas, by the Komisi Pengawasan Pupuk dan Pestisida.


All chemicals were categorised as World Health Organisation type 1A or 1B, or listed by Stockholm or Roterdam Conventions. Paraquat which was the active ingredient of Gramoxone was still used in Gunung Malayu Estate and Sei Rumbiya Estate. Policy and commitment of the company has determined, based on the decision of Director of the entire garden in PT. PP London Sumatra Indonesia Tbk., dated 23

rd of September 2013, no. 038/MGT/S &

P/IX/2013: Reduce and discontinue use of paraquat herbicide active ingredients in stages: "committed to gradually reduce and discontinue the use of the active ingredient paraquat herbicides in weed control by 10% per year from use of paraquat ratio (ltr / ha) began in January 2014, and recommended alternative / substitution of herbicides which are effective in controlling weeds 4th quarter of 2013.


Data of paraquat used has been provided since 2012-2014.

Year Unit Plan Actual

2012 Liter 115 1781

2013 Liter - 2.9

2014 Liter 1.357


Audit Report




Sei Rumbiya Estate

Data of paraquat used has been provided since 2013-2014.

Year Unit Plan Actual

2013 Liter - 213.82

2014 Liter 795.95 44.25 (until February)


Sei Rumbiya Estate

1. There was no budget of paraquat in 2013 but the realisation was 213.82 liter. Budget of paraquat use in 2014 is795.95 liter.


1. Budget of paraquat in 2012 was 115 litters and the realisation was 1,781 litter. No budget of paraquat in 2013 but realisation was 2.9 litters. Budget of paraquat in 2014 is 1,357 litters.

4.6.2 minor

Are there records of the results of health check-up for those who apply agrochemicals?

Medical check-up record period 2013

Head assistance

Safety officer

Medical check for employees that is exposed to agrochemical was performed once a year. The medical check-up reports 2012, 2013 and ongoing 2014 were sighted and verified. Samples are taken to operators who exposed to agrochemical. The medical check-up packages is considered working hazard, such as cholinesterase and spirometers examination and records of medical check-up are maintained. There are 3 personnel suspiciously restrictive lungs functions at Sei Rumbia Estate from the last spirometer medical check-up dated 18

th of February

Compliant

Audit Report




2013.

4.6.3 minor

Are there records showing that no work with pesticides for pregnant and breastfeeding women?

Monthly checking record of pregnant monitoring.

Menstruation leave record

Group discussion with sprayer of Gunung Malayu Estate was conducted on 28 March 2014 and interview with sprayer Sei Rumbiya Estate on 25 March 2018

Estate (Nurse) There were 36 totally women sprayer for all Division in Sei Rumbiya Estate and were totally 10 women sprayer for all Division in Gunung Malayu Estate. To ensure that there were no pregnant women during spraying of pesticides, there are lists of women worker in Gunung Malayu Estate including data of monthly checking conducted by nurses. It was indicated that there were no pregnant women sprayer. Group discussion with sprayer of Gunung Malayu Estate was conducted on 28

th of March 2014. There

was no breastfeeding sprayer during spraying of pesticides. Though there were no pregnant women during spraying of pesticides based on group discussion with sprayer, however there was no record showing that no works with pesticides for pregnant and breastfeeding women. Moreover, interview with woman sprayer Division I on 25

th of March 2014 was shown that the

pregnant analyses for women worker who work with pesticide was not done. Minor Non-conformance:

Sei Rumbiya Estate

1. Based on worker database per February 2014 there were 36 women work with pesticide. However, record showing that no work with pesticides for pregnant and breastfeeding women were no available. Moreover, interview with woman sprayer Division I on 25

th of March 2014

shown that the pregnant analyses for women worker who work with pesticide was not done.

Minor Non-conformance

2014-10

Audit Report




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

4.7.1

major

Is there evidence of documented Occupational Health and Safety (OHS) policy and its implementation?

OHS Management Systems Manual and Procedures

OHS Policy

,

OHS Officer in charge

OHS Committee

Documented policy related to occupational health & safety (OHS) was established and approved by President Director dated 13

th of June 2006 that

consists of: compliance to regulations, prevent working accident and occupational disease also to control and minimize potential hazards, etc.

The documented manual of OHS was established on 15

th of September 2011, there were also several

documented procedures to support the OHS management system, such as: OHS communication and consultation, purchasing and contractor evaluation, emergency response, OHS monitoring and measurement, employees’ health monitoring, etc.

Implementation records were sighted for several OHS programmes, such as: fire extinguisher inspections, hydrants maintenance checklists, resume of medical check-up include audiometry and spirometers and also workplace measurements for chemical and physical factors such as noise, vibrations, temperature and indoor air quality that comply to local government Permenaker No.13/2011.

Hazard identification and risk analysis within the scope of oil palm mill processes activities and agricultural estate activities has already conducted, as it was considered the stages of OHS risk control hierarchy such as elimination, substitution, engineering, administrative and PPE (Personnel Protective Equipment) in order to OHS risk precautions.

Several mandatory PPE were available by the organization to the employees and visitors such as: helmet, safety shoes, ear plugs, ear muffs and respirators. There were also deployed several PPE

Compliant (Major Non-conformance

2014-11 closed)

Audit Report




symbols at the at risk areas.

Several working tools and machineries that utilized at Mill and Estate were also equipped with safety devices, such as knives cover those are used by harvester and also pressure release valve at mill processing machineries.

Emergency response equipments were available by the organization such as first aid boxes those kept by each trained harvester supervisors and several fire extinguishers at the risky areas, centre clinic and ambulance units were also available for each Estate.

Internal audit related to OHS management systems was integrated within the RSPO internal audit which conducted on period of 2014 by internal auditor.

Quarterly reporting of OHS committee to local government (Ministry of Manpower) was periodically conducted as records were sighted for reporting period December 2013 – February 2014.

Accident reports and records recapitulations were reported periodically by OHS committee (P2K3) to local government Ministry of Manpower, there were also separated log book of accident records at the clinic. Regarding incident investigation are conducted by using forms (F-12-03) for only lost time incidents.

Several tools and equipment those are regulated within the law are already certified and inspected by local government Ministry of Manpower (Disnaker Sumatera Utara), such as:

1 unit boiler at Gunung Malayu Mill that has pressure capacity 24 kg/cm3; last inspected date: May-2013; however there was ongoing progress of new boiler installation.

2 units of sterilizer at Gunung Malayu Mill that

Audit Report




have pressure capacity each 3.5 bar; last inspected date: July-2013.

3 units of compressors at Gunung Malayu Mill that have pressure capacity each 8 bar; last inspected date: July-2013.

2 units of steam Turbine at Gunung Malayu Mill capacity each 750 Kw and 1000 Kw; last inspected date: September 2013.

Lightning installation arrester at Gunung Malayu Mill; last inspected date: July 2013.

2 units of Motor diesel (genset) at Gunung Malayu Mill capacity each 325 Kva; last inspected date: July-2013.

Electricity installation at Gunung Malayu Mill with capacity 730 kW; last inspected date: July-2013.

As the result of inspections and testing that all of the equipment was summarized as safe and proper to be used.

However several equipments were still found have not yet conducted approval inspection from ministry of manpower such as excavator at Gunung Malayu Estate and pressurized vessels at Sei Rumbiya Estate.

It was also noted several license certificates were sighted for personnel who has special competencies such as:

Mill has licensed operators (SIO) for steam boilers operators and pressurized vessels

Mill and Estates have licensed operators (SIO), operators of lifting equipment

Certified welder at mill

Paramedic and medical doctor certified industrial Hygienist (HIPERKES)

Audit Report




It was noted that there were ongoing Replanting activities at Gunung Malayu Estate and currently was on stages of chipping activities that execute by contractor CV. Rimba Perkasa. As it was written within the contract document “SPK (Surat Perintah Kerja)” that every contractor worked at LONSUM premises shall be complied with the OHS regulation and each of personnel employees shall be provided with PPE. Based on observation within the audit it was noted that the contractors worked were provided with the license operator (SIO) of excavator and also always conducted safety briefing prior to start the work activities.

Opportunity for Improvement:


It could be considered to improve mask for the sprayer operator as required from MSDS.

Gunung Malayu Mill

It could be considered to develop the provisions proper equipment and PPE of confined space working activities.

It could be considered to provide information of safe working load (SWL) capacity for the lifting equipment.


Sei Rumbiya Estate

1. It was observed on “up-keep” activity regarding manual trenching at Div-7 estate of Sei Rumbia

Audit Report




that the personnel worked there does not wear safety shoes as their Personal Protective Equipment (PPE).

4.7.2

major

Are responsible person for health and safety program identified? Are records of their regular meetings with workers to discuss health, safety and welfare issues kept?

Approval letter from local ministry of manpower regarding OHS Committee member

OHS yearly programmes

OHS periodical reporting

OHS officer in charge

OHS Committee member

As per regulation by Ministry of Manpower, the organizations were complied with availability of OHS officer and also the OHS committee (P2K3) at every unit affiliate for Mill and Estate as follows:

Sei Rumbia Estate: Mr. Musfa Efendi as OHS Officer and OHS committee (P2K3) consists of 43 members who have already approved by Dis Nakertrans Pem Kabupaten Labuhan Batu Selatan with approval letter No. 39/P2K3/DSTKT/2011

Gunung Malayu Mill and Estate: Mr. Bahrum Simanjuntak as OHS Officer and OHS committee (P2K3) consists of 53 members who have already approved by Dis Nakertrans Pem Kabupaten Asahan.

Monthly safety committee meeting was held to review the OHS programme and performance; records were sighted for 2

nd and 3

rd quarter of 2013 and also 1

st

quarter of 2014. Reports were quarterly submitted to local authority as required by local regulation.

Compliant

4.7.1 minor

Is there provision for accident insurance for workers?

Jamsostek monthly allowance

Head of Assistance

Accident insurance was provided to workers under the scheme “Jamsostek” as required by local regulation. Samples of workers for Mill and Estate were taken during this audit. Samples are taken have been provided with accident insurance.

Compliant

4.7.2 minor

Is there regular health examination by a doctor for workers in stations or exposed to high-risk work?

MCU Reports

Head of Assistance

General medical check-up has been conducted within period 2013 as it is planned to be conducted once in a year; the medical check-up was conducted by third party clinics with package such as: physical examination and specific measurement especially for

Compliant

Audit Report




audiometry and cholinesterase for high risk workers at Mill and Estate.

As the result summary for the check-up was sighted that there are 3 personnel suspiciously restrictive lungs functions at Sei Rumbia Estate from the last spirometer medical check-up dated 18

th of February

2013.

4.7.3 minor

Is there documented risk assessment for Occupational Health and Safety (OHS)?

HIRAC (Hazard identification and Risk assessments


The quantitative method of risk analysis was conducted for several activities at Mill and Estate, where the analysis method was described within the documented procedure that analysis was considered frequency of hazard and consequences of risks which summarized the risk level from low risk to extreme risks.

The Mill risk analysis covered activities such as: transportation, weighbridge receiver, FFB sorter, loading ramp, transfer carriage, sterilizer, tippler, thresher, press, clarifier, engine room, water treatment, effluent plant, workshop, warehouse, diesel tank, laboratory, offices and traffic activities. While the estates risk analysis covered activities such as: Loading FFB, estate maintenance, fertilizer, pesticides & herbicides, harvesting, workshop activities and also warehousing.

The hierarchy of control to take action of risk control such as elimination, substitution, engineering, administrative and PPE was also considered in the risk analysis.

However several risk activities at Mill and Estate were not identified yet as it is become non-conformance within this report.


Minor Non-conformance NCR 2014-12

closed

Audit Report




Sei Rumbiya Estate

1. The records of hazard identification and risk assessment (Revision January-2014) did not coverage activities of upkeep (e.g. pruning, manual drainage trenches, etc).


1. The records of hazard identification and risk assessment (Revision January-2014) did not coverage activities of Replanting.

4.7.4 minor

Are there records of OHS training? Yearly training programme

Training attendance sheet and pictures

Head of Assistance

Training records related to OHS were sighted and verified during this audit, e.g. Licence for boiler operator, licence for operator of generator set, license of heavy equipment operator, HIPERKES for paramedics and doctors and also training performed internally such as basic OHS, hazard identification, work inspection, emergency response and chemical handling.

Compliant

4.7.5 minor

Is there accident and emergency preparedness procedure?

Emergency handling procedure (P-10)

Evacuation procedure (P-11)

Emergency response team


Several documented procedures related to emergency response were avaiable. The emergency conditions have been identified including general fire, land fire, chemical spillage and earth quake.

The procedure described the roles and responsibilities of each emergency response team include the mechanism how to conduct medical evacuation to near hospital, the emergency contact number of each internal emergency team and external related parties such as public fire station was also available.

The composition of emergency response team was established consists of liaison team, evacuation team, health team, secure team and recovery team that all of the team are coordinated by head assistance act as emergency team commander. Each of estate divisions

Compliant

Audit Report




had each emergency structure.

It was defined the procedure of emergency and accident (P-12) regarding the reporting and investigation of accidents, which within the forms described the accident chronology, cause and impact of the accident also to find the root causes of the accident happened and formulized the corrective and preventive action.

4.7.6 minor

Is there evidence of OHS and first aid equipments available at worksites?

OHS Manual and procedure

Head of Assistance

The emergency kits such as first aid box and emergency shower/eyewash were available at Mill and several locations at Estate. First aid kits were regularly checked as checklist was sighted. Mill and Estate was supported with one clinic centre and first aid room at each division office. The group leader (mandor) was provided with first aid kits. However it was still found discrepancies that based on last internal audit (15

th of March 2014) several emergency

equipment were still on progress to provide such as first aid kits for each mandor/supervisor and emergency eyewash at hazardous waste storage.

Compliant

4.7.7 minor

Are workers trained in first aid should be present in both field and mill operation?

Training attendance sheet

Paramedics

Supervisors (mandor)

First aid kits were sufficiently provided at Mill and Estate held by each group leader (mandor) at estate. First aid training was conducted by paramedics. During the audit, the group leader (mandor) was able demonstrating the use of first aid kit. There were paramedics at each estate who also trained as first aider.

Compliant

4.7.8 minor

Are there records of the occurrence of any work accidents are maintained and regularly reviewed?

Accident reports


Accident number was reported on monthly basis. Quarterly accident statistic was also reported to local authority. Accident was followed up with treatment of the victim and accident investigation. Monthly accident recapitulation was available and investigation report was conducted. Last incident was happened at mill on 21

st of November 2013 wheret the operator of kernel

Compliant

Audit Report




was punctured because of sharp objects on machinery.

Guidance Growers and millers should ensure that the workplaces, machinery, equipment, transport and processes under their control are safe and without undue risk to health. Growers and millers should ensure that the chemical, physical and biological substances and agents under their control are without undue risk to health when appropriate measures area taken. A safe and healthy working environment should be provided for all workers whether they are employees or contractors.

The health and safety plan should also reflect guidance in ILO Convention 184.

4.8 All staff, workers, small holders and contractors are appropriately trained.

4.8.1

major

Is there documented training programme for staff, employee and scheme small holders in accordance with workers’ positions and competence?

Yearly Training Programme

Head of Assistance

The training program of 2013 has been established which includes internal and external trainings. Internal training consists of the standard operational procedure training, Introduction of Mill Processing, basic OHS, Introduction SMK3, roles and responsibilities of OHS committee, first aider, emergency response and chemical handling, also accident Investigation. External training consists of Human Resource Management, Leadership, Stock Management, Administration (General), General Experts OHS, OHS Fire Expert and OHS Chemistry expert. Evidence of training such as photos, list of attendees and certificates e.g., licence for boiler operator, licence for operator of generator set, license of heavy equipment operator, license for welder, HIPERKES and first aider for paramedics and doctors were available and properly maintained. Training programmes for period of 2014 thaose feedbacks from regulations and training needs identification from Mill and Estate were also established.

Compliant

4.8.2

major

Are there records of training for each employee kept?

Training attendance sheet and pictures

Training certificates

Head of Assistance

Evidence of training such as photos, list of attendees and certificates e.g., licence for boiler operator, licence for operator of generator set, license of heavy equipment operator, license for welder, sprayer, and chemical mixing operator, assistant of estates, pesticide and herbicide training, HIPERKES and first aider for paramedics and doctors, etc. were available

Compliant

Audit Report




and properly maintained

4.8.3

major

Is there evidence that the company uses experienced or trained contractors?

Contract Documents

Head of Assistance

It was defined within the contractual agreements that the contractor/vendors shall provide the competence personnel include skill, knowledge and experience. The attendance records regarding company rules socialization and briefing were also evident.

Samples were taken for replanting contractor CV. RIMBA PERKASA as described within the request letter No. 036/GME/OS/III/2014 that the contractors were provided with trained/licensed operators of excavators, short briefing from the head assistance regarding safety and environments at estate were also conducted, and the attendances of its briefing were sighted.

Compliant

Guidance Training should be given to all staffs and workers by growers and millers to enable them to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these principles, criteria and guidance. Contractors should be selected for their ability to fulfil their jobs and responsibilities in accordance with documented procedures, and in compliance with the requirements of these principles, criteria and guidance.

Workers on smallholder plots also need adequate training and skills and this can be achieved through extension activities of growers or mills that purchase fruit from them, by smallholders’ organisation, or through collaboration with other institutions and organisations. For small holders training records should not be required by anyone working on the farm should be adequately trained for the job they are doing.

PRINCIPLES 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY



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

5.1.1 major

Is there documented impact assessment? PEL of Gunung

Malayu Mill and Estate RC.220/699/B/IV/19

Mill and Estate Document of PEL of Gunung Malayu Mill and Estate was approved by Ministry of Agricutrural on 18

th of

April 1994.

Gunung Malayu Estate was established before 1920

Compliant

Audit Report




94 dated 18 April 1994

RKL RPL of Gunung Malayu Mill and Estate RC.220/948/B/V/1994 dated 28 May 1994

Document of RKL and RPL of Sei Rumbiya Estate #660/05/SET-KOMISI/I/2009

Environmental aspect identification and evaluation procedure – EMS-P01

Identification and evaluation of environmental aspect and impact

so AMDAL was not provided. Due environment document was created after Estate establishment, then PEL was created

Document of RKL and RPL of Gunung Malayu Mill and Estate was approved by Ministry of Agricutrural on 28

th of May 1994.

Document of RKL RPL of Sei Rumbiya Estate was approved by Kepala Bapedalda Kabupaten Labuhan Batu (as Head of Distric AMDAL Committee) on 12

th

of January 2009.

Impact assessment covered in PEL, e.g.:

Water resources

Biological diversity

Air quality

Natural and cultural heritage

Environment quality

Economical, social and culture

Gunung Malayu Mill and Estate and Sei Rumbiya Estate implemented procedure for identifying environmental aspect and evaluating its impact based on Environmental Management System ISO 14001:2004. The result of environmental aspect and impact identification and evaluation was documented. As required by the procedure, the information of environmental is reviewed and updated annually. Last review and update of environmental aspect and impact register was performed in June 2013.

5.1.2 Are there records of regular report on Report of RKL Environmental Implementation of RKL RPL is reported every six Compliant

Audit Report




major environmental management in accordance with relevant regulations?

RPL 1st and 2

nd

semester 2013 for Gunung Malayu Mill and Estate and Sei Rumbiya Estate

Receipt note of RKL RPL submission

and CSR Department

months. The reports were submitted to Asahan District Environmental Agency (Gunung Malayu Mill and Estate) and Labuhan Batu Selatan District Environmental Agency (Sei Rumbiya Estate). However inconsistency was found in reporting submission.


Sei Rumbiya Estate

1. There was no evidence that report of RKL RPL 1st

semester 2013 was sent to related government institution.

2. Report of RKL RPL 2nd

semester 2013 was only sent to BLH Kabupaten Labuhan Batu Selatan. There was no evidence that report of RKL RPL 2

nd

semester 2013 was sent to Ministry of Environment and BLH Propinsi Sumatera Utara


1. There was no evidence that report of RKL RPL 1st

semester 2013 was sent to related government institution.

(Major Non-conformance NCR 2014-13

closed)

5.1.1 minor

Are revisions to environmental management document if there are changes in companies operating areas or activities?

Initial Document of PEL of Sei Rumbiya Estate # RC.220/998/B/V/94 dated 15 May 1994

Document of RKL and RPL of Sei Rumbiya Estate #660/05/SET-KOMISI/I/2009

Mill and Estate Initial Environmental Impact Assessment documents (PEL) which were approved by Department of Agriculture of Republic of Indonesia on 15

th of May

1994 for Sei Rumbiya Estate were available. The document was revised and approved by Kepala Bapedalda Kabupaten Labuhan Batu (as Head of Distric AMDAL Committee) on 12

th of January 2009.

