FELDA PLANTATIONS SDN BHD RSPO Membership No: 1-0013-04-000-00

PLANTATION MANAGEMENT UNIT

KKS Bukit Mendi Grouping Triang, Pahang, Malaysia

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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ANNUAL SURVEILLANCE ASSESSMENT (ASA-01) ON RSPO CERTIFICATION ASSESSMENT REPORT

FELDA PLANTATIONS SDN BHD (358158-V)

RSPO Membership No: 1-0013-04-000-00

PLANTATION MANAGEMENT UNIT

KKS Bukit Mendi Grouping Triang, Pahang, Malaysia

Certificate No: Issued date: Expiry date:

RSPO 927988 5 October 2012 4 October 2017

Assessment Type Pre Assessment Initial Certification (Main Assessment) Annual Surveillance Assessment (ASA-01) Annual Surveillance Assessment (ASA-02) Annual Surveillance Assessment (ASA-03) Annual Surveillance Assessment (ASA-04) Re-Certification

Assessment Dates 17 - 19 October 2011 5 - 6 December 2011 13 – 16 May 2013

Moody International Certification (Malaysia) Sdn Bhd 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, 56100 Kuala Lumpur, Malaysia. Tel: +00 (603) 9283 9881 Fax: +00 (603) 9284 8187 Email: [email protected] Website: www.intertek.com; www.moodyint.com

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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TABLE OF CONTENTS Section

Content

1.0

SCOPE OF ANNUAL SURVEILLANCE ASSESSMENT (ASA-01)

4

1.1

Introduction

4

1.2

Location (address, GPS and map) mill, estates and hectarage

4

1.3

Description of supply base (fruit sources)

5

1.4

Summary of plantings and cycle

5

1.5

Summary of Land Use – Conservation and HCV Areas

6

1.6

Other certifications held and Use of RSPO Trademarks

6

1.7

Organizational information/contact person

6

1.8

Tonnages Verified for Certification

7

1.9

Time Bound Plan for Other Plantation Management Units and Requirements for Partial Certification

8

1.10

Abbreviations Used

9

2.0

ASSESSMENT PROCESS

10

2.1

Assessment Methodology, Plan & Site Visits

10

2.2

Date of next scheduled visit

10

2.3

Qualifications of the Lead Assessor and Assessment Team

10

2.4

Certification Body

10

2.5

Process of Stakeholder consultation

3.0

ASSESSMENT FINDINGS

3.1

Summary of findings

3.2

Status of Identified Noncompliance and Corrective Actions, Observations and Identified Positive Elements

34

3.3

Summary of Feedback Received from Stakeholders and Findings

35

4.0

ASSESSMENT CONCLUSION AND RECOMMENDATION

37

4.1

Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings

37

4.2

RSPO Certification Details for KKS Bukit Mendi Grouping

38

APPENDICES

Page No

11-12 13 13-34

Appendix Page

Appendix A

Qualifications of the Lead Assessor and Assessment Team

Appendix B

Assessment Plan

2-3

Appendix C

Maps of location – Mill, Estates, Conservation and HCV areas

4-8

Appendix D

Photographs of Assessment findings at KKS Bukit Mendi Grouping

9-10

Appendix E

Time Bound Plan for Other Plantation Management Units

MICM RSPO Report: July 2013

1

11

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 1.0

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SCOPE OF ANNUAL SURVEILLANCE ASSESSMENT (ASA-01)

1.1 Introduction This Annual Surveillance Assessment (ASA-01) was conducted on the Plantation Management Unit (PMU) KKS Bukit Mendi Grouping of Felda Plantations Sdn Bhd (hereafter abbreviated as FELDA), from 13 – 16 May 2013, to assess if the organization’s operations of the mill and its supply bases were in compliance against the RSPO Principles and Criteria (October 2007), Malaysian National Local Indicators (November 2010) and the RSPO Supply Chain Certification Standard (November 2011) for Palm Oil Mill. This assessment also includes a review of the changes made by the PMU to comply with the requirements of the ratified new RSPO Principles and Criteria (effective 25 April 2013). It was found that the PMU is aware of the new RSPO Principles and Criteria and the transition period for compliance but has not yet make the necessary changes required. The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned by Felda Plantations Sdn Bhd 1.2 Location (address, GPS and map) of palm oil mill and estates KKS Bukit Mendi Grouping consists of one (1) palm oil mill, namely KKS Bukit Mendi and four (4) own supplying estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C.

Table 1: Address of Palm Oil Mill, Estates and GPS Location Name Felda Palm Industries Sdn Bhd, Kilang Sawit Bukit Mendi - POM (Capacity: 30 mt/hr)

Address

GPS Reference Latitude

Longitude

3° 12’20.89” N

102° 18’12.39” E

Kilang Sawit Bukit Mendi,28320 Triang, Pahang Darul Makmur

Felda & FTPSB Bukit Mendi

Pejabat Felda Bukit Mendi,28320 Triang, Pahang Darul Makmur,

3° 12’20.89” N

102° 18’12.39” E

Felda & FTPSB Bukit Puchong

Pejabat Felda Bukit Puchong,28320 Triang, Pahang Darul Makmur

3° 13’39.41” N

102° 19’45.15” E

Felda & FTPSB Mengkuang

Pejabat Felda Mengkuang,28320 Triang, Pahang Darul Makmur

3° 11’59.67” N

102° 23’1.03” E

Pejabat Felda Sungai Kemahal,28320 Triang, Pahang Darul Makmur

3° 12’20.89” N

102° 18’12.39” E

Felda & FTPSB Kemahal

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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1.3 Description of supply base (fruit sources) The supply base i.e. FFB sources to the POM at KKS Bukit Mendi Grouping PMU are from the abovementioned 4 estates which are owned by organized smallholders under the FELDA Scheme. There were other plantations/estates owned by independent smallholders, which also supplied FFB to the POM. These other supply bases have also been considered in the overall assessment on Bukit Mendi Grouping -PMU and have been verified to be part of the Time Bound Plan committed by FELDA for eventual certification.

Details of the planted hectarage for the FFB supply for KKS Bukit Mendi Grouping are as shown in Table 2 below. Table 2: Estate Area Summary and FFB Production Area Summary (ha) – FY July 2012 / June 2013

Estate

Certified Area

Planted Area

Felda & FTPSB Bukit Mendi

2,587.29

1,893.33

Felda & FTPSB Bukit Puchong (not audited during this Annual Surveillance Assessment)

2,511.25

1,870.38

636.09

610.84

2,103.49

1,863.65

Total:

7,838.12

6,238.20

Percentage:

100%

79.59%

Felda & FTPSB Mengkuang Felda & FTPSB Kemahal

Notes: 1.

This Annual Surveillance Assessment (ASA-01) covered the overall land use for oil palm plantation areas, and the identified Conservation areas including HCV areas marked out at the estates.

2.

The estates sampled for this Annual Surveillance Assessment (ASA-01) have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas.

