CONFIDENTIAL - RSPO

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CONFIDENTIAL

SIRIM QAS INTERNATIONAL SDN. BHD. Building 4, SIRIM Complex, No. 1 ,Persiaran Dato’ Menteri,

Section 2, P.O. Box 7035, 40911 Shah Alam, Selangor, Malaysia.

File Ref: EP09760003

RSPO SURVEILLANCE AUDIT REPORT

CLIENT : PPB Oil Palms Berhad Ribubonus Palm Oil Mill and Ribubonus Estate ADDRESS OF MAIN SITE AUDITED (In the case of multisite certification, list additional sites in attachments): Palm Oil Mill : Ribubonus Palm Oil Mill CL 085330089, Telupid, Labuk/ Sugut Sandakan, Sabah Malaysia Supply Base : Ribubonus Estate Batu 165 Jalan Telupid Labuk/Sugut, Sandakan Sabah. MALAYSIA ASSESSMENT DATE : 17 to 21 October 2011 STANDARD : RSPO MYNI: 2008 SCOPE OF CERTIFICATION : Ribubonus Palm Oil Mill and its supply base Ribubonus Estate

Report by Audit Team Leader Name : Dr. S.K.Yap

Signature : Date : 19 APRIL 2012

Report Reviewed by: Name : Radziah Mohd Daud

Signature : Date : 26 APRIL 2012

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TABLE OF CONTENTS

1 INTRODUCTION

1.1 Description of the Certification Unit (Estate and Mill) 1.2 Location of Mills and Estates 1.3 Description of Supply Base (Fruit Sources) 1.4 Work Force 1.5 Date of Plantings and Cycle (Total Plantations and Area Planted) 1.6 Other Management System Certifications Held (ISO etc) 1.7 Organisational Information/Contact Person

1.8 Actual and Approximate Tonnages Offered for Certification (CPO and PK)

2 ASSESSMENT PROCESS

2.1 Assessment Methodology (Program, Site Visits) 2.2 Date of Next Surveillance Audit 2.3 Assessment Team

3 ASSESSMENT FINDINGS

Principle 1 : Commitment to Transparency Principle 2 : Compliance with Applicable Laws and Regulations Principle 3 : Commiment to Long-Term Economic and Financial Viability Principle 4 : Use of Appropriate Best Practices by Growers and Millers Principle 5 : Environmental Responsibility and Conservationof Natural Resources and Biodibversity Principle 6 : Responsible Consideration of Employees and of Individuals and Communities Affected by Growers and Mills Principle 7 : Responsible Development Of New Planting Principle 8 : Commitment to Continuous Improvement on Key Areas of Activity

4 ASSESSMENT RECOMMENDATION 5 ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF

OF ASSESSMENT FINDINGS 6 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL

SIGN-OFF OF ASSESSMENT FINDINGS Tables: Table 1 Coordinates of T1 (Mills and Estates)

Table 2 FFB Contribution of Each Estate to Ribubonus Palm Oil Mill

Table 3 Total and Composition of Workers in S1

Table 4 Total Plantation and Area Planted

Table 5 Approximate CPO and PK Tonnage Claimed for Certification Year 2011

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Photos: Photo 1 : Relevant Licences and Documents on Display in the Estate’s Office Photo 2 : Boundary Marker with Neighbouring Bukit Kuamas Forest Reserve Photo 3 : Distribution of Empty Fruit Bunches as Fertilizers in the Field Photo 4 : Presence of the Mucuna bracteata and Neprolepis biserrata cover along slopes Photo 5 : Riparian Buffer Belt clearly demarcated with clear instructions that no activities should be conducted Photo 6 : Storage facility at the labour line for rain water harvesting Photo 7 : Beneficial plants planted along road sides and vacant areas in all the estates Photo 8 : A Chemical Store With Triple Rinsing tanks and pre mix bay Photo 9 : Project site that was not barricaded and with no warning sign erected posing danger to a community living nearby Photo 10 : Signage on the requirement of PPE and the need to cover sharp tools – chisel, sickle and parang Photo 11 : Sprayers and Harvester Equipped with Appropriate PPE Photo 12 : HCV Site Identified in Ribubonus Estate Photo 13 : Recycling Bins at the Land Fill Site Photo 14 : Landfill for Domestic Waste in the Estate Attachments: Attachment 1 Location map of Ribubonus Certification Unit

Attachment 2 Rspo surveillance assessment plan

Attachment 3 Details on NCRs and OFIs and Corrective Actions Taken

Abbreviations:

B.Sc. Bachelor of Science CHRA Chemical Health Risk Assessment CPO Crude Palm Oil CSDS Chemical Safety Data Sheet CSR Corporate Social Responsibility DOE Department of Environment DOSH Department of Occupational Safety and Health EFB Empty Fruit Bunch EHA Estate Hospital Assistant EIA Environmental Impact Assessment EPF Employees Provident Fund EQA Environmental Quality Act ERT Endangered, Rare and Threatened Species EARA Environmental Auditors Registration Association FFB Fresh Fruit Bunch FSC Forest Stewardship Council GAP Good Agricultural Practice HCV High Conservation Value HIRARC Hazard Identification, Risk Assessment and Risk Control IPM Integrated Pest Management ISO International Organization for Standardization IRCA International Register of Certificated Auditors IUFRO International Union of Forest Research Organization JCC Joint Consultative Committee

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KPI MC&I

Key Performance Index Malaysian Criteria and Indicators for Forest Management Certification

M.E Master of Engineering MBA Master of Business Administration MDP Management Development Programme MIS Management Information Services MoU Memorandum of Understanding M. Phil Master of Philosophy MPOA Malaysian Palm Oil Association MPOB Malaysia Palm Oil Board MS GAP-OP Malaysian Standard Good Agricultural Practice – Oil Palm MTCS Malaysian Timber Certification Scheme MYNI Malaysia National Interpretation NCR Non-Conformity Report NREB Natural Resources and Environment Board OER Oil Extraction Rate OSH Occupational Safety and Health OHSAS Occupational Health and Safety Assessment Series OHSMS Occupational Health and Safety Management System Ph.D. Doctor of Philosophy PIC Person in-Charge PK Palm Kernel POME Palm Oil Mill Effluent PPE Personnel Protective Equipment RSPO Roundtable on Sustainable Palm Oil SHO Safety and Health Officer SIA Social Impact Assessment SOP Standard Operating Procedure TOR Terms of Reference USA United States of America WTP Water Treatment Plant WWF World Wide Fund for Nature

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RSPO SURVEILLANCE AUDIT REPORT

1. INTRODUCTION

1.1 Description of the Certification Unit (Estate and Mill)

The certification unit (CU) assessed in this surveillance was Ribubonus which was part of Sabahmas Plantations Sdn. Bhd. (SSB). SSB is wholly owned subsidiary of PPB Oil Palms Berhad (PPB Oil Palms). Ribubonus CU consisted of Ribubonus Palm Oil Mill and Ribubonus Estate. The unit underwent the RSPO assessment by SIRIM QAS International Sdn. Bhd in 2009. The Stage 1 and Stage 2 audits on Ribubonus against the requirements of the RSPO MY-NI (2008) was conducted by SIRIM QAS International Sdn. Bhd. (SIRIM QAS International) on 25-27 June 2009 and 1-5 October 2009 respectively. Ribubonus CU was finally certified for RSPO sustainable palm oil production in September 2010. Ribubonus Palm Oil Mill (RPOM) commenced operations in February 2008 with a processing capacity of 45 metric tonnes of fresh fruit bunches (FFB) per hour. As Ribubonus CU is a fully developed estate, Principle 7 of the RSPO Principles & Criteria is therefore not applicable. 1.2 Location of Mill and Estates Ribubonus Mill and Ribubonus Estate are located in km 157 Sandakan Telupid Road Beluran District, Sabah, Malaysia. Ribubonus CU can be accessed by using the Sandakan – Telupid Road and about 157 km from Sandakan. For Ribubonus CU, it is surrounded by Ulu Tungud and Bukit Kuamas Forest Reserves bordering the northern to the south western side. Kg. Wonod and Twin Acre Plantation are located at the southern side while Lipaso Forest Reserve is located further east. The Labuk River passes through the western boundary of the certification unit. There are three living quarters (known as line site) within Ribubonus Oil Palm Mill and Estate. The official address of Ribubonus CU is CL 085330089, Telupid, Labuk/ Sugut Sandakan, Sabah, Malaysia. The location map of Ribubonus CU (mill and estates) is shown in Attachment 1 while their coordinates are detailed in Table 1.

Table 1: Coordinates of T1 (Mills and Estates)

Operating Unit Latitude Longitude

Ribubonus Palm Oil Mill 5° 41' 19.977" N 117° 05' 34.150" E

Ribubonus Estate 5° 41' 32.763" N 117° 05' 49.962" E

(Note: The coordinates are for the offices of the palm oil mill and estates) 1.3 Description of Supply Base (Fruit Sources) RPOM received FFB supply from Ribubonus Estate, smallholders and small growers. The average annual FFB contribution from Ribubonus Estate and outside sources for the year 2010 is detailed in Table 2.

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Table 2: FFB Contribution of Ribubonus Estate and external suppliers to Palm Oil Mill

Estate FFB Production (2010)

Tonnes Percentage

Ribubonus Estate 71,167

69

Outside sources 32,426 31

Total

103,593

100

1.4 Work Force As of September 2011 Ribubonus CU had a total workforce of 532, of whom about 78 % were migrant field workers from Indonesia. The composition of workers within Ribubonus CU is shown in Table 3.

Table 3: Total and Composition of Workers in S1

Operating Unit Local Foreign Sub-Total

Ribubonus Palm Oil Mill

49 14 63

Ribubonus Estate

68 401 469

Total

117 415 532

1.5 Date of Plantings and Cycle (Total Plantations and Area Planted)

Table 4: Total Plantations and Area Planted

Estate Year of Establishme

nt

Total Area (ha)

Planted area (ha)

Ribubonus Estate

2001 – 2002

3,262 2,702.30

1.6 Other Management System Certifications Held (ISO etc)

The palm oil mill and all the estates do not hold any other form of third-party certification of their management systems. Nevertheless, they had been implementing an internal system which was based on the requirements of the ISO 14001:2004 and the Occupational Safety and Health Act (1994). The CU had obtained the International Sustainability for Carbon Certification (ISCC) and also the RSPO Supply Chain Certification.

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1.7 Organisational Information/Contact Person

PPB Oil Palms Berhad through its Headquarter in Sandakan is responsible for overseeing Ribubonus and other management units in Sabah. The correspondence address and contact person are as detailed below: Address: PPB Oil Palms Berhad, Sabah Operations, Lot 1A, KM 15, Jalan Labuk, Locked Bag 34, 90009 Sandakan, Sabah, Malaysia. Contact person: Mr. Tee Seng Heng General Manager Phone: +6089 671546 / +6089 670208 Fax: +6089 670260 e-mail: [email protected]

1.8 Actual and Approximate Tonnages Offered for Certification (CPO and PK)

The approximate tonnage of CPO and PK produced and claimed for certification, is shown in Table 5 as follows:

Table 5: Approximate CPO and PK Tonnage Claimed for Certification Sept Year 2011

Certification Unit

CPO Tonnage claimed for certification

PK Tonnage claimed for certification

Ribubonus CU

21,948 3,653

Note: The amount claimed for certification excludes contribution from smallholdings

2. ASSESSMENT PROCESS 2.1 Assessment Methodology (Program, Site Visits)

The surveillance audit was conducted on 17 to 21 October 2011. The main objectives of this surveillance audit were to (a) determine the continued compliance of Ribubonus CU against the requirements of the RSPO MYNI:2008, (b) verify the effectiveness of the corrective actions being implemented by Ribubonus CU to address the NCRs raised during the previous Stage 2 audit and (c) make appropriate recommendation on the continued certification of Ribubonus CU based on the findings of this surveillance audit.

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The planning of this surveillance audit was guided by the RSPO Certification Systems Document. The sampling formula of √0.8y, where y is the number of estate in Ribubonus CU was not used as the CU had only one estate. Both the mill and estate (Ribubonus Palm Oil Mill and Ribubonus Estate) were assessed. The audit was conducted by visiting the field, mill, HCV habitats, labour lines, chemical and waste storage areas and other workplaces. Random interviews with management, employees, contractors and other relevant stakeholders were conducted. Apart from the above, records as well as other related documentation were also evaluated. The details on the surveillance audit programme are presented in Attachment 2.

2.2 Date of Next Surveillance Audit

Next surveillance audit should be conducted within twelve months from the date of this first annual surveillance audit was conducted.

2.3 Assessment Team

Member of the Assessment

Team

Role/area of RSPO

requirements

Qualifications

Dr. S.K. Yap

Assessment team leader/ estate environmental issues and HCV habitats

Over 400 auditor days of auditing experience, UNDER the following: ISO 14001, MTCS MC&I and FSC forest management certification & RSPO

Technical expert for ISO 9001 (2008)

Completed RSPO Lead Assessor Course - 2008

Successfully completed EARA approved lead Assessor course for ISO 14001: 2001

Ph. D. (Forest Biology) University of Aberdeen (Scotland) and University of Malaya Fellowship in Tropical Rain Forest Project.

B.Sc. Hons. Second Class Upper (Botany), University of Malaya

Memberships in Professional Organizations:

Member of the IUFRO Working Party on Seed Problems. Nominated as one of the candidates for the Co-Chairman of Working Party in 1986.

Project Leader for Project 8 of the Reproductive Biology of Tropical Trees of the ASEAN-Australian Tree Improvement Programme. 1986. Given the role to develop research activities on reproductive biology within ASEAN countries with sponsorship from Australia.

