Roundtable on Sustainable Palm Oil

Roundtable on Sustainable Palm Oil 1st Surveillance Audit

Report No. : ASA1_14026

Certification assessment against the Generic RSPO Principles & Criteria 2013 and RSPO Supply Chain Certification System November 2014

PT Gawi Makmur Kalimantan Satui Palm Oil Mill

Head Office : Gawi Building 4th floor, Kuningan Office Park, Jl. Setiabudi Selatan Kav.16-17, South Jakarta,

Indonesia 12920 Branch Office :

Jl. Pramuka No. 16 RT 020, Sungai Lulut, Banjarmasin Timur – Banjarmasin South Kalimantan Province, Indonesia

Date of assessment: August 6 – 8, 2015

Report prepared by: Mhd Fundy C Kurniawan (RSPO Lead Auditor)

Certification decision by:

Nyoman Susila (Managing Director TUV Rheinland Indonesia)

Certification Body:

PT TUV Rheinland Indonesia Menara Karya, 10th floor

Jl. H.R Rasuna Said Block X-5 Kav.1-2 Setia Budi – Jakarta, Indonesia

Tel: +62 21 579 44 579 Fax: +62 21 579 44 575

www.tuv.com

1.0 SCOPE OF CERTIFICATION ASSESSMENT ............. ................................. 3

1.1 National Interpretation Used .................................................................................................................. 3 1.2 Type of Assessment ............................................................................................................................... 3 1.3 Certification Details ................................................................................................................................ 3 1.4 Location and Maps ................................................................................................................................. 4 1.5 Organisational Information / Contact Person ......................................................................................... 5 1.6 Description of Supply Base .................................................................................................................... 6 1.7 Actual production volumes, tonnages and projected outputs. ............................................................... 7 1.8 Dates of Plantings and Replanting Cycles ............................................................................................. 8 1.9 Area of Plantation (Total, Planted and Mature) ..................................................................................... 9 1.10 Progress Against Time Bound Plan ................................................................................................... 10 1.11 Compliance to Rules for Partial Certification ..................................................................................... 10 1.12 Progress of associated smallholders or outgrowers towards RSPO compliance ............................. 11 1.13 Approximate Tonnages Certified ....................................................................................................... 11 1.14 Recommendation for certification ...................................................................................................... 11 1.15 Date of certification issued and scope of certificate .......................................................................... 11

2.0 ASSESSMENT PROCESS .......................................................................... 12

2.1 Certification Body ................................................................................................................................. 12 2.2 Qualifications of Lead Assessor and Assessment Team .................................................................... 12 2.3 Assessment Methodology & Agenda ................................................................................................... 13 2.4 Stakeholder Consultation and Stakeholders Contacted ...................................................................... 14

3.0 ASSESSMENT FINDINGS .......................................................................... 15

3.1 Summary of Findings ........................................................................................................................... 15 3.2 Identified non-conformances, corrective actions taken and auditors conclusions .............................. 36 3.3 Description of Supply Chain Management System ............................................................................. 52 3.4 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and

Auditors Conclusions .......................................................................................................................... 55 3.5 Noteworthy Positive Component ......................................................................................................... 55 3.6 Conclusion and Recommendation for RSPO P & C and Supply Chain Certification ........................ 55 3.7 Issues raised by stakeholders and findings pertaining to Issues ....................................................... 55

4.0 CERTIFIED RGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY .................................... .................................................. 59

4.1 Date of Next Surveillance Visit ............................................................................................................. 59 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client .................................... 59

APPENDICES ................................................................................................... 60

Appendix 1 : Details of certificate ............................................................................................................... 60 Appendix 3 : List of Abbreviations .............................................................................................................. 62 Appendix 4 : Observations and Opportunities for Improvement ................................................................ 62

RSPO 1st Surveillance Report

PT Gawi Makmur Kalimantan – Satui Palm Oil Mill South Kalimantan

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1.0 Scope of 1st Surveillance Audit 1.1 Generic RSPO Principle and Criteria 2013

The operations of the palm oil mill(s) and its supply base of FFB were assessed against the Generic RSPO Princi-ple and Criteria 2013 & RSPO SCCS November 2014.

1.2 Type of Assessment

The surveillance assessment was carried out on 1 (one) mill i.e. Sati Palm Oil Mill (POM) and 2 (two) estates i.e. Timur Estate & Satui estate under PT Gawi Makmur Kalimantan – Satui Unit, South Kalimantan, Indonesia.

1.3 Certification Details

The details of RSPO certification of PT Gawi Makmur Kalimantan – Satui Unit area as per the table below

Table 1: RSPO Certification details of PT Gawi Makmur Kalimantan – Satui Unit

RSPO Membership no. : 1-0216-12-000-00

RSPO Certificate no. : 824 502 14026

RSPO e-Trace no. : RSPO_PO1000002103

Date of first RSPO certificate & validity : 12-01-2015 until 11-01-2020

Date of 1st surveillance audit : August 6 - 8, 2015

Date of previous surveillance audit : This is 1st surveillance

Date of revised RSPO certificate & validity (if applic able) : Not applicable

CPO tonnages claimed (tonnes) : 39,576.54

PK tonnages claimed (tonnes) : 8,393.37

PKO tonnages claimed* : -

Note: PKO was managed under Kernel Crushing Plant, and was applied for RSPO SCCS.



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1.4 Location and Maps

Figure 1: Location map of PT Gawi Makmur Kalimantan – Timur Estate in Tanah Laut District, South Kalimantan, Indonesia

Figure 2: Map of Estate PT Gawi Makmur Kalimantan – Timur Estate



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Table 2: GPS locations for all estates and mills in cluded in 1st surveillance assessment

Note: In this 1st surveillance, sampling was carried out in Timur estate and Satui Palm Oil Mill.

1.5 Organizational Information / Contact Person

Contacts details of the company are as follows:

Company Name : PT Gawi Makmur Kalimantan

Address : Head office : Gawi Building 4th floor, Kuningan Office Park, Jl. Setiabudi Se-latan Kav.16-17, South Jakarta District, DKI Jakarta Province, Indonesia

Name of mill / estate

Location GPS locations

Latitude Longitude Satui Palm Oil Mill

Satui Barat village, Satui Sub District, Tanah Bumbu District, South Kalimantan Province

030 44’16.7” S 1150 27’ 18.7” E

Timur Estate Pasir Putih village and Sungai Cuka village, Kintap Sub District, Tanah Laut District, South Kalimantan Province

030 48’02.21” S 1150 13’ 50.38” E

Satui Estate

Satui Barat village, Jombang village, Al-Kautsar village, Setarap village, Sekapuk village, Wonorejo village, Pendamaran Jaya village, Satui Sub district, Tanah Bumbu District, South Kalimantan Province

030 44’16.7” S 1150 27’ 18.7” E



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12920 Mill : Damit Hulu village, Batu Ampar Sub District, Tanah Laut District, South Kalimantan Province

Contact Person :

Mr. Farid Makruf

Telephone : +62-21-579 01 085

Email : [email protected]

1.6 Description of Supply Base

Table 3: FFB Supply Information for PT Gawi Makmur Ka limantan – Satui Mill for 2014 and 2015

FFB Contributors

FFB supplied Year 2014*

FFB supplied Year 2015**

Tones % Tones %

Company owned estates:

Satui Estate 83,265.150 29.70 37,104.100 24.65

Timur Estate 99,419.990 35.46 58,998.900 39.19

Sub Total I 182,685.14 65.16 96,103.00 63.81

Smallholder:

Plasma Sei Cuka 2,064.520 0.74 2,694.420 1.79

Sub Total II 2,064.520 0.74 2,694.420 1.79

Out grower:

Berlian 780.710 0.03 - -

Kop. Karya Tani 4,674.86 1.67 579.33 0.04

Gapoktan K. Tani 2,305.09 0.82 2,354.96 1.56

Kop. Agro Mandiri 2,604.6 0.93 1,188.28 0.79

Usaha Sejati Mandiri 5,630.8 2.01 1,854.34 1.23

Hati Nurani 3,662.92 1.31 3,072.38 2.04

Pradiksi Gunatama 4,940.69 1.76 - -

Prima Tirta 2,342.73 0.84 - -

Tani Mandiri 11,275.75 4.02 4,367.73 2.90

KT. Karya Barokah 3,758.3 1.34 672.93 0.04

KT. Pemuda Makmur KS 10,273.42 3.66 13,830.11 9.19

KT Sawit Sejahtera 1,681.93 0.60 761.06 0.51

PT. Bangun Kalimantan 2,109 0.60 - -

PT. Candi Arta 1,671.61 0.60 - -

CV. Satria Bagus 4,231.51 1.51 3,672.3 2.44

KT. Setia Kawan 4,098.07 1.46 1,282.51 0.85

KT. Trigan Group 3,338.55 1.19 1,852.69 1.23



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FFB Contributors

FFB supplied Year 2014*

FFB supplied Year 2015**

Tones % Tones %

KT. Telaga Sari 10,544.18 3.76 3,170.2 2.11

CV. Ridho Pendamaran 2,525.54 0.90 543.95 0.04

PT. Merah Delima/JMS 475.57 0.02 - -

Nur Jaya 14,779.61 5.27 12,933.53 8.59

CV. Titipan Ilahi 638.72 0.04

Sub Total 95,617.53 34.10 51,743.65 24.65

Total 280,367.19 100 150,532.07 100

Note : *) January to December 2014 (after grading)

**) January to July 2015 (after grading)

1.7 Actual production volumes, tonnages and project ed outputs.

Table 4 : Certified tonnages claimed, certified ton nages purchased or sold, total and projected CPO and PK production from PT Gawi Makmur Kalimantan – Satui Mill

Amount (MT)

CPO PK

Realization production for 2014

Certified tonnages claimed* 39,576.54 8,393.37

Certified tonnages sold under RSPO SCCS system** - -

Certified tonnages purchased - -

Actual Production for 2014 owned estate 40,208.999 8,659.272

Actual Production for 2014 from all (Owned estate, smallholder and out grower (Jan – Dec)

61,698.092 13,277.282

Conversion Factor year 2014 (average) 22.01% 4.74%

Projected output for 2014 owned estate (budget) 40,979.840 8,941.056

Actual production for 2015 (Jan – July) during 1st Surveillance audit

32,838.165 7,099.347

Projection for 2015

Projected FFB for 2015 from all (own estate, small-holder and out grower)

291,630.00

Projected FFB for 2015 from own estate (budget) 181,595.00

Projected output for 2015 own estate (budget) 42,130.040 9,079.750

Projected output for 2015 from all (own estate, smallholder and out grower)

291,630.00 13,998.24



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Conversion Factor year 2015 23.2% 5.0%

Projected FFB for 2016 from owned estate (mt) 145,088.91

Projected FFB for 2016 from all (own estate, small-holder and out grower)

196,089.00

Projected CPO for 2016 from owned estate (mt) 32,935.182

Projected CPO for 2016 from all (Owned estate, smallholder and out grower (mt)

44,512.00

Projected PK for 2016 from all (Owned estate, small -holder and out grower (mt)

9,804.45

Note :

*) Based on projection for production year 2016 from company owned estates only **) All dispatch in year 2014 for CPO and PK under claim RSPO SCCS system (nul)

1.8 Dates of Plantings and Replanting Cycles The company follows a replanting cycle of 25-30 years. Information on the dates of plantings is as per the table below. Table 5 : Age and year of plantings of company esta te supplying to PT Gawi Makmur Kalimantan – Satui

Unit

Age & Year of Plantings

Oil palm planted area at each estate (ha)

Timur Estate Satui Estate Total

Period of January-December 2014

1996 0 350.82 350.82

1997 348.07 771.39 1,118.46

1998 1,397.10 1,573.96 2,971.06

1999 1,081.01 359.90 1,440.91

2000 0 81.98 81.89

2001 945.96 140.15 1,086.11

2002 218.24 0 218.24

TOTAL 3,990.38 3,278.20 7,267.49

Period of January-July 2015

1996 0 327.16 327.16

1997 348,07 654.54 1,002.61

1998 1397,10 1,491.11 2,888.21

1999 1081,01 359.33 1,440.34

2000 0 81.98 81.89

2001 945,96 140.16 1.086.11

2002 218,24 0 218.24

TOTAL 3,990.38 3,054.28 7,044.56

Note: During 1st surveillance, sampling was carried out in Timur Estate.



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Some area in Satui estate was not under company management, because was release by company from land use rights (HGU). This is because in Satui estate during the surveillance area was released for mining was 223.92 Ha, this is will expand in every year, because of Indonesian Regulation.

1.9 Area of Plantation (Total, Planted and Mature) Table 6: Oil Palm Planted Area Summary, FFB Producti on and Average yield/ha for PT Gawi Makmur

Kalimantan – Satui Unit

Estate Name

Total area (ha)

Oil Palm Planted area

(ha)

Mature (Production)

area (ha)

Immature (Non-

production) area (ha)

FFB Produc tion(tones)

Average yield/ ha

(tones/ha)

January – December 2014

Timur Estate

4,320.55 3,990.38 3,990.38 0 99,419.990 24.599

Satui Estate

7,200 3,278.20 3,278.20 0 83,265.150 25.399

TOTAL 11.520,55 7,268.58 7,268.58 0 182,685.14 24.99

January – July 2015 Timur Estate

4,320.55 3,990.38 3,990.38 0 58,998.900 14.785

Satui Estate

7,200 3,054.28 3,054.28 71.28 37,104.100 12.148

TOTAL 11,520.55 7,044.66 7,044.66 71.28 96,103.00 13.46

Note: Satui Estate, some area in Satui Estate released for coal mining, this area will expand based on Indonesian Regulation.

Table 7: Land use data for PT Gawi Makmur Kalimantan – Unit of Satui

Estate Name Total area (ha)

Oil Palm Planted

Area (ha)

HCV* (ha)

Land used for other purposes (ha) Housing,

Road, Drainage, Nursery

Not plantable

area Mill Other **

January – December 2014

Satui Estate 4,320.55 3,990.38 214.15 129.82 149,18 0 0

Timur Estate 7,200 3,278.20 1,632.31 191 2,329.11 31 0

TOTAL 11,520.55 7,286.58 1,846.46 320.82 2,478.29 31 0

Period of January-July 2015

Satui Estate 4,320.55 3,990.38 214.15 180.99 149.18 0 0

Timur Estate 7,200 3,054.28 1,632.31 199.93 2,455.37 31 0

TOTAL 11.520,55 7,044.66 1,846.46 320,82 2,478.29 31 0

Note :

*) Not separate with hectare statement **) Other such as land clearing



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1.10 Progress against Time Bound Plan

Table 8: Time Bound Plan of the Other Management Unit s

Name of Holding Location Time bound plan for certification

Remarks

PT Gawi Makmur Kalimantan – Kebun Satui & Kebun Timur

Tanah Bumbu Regency –

South Kalimantan 2015 1st surveillance

PT Gawi Makmur Kalimantan – Kebun Penajam

Penajam Paser Utara Regency –

East Kalimantan 2015 Pre assessment

PT Gawi Makmur Kalimantan – Kebun Paser

Paser Regency – East Kalimantan

2015 Pre assessment

1.11 Compliance to Rules for Partial Certification

Compliance of the uncertified management units of PT Gawi Makmur Kalimantan against the rules for partial cer-tification according to RSPO Certification System clause 4.2.4 was assessed by submission self assessment re-port. A summary of findings is as stated below:

Partial Certification Requirements Audit Findings

(a) The parent organization or one of its ma-jorities owned and / or managed subsidiaries is a member of RSPO.

PT Gawi Makmur Kalimantan is RSPO member since Sep-tember 14, 2012 with RSPO membership number 1-0126-12-000-00.

(b-d) A challenging time-bound plan for certi-fying all its relevant entities is submitted to the Certification Body (CB) during the first certification audit. The time-bound plan should contain a list of subsidiaries, estates and mills.

Any revision to the time-bound plan or to the circumstances of the company shall cause the plan to be reviewed. for whether it is still appropriate, such that changes to the time-bound plan are permitted only where the or-ganisation can demonstrate that they are justified

Company made time bound plan and reported to RSPO as determined on the table

(e) No replacement of primary forest or any area identified as containing High Conserva-tion Values (HCVs) or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. Any new plantings since Janu-ary 1st 2010 must comply with the RSPO New Plantings Procedure

There is no evidence that company replace primary forest for they all plantation area. According to Indonesia Gov-ernment regulation plantation area have to established not in primary forest but could be in logged over area forest (LOA) or production forest for conversion to other forestry uses (hutan produksi yang dapat dikonversi) or non forest area/land for other uses as well as non productive area, land bank and other category area decided by govern-ment .

In Penajam estate, there are HCV areas amount of 756.60 ha (HCV 1, 3 & 4). There is no evidence that company re-place HCV areas.

(f) Land conflicts, if any, are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Set-tlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

There are land conflicts due to overlapping land between the company with the villagers where the conflict is usually resolved by deliberation. The company has proce-dures/mechanism for handling of conflict and identification, calculation and compensation the loss of legal of land with the involvement of local community representative and rel-



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Partial Certification Requirements Audit Findings

evant agencies.

The company has provided evidence such as minute of meeting (include of agreement) a handling of conflict, re-sult of inventories regarding owner of land, record of com-pensation that was signed by both the parties, head of vil-lage and head of sub district, etc

(g) Labour disputes, if any, are being re-solved through a mutually agreed process, in accordance with RSPO criterion 6.3.

No labor dispute in PT Gawi Makmur Kalimantan

(h) Legal non-compliance, if any, is being re-solved in accordance with the legal require-ments, with reference to RSPO criteria 2.1 and 2.2.

Some legal non compliance has been identified as stated on the NCR of this report. While Paser and Penajam Pa-ser Utara estates has identified laws/regulations compli-ance and the company are processing it with non-compliance status.

1.12 Progress of associated smallholders or out gro wers towards RSPO compliance

As seen from data in Table 3, in year 2014 is about 0.74% FFB recieved from smallholders, this FFB received increased from last year, and for year 2015 until the the end of July, the mill recieved 1.79%. The company manage community’s land for oil palm plantation and all FFB from smallholder will send to the mill.

During the 1st surveillance audit company (Mill and estate) can not showed the smallholder RSPO certification program and implementation as a mention in RSPO requirement system, and this condition was a non conformity for the company.

1.13 Approximate Tonnages Certified

During the 1st surveillance audit, there is no production over capacity form the Satui Mill. The approximate ton-nage certified, based on projection of production year 2016 from company owned estates only are as follows:

Crude Palm Oil (CPO) : 39,576.54 tones Palm Kernel (PK) : 8,393.37 tones

1.14 Recommendation for certification

PT Gawi Makmur Kalimantan – Satui mill has established and maintains an effective system to ensure compli-ance with the RSPO principles and criteria. The audit team has confirmed through the audit process that the company’s practices complies with, adequately maintains and implements the requirements of Generic RSPO principle and criteria 2013 and RSPO Supply Chain Certification System November 2014.

TUV Rheinland Indonesia recommends that PT Gawi Makmur Kalimantan – Satui mill worthy maintain as a pro-ducer of RSPO Certified Sustainable Palm Oil.

1.15 Date of certification issued and scope of certi ficate

The scope of the 1st surveillance covers production of palm oil from PT Gawi Makmur Kalimantan – Satui mill and its supply base which include Timur Estate (Kebun Timur) and Satui Estate (Kebun Satui). The date of cer-tificate issued was 12-01-2015. Further details of the certificate are as per Appendix 1.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 lo-cations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certification for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO, ISPO, SNI, Sustainable Forest Management, Timber Legality Verification, etc. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indonesia.