1.4 Summary of plantings and cycle The 4 schemes / estates been developed beginning from 1985 onwards and for the Mengkuang scheme/ estate nd which has started their 2 cycle of re-planting in December 2011. The age profile is as shown in Table 3. Table 3: Age Profile of Planted Oil Palm (FY July 2012 / June 2013) Estate Name

Year of Planting

Cycle of Planting

Felda & FTPSB Bukit Mendi

1995 - 1998

1 cycle

Felda & FTPSB Bukit Puchong

1997-1999

Felda & FTPSB Mengkuang Felda & FTPSB Kemahal

MICM RSPO Report: July 2013

Mature OP (ha) – Above 3 years

Immature OP (ha) – 3 years & below

st

1,893.33

0

1 cycle

st

1,870.38

0

1989-2004 2011-onwards

1st cycle 2nd cycle

56.45 -

554.39

1995

1st cycle

1,452.30

411.35

Total

5,272.46

965.74

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Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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1.5 Summary of Land Use - Conservation and HCV Areas The summary of Conservation and HCV Areas as identified in KKS Bukit Mendi Grouping during this Annual Surveillance Assessment (ASA-01) in 2013 is as shown in Table 4 below: Table 4: Conservation and HCV Areas #

Statement of Land Use (Ha)

FY July 2010/ June 2011 (Main Assessment)

1

Planted Area (ha) – Oil Palm - Mature - Immature

2

7,253.06

5,272.46

-

965.74

1.0

1.0

0

0

Conservation Area (ha) -

3

FY July 2012 / June 2013 (Annual Surveillance Assessment ASA-01) Hectarage - Ha

comprising buffer zones along small streams

HCV Area (ha) -

comprising buffer zones near forest reserves, water catchments, burial & religious sites

1.6 Other certifications held and Use of RSPO Trademarks The POM i.e. KKS Bukit Mendi (registered under Felda Palm Industries Sdn Bhd) was certified to ISO 9001:2008, ISO 14001:2004 & OHSAS 18001:2007 since 11 April 2005, 19 Dec 2003 and 27 May 2005 respectively. 1.6.1 The RSPO’s trademarks and logo are not being used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest “RSPO Rules on Communications & Claims” during the assessment. 1.7 Organizational information / Contact Person Name: Norazam Abdul Hameed Designation: General Manager, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations (Malaysia) Sdn Bhd, Tingkat 8, Balai Felda, Jalan Gurney Satu, 54000 Kuala Lumpur Malaysia. Tel: 03-26005348 ext 5348 or 03-26005349 ext 5349 Fax: 03-26987816 Email: [email protected]

MICM RSPO Report: July 2013

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Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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1.8 Tonnages Verified for Certification The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Bukit Mendi Grouping based on the reporting period for FY July 2012 / June 2013 are as follows:

#

FFB Processed (MT)

Estate /Supplier

Main Receiving Mill

Certified By

KKS Bukit Mendi

MICM

KKS Bukit Mendi

MICM

(just replanted and no crop send to the Mill yet) KKS Bukit Mendi

MICM

87,434.43

KKS Bukit Mendi

-

4,701.76

KKS Bukit Mendi

-

KKS Bukit Mendi

-

1.

Felda & FTPSB Bukit Mendi

47,951.58

2.

Felda & FTPSB Bukit Puchong

43,528.77

3.

Felda & FTPSB Mengkuang

4.

Felda & FTPSB Kemahal

Nil 33,421.13 124,901.48

Sub-total Group

11 12

MICM

Kim Ma Oil Palm Ong Chong Lim Plt. Sdn Bhd

13

Ladang Keng Tek Lee Sdn Bhd

559.72

14

Risda Plantation Sdn Bhd

2,268.25

KKS Bukit Mendi

-

15

Pekebun Kecil

3,991.52

KKS Bukit Mendi

-

16

Jawatankuasa Kemajuan & Keselamatan Kampung

KKS Bukit Mendi

-

558.13

Sub-total non-group

99,513.81

Grand total

224,415.29

Total annual volumes / tonnages of FFB supplied from the supply base to KKS Bukit Mendi Grouping POM during the previous period, current Annual Surveillance Assessment (ASA-01) period and projected period are as follows:

Estate / Supplier

FELDA Bukit Mendi Grouping Other Suppliers (under FELDA Group)

FFB Processed in FY July 2010 / June 2011

FFB Processed in FY July 2012 / June 2013 Actual & Projected

FFB Processed for FY July 2013 / June 2014 - Projected

MT

%

MT

%

MT

%

127,580.84

54.78

124,901.48

55.66

119,395.26

55.8

Nil

Nil

Nil

Other Suppliers(External)

105,313.37

45.22

99,513.81

44.34

94,574.74

44.2

Total

232,894.21

100%

224,415.29

100%

213,970.00

100%

SCCS Model for POM

MICM RSPO Report: July 2013

MB

MB

MB

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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The annual certifiable tonnages of CPO and PK production by KKS Bukit Mendi Grouping from the supply base/suppliers as assessed and verified during the current Annual Surveillance Assessment (ASA-01) (based on FY July 2012 / June 2013 data) are detailed as follows: POM

FY July 2010 / June 2011

Total FFB Processed (MT)

FY July 2012 / June 2013 Actual & Projected 124,901.48

127,580.84

FY July 2013 / June 2014 - Projected 119,395.26

Total CPO Production (MT)

25,898.91

OER: 20.30%

25,604.8

OER: 20.5%

24,476.03

OER: 20.5%

Total PK Production (MT)

6,965.91

KER: 5.46%

6,819.62

KER: 5.46%

6,686.13

KER: 5.60%

Note: Currently, the POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill and was verified to be adopting the ‘Mass Balance – MB’ model in accordance with the RSPO Supply Chain Certification Standard (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section.3.1.1.

1.9

Time Bound Plan for Other Plantation Management Units and Requirements for Partial Certification

Felda Group operates 70 palm oil mills and 416 oil palm estates and schemes throughout Malaysia. The organization is a member of RSPO since 2004 and has been taking an active role in the RSPO certification. Currently, a significant number of its Certification Units is undergoing the RSPO certifying process in accordance with its time bound plan to achieve RSPO certification for all its plantation certification units by 2017. Based on the due diligence conducted on FELDA there were no significant land conflicts, no replacement of primary forest or any area containing HCVs since November 2005, no labour disputes that are not being resolved through an agreed process, no evidence of non-compliance with law in any of the non-certified holdings. It was stated in the Main Assessment report that that FELDA has acquired 10000 hectares of land in Limbang, Sarawak. The EIA and HCV reports are being prepared by a local Sarawak based environmental and agricultural consultant company. The EIA report is in the final draft stage and the HCVF interim reported had been prepared as of end January 2012. However, there are plans to develop 300 hectares of land each in Endau and Mersing into new planting. Work is in progress to conduct HCV and social impact assessments there. Independent HCV assessors within the list of RSPO were engaged. FELDA is committed to transparency on the new clearing through new planting procedure (NPP) that came into effect on January 2010. Details of the time bound plan as submitted by FELDA are as per Appendix E.

MICM RSPO Report: July 2013

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Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 1.10

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Abbreviations Used

CB

Certification Body

KER

Kernel Extraction Rate

CHRA

Chemical Health & Risk Assessment

LTA

Lost Time Accidents

CPO

Crude Palm Oil

MICM

Moody International Certification (Malaysia) Sdn Bhd

CSDS

Chemical Safety Data Sheets

MSDS

Material Safety Data Sheets

CSPO

Certified Sustainable Palm Oil

MTCS

Malaysia Timber Certification Scheme

CSPK

Certified Sustainable Palm Kernel

NCR

Non-Conformance Report

EFB

Empty Fruit Bunch

NGO

Non-Government Organization

EHS

Environmental Health & Safety

OER

Oil Extraction Rate

EIA

Environmental Impact Assessment

OHS

Occupational Health & Safety

ETP

Effluent Treatment Plant

PEFC

Programme for the Endorsement of Forest Certification

Felda

Felda Plantations Sdn Bhd

PK

Palm Kernel

FTPSB

Felda Tekno Plant Sdn Bhd

PMU

Plantation Management Unit

FFB

Fresh Fruit Bunch

POM

Palm Oil Mill

GAP

Good Agriculture Practice

POME

Palm Oil Mill Effluent

HCV

High Conservation Values

PPE

Personal Protective Equipment

IPM

Integrated Pest Management

SCCS

Supply Chain Certification Standard

ISCC

International Sustainability & Carbon Certification

SOP

Standard Operating Procedures

IUCN

International Union for Conservation of Nature

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 2.0

ASSESSMENT PROCESS

2.1

Assessment Methodology, Plan and Site Visits

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Since 27 April 2013, MICM has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on KKS Bukit Mendi Grouping regarding the environmental, biodiversity, community development and other relevant issues. From 13 to 16 May 2013, the Assessment team of MICM conducted the Annual Surveillance Assessment (ASA-01) in which 3 out of the 4 estates of KKS Bukit Mendi Grouping namely Felda & FTPSB Bukit Mendi , Felda & FTPSB Mengkuang and Felda & FTPSB Kemahal as well as the palm oil mill were assessed for compliance against the RSPO requirements. The number of estates sampled was based on a minimum sample of 0.8√y where y is the number of management sub-units and the selection was made based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders’ interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation). KKS Bukit Mendi Grouping POM was also assessed against the requirements for the Mass Balance Module as specified in RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for mass balance requirements. These include purchasing and goods in, record keeping, sales and goods out, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims. After completion of the on-site field assessment, MICM also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The surveillance assessment report, findings and associated documents were evaluated through an independent review and approval by the MICM Panel of Technical Reviewers prior to submission of the Assessment Report to RSPO Secretariat The details of the Assessment Plan (actual on-site) are provided in Appendix B. 2.2