Intial Environmental Impact Assessment document (PEL) approved by Ministry of Agricutrural on 18

th of

April 1994 remained the same.

Compliant

Audit Report




Environmental aspect identification and evaluation procedure – EMS-P01

Regarding internal environmental aspect and evaluation of its impact document, as required by the procedure, the information of environmental aspect and impact was reviewed and updated at least once a year. Last review and update of environmental aspect and impact register were performed in June 2013. Several new environmental aspects were identified, e.g. environmental aspect of replanting.

Guidance Documented impact assessment is AMDAL for plantation area ≥ 3000 Ha and UKL/UPL for plantation < 3000 Ha. In view of the fact that development activities in general will alter the environment, it is important to pay due attention to environmental components having the following characteristics:

1. Environmental components for which the functions must be maintained, safeguarded and preserved, such as:

protection forests, conservation forests, and biosphere reserves

water resources

biological diversity

air quality

natural and cultural heritage

environment quality

environmentally-oriented cultural values 2. Environmental components which may undergo fundamental change(s), along with such change(s) as are considered important by the community in the area of the proposed business or

activity, for instance:

land ownership and control

employment and business opportunities

living standards of the community

public health AMDAL is Analisis Mengenai Dampak Lingkungan Hidup consisting of 3 (three) main documents; 1) Environmental Impact Assessment, 2) Environmental Management Plan, and 3) Environmental Monitoring Plan. The company must report periodically to related institution on environmental management and monitoring plan implementation. It is the responsibility of the companies to provide sufficient objective evidence to the audit team that the full requirements of an EIA are met for all aspects of plantation and mill operations, and captures all changes over time. Environmental impact assessment should cover the following activities where they are undertaken:

Building new roads, processing mills or other infrastructure.

Putting in drainage or irrigation systems.

Replanting or expansion of planting area.

Disposal of mill effluents (see criterion 4.4)

Clearing of remaining natural vegetation.

Audit Report




Impact assessment may be a non restrictive format, e.g. ISO 14001 EMS and/or EIA report incorporating elements spelt out in this criterion and rose through stakeholder consultation. Documented management action plans addressing issues rose from the above impact assessment, which is monitored annually.

Effect on the environment can be identified on soil and water resources, air quality (see criterion 5.6), biodiversity and ecosystems, and people’s amenities and people amenities (see criterion 6.1 for social impacts), both on and off-site.

Stakeholder consultation has a key role in identifying environmental impacts. The inclusion of consultation should result in improved processes to identity impacts and to develop any required mitigation measures. It is important that where activities, techniques or operations change over time, identifications of impacts, and any required mitigation, are updated as necessary.

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

5.2.1 major

Are there records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat?

Reground checking HCV result 2008

Estate Record of HCV assessment result in Sei Rumbiya Estate was not available. In August 2008, Organization has conducted reground checking HCV area in Gunung Malayu Estate internally by Senior Conservation Staff. Report of reground checking HCV was only contained map of HCV potential. It was not described the HCV identification analyses. Major Non-conformance:

Sei Rumbiya Estate

1. Record of HCV assessment result was not available.


1. In August 2008, Organization has conducted reground checking HCV area internally by Senior Conservation Staff. Report of reground checking HCV was only contained map of HCV potential. It did not describe HCV identification analyses.

Major Non-conformance NCR 2014-14 closed


closed)

Audit Report




Based on objective finding organization has performed

HCV assessment. HCV assessment report has been

distributed to each estate.

Organization has conducted HCV assessment collaborates with PT. SAIL consulting. It was performed by accredited assessor RSPO on 5

th – 7

th

of June 2014 in Sei Rumbiya Estate and on 30th of

June – 3rd

of July 2014 in Gunung Malayu Estate. Public consultation has been done on 7

th of June 2014

in Sei Rumbiya Estate and 3rd

of July 2014 in Gunung Malayu Estate attended by Labour Local Department, Head District, Head Police District, Village head around estate, community around estate and local NGO-Harian Waspada. It has intended to get aspiration and responses from stakeholders related identification result of HCV and its management plan. HCV assessment report has been also commented by accredited assessor RSPO from Forestry Faculty of IPB.

There is No RTE species identified in Sei Rumbiya

and Gunung Malayu Estate, however there are

protected species identified based on PP No.7/1990

among others: Kucing Kuwuk (Felis bengalensis),

Raja udang (Alcedo meninting), Burung madu kelapa

(Anthreptes malacensis) and Burung madu belukar

(Anthreptes singalensis). HCV identified in Sei

Rumbiya and Gunung Malayu Estate regarding:

HCVs Sei Rumbiya Estate

Areas critical to water catchments (HCV 4.1) were

Audit Report




identified Water DAM Division 4, Water source

Division 6 and Rumbiya river

Areas critical to erosion control (HCV 4.2) area

which slope > 400 were identified

o Erosion control Division 1 (33,234 ha),





o Erosion control Division 07 (3,5 ha)

Areas critical to religious significance (HCV 6) were identified; Cemetery of worker (0,647 ha)

HCV s Gunung Malayu Estate

Areas critical to water catchments (HCV 4.1) were

identified; water course of Asahan River, GK GM

river, NB river, totally 8,814 ha

Areas critical to religious significance (HCV 6) was

identified; Cemetry of Batak Naga Bolon,

Cemetery in Portu, Cemetry of Felix, Cemetery

NA, Cemetery NB.

5.2.2 major

If, rare, threatened or endangered species, or high conservation value habitats are present, are appropriate measures to preserve them to be taken?

Procedure SOP-OP.13 -Management of Riparian Strips

Procedure EMS-P16- HCV Management and Monitoring

Record of flora and fauna monitoring

Estate Though the HCV assessment result was not available, organization has been arranged HCV management generally in company’s SOP. The management of HCV areas potential was presently based on the company’s SOP of HCV area management. It was sighted that the management and monitoring plan were described for all HCV (HCV 1-6). Generally HCV management program including:

Setting of boundaries

Planting areas of prone erosion to river bank and

Compliant

Audit Report




planting wood plant.

Setting of protection signboards, including: prohibition to hunting wildlife, prohibition to protected area.

Appoint officer to ensure the implementation of management and monitoring HCV area.

Patrol of HCV area.

Implemented best management practise for all estate activities especial for immediately adjacent with HCV area.

Field observation in several HCV potential areas including Riparian zone of Bengkala in Block 93112002 Gunung Malayu Estate and Riparian zone in Block 04111012 Sei Rumbiya Estate was shown that area has been enriched with woody trees, such as: Gmelina arborea, Artocarpus sp., Durio sp. Moreover Vetiver was planted on riverbank erosion prone It was sighted only manual control conducted in the riparian buffer zone of Bengkala. Pollution prevented by means of a > 50 meters buffer zone where the application of agrochemicals is prohibited. However, it was observed pesticide application up to riverside.on riparian zone Block 04111012 Sei Rumbiya Estate. Moreover, record of dissemination riparian protection to worker in appropriate with related procedure was not available. This case has been described in criterion 4.4.1 major.

Organization has also developed and established monitoring program to ensure condition and the existence of HCVA, including:

Monitoring existence of flora and fauna using line

Audit Report




transect method.

Monitoring condition and the existence of riparian buffer zone including periodically quality monitoring of river water.

Monitoring activities were conducted for HCV potential in Gunung Malayu Estate including flora and fauna monitoring and periodically quality monitoring of river water. Its records were documented and sighted.

5.2.3 major

Are measures taken for protecting species and their habitats in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities?


Procedure SOP-OP.13 -Management of Riparian Strips.

Procedure EMS-P16- HCV Management and Monitoring

Environment and CSR Department

Estate

The HCV management and monitoring plan described measures taken for each HCV and its monitoring. Relevant laws were taken into account for determining appropriate measure including Government regulation #7/1999, President Decree #32/1990, and Indonesian Laws # 5/90, Indonesian Laws # 5/94, Indonesian Laws # 11/1974, Indonesian Laws #7/2004 and Ministry of Forestry Decree # 104/Kpts-11/2000

Compliant

5.2.1 minor

Are posters and signs warning of the presence of protected species produced, distributed, and made visible to all workers, and the community, including guidelines in handling them?

Field Observation on Block 04111003 Sei Rumbiya Estate and Riparian zone of Bengkala in Block 93112002 Gunung Malayu Estate

Attendance List of dissemination about protected against HCV area and protected of wildlife in Gunung Malayu Estate

Estate Posters and sign boards concerning HCV areas potensial and protected species are available in the necessary places, however poster of the presence of protected species in Sei Rumbiya Estate was not available. There was only protected species photo which documented in office.

Dissemination about protected against HCV potential and protected area of wildlife was conducted in Gunung Malayu Estate on 27

th -28

th of February 2014

and March 2014 and to local community on 4th

of February 2014, however dissemination protection of protected species to mill worker, worker of Sei Rumbiya Estate, and to community around estate was


closed

Audit Report




not done.

In according interview indicate that staff and employees were informed in regard HCV areas and ERT species.


Sei Rumbiya Estate

1. Sign warning of protected species has been posted on HCV potential area, such as: water infiltration at Block 04111003, however poster of the presence of protected species was not available. There was only protected species photo which documented in office.

2. Evidence of dissemination of protected species to worker and to community around Estate was not available.

3. Interview with worker representative (sprayer and foreman of sprayer) on 25

th of March 2014 shown

that the worker has not understood about protected species.

Gunung Malayu Mill

1. Dissemination protection of protected species to mill worker was not done.

5.2.2 minor

Does company appoint dedicated and trained officers to monitor any plans and activities as above?

Decision Letter from manager Sei Rumbiya estate # 02/P2K3/SRE/I/2013 2 January 2013- Conductor Division.

Decision Letter from

Estate Sei Rumbiya Estate has appointed filed foreman for each division and Gunung Malayu Estate has appointed foreman of upkeep as an officer to ensure the implementation of management and monitoring plan. These ”HCV Officers” have no particular background for HCV management. Evidence of competent/training


closed

Audit Report




manager Gunung Malayu estate # 115A/GME/SE/III/2013, 17 June 2013.

record of HCV Officers was not available. Minor Non-conformance:

Sei Rumbiya Estate

1. Organization has appointed field foreman in each division as an officer to monitor all plans and activities of HCV management and monitoring program (SK Estate Manager No.02/P2K3/SRE/I/2013, 2

nd of January 2013-

Conductor Division). These ”HCV Officers” have no particular background for HCV management. Evidence of competent/training record of HCV Officer was not available.


1. Organization has appointed foreman of upkeep and worker Division I as an officer to monitor all plans and activities of HCV management and monitoring program (SK Estate Manager No.115A/GME/SE/III/2013,17

th of June 2013).

These ”HCV Officers” have no particular background for HCV management. Evidence of competent/training record of HCV Officer was not available.

Guidance This information gathering should include checking available biological records and consultation with relevant government departments, research institutes and interested NGOs if appropriate. Depending on the biodiversity values that are present, and the level of available information, some additional field survey work may be required.

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

5.3.1 major

Are all waste and pollutions sources identified and documented?


Mill and Estate Identification of waste and pollution sources from Gunung Malayu Mill and Estate and Sei Rumbiya Estate activities was evident. The source of pollution, type and control method of waste was documented except for waste and pollution sources of Laboratory activities. Wastes identified were among others: POME, used oil, used oil filter, agrochemical and


closed)

Audit Report




chemical containers, contaminated rags and domestic wastes. Major Non-conformance:

Gunung Malayu Mill

1. Waste and pollutions sources from laboratory activities have not been identified and documented.

5.3.2 major

Are estates and mills waste management and disposal implemented to avoid or reduce pollution?


Waste management procedure - SOP EMS-WI-8

Permit of temporary storage of hazardous waste for Gunung Malayu Mill #660.1/434/LH/2011

Application letter for temporary storage permit extension #179/GSD/G/43/XII/2013 on 27 December 2013

Result of site visit

Environmental and CSR Department

Mill and Estate

Procedure waste handling including hazardous waste handling has been established and implemented. The procedure required waste to be segregated from point of generation.

EFB were used for fertiliser in Gunung Malayu Estate. Fibre and Shell from Gunung Malayu Mill were used for boiler feed. Rest of shell was sent to the sister Units for boiler feed. It was observed that organic and inorganic wastes were segregated at point of source. Mill and Estate including housing has provided different of waste bins for each type of wastes. Organic and inorganic wastes from Mill and Estate including housing were disposed to landfill in the Estate area.

Hazardous wastes generated by Mill and Estate are used oil, used oil filter, used battery, agrochemical and chemical containers waste, medical waste and used lamp. Temporary storage of hazardous waste in Gunung Malayu Mill still held valid permit from Asahan District Environment Agency on 12

th of May 2011 with

permissible period 90 days and valid through 3 years. Permit of temporary storage of hazardous waste in Gunung Malayu Estate and Sei Rumbiya Estate was expired. The organisation has sent letter to extent the permit to Asahan and Labuhan Batu Selatan Distric

Compliant (Major Non-conformance

NCR 2014-18 closed)

Audit Report




by BLH Kabupaten Labuhan Batu Selatan regarding temporary storage permit extension on 10 February 2014

Contractual agreement of PT. PP London Sumatra Indonesia Tbk. and CV. Amindy Barokah and CV. Karisma #005/ENV/Cont/XII/2013

Contractual agreement of PT. PP London Sumatra Indonesia Tbk. and CV. Amindy Barokah and PT. Wahana Pamunah Limbah Industri #007/ENV/Cont/XII/2013

Permit of CV. Amidy Barokah as hazardous waste transporter


Report of

Environmental Agency.

These hazardous wastes were managed by licensed vendor: CV. Amindy Barokah as transporter of all wastes, PT. Wahana Pamunah Limbah Industri as processor of used filter, agrochemical and chemical containers waste, used lamp, PT. Nonferindo Utama as processor of used battery, CV. Karisma as processor of used oil. Disposal of hazardous waste was completed with manifest. Manifest of disposal were sighted for 16

th of December 2013.

Hazardous waste was reported to Asahan District Environmental Agency and Labuhan Batu Selatan District Environmental Agency. Receipt note was also sighted.

Several inconsistencies were found in waste management and disposal implementation.


Sei Rumbiya Estate

1. Procedure EMS P14 mentioned that water from cleaning outside agrochemical containers was drained to isolation pit and location is 50 meters as a minimum from housing. There are two isolation pits: sedimentation and absorption pit. In actual there was only one pit: absorption pit and location was less than 50 meters.

2. Handling of used fertiliser sacks was not according to EMS-WI-8.

3. Non-hazardous waste was not handled according to EMS-WI-8, e.g.

a. Prohibition of waste burning. Trace of waste

Audit Report




hazardous waste management 3

rd

and 4th quarter

2013

Receipt note of report of hazardous waste management submission

burning was found beside chemical storage, at backyard of housing beside chemical storage and at backyard of Madrasah.

b. Organic and non-organic waste were mixed in final disposal of the final landfill of non hazardous waste

c. There was no fence and identification at the final landfill of non hazardous waste

4. Report of hazardous waste management Q3 and Q4 was only sent to BLH Labuhan Batu Selatan. There was no evidence that hazardous waste management report was sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.


1. Report of hazardous waste management Q3 and Q4 was only sent to BLH Asahan. There was no evidence that hazardous waste management report was sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.

5.3.1 minor

Is there management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance with the product label and existing regulations?



Balance sheet of hazardous waste

Estate All agrochemical containers were triple rinsed and then managed by licensed vendor: CV. Amindy Barokah for transporter and PT. Wahana Pamunah Limbah Industri as processor. Hazardous waste manifests were sighted for handling of agrochemical containers on 16

th of December 2013. Liquid waste

from agrochemical was reused for the next spraying application.


NCR 2014-19

Audit Report





Sei Rumbiya Estate

1. Based on interview with warehouse operator it was informed that agrochemical containers were rinsed twice. Procedure EMS P14 mentioned that agrochemical containers were triple rinsed.

5.3.2 minor

Are there records of waste monitoring or analysis?

Balance sheet of hazardous waste

Mill and Estate The hazardous wastes balance sheet was made for each type of hazardous waste: waste oil, waste battery, used filters, agrochemical and chemical containers waste, used lamp and medical waste. Record was also provided for fertiliser sacks. Inconsistencies were found in Sei Rumbiya Estate. Minor Non-conformance:

Sei Rumbiya Estate

1. Quantity of utilisation of used fertiliser sacks has not been recorded.

2. Balance or logbook of agrochemical containers was not available in temporary storage of hazardous waste except for jerry can and drum.


NCR 2014-20

Guidance The waste management and disposal plan should include measures for:

Identifying and monitoring sources of waste and pollution.

Improving the efficiency of resource utilisation and recycling potential wastes as nutrients or converting them into value added products (e.g. through animal feeding programmes).

Appropriate disposal of hazardous chemicals and their containers. Surplus of chemicals container should be disposed of or cleaned in an environmentally and socially responsible way (e.g. returned to the vendor or cleaned using a triple rinse method), such that there is no risk of contamination of water sources or to human health. The disposal instruction on manufacture’s label should be adhered to.

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

5.4.1 minor

Are records of monitoring renewable energy use and its efficiency analysis? (energy/ton CPO, or energy/ton palm product)


Monitoring of renewable energy

Mill Fibre and shell were used as boiler feed. Volume of fibre and shell used for boiler feed is estimated monthly. Record sighted for 2012 and 2013. Total energy generated by steam turbine generator for Gunung Malayu Mill was recorded monthly and

Compliant

Audit Report




use evaluated yearly as total renewable energy use (ton fibre and shell) per ton CPO. Data of total renewable energy use 2012 and 2013:

YEAR CPO (Ton)

Renewable energy use (cangkang (ton)

Renewable energy use (ton cangkang/ton CPO)

2012 31,951.38 6,876.91 0.22

2013 30,381.22 6,938.07 0.23

YEAR CPO (Ton)

Renewable energy use (fibber (ton)

Renewable energy use (ton fiber/ton CPO)

2012 31,951.38 17,529.37 0.55

2013 30,381.22 16,399.08 0.54

Shell use was increased 4.34% and fibre use was decreased 1.85%.

5.4.2 minor

Are records of monitoring of fossil fuels use for operational reason and its efficiency analysis?


Monitoring of fossil fuels use

Mill and Estate Fossil fuel used for Mill and Estate activities were recorded. Fossil fuel was used for heavy equipment, diesel generator and FFB transportation.

In 2013 fossil fuel use in Mill was below the budget. And fossil fuel budget in 2014 is less than budget in 2013.

In 2013 fossil fuel use in Estate has been recorded however it has not been analysed its efficiency.

YEAR CPO (Ton) Fossil fuel use (L)

Fossil fuel use L/ton CPO


NCR 2014-21

Audit Report




2012 31,951.38 202,262.01 6.33

2013 30,381.22 176,605.46 5.81

Fossil fuel use was decreased 8.95%.



1. There was no evidence that efficiency analysis of fossil fuels use.

Guidance Growers and mills should assess the direct energy use of their operations, including fuel and electricity, and energy efficiency of their operations. This should include estimation of fuel use by contractors, including all transport and machinery operations. The feasibility of collecting and using biogas should be studied if possible.

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

5.5.1 major

Is there documented assessment where fire has been used for preparing land for replanting?

Standard Operating Procedure Oil Palm-Development Procedures, LONSUM, march 2008

Estate

The procedure of replanting mentioned that field assistant should do an inspection to ensure that the contractor does not do the burning for land preparation for replanting. Inspection report was evident.


Replanting 2012 and 2013 was performed in Division V. No fire used for preparing land for replanting. During field observation there is no evidence of fire use during land preparation on replanting area in Division V.

Sei Rumbiya Estate

Replanting 2012 and 2013 was performed in Division V. No fire used for preparing land for replanting.

Compliant

Audit Report




During field observation there is no evidence of fire uses during land preparation on replanting area in Division 7.

5.5.2 major

Are there records of implementation of zero burning policy?

Standard Operating Procedure Oil Palm-Development Procedures, LONSUM, march 2008

Estate

The organisation has policy of zero burning which is documented in procedure of land preparation – strategies and parameters no. OP 2.8 revises on March 2008 and replace on September 2006: “The use any fire with any reason is strictly prohibited, such as activities in land preparation of new developments areas and replanting”. Realisation of land preparation for replanting activities was well documented and reported including activities of chipping, ripping, cleaning ditch, making ditch and total area prepared.