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Elected member of the Committee on Forest Tree and Shrub Seeds of the International Seed Testing Association. 1989 to 1992.

Vice Chairman of the Working Group on Seed Origin and Genetic Resources of the ASEAN Canada Forest Tree Seed Centre. 1990 to 1995. Responsible in coordinating research activities on genetic resources within the ASEAN countries.

Project leader on Impact of Acid Precipitation on Forest working in conjunction with researchers from China, Indonesia, Japan and Thailand.

Mr. Mahzan Munap

Auditor /Occupational Health and Safety & related legal issues

Collected over 370 days of auditing experience in OHSAT 18001 and MT 1722 OHSMS and RSPO (46 days for palm oil milling & 6 days for oil palm plantation).

CIMAH Competent Person with Malaysian Department of Occupational Safety and Health (DOSH) since 1997.

Occupational Safety and Health Trainer at INSTEP PETRONAS

Successfully completed RSPO Lead Assessor Course – 2008.

Successfully completed Lead Assessor Course for OHSAT 18001-2000.

Successfully completed IRCA accredited Lead Assessor training for ISO 9001-2006

MBA, Ohio University.

B.Sc. Petroleum Engineering, University of Missouri, USA.

Professor Datuk Abdul Rashid Abdullah

Auditor /Community issue /social criteria and national legislation

Attended training on RSPO Principle & Criteria and RSPO certification requirements in 16 November 2010

Current position as Director, Institute of East Asian Studies, Universiti Malaysia Sarawak

Appointed as the Vice Chancellor Universiti Malaysia Sarawak (Academic Affairs) from 1 February 2005 to end February 2008

Appointed as the Deputy Vice Chancellor (Academic Affairs) of Universiti Malaysia Sarawak from December 2000 to January 2005

Lecturer and founding Dean of the faculty of Social Sciences, Universiti Malaysia Sarawak

PhD in Social Anthropology, Hull University.

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M.Sc. in Development Studies, Cornell University.

Some of the research projects

Masyarakat Pesisir Sarawak Barat Daya

Centre-periphery relation:Its implications on the smallholders in Sarawak

Socio-cultural change in the Melanau community in Wing. A (ed) kaum melanau

Current research projects

Engaging the market: Periperal communities of Belaga district (Project leader: 2008-2010)

The Iban Diaspora: Iban communities in Tawau and Brunei Darulsalam (Research team) 2009 - 2011

Mr. Selvasegam

Technical Specialist / Good Agricultural Practices (GAP) and workers issues

B. Sc. (Hons) Agriculture – University of Agricultural Sciences, Hebbal, Banglore, India (1969-1973)

Assistant Estate Manager, Kumpulan Guthrie Berhad (1974-1979)

Senior Assistant Estate Manager, Guthrie Berhad (1979-1994)

Estate Manager, Guthrie Berhad (1995-2002 – retired)

Managing and supervise the following activities

Nursery for rubber and cocoa

Supervise Plantings activities for : Cocoa Replant, Rubber Replant, Oil Palm Replant, Oil Palm Replant, Oil Palm New Clearing

Supervise Upkeep Immature & Areas : Cocoa Replant, Rubber Replant, Oil Palm Replant, Oil Palm Replant, Oil Palm New Clearing

Collection : Cocoa Harvesting, Tapping, FFB Harvesting, Cocoa (i.e Splitting Cocoa Pods & Fermenting and Drying Beans), Oil Palm – In field collection (i.e Buffalo, Jamsa, Mini Tractor, Crane Loading, Bin Loading (Jamsa))

Vehicle Maintenance & Workshop : Mini Tractors, Jamsa, Lorries – Tippers and Flat Body, Prime Movers, Jeeps

Estates Developments : Collection of Data for Monitoring Estates’ Performance, Organizing Seminars, Meetings,

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Forecasting Workers Housing Requirement for Company, Forecasting FFB Yield & Oil Extraction Ratio for Company, Assist in Budget Formatting and Budget Preparation, Assisting Computerization of Budget Preparation, Formulation of Best Practices

Formulation of SOP for all Estate Operations for all workers, Junior Staff and Senior Staff

3. Assessment Findings The audit findings were highlighted and discussed during the on-site audit. This surveillance audit had resulted in the issuance of one (1) major Non Conformity Reports (NCRs) and eight (8) Opportunities for Improvements (OFIs). The details on the NCR (including corrective actions taken) and OFIs are as in Attachment 3. The findings of this surveillance audit are reported based on the format for the RSPO MY-NI indicators. The detailed findings of this surveillance audit on Ribubonus CU’s compliance to the requirements of the RSPO MY-NI are as follows:

PRINCIPLE 1: COMMITMENT TO TRANSPARENCY Criterion 1.1

Oil palm growers and millers provide adequate information to other stakeholder on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making. Indicator 1.1.1

Records of requests and responses must be maintained. Major compliance Guidance:

Growers and millers should respond constructively and promptly to requests for information from stakeholders

Audit Findings:

Ribubonus Estate had maintained records on requests for information or documents that were related to the RSPO Criteria. There was a written SOP for stakeholders’ consultation and a Public Information Request (PIR) Form was made available to any interested parties. Ribubonus Estate had also notified the stakeholders via letters. Ten documents were made available for public viewing at the estate and mill offices. The following documents specified under the Indicator were not included:

a. Safety and health plan b. Plans and impact assessments relating to environmental and social impacts c. Pollution and prevention plans d. Details of complaints and grievances

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e. Negotiation procedures

f. Continuous improvement plan

A Minor NCR SK 1 was raised.

From the record books, it was found that Ribubonus CU had not received any request for such information from external stakeholders. Criterion 1.2

Management documents are publicly available, except where this is prevented by commercial confidentially or where disclosure of information would result in negative environmental or social outcomes. This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria. Documents that must be publicly available include, but are not necessarily limited

to:- 1.2.1 Land titles / user rights (C 2.2) 1.2.2 Safety and health plan (C4.7) 1.2.3 Plans and impact assessments relating to environmental and social impacts (C 5.1, 6.1, 7.1, 7.3) 1.2.4 Pollution prevention plans (C 5.6) 1.2.5 Details of complaints and grievances (C 6.3) 1.2.6 Negotiation procedures (C 6.4) 1.2.7 Continuous improvement plan (C 8.1)

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.

Audit Findings:

All the documents listed in this Criterion were made available in the offices of all the estates. Land titles, Safety and Health Manual, policies of the company, Pollution Prevention Plan, Continuous Improvement Plan, licenses and organizational charts were put on display in the office of Ribubonus Estate.

PRINCIPLE 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS Criterion 2.1

There is compliance with all applicable local, national and ratified international laws and regulations Indicator 2.1.1

Evidence of compliance with legal requirement Major compliance

Audit Findings:

There was no change to the identified applicable legal requirements as sighted in document No.

RSPO 2.1.2, Register of Legal and Other Applicable Requirement. Among the identified legal

requirements were the Occupational Safety and Health Act 1994, Factories and Machinery Act

1967, Petroleum (Safety Measures) Act 1984, Fire Services Act 1988, Poisons Act 1952,

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Pesticides Act 1974, Workers’ Minimum Standards Of Housing and Amenities Act 1990,

Immigration Act 1959/63 & Regulations and Orders & Passport Act 1966, Sabah Environment

Protection Enactment, 2002, Sabah Water Resources Enactment, 1998 and Labour Ordinance

of (Sabah Cap. 67) 1950.

All the relevant permits and licenses were sighted in the estate office. These documents were

found to be valid and to be in compliance with the conditions and bi-laws. These certificates,

permits and licenses were displayed prominently in the office (see Photo 1).

The following documents were sighted:

1. ‘Ordinan Perniagaan Profesion dan Perlesen Perdagangan’ No.R10602/88, which was

valid until 31 December 2011

2. ‘Surat Kuasa’ or Authorization Letter Ref. No. 2140 issued by the Enforcement Division, Ministry of Domestic Trade and Consumer Affairs for Petrol, Diesel and Chemical Fertilizer

3. EIA Report/EIA Approval for the estate issued by the Environmental Protection

Department Sabah 4. Permit Potongan Daripada Gaji Pekerja issued by the Jabatan Tenaga Kerja Sabah for

Ribubonus Estate 5. Licence No. B-000130/08 and B-003786/05 from Jabatan Tenaga Kerja Sabah for the

employment of foreign workers in Ribubonus Estate.

Photo 1: Relevant Licences and Documents on Display in the Ribubonus Estate’s Office.

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The plantation management had complied with the relevant forestry laws by having clear

boundary demarcation with the forest reserves bordering its estates. There was no evidence of

infringement into these reserves. It had also complied with the specifications of the

Environmental Protection Department requirement of riparian boundary.

Ribubonus CU maintained its commitment to legal compliance to the applicable legal

requirements. Evidences such as quarterly reporting to DOE, holding quarterly OSH Committee

meeting, Terms and Conditions of employment as per Sabah Labour Ordinance (Cap. 67) 2005

and required certified machineries and licences were available to support the evaluation.

Other evidence of compliance verified was related to the issuance and acceptance of Personal

Protective Equipment (PPE).

Nonetheless, a non-conformity was issued as it was confirmed that Ribubonus CU Palm Oil Mill

have fulfilled some of the requirements for competent persons in accordance to the Factories

and Machinery (Person-In-Charge) Regulations 1970. The Person-In-Charge of the boiler, a

Second Grade Steam Engineer, was not assisted during each shift by a First Grade Engine

Driver, but rather by one Second Grade Engine Driver. Additionally, the electrical generator

sets at Ribubonus Estate and Ribubonus POM were not being placed under the charge by First

Grade Internal Combustion Engine Driver during each shift as required under the Act.

As the requirements of Factory and Machinery Act 1967 (Person-In-Charge) Regulations 1970

was not complied with, a Major NCR MM1 was raised.

Indicator 2.1.2

A documented system, which includes written information on legal requirements. Minor compliance

Audit Findings:

A Register of Legal and Other Applicable Requirement for Ribubonus Estate & Mill dated 3 February 2009 was presented during the assessment. Indicator 2.1.3

A mechanism for ensuring that they are implemented. Minor compliance

Audit Findings:

Environmental Management Plan for the estate was presented to the auditor. This was approved by the Sabah Environmental Protection Department. Quarterly monitoring reports had been submitted with the assistance of a consultant company. The complete set of reports for 2009 and 2010 were examined. The estate had also conducted a series of water sampling and the results obtained were incorporated into the reports submitted to EPD as specified in the conditions of EIA approval.

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Data of analysis of water sampling presented from 7 points in Ribubonus (one RM 7 upstream inlet point while the other 6 discharge points into Sg. Labuk) were presented. High COD and BOD recordings were observed at Point 2 where the discharge is coming in from the oil palm mill. Indicator 2.1.4

A system for tracking any changes in the law. Minor compliance

Audit Findings:

The Safety and Health Officer had been tasked to track any changes in the law. Criterion 2.2

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

Indicator 2.2.1

Evidence of legal ownership of the land including history of land tenure. Major compliance

Audit Findings:

Ribubonus Estate had a 99 year lease on the land from the Sabah State government. and the condition of the lease was for ‘Agriculture Purpose’. The estate was found to be in compliance with that lease condition. The Country Lease Title No. 085330089 for Ribubonus Estate issued on 22 June 1998 was presented to the audit team. A Sijil Pembangunan Tanah (Certificate for Land development) dated 1 February 2007 was also presented. Indicator 2.2.2

Growers must show that they comply with the terms of the land title. [This indicator is to be read with Guidance 2] Major compliance

Audit Findings:

The estate was in compliance with the condition as stated in the terms and conditions of the lease agreement that specified for agricultural purpose. Indicator 2.2.3

Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained. Minor compliance Specific Guidance: Growers should attempt to comply with the above indicator within 15 months from date of announcement of first audit. Refer to State Land Office for examples of other reserves.

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Audit Findings:

During the site inspection conducted in the estate, it was observed that there were distinct wooden boundary markers and boundary stones (see Photo 2). The positions of these markers were labeled and marked on the Boundary Stone map and the position of each marker recorded. During the site inspection conducted in Ribubonus Estate 3 sets of marker stones were examined at the boundary.

Photo 2: Boundary Marker with Neighbouring Bukit Kuamas Forest Reserve

Indicator 2.2.4

Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. CF 2.3.3, 6.4.1 and 6.4.2. Minor compliance Guidance: 1. For any conflict or dispute over the land, the extent of the disputed area should be mapped out in a participatory

way. 2. Where there is a conflict to the condition of land use as per land title, growers must show evidence that necessary

action has been taken to resolve the conflict with the relevant authorities. 3. Ensure a mechanism to solve the dispute (Refer to C 6.3 and C6.4) 4. Evidence must be demonstrated that the dispute has been resolved. 5. All operations shall cease on land planted beyond the legal boundary.

Audit Findings:

It was documented during the Stage 2 audit, there was a claim to land in Ribubonus Estate by the local villagers. The assessment also uncovered a potential land dispute over Ribubonus Estate by the communities from Kampung Telupid Batu 4 and Kampung Gading. Although the potential claimants had registered a broad unspecified interest they were still in the process of establishing their claim through the gathering of evidence.

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Ribubonus Estate had expressed its willingness to consider the claim should it turn out to cover any part of the estate. A discussion held with an advisor to the potential claimants also indicated that they too, were open to negotiations and discussions should the claim cover any part of the estate. The advisor was a representative from JOAS and PACOS. Through the mechanism of the Stakeholders Meeting, Ribubonus Estate had clarified their legal rights over the disputed land with the Persatuan Rakyat, Kampung Telupid and established that the Company was not involved in illegal occupation of NCR land (the process was documented in file: Tuntutan Tanah Adat (NCR) Daripada Penduduk Kampung Telupid). The villagers were advised to deal with the appropriate government authority.