Date of next scheduled visit

The next scheduled visit will be the 3rd Annual Surveillance Assessment (ASA-02) which will be carried out within a 12-month period of the due date for annual surveillance during the certification cycle. 2.3

Qualifications of the Lead Assessor and Assessment Team

Competency details of the Lead Assessor and Assessment Team are given in Appendix A. 2.4

Certification Body

Intertek-Moody is the trading name / brand name of Moody International Certification (Malaysia) Sdn Bhd. The Intertek-Moody Group is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO SCC, ISCC, Marine Sustainability Chain-of-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek Moody operates globally providing clients with a wide-ranging technical inspection expertise and access to thousands of skilled specialists worldwide. Intertek-Moody Group’s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries.

MICM RSPO Report: July 2013

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Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 2.5

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Process of stakeholder consultation

Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, FELDA and MICM. E-mails, facsimiles and letters of the same were sent to applicable stakeholders including government agencies, NGOs and local communities. Telephone enquiries were made prior to the actual assessment and stakeholder’s response and feedback received were followed up accordingly. During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies and NGOs; external FFB suppliers, fertilizer suppliers and contractors. Details on stakeholders’ feedback, PMU response and MICM verification / comments are provided in section 3.3. Among the list of key stakeholders consulted was the following: Government Agencies (by emails) 1. Department of Environment 2. Department of Forestry Peninsular Malaysia 3. Department of Immigration 4. Department of Irrigation & Drainage 5. Department of Labour 6. Department of Lands And Mines 7. Department of Occupational Safety & Health 8. Department of Orang Asli Affairs 9. Department of Wildlife & National Parks 10. Department of Environment (Johor)

11. Department of Forestry (Pahang) 12. Department of Immigration (Pahang) 13. Department of Irrigation & Drainage (Pahang) 14. Department of Labour (Pahang) 15. Department of Occupational Safety & Health (Pahang) 16. Department of Wildlife & National Parks (Pahang) 17. Land and Mines Office (Pahang) 18. Pejabat Buruh (Pahang) 19. Pertubuhan Keselamatan Sosial (SOCSO)

Statutory Bodies (by emails) 20. Malaysian Palm Oil Board (MPOB) - Central Region 21. Malaysian Palm Oil Board (MPOB) - Eastern Region 22. Malaysian Palm Oil Board (MPOB) - Northern Region 23. Malaysian Palm Oil Board (MPOB) - Sabah Region 24. Malaysian Palm Oil Board (MPOB) - Sarawak Region

25. Malaysian Palm Oil Board (MPOB) - Southern Region 26. Malaysia Palm Oil Association (MPOA) 27. Malaysia Palm Oil Association Kuala Lumpur (MPOA) 28. Malaysia Palm Oil Association Sabah (MPOA)

NGOs (by emails) 29. All Women’s Action Society (AWAM) 30. BCSDM - Business Council for Sustainable Development in Malaysia 31. Borneo Child Aid Society (Humana) 32. Borneo Resources Institute Malaysia (BRIMAS) 33. Borneo Rhino Alliance (BORA) 34. Center for Orang Asli Concerns COAC 35. Centre for Environment, Technology and Development, Malaysia - CETDEM 36. Consumers Association Of Penang - CAP 37. EcoKnights 38. Environmental Management and Research Association of Malaysia (ENSEARCH) 39. Environmental Protection Society Malaysia (EPSM) 40. Friends of the Earth, Malaysia 41. Future in Our Hands Society, Malaysia 42. Global Environment Centre 43. Institute of Foresters, Malaysia (IRIM) 44. JUST - International Movement for a Just World 45. Malaysian CropLife & Public Health Association (MCPA) 46. Malaysian Environmental NGOs - MENGO 47. Malaysian National Animal Welfare Foundation MNAWF 48. Malaysian Nature Society (MNS) Kuala Lumpur 49. Malaysian Nature Society Johor

MICM RSPO Report: July 2013

58. Malaysian Nature Society Sabah 59. Malaysian Nature Society Terengganu 60. Malaysian Plant Protection Society (MAPPS) 61. Mountaineering and Outdoor Pursuits Association of Negeri Sembilan 62. National Council of Welfare & Social Development Malaysia – NCWSDM 63. National Union of Plantation Workers (NUPW) 64. Partners of Community Organisations (PACOS) 65. Penang Institute previously known as Socio-Economic & Environmental Research Institute (SERI) 66. Pesticide Action Network Asia and the Pacific (PAN AP) 67. Proforest - South East Asia Regional Office 68. R.E.A.C.H. - Regional Environmental Awareness Cameron Highlands 69. Sabah Wetlands Conservation Society (SWCS) 70. SEPA - Sabah Environmental Protection Association 71. SUARAM - Suara Rakyat Malaysia 72. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 73. Sustainable Development Network Malaysia (SUSDEN) 74. Tenaganita Sdn Bhd 75. The Malaysian Forum of Environmental Journalist (MFEJ) 76. TRAFFIC - the wildlife trade monitoring network 77. Transparency International - Malaysian Chapter 78. Treat Every Environment Special Sdn Bhd. (TrEES)

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 50. Malaysian Nature Society Kedah 51. Malaysian Nature Society Kelantan 52. Malaysian Nature Society Kuching 53. Malaysian Nature Society Melaka/Negeri Sembilan 54. Malaysian Nature Society Miri 55. Malaysian Nature Society Pahang 56. Malaysian Nature Society Perak 57. Malaysian Nature Society Pulau Pinang Local community (On-site interviews) Gender representatives Workers representatives

MICM RSPO Report: July 2013

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79. UNION – AMESU 80. United Nations Development Programme - UNDP Malaysia 81. Water Watch Penang (WWP) 82. Wetlands International (Malaysia) 83. Wild Asia Sdn Bhd 84. World Wide Fund for Nature (WWF) Malaysia 85. World Wide Fund of Nature (WWF) Sabah

Suppliers / Contractors Village Heads / Representatives

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 3.0

ASSESSMENT FINDINGS

3.1

Summary of findings

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Principle 1: Commitment to transparency Criterion 1.1 Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation in decision making. Indicators

Findings and Objective Evidence

Compliance

1.1.1 Records of requests responses must be maintained

The procedure for providing information and handling responses and requests was available at the FELDA Kompleks Bukit Mendi-PMU and records of requests and responses have been adequately maintained.

Complied

and

Major compliance.

The mill and estate management have responded constructively and promptly to requests for information from all stakeholders. This was evident from records sighted among which were letters and minutes of meetings held with the local authorities, smallholders, employee consultative committees and local community leaders. Criterion 1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes. Indicators

Findings and Objective Evidence

This concerns management documents relating to environmental, social and legal issues that are relevant to compliance with RSPO Criteria. Documents that must be publicly available include, but are not necessarily limited to:

In line with the organization’s policies , FELDA Kompleks Bukit Mendi-PMU has maintained hard-copies of the 7 types of documents (land titles, health and safety plan, plans and impact assessments relating to environment and social impacts, pollution prevention plans, details of complaints & grievances, negotiation procedures and continuous improvement plan) that are required to be made available to the public.