Compliant

5.5.3 major

Are there procedure and records of emergency responses to land burning (tanggap darurat kebakaran lahan)?

Fire drill records

Emergency handling procedure (P-10)

Evacuation procedure (P-11)

Head assistance


OHS committee member

Several documented procedures related to emergency response to land burning such as: Emergency handling procedure (P-10) was available.

The procedure described the roles and responsibilities of each emergency response team include the mechanism how to conduct medical evacuation to near hospital, it was also available the emergency contact number of each internal emergency team and external related parties such as public fire station.

The composition of emergency response team was established consists of liaison team, evacuation team, health team, secure team and recovery team that all of the teams are coordinated by head assistance act as emergency team commander. Each of Estate divisions had each emergency structure.

Fire drill simulation was conducted at Sei Rumbia Estate dated August 2013 with scenario was happened fire incidents at Mill processing. This scenario was also conducted at Gunung Malayu Mill

Compliant

Audit Report




and Estate. The records of drill evaluation review were sighted.

5.5.1 minor

Are there presence of appropriate fire extinguishers and facilities, depending on the risks assessment?

Emergency equipment inspection and procedure



The infrastructure and equipment regarding to fire control and prevention were provided and properly functioned such as:

Estates are provided with: ambulance, fire extinguishers deployed at several risky locations such as offices, housings, Workshop & warehouse, also first aid boxes and bags that kept by each supervisors (mandor); also water mobile tanks (fire trailer) that supported with 1 unit “robin” pumps.

Mill are equipped with: fire extinguisher (with DCP and CO2 medium at electrical area), hydrant box with hydrant pumps and first aid boxes.

However hydrant pumps at Mill are not properly maintained based on local regulation, as this were described within the NCR report. (Refer NCR 2014-01)

Compliant

Guidance Fire should be used only where an assessment has demonstrated that it is the most effective and least environmentally damaging option for minimising the risk of severe pest and disease outbreaks, and with evidence that fire-use is carefully controlled. Use of fire on peat soils should be prohibited.

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

5.6.1 major

Is there evidence of identification of emission sources at mills?


Mill Identification of pollution and emission sources at Gunung Malayu Mill activities was evident. The source of pollution, type of pollution and its control was documented, e.g. stack of boiler, electricity generator and heavy equipment, methane from WWTP and fertiliser.

Compliant

5.6.2 major

Is there monitoring of emission quality of the sources identified?

Report of analysis for boiler emission, generator emission, ambient air, noise

Mill and Estate Monitoring of pollution and emission quality of sources identified has been programmed. Monitoring and measurement results for 1

st and 2

nd semester 2013

were sighted for boiler emission against Environment Ministry Decree #07/2007, diesel electricity generator

Compliant

Audit Report




against Environment Ministry Decree #Per13/Menlh/2009, vehicle and heavy equipment emission against Environment Ministry Decree #05/2006, odour emission against Environment Ministry Decree #50/Menlh/11/96, ambient noise against Environment Ministry Decree #48/Menlh/11/96, also ambient air quality against Government Regulation #41/1999.

5.6.1 minor

Are there records of efforts and strategies employed to reduce pollution and emissions?

Environmental improvement programs

Mill and Estate Efforts and strategies employed to reduce pollution and emissions were sighted, e.g.:

Substitute diesel fuel to fibre and shell to operate boiler.

Conduct preventive maintenance regularly based on working hour of electricity generator

Still operate turbine 1 – 2 hours after process.

Install dust collector to control boiler ash.

Grow Sansevieria (Lidah mertua) in housing and office.

Manuring application based on recommendation.

No wastes burning. Waste bins were provided in housing.

Compliant

5.6.2 minor

Are there records of identification, monitoring, and treatment methodology for POME?

Effluent Treatment – LA procedure – POM-SOP/12 –

Certificate of analysis of waste water quality

Permit of Land Application from Bupati Asahan #660.1/358/2010 on 12 Agustus 2010

Mill POME was processed in 4 ponds: acidification (pond A and B), anaerobic (pond C) and facultative (pond D). POME from pond D was applied in the Gunung Malayu Estate according to permit of land application from Bupati Asahan on 12

th of August 2010 and valid

through 5 years. POME was monitored by Gunung Malayu Mill laboratory for parameter pH and debit and external laboratory for parameter required by permit of land application (pH, BOD, COD, Cu, Pb, Cd, Zn, oil and grease). The result of POME monitoring was reviewed including measurement of BOD for period July – December 2013 and January – February 2014. The Ministry of Environment Decree #29/2003 and permit of land application required that BOD of POME

Compliant

Audit Report




Report of Land Application period July – December 2013

flowed to land application is less than 5,000 mg/litre. The result of POME quality during this period was under 5,000 mg/litre.

Monitoring well in area of LA, non-LA and community is conducted every 6 months. The result of monitoring well measurement was reviewed for period 1

st and 2

nd

semester 2013. Result mentioned that quality of monitoring well was inline with Per-416/Menkes/Per/IX/1990.

Report of land application is reported to Environmental Agency of Kabupaten Asahan. Receipt note was also sighted.

PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS



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

6.1.1

major

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

Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) of Sei Rumbiya 1993, #RC. 220/699/B/IV/94

Presentation of Environmental Evaluation-Penyajian

Estate & Mill Documentation of impact analyses covering negative and positive impact of social from Mill and Estate did not clearly describe scope of study as well as the impact of Mill and Estate activities. Record of participation of affected parties and local communities in Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) was not available. Major Non-conformance:

Though the organization has developed Presentation of Environmental Evaluation-


closed)

Audit Report




Evaluasi Lingkungan (PEL) of Gunung Malayu 1993, #RC. 220/699/B/IV/94

Environment management and monitoring plan document revision January 2009, #660/05/SET-KOMISI/I/2009

Social mapping of Sei Rumbiya on 7 – 8 October 2013

Social mapping of Gunung Malayu on 9 – 10 October 2013

Penyajian Evaluasi Lingkungan (PEL) Document, however it did not clearly describe scope of study as well as the impact of Mill and Estate activities.

In January 2009, Sei Rumbiya Estate has conducted revision against Environment management and monitoring plan document. It has been approved by Environmental Agency of Labuhanbatu Regency on 12

th of January 2009,

however it was only covered Sei Rumbiya Village.

Organization has also conducted social Mapping covering village around Estate (dated on 7

th – 8

th

of October 2013 in Sei Rumbiya covering Sosopan, Sisumut and Kota Pinang Village and 9

th

– 10th of October 2013 in Gunung Malayu covering

12 villages around Estate) however its result was only used to develop CSR program 2014.

Major Non-conformance NCR 2014-22 closed Based on objective finding during the audit, organization has performed social impact analyses. Social impact assessment result has been distributed to each estate.

Social impact analyses was conducted based on social mapping result in Sei Rumbiya and Gunung Malayu Estate on 7

th – 8

th of October 2013 and social

survey which was performed by Public relation officer and Community Development Officer in August 2014 covered villages around estate. Social survey was conducted involving village head around estate. Some aspects were considered during survey such as land identities, residence, economy, social cultural and public health.

Negative and positive impacts were identified during assessment. It was noted that negative and positive

Audit Report




issues from social assessment results for all estate and mill were similar. Negative impacts were identified such as: Transport of dusting originating from FFB (public health), social envy from inequitable donation for community estate (social cultural). Positive impacts were identified such as: Regional development and increased the village economy, ease of road access and job opportunities.

6.1.1 minor

Are there regular monitoring and management of social impact, with the participation of local communities?

Environment management and monitoring plan (RKL-RPL) Report of Sei Rumbiya and Gunung Malayu Estate

Mill and Estate Record of social impact monitoring with local community participation was not available. Though the report of environment management and monitoring plan implementation has been developed based on Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) however evidence of local community participation was not available. Minor Non-conformance:


1. Though the report of environment management and monitoring plan implementation have been developed based on Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) however evidence of local community participation was not available.


2014-23

6.1.2 minor

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

Initial Document of PEL of Sei Rumbiya Estate # RC.220/998/B/V/94 dated 15 May 1994

Document of RKL and RPL of Sei Rumbiya Estate #660/05/SET-

Mill and Estate Initial Environmental Impact Assessment documents (PEL) which were approved by Department of Agriculture of Republic of Indonesia on 15

th of May

1994 for Sei Rumbiya Estate were available. The document was revised and approved by Kepala Bapedalda Kabupaten Labuhan Batu (as Head of Distric AMDAL Committee) on 12th of January 2009.

For internal environmental and social aspect and evaluated its impact document, as required by the

Compliant

Audit Report




KOMISI/I/2009

Environmental and social aspect identification and evaluation procedure – EMS-P01

procedure, the information of environmental and social aspect and impact was reviewed and updated at least once a year. Last review and update of environmental and social aspect and impact register were performed in June 2013. There was several new environmental and social aspects identified, e.g. environmental aspect of replanting. Gunung Malayu Estate does not have SEIA/AMDAL but only PEL, therefore Major NCR 2014-22 was issued.

6.1.3 minor

Are there a regular and scheduled environmental management and monitoring report?

RKL-RPL report of Sei Rumbiya and Gunung Malayu Estate for January - June 2013 period.

Mill and Estate Though the documentation of impact analyses covering negative and positive impact of social was not available, organization has conducted monitored social issue based on SPO- 01 “Logbook of aspiration and complaint stakeholder”. There was reporting social impact management and monitoring implementation in RKL-RPL report for January - June 2013 period.

Compliant

6.1.4 minor

Are particular attention paid to the impacts of outgrower schemes (were the plantation includes such a scheme)

There was no out grower scheme in PT. PP London Sumatra Indonesia Tbk.

Not Applicable

Guidance The identification of social impacts can use AMDAL as a part of the process but it is the responsibility of the companies to provide sufficient objective evidence to the audit team that the full requirements of an SEIA are met for all aspects of plantation and mill operations, and captures all changes over time. Identification of social impacts should be carried out by the grower with the participation of the affected parties as appropriate to the situation. The involvement of independent experts should be sought where this is considered necessary to ensure that all impacts (both positive and negative) are identified. Potential social impacts may results from activities such as: building new roads, processing mills or other infrastructure; replanting with different crops or expansion of planting area; disposal of mill effluents; clearing of remaining natural vegetation; changes in employee numbers or employment terms. Plantation and mill management may have social impacts (positive or negative) on factors such as:

Access and use rights

Economic livelihoods (e.g. paid employment) and working conditions.

Subsistence activities.

Cultural and religious values.

Health and education facilities.

Other community values, resulting from changes such as improved transport/communication or arrival of substantial migrant labour force.

Audit Report




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

6.2.1

major

Is there documented procedure and records of communication and consultation with the communities?


SPO-01 “Logbook aspiration and complaint stakeholder”.

Meeting with stakeholder of Sei Rumbiya Estate on 26 Mei 2011 attended Village head around estate, Head of Kota Pinang District, Labour regency of South Labuhanbatu Regency, Legislature of South Labuhanbatu and reporter of Waspada

Meeting with stakeholder of Gunung Malayu Estate has been conducted on 17 September 2013 attended Village head and

Head of administration- KTU

Documented procedure for communication and consultation with public was established. Stage of communication and consultation with public was described in the procedure. However, there was no evidence of communication procedure (EMS-P05, Communication) arranged in collaboration with local communities and other affected or interested parties. Though the stakeholder meeting has been done however it did not discuss about procedure EMS-P05.

Related procedure described communication and consultation including aspiration and complaint methods. Communication and consultation can be done using verbal or letter. Result of communication and consultation was recorded in the ‘log logbook SPO-01”. Most of requests were road maintenance, donation, facilities support, invitation for memorial, invitation to follow the event held by the stakeholders, for example: invitation for memorial of religious holidays, etc.


Sei Rumbiya Estate

1. Meeting with stakeholder has been conducted on 26

th of Mei 2011 attended by Village Head around

Estate, Head of Kota Pinang District, Labour Regency of South Labuhanbatu Regency, Legislature of South Labuhanbatu and reporter of Waspada however it only discussed limited issues as follow:

a. HGU.


closed)

Audit Report




representative communities around estate

b. Environment management aspect, including:

PEL #RC.220/699/B/IV/94, RKL RPL

#RC.220/948/B/V/1994, and also environment

policy.

c. Social aspect including: CSR programme and

OHS policy.

d. Continuous Improvement Program: Audit internal, pesticide use, EFB application, identification and evaluation of environment impact.



th of September 2013 attended by Village Head

and representative communities around Estate however it only discussed limited against CSR management.

6.2.1 minor

Is a list of stakeholders maintained? List of stakeholder,

December 2013

Head of administration- KTU

Stakeholder list was made and mentioned interested party. Stakeholder list covered:

Government institution including; Head of Regency (Bupati), Forestry and Plantation local Department, Environmental local Agency, Labour, transmigration and social local Department, Camat, Village Head around Estate and Mill, Police of district.

Local Community including: Religion leader and community leader.

Local NGO and Contractor including: Local NGO (Pijar Keadilan), UD Sofyan, CV. Rimba Perkasa Abadi.

Stake holder list was made detaily, address and phone numbers were mentioned in the list. It was

Compliant

Audit Report




updated in September 2013. During audit email were also sent to National/International NGO to invite for comment to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. (Refer to Table 12. List of nasional/international NGO for consultation).

6.2.2 minor

Are there records of local communities’ aspiration and responses or follow up actions by companies to there requirements?


Interview with village head as well as religion and community leader around Gunung Malayu Estate on 27 March 2014

SPO-01 Logbook “aspiration and complaint stakeholder”

Mill and Estate Community aspirations were kept and recorded by the Head of Administration on logbook “stakeholder aspiration” e.g. road maintenance, donation, invitation for memorial, invitation to follow the event held by the stakeholders, etc. In general, group discussion and interview result indicated that the communication between local society and Estate/Mill was evident where some agreements were made to improve social relationship.

Compliant

6.2.3 minor

Is there a dedicated person responsible for consulting and communicating with local communities?

Procedure EMS-P05. Communication, date 10 August 2009.

Organization structure of Sei

Environment and CSR Department

Estate

Organization has appointed public relation officer of each estate that they have responsible to coordinate communication and consultation with stakeholder.

Environment and CSR Coordinator is responsible to coordinate communication and consultation corporate level issue.

Compliant

Audit Report




Rumbiya

Manager letter of Sei Rumbiya # 018A/GME/SE/1/2013

Guidance Decision that the growers or mills are planning to make should be made clear, so that local communities and other interested parties understand the purpose of the communication and/or consultation. Communication and consultation mechanism should be designated in collaboration with local communities and other affected or interested parties. These should consider the use of existing local mechanism and languages. Consideration should be given to the existence/formation of a multi-stakeholder forum. Communication should take into account differential access to information of women as compared to men, village leaders as compared to day labourers, new versus established community groups, and different ethnic groups.

Consideration should be given to involving third parties, such as disinterested community groups, NGSs, government (or a combination of these) to facilitate smallholder schemes and communities, and others as appropriate, in these communications.

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

6.3.1

major

Is there an open mechanism, which is accepted by affected parties, to receive complaints and resolve dispute in an effective, timely and appropriate manner?


Internal Memorandum of HR Director #028/HRD/CIR/IV/2011 on 1 April 2011

HR Policy on 25 May 2005 “Internal Complaint procedure”


Communication book

Meeting with

Estate and Mill (Head of administration- KTU)

Procedure for complaints and grievances was determined with different acces between ekternal stakeholder and internal stakeholder (woker and or union worker). Mechanism complaints and grievances from eksternal stakeholder was described in procedure EMS-P05, whereas complaint mechanism from internal was described in internal memo of HR Director and also HR Policy on 25

th of May 2005 “

Internal Complaint procedure”. Complaints and grievances can be done using verbal or letter. Complaint from external stakeholder was recorded on SPO 01 and recorded in communication book if any complaint from internal. During the audit, there was no evidence of communication procedure (EMS-P05, Communication) arranged in collaboration with local communities and other affected or interested parties. Though the stakeholder meeting has been done however it did not discuss about procedure EMS-P05.


closed)

Audit Report




stakeholder of Sei Rumbiya Estate on 26 Mei 2011 attended Village head around estate, Head of Kota Pinang District, Labour regency of South Labuhanbatu Regency, Legislature of South Labuhanbatu and reporter of Waspada

Meeting with stakeholder of Gunung Malayu Estate has been conducted on 17 September 2013 attended Village head and representative communities around estate.

Related procedure described communication and consultation including aspiration and complaint methods. Major Non-conformance:

Sei Rumbiya Estate


th of Mei 2011 attended by Village Head around

Estate, Head of Kota Pinang District, Labour Regency of South Labuhanbatu Regency, Legislature of South Labuhanbatu and reporter of Waspada however it only discussed limited issues as follow:

a. HGU.

b. Environment management aspect, including:

PEL #RC.220/699/B/IV/94, RKL RPL

#RC.220/948/B/V/1994, and also environment

policy.

c. Social aspect including: CSR programme and

OHS policy.



1. Meeting with stakeholder has been conducted on 17 September 2013 attended by Village Head and representative communities around Estate however it only discussed limited against CSR management.

6.3.1 Are there records of handling of the Procedure EMS- Estate and Mill Group discussion with village head around Sei Minor Non-

Audit Report




minor complaints? P05– Communication, 10 August 2009

Internal Memorandum of HR Director #028/HRD/CIR/IV/2011, on 1 April 2011

HR Policy on 25 May 2005 “Internal Complaint procedure


Communication book


Interview with village head as well as religion and community leader around Gunung Malayu Estate on 27 March 2014

Clarification process with Head Asisten of

(Head of administration- KTU)

Rumbiya Estate indicated there was no complaint and grievances from surrounding community. During interview with village head around Gunung Malayu Estate indicated that there was complaint on 19

th of

March 2014 from Rahuning I communities about damage of village road which has been used transport activities of Mill and Estate. Meeting with Head Rahuning I and representative community with organization has been done on 20

th of March 2014.

Meeting results are as follow: 1. Organization could be conducted repair against

damage road. 2. Organization was disposed to road watering three

times per day. 3. Repair damage drainage. 4. FFB transport could not transverse road village

Dusun III, IV, V, VI, VII at 06.00-08.00 am. 5. Transport of Mill and Estate could not transverse

road village from Simpang Es up to Simpang Empat.

Overall complaint from internal in Gunung Malayu Estate and Mill was related to infrastructure. It has documented and has been handled. However, receipt and handling of complaint from internal (worker) in Sei Rumbiya Estate was not recorded appropriately according to established procedure. Based on its procedure, complaint should be registered in the communication book. Logbook communication Division I only covered communication from field assistance to manager. Most of communications from field assistant are related with field work. Such as: filing a letter of warning for worker who absent. During interview with childcare worker Division I on

conformance 2014-25

closed

Audit Report




Sei Rumbiya Estate on 24 March 2014

25th

of March 2014, there was complaint about supporting facilities of childcare operational including; brooms, soap and mops. Worker inform that the complaint against provision supporting facilities of childcare has been delivered to assistance however it was not recorded and there was no respond, so that it was provided by herself. Clarification has been done on 25

th of March 2014 to field staff Division I and Head

of assistant. Its results are as follow: 6. Filed assistant information and childcare worker never

communicate about its complaint.

7. During audit, evidence of giving supporting facilities of childcare (brooms, soap and mops) was not shown.

Minor Non-confromance:

Sei Rumbiya Estate

1. Logbook communication Division I only covered communication from field assistant to manager. Most of communications are related with field work. Such as: filing a letter of warning for worker which absent.

2. During interview with child care worker Division I on 25

th of March 2014, there was complaint about

supporting facilities of childcare operational including; brooms, soap and mops. Worker informed that the complaint against provision supporting facilities of childcare has been delivered to assistant however it was not recorded and there was no respond, so these were provided by her. Clarification has been done on 25

th of March 2014 to field staff Division I and

Head of assistant. Its resultd are as follow:

Field assistant information and childcare

Audit Report




worker never communicate about this

complaint.

During audit, evidence of giving supporting facilities of childcare (brooms, soap and mops) was not shown.

6.3.2 minor

Are there procedures for identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available?


Procedure OP 2.2 Land acquisition and Compensation, December 2012.

Estate (Head of administration- KTU)

Organization has established procedure for identification and calculation of fair compensation for the loss of legal or customary right of the land.

Related procedure described identification and compensation mechanism and also completion of any land occupation.

Compliant

Guidance Dispute resolution mechanism should be established through open and consensual agreements with relevant affected parties. Complaints may be dealt with by mechanism such as Joint Consultative Committee (JCC).