2.2 Qualifications of Lead Assessor and Assessment Team The main certification assessment team members of certification audit are As per the table below:

Name Position Qualifications/Experience

Mhd Fundy C Kurniawan

Lead Auditor

Education: Master Degree in Natural Resource and Environmen-tal Management, Bogor Agriculture University Trainings attended: Environmental Impact Assessment (EIA), Eco-logical Risk Assessment (ERA), Internal Quality Audit Training for Quality Management System, IRQA-QMS ISO 9001:2000, IRQA-EMS 14001, High Conservation Value (HCV), RSPO Lead Auditor Course, ISPO Auditor Course, SCCS Auditor and ISCC plantation audit. Working experience: Experienced in Environmental Impact As-sessment, Environmental Health Safety Senior Officer (EHS-Officer) in Wilmar International Plantation, Internal Auditor for Wil-mar International Plantation, Auditor for Rount able on Sustainable Palm Oil (RSPO), Indonesian Sustainable Palm Oil (ISPO), Certification for Timber Legality Verification (SVLK) in PT TUV Rheinland Indonesia since June 2012 – present.

Riswan Auditor

Education : Bachelor of Forestry Faculty of Forestry, Bogor Agricul-tural University and a Masters in Management of Natural Resources and Environment, Graduate School of the University of North Suma-tra. Training attended : Authors Course EIA, GIS training and advanced levels analyst, Internal Auditor Training Integration System: Quality Management System ISO 9001: 2008, EMS ISO 14001: 2004 and OHSAS 18001: 2007, the RSPO GHG Calculation Training (PalmGHG). Technical Training Training Course of High Conserva-tion Value (HCV), ISPO Auditor Training Batch VI. Working Experience : Team Leader Identification of Protected Areas and Biodiversity in several oil palm plantations (Anglo Eastern Plan-tation and Delima Makmur), Chairman of the mapping team detail units plantation PT PTPN III, Team Coordinator Acceleration RTRWP North Sumatra areas of GIS, Team Expert / Assessor HCV assessment in some plantation PTPN IV; PT SKM, PT.BTS (Sinar Mas), Bukit Maradja Est, Parlabian est, PT UMW and PT TUM (SIPEF Group), PT SIS and SMA (Asiatic Group), Expert in Project Integrating sectoral Programme in the district. Nias, Tim EIA prepara-tion Electrical Transmission and Power Plant of PLN Peusangan Aceh and UKL-UPL Development Sei Ular irrigation dikes. PTPN III compensation consultant for HCV. Landscape and BMP IFACS pro-ject specialist at USAID, and the Auditor ISPO and RSPO external auditor PT TUV Rheinland Indonesia on several oil palm plantation



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Name Position Qualifications/Experience

companies.

Suriadi Auditor

Education : Diploma Applied Analytical Chemistry. North Sumatra University, Medan and Bachelor of Chemical Engineering, Universi-ty of Jaya Baya, Jakarta. Trainings attended: ISO 9000:2000 Series Auditor / Lead Auditor Training - PE International (Jakarta), IEMA Advanced EMS Auditor (IEMA / EARA ISO 14001) Auditor / Lead Auditor Training Course - PE International (Jakarta), OHSAS 18001 Lead Auditor Training Course - PE International (Jakarta). ISPO lead auditor training. Na-tional Examination Board of Occupational Safety and Health (Inter-national General Certification (IGC) 1,2 and 3 TUV Nord (Dubai). National Examination Board of Occupational Safety and Health (In-ternational Technical Certification (ITC) for Oil and Gas Industries. RRC (Dubai). Indonesian Engineer Association (PII) (Jakarta), Oc-cupational Health and Safety Specialist for lifting equipments. Indo-nesia Man Power and Transmigration Department (Jakarta). Working experience: Experienced in Quality Control from 1992-2004. Coordinator for Safety Quality and Environment Management System since 2002 – present. Auditor for Environmental Management System since 2002 – present. Auditor for OHSAS 18001 since 2012 - present. Conducted over 10 Quality Management System audits Environmental Management System audits and OHSAS

Harso Yuli Antena Auditor

Education: Bachelor degree of Agriculture Science – Bogor Agricul-ture Institute Trainings attended: RSPO Lead auditor course, ISO 9001:2008 Lead auditor training, Indonesian Sustainable Forest Management Social Auditor, Indonesian Sustainable Palm Oil (ISPO). Working experience: Auditor at TUV Rheinland Indonesia 2014 until pre-sent, social research Indonesia centre for agricultural (social economic poli-cy study), social researcher – CSR Indonesia mott-McDonald Indonesia, personal consultant in Research and development-colours media group and RSPO, ISPO auditor.

2.3 Assessment Methodology & Agenda

The 1st surveillance audit was conducted from August 6 – 8, 2015 as per the assessment program below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Certification Systems document. During the assessment, the qualified TUV Rheinland assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings.

Due to the location and proximity of the estates, combined with common management systems, it was possible to carry out both field and document assessments of all estates and the mill within the time frame without com-promising the integrity of the assessment in anyway.

All 2 estates and 1 mill were visited and the assessment team carried out field and document assessments of compliance to all the RSPO principles and criteria Generic 2013 and RSPO SCCS year November 2013. Com-mon systems were identified and specific evidence was recorded for individual estates. Interviews were con-ducted at all estates and the mill.

The company proposed the correction and corrective action for all identified non conformities raised to the certi-fication body 30 days after the closing meeting. Verification of closure of major non-conformances was conduct-ed 2 months after the closing meeting of the main assessment and implementation of corrective actions for mi-nor non-conformities will be verified during the next surveillance audit. The certification assessment agenda is as explained below:

Certification Assessment Agenda.



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Date Location/ Main sites

Main activities

August 6, 2015 Satui Palm Oil Mill and KCP - Satui

Document Reviews: verification of previously audit result, update le-gal requirements and compliance, OSH, environmental issues, haz-ardous waste management, HCV management plan, efficiency ener-gy, water used record, training, production record, transparency, code of ethical conduct, workers welfare, water plan management, GHG calculation, emission, pollution prevention and reduction plan, RSPO-SCCS for mill and kernel crushing plant. On-site Visit: loading ramp, weighbridge activity, production plant Interviews: Head of mill, staff operational, foreman, mill workers, OSH officer, production clerk, kernel crushing plant unit.

August 7, 2015 Timur Estate

Document Reviews: verification of previously audit result, update le-gal requirements and compliance, OSH, environmental issues, haz-ardous waste management, HCV management plan and implementa-tion, spraying activity, production record, ethical conduct, transparen-cy, workers welfare, emission, pollution prevention plan, harvesting, riparian buffer zone conservation, chemical and fertilizer stores, OSH Committee, accident records, GHG calculation. On-site Visit: harvesting and spraying activity, chemical and fertilizer stores, housing, hazardous waste, EFB application and others. Interviews: Head of Timur Estate, agronomist personal, Estate man-ager, chemical and fertilizer stores officer, harvesters, sprayers, OSH staff, workers.

2.4 Stakeholder Consultation and Stakeholders Contact ed

PT Gawi Makmur Kalimantan bought the mill and its supply based plantation from the former owner i.e. PT Damit Mitra Sekawan in year 2007, it was noted on notariat deed no.184 dated on November 20, 2007 by notary of Dr Irawan Soerodjo, SH, M.Si). In year 2012 the company become RSPO member and has commitment to comply with all RSPO principles and criteria in all the company operations activities. The initial audit was con-ducted on February 10 to 13, 2014 and the company has worked hard to address all identified non conformities raised during initial audit.

The stakeholder consultation involved both external and internal stakeholders. External stakeholders were noti-fied to make comments on the certification assessment by placing an invitation to comment on the RSPO web-site. Stakeholders included those immediately linked with the operation of the company such employees, out growers, the local government, NGO’s, trade and labor unions and local communities.

Stakeholder consultation took place in the form of meetings and interviews. Meetings with stakeholders were held at meeting room in Satui’s POM to seek their views on the performance of the company with respect to the sustainability practices outlined in the RSPO Principles & Criteria, and to comment on aspects where improve-ments could be made. Meetings with local communities were held at their respective premises within and near the company’s area. A stakeholder consultation , emails and sms invitations inviting individual stakeholders to the stakeholder consultation meeting were prepared and sent to the individual stakeholders.

In all the interviews and meeting, the objectives of the RSPO and the purpose of the assessment was clarified at the outset followed by an evaluation of the relationship between the stakeholders and the company before dis-cussion proceeded to obtain the stakeholders feedback on the company’s compliance to different aspects of the RSPO Principles & Criteria. Although several stakeholders were not familiar with RSPO but they agreed with its objective and expressed their willingness to collaborate in the promotion of sustainable palm oil in South Kali-mantan province. In all interviews and meeting, the assessment team did not restrict discussion of both the pos-itive and negative aspects of operations conducted by the estates and mill.

The stakeholder consultation meeting held with stakeholders during the audit was extensive and productive, with an attendance of 18 attendees as listed on the appendix 5 below. This was followed by site inspections, in-cluding visits to the local communities, interviews with land claimants and contractors, and inspections of worker amenities and infrastructure. All stakeholder issues raised were recorded and forwarded to the management for their written response, and this is summarized in Section 3.7. The list of stakeholders that attended the stake-holder consultation meeting and stakeholders interviewed during the assessment is included as Appendix 5 .



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3.0 ASSESSMENT FINDINGS

3.1 Summary of Findings

During the 1st surveillance audit there were found 17 non-conformities against RSPO P&C requirement (8 major non-conformities and 9 minor non-conformities) and 1 non-conformities against RSPO SCCS, 11 observations or opportunities for improvement were identified. Further explanation of the non-conformities raised and correc-tive actions taken by the company are provided in Section 3.2. The observations & opportunities for improve-ment are listed in Appendix 4.

The following is a summary of findings made for the criteria listed in the Generic RSPO Principles 2013 and RSPO SCCS November 2013.

Principle 1: Commitment to transparency Criteria assessed: CR1.1, CR1.2, CR1.3 Criteria not assessed: Findings: CR 1.1 Company still hold a documented procedure of communication no. SOP/GMK-AGRO/01/08, rev. 04, regarding “Procedure of Internal and External Communication”, published in April 1st 2015. This document has clearly stated procedural steps for communications with external parties, such as: a. Management personnel taking responsibility to determine the kind of data and information that publicly avail-

able, accept and response information request; b. Detail publicly available documents c. Strategic stakeholders that must be responded regarding information request. GMK Satui has identified and documented list of stakeholders. The list has make information such as address and social status up to date. Responsible officer (public relation and legal officer) conduct regular meeting with strategic stakeholder to maintain communication. There was pictures documentation showed during audit re-garding regular visit activity to stakeholders. There are some communication records has showed during surveillance, such as finding as follow:

a. Incoming and Out-coming letters logbook of HSE department 2014/2015. Letters registered to this list were communication between GMKS with local institutional stakeholder such asBP3K Kintap; iPos Of-fice of Batulicin and FKPI Kintap.

b. Logbook of Information request and responses 2014/2015. Letters registered to this list were commu-nication between GMKS with local stakeholders.

CR 1.2 Company still hold a documented procedure of communication no. SOP/GMK-AGRO/01/08, rev. 04, regarding “Procedure of Internal and External Communication”, published in April 1st 2015. Since the last audit, revisions have been conducted to this procedure but not including the main contain. The revisions that has been made were: 1. June 9th 2014, change the numbering system. 2. March 12th 2015, changes in pages 1 – 5 regarding verification page. Regarding to this procedure, documents that can be made publicly available, such as follows :

1. Vision and mission of the company 2. Company policy 3. EIA (AMDAL/UKL-UPL, RKL-RPL) Documents 4. Location permit 5. Land use right 6. Legal permits 7. Continuous improvement 8. CSR activity report 9. Social conflict resolution 10. Work health and safety program.

The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C such as: 1. Report and Plan of Environment and Social Impact Management.



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2. HCV 3. Negotiation Procedures 4. Public Summary of certification assessment 5. Human Rights policy 6. Code of Ethical Conduct policy This finding rise as non-conformity (NCR 2015 – 01 of 17 ). CR1.3 Company has a documented policy documented as Director Decree number 005/DIR/GMK/JKT/VII/15, Decem-ber 1st 2014, regarding “Working And Business Ethic of Gawi Plantation Group”. This policy has communicated to all level workers in Mill and Estate. Latest socialization evidences showed during surveillance were attendant lists as Follow

a. Policy of “Working And Business Ethic of Gawi Plantation Group” socialization, Meeting Room Mill, Juli 27th 2015, Attended by Staff (8 persons).

b. Policy of “Working And Business Ethic of Gawi Plantation Group” socialization, Centre Office Front yard, July 31st 2015, for Workers (Security, operators, and administration).

Compliance status: Non Compliance NCR 2015 – 01 of 2015 The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C such as: Environment and Social Impact Management Plan and report; HCV; Negotiation Procedures; Public Summary of certification assessment; Human Rights policy and Code of Ethical Conduct policy.

Principle 2: Compliance with applicable laws and reg ulations

Criteria assessed: CR2.1, CR2.2, CR2.3, CR2.4, CR2.5, CR2.6 Criteria not assessed: Findings: CR2.1 Timur estate has record of legal compliance, such as:

1. License for chemical used in work place, during in 1st surveillance still on process in the Man Power, Transmigration and Social Office Agency based on letter number 670/HIPK-WAS/VIII/2015 dated on August 3, 2015. The letter stated that official will conduct the verification in the site as a requirement for get this license.

2. Extension for Principle license for KCP, decree number 1/63/IP-PL/PMDN/2014, issued on April14, 2014 at Banjarmasin, covered for expeller, shell, kernel oil and crude palm oil.

The company provides a mechanism for evaluation of implementation and compliance to applicable legal re-quirements in a standard operation procedure i.e. SOP/GMK-SMK3/01/03 Rev 00 2 January 2014 where in this procedures are define the mechanism of evaluation of compliance to regulations related to the company's plan-tation, environment, labour, and regulations related to the health and safety. The SOP states that the identifica-tion and evaluation is to be carried out 2 (two) times a year and conducted by the each section, and estate and will be compiled by Legal officer and supported by the Head of Operations / field and other departments within the company organisation. Most estate maintains and updates their list of all applicable legal requirements relat-ing to environmental, occupational safety and health, the company plantations, and employment as well as rec-ords of internal compliance checks to legal requirements, which performed by SHE Department and Form for Law and Regulation List Register, which last updated on June 2015. The company maintains a list of all appli-cable legal requirements relating to environmental, occupational safety and health, the company plantations, and employment as well as records of internal compliance checks to legal requirements as they are summariz-ing in this form. List of applicable legal, regulation and other requirements was recorded in this form. Some evidences of compliance with relevant legal requirements as seen on latest legal requirements register i.e. "Compliances of law and regulation list " for First Semester of year 2015 in Satui Mill and Timur Estate but in Timur estate also Satui Palm Oil Mill OSH committee still not authorised by related government agency as it was required Ministry of manpower regulation no.Per-04/Men/1987 related OSH committee, including their regu-lar quarter reporting to the government since quarter II, III and IV 2014 periods and for quarter I and II 2015 pe-



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riods. They were raised as non-conformity (NCR 2015 – 04b of 17 ). Annual Routine medical laboratory examination still not perform yet as required by Permenakertrans No.2/MEN/1980. It was raised as non-conformity (NCR 2015 – 04c of 17 ). Report of RKL and RPL monitoring result for period IV year 2014 for soil analysis result still not conducted and still not submitted to Gubernur Kalimantan Selatan, MenLH, Dinas Kehutanan dan Lingkungan Hidup Kabupat-en Tanah Bumbu. It was raised as non-conformity (NCR 2015 – 04d of 17 ). Evidence of efforts made to comply with changes in the regulations was checked through the latest legal regis-ter updated on June 2015 & confirmed that latest applicable legal requirements as described above have been updated. The latest legal register is also sighted to be available at the respective mill and estate offices Howev-er. Company has developed a Company Regulations 2014-2016 as compliance to national Law No. 13/2003 re-garding Workforce. This Company Regulation has been registered to South Kalimantan Province Office of Workforce and Transmigration, and authorized in June 30th 2014. This scope of regulation is covering all of worker that has working relations with Gawi Plantation Group. Based on this document, article 7, company has divide worker status into 5 categories as follows: a. Permanent Worker known as Un-Determined Duration Contract Agreement (PKWTT). b. Contract Worker known as Determined Duration Contract Agreement (PKWT). c. Daily un-permanent Worker (BHL) d. Honor based Worker e. Special/Foreign Worker. Payroll statements for last 6 months of BHL worker of Mill and Estate has showed during surveillance. Deep check found that some of BHL workers have been working for 21 days more than three months in a row. The Company has not yet convert/upgrade their status from BHL worker to PKWT/PKWTT worker. This finding has not comply with national regulation (Workforce and Transmigration Minister Decree No. 100/2004), and rise as non-conformity (NCR 2015 – 2c of 17 ). GMKS has also developed working contract agreement for non-staff worker (SKU and BHL). The contract con-sist the term, conditions, rights and obligations of both parties (company and worker) such as: working relation; working hour, salary, code of conduct, and work termination. Other clauses that has not yet mentioned will refer to company regulations. Deep check into records and documents regarding harvesting workers found that they were not part of SKU (PKWT) or BHL worker. GMKS develop collective agreement letter with groups of harvester. This contract has complied with minimum wage requirement but not comply with regulation regarding worker status. According to national regulations, harvesting as a main flow production process must not outsourced. This finding rise as non-conformity (NCR 2015 – 2a of 17 ). GMK Satui Estate and Mill have implemented their commitment regarding minimum wage payment for perma-nent workers. Relevant regulations such as Governor Decree of minimum wage has been followed up by com-pany and implemented to all workers. There are evidences such as copy of relevant company regulations and pay-slips such as: a. Governor Decree , No. 188.44/0632/KUM/2014 regarding Minimum Sectoral Wage Appointment of South

Kalimantan Province, 2015. Attached to this decree annexure according to sectoral minimum wage, and stated that Palm Oil Plantation minimum wage 2015 is IDR 1.875.000, 00.

b. Company has published Standard and policy regarding Non-Staff Wage improvement (adjustment). This records consist information such as: c. Worker Grade and their wage standard that divide into two districts. d. Minimum wage for Tanah Bumbu IDR 1.913.000, 00 and other (Satui) is IDR 1.875.000, 00.

c. Payment list ( signed by each worker) of each division. These records contain information regarding daily rate calculation and its total payment per 2 weeks. Verification result on this documents found that all pay-ment has comply with local regulation according to minimum wage payment.