Compliance Complied

Major compliance

Copies of all the land titles were available and have been maintained.

1.2.1 Land titles/user rights (C2.2). 1.2.2 Safety and health plan (C4.7).

Safety and Health Plan for 2012/2013 for Mill & Estates has been verified to be reviewed and implemented.

Complied

1.2.3 Plans and impact assessments relating to environmental and social impacts (C5.1, 6.1, 7.1, 7.3)

SEIA established by Sustainability team (HQ) was reviewed and updated on July 2012 with feedback by the Mill, Estate manager and RSPO team.

Complied

1.2.4 Pollution prevention plans (C 5.6)

Environmental and Pollution Prevention Management Plan was for 2012/2013 was evident and appropriately maintained.

Complied

1.2.5 Details of grievances (C 6.3)

Complaints / queries and enquiries records for internal and external stakeholders were maintained. Actions found to be appropriately implemented and recorded.

Complied

1.2.6 Negotiation procedures (C 6.4)

Negotiation SOP and flowchart used has been maintained from previous year. There was no incidence of any disputes for FY2012/ 2013.

Complied

1.2.7 Continuous improvement plan (C

The respective annual Continual Improvement Plans were

Complied

complaints

MICM RSPO Report: July 2013

and

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 8.1)

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available which had been reviewed by the Estate Manager and Mill Manager for 2012/2013. (see also details of findings on C 8.1)

Principle 2: Compliance with applicable laws and regulations Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. Indicators

Findings and Objective Evidence

Compliance

2.1.1 Evidence of compliance relevant legal requirements.

The FELDA Kompleks Bukit Mendi-PMU has established a documented system explaining the mechanism for identifying, determining, reviewing and updating applicable legal and other requirements that the PMU has subscribed.

Complied

with

Major compliance

The evidence of compliance with relevant legal requirements as per prescribed format by FELDA’s “Senarai Undang-Undang Dan Kepatuhan” was adequately completed and updated for FY2012/2013. 2.1.2 A documented system, which includes written information on legal requirements.

A legal register covering applicable local and international laws and regulations were available at the mill and additionally available at each estate.

Complied

Management plans for implementation of legal requirements have been established and implemented at mill and all estates. These are the responsibility of the respective environment officers at the mill and estates supported by the Safety, Health & environment Committee.

Complied

The Mill and Estate Managers maintain the tracking with the support from Felda Headquarters for any changes in legal requirements. These were reviewed on yearly basis and updated (when necessary) with the compliance status indicated.

Complied

Minor compliance 2.1.3 A mechanism for ensuring that they are implemented. Minor compliance

2.1.4 A system for tracking any changes in the law. The systems used should be appropriate to the scale of the organization. Minor compliance

An example of recent legislation is the Minimum Wage Order specifying a minimum wage of RM900 per month for workers of plantations and mill.

Criterion 2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights. Indicators 2.2.1 Evidence of legal ownership of the land including history of land tenure.

Findings and Objective Evidence

Compliance

Copies of all land titles were sighted and observed that there were no changes to land ownership.

Complied

The stated use of the respective plots of land for agricultural / plantation purpose is maintained.

Complied

Major compliance 2.2.2 Growers must show that they comply with the terms of the land title. [This indicator is to be read with Guidance 2] Major compliance

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 2.2.3.1 Evidence that boundary stones along the perimeter adjacent to state land and other reserves are being located and visibly maintained.

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Legal boundary markers were sighted and maintained along the perimeters of estate lands which were appropriately mapped.

Complied

There has been no new land acquisition since the main assessment audit in 2011 and no land disputes arising.

Complied

Minor compliance 2.2.3.2 Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. Cross ref. to 2.3.3, 6.4.1 and 6.4.2. Minor compliance

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

Findings and Objective Evidence

Compliance

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

The estate lands at the PMU are legally owned by the organized smallholders, FELDA, independent smallholders and no other users were identified in the land area.

Complied

No claims / disputes for FY2012/2013 to date have been recorded.

Complied

No claims / disputes for FY2012/2013 to date have been recorded.(See above 2.3.2)

Complied

Major compliance 2.3.2 Map of appropriate scale showing extent of claims under dispute. Major compliance 2.3.3 Copies of negotiated agreements detailing process of consent (C2.2, 7.5 and 7.6). Minor compliance

Principle 3: Commitment to long-term economic and financial viability Criterion 3.1 There is an implemented management plan that aims to achieve long term economic and financial viability. Indicators

Findings and Objective Evidence

Compliance

3.1.1 Annual budget with a minimum 2 years of projection

Annual budget with 3 years projection including FFB, OER, and CPO yield per ha had been sighted on the Estates and the Palm Oil Mill.

Complied

There will be no replanting on Estates in the next 5 years as the palms were planted from 1993 to 2001 except Sungai Mengkuang estate where replanting had commenced from 2011 onwards.

Complied

Major compliance 3.1.2 Annual replanting programme projected for a minimum of 5 years with yearly review. Minor compliance

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

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Principle 4: Use of appropriate best practices by growers and millers Criterion 4.1 Operating procedures are appropriately documented and consistently implemented and monitored. Indicators

Findings and Objective Evidence

Compliance

4.1.1 Documented Standard Operating Procedures (SOP) for estates and mills.

A copy each of the Standard Operating Procedures (SOP) is available at the mill and at the estates.

Complied

Major compliance 4.1.2 Records of monitoring and the actions taken are maintained and kept for a minimum of 12 months. Minor compliance

The records of monitoring and the actions taken had been maintained for more than 12 months on the mill and estates concerned. However, on Bukit Mendi Estate, some details on chemical spraying record were incomplete and a minor noncompliance had been issued.

Minor NCR 1 of 2

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

Findings and Objective Evidence

Compliance

4.2.1 Monitoring of fertilizer inputs through annual fertilizer recommendations.

Annual fertilizer inputs had been monitored through fertilizer recommendations made by Felda Agricultural Services Sdn. Bhd. with reference to the soil and leaf analysis and was verified.

Complied

Leaves and soil sampling and analysis had been carried out annually by Felda Agricultural services Sdn. Bhd. to determine the nutrient levels for fertilizer recommendations that aimed to sustain the long term soil fertility and nutrient efficiency.

Complied

EFB application had been carried out in some of the mature areas and in the immature areas of Felda Mengkuang Estate. Frond stacking/ spreading in the inter-rows of mature palms had been sighted.

Complied

Minor compliance 4.2.2 Evidence of periodic tissue and soil sampling to monitor changes in nutrient status. Minor compliance 4.2.3 Monitor the area on which EFB, POME and zero-burn replanting is applied. Minor compliance.

Records had been verified on monitoring of EFB application, for the purpose, among others, of maintaining the organic matter, nutrient status and microbiological health of the soil. Decanter cake from POME is used as fertilizer supplement. Zero burning had been practiced in the replanting. No evidence of burning had been noticed during the visit. Criterion 4.3 Practices to minimize and control erosion and degradation of soils. Indicators

Findings and Objective Evidence

Compliance

4.3.1 Documented evidence of practices minimizing soil erosion and degradation.

No blanket spraying of the fields had been practiced. Only circle, path, and selective sprayings where necessary had been carried out to minimize soil erosion.

Complied

Minor compliance

Cut fronds were stacked along the inter-rows to minimize

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

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soil erosion. EFB mulching had been carried out on estates to improve the organic matter, nutrient status, and microbiological activities in soil. There was no soil erosion noted during the visit. Leguminous cover crop, Mucuna bracteata, had been established in the replanting areas. Terraces had been constructed in the replanting areas where slope was 13° and above which was verified during site visit. According to the records, a total of 99,785 meters of terraces had been constructed on Felda Mengkuang Estate. 4.3.2 Avoid or minimize exposed soil within estates.

bare

or

Minor compliance

There was no blanket spraying. Only circle, path, and selective sprayings had been practiced.