Grievance may be internal (employees) or external.

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

6.4.1 major

Are there procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies?


Procedure OP 2.2 Land acquisition and Compensation, December 2012.

Estate

Legal Department HO

A mechanism to resolve conflict was described in the procedure for complaint handling including claim or conflict of land and in the procedure identification and compensation calculation to identify and determine calculation method to provide fair compensation due to loss of land and customary rights where identified. If any land complaint, estate manager could be coordinated with legal department. Observation will be done to verify land claim. If the stakeholder who complaint had the land ownership, so that negotiations could be done to identify and determine calculation with the involvement of local community representatives and relevant agencies. Litigation will be done if there was no agreement.

Compliant

Audit Report




6.4.1 minor

Are there records of identification of people entitled to receive compensation?



Interview with Head asisten of Sei Rum biya Estate and Estate Manager of Gunung Malayu

Legal entities of PT. Londom Sumatera No.# 93/1962

The organisation did not acquire any new land after 2005. It was noted that there was no ongoing progress of new land acquisition during group discussion and interviews with village head. There has been consession area before 1928. Concession area of PT. PP London Sumatra Indonesia Tbk. is a former concession of PT. Harrisons & Crossfield (H&C). In 1908, H&C established Harrison & Crossfiled Plantation Ltd. H&C bought Gunung Malayu Estate in 1926. At the 1928 H&C bought Tjong Ah Fie Plantation including Rambong Sialang, Egaharap, Bengambing, Tanjoeng Poteri, Bandar Teloe, Suka Radjin, Nagaga, Maligas, Bolok, Bah Lias, Bah Hilang and Mardjandi. Based on Legal entities of PT. London Sumatra No.# 93/1962 concession area including:

Asahan Rubber Estate Limited is a Gunung Melayu Estate.

The Bah Lias Rubber Estate Limited is a Bah Lias Estate

Central Sumatra Rubber Estate Limited is a Turangi, Bungara and Pulau Rambung Estate.

Namoe Tonga Rubber Estate Limited is a Turangi Estate

The Sialang Rubber Estate Limited is a Rambong Sialang Estate

The Soengei Rampah Rubber and Coconut Plantations Company Limited is a Rambong Sialang Estate

The Tandjung Rubber Company Limited is a Sungai Merah Estate

Not Applicable

6.4.2 minor

Are there records of negotiations processes and/or the details of

compensation settlements?

6.4.3 minor

Are there records of the implementation of compensation payment?

Audit Report




Toerangie (Sumatra) Rubber and Produce Estate Limited is a Turangi Estate

The United Langkat Plantation Company Limited is a Turangi, Bungara and Pulau Rambung Estae

The United Serdang (Sumatera) Rubber Plan Limited is Bagerpang, Sungai Merah and Dolok Estate.

Guidance This criterion should be considered in conjunction with Criterion 2.3. and the associated guidance.

Local communities have right to appoint their own representatives and this processes and results must be documented.

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

6.5.1 major

Is there documentation of employees’ pay rates?

Northern Sumatera Governor’s Decree Letter #188.44/711/KPTS/2012 - Minimum wages payment 2013 (1.357.000 IDR/month)

Letter of HR Director #008/HRD/C-SAL/III/2013, date on 13 March 2013 about Wage Increase MRP & DRP 2013 North Sumatra (1.416.000 IDR /month).

Northern Sumatera Governor’s Decree Letter #188.44/811/KPTS/

Estate and Mill (Head of administration- KTU)

Documentation of employees’ pay rates was made by the organization. In Sei Rumbiya and Gunung Malayu Estate, workers were classified into daily worker (BHL – Buruh Harian Lepas), and permanent worker (DRP & MRP). In Gunung Malayu Mill, all workers are permanent. Evidence that the workers have received wage according regulation could be shown. Wages payment refers to Letter of HR Director. It was more than pay rate of Northern Sumatera Governor’s Decree Letter. Based on interview with worker it was noted that there was no worker wage deduction. Payments for workers were determined according to daily attendance register and over time sheet. Daily attendance for workers was recorded and controlled manually by each Assistant.

Compliant

Audit Report




2013 - Minimum wages payment 2013 (1.505.850 IDR/month)

Letter of HR Director #001/HRD/C-SAL/III/2014, date on 3 March 2014 about Wage Increase MRP & DRP 2014 North Sumatra (1.728.000 IDR /month).

6.5.2 major

Are there a company working regulations and work contracts, in accordance with existing regulations?

PKB year 2012 Estate and Mill (Head of administration- KTU)

The company and workers have arranged mutual working agreements as described in PKB document (created in 2012) which is expected to be updated every 2 years, its time limit is 2012-2014). PKB has been approved by Social security and industrial relation Director of Transmigration and Labour Ministry, Decree XII/2012. Rights and obligation between two parties seems to be implemented accordingly. Some items were regulated in the PKB (2012 version, such as working hours, wage, over time, sickness, leave, maternity leave, work accident, etc. Worker also receives rice that was distributed twice a month. This was mentioned in the “Joint Working Agreement” (PKB) 2012 between employees and the organisation.

Compliant

6.5.1 minor

Do growers and millers provide adequate housing, water supplies, medical, educational, and other facilities for employees where such facilities are not available or accessible?

Building statement of Sei Rumbiya and Gunung Malayu Estate January 2014.

Estate and Mill Public facilities were provided by the organisation and covered residential facilities, day care, kindergarten, building for prayers, sports facility (e.g. volley ball, badminton, futsal, and tennis), Moslem education place, Church, etc. Housing for workers and medical facilities (clinics) were provided by the organisation

Compliant (Minor Non-conformance NCR 2014-26

closed)

Audit Report




Interview with sprayer and its foreman of Sei Rumbiya Estate on 25 March 2014

with basic facilities. Clean water was distributed from artesian well and surface water, however water quality testing result which distributed to worker housing of Sei Rumbiya Estate (Housing of Division I, Division 2, Division 3, Division 4, Division 5 and mill housing) was not available in according with Decision of Health Ministry No.416/MEN.KES/PER/IX/1990. Interview with sprayer and its foreman of Sei Rumbiya Estate on 25

th

of March 2014 was informed that the water quality caused rusted to the cooking utensils. In Gunung Malayu Estate, Water quality testing of Division 2 and Division 3 housing was not done. Last testing of water quality housing area of Sei Piring and Emplasment was conducted on 23

rd of October 2012.


Sei Rumbiya Estate

1. Evidence of water quality testing result which distributed to worker housing was not available (Housing of Division I, Division 2, Division 3, Division 4, Division 5 and mill housing).

2. Interview with sprayer and the foreman on 25th of

March 2014 was informed that the water quality caused rusted to the cookware.


1. Water quality testing of Division 2 and Division 3 housing was not done.

2. Last testing of water quality housing area of Sei

Audit Report




Piring and Emplasment was conducted on 23rd

of October 2012.

6.5.2 minor

Are agreements entered into with contractors to specify that contractors abide by labour laws?

Working agreement #BB/SPK/07/VII/2013.

HO Local contractors were used by organization for several activities. Working agreement with contractor Gunung Malayu Mill and Estate has been required contractors abide to labour laws, however it was found working agreement between Sei Rumbiya Estate with third party (contractor) does not require contractors abide to labour laws. For example: Working agreement between organization with PT.Asean Raya to executed FFB transpot was not required PT.Asean Raya abide to labour laws. For example: Working agreement No. BB/SPK/07/VII/2013. Minor Non-conformance:

Sei Rumbiya Estate

1. Agreement with contractor of FFB transporter did not require that contractors comply with labour laws. For example: agreement with PT.Asean Raya, contract number 004/OAD/Cont-Trf/SRE/11/2014.


Guidance Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy should state the non-discriminatory practices; no contract substitution; post arrival orientation program to focus especially on language, safety, labour laws, cultural practice, etc; decent living condition to be provided. Migrant workers are legalised, and a separate employment should be drawn up to meet immigration requirements for foreign workers, and international standards. Deductions do not jeopardies a decent living wage.

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

6.6.1

major

Is there documented company policy recognising freedom of association?

Internal memorandum of HR Director #006/HRD/CIR/2004, date on

Mill and Estate A published statement in local languages recognizing freedom of association was stated in the Internal memorandum of HR Director #006/HRD/CIR/2004, date on 07/01/2004. Memorandum stated that the organisation respect to comply with regulation pertinent to freedom of association. Also PKB stated

Compliant

Audit Report




07/01/2004 that freedom of association can be conducted by the worker through Labour Union. “Indonesian Worker Union” (Serikat Pekerja Seluruh Indonesia (SPSI) was established for Mill and Estate. Worker representative was available and they conducted a communication with the Labour Union at Head Office Medan. There was SPSI in Gunung Malayu. It has been approved by SPSI Asahan Regency, Decree No SK.311/ORG/PC FSP.PP-AS/II/2013. At the Sei Rumbiya was also SPSI. It has been approved by SPSI Labuhanbatu, Decree No SK 18/ORG/PC FSP.PP-LBR/II/2014.

6.6.1 minor

Area there documented minutes of meeting with any labour union (if any)?

Decision letter of Worker Union Asahan Regency #SK.311/ORG/PC FSP.PP-AS/II/2013).

Decision letter of Worker Union Labuhanbatu #SK 18/ORG/PC FSP.PP-LBR/II/2014).

Minutes of meeting date 10 December 2013 - employee wage agreement for 2014.

Minutes of meeting date 17 July 2013 –

Mill and Estate There are SPSI (Serikat Pekerja Seluruh Indonesia- Indonesian Worker Union) for Mill and Estate. Each estate and mill has PUK (Pengurus Unit Kerja- Caretaker unit). Worker representative was elected independently among workers. Worker Union of Gunung Malayu has been registered in Indonesian Worker Union Asahan Regency. Worker union of Sei Rumbiya has also been registered in Indonesian Worker Union Labuhanbatu As found during group discussion with PUK of each estate, conditional meeting was also held to discuss any issues as necessary and recorded in minutes of meeting. Several issues discussed at meetings were not limited to labour issues, for example: Gunung Malayu Mil and Estate

Meeting between organization with worker union on 10

th of December 2013, it discussed

employee wage agreement for 2014.

Compliant

Audit Report




Replacement holiday of Eid

Sei Rumbiya Estate

Meeting between organization with worker union on 17

th of July 2013, it discussed

replacement holiday of Eid

Guidance The right of employees and contractors to form associations and bargain collectively with their employer should be respected, in accordance with Convention 87 and 98 of the International Labour Organisation. Labour laws and union agreements or in their absence, direct contracts of employment detailing payments and other condition are available in the languages that understood by the workers or explained carefully to them by a management official.

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

6.7.1

major

Is there documented company policy on worker age requirements, in accordance with national laws?

Internal Memorandum of HR Director No #006/HRD/CIR/2004, on 07 January 2004,

PKB 2012

Mill and Estate Organisation has policy for minimum age for worker and mentioned in the Internal memorandum of HR Director and PKB 2012. Minimum age of worker is 18 years old. This was in accordance with Indonesian Law 13/2003. List of worker and related documents were verified and there was no worker under 18 years old. According to observation result and interview with representative worker Mill and Estate, there was no worker under 18 years old.

Compliant

6.7.1 minor

Are there records of implementation of company policy on worker age requirements?


Interview with with village head as well as religion and community leader around Gunung

Mill and Estate Job opportunities were communicated and given to surrounding villagers at first priority where no discrimination found observed during group discussion with Village head around estate. Based on related records, there was no worker under 18 years old. All workers were treated equally in accordance with company regulation including rights of worker as well.

Interview with village head, head of worker union and worker cooperative as well as interview with representative worker were informed that 18 years old is a one of recruitment requirement for new worker.

Compliant

Audit Report




Malayu Estate on 27 March 2014.

Interview with Head of worker union and worker cooperative, representative worker of Sei Rumbiya Estate (Sprayer, Foreman of sprayer, Harvester and Nurse) on 24-25 March 2014.

Interview and group discussion with Worker representative of Gunung Malayu Estate (sprayer of Division IV, harvester of Division II, care worker, Christian leader and Nurse), Head of mill laboratory, worker of weight bridge and Mechanical, Head of worker union and worker cooperative on 27-28 March 2014

List of worker period February and March 2014

Audit Report




Guidance Growers and millers should clearly define minimum working age, together with working hours under national regulations.

Smallholders and family farm should allow work by children only if permitted by national regulations.

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

6.8.1

major

Is there documented equal opportunities policy?

Business conduct instruction- Petunjuk Perilaku Binis, Chapter 3.3.2.2, date on 20 January 2006

Mill and Estate Policy for against discrimination was determined by the organisation. “Business conduct instruction- Petunjuk Perilaku Bisnis, Chapter 3.3.2.2” also mentioned ban of discrimination for all workers in the organization.

Compliant

6.8.1 minor

Is there evidence of equal treatment in working opportunities for workers?

Interview with Head of worker union and worker cooperative, representative worker of Sei Rumbiya (Sprayer, Foreman of sprayer, Harvester and Nurse) on 24-25 March 2014.

Interview and group discussion with Worker representative of Gunung Malayu(sprayer of Division IV, harvester of Division II, care worker, Christian leader and Nurse), Head of mill laboratory, worker of weight bridge and

Mill and Estate Worker list mentioned that all workers came from different back grounds (race, religion, gender, etc). Ethnic diversity (of worker and also during interview with workers, no discrimination was identified based on religion, ethnic, gender. During group discussion with religion leader, worker representative and with head of worker union was informed no evidence of discrimination found during the audit.

Compliant

Audit Report




Mechanical, Head of worker union and worker cooperative on 27-28 March 2014.

Interview with with village head as well as religion and community leader around Gunung Malayu on 27 March 2014.

List of worker period February and March 2014

Guidance The grievance procedures detailed in 6.3 apply. Positive discrimination to provide employment and benefits to specific communities is acceptable as part of negotiated agreements.

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

6.9.1 Is there a documented company policy on sexual harassment and violence?

Business conduct instruction- Petunjuk Perilaku Binis, Chapter 3.3.2.2, date on 20 January 2006

Mill and Estate

Policy for sexual harassment and violence and to protect women reproduction rights was determined in the Business conduct instruction- Petunjuk Perilaku Bisnis, Chapter 3.3.2.2, date on 20

th of January 2006

“Prohibition of sexual harassment, intimidation and employee protection”.

Compliant

6.9.2

major

Is there a documented company policy on the protection of reproductive rights?

6.9.1 minor

Is there proof of implementation of sexual harassment policy?

Interview with Head of worker union and worker cooperative, representative worker of Sei Rumbiya Estate (Sprayer, Foreman of sprayer, Harvester and

Mill and Estate

Communication to workers pertinent to prevent sexual harassment and protect women reproduction was conducted by the organisation and nurse or doctor.

As a commitment organization to the protection of reproduction rights, menstruation leave has been given for women workers. Organization conducted trainings on women’s rights, dissemination about women to be allowed to breastfeed up to nine months

Compliant

6.9.2 minor

Is there proof of implementation of reproductive rights policy?

Audit Report




Nurse) on 24-25 March 2014.

Interview and group discussion with Worker representative of Gunung Malayu Estate (sprayer of Division IV, harvester of Division II, care worker, Christian leader and Nurse), Head of mill laboratory, worker of weight bridge and Mechanical, Head of worker union and worker cooperative on 27-28 March 2014.

Attendance list of communication about prevent sexual harassment and protected women reproduction on 25 March 2013.

before resuming chemical spraying or usage tasks, and women to be given specific break times to enable effective breastfeeding.

Interview and group discussion with worker representative, head of worker union and worker cooperative was informed there was no sexual harassment case in estate and mill. It observed worker understand of sexual harassment policy and grievance mechanism.

6.9.3 minor

Is specific grievance mechanism is available?

Internal Memorandum of HR Director on 1 April 2011 #028/HRD/CIR/IV/2011

Mill and Estate Complaint handling procedure for sexual harassment was determined in internal memorandum of HR Director. All complaints can be issued verbal and or written and informed to all administrators, direct superiors and Mill/Estate Managers. Sexual harassment case will be handled by bipartite as required by Indonesian Laws – UU 13/2003. Based on

Compliant (Minor Non- conformance NCR 2014-28

closed)

Audit Report




Interview with Head of worker union and worker cooperative, representative worker of Sei Rumbiya Estate (Sprayer, Foreman of sprayer, Harvester and Nurse) on 24-25 March 2014.

Interview and group discussion with Worker representative of Gunung Malayu Estate (sprayer of Division IV, harvester of Division II, care worker, Christian leader and Nurse), Head of mill laboratory, worker of weight bridge and Mechanical, Head of worker union and worker cooperative on 27-28 March 2014.

UU 13/2003 sexual harassment is serious violation case. Bipartite is a communication and consultation forum to handle industrial relationship case including sexual harassment between organization and worker union as well as representative worker. Grievance mechanism was only available in Gunung Malayu. During audit Specific grievance mechanism of sexual harassment and violence was not available in Sei Rumbiya. Based on workers interview and group discussion with union worker and women workers representative, it was concluded that there was no sexual harassment and violence within the organization. Minor Non-conformance:

Sei Rumbiya Estate

1. Specific grievance mechanism of sexual harassment and violence was not available. For example: formation of gender committees.

Guidance There should be a clear policy developed in consultation with employees, contractors, and other relevant stakeholders, and the policy should be publicly available. Progress in implementing the policy should be regularly monitored, and the results of monitoring activities should be recorded.

A gender committee specifically to address areas of concern to women may be requested to comply with the criteria. This committee, to have representatives from all areas of work, will consider matters such as; trainings on women’s rights, counselling for women affected by violence, child care facilities to be provided by the growers and millers, women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage tasks, and women to be given specific break times to enable effective breastfeeding.

Audit Report




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

6.10.1 major

Are current and past prices paid for FFB publicly available?

Not applicable Not applicable Not applicable since the FFB supplied from internal estate / same company (group).

Not applicable

6.10.2 major

Are pricing mechanism for FFB and inputs/services documented (where these are under control of the mill or plantation)

Not applicable Not applicable Not applicable since the FFB supplied from internal estate / same company (group).

Not applicable

6.10.1 minor

Is the evidence available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent?

Contract Documents

Head assistance Each contractor/vendor who worked within the London Sumatra premises shall be agreed as written in the contracts that initiate by the procurement of London Sumatra. Samples are taken for local contractor of replanting CV RImba Perkasa based on Contract agreement No. 011/INP/Loi/2014 stated that the scope of works, fees, personnel requirements, roles and responsibilities, payments and penalties, timeframe and ended with signature of both parties as approval symbols.

Compliant

6.10.2 minor

Are agreed payment made in timely manner?

Contract Documents

Bills

Receipts

Tax invoices

Minutes of completion of the work

Head assistance As defined within the contract payment applications including bills, receipts, tax invoices and minutes of completion of the work. Samples were taken for records of contract payments applications to local contractors replanting, CV RIMBA PERKASA, letter number: 027/OAD/Cont-LC/GME/VII/2013. There were completeness of bills, receipts, tax invoices and the minutes of work completion. Payment note indicated that the payment was conducted in accordance with contract agreement.

Compliant

Guidance Transaction with smallholders should consider issues such as the role of middle men, transport and storage of FFB, quality and grading. The need to recycle the nutrient in FFB (under 4.2) should be also considered; where it is not practicable to recycle wastes to smallholders, compensation for the value of the nutrients exported might be made via the FFB price. Smallholders must have access to the grievance procedure under criterion 6.3, if they consider that they are not receiving a fair price for FFB, whether or not middle men are involved. The need for a fair and transparent pricing mechanism is particularly important for out growers, who are contractually obliged to sell all FFB to a particular mill.

If mills require smallholders to change practices to meet the RSPO criteria, consideration must be given to the costs of such changes, and the possibility of advance payment for FFB could be considered.

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

Audit Report




6.11.1 minor

Are there records of company contributions to the local developments?

CSR Program 2013 and 2014

SPO 01- Aspiration stakeholder

Minutes, receipt note and several photo of assistance.

CSR report 2013

Social mapping of Sei Rumbiya Estate on 7 – 8 October 2013

Social mapping of Gunung Malayu Estate on 9 – 10 October 2013

Estate and Mill Mapping social in Sei Rumbiya and Gunung Malayu Estate was provided by the organization and it was deployed in to CSR program. There were several sectors of CSR Program for 2014 including:

Education: assist teaching honorarium of several schools around Estate, scholarship and Smart Home-Rumah Pintar (Rumpin) as a media for training.