The implementation of workers right regarding overtime has complies with regulations. Company has stated their commitment regarding overtime in Company Regulation 2014 – 2016 (Chapter VII, article 27), Overtime di-vide into 3 categories: regular day, weekly rest day, and official feast and religious day. Some form has been prepared and implemented as part of management system. The regular Overtime payment as stated in Compa-ny Regulation has complied with Decree Letter of Workforce Minister No. KEP.102/MEN/VI/2004 article 11 re-garding overtime payment calculation. Deep check conducted into the piece rate norm for harvesting and maintaining jobs. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Ministry of Workforce and Transmigra-



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tion regulation no. 102 year 2004 regarding overtime. In this regulation, working in Sunday (and national holi-day) defined as overtime, so the payments must comply with overtime payments regulation (the different be-tween regular day and Sunday/holiday piece rate still too small). This finding rise as non-conformity (NCR 2015 – 2b of 17 ). GMK Satui has commitment to employ only 18 years above. This commitment has documented in Company Regulations article 5 regarding worker recruitment requirements. This article stated that minimum age is 18 years old, health conditions and found comply with all requirements and qualifications. This commitment and policy implemented to all estates and mills, for internal and external worker that working in PN III operational ar-eas. Company’s commitment regarding worker right to work leave days has documented in Company Regulations, Chapter XI regarding “Work Leave”. This chapter consist of: a. Article 41, Annual Leave Day. b. Article 42, Maternity and monthly period Leave Day c. Article 43, Permitted Paid Leave Day d. Article 44, Pilgrimage leave day e. Article 45, Training and Seminar leave day f. Article 46, Permitted un-Paid Leave Day

GMK Satui has identified related regulations into a document of Law Registers. This document has also listed regulation regarding human resources and workforce. Check into this law registers found that company has not input 2 related regulations regarding workforce, such as Minister of Workforce and Transmigration Decree No. 100/2004 regarding working agreement and 102/2004 regarding overtime. This finding rise as non-conformity (NCR 2015 – 03 of 17 ). Company has not yet developed an evaluation procedure to make sure that worker sta-tus is complying with Minister of Workforce and Transmigration Decree No. 100/2004 regarding working agree-ment. This finding rise as non-conformity (NCR 2015 – 04a of 17 ). CR2.2 During the 1st surveillance audit, there is no changed and/or revision related legal land permit (land use right) for all estate and mill. The permits still same with main assessment audit. The legal land permit for Timur Estate will presented below: • Primary : the company has land used right permit (HGU) base on head of National Land Agency Decree Letter

No. 74/HGU/BPN/99 dated August 19, 1999 with total area 4,026 ha according to Land Used Map No.04/1996 dated February 15, 1996 (it has informed that there was exclude areas from east estate areas amount of 954 Ha) with valid for 35 years and land use permit (HGU) certificate No. 15 dated October 5, 1999 (NIB : 00002/SC,00001/PP) with total area 4,026 ha according to measurement letter no. 01 & 02/1999 dated on Octo-ber 2, 1999 (referee from Land Used Map No. 04/1996) located in Sungai Cuka village and Pasir Putih village, Kintap Sub District, Tanah Laut District. In head of National Land Agency Decree Letter No. 74/HGU/BPN/99 and HGU certificate No. 15 on behalf PT Damit Mitra Sekawan but on the page of registration of transfer right and other recording informed the change of ownership certificate name to PT Gawi Makmur Kalimantan accord-ance with deed of incorporation no.34 dated of November 20, 2007 by notary of Dr Irawan Soerodjo, SH, M.Si (DP No.2811/1009 and 208/653/2009). The company (East Estate) has location permit (decision letter from head of National Land Agency South Kalimantan Province no. 460.3/01/KPT-08/1997 dated January 4, 1997) on be-half PT Damit Mitra Sekawan amount of 15,000 Ha in S.Bakar village, Pamalongan village, Damit village, Pantai Linuh village, Sabuhur village, Pelaihari Sub District, Batu Ampar Sub District, Jorong Sub District, Tanah Laut Regency, South Kalimantan Province. It location permit same as west estate and central estate cause east es-tate include scope. In Minutes of land examination committee (committee B) no.09/RISHGU/02/1999 dated Feb-ruary 27, 1999 that east estate is zoned for non-forest uses (Kawasan Budidaya Tanaman Ta-hunan/Perkebunan) based on province & regency spatial map (appendix local government regulation No.3 year 1993 and No.13 year 1993) but based on decision letter of Head of Ministry of Forestry No. 435/Menhut/2009 dated July 23, 2009 that part of estate is conversion of production forest (Hutan Produsi yang dapat dikonversi) amount of 73.80 Ha so the release of forest areas in still ongoing processing status. Current condition for pro-cess it are the auditee has submitted request of the release forest areas (letter No. 010/Dir/JKT/XII/2012 dated on December 24, 2012) to Ministry of Forestry and The Ministry of Forestry has replied to the letter it (no. S.378/BRPUK-1/2013 dated on June 17, 2013) where there is shortage of requirement i.e.: recommendation of approval for the release of the region into non-forest from Governor of South Kalimantan. Land use map no. 04/1996 has re-measurement be No.094-17.08-2013 dated of November 28, 2013 with total areas are 3,822.69 Ha (4,025.48 Ha (result of re-measurement for East estate) – 91.86 Ha (operational of east estate outside legal land) – 110.93 Ha (operational of east estate on other company areas)).

• Additional I : for this area that the company is processing land used right (HGU) permit where current condition, National Land Agency of South Kalimantan Province has submitted letter (no.540.2/135/652/BPN-43) to National Land Agency of Republic of Indonesia regarding request of land used permit on behalf PT Gawi Makmur Kali-



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mantan amount of 350 Ha (land used map no. 18/PT-TL/2005). During audit, there are not response from Na-tional Land Agency of Republic of Indonesia regarding request letter from company and there is no evidence that the company has carry out the process/step of conversion of production forest (Hutan Produksi yang dapat dikonversi) because the result of overlay between plantation map with map of forest areas in South Kalimantan Province (attachment decision letter of Head of Ministry of Forestry no. 435/Menhut/2009 dated July 23, 2009) that it areas are conversion of production forest (Hutan Produsi yang dapat dikonversi).

Based on hectare statement June 2015, current existing planted was 3,990.38 Ha, which consist of: - Division 1 was 710.47 Ha - Division 2 was 691.33 Ha - Division 3 was 665.67 Ha - Division 4 was 618.67 Ha - Division 5 was 641.46 Ha - Division 6 was 662.26 Ha

But, based on total planted area under Timur Estate was 4,214.21 Ha. There is discrepancy between planted areas with land use rights (HGU), when the land use rights were 4,026 Ha. This is raised as non-conformity (NCR 2015 – 5c of 17 ). Related the Additional I assessed certification assessment above, the current condition during 1st surveillance was:

- As impact of forest area revision of South Kalimantan based on Forestry Ministry Decree number SK.453/Kpts-II/1999 dated on June 17, 1999, the current land use rights (HGU) was 4,026 Ha catego-rized in non forest area (others land use/APL).

- Revision of Forestry Ministry Decree number SK.435/Menhut-II/2009 dated on July 23, 2009, stated that the land use rights (HGU) nucleus area was 75.80 Ha categorized as Conversion Production Forest ar-ea (HPK), and area was 3,768.60 Ha still categorized as non forest area (others land use/APL).

Until during the 1st surveillance audit, the company has been correspondence with related official agency in 2014, with the result was 330 Ha still in cadastral process, then in 2015 there is no correspondence again car-ried out by company. This raised as a non conformity (NCR 2015 – 5b of 17 ). From the last non-conformity (NCR 2014 – 05 of 16) No.2 , the company was stated on the CAR’s report that the company will not carried out the manuring, harvesting activity and will excluded the planted area was planted outside the land use rights (HGU), but based on field visited and hectare statement, the company not consistent and still carried out the activity. This is raises as a non conformity (NCR 2015 – 5a of 17 ). CR2.3 There were no new land disputes found during surveillance since main audit in 2014. The last land disputes has been covered in main audit (2014), such as cases described in Conflict Resolution Report Progress as follow: 1. By letter on 19 March 2012 villagers of Sekapuk village claimed 110 Ha and 282 Ha area of PT GMK Satui estate

as their farmer’s organization cultivation area used by PT GMK. Since 2013, there was no further interaction with claimers.

2. Conflict with Ex Head of Alkautsar village for the land at Block E26 area. Last interaction was On 1 May 2013; the head of Alkautsar village sent a letter no. 002/Umum/Pem.AK/IV/13 asked the company to stop any activities in-side conflict area until solution was achieved. On 1 May 2013 the company issued official report regarding to ac-tivities stop based on the Head of Alkautsar village head. Based on interview report by District level of Police Of-fice on 5 Agustus 2013 it was known that some community member from Alkautsar village has stolen FFB from block E26. This action was initiated by one of them. For this action, each person was punished by 3 years and 1 year in jail.

3. Land claimed by Sungai Danau villagers. Until this surveillance; there is no disruption to company’s activities at this claimed area.

Company has provided evidences regarding negotiations and compensation records during surveillance. There was a list of land compensation of GMKS showed during audit. These list consist information regarding agree-ments since 2005 to 2015, provides detail information of the name of compensated parties, number of agree-ment record, compensation date and the land wide area that has been compensated. Each documents consist records and data regarding the negotiation/compensation process and administrative legal compliment, such as: a. ID card and/or certificate of domicile of compensated party b. Payment Slips c. Agreement that has titled as “Minutes of Compensation Payment for the Release of the Rights towards the

Land and Planted Vegetation above”. Each document has unique number, and signed by the related party and witnesses (local community leader).

d. The Release of Land Declaration letter, signed by compensated party and local community head. e. A Map of compensated land, signed by compensated party and local community head.



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f. Power of Attorney letter (Appointment as community representative) describes a person who acts as com-pensated parties’ representative in conducting negotiations and agreement process.

g. Declaration Letter of Land Rights (Sporadic) of each represented parties, issued by compensated party and signed by witnesses and local Head of Village.

All of these records and data that have been showed during surveillance indicated that the land acquisition pro-cess has complied with FPIC principles. GMKS Estate Management stated that company still open for negotia-tion to compensation for local community who wants to release their land. They could only follow the procedures that they have already known, by him/her or with their representatives. During audit, the auditee asked to show some records that chosen randomly of each year. All of documents and records that have been asked have been provided completely by the auditee. This finding indicates that management has maintained the documents and records as determined by the procedure. Since the main audit, there was no new agreement that has been made by GMKS. Compliance status: Non Compliance NCR 2015 – 02 of 17

a. Check into contract documents regarding harvesting workers found that they were not part of SKU (PKWT) or BHL worker. GMKS develop collective agreement letter with groups of harvester. This con-tract has complied with minimum wage requirement but not comply with regulation regarding worker status. According to national regulations, harvesting as a main flow production process must not be outsourced.

b. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Minis-try of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regula-tion, working in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small).

c. Checking for ppayroll statements for last 6 months of BHL worker of Mill and Estate has showed during surveillance found that some of BHL workers have been working for 21 days more than three months in a row. The Company has not yet convert/upgrade their status from BHL worker to PKWT/PKWTT worker. This finding has not complied with national regulation (Workforce and Transmigration Minister Decree No. 100/2004).

NCR 2015 – 03 of 17 The company has not input 2 related regulations regarding workforce, such as Minister of Workforce and Transmigration Decree No. 100/2004 regarding working agreement and 102/2004 regarding overtime. NCR 2015 – 04 of 17

a. The company was stated on the CAR’s report that the company will not carried out the manuring, har-vesting activity and will excluded the planted area was planted outside the land use rights (HGU), but based on field visited and hectare statement, the company not consistent and still carried out the activi-ty.

b. East estate also Satui Palm Oil Mill OSH committee still not authorised by related government agency as it was required by Ministry of manpower regulation no.Per-04/Men/1987 related OSH committee, in-cluding their regular quarterly reporting to the government since quarter II, III and IV 2014 periods and for quarter I and II 2015 periods.

c. Annual Routine medical laboratory examination still not perform yet as required by Permenakertrans No.2/MEN/1980.

d. Report of RKL and RPL monitoring result for period IV year 2014 for soil analysis result still not con-ducted and still not submitted to Governor of South Kalimantan, Ministry of Environmental and Envi-ronmental Official Agency of Tanah Bumbu Regency.

NCR 2015 – 05 of 17

a. The Timur Estate still carried out the manuring, harvesting activity and put in the area was planted out-side the HGU in to the hectare statement, so this is non-compliance with corrective and correction ac-tion submitted for closed the previous audit. This is last major non-conformity.

b. The company can not showed the progress of land use rights process of some area that was catego-rized as a forest production conversion area, last correspondence was in 2014.

There is discrepancy between hectare statements with planted area controlled by company.



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Principle 3: Commitment to long-term economic and fi nancial viability

Criteria assessed: CR3.1 Criteria not assessed: - Findings: Mill and Estate has a record of budget summary for 3 years from 2015 – 2017. In the budget summary record showed the information about plan for incoming FFB (own estate, smallholder and out grower), CPO and PK production plan, OER and KER for CPO and kernel, oil losses, production cost, fertilizing and spraying plan, production plan every years, planting years, road maintenance, replanting plan, and others. Compliance status: Full Compliance

Principle 4: Use of appropriate best practices by gr owers and millers

Criteria assessed: CR4.1, CR4.2, CR4.3, CR4.4, CR4.5, CR4.6, CR4. 7, CR4.8 Criteria not assessed: Findings: CR4.1 During the 1st surveillance, there is no revision or replaced the company procedure. The company has list of master document (FR/GMK-AGRO/PD/01/01) consist of manual and procedure for estate and mill activities. The procedures covering all estate activities such as nursery practices, land clearing (include without burning activity), conservation of soil and water, planting cover crops / LCC, planting of oil palm, mulching of EFB and fertilizer, land application, disease and pest control, harvest and transportation, etc. While procedure covering all mill activities such as receiving product, dispatch product, laboratory, and maintenance of mill, kernel crush-ing plant and processing in mill. Procedure for other group/section (supporting & sustainability) available such as human resources department, legal & relationship of community, purchasing, logistic, finance, security, tech-nic and workshop, record and document control, audit internal, control of nonconformity product, corrective ac-tion, OSH, preparedness and emergency response, inventory of GHG, handling of hazardous waste, handling of hazardous material, communication of internal & external, loading oil from truck, mass balance report, riparian area, handling of conflict, etc. Based on verification in field, there are several condition relating inconsistency between procedure with imple-mentation, the procedures such as : 1) SOP/GMK-AGRO/02/08 about fertilizing activity for mature and immature palm oil. 2) SOP/GMK-AGRO/02/08 about organic and inorganic fertilizing. 3) SOP/GMK-SMK3/01/14 about domestic waste handling. 4) SOP/GMK-AGRO/03/03 about water treatment in laboratory 5) SOP/GMK-AGRO/10/01 about workshop and technique 6) SOP/GMK-AGRO/03/04 about maintenance This inconsistency caused by the absence of the mechanism on monitoring the effectiveness of implementation of SOPs. Some SOPs are not implemented properly as above and the absence of control mechanisms of im-plementation of the SOP is raised as non-conformity (NCR 2015 – 6b of 22 ). Actually the company has conducted internal audit (RSPO & ISPO standard/scheme) on December, 2014, to monitoring for all applicable procedure, but rerecords of monitoring the implementation of SOPs is not availa-ble, then the organization cannot perform an evaluation to measure the effectiveness of SOPS. This condition is raised as non-conformity (NCR 2015 – 6a of 22 ). Monitoring result of evaluation SOP’s effectiveness still not available and already for agronomy only and still on progress and not finish yet. This condition is raised as non-conformity (NCR 2015 – 7 of 22 ). The document of operational results are well maintained in each estate and mill on monthly report e.g. monthly reports for January to June 2015 of Barat estate and Tengah estate and annual report of year 2014 which in-clude all activities. Records of operational results has available such as record of harvesting, fertilization, mulch-



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ing of EFB, maintenance of plant, control of pest and disease, maintenance of road activities in estates, etc. Whereas in mill has available too such as production process, FFB receipt, grading, dispatch, test of quality product, sounding activities, etc. The Satui Mill has recorded the origins of all third-party sourced Fresh Fruit Bunches (FFB) example in January – June 2015, as follows:

1. Koperasi Karya Tani, FFB supplied to the Satui Mill was 579.33 tonnes (0.04%) 2. Gapoktan K Tani, FFB supplied to the Satui Mill was 2,354.96 tonnes (1.56%) 3. Koperasi Agro Mandiri, FFB supplied to the Satui Mill was 1,188.28 tonnes (0.79%) 4. Usaha Sejati Mandiri, FFB supplied to the Satui Mill was 1,854.34 tonnes (1.23%) 5. Hati Nurani, FFB supplied to the Satui Mill was 3,072.38 tonnes (2.04%) 6. Tani Mandiri, FFB supplied to the Satui Mill was 4,367.73 tonnes (2.90%) 7. Kelompok Tani Karya Barokah, FFB supplied to the Satui Mill was 672.93 tonnes (0.04%) 8. Kelompok Tani Pemuda Makmur KS, FFB supplied to the Satui Mill was 13,830.11 tonnes (9.19%) 9. Kelompok Tani Sawit Sejahtera, FFB supplied to the Satui Mill was 761.06 tonnes (0.51%) 10. CV Satria Bagus, FFB supplied to the Satui Mill was 3.672.3 tonnes (2.44%) 11. Kelompok Tani Setia Kawan, FFB supplied to the Satui Mill was 1,282.51 tonnes (0.85%) 12. Kelompok Tani Trigan Group, FFB supplied to the Satui Mill was 1.852.69 tonnes (1.23%) 13. Kelompok Tani Telaga Sari, FFB supplied to the Satui Mil was 3,170.2 tonnes (2.11%) 14. CV Ridho Pendamaran, FFB supplied to the Satui Mill was 543.95 tonnes (0.04%) 15. Nur Jaya, FFB supplied to the Satui Mill was 12,933.53 tonnes (8.59%) 16. CV Titipan Ilahi, FFB supplied to the Satui Mill was 638.72 tonnes (0.04%)

CR4.2 During the 1st surveillance, the company has some SOPs regarding to fertilization activity namely SOP/GMK-AGRO/02/08 on Inorganic Fertilizing, SOP /GMK-AGRO/02/09 on Land Application, SOP/GMK-AGRO/02/10 on EFB application to the land, SOP/GMK-AGRO/02/11 on Determination of Census and Sample Tree. The com-pany also utilized residual solid sludge, empty fruit bunch, and liquid effluent for organic fertilizer to enrich the nutrient content in very shallow topsoil conditions. Evidence of solid sludge and EFB usage is a warrant dosage recommendations dated January 10, 2015 issued by the Head of Plantation which describes the dose in 2014 and 2015 as well as solid use programme in 2015 and map of solid used. The company recorded fertilizer application including empty fruit bunch application. Fertilizing recording made in estate monthly report and it comes from Field Head and Division Head report. The company manage soil fertility by conducting leaf analysis and soil analysis. According to the company pro-cedure no. SOP/GMK-AGRO/02/11, the company conduct soil analysis every 5 years, and leaf analysis every year as consideration to get fertilizer recommendation, with evidenced is :

- Leaf analysis conducted by Sumbio-BLRS Analytical Laboratory Plant Tissue at Timur Estate, Analysis re-port on July 14th, 2013 with parameter analyzed is N, P, K, Mg,B,

- Leaf analysis conducted by Sumbio-BLRS Analytical Laboratory Plant Tissue at Satui Estate, Analysis re-port on August 4rd, 2012 with parameter analyzed is N, P, K, Mg, Ca, B.

Soil analysis conducted by Soil Research Centre Bogor on August 6th – September 7th 2012 at Timur and Satui Estate with total of 177 samples. In addition to inorganic fertilizer, the company also applied organic matters such as EFB, effluent residues as an effort to increase soil fertility. The company has recorded EFB and other nutrient matters application. But, there is no procedure for solid application in Timur estate, because during the field visit found some area was applied solid, and also found some fragile area with sandy in filed number F14 and F15, and the estate did not yet the work program to increase and/or maintain the soil fertility for that. This is raised as nonconformity (NCR 2015 – 08 of 17 ). CR4.3 There is no revised of fragile map soil in Timur estate during the 1st surveillance. The company has map of fragile soil on the Kebun Satui Estate and East Estate. The fragile soil can be identified Through the slope map. Based map, the slope condition on both estate is :

a. Satui Estate : • 0 – 3% is 4,685.529 Ha • 3 – 8% is 1,236.166 Ha • 8 – 15% is 646.206 Ha • 15 – 25% is 244.804 Ha • 25 – 40% is 66.755 Ha



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• 40% is 39.641 Ha b. Timur Estate :

• 0 – 3% is 3,987.313 Ha • 3 – 8% is 184.935 Ha • 8 – 15% is 32.066 Ha • 15 – 25% is 10.986 Ha • 25 – 40% is 6.087 Ha • >40% is 14.843 Ha

The company also has map for erosion identification. Based on map, erosion potential in Satui Estate is located in field number F32, F33, F34, G33, G34, H32, H33, H34. For East Estate based on slope map, there is no fragile soil. When field observation to fragile soil location, the company has implemented terrace for location with slope 25 – 40% and also has cultivated by leguminose (Mucona bracteata). For riparian buffer zone the company also not allowed for chemical activity to maintain the cover crop along of riparian buffer zone to prevent the erosion in along of riparian CR4.4 During the 1st surveillance, Satui mill has record for water consumption in 2014 and 2015 until July. In 2014 wa-ter usage was 1, 17 m3/tone FFB and in 2015 until July was 1, 19 m3/tone FFB. Mill and estate also Hans identi-fied their river as a water source. This river was protected by company through the prohibited of all activity will broken and contaminate the river such as chemical activity, and others. Mill and estate also carried out the water quality analysis periodically, example in 2014 the water quality analy-sis result in December 2014, showed that the water quality still compliance with National and Local regulation for all standard. Also for POME, mill carried out the waste water analysis, and the result also compliance with the regulation. This POME analysis carried out in every month and reporting every three months to the official government. CR4.5 Timur Estate has work program for IPM in form FR/GMK-AGRO/PHP/07/04 for 2015. During the surveillance there is no revision of IPM procedure, the procedure was SOP/GMK-AGRO/02/13 Rev 01 dates 07/06/2013. Procedure stated that the EWS should be carry out in every month. But during the 1 surveillance, there is no EWS record carry out in every month for cater pillar and bag worm. This is raised as a non conformity (NCR 2015 – 10 of 17 ). EWS record only available for rat and termite. Based on EWS records for all division, showed the low level at-tack. Timur estate has realization and map for owl and owl box for each division. For every division consist of 5 – 7 owl boxes. Timur estate also has carried out the owl census; it was 22 owls available on Timur estate. Record of beneficial plant such as Turnera subulata and Casia tora are available in all division. Record for bene-ficial plant management was record in form number FR/GMK-AGRO/PHP/02/04 complete with photograph and maintenance process. CR 4.6 There is sufficient evidence that all pesticides/chemicals used by Timur Estate is registered and permitted. This is evidenced by: � Timur estate: The same recommendation was get by Tengah Estate with recommendation letter num-

ber 015/HIPK-WAS/VII/2015, this recommendation valid for one year start on July 30th, 2015. Type of pesticide used in Satui are Trap 20 WP; supretox, aladin, supreme 480 AS, primax 480/1; winson WP 20; wintag 490 G/L, meta prima, matador, furadan.