Complied

Other conservation practices adopted by the estate for minimizing and controlling erosion and degradation of soils were: - mulching of EFB. - Stacking of cut fronds in the inter-row on flat land.

4.3.3 Presence of road maintenance programme.

Generally, estate roads were found to be in good and satisfactory condition. Road maintenance programme was available and implemented.

Complied

Based on the estate soil maps, there was no peat soil on the estates as confirmed by auditor’s on-site assessment

Complied

Based on the estate soil maps and visit to the estates, there were no other fragile and problematic soils on these estates

Complied

Minor compliance 4.3.4 Subsidence of peat soils should be minimized through an effective and documented water management programme. Minor compliance 4.3.5 Best management practices should be in place for other fragile and problem soils (e.g. sandy, low organic matter and acid sulphate soils). Minor compliance

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

Findings and Objective Evidence

Compliance

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

Buffer zones had been appropriately maintained. Natural vegetations were allowed to establish within the buffer zones. It’s the Estates’ policy not to plant any oil palm in the buffer zones.

Complied

It was confirmed that no bund/weir/dam had been constructed across the rivers or waterways on the Estates.

Complied

Major compliance 4.4.2 No construction of bunds/weirs/dams across the main rivers or waterways passing through an estate.

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

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Major compliance 4.4.3 Outgoing water into main natural waterways should be monitored at a frequency that reflects the estates and mills current activities which may have negative impacts (Cross reference to C 5.1 and 8.1).

In palm oil mill, water samples had been taken at monthly interval at the discharge point from effluent pond. BOD had been in the range of 30 to 85 ppm, within the limit of 100 ppm set by the D.O.E.

Complied

Major compliance 4.4.4 Monitoring rainfall data for proper water management. Minor compliance

Records on rainfall data had been maintained by the mill and the estates. However, the figures were inaccurate as the readings taken with the measuring cylinders were not calibrated accurately. A minor non-conformance had been issued.

Minor NCR 2 of 2

4.4.5 Monitoring of water usage in mills (tonnage water use/tonne FFB processed). Minor compliance

Water usage in the mill for 2012 ranged from 1.07 to 1.48 m3/tonne FFB with an average of 1.28 m3/tonne FFB. Overall there was a slight reduction of water usage in comparison with the previous year.

Complied

4.4.6 Water drainage into protected areas is avoided wherever possible. Appropriate mitigating measures will be implemented following consultation with relevant stakeholders.

There was no water drainage into protected areas.

Complied

Water management plan for the Grouping for 2012/2013 was available and reviewed appropriately by the estate management.

Complied

Minor compliance 4.4.7 Evidence of water management plans. Minor compliance

Field verification during this surveillance assessment confirmed that a revised Water Management Plan For FELDA Bukit Puchong has been reviewed and improved appropriately. The implementation was found effective and therefore the Minor NCR 2 of 2 from Main Assessment was effectively closed

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

Findings and Objective Evidence

Compliance

4.5.1 Documented IPM system.

Documented IPM system for the Company had been reviewed and implemented. The estates’ current IPM techniques were: - Biological control method. - Barn owl boxes had been put up at Bukit Mendi and Sungai Kemahal at the rate of 1 box to 92 ha. And 1 box to 97 ha, respectively. - Rat baiting would only be carried out when the attack exceeds the defined threshold.

Complied

Turnera subulata had been planted over 150 ha of mature area on Bukit Mendi Estate and recorded appropriately in suitable records and maps.

Complied

Minor compliance

4.5.2 Monitoring extent of implementation for major pests. Minor compliance

MICM RSPO Report: July 2013

IPM

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Rat baiting would be carried out when attack was above 5%. Monitoring records on rat damage census and rat baiting had been verified. 4.5.3 Recording areas where pesticides have been used. Minor compliance

Records on areas where pesticides had been used had been maintained appropriately.

Complied

4.5.4 Monitoring of pesticide usage units per hectare or per ton crop e.g. total quantity of active ingredient (a.i.) used/ tonne of oil.

Pesticides usage units per ha or per tonne crop had been monitored. The rates of common herbicides used by the Group Estates were as follows: a.i. In kg. Name p.ha p.t FFB Paraquat dichloride 0.345 0.0035

Complied

Minor compliance

Metsulfuron Methyl 0.025 Glyphosate isopropylamine 1.322

0.0001 0.0310

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

Findings and Objective Evidence

Compliance

4.6.1 Written justification in Standard Operating Procedures (SOP) of all agrochemicals use.

Complied

Major compliance

Written justification in Standard Operating Procedures of all agrochemicals use had been reviewed and found acceptable. The common Agrochemicals currently used by the Group Estates are: - Paraquat dichloride - Glyphosate Isopropylamine - Metsulfuron Methyl

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

Pesticides selected for use are those officially registered under the Pesticides Act 1974 (ACT 149) and the relevant provision (Section 53A). Implementation of USECHH Regulations (2000) was done. See also C4.6.5

Complied

Pesticides had been stored in accordance to the local Occupational Safety and Health Laws and Regulations and local laws on Pesticides control.

Complied

Major compliance 4.6.3 Pesticides shall be stored in accordance to the Local Occupational Safety and Health Laws and Regulations and local laws on Pesticides control. Major compliance

Empty chemical containers had been triple rinsed and pieced with 3 holes at the base to prevent reuse by others.

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

All information regarding the chemicals and their usage, hazards, trade and generic names were available in the local Malay language and displayed next to the chemicals in the store and on the notice board. This information had also been explained carefully to the workers by the management

MICM RSPO Report: July 2013

Complied

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) operating unit level.

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staff.

Major compliance 4.6.5 Annual medical Annual Surveillance Assessment (ASA-03) as per CHRA for plantation pesticide operators. Major compliance

Plantation workers in Bukit Mendi estate were sent for annual CHRA medical examination on 8 May 2013. All the workers were found to be in healthy conditions, not noted with any abnormality due to handling of chemicals and were fit to continue with the duties they had been assigned to.

Complied

Any worker found to be unsuitable to continue with their current duties would be deployed in other work where no pesticide would be involved. 4.6.6 No work with pesticides for confirmed pregnant and breast-feeding women.

It was also verified that no pregnant or breastfeeding women were assigned to work with pesticides.

Complied

Paraquat was still being used at a minimal rate for the eradication of VOP. Estates planned to reduce the use of paraquat in the future.

Complied

It’s not the company’s policy to carry aerial spraying. Field visits verified the compliance of this policy.

Complied

Not requested by the buyers.

Complied

Records of pesticides and their active ingredients used, area treated, and number of applications had been maintained and kept for a minimum of 5 years.

Complied

Major compliance 4.6.7 Documentary evidence that use of chemicals categorized as World Health Organization Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions and paraquat, is reduced and/or eliminated. Adoption of suitable economic alternative to paraquat as suggested by the EB pending outcome of the RSPO study on IWM. Minor compliance 4.6.8 Documented justification of any aerial application of agrochemicals. No aerial spraying unless approved by relevant authorities. Major compliance 4.6.9 Evidence of chemical residues in CPO testing, as requested and conducted by the buyers. Minor compliance 4.6.10 Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) are maintained for either a minimum of 5 years or starting November 2007. Minor compliance

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

Findings and Objective Evidence

Compliance

4.7.1 Evidence of documented Occupational Safety Health (OSH) plan which is in compliance with OSH Act and Factory Machinery Act.

A safety and health policy had been sighted. It had been communicated to all the staff, workers, and contractors.

Complied

MICM RSPO Report: July 2013

All operations had been risk assessed and documented.

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) Major compliance The safety and health (OSH) plan shall cover the following: a. A safety and health policy, which is communicated and implemented. b. All operations have been assessed and documented.

risk

c. An awareness and training programme which includes the following specifics for pesticides : i. to ensure all workers involved have been adequately trained in a safe working practices ( See also C 4.8) ii. All precautions attached to products should be properly observed and applied to the workers. d. The appropriate personal protective equipment (PPE) is used for each risk assessed operation. i. Companies to provide the appropriate PPE at the place of work to cover all potentially hazardous operations such as pesticide application, land preparation, harvesting and if used, burning.