This mechanism was also used to settle the claim on the damage to paddy land belonging to a farmer Laina Salim during road construction work by the Estate. A compensation of RM1000 was made after discussion involving the complainant, the estate management and the Telupid Sub-district office (Ref. file on communication between Ribubonus, Laina Salim, and Telupid Sub-district Office). Criterion 2.3

Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent. Indicator 2.3.1

Where lands are encumbered by customary rights, participatory mapping should be conducted to construct maps that show the extent of these rights. Major compliance

Audit Findings:

There was no land within the estates being encumbered by customary rights and any land disputes had been settled through consultations with the local communities and the authority. Indicator 2.3.2

Map of appropriate scale showing extent of claims under dispute. Major compliance

Audit Findings:

Encroachment by local communities into the forested sites next to the estate had been documented. Photographic records of sites encroached by 13 villagers had been taken on 13 August 2011. Reports were then made to the Forestry Department and the Assistant Forester of Mukim Ulu Tungod had written to the District Forest Officer of Belurun on 15 December 2011. A police report was also made on 18 August 2011. As indicated in the findings on Indicator 2.3.1 above, there were no longer any cases involving land disputes in Ribubonus CU. Indicator 2.3.3

Copies of negotiated agreements detailing process of consent (C2.2, 7.5 and 7.6). Minor compliance Guidance:

Where lands are encumbered by legal or customary rights, 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,

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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.

Audit Findings:

Through the mechanism of the Stakeholders Meeting, Ribubonus Estate had clarified their legal rights over the disputed land with the Persatuan Rakyat, Kampung Telupid and established that the Company was not involved in illegal occupation of NCR land (the process was documented in file: Tuntutan Tanah Adat (NCR) Daripada Penduduk Kampung Telupid). The villagers were advised to deal with the appropriate government authority.

PRINCIPLE 3: COMMITMENT TO LONG-TERM ECONOMIC AND FINANCIAL VIABILITY Criterion 3.1

There is an implemented management plan that aims to achieve long-term economic and financial viability. Indicator 3.1.1

Annual budget with a minimum 2 years of projection Major compliance Specific Guidance:

Annual budget may include FFB yield/ha, OER, CPO yield/ha and cost of production that is not required to be publicly available.

Audit Findings:

A Management Plan including crop forecast, profit and loss, infra-structure development (roads, houses etc) covering the period of 2011 to 2016 had been prepared for the estate and made available to the assessment team. Maintenance and social services such as upgrading of workers quarters and other amenities had been emphasized. The construction of new water treatment plants in the Eastern Division and Northern Division for workers’ quarters had been completed. These treatment plants were able to produce 180,000 litres clean water during an 8 hour period. An additional pond at RBPOM for the purpose of ensuring legal compliance with regards to effluent discharge had also been constructed.

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Annual budget for the years 2008, 2009, 2010 and 2011 were kept in the office. Copies of Annual Report 2008 and 2009 were also available. Data was kept for FFB production from 2010 to 2011. The Five Year FFB Yield Projection from 2008 to 2013 of the estate was presented. The projected Yield Per Hectare (YPH) was at 30.04 tonnes.

Indicator 3.1.2

Annual replanting programme projected for a minimum of 5 years with yearly review. Minor compliance

Audit Findings:

Records of Plantable and Cummulative Planted Areas for 2009 to 2019 were made available. Replanting for Ribubonus Estate was scheduled to be done in 2013. A 5-10 Years Replanting Plan for the estate was also presented.

PRINCIPLE 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS Criterion 4.1

Operating procedures are appropriately documented and consistently implemented and monitored. Indicator 4.1.1

Documented Standard Operating Procedures (SOP) for estates and mills Major compliance

Audit Findings:

Documented procedures for the estate and mill’s operation had been established in the certification unit. An Agriculture Manual & Standard Operation Procedure [Manual and SOP] (2011 Edition) was sighted. This Manual and SOPs prescribed all the standard operation procedures, from nursery, land preparation to harvesting as well as monitoring of compliance. Records of fertilizer application, pest and diseases control as well as weeding regimes were maintained in accordance to the SOPs. There was also a copy of Safe and Standard Operating Procedure for Oil Palm which was updated on 23 March 2011. Training had also been conducted to all relevant employees and this was confirmed by the interviews with the field workers. SOPs were also posted at the muster ground notice board and other operational locations. Random interviews with workers and staff revealed that the level of understanding towards the requirements of the manual and SOPs were satisfactory. It was observed that, ripeness standard and chemicals usage had been properly understood by the field workers. The checking on crop quality was done by the Eco-Management Audit Unit. Indicator 4.1.2

Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months. Minor compliance

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Audit Findings:

Monthly Progress and Annual Reports on monitoring of all activities were made available during the surveillance. These included field audit report (2008) and Plantation Advisor’s Visit Reports 2009. Weeding Schedule and Completion Sheet was also used to monitor the progress of weed control. These reports had also been displayed on the office’s notice boards. These monitoring reports were kept and maintained in the estate offices for at least a year. The Estate maintained a Monthly Fertilizer return up to September 2011. For the Estate 46.94 % of fertilizer application for 2011 had been completed. The delay was caused by the late delivery of fertilizers from the manufacturer. Fertilizer recommendation for 2012 had also been received. Maps for EFB and POME application were maintained showing that EFB application had been conducted in the estate. Criterion 4.2

Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. MY-NIWG recommends that the indicators in criterion 4.2 and 4.3 are linked Indicator 4.2.1

Monitoring of fertilizer inputs through annual fertilizer recommendations. Minor compliance

Audit Findings:

A soil test was conducted and the agronomist had drawn up a soil map. Soil sampling was scheduled once at every 6 years with the last done in 2009. For Ribubonus Estate there was a soil organic Carbon and soil Nitrogen content report. An annual agronomic foliar analysis had been conducted in the estate and the last conducted in 2010. The results formed a basis to ascertain soil fertility and recommendation for the use of fertiliser. Fertilizers recommendation for the period of 2001 to 2012 had been prepared. Up to September 2011 1,710.38 tonnes were applied achieving 46.9% of the targeted amount.

Indicator 4.2.2

Evidence of periodic tissue and soil sampling to monitor changes in nutrient status. Minor compliance

Audit Findings:

As mentioned in the findings on Indicator 4.1.2, an annual agronomic foliar analysis had been conducted in the estate and the results formed a basis to ascertain soil fertility and recommendation for the use of fertiliser. The last soil sampling was conducted in 2009 and was repeated in June 2011. Foliar sampling was done annually and results of 2010 and 2011 were sighted.

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Indicator 4.2.3

Monitor the area on which EFB, POME and zero-burn replanting is applied. Minor compliance

Audit Findings:

Soil fertility had been maintained by empty fruit bunches (EFBs) mulching, proper frond stacking (biomass), POME application, regular application of inorganic fertilizers, water management and by maintaining soft weeds within interlines. An EFB Application Programme for Ribubonus Estate was sighted. Monthly records of EFB usage (block by block) were inspected. A map showing the locations where EFBs were applied for 2011 was presented during the surveillance. Empty fruit bunches (EFBs) distributed and used as organic fertilizer for the oil palm trees in the estates is shown in Photo 4. The EFBs were applied as single layer allowing better decomposition and loss of nutrients. As of September 2011 EFB application was completed for 36.42% of the areas allocated for such treatment.

Ribubonus Oil Palm Mill had 16 effluent treatment ponds cleaning up 156,806 cu m of POME reducing the BOD level to 5.43 (licensed to BOD level of 20). The POME was used to irrigate 40 ha of the oil palm estate through a gravity feed system through trenches. Mulching was done at a rate of 40 to 80 mt/ha/year. It was observed that the application of EFBs as fertilizer had adhered to the structured EFB program for all the matured trees.

Photo 3 : Distribution of Empty Fruit Bunches as Fertilizers in the Field

Criterion 4.3

Practices minimise and control erosion and degradation of soils. Indicator 4.3.1

Documented evidence of practices minimizing soil erosion and degradation (including maps). Minor compliance Specific Guidance:

Replanting on sloping land must be in compliance with MSGAP Part 2: OP (4.4.2.2) For Sarawak, steep slopes are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report and approved by the Natural Resources and Environment Board (NREB).

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For Sabah, slopes 25 degree and steeper are considered high risk erosion areas and cannot undergo replanting unless specified in the EIA report [Environment Protection (Prescribed Activities)(Environment Impact Assessment) Order 2005] and approved by the Environmental Protection Department (EPD). Slope determination methodology (slope analysis) should be based on average slope using topographic maps or topographical surveys.

Audit Findings:

Slope classification maps for the estates showing steep slopes above 25 degrees were made available to the assessment team. It was observed that terraces had been constructed in all sloping areas with regular bunds to retain water and as erosion control measure. As mentioned in the findings on Indicator 4.2.3, the application of EFBs as fertilizer further assisted in reducing erosion. A slope classification map of the estate was also presented. Fronds staking was also carried out to reduce erosion along slopes. For slopes, planting of Mucuna bracteata was implemented and 2,530 seedlings had been prepared for the planting. Map of planted areas and areas to be planted was presented. In addition Viterver grass was also established along slopes.

It was observed that, roads had been satisfactorily constructed and water runoff was adequate. Rain water was drained into the terraces on the lower slopes. Ribubonus

Estate had also established a road maintenance programme and the road conditions were found to be generally satisfactory. Proper frond stacking, EFB application, maintenance of soft vegetation in interlines, sufficient road side outlets for water and avoiding bare grounds had assisted in erosion control. Indicator 4.3.2

Avoid or minimize bare or exposed soil within estates. Minor compliance Specific Guidance:

Appropriate conservation practices should be adopted.

Audit Findings:

During the field audit, it was observed that generally the estates had been well protected from soil erosion with natural vegetation. Circular weeding had been implemented. In matured planted area, frond stacking (one stack with 4 palms) was observed. This had helped to further reduce the incidences of erosion.

Ground cover had been a standard requirement with Mucuna bracteata as cover crop being planted in exposed slopes. It was also observed that the presence of the fern Neprolepis biserrata cover along slopes to reduce exposed areas (Photo 5), Maps showing planted areas of Mucuna bracteata and Vertiver grass were presented. No bare grounds were observed during the inspection.

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Photo 4: Presence of the Mucuna bracteata and Neprolepis biserrata cover along slopes

Indicator 4.3.3

Presence of road maintenance programme. Minor compliance

Audit Findings:

It was observed that harvesting roads in the estate were in satisfactory condition and that water runoff was found to be adequate. Rain water was drained into the terraces and lower slopes. There was a road maintenance programme as shown in the machine utilization record documented. The Schedule for Heavy Machineries for Road Maintenance (Motor Graders and Compactors) January to December 2010 for Estate was examined.

No peat soil within the Ribubonus CU.

No such fragile soils in the Ribubonus CU

Indicator 4.3.4 Subsidence of peat soils should be minimized through an effective and documented water management programme

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

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Criterion 4.4

Practices maintain the quality and availability of surface and ground water. Indicator 4.4.1

Protection of water courses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting along all natural waterways within the estate. Major compliance

Specific Guidance:

Riparian buffer zones: Reference to be made to relevant national regulations or guidelines from state authorities e.g. Department of Irrigation and Drainage (DID), whichever is more stringent.

Audit Findings:

Riparian belts along the major rivers in all the estate had been demarcated with appropriate signage in accordance to the written Riparian Zone Management Guidelines (see Photo 5). Maps of the riparian buffer belts were made available to the assessment team. No activities were allowed within the buffer belts except for harvesting of the ripe fruits.

Photo 5 : Riparian Buffer Belt clearly demarcated with clear instructions that no activities should be conducted

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Indicator 4.4.2

No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate. Major compliance

Audit Findings:

It was observed that there was no construction of bunds/weirs/dams across the main rivers or waterways in the estate and that all streams and drainage were without any obstruction. Indicator 4.4.3

Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to 5.1 and 8.1). Major compliance

Audit Findings:

Water sampling had been conducted four times a year at specified sampling points along the main rivers in the estate as specified under the approval conditions of the Environmental Impact Assessments. Water sampling was done by the estate in Feb, May 7 Aug 2010 and a third party (Ekohandal Sdn Bhd.) sampling also done. The results of the water sampling indicating the level of E,coli, Coliform, pH, iron and turbidity were submitted at quarterly intervals by the estate to the Environmental Protection Department of Sabah (EPD). The water samples were analyzed by accredited laboratory. The results of water analysis for April 2011 for sampling points in Ribubonus indicated Class II B quality.

Indicator 4.4.4

Monitoring rainfall data for proper water management Minor compliance

Audit Findings:

Data on rainfall was collected by the estates. Records on rainfall from 1992 to 2011 were made available and they were examined by the assessment team. For 2009 the rainfall recorded was 2,827 m while 3,155 mm were recorded in 2010. Up to September 2011 a total of 2,687 mm of rainfall was recorded. Water for the estate and mill was sourced from Sungai Labuk and it would be treated in the two treatment plants. The treatment plant in the eastern side produced 10,500,000 l while the northern side would process 7,000,000 l of water. Procedures on minimizing water usage were implemented in all the offices, mills and estates. Rain water harvesting was constructed in line sites and estate complexes resulting in additional 17,205 l. A Water Management Plan to conserve water for estate and surrounding areas like the clinic, Humana School, all staff & workers quarters was made available.