The organization keeps and maintains the records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications). Also has already been established a plan to reducing the limited pesticide used in Timur estate until 2018. Herewith some docu-ment were reviewed: Timur Estate:

• Report of chemical usage for March 2015, Division I: Sida, Up 480SL : 10 cc/ha (applied for 265,15 ha of areal); Division II: Sida Up: 0,010 ltr/ha (applied for 296,5 ha of areal); Division III: Gilposate: 3,7 cc/ha (applied for 265,10 ha of areal)

Toxicity recapitulation of Herbicide, Sida Up 490 SI, at Division VI:

• January 2015: applied areal 255, 2 ha; used around 99, 6 liter; active ingredient 36,881 grams/liter; Dose per ha: 145 grams/liter; LD 50 Oral Rate: 5, 4 Mgs/ha and LD 50 Human: 386 grams/person.

The organization has been demonstrated that all pesticides handled, used and/or applied by persons who have



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completed the necessary training. Some document were reviewed, i.e.: • Training Need Identification to improved human resources, year 2015 at Timur Estate. The results, i.e.:

Training of Handling and Usage of Hazardous Materials. It was attend by 2 person of warehouse per-sonnel, 2 (two) persons of maintenance foreman (Mandor), and 10 maintenance employees who relat-ed to hazardous substance.

• Letter of Timur Estate Manager on March 18, 2015, concerning Training of Chemical Usage. The letter said that; request of training for all pesticides / chemical-applying worker (according to Decree of minis-try of labor: 187/Men/1999.

• Letter from Commission of Pesticide and Fertilizer Monitoring. The Government of South Kalimantan Province No. 14151/KP3/KS/I/2014 and 14152/KP3/KS/I/201 for the 2(two) GMKS employee who have trained related to Limited Pesticide Usage.

During the estate visit in Timur estate, it was found the truck tank which used to spraying activity was completed with MSDS which bring together with foreman on duty related chemical used to readily available for easy refer-ence. There is evidence that the organization has defined a mechanism to ensure that all chemical-applying worker not consist of pregnant women and not pregnant nor breastfeed their babies, even for the company’s sub-contracted workers. There is applied mechanism to ensure that all sub-contractor workers are obeying to com-pany’s policy. An example is a Work Order Letter No.: 15/GMKS-SDE/EXT/2014 date December 25, 2014 to certain sub-contractor. Based on the letter, the third party should be do not employ pregnant women and not pregnant nor breastfeed their babies, menstruating women, and employ children. In the other hand, the organization has conducted socialization of chemical technical spraying to sub-contractor’s personnel, i.e.: date December 7, 2014 at Division I. The socialization include about personnel pro-tective equipment (PPE). During this recertification audit at Satui Mill and Timur Estate, there is a chemical-spraying activities and it were observes the workers were well understand what their job and responsibilities related their job risks and com-plete personal protective equipment were found wear during the workers perform the job including how they were dispose the chemical container used as responsibly manner but some of face shield used has already opaque and need to be replace and it has been raise an observation. The wash room for sprayer has already available but only to wash the PPE used by worker and their cloth still bring to home as they are still be contaminate their family member clothes when it was washed together In the same container at home as it has described in the SOP No.SOP/GMK-AGRO/01/18 related Chemist PPE Washing and used chemical container handling. It was raised as observation. There is evidence that the organization has perform specific annual medical surveillance for pesticide operators, for example:

• There is Report of Measurement/Examination Report Working Environmental and Medical Check PT GMKS Year of 2014, Document No.: 26/DHU/BK3-MDN/XII/2014, issued by Kemenakertrans Sekretar-iat Balai Keselamatan dan Kesehatan Kerja Banjarmasin; The medical checkup was include:

• Cholinesterase (consist of 18 women worker) Timur estate manager issued letter no. GMKS-SC/PKES/2015 dated March 20, 2015 regarding medical check-up for all subcontractor, especially for sprayer as recorded as sub-contractor worker and work as chemist work-er at Central estate. From interviews of female sprayers at Timur estate, they said that they undergo medical checkups once a year and this includes blood and urine test and checks for headaches or skin itchiness. Sprayers interviewed in the estates also mentioned that they receive free supply of milk from the management once a week. The milk serves to neutralize the effects of pesticide poisoning and it is required by law in Indonesia to provide milk to workers handling pesticides. CR4.7 All estates have documented occupational safety and health (OSH) policy. Example for this fact is Timur Estate OSH policy dated 2 January 2014; and Satui Palm Oil Mill OSH policy dated 2 January 2014, which is signed by the vice president of PT.Gawi Plantation. The OSH policy includes documented objectives and targets, i.e. comply with the company’s OSH procedures No. MNL/GMK-SMK3/01/01, Rev.0 2 January 2014, committed to wearing of Personal Protective Equipment (PPE) at work sites, and manages potential work risks at the site. As sighted from Tengah and Barat Estate documents, the organisational team of Estate OSH structure has already been available but still not approved by the Head of Social, Manpower and Cooperation Office of South Kali-mantan Province as required by Indonesia law and regulation also for Satui Mill still not approved yet, Regular reporting system to the related responsible local government also were sighted as they were observed report quarterly which consist of the OHS team activities such as safety patrol, inspection, regular meeting and emer-



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gency drill, summary of accident report using Frequency Rate and Severity Rate calculation record activities were reported only for first quarter 2014 not for quarter II,III and IV 2014 and quarter I,II 2015. They were raised as non-conformances by CR2.1 All estates provide National Employee Social Security (Jamsostek), as sighted from sampled payslips of 10 har-vesters of Timur Estate, as verified with interview of 6 related sampling employees. According to the company’s Work Instruction for Jamsostek Participants and Fees, the amount paid by the company for Jamsostek contribu-tion is 3 % of the employees' basic salary, while another 2% payment is made through regular deduction of their basic salary. It has been verified paid correctly. As for contract workers, Timur Estate deducts the amount re-quired for their insurance against payment to the respective contractors, and pays this insurance amount directly to the relevant authority to ensure that all contract workers are covered with insurance. The estates have records of annual physically medical check-up provided by internal hyperkes company medi-cal doctor on rotational basis for permanent workers performing high-risk works, e.g. chemical storehouse oper-ators, sprayers, weeding, and harvesters as required by Transmingration and Man Power ministry regulation No.2/MEN/1980 related regular medical test for employee. For Satui Mill employee, an annual medical checkup also never been performed during the time. This was raised as minor non- conformity in criteria 2.1 (CR2.1) above. The last medical check-up report for Timur Estate is dated 7 February 2015, while for Satui Mill dated 23 January 2015. Both are available and records have been prepared on recent check-up completely performed. Medical check-up reports blood cholinesterase levels. Workers at Timur Estate were identified having high blood cholinesterase level and the doctor produced recommendation letters for workers found with high cholin-esterase levels, stating that these workers should not do insecticide spraying work for at least one month and there were an objective evidence has been obtained indicating that the company has followed up the doctor recommendation to temporarily transfer these workers to carry out other works. Some of permanent and sub-contractor workers interviewed stated that they have undergone medical checks, and based on review of Timur Estate’s medical examination records, such medical check-up records were available for three interviewed har-vesters. Satui Mill has identified and documented Occupational Health and Safety (OHS) risks for all mill activities, alt-hough this was documented under its 8 January 2015 environmental aspects and impacts register. Also in Satui Mill, Central and West estate have implement the work permit system as it was found in their standard operating procedure No. SOP/GMK-SMK3/01/10 Rev.0 2 January 2014. The work permit will needed for several work such as hot work, confined space, working at high and some working which are not usual per-formed during the time. Timur Estate and Satui Mill has Hazard Identification, Risk Assessment and Risk Control document for 2015, dated 6 January 2015 for all estate activities including spraying, manuring, harvesting, workshop activities, gen-erator, truck transportation, chemical and material storage, and waste handling. But however in Required PPE using for all kind of activities are well implemented except PPE using were not according to specific jobs re-quirement for PPE as it were found for electrical generator set operator in the Timur estate using earplug but not using earmuff as required by this area. This was raised as an observation The company has an emergency response procedure documented under Standard Operating Procedure No. SOP/GMK-SMK3/03/08 Rev.02 January 2014, including identification of potential emergency situations (fire, accidents, flood, explosion, and chemical leakage) and a flowchart for Handling Fire Emergencies. Satui Palm Oil Mill has records of emergency response training and simulation on 16 June 2015 for over 50 workers, as well as land burning simulation on 12 May 2015 for 16 employees’ estate division staffs. It was confirmed through interviews with three harvesters that they had attended the emergency response training. Notes of the training results are maintained, including the steps of the accident & emergency response procedure. Records of other OSH training, i.e. for first aid and management of hazardous waste, are available as described under CR4.8. Fire emergency training for East Estate was conducted on 14 February 2015 for 35 staffs. Training on emergency response procedure for fire was conducted in March 2015 for 31 workers at Timur Estate in some emergency scenarios such as earth quake, chemical spill etc. also include in the drill. Induction system implementation still not yet conducted for both Palm Oil Mill area and Timur Estate also Eye wash station was not found for the Laboratory in the Satui Palm Oil Mill and Employee shirt storage near the electrical distribution panel in Boiler area could be endangerous to the employee itself and electrical short con-nection hazard. They were raised as an observation. It was found a Hydrant in the Satui Palm Oil Mill which is using not only for firefighting purpose; it has been used for other cleaning activities in the palm oil mill area. It was raised as minor non-conformity NCR 2015 – 11 of 17 . During site visits, foreman (Mandor) in Timur Estates were found having brought first aid kits to the field, and those are located at other locations such as estate office, workshops, chemical storehouse, etc. It was observed that the first aid kit at Division 1 of Timur estate office a complete pack of first aid kit. However, at Timur Estate Division 3, harvester and manure foreman also have a first aid kit. Evidence of OHS (e.g. PPE provided to workers) has been found in the Satui Palm Oil Mill. However, there are



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aspects must be improved such as Need some refreshment regarding PPE maintenance and storage procedure as they were found not safe and hygiene to use during the site visit in Satui Palm Oil Mill and Timur Estate. This was raised as an observation Chemical storekeeper in Timur Estate is provided with helmets, boots and goggles but look not much aware to the visitor that need to wear the PPE while entering his area as it was already arranged in procedure No. SOP/GMK-SMK3/01/07 related to Personal Protective Equipment. Contract field-maintenance workers are re-quired to wear boots and provide by company. Female contract spraying/manual maintenance workers inter-viewed in Timur Estate are provided with Personal Protective Equipment (PPE) by the company, including masks, gloves, and plastic aprons. The sprayers are provided with appropriate cloth gloves for spraying activity. While they wash their PPE at washing facilities at the division office and they store their PPE in the estate store. At Timur Estate, spraying workers are also providing with rubber gloves, goggles; masks and plastic aprons by the company. PPE washed in washing room and storage facilities are provided for the sprayers. The contract workers in Timur Estates were aware that they can get medication or treatment for minor illnesses from the es-tate clinic as they are allowed by the estate management and this medication is to be paid for by the company. As a matter of fact, they currently recorded in estate clinic record for medication. Based on interviews with harvesters at Timur Estate, there was a worker whose part of his leg was injured by slippery accident while the harvesting activities The estate’s report of this accident occurring on 2 December 2015 is available and the company has documented preventive actions and followed up by requesting their Hu-man Resources Department (HRD) to apply for insurance payment for the worker as required by their Working Procedure of Handling and reporting of OHS accident No SOP/KLS-SMK3/01/15 Rev 0 Year 2 January 2014. CR4.8 As sighted in the memorandum of Human Resources Manager No.GMK/MO/14/2015 related on the training program for estate employees in Timur and Satui Estate. The training program consist of Chemical handling training, Integrated pest management and early warning system, and HCV training were well filed including their signed attendance list, training materials and completed with the training evaluation. Satui Palm Oil Mill has also documented 2015 training plan, including training plan for OSH hazard and risk identification, workplace safety inspections, first aid training, hazardous waste management, and emergency response training. The estate and Mill have documented worker identification that requires training. For example in January to June 2015, Timur Estate has also identified the training need for Harvesting training for harvester total 33 harvester and main-tained training participant record. Timur Estate and satui Palm Oil Mill and estate training programme in 2015 has also been observed, including harvesting, fire emergency and pest management trainings. The company’s estates maintain records of trainings delivered by contractors to their workers. For example, in Timur Estate harvesting training was delivered for Mill Staff on March 2015. Signed attendance 45 participants list for Emergency Response Procedure, self assessment training including the training evaluation, Report train-ing result employees’ including the post training evaluation result was well documented in the mill office was sighted. The estate also carries out evaluation of workers understanding on the trainings provided. Timur Estate holds records of competency certificates for employee such as General OHS specialist certificate and several available contractors, i.e. contractors for Sprayers and road maintenance. Selection of contractors providing spraying workers is done. Certificates of competency from South Kalimantan Chamber of Commerce & Industry for two contractors providing spraying workers. Compliance status: Non Compliance NCR 2015 – 06 of 17

a. Mechanism of effectiveness monitoring procedure implementation still no available. b. There is found some procedure inconsistency such as procedure number SOP/GMK-AGRO/02/08;

SOP/GMK-SMK3/01/14; SOP/GMK-AGRO/03/03; SOP/GMK-AGRO/10/01; SOP/GML-AGRO/03/04. NCR 2015 – 07 of 17 There is no record of SOP monitoring result implementation available. NCR 2015 – 08 of 17

a. There is no solid application procedure available. b. Found the marginal soil in field number F14, F15 Div II, but there is no evidence record to increase the

soil fertility. NCR 2015 – 09 of 17



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Record of fertilizing input output recording was not well recorded.. It was found the discrepancy of expenditure slip with warehouse recording book. NCR 2015 – 10 of 17 There is no EWS record carry out in every months accordance to procedure number SOP/GMK-AGRO/02/03, mentioned that EWS should be carry out in every month. NCR 2015 – 11 of 17 It was found a Hydrant in the Satui Palm Oil Mill which is using not only for firefighting purpose; it has been used for another cleaning activity in the palm oil mill area.

Principle 5: Environmental responsibility and conse rvation of natural resources and biodiversity

Criteria assessed: CR5.1, CR5.2, CR5.3, CR5.4, CR5.5, CR5.6 Criteria not assessed: CR5.4 Findings: CR5.1 The mill has their UKL and UPL documents which was last revised on September 08, 2011 and approved by the Head of South Kalimantan Regional Body for Management of Environmental Impacts on 11 February 2011. No.660/06/BLH/2011 This document includes details of the mill's activities pertaining to oil palm processing and production, and CDM project, and also analysis results for air quality, NOx, SOx, particulate, carbon monoxide, land water quality, biological components and so on. All estates have their UKL and UPL document which was last revised on 11 February 2011 and approved by the Head of South Kalimantan Regional Body for Manage-ment of Environmental Impacts on 24 February 2011. The UKL and UPL document includes details on the es-tate activities, usage of natural resources, climate, air and water quality, geography and other environmental as-pects, social aspects, potential environmental impacts, and monitoring. The mill and all estates have also conducted their Identification of Environmental and Occupational Safety As-pects and Impacts dated 17 March 2015 for the mill, 22 March 2015 for East and Satui estate. The document covers environmental and safety aspects and impacts for estate work activities (eg. manual treatment, mechani-cal treatment, harvesting and tree maintenance), office activities, housing, management of hazardous wastes and domestic wastes, usage of natural resources, warehouse operations, transport and so on. The mill and all estates prepare a report every 6 months based on their UKL and UPL documents as required by legal requirements includes reports on air quality, emissions from electrical generator, groundwater and soil quality, and noise. In Timur and Satui Estate, such report includes result of analysis of the same parameters, as well as of odour levels, and amount of hazardous waste produced. This is reported semi-annually, while some parameters to be reported annually have been sighted in the estate’s December 2014 report, e.g. analysis of employment opportunities, local community perception and CSR activities. The analysis results indicate no ex-cess towards legally permitted standards. The last report was prepared on December 2014 and includes moni-toring and analysis results for ambient air and noise, water quality, and evaluation of results as they were sight-ed on report number 110/AP/IV/2015 for air ambient test result in Tengah estate, 111/AP/IV/2014 dated 24 June 2015 for Clean Water test result from ground water sample point, No.04/GMK-HSE/PKSJ/IV/2015 related to sampling point notes in Satui Palm Oil Mill. The analysis results for mill air and water quality show no exceed-ance of environmental parameters to legal standards. From the reports, it was found that all environmental quali-ty parameters measured were within the legal standards. The report has already been distributed to the related government department which concern to this UKL and UPL as required by law and regulation. Report of RKL and RPL monitoring result for period IV year 2014 for soil analysis result still not conducted and still not submit-ted to Governor of South Kalimantan, MenLH, Environmental and Forestry Agency of Tanah Bumbu District. It was raised as a non-conformity in CR2.1. CR5.2 During the 1st surveillance audit, there is no revision of HCV document and HCV assessment. PT Gawi Makmur Kalimantan (East and Satui estate) has conducted an assessment and identification of protected, rare and en-dangered species and HCV habitats within their area. An identification of flora and fauna has been carried out by a consultant, Re-mark Asia in year 2012 (July to August 2012). The results of these assessments are docu-mented in HCV assessment report.