Religion: house of worship maintenance around Estate.

Health: services of maternal health and toddlers in cooperation with health local department.

Sport: Maintain and purchase sport infrastructure, such as: sport equipment, assist donation for sports tournaments.

Community empowerment through Smart Home-Rumah Pintar (Rumpin) including handy craft from oil palm stick.

Smart Home-Rumah Pintar (Rumpin) is a program SIKIP which is used for community around estate including for worker and family worker. It has been obtain since April 2013. The main program in Rumpin among others:

Reading center: drawing, reading independently,

Audio visual: singing, local dance, music (piano)

Computer: Training of windows, paint and Ms. Office.

Craft Center: Handy craft from oil palm stick (lidi).

Besides the CSR program, Social contribution was implemented based on stakeholder aspiration. Records of organization contribution to regional

Compliant

Audit Report




development were evident, among either: agreement contract, and social assistance list. Some of organization’s social contribution such as: Gunung Malayu Estate and Mill

Heavy equipment assistance to construct drainage in Aek Nagaga Village on 7

th of May

2013 and Gunung Malayu Vilalge on 5th of June

2013.

Assistance material for mosque building on 4th of

April 2013 in Gunung Malayu Village

Services of maternal health and toddlers around estate on 17

th of September 2013.

Handy craft training from oil palm stick (lidi) for community around estate on 24

th – 28

th of

February 2014. Sei Rumbiya Estate

Assistance for teacher honorarium of SBN 112241SDN 115502, SDN 116886 and SDN 118176.

Assist seed of Hevea to Plantation local Department of South Labuhanbatu Regency.

Assist material for mosque building of At Taqwa, Kota Pinang Vilalge on 27

th of July 2013

Assistance for flood disaster management Kota Pinang District on 8

th of January 2014.

Guidance Contributions to local development should be based on the results of consultation with local communities. See also criterion 6.2. Such consultation should be based on the principles of transparency, openness and participation, and should encourage communities to identify their own priorities and needs, including the different needs of men and women.

Where candidates for employment are of equal merit, preference should always be given to members of local communities. Positive discrimination should be recognised as conflicting with criterion 6.8

Audit Report


PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS Planting year within November 2005 and November 2007 was replanting therefore Principles 7 is not applicable

PRINCIPLES 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY



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

8.1.1

major

Is there a monitoring action plan based on the social environmental impact assessment (AMDAL), and regular evaluations of plantation and mill operations? As a minimum these must include, but not necessarily be limited to:

Reduction in use of certain chemicals (criterion 4.6)

Environmental impacts (criterion 5.6)

Waste reduction (criterion 5.3)

Pollution and emissions (criterion 5.6)

Social impacts (6.1)

Environmental improvement program

SMK3 and OHSAS 18001 Audit Report

Corrective/ preventive action



Evidence of several improvements was shown, e.g. Reduction in use of certain chemicals:

No reduction in use of paraquat (refer to NCR 2014-09.

Dissemination of safe chemical use.

Environmental impacts:

Pesticide warehouse was completed with cleaning room, MSDS, label, sign, secondary containment, PPE and first aid box.

Bulk tank, genset and workshop are completed with oil trap, secondary containment, spill kit and signboard.

Segregation between organic and non-organic waste.

Waste reduction and pollution emission:

Grow Sansiviera.

Provide PPE and first aid box in hazardous waste storage.

Change material cause GHG with environmental friendly material.

Application organic waste as compost and

Compliant

Audit Report




landfilling of non organic waste.

Social impacts:

Though the negative and positive impacts of social from estate and mill were not clearly described, organization has arranged CRS program for 2014 period and has been implemented CSR program for 2013. The goals of CSR program are minimizing negative impact and increasing positive impact.

The Mill and Estate is certified to OHSAS 18001:2007 and SMK3 continually set management objective and target. Regular internal and external audits were held to evaluate the adequacy and effectiveness of the management system.

8.1.1 minor

Are there records of follow-up actions taken against RSPO audit findings, if any?

Internal audit result

Corrective and preventive action request

Mill and Estate RSPO internal audit has been conducted on 5th of

March 2014 in Sei Rumbiya Estate and 6th of

March 2014 in Gunung Malayu Mill and Estate combined with ISPO internal audit. Internal audit report was reviewed. There were several non-conformances. Completion date of corrective action is defined on 30

th of April 2014. Verification

result has not been available since completion date of corrective action has not been done. All major and minor nonconformances issed from previous RSPO audit have been corrected.

Compliant

Guidance Growers should have a system to improve practices in line with new information and techniques and a mechanism for disseminating this information throughout the workforce.

Audit Report


3.3.2 Mill Supply Chain Requirements

The FFB source is two (2) organisation owned by PT. PP London Sumatra Indonesia Tbk. and no FFB from the third party. Therefore the Model selected is Segregation and RSPO Supply Chain Module D was used as audit criteria. The detail of FFB processed in Gunung Malayu Mill is described in Table 7, Table 8 and Table 9 presented in this report.

3.3.2.1 Supply Chain Certification Standard

Supply Chain Certification Standard

AUDIT FINDINGS / OBJECTIVE EVIDENCE STATUS (NC/AoC/

Compliant)

Supply chain actors who take legal ownership and physically handle RSPO Certified Sustainable oil palm products before and up to the (final) refinery need to register their transaction in the RSPO IT System upon the moment of physical shipment.

Note: at present, it is not yet possible to enter palm kernel product transaction into the RSPO IT System. Therefore, until further notice, the reporting of trades into a central database will not be required. Trade will be monitored by RSPO accredited certification bodies as part of supply chain certification audits that also cover the palm kernel product supply chain.

Actor who must register include:

Palm oil mills producing RSPO certified palm oil and palm kernel oil

Refineries (the final refinery that does not further delivery to other refineries directly or indirectly via traders – only needs to confirm the receipt of shipments; it does not need to do sales announcements)

Previously Mill was certified under RSPO scheme with Supply Chain

Model: Segregation by PT. TUV NORD Indonesia (Certificate # TNI –

RSPO 001.2008, expiry date 29th of April 2014). Based on sales

document indicated that certified CPO and PK were sold under

RSPO scheme in 2013. The quantity that already sold under RSPO

scheme were 31,203.99 MT (certified CPO) and 7,850.53 MT

(certified palm kernel). However the transaction was not registered in

eTrace due base on information from organisation,CSPO and CSPK

was sold under Green Palm. Non conformance report was issued in

this area.

Compliant

(Major Non

conformance NCR

2014-30 closed)

D.1 Documented procedures

Audit Report




Compliant)

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

There is documented procedure available on site to ensure the implementation of RSPO SCC requirements.

SCCS/PR-SG/01 – Supply Chain System RSPO CSPO dated 5 May 2013. The procedure was established to ensure that the production of sustainable CPO and PK produced by the Mill and shipped out can be traced to the suppliers of raw material, and also to ensure the palm oil production process can be described and also described mechanism to monitor the supply chain of certified CPO and PK production are sustainable, from receipt of raw materials to the delivery of mill products and to ensure the record of number of "sustainable" CPO and PK production generated by POM and shipped out from the mill were "balance" in each 3-months period

Compliant

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

The procedures are up to date covering all the elements of RSPO SCC requirement, including purchasing and goods in, recording and mass balancing, and sales goods out. The implementation was appropriate with existing procedure.

Compliant

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

Currently, personnel who having overall responsibility are Factory Manager. They were having awareness and knowledge for the implementation of RSPO SCC standard since they have already trained on 15

th of August 2013.

Compliant

D.1.2. The facility shall have documented procedures for receiving and processing certified and uncertified FFBs.

There is documented procedure for receiving and processing certified FFB, including the grading up to CPO and Kernel dispatch are described within the procedure:

SCCS/PR-SG/01 – Supply Chain System RSPO CSPO

Weigh Bridge Procedure (POM-WI/01)

Compliant

Audit Report




Compliant)

Loading ramp & FFB Shortage Procedure (POM-WI/02)

IK Sterilization station Procedure (POM-WI/03)

Threshing Procedure (POM-WI/04)

Pressing Procedure (POM-WI/05)

Clarification Procedure (POM-WI/06)

Kernel Recovery Procedure (POM-WI/08)

Dispatch COP and Kernel Procedure (POM-WI/17)

There was no uncertified FFB received. The facility only process certified FFB.

D.2 Purchasing and goods in

D.2.1. The facility shall verify and document the volumes of certified and non-certified FFBs received.

Gunung Malayu Mill has a clear system for recording FFB received from certifiable supply base. The mill only received certified FFB. It was verified that receiving of FFB was traceable to the supply base unit. Weighing slip and receiving report issued clearly stated weight of FFB received and its source. There is one weighbridge – Avery Type E1205 Serial Number 061540141 with maximum capacity was 40,000 kgs. Weighbridge has been calibrated in November 2013 based on calibration letter #510.3/655/MT.RP/13-TU. A review to the current records (March 2014) found that they were well maintained and retrievable.

Compliant

D.2.2. The facility shall inform SAI Global immediately if there is a projected overproduction.

No overproduction identified in 2013. The organisation aware that if there was a projected overproduction, they would inform SAI Global. Compliant

D.3 Record keeping

D.3.1. The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all of these requirements.

A review to the records and related documentation of the implementation of the SCC was found accurate, complete and up to date, records and report have been maintained by Gunung Malayu Mill e.g. FFB receiving records; CPO and PK production daily records; monthly recapitulated record of FFB received, and CPO and

Compliant

Audit Report




Compliant)

PK produced.

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

The records and reports are easily accessible both in hard copy and soft copy. Retention time for these records and reports has been determined (5 years).

Compliant

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

Balance among all FFB, CPO and PK receipts, produced and delivered was conducted in daily basis and recapitulation was done in three months interval. The records (January – December 2013) were well maintained.

Compliant

D.3.3. The following trade names should be used and specified in relvant documents, e.g. purchase and sales contracts, e.g. *product name/S or Segregated. The supply chain model used should be clearly indicated.

Supply chain model “RSPO SG” was clearly stated in “Delivery Note”. Statement “CPO Certified RSPO” and “Kernel Certified RSPO” was also clearly stated in “Delivery Note”.

Compliant

D.4 Sales and good out

D.4.1. The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information:

a) the name and address of the buyer

b) the date on which the invoice was issued

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

d) the quantity of the products delivered

e) reference to related transport documentation

It was observed that document related to sales invoices provided information regarding:

The name and address of the buyer

The date on which the invoice was issued

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

The quantity of the delivery product

Reference to related transport documentation

Compliant

D.5 Processing

D.5.1. The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures

The facility only received certified FFB. Base on internal memorandum from President Director #086-Mdn/ECSR/V/2013 on 15

th of May 2013, supply chain model is Segregated since CPO

produced only from certified FFB.

Compliant

Audit Report




Compliant)

ensure that contamination is avoided. The objective is for 100% segregated material to be reached. The system should guarantee the minimum standard of 95% segregated physical material, up to 5% contamination is allowed. Note: the background of guaranteeing the minimum standard of 95% segregated physical material is due to physical intermixing of two product flows (certified and conventional oil) in processing, which is technically unavoidable.

D.5.2. The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material.

Base on internal memorandum from President Director #086-Mdn/ECSR/V/2013 on 15

th of May 2013, supply chain model is

Segregated since CPO produced only from certified FFB from own Estate. The facility did not receive uncertified FFB.

Compliant

D.5.3. In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that:

The crush operator conforms to these requirements for segregation

The crush is covered through a signed and enforceable agreement.

Not applicable

Not applicable

D.6 Training

D.6.1. The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems

Training for all personnel regarding implementation of RSPO SCC standard has been provided. Training was conducted on 15

th of

August 2013 by intern training from Lonsum and Indo Agri Group.

Compliant

D.7 Claims

D.7.1 The facility shall only make claims regarding the use of It was observed that claim regarding the use of or support of RSPO Compliant

Audit Report




Compliant)

or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

certified CPO and PK was not inline as required by RSPO Rules for Communications and Claims. The transaction was not registered in eTrace

(Major Non conformance NCR 2014-30 closed)

Audit Report


3.3.2.2 Supply Chain Certification System

Supply Chain Certification System STATUS (YES/NO)

Have the client made aware that until they receive written confirmation of their RSPO Supply Chain certification registration and its expiry date that they are not certified and cannot make any claims concerning registration?

Yes

Have the client made aware what actions they may have to complete before certification can proceed? Yes

Have the client made aware of the findings of the audit team including any deficiencies which may result in a negative certification decisions or which may require further actions to be completed before a certification decision can be taken?

Yes

Have the client made aware that when there is a projected overproduction, SAI Global shall decide whether an interim visit is required? Yes

Have detail records been compiled of the closing meeting including:

a list of the participants in the meeting

records of certified FFB received on monthly basis

records of CSPO and certified PK produced

records of CSPO and certified PK sold (under GreenPalm and UTZ system) to each buyer

Yes

Have the client made aware that the findings of the audit team are tentative pending review and decision making by the duly designated representatives of the certification body?

Yes

Audit Report


3.4 Recommendation

The recommendation from this audit is approval as a producer of the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and the RSPO Supply Chain Certification Standard, Module D – CPO Mill: Module D Segregation November 2011 when corrective action is taken and verified.

Audit recommendations are always subject to ratification by RSPO.

This report was prepared by: Ria Gloria, Dirgantara Bayu, Edy Widodo and Anwarsyah Harahap 3.5 Environmental and social risk for this scope of certification for planning of the

surveillance audit Gunung Malayu Mill and Estate

Environmental risk: compliance with regulations, hazardous waste management, RKL RPL reporting

Social risk: compliance with regulations

OHS: prevention of hazard and risk, compliance with regulations 3.6 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment

Findings Please sign below to acknowledge receipt of the assessment visit described in this report and confirm the acceptance of the assessment report contents including assessment findings. Signed for and on behalf of PT. PP. London Sumatra Indonesia Tbk. Muhammad Waras Head of Environment and CSR Date Signed for and on behalf of PT. SAI Global Indonesia Ms. Inge Triwulandari Technical Manager Date

Doc ID: 3843 / Issue Date May, 2014 © SAI Global Limited Copyright 2008 - ABN 67 050 611 642 of 194

Appendix A – Audit Plan

Date Auditor Audit meetings plus functions/ processes/ areas/ *shifts

audited: Times*

From - To

24.03.2014 Day 1

Sei Rumbiya Estate

All auditors Opening meeting 08.00

Ria

Document review and site visit Criterion: 2.1 all indicators Criterion: 4.4 indicators minor 1, 2, 3 Criterion: 4.6 indicator major 4 Criteria: 5.3, 5.4, 5.6 all indicators Criterion: 8.1 all indicators

08.30 – 17.00

Tara

Document review Criterion: 2.1 all indicators Criteria: 4.6 indicator minor 2 Criteria: 4.7 and 4.8 all indicators Criterion: 5.5 indicator indicator major 3 and minor 1 Criterion: 6.10 all indicator Criterion: 8.1 all indicators

08.30 – 17.00

Edy

Document review Criteria: 2.2 indicator major 1, 2 Criteria: 3.1 all indicators Criteria: 4.1 indicator major 1 and minor 1, 2 Criteria: 4.2, 4.3, 4.5 all indicators Criteria: 4.6 indicator major 1, 2, 3 and minor 1 Criteria: 5.5 indicator major 1, 2 Criteria: 7.3 all indicators Criteria: 8.1 all indicators

08.30 – 17.00

Anwar

Document review Criteria: 1.1, 1.2 all indicators Criteria: 2.1 all indicators Criteria: 2.2 indicator major 3, and minor 1, 2 Criteria: 2.3 all indicators Criteria: 4.4 indicator major 1 Criteria: 4.6 indicator minor 3 Criteria: 5.2 all indicators Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 all indicators Criteria: 8.1 all indicators

08.30 – 17.00

25.03.2014 Day 2

Sei Rumbiya Estate

Ria


08.00 – 15.00

Tara

Document review Criterion: 2.1 all indicators Criteria: 4.6 indicator minor 2 Criteria: 4.7 and 4.8 all indicators Criterion: 5.5 indicator indicator major 3 and minor 1 Criterion: 6.10 all indicator Criterion: 8.1 all indicators

08.00 – 15.00

Edy Site visit Criteria: 2.2 indicator major 1, 2

08.00 – 15.00

Audit Report

QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15 © SAI Global Indonesia Copyright 2009 of 194


audited: Times*

From - To

Criteria: 4.1 indicator major 1 and minor 1, 2 Criteria: 4.2, 4.3, 4.5 all indicators Criteria: 4.6 indicator major 1, 2, 3 and minor 1 Criteria: 5.5 indicator major 1, 2 Criteria: 7.3 all indicators

Anwar Interview with Kepala Desa, Local NGO and Serikat Pekerja

08.00 – 12.00

Clarification regarding issues found during public consultation

13.00 – 15.00

All auditors Discussion 15.00

All auditors Closing meeting 16.00

26.03.2014 Day 3

All auditors Travelling Sei Rumbiya Estate – Gunung Malayu Estate

08.00 – 12.00


All auditors Opening meeting 13.30

Anwar

Document review Criteria: 1.1, 1.2 all indicators Criteria: 2.1 all indicators Criteria: 2.2 indicator major 3, and minor 1, 2 Criteria: 2.3 all indicators Criteria: 4.4 indicator major 1 Criteria: 4.6 indicator minor 3 Criteria: 5.2 all indicators Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 all indicators Criteria: 8.1 all indicators

14.00 – 17.00

Edy

Document review Criteria: 2.2 indicator major 1, 2 Criteria: 4.1 indicator major 1 and minor 1, 2 Criteria: 4.2, 4.3, 4.5 all indicators Criteria: 4.6 indicator major 1, 2, 3 and minor 1 Criteria: 5.5 indicator major 1, 2 Criteria: 7.3 all indicators Criteria: 8.1 all indicators

14.00 – 17.00

Gunung Malayu Mill

Ria SCC 14.00 – 17.00

Tara

Document review Criterion: 2.1 all indicators Criterion: 4.1 indicator major 2, minor 1, 2 Criteria: 4.6 indicator minor 2 Criteria: 4.7 and 4.8 all indicators Criterion: 6.10 all indicator Criterion: 5.5 indicator indicator major 3 and minor 1 Criterion: 8.1 all indicators

14.00 – 17.00

27.03.2014 Day 4

Gunung Malayu Mill

Ria Document review and site visit Criteria: 2.2 indicator major 1, 2

08.00 – 17.00

Audit Report



audited: Times*

From - To

Criteria: 4.1 indicator major 1 and minor 1, 2 Criteria: 4.2, 4.3, 4.5 all indicators Criteria: 4.6 indicator major 1, 2, 3 and minor 1 Criteria: 5.5 indicator major 1, 2 Criteria: 7.3 all indicators Criteria: 8.1 all indicators


Tara

Document review and site visit Criterion: 2.1 all indicators Criteria: 4.6 indicator minor 2 Criteria: 4.7 and 4.8 all indicators Criterion: 5.5 indicator indicator major 3 and minor 1 Criterion: 8.1 all indicators

08.00 – 17.00

Edy


08.00 – 17.00

Anwar

Interview with Kepala Desa, Tokoh Agama and Serikat Pekerja

08.00 – 12.00

Clarification regarding issues found during public consultation

13.00 – 17.00

28.03.2014 Day 5


Ria


08.00 – 15.00

Edy


08.00 – 15.00


Anwar

Document review and site visit Criteria: 1.1, 1.2 all indicators Criteria: 2.1 all indicators Criteria: 2.2 indicator major 3, and minor 1, 2 Criteria: 2.3 all indicators Criteria: 4.4 indicator major 1 Criteria: 4.6 indicator minor 3 Criteria: 5.2 all indicators Criteria: 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 all indicators Criteria: 8.1 all indicators

08.00 – 15.00

Audit Report



audited: Times*

From - To

Gunung Malayu Mill

Tara

Document review and site visit Criterion: 2.1 all indicators Criteria: 4.6 indicator minor 2 Criteria: 4.7 and 4.8 all indicators Criterion: 5.5 indicator indicator major 3 and minor 1 Criterion: 8.1 all indicators

08.00 – 15.00

All auditors Discussion 15.00

All auditors Closing meeting 16.00


Appendix B – Previous Nonconformities and Opportunity for Improvement Summary

RSPO Principe and Criteria, Indonesian National Interpretation Based on corrective and preventive action below, all non-conformances have been corrected. There were recurrences of the major and minor non-conformance during the audit in 4.6.3 major, 6.1.1 minor and 6.5.2 minor. Major Non-conformance

No RSPO Indicator

Details Correction Root Cause Corrective Action Status Verification during

certification audit

5th

surveillance audit

1 2.1 indicator major 1

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

Provide register of permit for year 2013.