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Records on training of workers had been sighted. a) All workers involved had been adequately trained in safe working practices. b) All workers had been briefed on the precautionary measures to be observed when handling the chemicals. Appropriate personal protective equipment (PPE) had been provided at the place of work to cover all potentially hazardous operations. Individuals had been identified (usually the Mandore or Headman) as responsible person(s) for each job function, and they would be with the workers at their respective worksites. Records on regular meeting with workers conducted at quarterly interval to review the safety and health procedures, the precautionary measures, and concerns of workers had been sighted. Accident and emergency procedures had been prepared and briefed to staff, workers, contractors and visitors. First Aid equipment was available at mill and estates.

e. The responsible person (s) should be identified. f. There are records of regular meetings between the responsible person(s) and workers where concerns of workers about health and safety are discussed. g. Accident and emergency procedures should exist and instructions should be clearly understood by all workers. h. Workers trained in First Aid should be present in both field and mill operations. i. First Aid equipment available at worksites.

should

be

4.7.2 Records should be kept of all accidents and periodically reviewed at quarterly intervals. Major compliance 4.7.3 Workers should be covered by accident insurance.

Records on all accidents had been sighted. Quarterly review on accident cases had been carried out during quarterly meeting of Environment, Safety, & Health (ESH)

Complied

There had been no accident for the last two years. Local workers are covered by SOCSO, whereas foreign workers are covered by Foreign Workers Compensation Scheme.

Complied

Major compliance

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

Findings and Objective Evidence

Compliance

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

Training programme on training for various categories of operators, including all field and office staff, with regards to their duties had been reviewed and found acceptable.

Complied

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) kept. Major compliance

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Training programme 2013 is appropriate to the size of the Estates and the mill. Training programme is based on training need assessment including need for RSPO programmes aimed to fulfill their jobs and responsibilities as per the relevant documented procedures Records and documentation related to training conducted are maintained adequately including training for Estate Hospital Assistants on the chemicals used at the estates and the related laws.

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Criterion 5.1 Aspects of plantation and mill management, including replanting, that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Indicators

Findings and Objective Evidence

Compliance

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

Documented Environmental Aspect and Impact Assessment, Action Plans were prepared for the respective estates by the Plantation Sustainability and Quality Management (PSQM) Department of Felda Plantations (Malaysia) Sdn Bhd based in Kuala Lumpur, Malaysia.

Complied.

Major compliance

The findings of the assessment had included the identification of aspects from field activities that includes fertilizing, spraying, transportation of FFB, garbage disposal and road maintenance. The report includes action plans and recommendations in order to mitigate negative effects and promote positive ones such as sewage, landfill/dumpsite and new dumpsites. 5.1.2 Environmental improvement plan to mitigate the negative impacts and promote the positive ones, is developed, implemented and monitored. Minor compliance

A generic timetable / monitoring frequency was developed and implemented by the PMU management team. Environmental impact assessment covered activities such as POM operations, oil palm estate fields, and open areas, patches of hill forest and forest edges / boundary to forest land areas were targeted by the assessment team in this study. Management action plans addressing issues raised which was monitored and projected to be reviewed annually. The EIA report had included the stakeholder consultation with external stakeholders i.e. the Land, Forestry Department and DOE.

Complied

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

Findings and Objective Evidence

Compliance

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

The latest HCV assessment report(s) conducted on 2011 was in – process of being reviewed at time of surveillance audit. The HCV assessments and report(s) were produced by FELDA PQSM with local stakeholder consultations including relevant government departments and NGOs.

Complied

Major compliance

MICM RSPO Report: July 2013

The collated information has included the planted area itself and relevant boundary considerations such as the boundary of the Forest Reserve Lands near the Bukit Mendi PMU

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

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estates. Refer to Maps in Appendix. 5.2.2 Management plan for HCV habitats (including ERTs) and their conservation. Major compliance

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

Management Plan FY2012 / 2013 for HCV are being implemented by the designated person(s) at Bukit Mendi PMU Grouping. Site inspections and HCV monitoring records confirmed that there was no presence of any endangered, rare and threatened (ERT) species at the Bukit Mendi PMU estates. Mosque and cemeteries have been suitably maintained.

Complied

The relevant estate(s) management has undertaken appropriate measures to control any illegal or inappropriate hunting, fishing or collecting activities within the PMU. Bukit Mendi - PMU has “No Hunting” policy. Appropriate signages were prominently displayed to convey this policy.

Complied

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

Findings and Objective Evidence

Compliance

5.3.1 Documented identification of all waste products and sources of pollution.

The Bukit Mendi PMU have suitably performed identification of all the waste products such as EFB , fiber , shell, scheduled waste and sources of pollution such as POME . The PMU has segregated its wastes as general wastes and scheduled wastes.

Complied

Major compliance

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

Updates for the action plans for FY 2012 and 2013 were implemented, monitored and recorded using appropriate checklists and records. Management plans have been implemented as planned. Proper areas were identified for the storage of the respective wastes. Scheduled wastes have been identified comprehensively at all mill operations and estate operations. The medical clinics are operated by the Ministry of Health Malaysia and they have their own operational procedures for scheduled waste disposal. The PMU’s plan to reduce, recycled, re-used and disposal of the types of wastes that are generated by the estates hare been continued from previous years since 2010/ 2011.

Complied

Scheduled Waste were properly stored and labeled with secondary containment noted at the major scheduled waste storage areas. The schedule waste storage area had been locked and restricted access to authorized personnel only. Inventory of scheduled waste were accurate and up to date and reported in the prescribed form required by DOE. The disposal of scheduled was made by Department Of Environment (DOE) approved contractors. Recycling bins of three different color codes were available in the POM and estate(s) offices and were used for solid waste segregation and recycling. Corrective action for Minor NCR 1 of 2 from Main Assessment verified to be effective and therefore closed. 5.3.3 Evidence that crop residues / biomass are recycled (Cross ref. C 4.2). Minor compliance.

Criterion 5.4

MICM RSPO Report: July 2013

Mesocarp fiber and shell are used as fuel for renewable energy .EFB is used in the fields in the sponge pits and as mulching in the estate fields. POME from the mill operations are chemically and biologically treated and applied to the palm fields.

Complied.

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

Findings and Objective Evidence

Compliance

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

The use of renewable energy in palm oil mill is monitored monthly to compare the energy usage against the production of CPO. Electricity generation was through steam turbine and boiler plant where palm fiber and shell were used as renewable energy fuel.

Complied

Minor compliance

The usage of renewable energy in year 2012 was 9.0 kWh per metric tonne CPO and for year 2013 (Jan to May 2013) was 9.2 kWh per metric tonne CPO. The renewable energy usage data is monitored for management control purposes and for opportunity for improvement. 5.4.2 Monitoring of direct fossil fuel use per tonne of CPO or kW per tonne palm product in the mill (or FFB where the grower has no mill). Minor compliance

The direct usage of diesel (fuel) was monitored and recorded by the palm oil mill. The usage of diesel (fuel) in year 2012 was 3.9 liters per metric tonne CPO and for year 213 (Jan to May 2013) was 4.6 liters per metric tonne CPO. The (diesel) energy usage data is continually monitored over the years as opportunity for improvement.

Complied.

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

Findings and Objective Evidence

Compliance

5.5.1 No evidence of open burning. Where controlled burning occurs, it is as prescribed by the Local - Environmental law on Open Burning’.

Bukit Mendi-PMU had observed the FELDA’s group policy of ‘Zero open burning’ in the estates.

Complied.

Major compliance

Inspections at physical sites – line-sites and estate fields verified no open burning activities have been carried out. No burning of waste including domestic waste was noted. No open burning policy has been maintained and no evidence of open burning during sighted during surveillance.