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In the HCV assessment report it was stated that 5 types of HCVs were identified in the satui estate i.e. HCV 1, HCV 2, HCV 3, HCV 4 and HCV 5 whereas in east estate was stated 3 types i.e. HCV 1, HCV 2, and HCV 4. Identified HCV’s area in each estate consist of :

• HCV 1 areas are riparian (satui estate: Setarap river and Batulaki river. East estate : Kasayan river and Cuka river), riparian of water source (east estate : Kasayan river, Cuka river and nucleas spring), and reservoir areas (satui estate : mangrove areas) where HCV 1 in satui estate include HCV 1.2 and 1.3 areas due to identification of many wildlife species of protected and endangered status as explained above spread throughout satui estate;

• HCV 2 & 3 areas is mangrove ecosystem or areas (satui estate); • HCV 4 area are riparian (satui estate : Setarap river, Batulaki river and mangrove areas, whereas east

estate: Kasayan river, Cuka river, Kasayan spring and nucleas spring) and buffer zone in forest and land fire (satui estate : Setarap river, Batulaki river and mangrove areas, whereas east estate : Kasayan river and Cuka river);

• HCV5 area is basic need of local communities in mangrove/swamp areas (satui estate) Total overlayed HCV area in PT GMK unit satui is 1,846.46 ha (satui estate: 1,632.31 Ha and east estate: 214.15 Ha. Several protected species have been found in PT GMK area (east and satui estate) such as alcedo meninting, nasalis larvatus, macaca nemestrina, hystrix brachyurum, tomistoma schlegelii, trachypithecus au ratus, pterospermum javanicum, etc. A HCV management and monitoring plan and recommendation on year 2014 for all identified HCV areas in PT GMK (east and satui estate) have been established by PT GMK unit of satui. The document describes the activi-ties planned for each identified HCV (such as installation of signboard in HCV area, socialization about HCV to worker and around community, marking with paint as limited access chemical activities in riparian, patrol, moni-toring of quality water, restoration of riparian with enrichment planting, etc), and timeline for each identified HCV. Several signboards have been installed in front of all HCV area amounts of 33 units and socialization of HCV to communities and to worker. The company has to appoint and trained officer to monitor any plans and activities it. During the 1st surveillance, it was found that the river rehabilitation and timeline was not plan well. This is raised as nonconformity (NCR 2015 – 12 of 17 ). On the other hand, also found there are no monitoring record for HCV RTE species in Timur estate, and record of wildlife animal monitoring. This is also raised as nonconformity (NCR 2015 – 13 of 17 ). CR5.3 The company has identified and record all generated waste from mill and estate activities. The waste is classi-fied by domestic waste and hazardous waste. Sources of waste and pollution are fertilizing processes, spraying, transportation, boiler operation, effluent ponds, power plant, land application, bunch processing and activities in emplacement. Pollution and emission source from Satui mill, and Timur estate has been identified consist of location source (station), pollution and emission source, impact to human, machine and equipment, environment and impact management. In the estates and mills, waste management and disposal are implemented to avoid or reduce pollution by im-plementing documented procedure of Handling of Hazardous Waste (SOP/GMK-SMK3/01/14). Hazardous waste was kept less than 90 days, as permit and will be collected by licensed collector to proceed to processor and end user. This procedure also contains mechanism to dispose hazardous waste and agrochemical con-tainer. Hazardous and toxic waste collection, storage and transportation are recorded very well. PT NAZAR, a licensed company for hazardous and toxic waste handling, assigned by PT GMK as a partner to collect and transport the waste. The company has procedure of the handling of hazardous waste as guidance in handling of wastes (SOP/GMK-SMK3/01/14), and hazardous waste was kept less than 90 days before sent to licenced collector PT NAZAR, PT Nazar as a partner of PT GMK for collection and transportation of hazardous waste has a license from Envi-ronmental and Forestry Ministry No. 06.8.05 year 2015 dated May 13th, 2105. The license described kind of hazardous waste that may be collected or transported by PT Nazar, and agrochemical container is excluding. A contract No. 009/GMK-BJM/SPK/VI/12 dated May 4th, 2015 between PT GMK and PT Nazar stated agrochemi-cal container is also handled by PT NAZAR. PT Nazar is not allowed to handle agrochemical container (HCL container) either collect or transport. Then PT Nazar has some agreement contracts with other parties to man-age or utilize hazardous waste, namely PT Wastec International, PT Muhtomas and PT Job Colouring. Licence of PT Wastec International has been expired on March 30th, 2015, PT Muhtomas expired on June 24th, 2010, and PT Job Colouring license is not listed in the contract. This condition causing uncertainty of safety waste



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handling and disposed. Also found the 7 (seven) chemical container (HCL) was loaded to Banjarmasin by com-pany car. This is raised as nonconformity (NCR 2015 – 14 of 17 ). CR5.5 There is no land clearing due to no replanting plan until year 2025. The company has zero burning policy as seen letter number 02.2001 by General Manager PT Gawi Mamur Kalimantan and has procedure of emergency response (SOP/GMK-AGRO/01/08) where include emergency response to land burning. Based on result of monitoring for risk of fire level year 2015, the average risk for year 2015 is low to moderate. Fire extinguishers and facilities available such as water truck non nozzle, sand, shovel, bucket, water truck with nozzle, etc for fire fighter emergency team when fire is happen in PT GMK. There is regular patrol program, to monitor activities that might cause of fire in company’s area. Company conduct fire drill simulation and socialization to all workers and community surrounding plantation area. It was found fire for waste burning when plant tour activity in Satui Palm Oil Mill in front of fabrication workshop area. It was raised as a non-conformity (NCR 2015 – 15 of 17 ). CR5.6 Company has identified the emission source dan pollution from mill and estate (Timur and Satui Estate). When the emission and pollution source is:

• FFB transport • CPO transport • Heavy equipment operational • Genset operational • Water pump operational • Waste water treatment plant (IPAL) • Land clearing • Fertilizing and spraying activity • IPM activity

But, mill and both of estate still no has work program to reduce and minimize the significant emission and pollu-tion and there is no record for that implementation. This raised as a non-conformity (NCR 2015 – 16 of 16 ). GHG calculation was created by the mill and estate, but the GHG calculation not used the RSPO template and there is no record that the GHG calculation used was endorse by RSPO. This is also raised as non-conformity (NCR 2015 – 17 of 17 ). Compliance status: Non Compliance NCR 2015 – 12 of 17 Found that the river rehabilitation and timeline was not plan well. NCR 2015 – 13 of 17 Found there are no monitoring record for HCV RTE species in Timur estate, and record of wildlife animal moni-toring. NCR 2015 – 14 of 17 Based on PT Nazar’s license from Environmental and Forestry Ministry No. 06.8.05 year 2015 dated May 13th, 2105, PT Nazar as a partner PT GMK to collect and transport hazardous and toxic waste is not al-lowed to handle agrochemical container, but in fact this company collect and transport that kind of waste. PT Wastec Internasional, PT Muhtomas and PT Job colouring as a partner of PT Nazar and PT GM pro-cess and utilize hazardous waste does not have valid license to handle the waste. PT GMK cannot show a valid license of that company in the contracts. This condition causing uncertainty of safety waste handling and waste disposed of responsibly. NCR 2015 – 15 of 17 Based on PT Nazar’s license from Environmental and Forestry Ministry No. 06.8.05 year 2015 dated May 13th, 2105, PT Nazar as a partner PT GMK to collect and transport hazardous and toxic waste is not al-lowed to handle agrochemical container, but in fact this company collect and transport that kind of waste. PT Wastec Internasional, PT Muhtomas and PT Job colouring as a partner of PT Nazar and PT GM pro-



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cess and utilize hazardous waste does not have valid license to handle the waste. PT GMK cannot show a valid license of that company in the contracts. This condition causing uncertainty of safety waste handling and waste disposed of responsibly. NCR 2015 – 16 of 17 Mill and both of estate still has no work program to reduce and minimize the significant emission and pollution and there is no record for that implementation. NCR 2015 – 17 of 17 GHG calculation was created by the mill and estate, but the GHG calculation not used the RSPO template and there is no record that the GHG calculation used was endorse by RSPO.

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills

Criteria assessed: CR6.1, CR6.2, CR6.3, CR6.4, CR6.5, CR6.6, CR6. 7, CR6.8, CR6.9, CR6.10, CR6.11, CR6.12, CR6.13 Criteria not assessed: - Findings: CR6.1 PT Gawi Makmur Kalimantan has conduct and published a report regarding Social Impact Assessment (SIA) covering all activities under company’s operation in Tanah Laut Regency, Tanah Bumbu Regency, Satui Palm Oil mill in South Kalimantan Province and estates inn Paser Penajam Regency, East Kalimantan Province. In line with this SIA report there was evidence of attendance list of surroundings community such as from Benua Lama village, Damit hulu, Batalang, Pamalongan, Batu Mulya, Sabuhur, Sukaramah, Setarap, Alkautsar, Pasir Puith, Sungai Cuka, Bebulu Darat, Lebanga and Satui Barat villages. There were pictures during assessment activities also. Potential impacts that has been identified are: a. Key Issues regarding social problem: workforce and working opportunity; local economic development; ten-

ure and legal compliments; environmental Management; coordination and communication. b. Internal Issues: Workforce and remuneration; worker facility and Occupation Health and Safety; Personal

Protection Equipment c. Positive and sustainable impacts:

• Company’s Internal and External interaction • Social Risks • Company’s activities • Challenges of Estate Internal Management

The SIA report contain information about history of the company, positive and negative impacts, action plan to manage identified impact and monitoring the action plan. The identified positive impact such as, improve and in-crease diversity of community’s income. While the negative impact was destruction or damage of community’s road because of FFB transportation activities and pollution. The social impact management plan still found rele-vant with current conditions. Company showed their record regarding social impact monitoring and review activities from January to July 2015. There are 14 activities that planned and monitored, divide into 3 categories: a. Internal:

• Policy regarding Social management Activities (January to July) • Updating stakeholder information (name and phone number) ((January to July) • Social Impact Management Plan Development (July) • Archived and responded incoming letters (January and June) • Regular monthly Stakeholder engagements (January to July) • Meeting and Discussion with stakeholder (January and June)

b. External:



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• Documentation and responding stakeholder grievances/complaints (June) • Water Supply for emplacement residents (March to July)

c. Smallholder Scheme: • Security Patrol (March to July).

CR6.2 The company still held Internal and External communication Standard Operating Procedure i.e. no: SOP/GMK-AGRO/01/20, rev.02, valid since 24/02/2014. The method of communication can be made vertically and horizon-tally in form of meetings, sign board, letter, email, sms and socialization. While for external communication, CSR manager or community relation was responsible to accept, make archive, disposition and prepare sufficient re-sponses to stakeholder. External communication could be in form of letter, email, facsimile, telephone, direct communication, newspaper and other. There were evidences showed during surveillance, such as: a. Direct Communication . GMKS has a list of stakeholder that routinely met (by public relation officer) every

month; the list is updated in May 10th 2015. The list contains +/- 20 stakeholders that consist of local formal and non-formal leader and members of “District Leaders Meeting – MUSPIDA/MUSPIKA”.

b. Minutes of events: Records of public relations activity with MUSPIKA 2015. c. Records of Communication and Consultation with stakeholders 2014/2015. These records contain 8 events

of stakeholder communication/consultation with various issues such as road maintenance and support of heavy equipment to local community.

GMK Satui has identified and documented list of stakeholders. All related and strategic stakeholders from gov-ernment and local civil society has been identified and listed. Contact persons, official address and phone number has also recorded in the list. Evidences showed regarding consultation and communication process, such as: a. September 5th 2014, Sungai Cuka Village, regular meeting with community members and local leaders. b. October 14th 2015, Pasir Putih Village, a meeting with community member regarding the narrowing broken

road near kindergarten. c. January 22nd 2015, Pasir Putih local businessman regarding opportunity to be part of Mill Supplier. CR6.3 GMK Satui still hold a system for complaint handling or conflict resolution i.e. SOP no. SOP/GMK-AGRO/01/15 valid since February 24th 2014, states that : 1. Branch controller/Plantation controller/Estate Head/Mill Head/Community relation and CSR head is respon-

sible for conflict handling. 2. Plantation controller/ Estate head/Mill head submit reports to the Department Head of CSR/community rela-

tion/Legal related to existing issues, grievance, claim, and conflict recorded in verbal or written. 3. Department Head of CSR/community relation/Legal collects related data and information. 4. When the report was assumed as priority the next step was to identify option available for decision making. 5. Assign third party as mediator if no result or no agreement among both parties. Based on branch controller,

the direction board will consider and prepare policy to resolve the conflict. GMK Satui has a logbook of complaint/grievances with external and internal stakeholder and archived all incom-ing letters. There was no letters regarding grievances and/or complaints from stakeholders and affected parties since last audit until this Surveillance. GMKS has also developed log book from internal stakeholder (worker). Check into this log book found that there are 9 grievances/complaints that have been recorded into this logbook. Issues that recorded are: base camp or housing facilities; reward and recognition for worker; personal protection equipment; box of suggestions; and housing safety regarding theft. GMK Satui has identified and documented list of stakeholders. The list has make information such as address and social status up to date. Responsible of-ficer (public relation and legal officer) conduct regular meeting with strategic stakeholder to maintain communi-cation. There was pictures documentation showed during audit regarding regular visit activity to stakeholders. There is some communication records have showed during surveillance, such as list of communication record 2014/2015. There are 8 meetings between company and stakeholders. Stakeholders could express their aspi-rations, attentions, grievances and complaints n this meetings. CR6.4 GMK Satui still holds a system for complaint handling or conflict resolution i.e. SOP no. SOP/GMK-AGRO/01/15 valid since February 24th, 2014. This SOP covers identification, calculation and compensation procedures to communities and other stakeholder; which is a state that third party (local government) will get involved if there was no agreement made between the company and complainers. Company has provided evidences regarding negotiations and compensation records during surveillance. The only compensations records were regarding



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land acquisition and growth planted vegetation above (tanam-tumbuh). There was a list of land compensation showed; consist information regarding agreements since 2005 to 2015. Each document consist records and data regarding the negotiation/compensation process and administrative legal compliment, such as: Copy of ID card; Payment Slips; Agreement; and declaration letters. The agree-ments has titled as “Minutes of Compensation Payment for the Release of the Rights towards the Land and Planted Vegetation above”. CR6.5 Based on Company Regulation 2015 – 2017, article 8 regarding worker levelling, worker categories has divide into: staff; non-staff; permanent worker (SKU); and un-permanent worker (BHL). Documents regarding wages available for every types of worker, such as: a. List of permanent Worker (SKU) wage payments of each estate’s divisions and mill for first and second

payment in May 2015 (SKU worker salary paid twice in a month or every 2 weeks). b. List of un-permanent worker (BHL) wage payment of each estate’s divisions and mill for first and second

payment in May 2015 (SKU worker salary paid twice in a month or every 2 weeks). The list consist information such as the workdays, wage, deduction (insurance and contribution), nett total pay-ments and the workers signatures. The definition of minimum wage has refer to Governor of South Kalimantan Decree No. 188.44/0632/KUM/2014 regarding Provision of Sectoral Minimum Wage, South Kalimantan Province, 2015. This wage consist infor-mation regarding minimum wage for agriculture sector that is IDR 1.875.000,00. This number is always adjusted every year. Company has also adjusted the minimum worker payment and issued documents of “Standard and Policy of Non-Staff Wage improvement/Adjustment for South Kalimantan Area 2015”. These records consist of information regarding the standard wages for Tanah Bumbu and other area (including Satui). Checked to the payment record and wage standard documents found that company workers salary has comply with minimum wage payment regulation. The company also issued a document regarding Norms of Piece Rate and worker premium 2015. These docu-ments contain information regarding wage standard that has been adjusted with regulations regarding minimum wage payment. The piece rate norms on this documents consist of: a. Harvesting job area b. FFB Loading c. Pruning d. EFB application e. Security f. Transportation (FFB, EFB and shell) GMK Satui Has developed Company Regulation 2015-2017 that appointed on June 30th 2014 by South Kali-mantan Province Office of Workforce and Transmigration. As stated on this appointment letter, this company regulation took affect since July 1st 2014 and expired in June 30th 2016. The company regulation has consists 17 Chapter and 72 articles that has been deeply checked by the government and found comply with regulation. GMK Satui has also developed working contract agreement for non-staff worker (SKU and BHL). The contract consist the term, conditions, rights and obligations of both parties (company and worker) such as: working rela-tion; working hour, salary, code of conduct, and work termination. Other clauses that has not yet mentioned will refer to company regulations. GMK Satui has showed two samples working contract documents as evidences during surveillance. The implementation of workers right regarding overtime has complies with regulations. Company has stated their commitment regarding overtime in Company Regulation 2014 – 2016 (Chapter VII, article 27), Overtime di-vide into 3 categories: regular day, weekly rest day, and official feast and religious day. Some form has been prepared and implemented as part of management system. The Overtime payment has complied with Decree Letter of Workforce Minister No. KEP.102/MEN/VI/2004 article 11 regarding overtime payment calculation. Company has provided workers with housing, educations, and toddler and health facilities. Evidences showed during audit such as Facilities Fix Active 2015, worker complaint handling and summary of facilities mainte-nance plan. In order to improve worker access to adequate, sufficient and affordable food, GMK Satui has facilitated Worker Cooperative to open some business regarding food supplies. Management has showed Cooperative Finance Statement per June 2015 regarding the business. Cooperative shop point for food access is located in main of-fice area. There is no worker emplacement that located in remote area. Small food stores owned by worker al-so available in all emplacements with competitive affordable prices. Interview result with workers found that sometimes Cooperative management conducted “Cheap Food Program” that supported by holding company (wingsfood). The food distribute to workers and sale with the basic prices.



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CR6.6 Company still maintain their commitment to their policy according to respects the right to all personnel to form and join trade unions of their choice and to bargain collectively. This commitment has updated in the new Com-pany Regulation 2014/2016, issued in June 30th 2014. Chapter XV, article 68 of these regulations stated that Company giving opportunity to all workers to form and join labour union as long as comply with all National Law and Regulations and will not disturb company operational. The same as main audit result, there’s no labour un-ion has established in the company, or local labour union that has official relation with GMKS workers. In order to facilitate worker’s rights to bargain collectively with the management, GMKS and workers has formed Bipartite Cooperation Institution (LKS Bipartite). Based on interview to workers, they think that LKS Bipartite still could accommodate their interest regarding workforce issues. There were evidence showed regarding LKS Bipartite activities, as follows: a. Minutes of Meeting, July 27th 2015, attended by 23 LKS Bipartite members. The main agendas were:

• Review of last LKS meetings • Preparation of Independence Day Celebration • BPJS Clinic

b. Minutes of Meeting, June 20th 2015, attended by 23 LKS Bipartite members. The main agendas were: • Collective leave-day and regulation regarding Holiday • Task Management during Holiday • Holiday Allowance • Worker Payment and Closing Book • Break Fast events planning • Follow-up actions regarding auditing result.

CR6.7 Company’s regarding minimum age requirement as the commitment of not employed or exploited children is stated in some documents such as: a. Management Policy and Commitment, June 1st 2012, stated that Company would always open equal work-

ing and career opportunity to every citizen that comply with basic requirement, honest, above 18 years old, and meet the organization need of worker.

b. Company regulation 2014 – 2016, article 5 regarding worker requirements, stated that one of the general requirement for worker minimum age is 18 years old, in health conditions and comply with qualifications.

Checking to worker list of BHL and SKU, May 2015 of estates and Mill found that all workers were above 18 years old. Field check in working areas such as mill, emplacement and estates conducted during surveillance. There’s no child worker found employed in the fields. CR6.8 Company still maintain their policy about equal opportunities for all manpower of PT GMK signed on March 3rd, 2014 that states:

1. The company gives an equal opportunity for manpower to gain the worth occupation and income. 2. The companies will places any manpower based on skill, competency and other position requirement and

operational activity needs. This policy has properly communicated to all level workers. As sighted on company’s list of workers and em-ployee there are approximately 657 workers of West Estate come from South Kalimantan Province and other province in Java island such as East Java, West Java Provinces. During surveillance, GMKS also showed Job Vacancy announcements as evidence regarding worker recruit-ment. This announcements mentions general requirements such as education background, age, working expe-riences and personal competencies. No statements that consist of discrimination issues stated in the an-nouncements. Workers of all ethnicities and religions, including Muslims, Catholics and other Christian denominations are pro-vided with their respective places of worship such as mosques and churches in each estate. No workers inter-viewed on-site complained about any form of discrimination from the management of the estates or mill. If any discriminative issued rise among workers and/or among workers and supervisors, workers know how to re-sponse by submitting their complaints to higher supervisor or LKS Bipartite. CR6.9 PT Gawi Makmur Kalimantan management has documented a written policy to prevent sexual harassment and all other forms of violence against women, as well protection of their reproductive rights. This policy issued on March 3rd 2014 by Vice president director. This policy stated three key statements as follows:



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a. GMK aware of sexual harassment definition that covered all actions, verbal and/or non-verbal that lead to sexual and law violations.

b. GMK against all actions that lead to sexual harassment and commit to create a better working environment that free from sexual harassment actions.

c. GMK will give punishment/sanctions to all workers (as determined by regulations) if any sexual harassment happen.