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Indicator 4.4.5

Monitoring of water usage in mills (tonnage water use/tonne FFB processed). Minor compliance Specific Guidance: Data trended where possible over 3 years to look into resource utilization

Audit Findings:

The estate had continued to monitor the amount of water being used by the mills and the estates. It was observed that the records of the mill’s daily water use (litres of water per ton of FFB) as well as the monthly and daily water consumption in the estates were being kept. Monthly Summary Record of Water Usage for Year 2011 and Ribubonus Estate Water Management Plan were examined.

For the palm oil mill, an average of 2.13 litres of water per MT FFB was recorded in 2009 but this had been reduced to 1.80 litres per MT FFB in 2010. Indicator 4.4.7

Evidence of water management plans. Minor compliance

Audit Findings:

Water Management Plan Sepember 2010 to minimize water usage had been implemented in all the offices, mill, the clinic, Humana School, all staff and workers quarters. All the water obtained from the river was treated before supplying to the workers. For the harvesting of rain water, every house had been equipped with its own rain water collection tank. The facilities for harvesting rain water had been constructed in the line sites and estate complexes (Photo 6). To enhance the efficiency of water conservation there was a continuous improvement plan to install meters and monthly checks for leakage in the piping system.

Photo 6: Storage facility at the labour line for rain water harvesting

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Criterion 4.5

Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Indicator 4.5.1

Documented IPM system. Minor compliance

Audit Findings:

Ribubonus Estate had continued to implement the Integrated Pest Management (IPM) in the estates. As described in the Agriculture Manual & SOP for Oil Palm of the company one of the techniques used was by establishing beneficial plants along road sides and vacant areas (Photo 7). A map indicating the location of the planted beneficial plants was completed. Mammalian pests, Nettle Caterpillar and Bag worm attacks had been monitored monthly also as in Chapter 8 of the Agriculture Manual. No rat baiting had been done in 2011.The biocide Dipel was used for pest control in January, March and April of 2010 while the rodenticide Matikus 194 kg were used in 2010. Up to September 2011 the Biocide Dipel was used only once in January while 20 kg of Matikus were applied in January of the year.

Photo 7: Beneficial plants planted along road sides and vacant areas in all the estates

Indicator 4.5.2

Monitoring extent of IPM implementation for major pests. Minor compliance Specific Guidance:

Major pests include leaf eating caterpillars, rhinoceros beetle and rats.

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Audit Findings:

As mentioned in the findings under Indicator 4.5.1, beneficial plants had been planted along road sides and vacant areas in all the estates. The species used were Antigonon leptopus, Cassia cobanensis and Tunera subulata. Pest attack detecting census was carried monthly to determine the success of the IPM. The assessment team had inspected the Cover Crop Planting of Beneficial Plants (LCC Planting Program 2011). In 2011 there were no serious attacks of caterpillars and bagworms as shown by the monthly monitoring. No rat baiting was done in the year as no serious damages were detected. Indicator 4.5.3

Recording areas where pesticides have been used. Minor compliance

Audit Findings:

As stated in 4.5.1 the application of pesticides was only made when the incidences of attack had exceeded the accepted threshold level for such attack. The estate had indicated a reduction of the use of pesticides and rodentcides in 2011 in comparison to the previous year. Indicator 4.5.4

Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredient (ai) used / tonne of oil. Minor compliance

Audit Findings:

Herbicides sage had been monitored. Monthly Agrochemical Consumption Monthly Returns for 2010 and 2011 were presented during the surveillance. These returns were all checked by the Assistant Manager and confirmed by Senior Manager. As of September 2011 a total of 1.242 litres of ai (active ingredients) per ha had been applied in the field for the 9 month period. There was a reduction when compared to the 1.74 litres of ai per ha used in 2010. The chemicals used were:

Chemicals used and a.i. a.i. per ha

2009 2010 Up to Sept 2011

Starane 200 (2-4 D dimethylamine 47.8%)

0.053 0.104 0.065

Sentry (Glyphosate Isopropilamine 41%)

0.297 0.588 0.804

Garlon (Triclopyr Butoxy Ethyl Ester 32.1%

0.045 0.083 0.100

Kenlly (Metsulfuron methyl 20%)

0.008 0.008 0.006

Basta (Glufosinate ammonium 13.5%)

0.083 0.210 -

Sodium chlorate 99% 0.047 - 0.267

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Criterion 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. Indicator 4.6.1

Written justification in Standard Operating Procedures (SOP) of all Agrochemicals use. Major compliance

Audit Findings:

All chemicals usage was based on the ‘need to do basis’ to enhance field operations. Justification for use of agrochemicals had been written in the SOPs of the Agricultural manual. Ribubonus Estate had provided written justifications for all the agrochemicals it had used in the Manual and SOP. The Manual had included a chemical register list which indicates the purpose of usage (intended target), hazards signage, trade and generic names. Indicator 4.6.2

Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). Major compliance Specific Guidance:

Reference shall also be made to CHRA (Chemical Health Risk Assessment)

Audit Findings:

The estate had adopted the PPB’s Oil Palm’s Occupational Safety and Health Policy, plan and programme. The plan had been documented, communicated and implemented across all levels of the organization. MSDS/CSDS for chemicals 2009/2010 and MSDS/CSDS for fertilizers 2010 were presented during the audit. Hazard identification, risk assessment and risk control (HIRARC) records, as well as CHRA records were verified during this surveillance. Indicator 4.6.3

Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders and Pesticides Act 1974 (Act 149) and Regulations. Major compliance Specific guidance:

Unless participating in established recycling programmes or with expressed permission from the authorities, triple rinsed containers shall be pierced to prevent misuse. Disposal or destruction of containers shall be in accordance with the Pesticide Act 1974 (Act 149) and Environmental Quality Act 1974 (Scheduled Wastes) Regulations 2005.

Audit Findings:

The storage of these chemicals was found to be in accordance to the related legal requirements as well as the International Sustainability for Carbon Certification which the estate certified. The store was with concrete walls and locked with specified persons-in-charge assigned to attend to

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it. The appropriate PPE for handling these chemicals were also available at the point of use. Used chemical containers had to be triple rinsed before being disposed off in accordance to Poison Control Unit of the Agriculture Department 10 July 2008. Indicator 4.6.4

All information regarding the chemicals and its usage, hazards, trade and generic names must be available in language understood by workers or explained carefully to them by a plantation management official at operating unit level. Major compliance

Audit Findings:

A concrete chemical store with locked door had been constructed in the estate (see Photo 8). The chemical storekeeper had shown understanding of the hazards involved and the required control measures. An exhaust fan had been installed in the store. Eye-wash area with a wash basin equipped with eye wash bottle was provided. Records of the purchase, storage and use of agrochemicals were properly documented in the Stock Statement Return. Empty chemical containers had to be triple-rinsed and if not required for use in the field were pierced to prevent misuse. The disposal or destruction of empty chemical containers was found to be in accordance with legal requirements. Booklet on MSDS/CSDS of 2008 to 2011 for 41 chemicals and MSDS/CSDS for fertilizers 2010 instructions was displayed.

Photo 8 : A Chemical Store With Triple Rinsing tanks and pre mix bay

Indicator 4.6.5

Annual medical surveillance as per CHRA for plantation pesticide operators. Major compliance

Audit Findings:

Ribubonus Estate had a schedule for medical surveillance of its workers under the Safety and Health Plan as stated in the Occupational Health and Safety Policy. The medical surveillance

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was conducted by the Estate Hospital Assistant for estate sprayers who were exposed to the dangers of chemicals. Samples of Occupational Medical Surveillance Programme reports were examined. The surveillance reports showed that all the sprayers were healthy and suffered no detrimental effects as a result of their job. In addition to the above, all the sprayers had to undergo annual medical surveillance carried out by Occupational Health Doctor. Workers Medical Surveillance by OHD – Biological Monitoring (Annually) 2009/2010 was presented to the assessment team during this surveillance. Indicator 4.6.6

No work with pesticides for confirmed pregnant and breast-feeding women. Major compliance

Audit Findings:

Monthly tests had been conducted in the estate clinics and all pregnant and breast-feeding women were not allowed to work as pesticides sprayers. Indicator 4.6.7

Documentary evidence that use of chemicals categorised as World Health Organization Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM. Minor compliance

Audit Findings:

There was no evidence to show that ‘Paraquat’ had been used in the estates. Indicator 4.6.8

Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant authorities. Major compliance

Audit Findings:

It was observed that there was no aerial spraying being conducted in all the estates. Indicator 4.6.9

Evidence of chemical residues in CPO testing, as requested and conducted by the buyers. Minor compliance

Audit Findings:

It was noted out that the mill had not received any request to conduct tests on chemical residues in CPO.

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Indicator 4.6.10

Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) are maintained for either a minimum of 5 years or starting November 2007. Minor compliance

Audit Findings:

Ribubonus Estate maintained a monthly return for the agrochemicals used as stated in Indicator 4.5.4. The 2011 Agrochemical Consumption Monthly Returns for 2010 and 2011 were inspected. As of September 2011 a total of 1.242 litres of ai (active ingredients) per ha had been applied in the field.

These chemicals used were as follows:

1. 4,805 l of Glyphosate(Glyphosate Isopropilamine 41% ai)

2. 460 l of 2-4 D dimethylamine 47.8%

3. 50 kg of Sodium chlorate

4. 265 l of Garlon (Triclopyr Buoxy Ethyl Ester 32.1%)

5. 68 kg of Metfuron/Kenlly

6. 20 kg of Matikus

Criterion 4.7

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

Indicator 4.7.1

Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967(Act139). Major compliance The safety and health (OSH) plan shall cover the following: a. A safety and health policy, which is communicated and implemented. b. All operations have been risk assessed and documented. c. An awareness and training programme which includes the following specifics for pesticides:

i. To ensure all workers involved have been adequately trained in a safe working practices ( See also C4.8) ii. All precautions attached to products should be properly observed and applied to the workers.

d. The appropriate personal protective equipment (PPE) are used for each risk assessed operation. i. Companies to provide the appropriate PPE at the place of work to cover all potentially hazardous operations

such as pesticide application, land preparation, harvesting and if used, burning. e. The responsible person (s) should be identified. f. There are records of regular meetings between the responsible person(s) and workers where concerns of workers

about health and safety are discussed. g. Accident and emergency procedures should exist and instructions should be clearly understood by all workers. h. Workers trained in First Aid should be present in both field and mill operations. i. First Aid equipment should be available at worksites.

Audit Findings:

Ribubonus CU had continued to adopt the PPB Oil Palm’s occupational safety and health policy, plan and programme. It was found that the plan PPB Oil Palms Bhd, Ribubonus Sdn Bhd, Safe & Standard Operation Procedure for Oil Palm had been updated on 23/3/2011.

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The Plan had been documented, communicated and implemented across all levels of the organization. Hazard identification, risk assessment and risk control (HIRARC) records, as well as CHRA records and audiometric report were verified during this surveillance and found to be in order. Since there was no change in the agrochemicals used in the estates and chemical used at the mill from previous years the existing CHRA Reports were considered valid. The HIRARC carried out had covered the activities in both the mill and estates. Among the activities identified were chemical mixing and spraying, harvesting, slashing and FFB collection in the estates. As for the mill, the identified activities were laboratory work, boiler operations, FFB sterilization, kernel extraction, oil extraction and clarification.

To meet Workers’ Minimum Standard of Housing and Amenities Act 1990, Ribubonus CU had progressively built accommodation to replace the old houses. It was observed that the on-going construction of the new houses was poorly supervised by Ribubonus CU. There was incomplete and improper hoarding at project site and no warning signage on unauthorised entry into the work site erected (Photo 9). There were also BRC wires stacked in between two rows of matured oil palm trees which would pose a hazard obstacle to harvesters during harvesting and collection of FFBs.

OFIs M 1 and M 2 were raised. Photo 9 : Project site that was not barricaded and with no warning sign erected posing danger to a

community living nearby

It was observed that Confine Space Entry Permit had been implemented the records did not include all parameters e.g. the date of entry was not documented. OFI M 3 was issued. For the welfare of the field workers and in line with good estate practice, Ribubonus CU had provided changing rooms as well as shower facilities for sprayers and fertilizer application gangs. However, it was observed that the two shower rooms provided at Ribubonus estate were inadequate to cater for 25 sprayers and 10 workers for fertilizer application. It may take 10 minutes average for a person to shower and wash their contaminated work clothes. There was also insufficient lighting provided in the shower rooms from the small opening allowing sunlight to come through. OFI M 4 was issued for improvement of these facilities. The laboratory in the mill had to obtain an approved design of the LEV even though its performance was marginally satisfactory. OFI M 5 was raised.

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Signage requiring the use of ear plugs in high noise area at the mill had been posted and communicated, nevertheless its enforcement would have to be improved as some workers were seen without them and thus OFI M 6 was issued. Ribubonus Palm Oil Mill had identified significant hazards and risks and determined appropriate risk control measures in their HIRARC Register, This register could be further improved by adding a HIRARC assessment following introduction of two new machineries (Shaper and Hydraulic Jack) to the mill. An OFI M 7 had been raised. There were evidences of implementation of appropriate risk control measures in the fields and mill visited where employees had been provided with and were seen to be using the appropriate PPE. Sprayers and workers responsible for fertilizers application were observed to have worn suitable PPE and had adequate tools to perform their works. Signage indicating the need to wear PPE and covering of sharp tools were erected in the field (Photo 10). Records on the distribution of PPE to sprayers, workers for fertilizer applications, harvesters and mill operators in 2011 were presented during the assessment.

Photo 10 : Signage on the requirement of PPE and the need to cover sharp tools – chisel, sickle and parang.