5.5.2 Previous crop should be felled / mowed down, chipped/shredded, windrowed or pulverized/ ploughed and mulched.

The old palm trees are chipped / shredded as per Felda SOP – titled ‘Felling & Shredding Palm Trees number GAP 1.7 Issue Number 1 dated 01 September 2006.

Complied.

No burning of domestic waste was sighted during site visits. Domestic waste generated was disposed at the designated land- fills

Complied.

Minor compliance 5.5.3 No evidence of burning waste (including domestic waste). Minor compliance

Signages displaying “Zero Open Burning” sighted during line- site and estate fields inspection. Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Indicators

Findings and Objective Evidence

Compliance

5.6.1 Documented plans to mitigate all polluting activities (Cross ref to C 5.1).

Pollution Prevention Plans were progressively implemented and reviewed for FY2012/2013. Environmental impact assessment was re-performed and reviewed to identify potential pollution to water, gaseous emissions to air and contamination on land. Management plans and continuous improvement plans were developed to mitigate significant impacts identified.

Complied.

Major compliance

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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PMU management has identified potential pollution from sludge oil, metal scrap, used PPE, empty fertilizer bags, boiler emission, tyres, glass bottles, plastics, paper and empty chemical containers. Suitable mitigation plans have been identified and implemented by the environment officers in charge at the respective mill and estates. 5.6.2 Plans are reviewed annually. Minor compliance

5.6.3 Monitor and reduce peat subsidence rate through water table management (Within ranges specified in C 4.3).

Annual reviews for mill and estates were performed for individual units within Bkt Mendi PMU between Mar - June 2013 and records maintained. .On-site verification at mill and estates had verified the implementation of the said action plans with overall positive results.

Complied.

There were no peat lands at Bukit Mendi PMU estates.

Complied.

Minor compliance

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and mills Criterion 6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Indicators

Findings and Objective Evidence

Compliance

6.1.1 A documented social impact assessment including records of meetings.

Under the Bukit Mendi-PMU, the respective Social Impact Assessment reports and Management plans dated between Feb - April 2013 at all the estates and mill was specific and individually documented by the Sustainability Team from FELDA’s Plantation Sustainability and Quality Management (PSQM) Department of Felda Plantations (Malaysia) Sdn Bhd based in Kuala Lumpur, Malaysia.

Complied

Major compliance

Stakeholder consultation meetings with the local communities and employees on the assessment were performed by the Estate managers with their Social Liaison Officers. Employee representation was through the Employees Consultative Council (ECC) which has representation from the different levels of workers who are elected by the workers. Participation from their official representatives expressed their views freely with records of meeting attendance and minutes of meeting being available. The main stakeholders meeting and monthly meetings are held at the KKS Mendi meeting rooms. The above meeting agenda covered social issues such as women issues, migrant issues, cultural & religious issues, working conditions, discriminations, sexual harassment, and freedom of association.

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 6.1.2 Evidence that the assessment had been done with the participation of affected parties.

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Records of meeting with stakeholders indicated discussions held were generally on matters pertaining to access roads and use rights, working conditions, cultural/festival activities, health facilities and other community concerns.

Complied

A time table of activities identified was sighted with time frame on implementation plans. Site inspection carried out confirmed that the implementations were in progress.

Complied

Minor compliance 6.1.3 A timetable with responsibilities for mitigation and monitoring is reviewed and updated as necessary. Minor compliance. Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties. Indicators

Findings and Objective Evidence

Compliance

6.2.1 Documented consultation and communication procedures.

FELDA Bukit Mendi grouping has adopted open and transparent methods of communication and consultation when dealing with internal and external stakeholders e.g. its workers, government agencies, contractors, neighboring plantations; even occasionally organising meetings by personal invitation to attend meetings.

Complied

Appointment letters and responsibilities for the nominated plantation management official within the PMU were verified. The nominated plantation official is the Senior Assistant of each of the four estates and mill

Complied

The lists of stakeholders were updated and records of meeting were maintained. The list of stakeholders include village headmen including orang asli, JKKK, settlers associations, RELA, government officers such as District Officer, OCPD,JKR District Engineer, District forester, BOMBA, Information Officer, Agriculture officer, JHE Orang Asli Officer, school principal, medical staff, women associations, religious bodies, welfare associations, youth association, Cooperatives, contractors, employee representatives such as supervisors, harvesters, manurers’ and NGOs.

Complied

Major compliance

6.2.2 A nominated plantation management official at the operating unit responsible for these issues. Minor compliance 6.2.3 Maintenance of a list of stakeholders, records of all communication and records of actions taken in response to input from stakeholders. Minor compliance

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

Findings and Objective Evidence

Compliance

6.3.1 Documentation of the process by which a dispute was resolved and the outcome.

All mill and estates in FELDA Bukit Mendi grouping had established complaints and grievances procedures and it was well implemented. The complaints and grievance logbooks – Smallholder’s Complaints Book, are still actively used in all mill and estates. Latest complaint received in FELDA Bt. Mendi was on 30 April 2013 and in FELDA Sg. Kemahal was on 9 April 2013.

Complied

Major compliance

As an alternative to the logbook, estate workers and administration staff could also lodge their complaints and grievances through their respective representatives in the Joint Consultative Committee (JCC). Other methods practiced for the settlers to raise complaints

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

6.3.2 The system resolves disputes in an effective, timely and appropriate manner. Minor compliance 6.3.3 The system is open to any affected parties.

to the FELDA management include as stated below: 1. Monthly roll calls 2. Jawatankuasa Keselamatan dan Kemajuan Kampung /Rancangan (JKKK/R) 3. Lawatan Mesra (Lawatan Rabu) conducted by the Estate Managers every Wednesday to each settlers’ house 4. Jawatankuasa Masjid Timelines for response to complaints and grievances are either through the logbook or JCC representatives. Mechanisms are appropriately established and implemented. Complaints in the logbooks are handled within an acceptable time frame which is normally less than one month. From field interviews at mill and estates, the system is verified open for all affected parties including internal and external parties.

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Complied

Complied

Minor compliance

Criterion 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions. Indicators 6.4.1 Establishment of a procedure for identifying legal and customary rights and a procedure for identifying people entitled to compensation.

Findings and Objective Evidence

Compliance

FELDA Grouping has a documented procedure for identifying legal and customary rights and procedure for identifying people entitled to compensation have been maintained. Reference document is ML-1A/L2-PR12 (0).

Complied

FELDA Grouping has a documented procedure in place to address legal and customary rights including identifying people entitled for compensation and the mechanism for calculating and distributing fair compensations. Reference document is ML-1A/L2-PR12 (0). However, there have been no claims or disputes relating to legal and customary rights. As such, the application of the procedure for calculating and distributing compensation has not been invoked.

Complied

So far, there have been no claims or disputes relating to legal and customary rights. As such, the application of the procedure for calculating and distributing compensation has not been invoked.

Complied

Major compliance 6.4.2 A procedure for calculating and distributing fair compensation (monetary or otherwise) is established and implemented. This takes into account gender differences in the power to claim rights, ownership and access to land; and long-established communities; differences in ethnic groups’ proof of legal versus communal ownership of land. Minor compliance 6.4.3 The process and outcome of any compensation claims is documented and made publicly available. Minor compliance

Criterion 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages. Indicators

Findings and Objective Evidence

Compliance

6.5.1 Documentation conditions.

Basic daily rate for all employees in Bukit Mendi Grouping Mill and estates have met the industry minimum standards. Labour policy is documented and publicly available. Employment agreements, statutory fringe benefits are available. Stated conditions in the employment agreement includes working hours, overtime, leave and medical benefits, maternity leave for women, insurance coverage,

Complied

of

pay

Major compliance

MICM RSPO Report: July 2013

and

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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deductions, resignation notice period, company rules, etc., which are in compliance with applicable legal requirements. These conditions are documented in Bahasa Malaysia and have been explained to and understood by the employees. The payment slip was easy to understand. Foreign workers are legally employed by FELDA TechnoPlant [FTP] and work permits were sighted and verified. Labour policy addresses migrant workers who mostly come from Indonesia. Employment conditions meet legal requirement. The estate management also provide free housing and treated water supply, subsidized electricity, medical benefits, community halls, mosques and welfare amenities constitutes a decent living for the employees. Settlers managing their own plantations are not considered as workers of FELDA, thus no salary being paid. 6.5.2 Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc) are available in the language understood by the workers or explained carefully to them by a plantation management official in the operating unit.