Lack of understanding and monitoring of permit.

Provide form of permit monitoring Disseminate regarding sustainability

Closed Closed


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

Disseminate regarding restricted pesticide management and handling according with regulation.

Lack of understanding regarding significance of restricted pesticed.

Disseminate regarding restricted pesticide management Assign certified spraying operator group

Closed Recurrence NCR 2014-08


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

Complete documentation of training program and realisation year 2013 and 2014

Dedicated personnil to handle environment and OHS administration in Estate/Mill has not been assigned.

Assign dedicated personnil/environment clerk to handle environment and OHS document in Estate/Mill

Closed Closed


No RSPO Indicator


certification audit

5th

surveillance audit

4 4.6 indicator minor 2

During audit it was found that there were no records of medical check-up which conducted in February 2013 for daily workers exposed to hazardous

Complete MCU for high risk employee, e.g. Mr. Sumarjan Sinaga, Karsan, Amru Faisal.

Result of MCU has not been issued therefore it has not been documented by Estate

Result of MCU which has been issued was sent to Estate

Closed Closed

AUDIT REPORT


No RSPO Indicator


certification audit

chemicals in the Division II e.g: Mr. Sumarjan Sinaga, Karsan, Amru Faisal.


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

Register daily worker to Jamsostek

Healt of daily worker has been assured by the organisation. When working accident happened, the organisation give responsibility and aid.

Include Jamsostek for all daily worker in the contract of work.

Closed Closed


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

Conduct training program regarding OHS especially for P2K3 team member

Several training program has been scheduled but has not been executed.

Issue circular letter to all Estate and Mill Manager that all P2K3 member required OHS training program

Closed Closed


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

Monitor social program/CSR. Assign dedicated personnel handling report of social program in each Estate and around Estate

Monitoring has not been fully conducted due limited personnel in unit who handling reporting social program/CSR

Develop “Rumah Pintar” as development center for social activity/CSR for each Estate Region

Assign 2 tutor for “Rumah Pintar”to manage and report all activity in “Rumah Pintar”

Include monitoring of social program in the job description of CDO

Closed Reccurence NCR 2014-23


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

Make statement letter mentioning that paramedic will not action without written permit from doctor. Record all medicine given to patient.

Permit has been given verbally by docter. Lack of understanding from paramedic regarding recording of medicine use.

Approve from management and company doctor for patient handling.

Disseminate to all paramedic regarding patient handling and authority of paramedic in each Estate

Closed Closed


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

Make aggrement with contractor regarding compliance with UU 13/2003 – Labour

Lack of understanding from PIC in coorperation with Engineering Department, OAD Department and Procurement Department

Disseminate dan give awareness to Engineering Department, OAD Department and Procurement Department regarding requirement of all contractor to comply

Closed Reccurence NCR 2014-27

AUDIT REPORT


No RSPO Indicator


certification audit

with labour regulation

Include statement of comply with labour regulation in the contractual agreement with contractor.

AUDIT REPORT


Appendix C – Nonconformities and Opportunity for Improvement Summary RSPO Principle and Criteria, Indonesian National Interpretation

Section 1 Section 2 Section 3 Section 4 Section 5

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n Details of non-conforming situation: SAI Verification

(how and when) Organisation’s Response/Action

Taken: SAI Global Response Review:

SAI Global Verification of Corrective Action for

Effectiveness:

SAI Global NCR Closure:

Name Date

2014-01

RSPO Criterion

2.1 indicator major 1

Major Non-conforming situation:

There was no evidence of compliance with relevant legal requirements.

Requirement:

RSPO Criterion 2.1 indicator major 1

SOP-OP5.13-Management of Riparian Strips, March 2008

Due Date:

23rd of July 2014

SAI Follow up Method: On site audit

Root cause : (how / why did it happen)

Sei Rumbiya Estate

1. Hazard symbol in medical waste bins in clinic still used hazard symbol from obsolete regulation.

Response Acceptable (please see

section 4 for details)

Reviewer:

Ria Gloria and Anwarsyah Harahap

Date: 17th of

September 2014

Sei Rumbiya Estate

1. Medical waste bins in clinic have been completed with hazard symbol against Per.MenLH 14/2013 on 21 Agustus 2014.

Ria Gloria and

Anwarsyah Harahap

17.09.2014

QEF08EL Non Conformance Report

Organisation Name: PT. PP London Sumatra Indonesia Tbk. Gunung Malayu Mill

Location: Asahan

Date: 29th

of March 2014 Audit team leader: Ria Gloria Activity/Report ID: WI-640828 License/Certificate No.: FMS40016

Organisation’s acknowledgement of receipt of NCR Employee Name: Sulkifli Darman, Suryanto, FX Martyas Budianto

Date NCR Accepted: 29

th of March

2014

AUDIT REPORT



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Effectiveness:


Name Date

Objective evidence:

Sei Rumbiya Estate


2. It was observed several first aid bags/boxes that deployed in several areas and Supervisors (mandor) were not completed and some only contain antiseptic and plaster. It was also noted that one supervisor was not provided with first aid bag.The first aid kits contents and deployment are not compliance to local regulation Permen 15/2008.

3. Overtime letter showing preparedness of worker to conduct overtime was not available in according to Transmigration and Labour Ministry Decision of Indonesian No. KEP.102/MEN/VI/2004 about over time and pay of overtime.

4. From the last MCU result summary dated February 2013 was found several employees had discrepancies from the result of audiometry and Spiro metric. While there is no further diagnose to follow up and investigate whether it is occupational disease or not. No follow up/investigation regarding MCU result (audiometry, spirometer). As it is defined within the regulation of Permenaker No.2 / 1980 Junction to Permenaker No.1/1981.

2. First aid kit has been

distributed only to Mandor of harvest and on Divisi office; however its control was not done.

3. Overtime permit previously was verbally done by Manager/KTU.

4. Coordination with company doctor has not been done as Sei Rumbiya Estate has chaged those workers to other activity.

5. Organization has been done training to fire brigade however it has not appropriated with related regulation. (Kepmenaker No 186/1999).

6. There was a lack of proper interpretation of Permen PU No.63/1993 when arrangement of procedure.


1. Hazard symbol in medical waste bins in clinic still used hazard symbol from obsolete regulation.

2. Organization has done ckecking first aid kit which is owned by Mandor. Completeness of the contents of First aid kit has appropriated in related regulation. First aid was also distributed and communicated to all Mandors on 5

th of June 2014.

Routinely contents monitoring of first aid kit has been done and it has recorded on Form Coantents of First Kit Mandor.

3. Organization has established special form for overtime permit letter. Overtime can be performed appropriate with overtime permite letter. It has been implemented, such as: overtime permit letter for office staff on 21

st of May

2014.

AUDIT REPORT



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Name Date


6. Determination of riparian zone in the related procedure was noncompliance with President Decision No.32/1990 about environmental management. In the related procedure was described that:






2. It was found noncompliance between working agreement of daily worker with Indonesian Laws No. 13/2003 about Employment, among others:

There was temporary worker contract/agreement of upkeep (pruning, wedding, manuring, spraying, and other upkeep activities). It was represented by group leader however there was no evidence that every worker has approved with contract.

2. Less thorough in the preparation of the contract so that the article about the period of validity of the contract has not already specified.

3. Peak crop condition reguires to increase harvester to normalize the crop rotation.

4. There was a lack of proper interpretation of Permen PU No.63/1993 when arrangement of procedure.

5. There was misinterpretation that is only monitoring of heavy equipment testing which was conducted to accredited laboratory.

Gunung Malayu Mill

1. Electrician has been trained; however there was misinterpretation from mill that the electrician must receive OSH of electric training.

2. Lack of interpretation against OHS regulation

4. Based on MCU result, organization has identified there are four workers have decreased of their heaths. Follow up and advanced treatment for worker has been done on Colombia Hospital. Worker was diagnosed through Tuba Cuter Duplek due to upper respiratory tract infections not due to occupational disease. Those workers are able to work against must use PPE. Currently those workers have been changed to other work.

5. Fire brigade training has been done collaborate with fire brigade department of Medan on 27

th of June 2014 covered

fire brigade team of Sei Rumbiya and Gunung Malayu.

6. Organization has reviewed related procedure. Organization has established new version of procedure (EMS-P16 HCV Management and Monitoring) on 14

th of

April 2014. Riparian zone established appropriated with related law and regulation. Related procedure has been distributed to all estates.

AUDIT REPORT



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Effectiveness:


Name Date

Contract expiry was not clearly described. Example: Group employee contract No.100/GME/Cont-PKHL/XII/2013, on 17/12/2013.

3. It was found noncompliance work agreement of temporary worker against Transmigration and Labour Ministry Decision of Indonesian No. KEP.102/MEN/VI/2004 about over time and pay of overtime, among others:

One of harvester Division II has been working more than 20 days since December 2013 up to February 2014. Based on temporary worker data base per 28

th of March 2014, this employee

has been worked since 1st of June

2012. However, employee status was still temporary worker.

It was observed that the continuously main job (harvester) was conducted by temporary worker. Example: Harvester Division II on 28

th of March 2014 in

Block 93112005.

4. Determination of riparian zone in the related procedure was noncompliance with President Decision No.32/1990 about environmental management. In the related procedure was described regarding:


1. Lack of interpretation against OHS regulation.

2. Lack of interpretation against OHS regulation.

Correction : (immediate fix)

Sei Rumbiya Estate

1. Complete hazard symbol in medical waste bins in clinic.

2. Distribute first aid kits to all Mandors.

3. Overtime can be done if there was any overtime permit letter and approved by both partiers (worker and organization).

4. Coordinate with company doctor and perform follow up action appropriate in suggestion of doctor.

5. Conduct fire brigade training as reguied related regulation.

6. Update SOP.


1. Complete hazard symbol in medical waste bins in clinic.

2. Complete the work agreement for daily temporary worker.

3. Organization will care authirization of compressor to Labor Department.


1. Medical waste bins in clinic have been completed with hazard symbol against Per.MenLH 14/2013 on 21

st

of Agustus 2014.

2. All of daily temporary worker have had work agreement; however it was documented in Region Office. Currently, all work agreemenst have been distributed to each estate, such as: Work agreement upkeep No. 100/GME/Cont-PKHL/XII/2013, valid until December 2014.

Work agreement has been revised become agreement No. 104/GME/Cont-PKHL/VI/2014, valid until December 2014. HRD Policy described that all contracts will be analized and updated per January 2015.

3. Organization has identified daily temporay worker of harvester and has proposed as permanent worker. There are 27 harvesters who have been proposed to be permanent worker. Harvester of Division II (Agus Sucipto) is one of harvester who has been established as a permanent worker (Letter of HR Director No. 043/HRD/GME/VII/2014

AUDIT REPORT



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Effectiveness:


Name Date




5. It was observed that the usage of pressurized air compressor capacity 9 bars workshop that is not provided with approval certifications from the local Ministry of Manpower as required regulation of Permenaker No.1/1982.

Gunung Malayu Mill

1. There is no certificate of electrical safety technician for technician personnel as required regulation of Kep Dirjen BW No 311/BW/2002.

2. The fire hydrant pumps were not provided with pressure gauge and also there is no evident of periodical maintenance records as required regulation of Ins Dirjen Naker No. BW/11/ 1997 Regarding fire safety prevention attachment paragraph IV.i.

4. Revise the work agreement with validity period of agreement.

1. Promote the harvester tobe permanent worker.

5. Update SOP.

Gunung Malayu Mill

1. Conduct OHS electric training.

2. Seting up pressure gage on hydrant.


1. Conduct firebrigade training collaborate ith Labour Department.

2. Organization will care authirization of excavator to Labor Department.

4. Organization has reviewed related procedure. Organization has established new version of procedure (EMS-P16 HCV Management and Monitoring) on 14

th of

April 2014. Riparian zone established appropriated with related law and regulation. Related procedure has been distributed to all estates.

5. Compressor Shark in workshop has approved by Labour Department of Asahan o n 20

th of June 2014

(Decisionletter No. 2558/BT/IV-DTK/2014.

Gunung Malayu Mill

1. OHS electric training has been done collaborated with PT. Geotekhnik Indonesia on 1

st of September 2014.

(Letter No. G.040/GT-SK/IX/2014).

2. Organization has been constructed pressure gauge in hydrant machine on 5

th of

May 2014. Pressure test has been also doncucted when constructed the machine. Test result was indicated the hydran was still function properly.

AUDIT REPORT



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Effectiveness:


Name Date



2. It was observed several lifting heavy equipment was utilized such as wheel loader and excavator. All of the equipment was not provided with approval certifications from the local Ministry of Manpower as required regulation of Permenaker No.5 1985.

Corrective Action : (action to prevent recurrence)

Sei Rumbiya Estate

1. Update related regulation for OHS and environment.

2. Increase and establish annual budget for medicine.

3. HRD ill to be perform routinely monitoring against agreement of worker.

4. HSE coordinator will be coordinated with OSH expert of each estate and mill about result of MCU.

5. Organization will perform routinely fire brigade training.

6. Dissemination to PIC of Sustainability.



2. Distribute the format standard of agreement of daily temporary worker to all estates.

3. Propose the new harvester to be permanet worker to HRD.

4. Dissemination to PIC of Sustainability.



1. Fire brigade team has been trained by fire brigade department of Medan on 27

th

of June 2014. There was 34 fire brigade personel who have been trained in Sei Rumbiya and Gunung Malayu.

2. Labour deparment of Kisaran has approved usage permit of excavator and loader on April 2014 (Loader- permit No. 2835/IV-DTK/2014 and Excavator- permit No. 2822/IV-DTK/2014.

PIC of sustainability has been assigned, e.g. Sei Rumbiya Estate - Hasandi Ginting (Field Assistant), Gunung Malayu Estate - Marzuki (Field Assistant), and Gunung Malayu Mill - Michael Ben Philips (Shift Coordinator).

NCR 2014-01 closed

AUDIT REPORT



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Gunung Malayu Mill

1 and 2. Establish the PIC of Sustainability for Mill.


1 and 2. Establish the PIC of Sustainability for Mill and each estate.

AUDIT REPORT



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Name Date

2014-02

RSPO Criterion



There was no evidence of effort made to comply with change in the regulations

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Several regulations have not been updated, registered and evaluated for its compliance, e.g. Permentan 98/Permentan/OT.140/9/2013, Per.MenLH 14/2013, RKL RPL Nomor: 660/05/SET-KOMISI/I/2009, Permenaker No. 13/2011 regarding chemical and physical factor threshold limit value, Permenaker No. 2/1980 regarding employee medical check up, Permenaker No. 1/1981 regarding occupational disease reporting, Permenaker No. 3/1982 regarding occupational health, Permenaker No. 25/2008 regarding occupational disease diagnose.

Due Date:

23rd of July 2014



Sei Rumbiya Estate, Gunung Malayu Mill and Estate

1. Update against related regulation has been done through website, information during meeting with other organisation and dissemination however there were also regulations which were rarely communicated by the government.



1. Update and revise related regulation for OSH and environment.



1. Identify new regulation.

2. More active in environment and sustainability forum.

3. Add personnel in Sustainability Department.

4. Routinely updating related regulation.

Response Acceptable (please see section 4 for details)

Reviewer:

Ria Gloria and Anwarsyah Harahap

Date: 17th of

September 2014

Sei Rumbiya Estate, Gunung Malayu Estate, Gunung Malayu Mill

1. Updating against regulation has been done on 5

th of

August 2014. Related regulation has been listed on Form-04-01. Renewed regulation regarding: Permenaker No. 13/2011 -NAB faktor kimia dan fisika, Permenaker No. 2/1980 - Pemeriksaan kesehatan, Permenaker No. 1/1981 - pelaporan PAK, Permenaker No. 3/1982 - Pelayanan Kesehatan Kerja, Permenaker No. 25/2008 - Diagnose PAK

2. List of environmental regulation has covered Permentan 98/ Permentan/OT.140/9/2013, Per.MenLH 14/2013, Permenperind No 23/M-IND/PER/4/2013, RKL RPL Nomor: 660/05/SET-KOMISI/I/2009. Compliance with these regulations has been evaluated by Environmental Staff from Medan Office in August 2014.

3. List of regulation is updated when there are new regulations or once a year.

Ria Gloria and

Anwarsyah Harahap

17.09.2014

AUDIT REPORT



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Name Date


1. Several regulations have not been updated, registered and evaluated for its compliance, e.g. Permentan 98/Permentan/OT.140/9/2013, Per.MenLH 14/2013, Permenperind No 23/M-IND/PER/4/2013, Permenaker No. 13/2011 regarding chemical and physical factor threshold limit value, Permenaker No. 2/1980 regarding employee medical check up, Permenaker No. 1/1981 regarding occupational disease reporting, Permenaker No. 3/1982 regarding occupational health, Permenaker No. 25/2008 regarding occupational disease diagnose.

NCR 2014-02 closed

AUDIT REPORT



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Name Date

2014-03

RSPO Criterion



There was no evidence that identification and maintenance of legal pegs of BPN (eg: painting, no. peg and peg coordinate numbers) was determined.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Peg BPN in Division 1 and Division 7 blocks 8611702 have not been maintained in accordance with the peg number HGU map (the observation of the field).

.

Due Date:

23rd of July 2014



Sei Rumbiya Estate

1. Dedicate personnel to monitor legal peg condition which have not been assigned due to previous dedicated personnel who have moved to the other division.


1. Monitor legal pegs of BPN.


1. Assign PIC of Sustainability.

2. Develop map of legal peg of land use title to make easier during monitoring.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Legal pegs have been maintained and number of legal pegs has been according to map of land use title.

2. PIC of sustainability has been assigned, e.g. Sei Rumbiya Estate - Hasandi Ginting (Field Assistant), Gunung Malayu Estate - Marzuki (Field Assistant), and Gunung Malayu Mill - Michael Ben Philips (Shift Coordinator).

3. Map of legal peg of HGU has been developed by BLRS to give information regarding map of block and number of legal ped.

4. Result of legal peg checking is checked regularly. Result of legal peg checking has been provided and it was noted that all legal pegs were found and in good contition.

5. Based on SOP OP2.1 – The HGU preparation survey and mapping, checking of legal pegs is conducted once a year.

NCR 2014-03 closed

Ria Gloria 17.09.2014

AUDIT REPORT



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2014-04

RSPO Criterion



During audit, there was found pesticide was applied in riparian zone.

Requirement:


SOP-OP.13 -Management of Riparian Strips.

Objective evidence:

Sei Rumbiya Estate

1. Field observation on Riparian zone Divisi I, Block 04111012 observed pesticide application up to riverside. Record of dissemination of riparian protection to worker in appropriate with related procedure was not available. During interview with sprayer and spraying foreman on 25

th of March

2014, it was confirmed that dissemination of riparian protection has not been done.

Due Date:

23rd of July 2014



Sei Rumbiya Estate

1. Boundary of riparian zone for chemical application was not done.


Sei Rumbiya Estate

1. Construct the riparian zone boundaries.

2. Communicate to worker about boundary of riparian zone for chemical application.


Sei Rumbiya Estate

1. Appoint the Sustainability PIC.

2. Conduct sustainability training to Sustainability PIC.

3. Arrange scocialization about riparian management and monitoring as a part of corrective program for environment.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Organization has constructed the riparian zone boundaries and was completed on 5

th of

May 2014.

2. Socialization about riparian zone protected program to sprayer has been done on 2

nd

of July 2014.

3. Organization has also conducted sustainability training including riparian management to PIC Sustainability of each estate on 15

th – 16

th of April 2014. It

was done to increase awareness and skill of PIC each estate.

NCR 2014-04 closed

Anwarsyah Harahap

17.09.2014

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2014-05

RSPO Criterion

4.5 indicator minor 1

Minor Non-conforming situation:

There was no evidence that the whole team (incl. the worker) have been trained regarding IPM.

Requirement:

RSPO Criterion 4.5 indicator minor 1

Objective evidence:

Sei Rumbiya Estate

1. There was no evidence that IPM training has been conducted.


1. IPM training was only attended by 1 group leader (mandor) and Coordinator of Pest and Diseases. There are 6 Divisions in Gunung Malayu Estate.

Due Date:

Next surveillance




1. IPM training was conducted only to mandor with asumsion mandor will deliver the training material to IPM employees.



1. Conduct IPM training to IPM employees.



1. Conduct regular IPM training especially when personnel changes therefore the personnel understand their working.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

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Name Date

2014-06

RSPO Criterion



Toxicity calculation has not been done on the use of agrochemicals.