A DOSH Registered Safety and Health Officer (SHO) had been appointed for taking charge and be responsible for OSH implementation at the mill and estates. From records inspected he had advised Ribubonus CU management on the importance of safety and health at workplace. It was verified during this surveillance that there were records of regular meetings/communication between management and workers where the concerns of workers on health and safety were discussed. This was practised in the regular morning briefings and the quarterly OSH Committee meetings. The minutes of these meetings had been maintained and management had taken the necessary actions to rectify issues as highlighted in these meetings and the corrective actions were found satisfactory. OSH training for staff and workers were continuous and had been conducted as per the OSH plan and programme developed by the SHO. Among the training which had been identified in the OSH plan were RSPO Awareness, Induction Course, ISCC Training, OSH at Workplace,

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Safe Standard Operating Procedure, Machine and Tools, Basic First-aider, understanding of CSDS with the emphasis on all precautions attached to the products and the use of PPE. The aspects of safety and health were also stressed during morning roll-call by Field Supervisors. Other OSH plans included workplace inspection/OSH audit and monitoring programmes. It was also verified during this surveillance that accident records were kept and the relevant reports including ‘Jabatan Keselamatan dan Kesihatan Pekerjaan’, JKKP 6 and JKKP 8 had been submitted timely to the Department of Occupational Safety and Health (DOSH). Ribubonus CU had constantly disseminated information on response to emergencies. This included site plan showing evacuation route to assembly point, location of firefighting equipment, emergency contact numbers and action to be taken during an emergency by staff and contractors. Emergency Response Team comprising of first aiders, fire fighters and search and rescue team had been formed at both mill and estate levels. The First Aiders interviewed at the field had been made aware of their duties and responsibility. They were provided with emergency contact numbers of whom to reach in an emergency. Accidents had been recorded by the Safety Officer and displayed as LTA on the notice board of each office. For the year 2011 there was no accident recorded. The JKKP 8 form (annual submission of previous year accident statistics) had been submitted timely to the Department of Occupational Safety and Health (DOSH) by the SHO. Evidence of implementation of appropriate risk control measures was observed during the field and mill assessment where employees had been provided with and were seen to be using the appropriate PPE (see Photo 11). First aid boxes were noticed located at several strategic locations at the mills and were also provided to each of the field supervisors. It was also noted that machines which have moving parts were well guarded while in the estate clean water was provided and transported to the field for use by the sprayer team. Records of this distribution were kept in PPE Distribution to Harvester Items-Harness 2011 and these records were presented during the assessment. Fruit harvesters had been provided with hard hats.

Photo 11: Sprayers and Harvester Equipped with Appropriate PPE

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Information on response to emergencies had been disseminated. This included site plan showing evacuation route to assembly point and location of firefighting equipment and action to be taken during emergency by staff and contractors. Indicator 4.7.2

Records should be kept of all accidents and periodically reviewed at quarterly intervals. Major compliance Specific Guidance:

Record of safety performance is monitored through Lost Time Accident (LTA) rate.

Audit Findings:

Accidents had been recorded by the Safety Officer and displayed as LTA on the notice board of each office. Accidents had to be reported in accordance to DOSH requirement in the form JKKP6 Pemberitahuanan Mengenai Kemalagan/ Kejadian Berbahaya within 7 days. These records were kept in the Occupational Accident Record and also Occupational Accident Statistics. The cases were classified under harvesting, spraying, slashing, fertilizing, drivers and others. The assessment team had sighted the report on accident investigation or ‘Laporan Siasatan Kemalangan’ . Indicator 4.7.3

Workers should be covered by accident insurance. Major compliance

Audit Findings:

It was also seen that Ribubonus CU had provided a group insurance for all workers as required under the Workmen Compensation Act 1992. The assessment team had sighted the insurance certificate (underwriter Jerneh Insurance) and found to be still valid. Criteria 4.8

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

Indicator 4.8.1

A training programme (appropriate to the scale of the organization) that includes regular assessment of training needs and documentation, including records of training for employees are kept. Major compliance

Audit Findings:

Ribubonus CU had drawn up a training schedule for employees and contractors at the beginning of the year for implementation. Record on the proposed training scheduled and actual training provided had been presented during this audit and it was observed that all scheduled courses were conducted.

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During the field interviews with the workers at their various work sites, it was observed that they were knowledgeable on the safety usage of PPE, the danger of chemicals they handle, the need to follow SSOP and the emergency action to be taken when responding to emergency situations. It was reported that contractors were briefed on safety, RSPO and ESH requirements prior to commencement of work in the estate. However, newly employed workers and staff (those with less than one year of joining the estate) were not aware of the basic requirements of RSPO. An OFI M 8 was raised.

The operation in the mill could be improved with Authorized Gas Tester and Authorized Entrant and Standby Person as required by the Confine Space Entry Code of Practice. An OFI M 9 was raised. The electrical LOTO permit had been introduced in the mill and training would have to be done resulting in OFI M 10. To further enhance the training process for the staff and workers a review process for each training course conducted to assess its efficiency could be implemented. An OFI SK 1 was raised.

PRINCIPLE 5: ENVIRONMENTAL RESPONSIBILITY AND CONSERVATION OF NATURAL RESOURCES AND BIODIVERSITY Criterion 5.1

Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Indicator 5.1.1

Documented aspects and impacts risk assessment that is periodically reviewed and updated. Major compliance

Audit Findings:

Ribubonus Estate had continued to review and up-date the environmental aspects and impacts risk assessment for activities relating to the estates and mill operations. These were incorporated into the report Identification of Environmental Aspects and Impacts and Evaluation of Significance For Ribubonus Sdn. Berhad. An EIA Report Oil Palm Plantation Development at Ribubonus Estate in Beluran, Sabah June 2009 was produced for the estate. This EIA was approved by EPD on 26 January 2010 with conditions. As specified environmental monitoring reports were produced at quarterly intervals on behalf of the estate by a consultant firm Ekohandal Sdn. Berhad which was registered with the EPD valid until 9 March 2012.Reports for the period July to September 2011 and April to June 2011 were examined. Indicator 5.1.2

Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored. Minor compliance

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Audit Findings:

Environmental improvement plans to mitigate the negative impacts had been developed and implemented. Among the plans were improving the quality of effluent discharged from the mills, water conservation plan, reduction of fuel consumption and increasing the 3Rs initiatives in domestic waste management. Criterion 5.2

The status of rare, threatened or endangered species (ERTs) and high conservation value habitats, if any, that exists 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. Indicator 5.2.1

Identification and assessment of HCV habitats and protected areas within landholdings; and attempt assessments of HCV habitats and protected areas surrounding landholdings. Major compliance

Audit Findings:

The HCVF scoping assessment of the estates HCVF Scoping Assessment of Ribubonus Estate of PPB Oil Palms Berhad’had been completed as reported in the Stage 2 report. It had documented the ERT species within the residual forested areas of the estates. It identified HCV sites within the estate with attributes of HCV 4 in Block 30, 34 and 36 which was contiguous with Bukit Kuamas Forest Reserve. Another area identified was in Compartment 23 and 32 covering 26 ha which was bordering the state land. Conservation sites were demarcated and mapped. Examination of the 2012 budget for the estate showed no allocation for HCV and survey of ERT species. The implementation of this Plan in the short-term and long-term period would have to be supported with a budget plan. Ribubonus Estate had initiated a monthly monitoring programme of these HCV sites which had been clearly demarcation and mapped. A more systematic monitoring process could be established and enhanced with a more precise documentation of the sightings of animals in these HCV sites. Personnel responsible could be trained in recognizing these animals. An OFI SK 2 was raised.

Photo 12: HCV Site Identified in Ribubonus Estate

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Indicator 5.2.2

Management plan for HCV habitats (including ERTs) and their conservation. Major compliance

Audit Findings: The Ribubonus Estate HCV and Conservation Management and Monitoring Plan April 2011 to 2015 was presented to the assessment team. The document had included the HCV habitats and the identification of ERT. Indicator 5.2.3

Evidence of a commitment to discourage any illegal or inappropriate hunting fishing or collecting activities, and developing responsible measures to resolve human-wildlife conflicts. Minor compliance

Audit Findings:

Poaching was not allowed within the plantation with warning signage being placed at the entrances of the estate. Criterion 5.3

Waste is reduced, recycled, re-used and disposed off in an environmentally and socially responsible manner. Indicator 5.3.1

Documented identification of all waste products and sources of pollution. Major compliance

Audit Findings:

A Waste and Pollution-Identification, Prevention, Mitigation and Improvement Plan was used by the estate to handle waste generated. This document had been revised twice in 2008 and again in September 2011. A 3 R Plan had also been implemented in 2009 for the office and labour lines to encourage reduction, reuse and recycle of domestic wastes. Monthly Domestic Waste Records were maintained in each division of the estates. This allowed the estate management to identify the types and amount of wastes generated as well as their sources. It was observed that recycling bins had been placed in the dump site for the workers to sort waste collected for the landfill (see Photo 13 and 14). Aluminum cans, plastic bags and papers were re-cycled from domestic waste and sold. Record Summary of Recycled Wastes Sold 24 March to 8 July 2011 was kept.

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Photo 13: Recycling Bins at the Land Fill Site

Photo 14: Landfill for Domestic Waste in the Estate

It was observed that mill waste EFB was used as organic supplements in the fields and EFB mulching was done in all new plantings and along roadsides. Land irrigation using POME was also noted. Indicator 5.3.2

Having identified wastes and pollutants, an operational plan should be developed and implemented, to avoid or reduce pollution. Minor compliance Specific Guidance:

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Audit Findings:

The management of domestic wastes had been described under Indicator 5.3.1. The disposal of scheduled wastes was done through a licensed contractor as specified under Environmental Quality (Scheduled Wastes) Regulation 1988 Sixth Schedule. Transportation of scheduled wastes was done by Cahajasa Sdn Berhad with licence 000/729 valid until 30 April 2012. These wastes were disposed off by Perniagaan Saudara Baru with licence number 001181 and Hiap Huat Chemical licence number 000378. Consignment notefor Scheduled Wastes CSB 2669 was inspected and found to have follow the specified procedures of the Act. Recycling of domestic wastes had been encouraged in the line site but this could be improved with more recycling bins that would allow sorting of wastes at source. An OFI SK 3 was raised.

Indicator 5.3.3

Evidence that crop residues / biomass are recycled (Cross ref. C4.2). Minor compliance

Audit Findings:

It was observed that EFB had been collected and used as fertilizer in the estates. The use of EFB as fertilizer was done in the planted areas (3-5 rows of palm trees from the road) Criterion 5.4

Efficiency of energy use and use of renewable energy is maximized. Indicator 5.4.1

Monitoring of renewable energy use per tonne of CPO or palm product in the mill. Minor compliance

Audit Findings:

Ribubonus mill had maintained and recorded monthly the usage of fossil fuel usage per tonne of CPO. For 2010 the diesel consumption was 355,589 l for the production of 72,933.18 mt of FFB which would be 4.87 l per mt. As of July 2011 255,934 l of diesel were used to convert 48365.75 mt of FFB which was 5.29 l/mt Indicator 5.4.2

Monitoring of direct fossil fuel use per tonne of CPO or kW per tonne palm product in the mill (or FFB where the grower has no mill). Minor compliance

Audit Findings:

Ribubonus CU had continued to monitor the monthly consumption of diesel per tones of FFB in the estate and palm oil mill. Monthly consumption of diesel in the mill had been shown in Indicator 5.4.1. In the estate including the line sites the 2011 Monthly Oil and Lubricant Return January to September was 9,219.78 l with 7,757 l of petrol.

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Criterion 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 Guidance or other regional best practice. Indicator 5.5.1

No evidence of open burning. Where controlled burning occurs, it is as prescribed by the Environmental Quality (Declared Activities) (Open Burning) Order 2003. Major compliance

Audit Findings:

There was no open burning being observed during this surveillance audit as this had not been allowed under the law and not permitted under any circumstances as clearly stated in the Manual and SOP. Indicator 5.5.2

Previous crop should be felled/mowed down, chipped/shredded, windrowed or pulverized/ ploughed and mulched. Minor compliance Specific Guidance:

A special dispensation from the relevant authorities should be sought in areas where the previous crop or stand is highly diseased and there is a significant risk of disease spread or continuation into the next crop.

Audit Findings:

There was no replanting observed during this surveillance audit. It was reported that all old palm trees would be felled and chipped for mulching during the replanting phase. Indicator 5.5.3

No evidence of burning waste (including domestic waste). Minor compliance

Audit Findings:

Burning of domestic wastes was not allowed as specified under the Manual and SOP and was not sighted during the audit. Criterion 5.6

Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Indicator 5.6.1

Documented plans to mitigate all polluting activities (Cross ref to C5.1). Major compliance

Audit Findings:

The palm oil mill had been installed with a tertiary effluent treatment plan and a methane recovery plant was planned after the testing in Serama 2 Mill.

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Indicator 5.6.2

Plans are reviewed annually. Minor compliance Specific Guidance:

Pollutants and emissions are identified and plans to reduce them are developed in conformance to national regulations and guidance.

Audit Findings:

Pollutants and emissions had been identified in the Aspects and Impacts Register. Proper procedures had been developed to reduce them which were in accordance to the national regulations and guidance.

Audit Findings:

Not applicable as there was no peat soil in the estates.

PRINCIPLE 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND OF INDIVIDUALS AND COMMUNITIES AFFECTED BY GROWERS AND MILLS Criterion 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. Indicator 6.1.1

A documented social impact assessment including records of meetings. Major compliance Specific Guidance:

Non-restrictive format incorporating elements spelt out in this criterion and raised through stakeholder consultation including local expertise.