Reproductive rights has clearly stated in Company Regulation 2014 – 2016, such as: article 36 regarding giving birth allowances and Article 42 regarding Maternity and menstruation leave. Two samples of maternity and menstruation leave records (form H1) showed during surveillance indicate that this policy has implemented. The company already established special grievance mechanism related to the issue and handling by the gender committee. The company established a Gender Committee 2015, established in January 9th 2015, with repre-sentatives committee from each estate division (29 people in total). An appointment letter regarding official head of Gender Committee has issued by estate manager on January 05th 2015. There was a minute meeting of gen-der committee activity in May 5th 2015 that has 5 main agendas as follows: a. Gender awareness b. Conflict regarding Women and gender c. Procedure of Conflict cases handling d. Double function of Woman. e. Tips for Breastfeeding mother regarding Ramadhan There are no sexual harassment cases, complaint and/or grievances recorded in gender committee complaint logbook. It indicates that there is no case reported so far. Interview with women workers has conducted during surveillance, they exclaim that know what sexual harassment is and what is gender based violence. They also convinced that all workers and supervisor has treated them well in working area and in emplacement. They know where and to whom they complaint and/or submit reports if any cases happened to them. CR6.10 The same result with main audit, FFB price was defined by meeting between related parties such as growers, smallholders and National Estate Agency. All interested parties can obtain this price decision from the agency by print out or sms service. There was FFB purchasing agreement with third parties as follow : 1. No. 115/PJB-TBS/GMK/X/12 on October 29th, 2012 with Usaha Sejati Mandiri Cooperative, placed at Hara-

pan Maji village, Batu Licin, Tanah Bumbu Regency. 2. No. 111/PJB-TBS/GMK/X/12 with Pemuda Makmur Kelapa Sawit Cooperative. 3. No. 175/PJB-TBS/GMK/III/14 with Farmer association Karyan Tani. 4. No. 136/PJB-TBS/GMK/V/2013 with Rukun Tani Farmer Group. 5. No. 105/PJB-TBS/GMK/V/12 with Cipta Prima Sejahtera Cooperative. These all agreement has the same template that consists of terms and conditions such as: FFB requirements (minimum weight, no dura seed, not being claimed by other party), delivering procedure, location and time deliv-ery, pricing and payment conditions. One of local FFB supplier has been met and interviewed during surveil-lance. He exclaims that company has conducted fairly trade with him. He also explained and showed how FFB prices information communicated to Him. A short cellular message text from GMK Marketing showed during in-terview session regarding FFB prices information. On this surveillance commitment regarding fairly deal and transparently with local business also checked to oth-er local business partner such as FFB transporter and contractors. GMKS showed list of active local business partner, consist of 4 contractors of construction services (2 from Banjarmasin, and 2 from Sei Cuka Village), and 3 FFB transporters (from Sei Cuka, Sungai Danau and Kintap Village). All of contractors has comply with regula-tion according to outsource requirements, and the company has conducted fairly trade with them. CR6.11 GMK Satui has developed CSR program 2014 and 2015, consist of activities that giving contribution to local de-velopment. The programs divide into 4 activities, such as: educations support; local traditional, national and reli-gion holiday celebration; environmental support; social and community contribution. There were reports showed regarding CSR program of January – July 2015, Satui estates as follow: a. Donations for local religion teacher, February 6th 2015, IDR 1.000.000,- b. Donations for local mosque renovation projects, May 10th 2015, IDR. 750.000,- c. Donations for local religion school operational cost, June 11th 2015, IDR 1.000.000,- d. Donations of Herbicide to Local Military Office, April 14th 2015, 20litres. e. Heavy equipment support to Pasir Putih Village’s Road maintenance, June 13th 2015. f. Heavy equipment support to Sungai Cuka Village’s Road maintenance, July 7th 2015. All of these contributions have consulted with related stakeholders. Documentation and record regarding con-



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sultation process has showed during surveillance. Some records samples such as payment and minutes has been checked during surveillance and found complied. CR6.12 Based on Company Regulations, article 7, letter (e) stated that Special/Foreign Employee is foreign employee that bonded by working relations with the company that has been permitted as Foreign Worker from National Government (cq. Ministry of Workforce and Transmigration). This statement is documented policies regarding company’s policy for not employ trafficked workers. Checking in to the list of worker 2015 for permanent and un-permanent workers found that all workers in GMKS are Indonesian. Field checked conducted during surveil-lance confirmed that there’s no indication of forced and trafficked worker found in GMKS operation areas. CR6.13 Gawi Makmur Kalimantan has published their commitment regarding respecting human rights that documented as Company policy in July 1st 2015, signed by Vice President Director. This policy stated that GMK as a com-pany respects Human Rights of worker and business associates, that detail as follows: a. Commitment to comply all Law and regulations, national and verified international laws of Human Rights. b. Respects every workers right to join organization as long as not conflicted with government regulations. c. Respects every workers right to conduct their private rights as long as along with culture, customs and regu-

lations. d. Open working opportunities to every citizen that comply with company’s requirement and qualification pro-

cess. e. Giving guarantee to all workers from disturbances, harassment and physical threats and/or verbal to per-

sonal and family members. f. Prohibit discriminative attitude and threats based on gender, race, ethnic and religion, to all workers. g. Will for not conducting working agreement with other organisations that has been recognised and/or indica-

tively suspected conducting practices that not complied with Human Rights Principles. During this surveillance, GMKS has showed evidences regarding socialization of Human rights policy, such as: a. Meeting attendant list and photo documentation, June 09th 2015, Division I, attended by 13 workers. b. Meeting attendant list and photo documentation, June 09th 2015, Division III, attended by 13 workers. c. Meeting attendant list and photo documentation, June 30th 2015, Division II, attended by 9 workers. d. Meeting attendant list and photo documentation, June 30th 2015, Division IV, attended by 12 workers. Compliance status: Non Compliance

Principle 7: Responsible development of new planting s

Criteria assessed: CR7.1; CR7.2; CR7.3; CR7.4; CR7.5; CR7.6; CR7.7 ; CR7.8 Criteria not assessed: - Findings: There is no planted area was carried out start from November 2015, because the youth planted based on field visit and planted record was in 2002. But based on EIA document explanation in 1997, the previous condition before palm oil plantation developed, was consist of 80% shrub (majority) and 20% secondary forest, with vegetetion has found little vegetation was Shore sp, Dipterocarpus sp, Palaquium sumatranus, Eusideroxylon zwageri. This EIA document has approval number 624/BA.5/XII/1997. So this principle and criteria not applica-ble for this time. Compliance status: Not Applicable

Principle 8: Commitment to continuous improvement in key areas of activity

Criteria assessed: CR8.1 Criteria not assessed: - Findings:



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In 2015 Environment aspect and impact report to monitoring and evaluation of environmental performances this is include the program of monitoring action plan (Environmental Monitoring/Management Plan - RKL/RPL) and prepare biannual reports to the local environmental department, which include parameter analysis result such as air and water quality, ambient noise, and generator emissions. In addition, East Estate has a documented environmental management programme for second semester of year 2014 as observed. However, the environmental management programme covers cleaning of spill at hazardous wastes temporary storage facility, including implementation progress report. In addition, the estate also plans to improve domestic waste management by organic and organic waste separation also the socialisation among the GMK Satui and their available sub-contractors. It should also consider other aspects where environmental performance can be improved. East Estate also has a documented environmental management programme for year 2015. Based on chemical usage records in all estates, there is several evidence of implementation of chemicals use-reducing practice. For example, zero use of paraquat or minimised use of chemicals for pest management due to little or even no pest attacks found in the estate. Compliance status: Full Compliance

3.2 Status of Previously Identified Non-conformities

During the main assessment certification, non-conformities against the RSPO Principle and Criteria for 2013 found. This non-conformities consist of 11 major and 5 minor classified. The company is given a timeframe to close all major non-conformities within 60 days and at time of first submission of this report to the RSPO. For the minor non-conformances, the company has provided their planned corrective action against these and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective actions taken and auditor conclusions is as:

Criterion 1.1. Records of information requests.

NCR 2014 - 01 of 16 (Major non-conformity) There was no evidence of company’s response related of the donation request for road maintenance from Al-kautsar village on 14 April 2014 Correction : Send response letter to the community and send the request letter to branch manager in Banjarmasin. Corrective Action : Ensuring that any request letter or proposal from community or stakeholder is being recorded on logbook of external communication and then deliver the letter to estate/mill manager to be responded within 3 weeks. Auditor Conclusions : Closed Date of closure : July 05, 2014 Verification results : The company has provided response letters about request for road maintenance from Alkautsar village. There was response letters complete with reception letter as follow: Letter no. 092/SM-STI/Umm/VI/2014 on June 3rd, 2014 to Head of Alkautsar village states that the request will send to the Banjarmasin Branch Manage-ment first and the response will be sent to the community within 3 weeks. Auditor Conclusions : Closed



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Criterion 1.2. The records must be maintained for a period of time determined by the company, taking into account their relative importance.

NCR 2014 - 02 of 16 (Major non-conformity) There was no retention time defined by the company for information request and the response. Correction : Revise company’s SOP retention time for document, record and response. Corrective Action : Community relation officer conduct monitoring activity to ensure that every request letter came from internal and external parties will be response based on procedure. Auditor Conclusions : Closed Date of closure : July 05, 2014 Verification results : The company provides control of records document no. FR/GMK-Agro/PD/01/06. It has been require the reten-tion time for request letter and response to related party which is 3 years.

Criterion 2.1. Evidence of compliance with relevant legal requirements.

NCR 2014 - 03 of 16 (Major non-conformity) There are indicated several evidence that the company not compliance to the law and regulation for national regulation and local regulation, such as :

• FFB truck driver no. TBS DA 9347 LC did not have valid driving license. • Komatsu 015 wheel loader’s operator in Satui mill has not have operator license letter (Surat Izin Op-

erator). • 635 non permanent daily workers at Satui estate did not registered in Jamsostek program. • Control wells parameter analyst result was not appropriate with requirement stated on Head of Tanah

Bumbu district decree No.273 year 2010. Correction :

• The driver and the operator proceed to license application process based on his type of vehicle. Add article related to driving license requirement in his working contract.

• The company identify all employees and proceed to enroll for Jamsostek program • Carried out test of control wells according with Head of Tanah Bumbu District decree no. 273 year

2010 Corrective Action :

• The company established 3 monthly schedules for every department to evaluate and their verification implementation of the law and regulation to ensure company’s compliance to related applicable law and regulation.

• HSE Dept responsible to ensure conducting test of control wells has according with Head of Tanah Bumbu District decree no. 273 year 2010.

Auditor Conclusions : Closed Date of closure : July 5, 2014 Verification Result :



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The company has provided evidence related non-conformities above : • The statement letter from driver that he will compliance with Gawi’s regulation and he will applied to police’s

office for create of driving license on period of June 10-17, 2014. • The company has submitted request letter and support document (attachment) to government regarding

operator license letter (Surat Izin Operator). • The company has submitted request letter and support document (attachment) to the national health care

security (BPJS Kesehatan) office, receipt note and list of new employees which was registered in Jam-sostek program.

• The company has provided a letter no. 660/01/Lab-BLHD/IV/2014 dated on June 23, 2014 from environ-mental agency in Tanah Bumbu District regarding statement letter that parameter used test of control wells in semester I year 2014 has appropriate with Head of Tanah Bumbu District decree no. 273 year 2010.

Criterion 2.1. Evidence of efforts made to comply wi th changes in the regulation.

NCR 2014 - 04 of 16 (Major non-conformity) • Local regulation (governor regulation) number 052/2007 about quality standard for ambience and noise and

local regulation (governor regulation) number 70/2008 about quality standard for emission not include inside the list of applicable laws and regulations (national and local regulations) (per January 2, 2014).

• The company has carried out laboratory test for emission and pollution sources with based on local gov-ernment (governor and head of district) requirement/regulation for quality standard but company not shows evidence that governor regulation no.053/2007 and no.70/2008 and head of district regulation has appropri-ated with environmental agency regulation

Correction : The company has submit the corrections, do it the identification local regulation of South Kalimantan Province and after that compare to the related national regulation to know which one of the regulation more strict, and that this will be guidelines for regulation compliance Corrective Action : Ensure the all of related national and local regulation with the company has registered on book of list regula-tion and ensure the evaluation every 6 month. Auditor Conclusions : Closed Date of closure : July 5, 2014 Verification Result : The company has provided evidences i.e. revised list of applicable legal regulation that has been included lo-cal government regulation number 053/2007 and 70/2008, there is statement that all regulation must be im-plemented. Whereas, the company has provided a matrix of comparison between local regulation no. 053/2007 and 70/2008 with environmental agency regulation and the conclusions is to use quality standard appropriate with EIA document i.e. local government regulation no. 053/2007 and no. 70/2008.

Criterion 2.2. Documents showing ownership or lease o f the land in.

NCR 2014 - 05 of 16 (Major non-conformity) • It was stated on the Map that there is another plantation activities from other company inside the company’s

area, while there are some company’s operational outside legal land area. • There is no evidence that the company has carry out release of the process/step of conversion production

forest (Hutan Produksi yang dapat dikonversi) because the result of overlay between plantation map with map of forest areas in South Kalimantan Province (attachment decision letter of Head of Ministry of Forestry no. 435/Menhut/2009 dated July 23, 2009) that it areas are conversion production forest (Hutan Produksi yang dapat dikonversi).



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Correction : • The management wills issue statement letter that company will not carry out activities in that area . • The hectare statement, budget of activities and all operational cost relate that areas will be revised. • To create the schedule of plan regarding issue of land used right and their release process /step of

conversion of production forest (Hutan Produksi yang dapat dikonversi) • The company will submit to planology agency regarding request of forest areas analyst. Result of ana-

lyst will submit to National Land Agency. Corrective Action :

• Statement letter issued by top management that there are prohibited to conduct operation outside le-gal land area.

• To ensure request to forestry planologi agency was carry out and result of analyst will submitted to National Land Agency.

Auditor Conclusions: Closed Date of closure: July 5, 2014 Verification Result : The company provided documents, such as :

• Schedule of plan regarding issue of land used right where follow up to national land agency in South Kalimantan province in March 014, forest areas analyst in planologi agency at June 2014, renew of land used right to national land agency at August 2014, till certificate issued at March 2015.

• Letter from company (no.009/Dir/GMK/JKTM/14 dated on June 17, 2014) to forestry planologi agency and evidence of receive note for letter it.

• Result of identification for outside legal land amount of 146 and re-application land used right amount of 349 Ha.

Criterion 2.3 Records of any negotiated agreements be tween traditional owners of land and plantation

companies (if any), supplemented with maps in appro priate scale. Criterion 2.3 Copies of negotiated agreements detaili ng process of consent. NCR 2014 - 06 of 16 (Major non-conformity) • There was no record of negotiation between company and 10 community members land owner inside of the

company’s land use right area for land acquisition process of the land. • There was no agreement between company and community members regarding to obligation and right of

both parties regarding to customary right inside of company’s land use right area. Correction : Conduct meeting with all community member as land owner and establish mutual agreement for all relevant activities. Corrective Action : Ensuring all cultivated or community area inside company’s legal area are being identified, make negotiation and make agreement between the company and the land owners. Auditor Conclusions : Closed Date of closure: July 05, 2014 Verification result : The company provide evidence that there are mutual agreement between the company and 10 community members as follow :

• Negotiation record and agreement with fish pool owner (3 person) of 21.273 Ha at Setarap village • Negotiation record and agreement with fish pool owner (4 person) of 46.287 Ha at Setarap village • Negotiation record and agreement with fish pool owner (3 person) of 32.311 Ha at Setarap village

All agreement records above has supplemented with maps.



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Criterion 4.1 Records of operation result

NCR 2014 - 07 of 16 (Minor non-conformity) There are several condition relating inconsistency between procedures with implementation such as : 1. There are stack of EFB in collection road between block C18 to C19 (east estate) has been not applied to

block during 5 months ago and block B08 (Satui estate) has been not applied to block during 7 days ago too so this is condition not compliance with their procedure (SOP/GMK-AGRO/02/10 Rev.01 dated June 6, 2013).

2. EFB application more than 1 layer in block G31 (Division IV – Satui estate) so this is condition not compli-ance with their procedure (SOP/GMK-AGRO/02/10 Rev.01 dated June 6, 2013) that EFB application should be 1 layer on soil surface (point 2.4).

Correction :

1. EFB applied in the relevant plantation block following the required time. 2. Conduct the evaluation of implementation of EFB application and brief all of workers who applied EFB

in the field. 3. Provide socialization again SOP/GMK-AGRO/02/10 Rev.01 by estate manager to operator and strictly

monitored the implementation of EFB application according to procedure. Corrective Action :

- Supervisor shall ensure all employment shall comply with procedure of EFB application. - Ensure the procedure has been implemented and conduct evaluation for implementation effectiveness

of procedure Auditor Verification Result: - The company has carried out the EFB application brief to all EFB workers in December 2015. - Based on field visit in Division II, EFB application was comply with the company procedure, i.e.: 1 layer and

the EFB foreman has ensured that the EFB application was comply. Auditor Conclusions : Closed

Criterion 4.6. Evidence of use of only approved and registered agrochemicals permitted by the relevant authorities.

NCR 2014 - 08 of 16 (Major non-conformity) The company (Satui estate) has propose to approval to use chemical pesticides to Manpower and Transmigra-tion dept of Tanah Bumbu District by letter no. 015/GMK-STI/HRD-ADM/II/2014, those chemical including are Glifosat, Paraquate and Methyl, but until the audit time, the license has not issued yet. Correction : The company submit letter again to Manpower and Transmigration as remainder letter and will monitoring until the license issued. Corrective Action : Proactive of coordination to local government that to ensure progress Auditor Conclusions : Closed Date of closure: July 05, 2014 Verification result : The company provides copy of letter related to chemical permit/recommendation in work location from Social,



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Manpower and Transmigration Agency in Tanah Bumbu District through the letter number 565/53/Pstd/Was.Naker/2014 on June 20, 2014. Criterion 4.6 Documentary evidence that use of chemic als categorised as World Health Organisation

Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated.

NCR 2014 - 09 of 16 (Minor non-conformity) The company has policy about pesticide/chemical use but there is no commitment (target or time) to reduce or eliminated paraquat use in the company (Satui and East estate) Correction : Create time table/or target to reduce or eliminated paraquat use Corrective Action : Ensure to reduce or eliminated program are implemented every year Auditor Verification Result : Based on record chemical used, the company has effort to reduce the chemical used especially chemical cat-egorized as 1A and 1B. In 2015, the chemical used type was not used the paraquat. Auditor Conclusions : Closed

Criterion 4.7 (Minor indicator 2) Regular health exam ination by a doctor for workers in station or ex-posed to high risk work

NCR 2014 - 10 of 16 (Minor non-conformity) Documented risk assessment for Occupational Health and Safety (OHS) was not covering Water Treatment Plant and Waste Water Treatment Plant Correction : Carry out HIRAC identification on WTP and WWTP station and evaluation annually Corrective Action : To ensure all areas and activities station has include in HIRAC identification report Auditor Verification Result: Based on HIRAC document, the company was complete the HIRAC document with WTP and WWTP and the document were identified the risk and environmental assessment identification. Auditor Conclusions : Closed

Criterion 4.8 A documented training programme for sta ff, employee and scheme smallholders in ac-cordance with workers’ positions and competences.

NCR 2014 - 11 of 16 (Major non-conformity) The training program was not prepared based on Training Need Analysis (TNA) and there is not information on training type that will be followed by each employee/worker in form of training program in Timur estate, Satui estate and Satui mill Correction : Develop of training program based on TNA, identified from organization structure, job description, competency standard and GAP competency. Corrective Action : To ensure that training program has developed with based on result of TNA and conducting evaluation each



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year. Auditor Conclusions : Closed Date of closure: July 05, 2014 Verification result : The company has provided training plan/program for worker in warehouse, HRD dept, head of division and all supervisors in Satui and East estate. Time, type of training and participant for training it such as : - Estate: training type i.e. awareness of RSPO, ISPO and ISCC, procedure of harvesting, procedure of ferti-

lizer, etc with participant is supervisor (mandor) on August 2014. - Warehouse: training type i.e. socialization of sustainability system, warehouse procedure, warehouse man-

agement and leadership with participant is head of warehouse and supervisor warehouse on August, Octo-ber, November and December 2014.