Requirement:


Objective evidence:


1. Record of calculation and monitoring of toxicity of pesticide unit use could not be shown.

.

Due Date:

Next surveillance




1. Previously, the organisation analysed pesticide residue in piece of FFB and CPO.



1. Conduct calculation of toxicity pesticide unit.



1. Assign PIC of Sustainability.

2. Record the toxicity of pesticide unit for each pesiticide use.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

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Name Date

2014-07

RSPO Criterion



There was no evidence that only registered and permitted agrochemical used.

.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. There was no evidence that only registered and permitted agrochemical used, e.g. SMART 486 SL..


1. Copy of valid permit has not been provided for several expired permits of agrochemical, e.g. Garlon 480 EC (6 October 2013) dan SMART 486 AS (7

th

of August 2013).

Due Date:

23rd of July 2014




1. Agrochemical used was base on BLRS (Bah Lias Research Station) recommendation.

2. Mistaken in SAP system. Agrochemical used was Smart SL not SMART 486 AS.



1. Register agrochemical use dan complete the permit of agrochemical use.

2. Improve SAP entry system.



1. Distribute list of agrochemical registered and permitted to all Estates and related department including Core SAP.


Reviewer:

Ria Gloria

Date:

17th of

September 2014


1. List of agrochemical recommended including their permit has been made by BLRS and has been sent to all Estates by email on 30

th of

December 2013.

2. Copy of valid permit of agrochemicals has been provided, e.g. SMART 486 SL and Garlon 480 EC.

3. SMART 486 SL has been included in SAP system.

NCR 2014-07 closed


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Name Date

2014-08

RSPO Criterion



Not all spraying operators have obtained training regarding agrochemical use.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Training regarding agrochemical use was only attended by group leader (mandor)


1. Training regarding agrochemical use was only attended by several spraying operators, group leader and Coordinator of Pest & Diseases

Due Date:

23rd of July 2014




1. Limitation of training participants from BLRS (Bah Lias Reseach Station).



1. Conduct training of restricted pesticide.



1. Conduct training of restricted pesticide by considering the suitability of spraying operator in each Estate.

Response Acceptable (please see

section 4 for details)

Reviewer:

Ria Gloria

Date:

17th of

September 2014


1. Training of restricted pesticide was conducted on 8

th of July

2014 by Topzone and Komisi Pestisida. Location of training was in Bahlias Estate.

2. Participants from Sei Rumbiya Estate were 10 personnel

3. Participants from Gunung Malayu Estate were 14 personnel.

4. Periodic training is conducted by Assistant when there were no spraying operator changes. Training of restricted pesticide is conducted by pesticide supplier and Komisi Pesticide based on input from Estate when there are new spraying operators and applied to BLRS and HRD.

NCR 2014-08 closed


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Name Date

2014-09

RSPO Criterion



There was no documented evidence that paraquat use was reduced or eliminated.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. There was no budget of paraquat in 2013 but the realisation was 213.82 liters. Budget of paraquat use in 2014 is795.95 liters.


1. Budget of paraquat in 2012 was 115 litters and the realisation was 1,781 litters. No budget of paraquat in 2013 but realisation was 2.9 litters. Budget of paraquat in 2014 is 1,357 litters.

Due Date:

Next surveillance




1. Population of pakis was increased.



1. Explain and justify paraquat use.



1. Try alternative safer agrochemical.


Reviewer:

Ria Gloria

Date: 17th of

September 2014

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Name Date

2014-10

RSPO Criterion



Records shown that no work with pesticides for pregnant and breastfeeding women were not available.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Based on worker database per February 2014 there were 36 women work with pesticide. However, record shown that no work with pesticides for pregnant and breastfeeding women were no available. Moreover, interview with woman sprayer Division I on 25

th of

March 2014 shown that the pregnant analyses for women worker which work with pesticide was not done.

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Pregnant test for sprayer conducted appropriate with instruction of estate management.


Sei Rumbiya Estate

1. Conduct pregnant test routinely to women worker which work use pesticide.


Sei Rumbiya Estate

1. Establish PIC Sustainability to monitor pregnant test periodicaly.

2. Conduct awareness training about implementation of palm oil sustainable management.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

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Name Date

2014-11

RSPO Criterion



It was still found the employee who did not use PPE while working activities as it was violate to company OHS policy and regulation.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. It was observed on “up-keep” activity regarding manual trenching at Div-7 estate of Sei Rumbia that the personnel worked there did not use safety shoes as their Personal Protective Equipment (PPE).

.

Due Date:

23rd of July 2014



Sei Rumbiya Estate

1. PPE has been previously distributed to worker however there was lacked of worker care against PPE.


Sei Rumbiya Estate

1. Redistribute PPE to worker


Sei Rumbiya Estate

1. Conduct socialization of PPE to worker.

2. Monitor the PPE usage


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Organization has redistributed and communicated PPE to worker of up keep on 14

th of July

2014. It has been documented on minutes and photo.

2. Daily monitoring has been done to ensure up kepp worker use their PPE. It was recorded on list of worker PPE’s.

NCR 2014-11 closed

Anwarsyah Harahap

17.09.2014

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Name Date

2014-12

RSPO Criterion



It was noted that not all activities of estates’ routine activities conducted risk assessment and risk control.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. The records of hazard identification and risk assessment (Revision January-2014) did not coverage activities of upkeep (e.g. pruning, manual drainage trenches, etc).


1. The records of hazard identification and risk assessment (Revision January-2014) did not coverage activities of Replanting.

Due Date:

Next surveillance




1. Risk assessment was conducted for main activities (office, harvest and workshop).



1. Conduct risk assessment for upkepp and replanting activities.



1. Conduct socialization about OHS to PIC of sustainability


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate 1. Risk assessment for upkeep

and pruning has been established and approved by Head P2K3 on 5

th of June

2014. Risk assessment has been communicated to PIC of Sustainability and was recorded in attendance list.

Gunung Malayu Estate 1. Risk assessment for

replanting has been established and approved by Head P2K3 on 29

th of March

2014. Risk assessment has been communicated to PIC of Sustainability and was recored in attendance list.

NCR 2014-12 closed

Anwarsyah Harahap

17.09.2014

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Name Date

2014-13

RSPO Criterion



No evidence record of regular report on environmental management in accordance with relevant regulations

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. There was no evidence that report of RKL RPL 1

st semester 2013 was sent

to related government institution.


semester 2013 was only sent to BLH Kabupaten Labuhan Batu Selatan. There was no evidence that report of RKL RPL 2

nd

semester 2013 was sent to Ministry of Environment and BLH Propinsi Sumatera Utara


1. There was no evidence that report of RKL RPL 1

st semester 2013 was sent

to related government institution.

Due Date:

23rd of July 2014




1. Report has been sent and receipt note was kept in Medan HO.

2. Reporting was conducted by Medan HO except for local BLH.



1. Show receipt note of reporting.



1. Assign PIC of Sustainability as person in charge in environmental and OHS and has reponsibitity by coordinating with Environmental CSR/ Sustainability Department.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Report of RKL RPL 1st

semester 2013 has been sent to to BLH Kabupaten Asahan, Ministry of Environment and BLH Propinsi Sumatera Utara. Receipt note was evident.


semester 2013 has been sent to to Ministry of Environment and BLH Propinsi Sumatera Utara. Receipt note was evident.


1. Report of RKL RPL 1st

semester 2013 has been sent to to BLH Kabupaten Asahan, Ministry of Environment and BLH Propinsi Sumatera Utara. Receipt note was evident.


NCR 2014-13 closed


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Effectiveness:


Name Date

2014-14

RSPO Criterion



Records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat were not available.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Record of HCV assessment result was not available.


1. In August 2008, Organization has conducted reground checking HCV area internally by Senior Conservation Staff. Report of reground checking HCV was only contained map of HCV potential. It did not describe HCV identification analyses.

Due Date:

23rd of July 2014




1. Identification of HCV has not completed yet. Identification of HCV result shown only map of potencial HCV area.



1. Conduct HCV assessment collaborates with HCV assessor acredted RSPO.



1. Communicate and distribute HCV assessment report to each estate.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014


1. Organization has conducted HCV assessment collaborates with PT. SAIL consulting. It was performend by accredited assersor RSPO on 5

th - 7

th of June 2014 in

Sei Rumbiya Estate and on 30

th of June – 3

rd of July 2014

in Gunung Malayu Estate.

2. Public consultation has been done on 7

th of June 2014 in

Sei Rumbiya Estate and was done on 3

rd of July 2014 in

Gunung Malayu Estate attended by Labour Local Department, Head District, Head Police District, Village head around estate, community around estate and local NGO-Harian Waspada. HCV assessment report has been also commented by acredited assessor RSPO from Forestry Faculty of IPB.

Anwarshah Harahap

17.09.2014

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Name Date

2014-15

RSPO Criterion



Poster of the presence of protected species was not available. Evidence of dissemination of protected species to several workers was not available.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Sign warning of protected species has been posted on HCV potential area, such as: water infiltration at Block 04111003, however poster of the presence of protected species was not available. There was only protected species photo which is documented in office.

2. Evidence of dissemination of protected species to worker and to surrounding community Estate was not available.

3. Interview with worker representative (sprayer and foreman of sprayer) on 25

th of March 2014 shown that the

worker has not understood about protected species yet.

Gunung Malayu Mill

1. Dissemination protection of protected species to mill worker was not done.

Due Date:

Next surveillance



Sei Rumbiya Estate and Gunung Malayu Mill

1. Lack of comprehension of personel in area. Organization assumed that the photo of protected species in office is a part of poster.

2. Communication about protected species has been done to worker of estate and surrounding community however it was not documented. It also did not cover worker of mill.



1. Construct signboard about protected species.

2. Conduct resocialization about protected species to worker and surrounding community.



1. Establesh PIC for Sustainability

2. Conduct sustainability training including management of protected species.

Response Acceptable (please see section 4 for

details)

Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Organization has constructed protected species on several locations, for example in Division 4 and housing area. Protected species poster was also constructed in each division office.

2. Direct socialization about protected species and HCV area was also done to estate worker on 10

th of April 2014

and was also done to surrounding community on 2

nd of July 2014.

Gunung Malayu Mill

1. Direct socialization about protected species and HCV area has been done to all levels of mill workers on 28

th

of April 2014.

Organization has also conducted sustainability training including protected species and HCV management to PIC Sustainability of each estate on 15

th – 16

th of

April 2014. It was done to increase awareness and skill of PIC for each estate.

NCR 2014-15 closed

Anwarsyah Harahap

17.09.2014

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Name Date

3. HCV identified in Sei

Rumbiya Estate regarding:

HCV 4.1: Water DAM

Division 4, Water source

Division 6 and Rumbiya

river

HCV 4.2 area which

slope > 400 : Erosion

control Division 1

(33,234 ha), Erosion

control Division 02

(4,395 ha), Erosion

control Division 3

(14,848 ha), Erosion

control Division 04

(3,296 ha), Erosion

control Division 05

(8,077 ha), Erosion

control Division 07 (3,5

ha)

HCV 6 : Cemetery of worker (0,647 ha)

4. HCV identified in Gunung

Malayu Estate regarding:

a. HCV 4.1: Water course

of Asahan River, GK

GM river, NB river,

totally 8,814 ha

b. HCV 6 : Cemetry of

Batak Naga Bolon,

Cemetery in Portu,

Cemetry of Felix,

Cemetery NA, Cemetery

NB.

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Name Date

5. There is No RTE species

identified in Sei Rumbiya and

Gunung Malayu Estate,

however any protected

species identified based on

PP No.7/1990 among others:

Kucing Kuwuk (Felis

bengalensis), Raja udang

(Alcedo meninting), Burung

madu kelapa (Anthreptes

malacensis) and Burung

madu belukar (Anthreptes

singalensis).

NCR 2014-14 closed

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Name Date

2014-16

RSPO Criterion



Evidence of competent/training record of officers to monitor any plans and activities of HCV management and monitoring program was not available.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Organization has appointed field foreman in each division as an officer to monitor any plans and activities of HCV management and monitoring program (SK Estate Manager No.02/P2K3/SRE/I/2013, 2

nd of January

2013- Conductor Division). These ”HCV Officers” have no particular background for HCV management. Evidence of competent/training record of HCV Officer was not available.


2. Organization has appointed foreman of upkeep and worker Division I as an officer to monitor any plans and activities of HCV management and monitoring program (SK Estate Manager No.115A/GME/SE/III/2013,17

th of June

2013). These ”HCV Officers” have no particular background for HCV management. Evidence of competent/training record of HCV Officer was not available.

Due Date:

Next surveillance




1. Training has been done internally however it was not recorded.



1. Conduct HCV management training to HCV officer.



1. Conduct periodicly awareness training about management HCV.


details)

Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014


1. Organization has also conducted sustainability training including protected species and HCV management to PIC Sustainability of each estate on 15

th – 16

th of April 2014. It

was done to increase awarenes and skill of PIC each estate.

2. Training HCV management is conducted once a year and attended by all Sustainability Staff.

3. Dissemination in Estate is conducted twice a year. The program was mentioned in EMS F-04 series – Environmental Monitoring Program.

NCR 2014-16 closed

Anwarsyah Harahap

17.09.2014

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Name Date

2014-17

RSPO Criterion



Not all wastes and pollution sources were identified and documented.

Requirement:


Objective evidence:

Gunung Malayu Mill

1. Wastes and pollution sources from laboratory activities have not been identified and documented.

Due Date:

23rd of July 2014



Gunung Malayu Mill

1. Environmental aspect and impact have been identified and evaluated however it did not cover laboratory area due the laboratory activities only related to BLRS (Bah Lias Research Station) and QCTL (Quality Control Test and Laboratory).


Gunung Malayu Mill

1. Identify and evaluate environmental aspect of laboratory activities


Gunung Malayu Mill

1. Update environmental aspect and impact periodically.


details)

Reviewer:

Ria Gloria

Date:

17th of

September 2014

Gunung Malayu Mill

1. Wastes and pollution sources from laboratory activities have been identified and documented on 1

st of Juli

2014 by Mill Manager.

2. Environmental aspect is updated annually as mentioned in procedure P-01

NCR 2014-17 closed


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Name Date

2014-18

RSPO Criterion



Several waste managemenst and disposals have not been implemented to avoid or reduce pollution.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Procedure EMS P14 mentioned that water from cleaning outside agrochemical containers was drained to isolation pit and location is 50 meters as a minimum from housing. There are two isolation pits: sedimentation and absorption pit. In actual there was only one pit: absorption pit and location was less than 50 meters.

2. Handling of used fertiliser sacks was not according to EMS-WI-8.

3. No- hazardous waste was not handled according to EMS-WI-8, e.g.

a. Prohibition of waste burning. Trace of waste burning was found beside chemical storage, at backyard of housing beside chemical storage and at backyard of Madrasah.

b. Organic and non-organic waste was mixed in final disposal of the final landfill of no-hazardous waste

c. There were no fence and identification at the final landfill of non-hazardous waste

Due Date:

23rd of July 2014



Sei Rumbiya Estate

1. Lack of awareness to environmental management

2. Reporting was conducted by Medan HO and receipt note was kept by Medan HO.




Sei Rumbiya Estate

1. Release instruction to remove the warehouse

2. Communicate environmental management

3. Handle waste according to EMS-WI-8, e.g.

a. Disseminate waste handling to worker

b. Contruct fence at the final landill

4. Show the receipt note of hazardous waste management


details)

Reviewer:

Ria Gloria

Date: 17th of

September 2014

Sei Rumbiya Estate

1. Letter #272/SRE/INT/IX/2014 regarding removing of chemical warehouse has been shown. Currenty the chemical warehouse is building.

2. Socialisation of waste handling EMS-WI-8 and EMS P14 has been conducted to warehouse operator, spraying operator and fertilising operator on 28

th of June

2014.

3. Handling of waste has been according to EMS-WI-8, e.g.

a. Dissemination regarding waste segregation and prohibition of waste burning has been conducted on 28

th of

June 2014 to housing resident, community around housing and waste transporter worker.

b. Fence and waste identification have been completed at the final landfill of non-hazardous waste on 28

th of June 2014.


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Name Date

4. Report of hazardous waste management Q3 and Q4 was only sent to BLH Labuhan Batu Selatan. There was no evidence that hazardous waste management report was sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.


1. Report of hazardous waste management Q3 and Q4 was only sent to BLH Asahan. There was no evidence that hazardous waste management report was sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.




Sei Rumbiya Estate

1. Conduct training/ socialisation regarding sustainability.

2. Remove chemical warehouse nearby temporary storage of hazardous waste.

3. Socialize to warehouse operator.

4. Non-hazardous waste is included in environmental management program

5. Assign PIC of Sustainability to monitor environmental program in Mill and Estate.

6. Socialise hazardous waste handling including completeness of administration.


1. Assign PIC of Sustainability to monitor environmental program in Mill and Estate.

2. Socialize hazardous waste handling including completeness of administration.

4. Report of hazardous waste management Q3 and Q4 has been sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.

Sei Rumbiya Estate

1. Report of hazardous waste management Q3 and Q4 has been sent to Ministry of Environment, BLH Propinsi Sumatera Utara and Pusat Pengeloaan Ekoregion Region Sumatera.


NCR 2014-18 closed

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Name Date

2014-19

RSPO Criterion



Disposal of agrochemical containers has not been conducted according to procedure.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Based on interview with warehouse operator it was informed that agrochemical containers were rinsed twice. Procedure EMS P14 mentioned that agrochemical containers were triple rinsed.

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Lack of understanding of procedure by warehouse operator.


Sei Rumbiya Estate

1. Conduct triple rinsed to agrochemical containers


Sei Rumbiya Estate

1. Disseminate procedure to warehouse operator.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

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Name Date

2014-20

RSPO Criterion



There was no record of several wastes quantity.

Requirement:

RSPO Criterion 5.3 indicator minor 1 and Procedure EMS P14

Objective evidence:

Sei Rumbiya Estate

1. Quantity of utilisation of used fertiliser sacks has not been recorded.

2. Balance or logbook of agrochemical containers was not available in temporary storage of hazardous waste except for jerry can and drum.

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Procedure did not require recording of used fertiliser sacks quantity.

2. Record of hazardous waste quantity was kept in Estate office.


Sei Rumbiya Estate

1. Record used fertiliser sacks quantity.

2. Record hazardous waste quantity.


Sei Rumbiya Estate

1. ECSR check hazardous waste warehouse every 3 months.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

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Name Date

2014-21

RSPO Criterion



There was no evidence that efficiency analysis of fossil fuels use.

Requirement:


Objective evidence:


1. There was no evidence that efficiency analysis of fossil fuels use.

Due Date:

Next surveillance




1. Data of fossil fuel use was provided in SAP however efficiency analysis has not been conducted.



1. Provide record of efficiency analysis of fossil fuel use.



1. Coordinate with PIC Sustainability related to update data.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

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Effectiveness:


Name Date

2014-22

RSPO Criterion



Documentation of impact analyses covering negative and positive impacts of social for Mill and Estates and did not clearly describe scope of study as well as the impact of Mill and Estate activities.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) of Sei Rumbiya 1993, #RC. 220/699/B/IV/94 did not clearly describe scope of study as well as the impact of Mill and Estate activities.

2. Organization has conducted social mapping on 7

th – 8

th of October 2013

covering Sosopan, Sisumut and Kota Pinang Village) however its result was only used to develop CSR program 2014.

Due Date:

23rd of July 2014




1. Social impact of mapping and analyses was still for arrangement of CSR budget.



1. Conduct analyses of social mapping and monitoring of social impact to identify social impact from estate and mill.



1. Distribute SIA report to all estate and mill.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014


1. Organization has conducted social impact analyses based on Social mapping result on 7

th – 8

th

of October 2013 in Sei Rumbiya and 9

th – 10

th of

October 2013 in Gunung Malayu as well as social survey which was performed by Public relation officer and Community Development Officer in August 2014 covered villages around estate. Social survey was conducted involving village head around estate. Some aspects were considered during survey such as land identities, residence, economy, social cultural and public health. Negative and positive impacts were identified during assessment. It was noted that negative and positive issues from social assessment results for all estate and mill were similar.

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1. Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) of Gunung Malayu 1993, #RC. 220/699/B/IV/94 did not clearly describe scope of study as well as the impact of Mill and Estate activities.