Audit Findings:

Social Impact Assessments was conducted for Ribubonus CU through a participatory approach.

The methods used to solicit inputs and feedbacks from identified stakeholders were informal discussions and formal interviews. The report Primary Report of SIA (Design Phase) for Ribubonus Oil Palm plantations and Ribubonus Palm Oil Mill of PPB Oil Palm Berhad (Sabah) was inspected. A Social Impact management Plan –Ribubonus Estate had been prepared. In

Indicator 5.6.3

Monitor and reduce peat subsidence rate through water table management

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addition a Community Development Plan Ribubonus Estate 2011 was presented during the surveillance.

The list of stakeholders consulted during the SIA study was made available and it covered all the relevant governmental agencies, surrounding communities, local businesses, contractors and panel doctors. The HCV assessment had covered HCV attributes 5 and 6, relating to local communities. The supporting documentation showed consultations with the identified local communities including joint site visits to identify areas said to have attributes 5 and/or 6. Meetings with stakeholders were held on 15 September 2009, 16 May 2010, 18 February 2011, 29 March 2011, 7 May 2011, 3 June 2011 and 9 September 2011. The meetings were between the estates and the mill with small holders around the estate, local communities and suppliers. Minutes of these meetings were also presented to the audit team. There was a Mitigation Plan on social issues raised in the SIA (File Document. 6.1.1). The most recent review of the progress of implementation was done on 20 September 2011. Indicator 6.1.2

Evidence that the assessment has been done with the participation of affected parties. Minor compliance

Specific Guidance:

Participation in this context means that affected parties or their official representatives or freely chosen spokespersons are able to express their views during the identification of impacts, reviewing findings and plans for mitigation, and monitoring the success of implemented plans.

Audit Findings:

Evidence of participation of local communities was shown in the records of consultation as well as photographic records. The mitigation plan, their implementation and continuous improvement were also developed with consideration of the views of the stakeholders. These were verified during the field-visits and discussions with stakeholders, communities and in documented forms (Community-based Development Committee Files and Management Review after Audit Files). Indicator 6.1.3

A timetable with responsibilities for mitigation and monitoring is reviewed and updated as necessary. Minor compliance

Guidance:

Identification of social impacts may be carried out by the grower in consultation with other affected parties, including women and migrant workers 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. Particular attention should be paid to the impacts of outgrower schemes (where the plantation includes such a scheme). Plantation and mill management may have social impacts on factors such as: 1. Access and use rights. 2. Economic livelihoods (e.g. paid employment) and working conditions. 3. Subsistence activities. 4. Cultural and religious values. 5. Health and education facilities. 6. Other community values, resulting from changes such as improved transport /communication or arrival of

substantial migrant labour force.

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Audit Findings:

Social impacts were discussed within the various committees established within the Ribubonus CU. These included Staff Welfare Committee, Women and Children Welfare Committee and Safety and Health Committee. Donations of cash and gifts were also part of the community programme. Other activities carried out by the Estates and Mills towards local- sustainability were:

Providing a free ferry service to local communities.

Improvement of local roads for villages

As indicated under the findings on Indicator 6.1.1, a great deal of new measures had been introduced and projects being implemented. Evidences of mitigation plan, implementation, and continuous improvement were found both during the field-visits and discussions held with stakeholder communities. Criterion 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. Indicator 6.2.1

Documented consultation and communication procedures. Major compliance

Audit Findings:

There were a policy and procedures on communication and consultation with stakeholders as outlined in the Standard Operating Procedure for Consultation and Communication. These provided an open communication with stakeholders and providing guidelines to effective management and coordination of communication to ensure that information communicated were accurate and timely. There was a set of guidelines covering internal and external communication and these were documented in Document No. RSPO 6.2(2) as:

Internal Communication Procedures

External Communication Procedures Person-in-charge and responsible over enquires about RSPO in Ribubonus Estate had been identified by a memo dated 18 July 2011 (updating earlier record).

Evidences of instances of such communications are found in minutes of meetings such as:

Meeting with Smallholders (Stakeholders) 13 May 2011

Meeting with FFB Suppliers (Stakeholders) 28th October 2011 Various modes of management to staff/workers communication had also been practiced which included daily assemblies, internal circulars and memos, notices, posters, environmental and

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social campaigns, management walk, suggestion box, staff/worker representatives as well as complaint form. Indicator 6.2.2

A nominated plantation management official at the operating unit responsible for these issues. Minor compliance

Audit Findings:

A Social and Welfare Committee had been formed. The members of the Committee were In addition, a Community-based Development Committee had also been set up to foster closer rapport with the local communities. Appointment of an officer responsible for and as a contact person on internal and external consultations regarding RSPO-related matters was made via letter dated 21st January 2011. Indicator 6.2.3

Maintenance of a list of stakeholders, records of all communication and records of actions taken in response to input from stakeholders. Minor compliance Specific Guidance:

Decisions 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 mechanisms should be designed in collaboration with local communities and other affected or interested parties These should consider the use of existing local mechanisms and languages. Consideration should be given to the existence/ formation of a multi-stakeholder forum.

Communications should take into account differential access to information of women as compared to men, village leaders as compared to day workers, new versus established community groups, and different ethnic groups. Consideration should be given to involving third parties, such as disinterested community groups, NGOs, or government (or a combination of these), to facilitate smallholder schemes and communities, and others as appropriate, in these communications.

Audit Findings:

A comprehensive list of stakeholders consulted had been maintained and was presented during the surveillance. The list included all relevant external and internal stakeholders with records of communication established. Criterion 6.3

There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. Indicator 6.3.1

Documentation of the process by which a dispute was resolved and the outcome. Major compliance Specific Guidance:

Records are to be kept for 3 years.

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Audit Findings:

There were established procedures for internal and external communication. Complaints and grievances were resolved through the following committees:

Social and Welfare Committee

Stakeholders Committee

The Social and Welfare Committee generally handled simple cases and cases involving individuals. The Stakeholders Committee dealt with more complex problems, and problems involving outsiders and groups of people. The Stakeholders Meeting was held at least three times a year or more when there was a need for it. .There was also a complaint form which had been improved over the past two years. The complaint and grievance form in every estate was actively utilized demonstrating a wide acceptance of this channel to communicate grievance for initiation of the resolution process. The form was used by the staff, workers, and other stakeholders. All these complaints were kept in RSPO File 6.7.1 The process of communications with stakeholders had been documented. There was a documented SOP for resolving grievances and complaints. A parallel system for complaints and grievances was also in place for employees, and there were workers representations on the relevant committees, in particular, the Social and Welfare

Committee. The procedure for internal stakeholders‟ complaint and grievances was well-

established as judged from the documentation and in interviews with workers. Indicator 6.3.2

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

Audit Findings:

A complaint and grievance form had been adopted and used. A compilation and a monthly summary on all complaints and grievances captured by the form were prepared. This system had been improved following the comment made during the Stage 2 assessment with now two sets of forms. These were Ribubonus Sdn. Berhad Borang Aduan (Complaint Form) and Ribubonus Sdn. Berhad Borang Permohonan (Request Form). Resolution of complaints and grievances was also guided by an SOP on grievances and complaints (SOP-GC) to ensure that resolution of disputes was done effectively, timely and in appropriate manner. Indicator 6.3.3

The system is open to any affected parties. Minor compliance Guidance:

Dispute resolution mechanisms should be established through open and consensual agreements with relevant affected parties. Complaints may be dealt with by mechanisms such as Joint Consultative Committees (JCC) with gender representation. Grievances may be internal (employees) or external.

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Audit Findings:

The system provided opportunities to all affected parties to lodge their grievances and complaints. The Joint Consultative Committee responsible for dealing with these issues was represented by employees of both genders.

Audit Findings:

The Stakeholders Meeting was an effective mechanism for negotiation with indigenous people over compensation on loss of customary rights. Through the mechanism of the Stakeholders Meeting Ribubonus Estate had clarified their legal rights over the disputed land with the Persatuan Rakyat, Kampung Telupid and established that the Company was not involved in illegal occupation of NCR land (the process is documented in file: Tuntutan Tanah Adat (NCR) Daripada Penduduk Kampung Telupid). The villagers were advised to deal with the appropriate government authority. This mechanism was also used to settle the claim on the damage to paddy land belonging to a farmer Laina Salim during road construction work by the Estate. A compensation of RM1000 was made after discussion involving the complainant, the estate management and the Telupid Sub-district office ( Ref. file on communication between Ribubonus, Laina Salim, and Telupid Sub-district Office) A proper documentation including a procedure to identify claimants and records was available.

Audit Findings:

Other than the potential claim and the legacy claim mentioned above, the local communities/indigenous people consulted during the course of audit, stated that they had no customary or legal rights issues with the estates in question. As mentioned above customary rights-encumbered land involved had been resolved and the Ribubonus CU were resolved through consultation and establishment of consensus on compensation.

Criterion 6.4

Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. Indicators 6.4.1

Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation. Major compliance

Indicator 6.4.2

A procedure for calculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land. Minor compliance

Indicator 6.4.3

The process and outcome of any compensation claims is documented and made publicly available. Minor compliance

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Audit Findings:

The resolution of the land claim at Ribubonus Estate was documented in the Stakeholders Meeting. Criterion 6.5

Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Indicator 6.5.1

Documentation of pay and conditions. Major compliance

Audit Findings:

Pay and conditions for employees were in accordance to legal and industry standards. Plantation workers were given flexibility with regards to the mode of wage determination as they could choose the piece rate or the daily-wage system. The workers interviewed were satisfied with the pay and conditions of employment. They were particularly happy with the improvement in housing. Indicator 6.5.2

Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit. Minor compliance

Audit Findings:

Employment was done in accordance to the Sabah Labour Ordinance. The wages and conditions were documented, and every employee had a contract of service. Workers were given contracts with the personal particulars, details of terms and conditions of employment, overtime rate, working hours and rest day per week were clearly spelt out in the contract. There was a Workers Welfare Committee in each estate to settle any grievances and in 2010 three meetings were held. Indicator 6.5.3

Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders). Minor compliance Guidance:

Where temporary or migrant workers are employed, a special labour policy should be established. This labour policy would state the non discriminatory practices; no contract substitution of original contract, post arrival orientation program to focus especially on language, safety, labour laws, cultural practices etc; decent living conditions to be provided. Migrant workers are legalised, and a separate employment agreement should be drawn up to meet immigration requirements for foreign workers, and international standards, if ratified.

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Audit Findings:

It was observed that all workers in the estates had been provided with type-H houses and supplied with free with treated-water and water-tank for storage of rainwater for non-consumption needs. The process of up-grading the accommodation was on-going and expected to be fully completed by 2012. Two new water treatment plants with storage facilities were completed in the year. The workers also collected rain water for use as part of the water conservation plan. The water collected in the line sites could be tested to ensure that it would be safe to use and an OFI SK 4 was raised. A new crèche was built for the benefits of the workers in the estates and mill. Workers had free access to basic health services provided through company-run clinics. Ribubonus CU also provided pre-school by way of the Humana schools for foreign workers’ children and transportation to near-by government schools for children of local workers and staff. Ribubonus CU did not discriminate between foreign and local workers in terms of pay and conditions of work. The salary scheme for the workers, either local or foreign, was similar. All foreign workers had to fulfill the legal requirements before they could be employed to work in the estate. Criterion 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. Indicator 6.6.1

Documented minutes of meetings with main trade unions or workers representatives. Major compliance

Audit Findings:

The company had a policy of respecting the rights of workers to join trade unions or other forms of association as long as it is legal and does not undermine peace in local community. This had been spelt out as one of the conditions in the workers contract document. This policy was publicized as notices in ‘Bahasa Melaysia’ or Malay language at strategic places (notice boards and walls). There was documented procedure for collective negotiation and resolutions of disputes or grievances (compiled in standard operating procedure and continuous Improvement Plan, 2008). Statements in Malay language recognizing the freedom of association had been displayed in appropriate places in the estate. Indicator 6.6.2

A published statement in local languages recognizing freedom of association. Minor compliance Guidance:

The right of employees and contractors to form associations and bargain collectively with their employer should be respected. Documented company policy recognizing freedom of association. Labour laws and union agreements or in their absence, direct contracts of employment detailing payments and other conditions are available in the languages understood by the workers or explained carefully to them by a plantation management official in the operating unit.

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Audit Findings:

The company’s policy of respecting the rights of workers to join trade unions or other forms of association had been spelt out as one of the conditions in the workers contract document. This policy was publicized as notices in ‘Bahasa Melaysia’ or Malay language at strategic places (notice boards and walls). There was a free election of workers’ representation among the workers in the Welfare Committee. Criterion 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. Indicator 6.7.1

Documented evidence that minimum age requirement is met. Major compliance Guidance:

Growers and millers should clearly define the minimum working age, together with working hours. Only worker of 18 years and older may be employed, with the stated exception of family farms. Smallholders should allow work by children only if permitted by national regulations.

The minimum age of workers should be not less than 16 years, or the minimum school leaving age, or the minimum age permitted under national regulations, where higher.

Audit Findings:

The company had established a policy prohibiting the employment of persons under the age of 18, in accordance with the definition of the ILO Convention. The policy called the Polisi Buruh Kanak-kanak written in the Malay language was publicized on notice boards in the offices. No person under the age of 18 was observed employed in any part of the operation. Its implementation was evident through verification of employment records which showed the minimum age requirement under Sabah Labour Ordinance section 72 (CAP 67) 1950 was being complied with. Site assessment also confirmed that there were no children working in Ribubonus CU. Interviews with workers also revealed that they were aware of the requirement. The register of employees included the date of birth as for the age verification. Criterion 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. Indicator 6.8.1

A publicly available equal opportunities policy. Major compliance

Audit Findings:

The Company had adopted a policy of equal opportunity which upheld the principle of justice and non-discrimination against minorities based on gender, ethnic origins, sexual orientation, physical attributes, and beliefs. This policy stance was displayed publically on notice boards in the Malay Language.