- HRD: type of training i.e. HRD procedure, socialization of sustainability system, recruitment training and leadership with participant is head of HRD, supervisor, payroll operator and radio operator on August, Sep-tember, and December 2014.

- Head of Division: training type i.e. socialization of RSPO, ISPO & ISCC training, leadership development, Training management and IPM training with participant is head of division on August, October, and Novem-ber 2014.

Criterion 4.8 Evidence that the company uses experie nced or trained contra.

NCR 2014 - 12 of 16 (Major non-conformity) Evidence that the company uses experienced or trained contractors is not available Correction : Develop of vendor/contractor selection & evaluation procedure and their format. Corrective Action : To ensure that vendor/contractor selection & evaluation procedure has been finished and implementation must consistent with procedure and evaluation of procedure. Auditor Conclusions : Closed Date of closure: July 05, 2014 Verification result : The company has provided contractor procedure (SOP/GMK-AGRO/12/01 dated on June 11, 2014) regarding selection and appointment of contractor, bidding and application procedure, contract issued, appointment of local contractor and information must be available in contract.

Criterion 5.1 Records of regular report on environmen tal management in accordance with relevant reg-ulations.

NCR 2014 - 13 of 16 (Major non-conformity) The company was not provided evidence that environmental monitoring & management report for period 1 year 2014 (January to March) has been submitted to relevant institution. Correction :

• Quick request to Environment Agency in Tanah Bumbu District regarding the results of laboratory test on March 2014 on behalf PT GMK- Satui.

• Auditee will submit environmental management and monitoring report to institution Corrective Action :



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To ensure schedule of environment monitoring was developed and carried out accordance time period in regulation. Auditor Conclusions: Closed Date of closure: July 05, 2014 Verification result : The company has provided the environmental monitoring & management report period I year 2014 and it report has submitted to local government and all parameter not more than standard values.

Criterion 5.3 Estates and mills waste management and disposal are implemented to avoid or reduce pollution.

NCR 2014 - 14 of 16 (Major non-conformity) There were no evidence that waste management plan has been implemented due to burned domestic waste was found in emplasment/worker housing block F (Timur estate) Correction : The company will conduct socialization again to worker, develop of sign board “avoid of burning domestic waste” and handling of domestic waste with disposal to landfill (tempat pembuangan akhir). Corrective Action : The company will carry out socialization and installment of sign board and create of inspection schedule in emplasment Auditor Conclusions: Closed Date of closure: July 05, 2014 Verification result : The company provided evidence of socialization activity and installment of sign board ”avoid of burning domes-tic waste, wood, etc” such as photograph and attendant list. Socialization was participated by all head of divi-sion in Satui and East estate.

Criterion 6.1 Regular monitoring and management of so cial impact with the participant of local com-munities.

NCR 2014 - 15 of 16 (Minor non-conformity) There was social impact management and monitoring action plan, but there was no evidence of community participation to make the planning. Correction : Conduct socialization of action plan taken regarding to social impact identified based on social impact as-sessment to the community and make some modification based on their comment or suggestion. Example was at Al Kautsar and Setarap villages. Corrective Action : Ensuring any social program established every year will communicate to the community and get approved prior to get approved by management. Auditor Verification Result: Evidences showed regarding consultation and communication process, such as: a. September 5th 2014, Sungai Cuka Village, regular meeting with community members and local leaders. b. October 14th 2015, Pasir Putih Village, a meeting with community member regarding the narrowing broken

road near kindergarten.



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c. January 22nd 2015, Pasir Putih local businessman regarding opportunity to be part of Mill Supplier. Auditor Conclusions : Closed

Criterion 6.5 Growers and millers provide adequate h ousing, water supplies, medical, education and other facilities for employees where such facilitie s are not available or accessible.

NCR 2014 - 16 of 16 (Minor non-conformity) There was facility found in damaged condition. For example was :

1. Toilet at Satui mill did not comply with sufficient lamp light, complicated night shift workers then. 2. Toilet at house no. H.08 at Jombang Housing was out of order. 3. Drain at Backyard of mill housing was fully of bush and being used for waste dump. 4. Backyard of Sei Cuka housing (block F) in east estate was not maintained, disposal of domestic liquid

waste clogged, and disposal domestic waste not right place. 5. There is leaking roof in emplasment/worker housing (block C.03) which has been reported but no re-

sponse/repaired from company. Correction : Make reparation to the damage facilities and established monthly monitoring plan to the employee’s facility. Corrective Action : Ensuring the facility monitoring program will be well implemented Auditor Verification Result: Housing and other facilities that found out of order during Main Audit has been repaired. 1. Field check into Mill’s toilet found that has been supplied by sufficient lamp light. 2. Field check into Toilet at house no. H.08 at Jombang Housing found that it has in order condition. 3. Field check into drain at Mill Housing backyard found that the reparation still on progress. 4. Field check into Backyard of Sei Cuka housing (block F) in east estate found that the maintenance pro-

cess still on progress. Management prepared a project to maintain this backyard. 5. Field check into emplasment/worker housing (block C.03) found that the leaking roof has been repaired.

Checking into complaint logbook found that the complaints have been registered and the response has been conducted. Record and documentation of reparation showed during audit.

Auditor Conclusions : Closed

3.3 Identified non-conformances, corrective actions taken and auditors conclusions

A total of 17 nonconformance’s were identified during the 1st surveillance audit. These consisted of 7 noncon-formity categorized as major non-conformities and 10 nonconformity categorized as minor non-conformities too. For the major non-conformances, the company has taken the necessary corrective action to close these non-conformances, and this was verified by the audit team through documented evidence submitted by the company. For the minor non-conformances, the company has taken corrective action against these as well, and for those which could not be verified as closed through document checks, the closure of these minor non-conformities will be assessed during the next surveillance audit. A summary of all identified non-conformances, corrective ac-tions taken and auditor conclusions is as below:

Criteria 1.2.1 Publicly available documents shall include, but are not necessarily limited to: Land titles/user rights, Occupational health and safety plans, Plans and impact assessments relating to environmental and so-cial impacts, HCV documentation, Pollution prevention and reduction plans, Details of complaints and griev-ances, Negotiation procedures, Continual improvement plans, Public summary of certification assessment re-port, Human Rights Policy. NCR 2015 – 01 of 17 (Major Non Conformity) The publicly available document lists not yet explicitly mentioned documents required by RSPO P&C such as:



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Environment and Social Impact Management Plan and report; HCV; Negotiation Procedures; Public Summary of certification assessment; Human Rights policy and Code of Ethical Conduct policy. Correction: Revised the procedure number SOP/GMK-AGRO/01/08 about External and Internal Communication, with complete by RSPO publically available document, such as plan and report of environmental and social impact; HCV report, negotiation procedure and others. Corrective Action: Ensure the revised procedure was complete by RSPO publically document accordance to RSPO requirements, such as Environment and Social Impact Management Plan and report; HCV; Negotiation Procedures; Public Summary of certification assessment; Human Rights policy and Code of Ethical Conduct policy. Auditor Conclusions : Closed Date of closure : September 30, 2015 Verification results : Company has revised their documented procedure according to publicly available document No. SOP/GMK/AGRO/01/08, on August 10th 2015, regarding additional publicly available documents. On page 4, sub chapter “External Communication”, points 3 has mentions additional documents as required by RSPO P&C as Follow: a. Environment and Social Impact Management Plan and report; b. HCV; c. Negotiation Procedures; d. Public Summary of certification assessment; e. Human Rights policy and Code of Ethical Conduct policy. This revised procedure has been communicate and socialized to relevant stakeholders such as local formal and un formal community leaders. Evidences showed regarding the socialization process such as: a. Attendant List of SOP External and Internal Communication Socialization, August 24th 2015, attended by

10 people of local community leader surround Kebun Barat and Kebun Tengah Estates. b. Minute Meeting: SOP External and Internal Communication Socialization, August 25th 2015, prepared by

Community Relations and acknowledged by Site Manager. c. Pictures: Photos regarding SOP socializations.

Criteria 2.1.1 Evidence of compliance with relevant legal requirements shall be available.

NCR 2015 - 02 of 17 (Major) a. Check into contract documents regarding harvesting workers found that they were not part of SKU (PKWT)

or BHL worker. GMKS develop collective agreement letter with groups of harvester. This contract has complied with minimum wage requirement but not comply with regulation regarding worker status. Accord-ing to national regulations, harvesting as a main flow production process must not be outsourced.

b. The norm of Piece Rate payment for Sunday and national holiday has not yet synchronized with Ministry of Workforce and Transmigration regulation no. 102 year 2004 regarding overtime. In this regulation, work-ing in Sunday (and national holiday) defined as overtime, so the payments must comply with overtime payments regulation (the different between regular day and Sunday/holiday piece rate still too small).

c. Checking for ppayroll statements for last 6 months of BHL worker of Mill and Estate has showed during surveillance found that some of BHL workers have been working for 21 days more than three months in a row. The Company has not yet convert/upgrade their status from BHL worker to PKWT/PKWTT worker. This finding has not complied with national regulation (Workforce and Transmigration Minister Decree No. 100/2004).

Correction : a. Management would develop contract for all worker (harvesting/maintenance) gradually. b. Management would develop formulation regarding overtime in Sunday and national holiday. c. Calculate minimum harvesting Worker and convert their status from daily un-permanent worker into daily

permanent worker gradually. Corrective Action :



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a. Ensure that the contract for all workers (harvesting/maintenance) has developed gradually. b. Ensure that Management develop formulation regarding overtime in Sunday and national holiday. c. Ensure Worker conversion status from daily un-permanent worker into daily permanent worker gradually.

Auditor Conclusions : Closed Date of closure : December 4, 2015 Verification Result : a. Direct Contract

- List of worker contract issued in October 1st 2015, prepared by HRD Staff and recognized by HRD Manager. There are 11 workers has direct contract with GMK.

- Contract Sample: GMK with Jamhari signed in October 1th 2015 by both parties. This contract has clearly stated worker rights such as working hour; salary; insurance and code of conduct.

b. Overtime. Management has issued new Norm of Piece Rate 2015 for South Kalimantan. This norm has clearly stated piece rate of regular day and Sunday/holiday for all piece rate working order.

c. Worker Status Conversion - Worker Status Conversion Program from BHL to PHT, October 1st 2015, prepared by HRD Staff and

recognized by HRD Manager. This document show management program for worker conversion from 2015 to 2022 based on minimum worker need assessment.

- Worker Assessment Test result, October 1st 2015, prepared by HRD Staff and recognized by HRD Manager.

- Recommendation letter (email) from Mill to GMK regarding workers who recommended to be convert-ed into daily permanent worker.

Criteria 2.1.2 A documented system, which includes written information on legal requirements, shall be main-tained.

NCR 2015 - 03 of 17 (Minor) The company has not input 2 related regulations regarding workforce, such as Minister of Workforce and Transmigration Decree No. 100/2004 regarding working agreement and 102/2004 regarding overtime. Correction : Input the regulations issued by Ministry of workforce and transmigration regarding worker status (100/2004) and overtime (102/2004) into Law Registers. Corrective Action : Make sure that all relevant regulation issued by Ministry of workforce and transmigration, especially regarding worker status (100/2004) and overtime (102/2004) would be input into the Law Register documents. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit

Criteria 2.1.3 A mechanism for ensuring compliance shall be implemented.

NCR 2015 - 04 of 17 (Major)

a. The company was stated on the CAR’s report that the company will not carried out the manuring, har-vesting activity and will excluded the planted area was planted outside the land use rights (HGU), but based on field visited and hectare statement, the company not consistent and still carried out the ac-tivity.

b. East estate also Satui Palm Oil Mill OSH committee still not authorised by related government agency as it was required by Ministry of manpower regulation no.Per-04/Men/1987 related OSH committee, including their regular quarterly reporting to the government since quarter II, III and IV 2014 periods and for quarter I and II 2015 periods.

c. Annual Routine medical laboratory examination still not perform yet as required by Permenakertrans No.2/MEN/1980.



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d. Report of RKL and RPL monitoring result for period IV year 2014 for soil analysis result still not con-ducted and still not submitted to Governor of South Kalimantan, Ministry of Environmental and Envi-ronmental Official Agency of Tanah Bumbu Regency.

Correction :

a. Complete the list regulation by added the regulation number 100/2004. b. Develop communication to the Man Power Official Agency about OSH Committee Approval, and re-

ported periodically to related official agency. c. Develop the annual routine medical laboratory for all palm oil mill workers accordance to related regu-

lation. d. Develop the soil analysis program in 2015/2016 and reported to the related official agency.

Corrective Action : a. Ensure the all related regulation will complete and available on regulation company list. b. Ensure the OSH committee approval progress will follow up and ensure the periodically report every 3

months will reported. c. Ensure the annual medical routine for all palm oil mill workers will implemented d. Ensure the soil analysis program in 2015/2016 will carry out and reported to the related official govern-

ment. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Date of closure: July 4, 2016

Criteria 2.2.1 Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available.

NCR 2015 – 05 of 17 (Major)

a. The Timur Estate still carried out the manuring, harvesting activity and put in the area was planted outside the HGU in to the hectare statement, so this is non-compliance with corrective and correction action submitted for closed the previous audit. This is last major non-conformity. (NCR 2014-05 of16)

b. The company can no showed the progress of land use rights process of some area was categorized as a forest production conversion area, last correspondence was in 2014.

c. There is discrepancy between hectare statements with planted area controlled by company. Correction : a. The company will develop application to cooperatives development for area outside the land use rights.

Because this area will excluded from land use rights and will develop to cooperatives. And all maintenance activity still stopped until cooperatives progress finish.

b. Make latter to the Head of Land Agency of South Kalimantan Regency related to land use rights process approval towards to area was managed by company (Barat, Tengah and Timur).

c. Total area based on hectare statement was 4,214.21 Ha and it is no 4,124.12 Ha, and land use rights area was 4,026 Ha added with cadastral process was 330 Ha. So the permit license total was 4,356 Ha. So there is no discrepancy, it was mistaken information.

Corrective Action : a. Ensure the application letter about cooperatives development for area outside the land use rights will pro-

cess by official agency related. b. Ensure the application letter will response by related official agency for (Barat, Tengah and Timur) was

managed by company c. Ensure the all related document for land use rights will complete and there is no mistake again. Auditor Conclusions : Closed Date of closure: September 30, 2015 Verification result : The company was submit the evidenced, i.e.: a. Application letter for cooperatives development number 518/494/Indagkop & UKM/VIII/2015, dated on Au-

gust 31, 2015. The letter was mentioned about the application letter for cooperatives development com-



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plete by attachment letter such as deed of incorporation, minutes of meeting, cooperatives organization and others.

b. Application letter number 007/Dir/GMK/JKT/VIII/15 dated on August 19, 2015. This letter addressed to the Head of Land Agency of South Kalimantan.

c. Hectare statement will complete by new and correct information and total amount area compliance with land use rights document and plantation permit.

Criteria 4.1.2 A mechanism to check consistent implementation of procedures shall be in place.

NCR 2015 - 06 of 17 (Minor) a. Mechanism of effectiveness monitoring procedure implementation still no available. b. There is found some procedure inconsistency such as procedure number SOP/GMK-AGRO/02/08;

SOP/GMK-SMK3/01/14; SOP/GMK-AGRO/03/03; SOP/GMK-AGRO/10/01; SOP/GML-AGRO/03/04. Correction : a. Creating a program or mechanism to monitor the effectiveness of the entire SOP implementation. b. Effectiveness evaluation procedure program was complete by for all procedure in GMK-Satui Corrective Action :

a. Ensure the monitoring program will implemented for all procedure in GMK-Satui b. Ensure the procedure effectiveness will implemented for all procedure in GMK-Satui.

Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Date of closure: Date of closure: July 4, 2016

Criteria 4.1.3 Records of monitoring and any actions taken shall be maintained and available, as appropriate.

NCR 2015 - 07 of 17 (Minor) Records of monitoring the implementation of SOPs are not available, and then the organization cannot per-form an evaluation to measure the effectiveness of SOPS. Correction : Creating a program to monitoring the SOP implementation and record the result as an effectiveness evaluation Corrective Action : Ensuring program to monitoring the SOP implementation conducted and record of monitoring results delivered well and documented Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit. Date of closure: July 4, 2016 Criteria 4.2.1 There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained yield, where possible. NCR 2015 - 08 of 17 (Minor) a. There is no solid application procedure available. b. Found the marginal soil in field number F14, F15 Div II, but there is no evidence record to increase the soil

fertility. Correction :



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a. Develop the related procedure for solid application for organic fertilizer of palm oil. b. Develop the program for maintenance and increase the soil fertility in marginal soil. Corrective Action : a. Ensure the procedure develop very well accordance to GMK-Satui condition related to solid application. b. Ensure the program for soil fertility maintenance will implemented for all marginal soil in GMK-Satui. Auditor Conclusions: Closed Date of closure: July 4, 2016 Verification result: Evidence of immediate action taken was accepted. Effectiveness of implementation to ver-ified at next audit.

Criteria 4.2.2 Records of fertiliser inputs shall be maintained.

NCR 2015 – 09 of 17 (Minor) Record of fertilizing input output recording was no record very well. Because found the discrepancy of expendi-ture slip with warehouse recording book. Correction : Operational system and recording in system management for all activity carried out based on worker flowchart system and systematic. Corrective Action : Ensure the work mechanism and recording process for all activity will implement and carry out by person in charge. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit. Date of closure: July 4, 2016

Criteria 4.5.1 Implementation of Integrated Pest Management (IPM) plans shall be monitored.

NCR 2015 – 10 of 17 (Major) There is no EWS record carry out in every months accordance to procedure number SOP/GMK-AGRO/02/03, mentioned that EWS should be carry out in every month. Correction : Carry out the EWS recording activity accordance to company procedure. Corrective Action : Ensure the EWS recording will implement and also for all activity in GMK-Satui will recorded very well accord-ance to company procedure. Auditor Conclusions: Closed Date of closure: September 30, 2015 Verification result : The company has submitted the EWS monitoring form for 2015 in December for caterpillar and bagworm, for division I and II. Based on EWS recording there is no high level attack, the level attack was low. Criteria 4.7.5 Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned op-eratives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed.



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NCR 2015 – 11 of 17 (Minor) It was found a Hydrant in the Satui Palm Oil Mill which is using not only for fire fighting purpose; it has been used for other cleaning activities in the palm oil mill area. Correction : Established the brief program about hydrant usage and function. Corrective Action : Ensure the all workers in Satui Mill will understand well about hydrant. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit. Date of closure: July 4, 2016 Criteria 5.2.2 Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through a management plan. NCR 2015 – 12 of 17 (Major) Found that the river rehabilitation and timeline was not plan well in Timur Estate. Correction : Develop the river rehabilitation with timeline, objective and PIC related for all riparian in Timur Estate. Corrective Action : Ensure the rehabilitation river program will implement well and will evaluate. Auditor Conclusions: Closed Date of closure: September 30, 2015 Verification result : The company was submitted the river rehabilitation program for all rivers in Timur estate complete by timeline, objective and PIC related for 2016. Criteria 5.2.4 Where a management plan has been created there shall be ongoing monitoring: The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; Outcomes of monitoring shall be fed back into the management plan. NCR 2015 – 13 of 17 (Minor) Found there are no monitoring record for HCV RTE species in Timur estate, and record of wildlife animal moni-toring. Correction : Develop the HCV monitoring plan for all RTE species and reported periodically Corrective Action : Ensure the HCV monitoring plan for RTE species will implement well and will evaluate the effectiveness. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit Date of closure: July 4, 2016

Criteria 5.3.2 All chemicals and their containers shall be disposed of responsibly.