2. Organization has conducted social mapping on 9

th – 10

th of October 2013

covering 12 villages around Estate however its result was only used to develop CSR program 2014.

Negative impacts were identified such as: Transport of dusting originating from FFB (public health), social envy from inequitable donation for community estate (social cultural). Positive impacts were identified such as: Regional development and increasing of village economy, ease of road access and job opportunities.

2. SIA report has been distributed to each estate

NCR 2014-22 closed

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2014-23

RSPO Criterion



Record of social impact monitoring with local community participation was not available.

Requirement:


Objective evidence:


1. Though the report of environment management and monitoring plan implementation have been developed based on Presentation of Environmental Evaluation-Penyajian Evaluasi Lingkungan (PEL) however evidence of local community participation was not available.

Due Date:

Next surveillance




1. Social impact monitoring which is done was available in social and environmental aspect evaluation.



1. Conduct social impact monitoring by third parties participation.



1. Optimizing Community Development Officer performance to conduct routinely monitoring.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

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2014-24

RSPO Criterion


and Criterion



There was no evidence that communication procedure (EMS-P05, Communication) was developed in collaboration with local communities and other affected or interested parties.

Requirement:

RSPO Criterion 6.2 indicator major 2 and Criterion 6.3 indicator major 1

EMS-P05, Communication

Objective evidence:

Sei Rumbiya Estate


th of Mei 2011 attended

by Village Head around Estate, Head of Kota Pinang District, Labour Regency of South Labuhanbatu Regency, Legislature of South Labuhanbatu and reporter of Waspada however it only discussed limited issues as following:

a. HGU.

b. Environment management aspect,

including: PEL

#RC.220/699/B/IV/94, RKL RPL

#RC.220/948/B/V/1994, and also

environment policy.

c. Social aspect including: CSR

programme and OHS policy.


Due Date:

23rd of July 2014




1. Related procedure has been communicated to village head, however it was not recorded.



1. Communicate and discuss the related procedure with related parties.



1. Ensure that the meeting with stakeholder which is conducted to discuss mechanism of communication is recorded so that if any change against communication method, organization can revise related procedure.


details)

Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014


1. Organization has communicated and consulted the communication and complaint mechanism to related parties Gunung Malayu (3

rd of July 2014)

and related parties Sei Rumbiya on 8

th of Agustus

2014. It was attended by District Head, Head of Police District, Village head and community leader around estate. Related procedure has been agreed and approved related parties. It was documented on minutes and attendance list.

NCR 2014-24 closed

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Name Date

2014-25

RSPO Criterion



Logbook of worker complaint handling record was not available in according with defined mechanism.

Requirement:

RSPO Criterion 6.3 indicator minor 1, EMS-P05, Communication, Internal memorandum No.028/HRD/CIR/IV/2011, 1

st of April 2011,

Guidance of Human resource policy, 25th of

Mei 2005, Appendix 12 “Complaint handling”

Objective evidence:

Sei Rumbiya Estate

1. Logbook communication Division I only covered communication from field assistant to manager. Most of communication was related with field work. Such as: filing a letter of warning for worker which absent.

2. During interview with child care worker Division I on 25

th of March 2014, there

was complaint about supporting facilities of childcare operational including; brooms, soap and mops. Worker informed that the complaint against provision supporting facilities of childcare has been delivered to assistant however it was not recorded and there was no respond, so these were provided by her. Clarification has been done on 25

th of March 2014 to

field staff Division I and Head of assistant. The result is as follow:

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Some of complaint from worker has been handled by Asistance, however it was not recorded.

2. Not all of workers complained to Assistant and Mandor.

3. Log book “communication” available in office division was still lack empowered.


Sei Rumbiya Estate

1. Bring orther Logbook “communication” usage in each division.

2. Communicate complaint handling menchanism to worker.

3. Complement the supporting facilities of child care such as broom.


Sei Rumbiya Estate

1. Bring orther Logbook “communication” usage in each division.


details)

Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Logbook “Communication” has been provided in each division. Complaint from worker has been recorded in logbook. One of complaint from worker namely complaints from water pump officer to Assistance on 15

th of June

2014 about damage water pump for worker housing. Its complaint has been handled and water pump has been serviced on 20

th

of June 2014.

2. Organization has completed supporting facilities of childcare in May 2014. It was properly documented in minutes and doc photo.

3. Resocialization and recommunication complaint handling mechanism to worker has been done on 23

rd of June 2014.

NCR 2014-25 closed

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Field assistant information and

childcare worker never

communicate about the complaint.

During audit, evidence of giving supporting facilities of childcare (brooms, soap and mops) was not shown.

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Name Date

2014-26

RSPO Criterion



Water quality testing result which distributed to worker housing was not available in accordance with Decision of Health Ministry No.416/MEN.KES/PER/IX/1990 about Requirements and water quality monitoring.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Evidence of water quality testing result which distributed to worker housing was not available (Housing of Division I, Division 2, Division 3, Division 4, Division 5 and mill housing).

2. Interview with sprayer and its foreman on 25

th of March 2014 informed that the

water quality caused rusted to the cookware.


1. Water quality testing of Division 2 and Division 3 housing was not done.

2. Last testing of water quality housing area of Sei Piring and Emplasment was conducted on 23

rd of October 2012.

Due Date:

Next surveillance




1. There is a change of PIC for clean water monitoring from Enginering Department (2012) to HS Department (2013), than it was became responsibility Environment Department in 2014. It causes lost control of clean water monitoring budget.



1. Conduct clean water testing collaborates with acrredited laboratory.



1. Increase clean water testing budget to each mill and estate budget.


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014


1. Water quality testing of clean water which distributed to worker housing has been done and collaborated with PT. Sucofindo. Based on testing result indicated that the clean water for worker has appropriate to quality standard as required in related regulation. Testing result certificate regarding:

a. Sei Rumbiya Estate: No.MDN. B03.2014.02349 54 - No. MDN. B03.2014.0234961.

b. Gunung Malayu Estate & Mill: No. MDN. B03.2014.01967 01 - No. MDN. B03.2014.01967 03

NCR 2014-26 closed

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2014-27

RSPO Criterion



Agreement with contractor did not require that contractors comply with labour laws.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Agreement with contractor of FFB transporter did not require that contractors comply with labour laws. For example: agreement with PT.Asean Raya, contract number 004/OAD/Cont-Trf/SRE/11/2014.

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Work agreement mentioned that the contractor has responsible comply with OHS regulation, but it has not specified to labour regulation.


Sei Rumbiya Estate

1. Publishing the LOL.


Sei Rumbiya Estate

1. Establish memo so that the new contract agreement must cover the responsibilty of contractor to comply against related labour regulation.


details)

Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

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2014-28

RSPO Criterion



Specific grievance mechanism of sexual harassment and violence was not available.

Requirement:


Objective evidence:

Sei Rumbiya Estate

1. Specific grievance mechanism of sexual harassment and violence was not available. For example: formation of gender committees.

Due Date:

Next surveillance



Sei Rumbiya Estate

1. Complaint handling mechanism has been established in code of conduct and PKB, however it was not documented in estate as well as was not communicated optimally.

2. Lack worker awareness against complaint handling as a part of preventive action sexual harassment.


Sei Rumbiya Estate

1. Communicated related mechanism to worker.


Sei Rumbiya Estate

1. Distribute code of conduct and PKB to all estate and mill


Reviewer:

Anwarsyah Harahap

Date:

17th of

September 2014

Sei Rumbiya Estate

1. Mechanism sexual harassment complain handling has been established in PKB 2012 and code of conduct policy. Complaint will be delivered to worker union and will be handled by bipartite appropriate in UU No.13/2013.

2. Related mechanism has been distributed to estate and has communicated to women worker on 23

rd of

June 2014.

NCR 2014-28 closed

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2014-29

RSPO Certificati

on System clause 4.2.4


There was no evidence that partial certification requirements was complied

Requirement:

RSPO Certification System clause 4.2.4

Objective evidence:

1. There was no evidence that uncertified management unit complied with partial certification requirements regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs), land conflicts, labour disputes and legal non-compliance.

Due Date:

23rd of July 2014



Development of internal audit report for all unit managements has not been finished at the time of stage-2 RSPO audit conduct.


1. Provide internal audit result as evident of fulfilling of partial certification requirements


1. Conduct internal audit once a year to ensure that partial certification requirement is fulfilled.

2. Discuss internal audit result in Management Review Meeting and BOD Meeting to get solution from issued found during internal audit.


Reviewer:

Ria Gloria

Date:

17th of

September 2014

The organisation conducted the internal audit and reviewing regarding no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3, land conflict, labour disputes and legal non-compliance to all management units which have not been certified to ensure that partial certification requirements were fulfilled in July – October 2013. Based on the reviewing it was concluded that:

There was no new planting since January 2010 so there was no replacement of primary forest or any area identified as containing High Conservation Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

There were no land conflict and labour disputes.

There was no non-compliance with regulations.


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Site visit was conducted to:

Arta Kencana Estate on 21st

of July 2013

Kencana Sari Estate on 23rd

of July 2013

Pahu Makmur Estate on 10th

of September 2013

Isuy Makmur Estate on 10th

of September 2014

Riam Indah Estate on 22nd

of October 2013

Sei Gemang Estate on 23rd of

October 2013

Sei Lakitan on 25th of October

2013

Sei Punjung on 24th of

October 2013

Gunung Bais Estate on 29th

of October 2013 NCR 2014-29 closed

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2014-30

RSPO Supply Chain

clause 5.6, Module D

3rd

paragraph, and D.7.1


CPO and PK were sold under RSPO scheme in 2013 without being reported in RSPO IT System (eTrace).

Requirement:

RSPO Supply Chain clause 5.6, Module D 3

rd paragraph, and D.7.1

The mill must also meet all registration and reporting requirements for the appropriate supply chain under the approved RSPO supply chain managing organisation (RSPO IT System or Greenpalm).

Objective evidence:

It was observed that based on sales invoices documents there was transaction of CPO and PK under RSPO scheme. However the transaction was not reported in RSPO IT System (eTrace).

Due Date:

23rd of July 2014

SAI Follow up Method: Document review


1. Lack of coordination regarding sales of CSPO.

2. Supply Chain Model chosed by the organisation was B&C and sold the CSPO to Green Palm.


1. Socialize sustainability

2. Instruct the Management regarding Supply Chain Model B&C.


1. Revise procedure of Supply Chain System CPO.


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Reviewer:

Ria Gloria

Date:

17th

of September 2014

1. Based on Internal Memorandum from President Director to all Mill Managers #062-Mdn/ECSR/IX/2014, supply chain model for Gunung Malayu Mill is “Book and Clain” due to the organisation sold CPO physicaly (non SCPO) and sold CSPO certificate through Green Palm. The internal memo also mentioned that label “CPO Certified RSPO” and “PK Certified RSPO” would be not used any longer until further information.

2. Training of sustainability has been conducted and attended by Estate Managers, Mill Managers and PIC of Environmental.

3. Procedure EMS P17 was revised to amend B&C system.

NCR 2014-30 closed


AUDIT REPORT


Mill Supply Chain Certification System See NCR register above Opportunities for improvement – RSPO Criterion 4.2 indicator minor 1 Gunung Malayu Mill It could be considered to improve system in regard with calibration status, tracebility and acceptance criteria. Criterion 4.7 indicator major 1


It could be considered to improve mask for the sprayer operator as required by MSDS

Gunung Malayu Mill

It could be considered to develop the provisions proper equipment and PPE of confined space working activities.

It could be considered to provide information of safe working load (SWL) capacity for the lifting equipment.

Opportunities for improvement – Mill Supply Chain Requirements Nill


Appendix D – Stakeholder’s issues and comment

Until the audit, there was no comment from National or International NGO. Generally, information gathered during consultation described in the table below

Date Method Information gathered during consultation

Sei Rumbiya Estate

24th of March 2014 Group discussion with

Community Leader of Sisumut Village, Religion Leader of Sisumut Village, Head of Sisumut Village, Head of Nagadang Village and Head of Sei Rumbiya Village.

Organization has given social contribution to surrounding village by CSR program, such as: road maintenance, tailoring training, scholarship, and others.

Women of PKK Sisumut Village have positive respond against Rumah Pintar (Rumpin) program. Rumpin have a role to increase skill of community by training such as handy craft from stick of palm, cooking training collaborated with Bogasari and tailoring training.

Environment monitoring against impact of estate activities has been well conducted. Community around the estate optain fish easily in the river of estate.

Legality entities of area is clear and there was no legal dispute withsurrounding community.

There were many temporary workers from surrounding village. Head of village around estate hope the CSR program of organization could be increased. For example; expansion area of cemetery

24th of March 2014 Interview with Head of

worker union and worker cooperative

Time of work is 8 hours/day

Organization gave office building to support union activities.

Organization has facilitated the worker cooperative by lending the computer in office.

Calculation of wage and overtime was determined by management in accordance with national regulation

Organization has well relationship with worker union.

There is one worker cooperative covering estate and mill. Its business units are a saving and credit

Meeting between organizations with worker union was conducted depend on issues.

25th of March 2014 Group discussion

Representative worker (Sprayer, Foreman of sprayer, Harvester and Nurse)

Electric is supplied from National Power Company – Perusahaan Listrik Negara (PLN).

Clean water distributed from artesian well and mill.

Time of work is 8 hours/day. Excess output was paid by premiums.

There was no sexual harassment case in estate and mill.

Routine medical check up was conducted for sprayer. PPE was provided by organization.

Women worker are given menstruation leave for two days.


Dissemination of riparian protection has not been done. This issue has been clarified to Head of

AUDIT REPORT



Asisten. It was observed there was no record of riparian protection dissemination to sprayer. This case has been established as a non-conforming situation and was described in criterion 4.4.1 Major.

25th of March 2014 Interview with care

worker

Worker status is permanent worker.

There was complaint about supporting facilities of childcare operational including; broom, soap and mops. Information from the worker about this complaint has been delivered to Asisten/Staff verbally however no respond, so it was provided by herself. This issue has been clarified with Head of Asisten. It was observed there is no provision record of broom, soap and mops to childcare. This case has described in criterion 6.3.1 Minor and has established as nonconforming situation in NCR 2014 – 25.

Gunung Malayu Estate and Mill

27th of March 2014 Group discussion with

Community Leader of Perkebunan Gunung Malayu Village, Religion Leader of Perkebunan Gunung Malayu Village, Head of Aek Songsongan Village, Head of Gunung Malayu Village, Head of Perkebunan Aek Nagaga Village, Head of Rahuning I Village, Head of Rahuning Village and Head of Perkebunan Gunung Malayu Village.

Organization has well relationship with surrounding community.

Organization has been allocated area for building of school and Moeslem Education Place. – Tempat Pendidikan Al-Quran..

Legal entity is clear and there was no legal dispute with surrounding community.

Organization has given social contribution to surrounding village, such as : heavy equipment for road maintenance, light for Al Baitul Makmur Mosque, assist equipment for road watering Children from around village can learn in Moslem Education Place – Tempat Pendidikan Islam at estate.

School bus was also used by children around estate to go to school.

If any environmental contamination issue, organization would handle it immediately.

Organization has commitment to contractor employee against occupational health and safety. One of its implementation that there was safety sign at several locations in estate.

There was no labour complaint from temporary worker around estate.

27th of March 2014 Interview with Head of

worker union and worker cooperative


Organization has well relationship with worker union.

Temporary meeting was conducted between organization with worker union.

Organization has given office building to support union workers activities. In addition, there is also worker hall for meeting of worker union.

27th of March 2014 Interview Head of mill

Working system in mill is shift system. There were two shift/days (1

st Shift started at 07.00 – 16.00

AUDIT REPORT



laboratory, worker of weight bridge and Mechanical.

and 2nd

shift started at16.00 – 24.00 in according to FFB from estate)


Overtime of worker for every shift was 2-3 hours/ day averages.

Other than salary, employees get a ration of rice, annual bonus and annual celebration support

Personnel protective equipment were provided by organization.

Replacement of PPEs’ damage was immediately conducted

Overall medical expense is covered by the company

27th of March 2014 Interview with

Contractor CV. Rimba Perkasa Abadi and Local NGO Pijar Keadilan.

There was no legal dispute with community around estate.

Organization has given social contribution to repair and construct infrastructure in village around estate.

There was no environment issues from estate and mill activities.

Organizations has commitment to contractor employee against occupational health and safety. One of its implementation that the organization was given briefing with contractor employee.

Payment has been given as required by related regulation and agreement.

28th of March 2014 Interview with Worker

representative (sprayer of Division IV, harvester of Division II, care worker, Christian leader and Nurse.


Overall medical expense is covered by the company

Maintenance of housing building was immediately conducted by organization if any complaint from worker

Other than salary, employees get a ration of rice, annual bonus and annual celebration support

Personnel protective equipment were provided by organisation

There was no sexual harassment case

Organization does not differentiate between minority and majority.

14th of March 2014 Letter #400/180 from

Rahuning District Head (Camat)

Land status of area is a HGU.

Organization has been allocated specific location for mill waste.

Organization has been planting Switenia sp., Artocarpus sp, Tectona grandis at disaster-prone area and riparian as well as has been setting up protection wildlife sign.

Organizations has had HGU permit, Plantation business permit (SIUP), Interference permit-Ijin gangguan (HO), Clinic permit, Survace water use permit-Ijin penggunaan air permukaan (APU),

AUDIT REPORT



Underground water use permit (ABT) and document of Environment Impact Assessment (AMDAL).

Implementation of relevant employment legislation including protection Wage, Heath worker Overtime Wages, Working Hours and Rest Time as well as CSR program for community has been done.

Organization was participated as a member Development Planning Meeting for Seruning District and also meeting in village around estate.

Organization was also conducted periodic continuous improvement including: maintenance production infrastructure, production waste, road maintenance in estate and village road around estate.

24th

of March 2014 Letter #006/GAPKI/III/2014 from Indonesian Palm Oil Association – Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI)

Organization has implemented their business in according law and related regulation

GAPKI did not find infelicity in implementation of their business operation.

Organization has implemented their responsibility and they were not involved in the violation of the law.

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Letter #400/180 on 14 March 2014 from Rahuning District Head

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Letter #006/GAPKI/III/2014 on 24 March 2014 from Indonesian Palm Oil Association – Gabungan Pengusaha Kelapa Sawit Indonesia (GAPKI)

AUDIT REPORT


Appendix E – Definition of, and action required with respect to audit findings:

RSPO Principle and Criteria, Indonesian National Interpretation: Major Nonconformities occur when system is failing to meet a relevant compulsory indicator.

Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. Correction and corrective action plan must be submitted to SAI Global for approval within 14 days of the audit. Follow-up action by SAI Global must ‘close out’ the NCR or reduce it to a lesser category within 90 days or less where specified. Certificate of conformance to the RSPO Criteria cannot be issued while any major nonconformity is outstanding. Major nonconformities raised during surveillance audit shall be addressed within 60 days, or the certificate will be suspended. Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn. Minor Nonconformities occur when system is failing to meet other indicators.

Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed

correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. In this instance, a certificate may still be awarded providing the root cause of the problem is identified and an acceptable plan is put in place to achieve the outstanding requirements in an agreed time frame. Verification will be made at subsequent surveillance audits. Minor nonconformities will be raised to major if they are not addressed by the following surveillance audit. Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make

specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding. RSPO Supply Chain Certification System: Major Nonconformities occur when system is failing to implement and/or maintain requirements of Supply Chain Certification

System. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client’s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. When non-conformances rose after the certification, RSPO shall be informed of these non-conformances within 7 days since non-conformance rose. A maximum of one month is given to the certified client to satisfactorily address the non-conformances. The effectiveness of the action taken for the non-conformances shall be assessed before closing o ut the non-conformances. Should the non-conformances not be addressed within the one month maximum time frame, a suspension or withdrawal of the certificate and a full re-audit may be necessary. Where objective evidence indicates that there has been a demonstrable breakdown in the supply chain caused by the certified client’s action or inactions, and that palm oil product that has been or is about to be shipped is falsely identified as RSPO certified product immediate action needs to be taken by SAI Global, and the RSPO Supply Chain certification shall be suspended until such time that it has been addressed. The RSPO shall be notified within 24 hours of this occurrence and further impacts on relevant supply chain certifications. Area of concern issued when there is an area of the system for which the client is required to investigate potential non-

conformity. Action required: SAI Global may require client to formulate preventive action plan for approval prior to next planned

audit/certification decision or alternatively may follow up client’s preventive action at the next planned audit. Lack of client attention to such issues implies that a preventive action system is not working effectively. Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make

specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.

Audit Report - RSPO

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