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Examination of the profile of the work force indicated that opportunities for employment were opened. Both the foreign workers and local workers were highly diversified in terms of ethnic origin, beliefs, and places of origin. Although there were more foreigners than local workers, this situation reflected the local labor supply situation. There was a general labor shortage in the plantation industry.

The composition of the management and general staff reflected the ethnic diversity of the Sabah population. There was no restriction on the employment of female workers. Female workers/staff were significantly represented in management, general staff and plantation labor

force. Indicator 6.8.2

Evidence that employees and groups including migrant workers have not been discriminated against. Minor compliance 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

Audit Findings:

As in indicated in the findings on Indicator 6.8.1, the workforce was of multi-cultural and multinational living and mixing together on the jobs and at places of residence. Generally it was observed that they had no apparent dissatisfaction as the pay scheme and work benefits for both foreign and local workers being the same. Criterion 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. Indicator 6.9.1

A policy on sexual harassment and violence and records of implementation. Major compliance

Audit Findings:

A policy against sexual harassment and violence against women was in place. The estate had a specific policy prohibiting sexual harassment called Polisi Gangguan Seksual which was publicised widely on notice boards. The policy defined what constituted sexual harassment and outlined its implementation on the basis of four principles as detailed in the policy document.

Awareness programs about sexual harassment and violence against women had been conducted periodically. Evidences of this policy had been put into practice were seen in Women and Children Welfare Committee (‘Jawatankuasa Kebajikan Wanita dan Kanak-Kanak’) which handled complaints about the treatment of women and children as well as promoting awareness about such issues as sexual violence, sexual discrimination, and children education and care. Members were made up of female plantation labor, general staff, and management. The committee met at least three times a year. Sexual harassment had been a standing agenda in the meeting of the Committee for Women and Children.

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Indicator 6.9.2

A specific grievance mechanism is established. Major compliance Guidance:

There should be a clear policy developed in consultation with employees, contractors and other relevant stakeholders, which should be publicly available. The policy is applicable within the boundaries of the plantation/mills or while on duty outside the premises. Progress in implementing the policy should be regularly monitored and the results of monitoring activities should be recorded. A committee specifically to address concerns of women may be required to comply with the criterion. This committee will consider matters such as; training on women’s rights, counseling for women affected by violence and child care facilities to be provided by the growers and millers. The activities of the committee should be documented.

Audit Findings:

There was a published policy on sexual harassment and violence which had been publicly displayed and made available to all employees in languages they understand. Forms for registering complaints about sexual harassment were made available and being sighted. The procedure was guided by the Sexual Harassment in the Workplace Act. The grievance mechanism for handling sexual harassment issues was also available. A Women and Children committee has been established by Ribubonus CU to handle sexual harassment and children-related issues. Interviews with the committee members revealed that they were aware of their roles and responsibilities. Criterion 6.10

Growers and mills deal fairly and transparently with smallholders and other local businesses. Indicator 6.10.1

Pricing mechanisms for FFB and inputs/services shall be documented. Major compliance

Audit Findings:

Ribubonus Palm Oil Mill received about 30% of the fresh fruit bunches from smallholders and nearby estates. Smallholders therefore formed an important group of stakeholders of the company. The smallholders had access to management through the stakeholders meeting and vice-versa. These meetings discussed and resolved issues affecting the smallholders and other local stakeholders. The Stakeholders meeting is an inclusive and engaging forum where stakeholders are free to express their views and seek clarification on matters they consider relevant. The Stakeholders meeting would be held at least 3 times a year. Prices of FFB had clearly been displayed at the palm oil mill and palm oil prices and pricing were discussed in the Stakeholders Meeting. Indicator 6.10.2

Current and past prices paid for FFB shall be publicly available. Minor compliance

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Audit Findings:

It was observed that the prices of FFB had clearly been displayed at the palm oil mill. Indicator 6.10.3

Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. Minor compliance

Audit Findings:

Complaint regarding prices and other FFB related dealings between mill and suppliers were registered with the Mill Manager and reviewed by an internal mechanism. It was found out that current and past prices for FFB were made available publicly. Indicator 6.10.4

Agreed payments shall be made in a timely manner. Minor compliance Guidance:

Transactions with smallholders should consider issues such as the role of middlemen, transport and storage of FFB, quality and grading. The need to recycle the nutrients in FFB (under 4.2) should also be 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 middlemen 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 payments for FFB could be considered.

Audit Findings:

As indicated in the findings on Indicator 6.10.1, prices of palm oil were made known to smallholders. Payment had been made timely and no complaints were made by the suppliers interviewed.

Criterion 6.11

Growers and millers contribute to local sustainable development wherever appropriate. Indicator 6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities.

Minor compliance

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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 in accordance to national policy. Positive discrimination should not be recognized as conflicting with Criterion 6.8.

Audit Findings:

The Company had established a clear policy on local sustainable development which was incorporated in the larger Social Policy. Local Sustainable development entails among other things the empowerment of local communities so that they develop capability to sustain and build on whatever initiatives or projects that were implemented. The documentation under this criterion was not properly organized, recording mostly activities which were in the nature of gifts and financial sponsorships of local school or sporting events. While these donations may indirectly contribute to local sustainable development, the indicator and guidance under Criterion 6.11 imply something more substantive and based on the local needs and participation. The Ribubonus CU had in fact planned and implemented a number of local sustainable initiatives, some of these were:

Organizing talks to enhance the agricultural knowledge and skill of smallholders, such as

the MPOB briefing on 13 January 2011, Security and safety on the plantation roads

Maintenance of access road to the estate for villagers

Ribubonus manages and operates the ferry crossing the Labuk river giving local

indigenous people free use of the ferry service. This is an important contribution to the

welfare of local community facilitating access to farms on both banks of the river by local

people

Employment opportunities to the local communities

A programme called Program Kelompok Baja Tersedia was placed under consideration.

This was in response to the smallholders’ request for a facility to purchase fertilizer on

credit from the Estate. The credit would be repaid via deduction from sales of FFB. If

implemented the program would facilitate the purchase of fertilizer by smallholders

reducing the problem of transportation and initial financial outlay.

A proper documentation of the activities would have to be done to facilitate planning, monitoring and reporting. This may be done in conjunction with Principle 8.1. An OFI R 1was raised.

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PRINCIPLE 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTING Not applicable, as Ribubonus estate is a fully developed estate and there was no new planting.

PRINCIPLE 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY Criterion 8.1

Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. MY NIWG commits to demonstrate progressive improvement to the following but not limited to: Indicator 8.1.1

Minimize use of certain pesticides (C4.6) Major compliance

Audit Findings:

The management of the estates and mills had established a monitoring system for continuous improvement through a Continuous Improvement Plan. The activities that were directed at improving areas of key operations had been carried out and recorded in a brief table-form in the file on Principle 8. This however did not record the review and monitoring processes that were critical to a continuous improvement plan. A periodical review of the progress of the implementation of the action plan that was recorded and documented would serve as a management tool and capture the sense of continuous improvement (in document e.g minutes of the management review meeting). An OFI R 2 was raised. The estates had maintained a programme of determining the threshold level of pest infestation before deciding on pesticides application. During this surveillance, it was observed that pesticides had not been applied in the estates. An Integrated Pest Management Programme (IPMP) had also been practiced in all estates through the planting of beneficial plants. GAP practices had satisfactory been maintained within the industry norm. Mills waste had been re-cycled and used as soil supplement and EFB used as fertilizer in the field. Indicator 8.1.2

Environmental impacts (C5.1) Major compliance

Audit Findings:

A management and monitoring programme had been established for the HCV areas identified within the estate. Environmental monitoring had also been conducted according to the Environmental Management Plan for each estate. These reports had been submitted on time to the Environmental Protection Department.

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New chemical stores made of concrete had been constructed in the estates. Each had a proper lock and key system controlled by the storekeeper. Appropriate safety posters had been placed at the entrance. Washing facilities for clothing, bath rooms and first aid boxes had also been provided. Indicator 8.1.3

Maximizing recycling and minimizing waste or by-products generation. Major compliance Specific Guidance To work towards zero-waste (C5.3)

Audit Findings:

Programmes on recycling and minimizing waste as well as by products generation had been established. Recycling bins and proper management of schedules wastes had been implemented. Recycling bins were visible in the estates as well as the land fill sites. There was also a Waste and Pollution Identification Procedure, Mitigation and Improvement Plan. A guideline on landfill for disposal of domestic wastes was written. As part of the CDM plan the utilization of biogas was in preparatory stage in the mill. Indicator 8.1.4

Pollution prevention plans (5.6) Major compliance

Audit Findings:

As stated above there was a Waste and Pollution Identification Procedure, Mitigation and Improvement Plan for the Ribubonus Estate. Indicator 8.1.5

Social impacts (C6.1) Major compliance

Audit Findings:

A major improvement was the construction of a new labour line (Class H) for the workers to replace the old wooden quarters. Each unit of the labour line had been equipped with electricity and treated water supply. Proper sanitation facilities had also been provided. All the workers interviewed expressed happiness over the availability of these new facilities. Other improvements in the fields included greater awareness of workers on 3R’s initiatives (i.e. reduce, reuse, recycle) as part of their work culture. Immunization programme was also initiated in the estate clinic for the children of workers. A new crèche was constructed and a new school bus was bought for sending children to schools.

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Indicator 8.1.6

A mechanism to capture the performance and expenditure in social and environmental aspects. Minor compliance Guidance

Specific minimum performance thresholds for key indicators should be established. (See also Criterion 4.2, 4.3, 4.4, and 4.5). Growers should have a system to improve practices in line with new information and techniques and a mechanism for disseminating this information and throughout the workforce.

Audit Findings:

A mechanism to capture the performance and expenditure had been well established. It was not limited to social and environmental aspects but being extended to occupational safety and health matters.

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4. ASSESSMENT RECOMMENDATION

Based on the evidences gathered during the on-site inspection, the assessment team had raised 1 major NCR and 1 Minor NCR on the Ribubonus CU against the requirements of the RSPO MYNI. The Ribubonus CU had taken the appropriate corrective actions to address the major nonconformity. The assessment team had examined and was satisfied with the corrective actions taken by the CU and had subsequently closed out this major NCR. In addition the assessment team had made 16 opportunities for improvement (see Attachment 5) which the CU should improve upon in complying with the requirements of the RSPO MYNI. The corrective actions taken by the CU to address these opportunities for improvement would be verified during the surveillance assessment. As the major NCR had been satisfactorily closed out, the assessment team therefore recommends Ribubonus Certification Unit continued to be certified against the RSPO MYNI. 5. Organization’s Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings I, the undersigned, representing SIRIM QAS International Sdn. Bhd., acknowledge and confirm the content of the assessment report and findings of assessment. Name : Dr. Yap Son Kheong

Signature: Designation: Assessment Team Leader Date : 19 April 2012

6. CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS

I, the undersigned, representing Ribubonus Certification Unit acknowledge and confirm the content of the assessment report and findings of assessment. Name : Simon Siburat Signature : Date

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Attachment 1

Location Map of Ribubonus Certification Unit

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Attachment 2

ASSESSMENT PROGRAMME

SIRIM QAS INTERNATIONAL SDN. BHD. Food, Agriculture & Forestry Certification Section

1. Objectives 2.

The objectives of the assessment are as follows:

(i) To determine PPB Oil Palms Berhad – Terusan & Ribubonus Certification Unit conformance against the RSPO Principles & Criteria Malaysian National Interpretation (MYNI).

(ii) To verify the effective implementation of corrective actions arising from the findings of last assessment.

(iii) To make appropriate recommendations based on the assessment findings. 3. Date of assessment : 17-21 October 2011 4. Site of assessment : PPB Oil Palms Berhad

Terusan & Ribubonus Palm Oil Mill 5. Reference Standard

a. RSPO P&C MYNI:2008 b. Company’s audit criteria including Company’s Manual/Procedures

6. Assessment Team a. Lead Assessor : Dr Yap Son Kheong b. Assessor : Prof Datuk Abdul Rashid Abdullah

Mahzan Munap : Mr Selvasingam a/l T Kandiah (Technical specialist)

If there is any objection to the proposed audit team, the organization is required to inform the Lead Auditor/RSPO Section Manager.

RSPO SURVEILLANCE ASSESSMENT PLAN

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7. Audit Method Site audits including observation of practices, interviews with interested parties (employees, nearby population, etc.), documentation evaluation and evaluation of records.

8. Confidentiality Requirements SIRIM QAS International shall not disclose any information concerning the company

regarding all matters arising or coming to its attention with the conduct of the programme, which is of confidential in nature other than information, which is in the public domain.

In the event that there be any legal requirements for disclosing any information

concerning the organization, SIRIM QAS International shall inform the organization of the information to be disclosed.