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NCR 2015 – 14 of 17 (Major ) Based on PT Nazar’s license from Environmental and Forestry Ministry No. 06.8.05 year 2015 dated May 13th, 2105, PT Nazar as a partner PT GMK to collect and transport hazardous and toxic waste is not al-lowed to handle agrochemical container, but in fact this company collect and transport that kind of waste. PT Wastec Internasional, PT Muhtomas and PT Job colouring as a partner of PT Nazar and PT GM pro-cess and utilize hazardous waste does not have valid license to handle the waste. PT GMK cannot show a valid license of those companies in the contracts. This condition causing uncertainty of safety waste handling and waste disposed of responsibly. Correction : Request copies of licenses/permits from PT NAZAR for collecting, transporting and utilizing chemical contain-ers waste, request of PT Waste license, PT Muhtomas license and related document. Corrective Action : Ensuring document control and monitoring system for recording run properly. Auditor Conclusions: Closed Date of closure: September 30, 2015 Verification result : The company has delivered a license/permit of PT Nazar which includes the handling of chemical container. License issued by Transportation Ministry on December 15th, 2104 No. KL.204/2/4/DN-14 for transportation of hazardous waste as well as license for solid and liquid waste include chemical container collection issued by Environment Agency of South Kalimantan Province on May 20th, 2014 No 1 year 2014. In addition, PT Nazar also include progress of permit extension of PT Wastec International which has been responded by the Envi-ronmental Ministry on January 20th, 2015, and license of PT Muhtomas No. 07.88.12 year 2014 issued by the Environmental Minister on December 4th, 2014 valid for three years, meanwhile PT Job Coloring is no longer involved in hazardous and toxic waste disposed. Criteria 5.5.1 There shall be no land preparation by burning, other than in specific situations as identified in the ‘Guidelines for the Implementation of the ASEAN Policy on Zero Burning’ 2003, or comparable guidelines in other regions. NCR 2015 – 15 of 17 (Major) Found the rubbish burned in front of Satui workshop. Correction : Carried out the waste management, how to handling to domestic waste from all activity in Satui. Corrective Action : Ensure the waste management handling for domestic waste implemented well. Auditor Conclusions: Closed Date of closure: September 30, 2015 Verification result : The company has submitted the record of waste management for domestic waste handling for all workers from housing and office, carried out in August 2015, was attendant by 25 people from harvesters, sprayers, fore-man, and others.

Criteria 5.6.2 Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to re-duce or minimise them implemented.

NCR 2015 – 16 of 17 (Major) There is no work program for minimize and reduce the emission source, pollution and significant GHG in Satui Mill. Correction :



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Develop the work program to minimize and reduce the emission source, pollution and significant GHG from all activity in Satui estate and mill Corrective Action : Ensure the work program will implement properly. Auditor Conclusions: Closed Date of closure: September 30, 2015 Verification result : The company has submitted the work program for reduce and minimize the emission source, pollution and sig-nificant GHG for 2016 accordance to all activity was identified by company.

Criteria 5.6.3 A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools.

NCR 2015 – 17 of 17 (Minor) Mill and both of estate still no has work program to reduce and minimize the significant emission and pollution and there is no record for that implementation. Correction : Conduct the GHG calculation based on GHG RSPO tools. Corrective Action : Ensure the GHG calculation was correct and comply with RSPO GHG Tools version. Auditor Conclusions: Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit. Date of closure: July 4, 2016

3.3 Description of Supply Chain Management System

E.1. Definition Findings: Satui Palm Oil Mill (PKS Satui) located in South Kalimantan – Indonesia. Satui Mill has production capacity of 30 tonne/hours. In year 2014, the mill processed Fresh Fruit Bunches (FFB) from company owned estate (Timur and Satui estate), Sei Cuka smallholder, and out grower, whereas in year 2015 that FFB supplier same as year 2014. The location of Satui Palm Oil Mill is within Satui Estate In 2014, Satui Palm Oil Mil has received FBB approximately 65.16% (182,686.14 tones) from owned estate (Satui and Timur Estate), from Sei Cuka smallholder is about 0.74% or 2,064.520 tone, and about 34.10% or 95,617.53 tone from out grower. While in 2015 (until July 2015), Satui Palm Oil Mill has received the FFB from owned estate is about 96,103.00 tone (63.81%), then FFB received from smallholders is about 1.79% or 2,694.420 tone and is about 24.65% or 51,743.65 received from out grower. Based on Mass Balance report started from January – July 2015, Satui Palm Oil Mill has produced the certified palm oil product is about 3,188.354.00 tone of CPO and 639,982.86 tone of PK, based on mass balance report in the end of July 2015. The certified palm oil product during the 1st surveillance audit is still positive. Because there is no transaction recorded in e-trace system. Satui Palm Oil Mill implemented the RSPO SCCS MB model. This model allowed the mixing of certified product and uncertified product with control in mass balance record. Compliance status : Full Compliance



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E.2. Explanation

Findings: Estimated of tonnage CPO and PK products has been recorded in to the public summary of the P&C certifica-tion report. Satui Palm Oil Mill registered in RSPO IT Platform (e-Trace) with the RSPO e-Trace member ID RSPO_PO1000002103. Compliance status: Full Compliance

E.3. Documented procedures

Findings: Satui Palm Oil Mill has established the procedure related to RSPO SCCS MB implementation. That procedure such as:

1. SPO/GMK-AGRO/01/10 Rev03 valid from 11-06-2014 about traceable sustainable mass balance report 2. SOP/GMK-AGRO/03/06 Rev03 valid from 02-0302015 about product delivery from palm oil mill 3. SOP/GMK-AGRO/06/01 Rev01 valid from 07-06-2013 about purchasing 4. SOP/GMK-AGRO/03/05 Rev02 valid from 11-06-2014 about product receiving in palm oil mill 5. SOP/GMK-AGRO/01/03 Rev01 valid from 07-06-2013 about handling non-conforming product 6. SOP/GMK-AGRO/01/05 Rev01 valid from 07-06-2013 about corrective action 7. SOP/GMK-AGRO/01/06 Rev01 valid from 07-06-2013 about calibration 8. SOP/GMK-AGRO/01/09 Rev02 valid from 24-02-2014 about incoming material receiving 9. SOP/GMK-AGRO/01/11 Rev02 valid from 24-02-2014 about sounding tank

Satui Palm Oil mill has provide the RSPO SCCS brief to all related person will implemented the RSPO SCCS, but the brief still used the RSPO SCCS principle and criteria 2011, so this no up to date. This condition was raised as non-conformities (NCR 2015 – 01 of 01 ). Compliance Status : Non Compliance NCR SCCS 2015 – 01 of 01 Satui Palm Oil Mill has provide the RSPO SCCS brief to all person related to implemented the RSPO SCCS, but, the brief still used the RSPO SCCS old standard i.e.: Nov 2011.

E.4. Purchasing and good in

Findings: Satui Palm Oil Mill has separate between certified FFB and non-certified FFB; also include the certified and un-certified palm oil product (CPO and PK) through the mass balance record control. Especially for FFB certified and un-certified will marked use stamp of SCCS in form slip FFB in weighbridge. Only FFB from Satui and Ti-mur estate marked use that stamp. And for FFB from outside that estate not marked this is mean the FFB is not certified. Amount of FFB and palm oil product certified and un-certified was explained in principle and criteria 1 above. Until 1st surveillance audit, there is no overproduction of certified palm product or FFB, but if the overproduction will happen, the mill has mechanism to inform to the certification body through the mill procedure. Compliance status: Full Compliance

E.5. Record keeping



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Findings: Satui palm oil mill has recorded and balance receipts all if RSPO certified and uncertified in to mass balance record and also for palm oil product such as CPO and PK and evaluated in every 3 months. During the 1st sur-veillance audit palm oil mill still consistent to record and control the mass balance stock, when in the end of July 2015 (during the 1st surveillance) certified palm oil product for CPO is about 3,188.354.00 tone and PK is about 639,982.86 tone. While the un-certified palm oil product is minus stock. This because the Satui Palm Oil Mill un-til the 1st surveillance audit no transaction yet for certified palm oil product. Compliance status: Full Compliance

3.4 Status of Previously Identified Non-conformities

During the man/certification audit was only 2 non-conformities against the RSPO SCCS MB. The company is giv-en a time frame to close those non-conformities within 60 days and at time of first submission of this report to the RSPO.

E.1.1 The facility shall have written procedures a nd/or work instructions to ensure the implementa-tion of all the elements specified in these require ments

NCR SCCS No. 2014 – 01 of 02 There are new revision procedures (dispatch procedure in mill (SOP/GMK-AGRO/03/06), traceable sustainable mass balance report procedure (SOP/GMK-AGRO/01/10) and transportation procedure (SOP/GMKAGRO/02/22)) in Satui mill has not socialization/update of information to worker. Verification result for Correction/Corrective action: The company provided evidence of socialization in Satui and East estate and mill inform attendant list, material of socialization and photograph. Socialization has carried out on June 12, 2014 (mill) and Juli 8, 2014 (estate). Date of closure: July 05, 2014 Auditor Conclusions: Closed

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

NCR SCCS no. 2014 – 02 of 02 There is no information about retention time for all record of CPO & PK despatch note, CPO & PK despatch report and despatch. Verification result for Correction/Corrective action: The company provided the provisions of the document retention time in estate and mill (FR/GMK-AGRO/PD/01/06). Retention time for FFB delivery note is 10 year as archive and 11 year in archive room, mass balance report, CPO & PK dispatch note, CPO & PK delivery report and product delivery instruction is 1 year as archive and 10 year in archive room. Date of closure: July 05, 2014 Auditor Conclusions: Closed

1.5

1.5

1.5

1.5

1.5 Identified Non-conformance against RSPO SCCS Require ments, Corrective Actions Taken and Auditors Conclusions.

NCR SCCS 2015-01 of 01 Satui Palm Oil Mill did not yet provide the new standard of RSPO SCCS Nov 2013 to all person in charge who responsible to RSPO SCCS implementation in Satui Mill.



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Correction Action : Develop the RSPO SCCS schedule training version Nov 2013 Corrective Action : Ensure the update of RSPO SCCS new standard was brief to all person in charge and ensure the imple-mentation. Date of closure : September 30, 2015 Verification result : Satui Palm Oil mill has brief all person in charge who responsible for RSPO SCCS implementation through the attendant list evidence conducted on September 15, 2015, attendant by 15. Auditor Conclusions : Closed

3.6 Noteworthy Positive Component

Criteria

OSH implementation in Satui Palm Oil Mill and Timur Estate implemented very well, especially in ware-house, hazardous waste and others. Emergency plan also very good simulation in Timur Estate.

3.7 Issues raised by stakeholders and findings pertaining to Issues

A. Issued raised during stakeholder consultation me eting

No. Stakeholders Issues Raised Management Response Audit Verifica-tion

1 Secretary from head of village) – Damit village and Sapri (secretary of village) – Bata-lang village

• There is no road access before op-erating the estate.

• If there is land of communities in-side the concession area (HGU ar-ea) because shifting agriculture so communities not know. There are some communities have land in es-tate does not come from Damit vil-lage and Damit Hulu village.

• Existence of estate company is preferred over the mining company (gold and coal) because many of absorb worker from communities. The first time the company will call us for the purpose of providing worker.

• Expectations of communities are maintenance road of ownership vil-lage has been used company until now because current condition is broken.

• Last time ago, there are conflict re-lated to local customary norms but at time there is not conflict again.

• The communities feel the positive impact for existences’ of the com-pany such as help in the provision of building material, financial loan, borrowing heavy equipment to re-pair/maintenance road, etc.

• The company will keep main-tain the road.

• The company will conduct so-cialization again to land claimer inside land use right (HGU) areas related company areas.

• The company will be continu-ing to maintenance of good relationship with the surround-ing community’s estate, in-cluding the provision of em-ployment opportunities.

• The company will be mainte-nance of road which has been used by company according budgeting and the ability of the company.

• The company will strive to re-spect local customary norms.

• The company will strive es-tablish good relationship with communities

• There are activi-ty plan regard-ing grading and road compac-tion and hoard-ing of perforated road in Damit Hulu and Pen-damaran village on May 2014 and August 2014.

• There are land conflicts where negotiation and resolution pro-cess continue to be done. Boundary stone has demarca-tion by compa-ny in field but not complete.

• There was rec-ord of commu-nication with surrounding community in form of minute of meeting and record of com-



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plaint and d re-quest from community and response from the company.

2 Mr UJP (Secre-tary of coopera-tion) – Damit vil-lage

The communities had not job last time, then they worked in company but this time they have their own estate and not longer working in the compa-ny

The company will continue to pro-vide opportunity for communities to working in company according to needs and qualifications

Based on statistic of employee that dominant of work-er from South Ka-limantan Province.

3 Mr T-Head of vil-lage representa-tive agency in Damit Hulu vil-lage

• The communities are willing to land acquisition if the amount of com-pensation offered suitable.

• Plantation has negative impact but more positive impact. One of nega-tive impact are road of damage be-cause was used by FFB transport truck of overload

• The company has contributed dona-tion for the construction of mosques and schools.

• The company will strive to communication with reference of local and national laws and regulations.

• The company will attention to road conditions which crossed by FFB transport vehicle with participate to repair to gather with the communities.

• The company will concern and improve relationship to commu-nities.

• The company has negotiation with communi-ties regarding land conflict but there are no ev-idence of the conflict resolu-tion progress accepted and did not have ev-idence of nego-tiation results.

• There are activi-ty plan regard-ing grading and road compac-tion and hoard-ing of perforated road in Damit Hulu and Pen-damaran village on May 2014 and August 2014.

• There was rec-ord of commu-nication with surrounding community in form of minute of meeting and record of com-plaint and d re-quest from community and response from the company.

4 Head of Damit village and Samidi (secretary of village) – Dam-it Hulu

• The communities live earlier in that area than the company so the communities has called as taking over land from company is not cor-rect

• The company has planted in near river so there are FFB fill in river at harvesting.

• The company has contributed dona-tion to communities but internal bu-reaucracy should be reform so that mill and estate manager was au-thorized to make decisions regard-ing of proposal from communities.

• The company will conduct of socialization & communication to the communities as well re-garding land conflict and in form of deliberation.

• The company seeks to do good practice with giving mark on oil palm on the edge of the river and socialization to employees.

• The company will continue im-provement for social relation-ship to communities.

• Result of verifi-cation in field on Asam-asam riv-er (there are gold mining ac-tivity) there are not oil palm trees on riparian rather that there are banana trees ownership of communities. Whereas in Katal-katal Riv-er, there are oil palm trees in ri-parian but the



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company has make mark as boundary of chemical activi-ty.

• Based on job description mill and estate manager that authority of mill and estate manager not covering deci-sion of giving donation for re-quest of com-munities.

5 Mr F & S – Bata-lang village

monkey, deer, pigs, snack, “black winged kite” bird, “White throated Kingfisher” bird, “pekaka emas” bird and kucing kuwuk still be found in the estate

The company has made the pro-tection to flora and fauna protect-ed with in form socialization to employee and communities who were surround in estate

Result of verifica-tion in HCV areas, auditor not found it but in HCV identi-fication report they are available.

The company has HCV monitoring and management plan covering HCV no. 1.2 & 1.3.

B. Issued raised during stakeholder interviews on-si te

No. Institution – Address Issue raised 1. CHSE Satui POM OHS committee, investigation of accident, haz-

ardous and toxic waste, Implementation of envi-ronmental impact assessment and UKL/UPL re-port

2. HSE Kalimantan Area OHS committee, investigation of accident, haz-ardous and toxic waste, Implementation of envi-ronmental impact assessment

3. HSE Kalimantan Area PPE, risk assessment, pollution & emission 4. EFB operator Implemented of EFB with 1 layer 5. Sprayers Implementation of spraying, women’s worker no

work with pesticides for pregnant and breast-feeding, agrochemical

6. Warehouse PPE, hazardous & toxic waste, used oil 7. Harvester • Implementation of harvesting, maintenance

and IPM 8. Estate manager • Stock of fertilizer & agrochemical available,

• There are manifest of hazardous & toxic waste

9. Boiler operator • All operator has give PPE • It is mill has implementation of efficiency en-

ergy such was used fibres and shell 10. Estate manager • The company has maintenance boundary

• There are coal mining activity by other com-pany and traditional of gold mining by com-munities

11. Head of Batalang village • CSR program, company policy brief 12. Head of Pemalongan village



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No. Institution – Address Issue raised 13. FFB transporter (contractor) • Local community development

• Land dispute, social conflict • Working and business opportunity • Contributions to local development



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4.0 CERTIFIED RGANISATION’S ACKNOWLEDGEMENT OF INTE RNAL RESPONSIBILITY 4.1 Date of Next Surveillance Visit

The 2nd surveillance visit is planned for July 2016

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client

It is acknowledged that the assessment visit was carried out as described in this report and we accept the as-sessment findings and report content. Signed on behalf of PT Gawi Makmur Kaliman-tan …………………………………… Farid Makruf Management Representative February 27, 2016

Signed on behalf of TUV Rheinland Malaysia

…………………………. Mhd Fundy C Kurniawan Lead Auditor February 27, 2016



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APPENDICES

Appendix 1: Details of certificate



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Appendix 2: List of Abbreviations

AMDAL Analisis Dampak Lingkungan & Sosial (Social & Environmental Impacts Assessment) CPO Crude Palm Oil EIA Environmental Impact Assessment ERTs Endangered, Rare & Threatened species FFB Fresh Fruit Bunches EFB Empty Fruit Bunches HCV High Conservation Value HGU Hak Guna Usaha (Land Use Right) IPM Integrated Pest Management OSH Occupational Safety & Health PPE Personal Protective Equipment P2K3L Panitia Pembina Kesehatan dan Keselamatan Kerja dan Lingkungan (OHS and Envi-

ronmental Committee) RKL Rencana Pengelolaan Lingkungan (Environmental Management Plan) RPL Rencana Pemantauan Lingkungan (Environmental Monitoring Plan) SIA Social Impact Assessment SOP Standard Operating Procedure UKL Upaya Pengelolaan Lingkungan (Environmental Management Efforts) UPL Upaya Pengelolaan Lingkungan (Environmental Management Efforts)

Appendix 3: Observations and Opportunities for Impr ovement

No. Observations / Opportunities for Improvement Criteria

1. The company should be make an especially statement related to publically doc-ument available for all stakeholders, through the policy or others letter.

1.2.1

2. Found the marginal soil with sandy in field number F14 and F15, year of plant-ing 1998. Company should make some of program to increase and or maintain the soil fertility

4.3.6

3.

- Found some worker with no used PPE when duty on Mill, this need to low enforcement related PPE when duty.

- PPE using still not compliance with kind of work, such as found the generator operator not used ear muff on duty, but the worker used ear-plug. Based on HIRAC document, generator operator should use ear-muff.

- Some area used to keep clothes in closed to boiler. This is will some risk because.

4.73

4. System induction not implemented yet in Satui Palm Oil Mill and Timur Estate 4.7.2

5. Eyewash station on Satui Palm Oil Mill Laboratory not available yet. 4.7.5

6. The company should make some company regulation related to keep, con-serve, not allow for catching, hunting, keeping and killing the protected species.

5.2.3

7. Pollution monitoring impact should be evaluated. 5.3.1

8.

- The company should make some guidance related to social impact management and monitoring.

- Person in charge for social impact management and monitoring should have a competency enough related to social impact assessment and monitoring plan.

6.1.3

9.

- Person in charge for stakeholder communication should have compe-tency enough to mapping and maintaining the stakeholders.

- The company should facility the regularly monitoring between company and all stakeholders through the recording in every meeting.

6.2.3

10. The company should more concern to environmental health in workers housing. Based on housing visit, showed the housing condition was not hygiene well.

6.5.3

11. a. Company contribution to local community in CSR program, should be develop based on:



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No. Observations / Opportunities for Improvement Criteria - Local community needs - Participative planning - Program implementation should base on objective, target, time and

source. - Continuous improvement should be evaluated. b. Stakeholders consultation showed the local community have a new and

many hope to the company, such as please give the responses when the letter from local communities coming.

Roundtable on Sustainable Palm Oil

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Transcript of Roundtable on Sustainable Palm Oil