9. Working Language : English and Bahasa Malaysia 10. Reporting a) Language : English b) Format : Verbal and written c) Expected date of issue : Sixty days after the date of assessment d) Distribution list : client file 11. Facilities Required

a. Room for discussion b. Relevant document and record c. Personnel protective equipment if required d. Photocopy facilities e. A guide for each group

12. Assessment Programme Details : See attachment 2 -1

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Attachment 2 -1

Day one: 17 October 2011 (Monday) Activities / areas to be visited

Dr Yap Son Kheong

Mr Mahzan Munap

Prof Datuk Abdul Rashid

Auditee

8.00 – 8.15 am

Opening meeting, audit team introduction and briefing on audit objective, scope, methodology, criteria and programmes by audit team leader

Top mgmt & Committee Member

8:15 – 9:00 am

Briefing on the organization background and implementation of RSPO (including progress of time bound plan and progress of the smallholder on RSPO standard of compliance and verifying previous assessment finding – non conformity(ies) Major or Minor (if any))

Management representative

9:00 – 12:00 pm

Site visit and assessment at Terusan Palm Oil Mill

Utilities (ETP, gen-set, boiler, WTP, etc.)

Waste management

Interview with FFB supplies and other supplies

Interviews with mill’s workers

Site visit and assessment at environmental area of concern at Terusan 1 & 2 Estates and Rumidi Estate:

Area of more than 25°

Riparian zone

River system including POME discharge

Forested area

Plantation boundary

Water bodies

Source of water supply

Over planted areas

HCV

Other area identified during the assessment

Site visit and assessment at Terusan Palm Oil Mill

Administration department

Facilities at workplace (rest area, etc)

Utilities (gen-set, boiler, etc.)

Production area

Chemical store

Workshop

Discussion with relevant management (CSR, community affairs) and preliminary viewing of documentation relating to local community and indigenous peoples issues such as EIA, SIA and management plans. Assessment on P1, P2-C2.1-2.1.1, P6 (6.1, 6.2, 6.3, 6.4) P8 Visit and assessment at:

Terusan 1 & 2 estates surrounding community

Humana School

Provision shop operator

Guide/PIC

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12.00 – 2.00 pm

Break

2.00 – 5.00 pm

Assessment on P1, P2 , P4 (C4.4-4.4.3, 4.4.4, 4.4.5, 4.4.7, C4.8), P5(C5.1, C5.3-5.3.1, 5.3.2, C5.4, C5.6), P8 EMS

Assessment on P1, P2 (C2.1- 2.1.1, C2.2-2.2.3, P3, P4( C4.4-4.4.1, 4.4.2, 4.4.6) P5 (C5.2, C5.3-5.3.3, 5.4, 5.6), P8 HCV

Assessment on P1, P2(C2.1-2.1.4), P4( C4.1 – 4.1.2, C4.7, C4.8) , P8 OHS

Guide/PIC

8.00 – 10.00 pm

Audit team discussion Document review Relevant PIC

Day two: 18 October 2011 (Tuesday)

Activities / areas to be

visited

Dr Yap Son Kheong

Mr Mahzan

Munap

Mr Selvasingam


Auditee

8.00 – 11.00 am

Site visit and assessment at Terusan 2 estate

Dumping site for estate & mill

Utilities (WTP , gen- set & etc)

Waste management

Facilities at workplace (rest area,

Continue assessment at environmentally area of concern at Terusan 1 & 2 Estates and Rumidi Estate Assessment on P1, P2 (C2.1- 2.1.1, C2.2-2.2.3, P3, P4( C4.4-4.4.1, 4.4.2, 4.4.6) P5 (C5.2, C5.3-5.3.3, 5.4, 5.6),

Site visit and assessment at Terusan 2 estate



Dispensary

Chemical store

Workshop Assessment on P1, P2(C2.1-2.1.4), P4( C4.1 – 4.1.2, C4.7, C4.8)

Site visit and assessment at Rumidi Estate:

Good Agricultural Practice

Workers Issues

Line site

fertilizer stores

witness activities at site (weeding/ spraying/harvesting)

Assessment on P2 (C2.1, C2.2.- 2.2.1, 2.2.2, 2.2.3), P3, P4 (C4.1, 4.2, 4.3, 4.5,

Continue assessment at Rumidi Estate Assessment on P1, P2-C2.1-2.1.1, P6 (6.1, 6.2, 6.3, 6.4) P8

Guide/PIC

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etc)

Dispensary

Chemical store

Workshop Assessment on P1, P2 , P4 (C4.4-4.4.3, 4.4.4, 4.4.5, 4.4.7, C4.8), P5(C5.1, C5.3-5.3.1, 5.3.2, C5.4, C5.6), P8 Interview with Terusan 2

estate‟s

employees

P8 , P8 4.6), C5.5, P6 (6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11), P8

12.00 – 2.00 pm

Travel to Ribubonus

2.00 – 5.00 pm

Site visit and assessment at Ribubonus Palm Oil Mill

Utilities (ETP, gen-set, boiler, WTP, etc.)

Waste management

Interview with FFB supplies and other supplies

Interviews

Site visit and assessment at environmentally area of concern at Ribubonus Estates and mill:

Area of more than 25°

Riparian zone

River system including POME discharge

Forested area

Site visit and assessment at Ribubonus Palm Oil Mill



Utilities (gen-set, boiler, etc.)

Production area

Chemical store

Workshop

Assessment at Ribubonus Estate on : P2 (C2.1, C2.2.- 2.2.1, 2.2.2, 2.2.3), P3, P4 (C4.1, 4.2, 4.3, 4.5, 4.6), C5.5, P6 (6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11), P8

Discussion with relevant management (CSR, community affairs) and preliminary viewing of documentation relating to local community and indigenous peoples issues such as EIA, SIA assessment and management plans. Visit and assessment at: Ribubonus estate & mill surrounding community (schedule according to their convenience)

Guide/PIC

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Day three: 19 October 2011 (Wednesday)

with mill’s workers

Assessment on P1, P2 , P4 (C4.4-4.4.3, 4.4.4, 4.4.5, 4.4.7, C4.8), P5(C5.1, C5.3-5.3.1, 5.3.2, C5.4, C5.6), P8

Plantation boundary

Water bodies

Source of water supply

HCV

Other area identified during the assessment

Assessment on P1, P2(C2.1-2.1.4), P4( C4.1 – 4.1.2, C4.7, C4.8) , P8

08.00-10.00pm

Audit team discussion Documentation review Relevant PIC

Activities /areas to be

visited

Dr Yap Son Kheong

Mr Mahzan

Munap

Mr Selvasingam


Auditee

8.00 – 12.00 pm

Site visit and assessment at Ribubonus estate

Dumping site at estate & mill

Environmental issue

Scheduled waste & non-scheduled areas

Utilities (WTP , gen- set & etc)

Continue assessment at Ribubonus Estate & mill, at environmentally area of concern at Ribubonus Estates and mill. Assessment on P1, P2 (C2.1- 2.1.1, C2.2-2.2.3, P3, P4( C4.4-4.4.1, 4.4.2, 4.4.6) P5 (C5.2, C5.3-5.3.3, 5.4, 5.6), P8

Site visit and assessment at Ribubonus estate



Dispensary

Chemical store

Workshop

Site visit and assessment at Ribubonus Estate:

Good Agricultural Practice

Workers Issues

Line site

chemical /fertilizer stores

workshop

EFB mulching

Plantation on hilly

witness activities at site (weeding/ spraying/other maintenance activities/ harvesting)

Continue assessment at Ribubonus Estate & mill, surrounding community , smallholders and Humana school Assessment on P1, P2-C2.1-2.1.1, P6 (6.1, 6.2, 6.3, 6.4) P8

Guide/PIC

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Day four: 20 October 2011 Activities/areas to be

visited

Dr Yap Son Kheong

Mr Mahzan

Munap

Mr Selvasingam


Auditee

08.00-12.00

pm

Verification on all outstanding issues Documentation review Audit team discussion and preparation on audit findings

12.00-02.00pm

Break

02.00 – 04.30 pm

Continue with the above assessment

Day five: 21 October 2011 Activities/areas to

be visited

Dr Yap Son Kheong

Mr Mahzan Munap


Auditee

08.00-09.00 am

Discussion on audit findings for Ribubonus and Terusan certification units Relevant PIC

12.00 – 2.00 pm

Break

2.00 – 4.00 pm

Assessment on P1, P2 , P4 (C4.4-4.4.3, 4.4.4, 4.4.5, 4.4.7, C4.8),

P5(C5.1, C5.3-5.3.1, 5.3.2,

C5.4, C5.6), P8

Continue assessment

Assessment on P1, P2(C2.1-2.1.4), P4( C4.1 – 4.1.2, C4.7, C4.8) , P8

Continue assessment at Ribubonus Estate on : P2 (C2.1, C2.2.- 2.2.1, 2.2.2, 2.2.3), P3, P4 (C4.1, 4.2, 4.3, 4.5, 4.6), C5.5, P6 (6.5, 6.6, 6.7, 6.8, 6.9, 6.10, 6.11), P8

Continue assessment Guide/PIC

Presentation on audit findings

Interview with Ribubonus estate’s employees

08.00-10.00pm

Audit team discussion

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09.00-11.00 pm

Interim closing meeting for Ribubonus and Terusan certification units

Top Management & committee member

11.00 – 02.00 pm

Travel to Sandakan & break

02.00 – 03.00 pm

Meeting with Financial Controller at Sandakan Office and verification on plan for other management unit & smallholder certification

Top Management

03.00 – 04.00 pm

Closing meeting for Ribubonus and Terusan certification unit

Top Management & committee member

04.00 pm Travel to Sandakan & end of assessment

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Attachment 3

File ref. : EP 09760003 Ribubonus CU

Details on NCRs and OFIs and Corrective Actions Taken

OPPORTUNITIES FOR IMPROVEMENT

Clause Details

Comments on action

taken

4.7.1

4.8.1

Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act 1994 and Factory and Machinery Act 1967. .OFI M 1 Project site hoarding could be improved at the Workers Housing construction site by installing full hoarding around the perimeter instead of just placing BRC wire on one side of the construction site. OFI M 2 A pile of BRC wires were observed between two rows of palms next to the construction site for the new workers housing project site. This could pose an obstacle to the workers during harvesting process. OFI M 3 Confined Space Entry Permit had been obtained in the POM not all the parameters specified e.g. entry dates had been logged. . OFI M 4 The shower facilities provided was inadequate to cater for the 25 sprayers and 10 fertilizers application workers. The lighting was also poor within the shower room. OFI M 5 The documented LEV design for laboratory in the POM had not been fully realized although its performance was marginally satisfactory. OFI M 6 Enforcement of PPE use especially ear plugs by the workers in high noise environment in the POM could be improved. OFI M 7 The HIRARC Register would have to be updated with the introduction of two new machines the Shaper and Hydraulic Jack to the site. A Training programme that includes regular assessment of training needs and documentation including records of training for employees are kept . OFI M 8

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The training could be improved with RSPO awareness training for all new workers (less than one year) as many of them interviewed were not aware of the basic requirements of the RSPO. OFI M 9 Ribubonus POM would have to employ own competent Authorized Gas Tester and Authorized Entrant and Standby Person. OFI 10 Electrical LOTO permit had been obtained by the POM training had yet to be conducted..

Auditor : Hj. Mahzan b. Munap Date: 21 October 2011

File ref. : EP 09760003 Ribubonus Estate


Clause Details

Comments on action

taken

4.8.1

5.2.1

5.3.2

. OFI SK 1 A training programme (appropriate to the scale of the organization) that include regular assessment of training needs and documentation, including records of training for employees are kept Appropriate training programmes had been established and conducted in all the estates and mills. These were documented for each staff that had undergone training. This process could be further improved with a process of review of the efficiency of the training conducted. OFI SK 2 Management plan for HCV habitats (including ERTs) and their conservation HCV Management & Monitoring Action Plan 2011-2015 had been written for the estate. The implementation of this Plan in the short-term and long- term period would have to be supported with a budget plan. A systematic monitoring process could be established and enhanced with a documentation of the sightings of animals in the HCV sites. Personnel responsible could be trained in recognizing signs of animal activities. OFI SK 3 Having identified wastes and pollutants, an operational plan should be developed and implemented to avoid or reduce pollution Recycling of domestic wastes had been encouraged in the line sites. This

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6.5.3

could be improved with sorting of the different recyclable items at source by providing collection bins. OFI SK 4 Growers and millers provide adequate housing, water supplies and welfare amenities in accordance with Workers’ Minimum Standard of Housing and Amenities Act 1960. The rain water collected at the line sites could be tested to ensure that it is safe for use.

Auditor : S.K..Yap Date: 21 October 2011

File ref. : EP 09760003 Ribubonus Estate


Clause Details

Comments on action

taken

6.11.1

. OFI R 1 Demonstrable contribution to local development that are based on the results of consultation with local communities Local Sustainable Development entails among other things the empowerment of local communities so that they develop capability to sustain and build on whatever initiatives or projects

that are implemented. Documentation of contributions to local community sustainable development could be improved by having a plan able to track the many activities carried out by the Estates and Mills which are local- sustainability in nature but were not documented . Examples are:

The ferry service on the Sg. Labuk at Ribubonus – enhances the mobility and physical connectivity of communities in the vicinity of Ribubonus. This is highly

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Criterion 8.1

appreciated by the locals.

Championing the cause of the physically challenged and socially disadvantaged girl resulting in a recognition of her right to citizenship and welfare benefit.

Improvement of local roads for villages

Sale of fertilizers to local growers (Program Kelupok Baja Tersedia).

OFI R 2 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Records of improvements made that allow demonstrable continuous improvement in key operations had been made. The process could be improved with periodical review to monitor

progress and review targets and implementation process. The action plan needs to cover both the environmental impacts and social impacts and other key areas identified so that the implementation of all these key initiatives are not done in isolation but as part of the organization-wide drive to attain Continuous Improvement in those key areas.

Auditor : Prof. Datuk Abdul Rashid Abdullah Date: 21 October 2011

CONFIDENTIAL - RSPO

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