Documented employment contract for migrant workers had covered all issue such as working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, and reasons for dismissal, period of notice made available in local languages which is understood by the workers (local and foreign workers).

Complied

Workers minimum standards for housing and amenities adhered for all estate workers including migrant workers from Indonesia.

Complied

Minor compliance 6.5.3 Growers and millers provide adequate housing, water supplies, medical, educational and welfare amenities in accordance with Local Workers’ Minimum Standard of Housing and Amenities or above, where no such public facilities are available or accessible (not applicable to smallholders).

Special labour practices was established in accordance with legal requirements and documented for migrant workers and records were available.

Minor compliance

Criterion 6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel. Indicators

Findings and Objective Evidence

Compliance

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

Complied

Major compliance

The estate management had formed the JCC as a mechanism to cater to the collective bargaining needs of the workers. Results of JCC meetings for FY2012/2013 were minuted and available.

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

The published statements of policy which recognizes the employee’s freedom of association, was noted to be available in two languages including Bahasa Malaysia and English.

Complied

Criterion 6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision,

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

Page 29 of 38

and when not interfering with education programmes. Children are not exposed to hazardous working conditions. Indicators 6.7.1 Documentary evidence minimum age requirement is met.

that

Major compliance

Findings and Objective Evidence

Compliance

The child labour policy adopted by estate managements on had stated that the minimum age of workers is not less than 17 years. This policy is fully well understood and fully adhered to by the mill and estate managers at Felda BME. Site inspection of the employment records in all mill and estates confirmed that this has been complied.

Complied

Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited. Indicators

Findings and Objective Evidence

Compliance

equal

Social Policy was documented and publicly available committing to an Equal Job Opportunity Policy in the Felda BME PMU.

Complied

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

Non discrimination policy has been effectively implemented by the PMU management.

Complied

6.8.1 A publicly opportunities policy.

available

Major compliance

Minor compliance

Wage records inspected and rates confirmed as being nondiscriminatory for male, female and for both local and migrant workers. Housing provided to all workers was standardized. Noted smallholder settlers own their own houses within the Felda BME estates. Payment slips were also inspected in all mill order to ensure no discrimination in daily workers, unfair deduction of wages and payment for work done during the rest days the payment slips issued.

and estates in rate between proper wage as reflected in

There was no negative feedback on any form of discrimination from the private interviews conducted with the interviewees and from the inspection of payment slips. Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their productive rights is developed and applied. Indicators

Findings and Objective Evidence

Compliance

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

The established sexual harassment policy has covered aspects on sexual harassment, gender and women reproductive rights. This policy has been maintained from 2011 and implemented effectively.

Complied

6.9.2 A specific grievance mechanism is established.

There is a Gender Committee specifically to address areas of concern to women.

Complied

Major compliance

The gender committee at mill and all estates have s established grievance remedial flowchart to deal with women concerns/grievances. Committee meeting minutes file addressing any grievances including women concerns is maintained and available for FY2012/ 2013. Noted that there was no incidence of sexual harassment and violence against women. Gender

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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Committee also met at least once a year to discuss issues related women welfare. Verified and confirmed through workers interviews that women’s issues have been adequately protected. Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. Indicators

Findings and Objective Evidence

Compliance

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

Pricing mechanism for FFB is documented and displayed at mill office. A file with the rates for transport contractors, worker supply and other services is maintained.

Complied

FFB prices were made available via Felda website links and mill office records. The estates in the FELDA Bukit Mendi grouping have dealt with smallholders and other local business fairly. Pricing mechanisms for FFB were fair and transparent. Current and past prices paid for FFB were publicly available and verified through interviews with smallholders including independent smallholders and suppliers.

Complied

Stakeholder interviews conducted during this surveillance assessment with parties concerned confirmed that business practices with local businesses are fair and transparent. Agreed payments are made promptly and settlers are provided with advance payments. There was also no evidence from the stakeholder interviews conducted to suggest of any unfair business practices with the local businesses.

Complied

Payment records for Felda BME Grouping for FY2012/2013 were available in hardcopy and e-copy .Interviews with employees, FFB suppliers and contractors confirmed that payments are made on- time.

Complied

Major compliance 6.10.2 Current and past prices paid for FFB shall be publicly available. Minor compliance

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

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

Criterion 6.11 Growers and millers contribute to local sustainable development wherever appropriate. Indicators

Findings and Objective Evidence

Compliance

6.11.1 Demonstrable contributions to local development that are based on the results of consultation with local communities.

All mill and estates in FELDA Bukit Mendi Grouping have contributed to the sustainable development of the local communities. FELDA Corporate Group and the Felda BME PMU contribute towards the local sustainable development of the FELDA settlers and their dependents. Based on feedback from stakeholders, social contributions from Felda include tuition facilities, community colleges, and community centre for women, school enrolments, study loans and scholarships for students.

Complied

Minor compliance

Principle 7: Responsible development of new plantings FELDA Bukit Mendi GROUPING-PMU has a procedure for this development but has not carried any new plantings after November 2005. Therefore Principle 7 is not applicable during this assessment.

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

Page 31 of 38

Principle 8: Commitment to continuous improvement in key areas of activity Criterion 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations. Indicators

Findings and Objective Evidence

Compliance

Demonstrate progressive improvement to the following but not limited to:

Use of Paraquat had been restricted to only spraying of voluntary oil palm (VOP) seedlings in the mature area.

Complied

Programs on water consumption reduction, pesticide consumption reduction and increase planting of beneficial plants have been implemented for FY2012/2013.

Complied

Programs on recycling activities and minimization of wastes were progressively implemented FY2012 / 2013 e.g. increase recycling of fertilizer bags , reduce water spillage from chemical mixing process at the estates , return of pesticide containers back to suppliers.

Complied

Pollution prevention and continual improvement plans dated for FY2012/2013 were available and progressively implemented such as reduction of use of solvents/paints and increase waste segregation and recycling rate for plastic, glass, paper and metals.

Complied

Achievements of social activities conducted in 2012/2013 were monitored and recorded properly to show commitment to continuous improvement on social issues. Among others the achievements from 2012/2013 social activities are listed below:

Complied

8.1.1 Minimize use of certain pesticides (C4.6) Major compliance 8.1.2 Environmental impacts (C5.1) Major compliance 8.1.3 Maximizing minimizing waste generation.

recycling and or by-products

Major compliance 8.1.4 Pollution prevention plans (C5.6) Major compliance

8.1.5 Social impacts (C6.1) Major compliance

a) Primary 6 students’ attendance at Skim Tuisyen FELDA was recorded at 100%. b) 10 students from FELDA Bukit Mendi PMU were accepted to continue their studies in local higher learning institutions. c)JKKK/R and GPW FELDA Mengkuang each organized 9 meeting and training session discussing relevant local social issues. 8.1.6 A mechanism to capture the performance and expenditure in social and environmental aspects.

SEIA expenditure and performance has been captured and details were evident in the annual budget report submitted for 2012/2013 to their HQ.

Complied

Minor compliance

3.1.1 Supply Chain Certification Standards Findings - on CPO Mill The Supply Chain model applied at Felda Bukit Mendi POM during this current surveillance assessment is Module E: Mass Balance (MB). Details of findings are as follows: E.1 Documented procedures Indicators

MICM RSPO Report: July 2013

Findings and Objective Evidence

Compliance

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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E.1.1 The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following:

A documented Supply Chain Procedure SOP for Mill RSPO Supply Chain Certification System has been established and implemented for Module E: Mass Balance (MB) system.

a) Complete and up to date procedures covering the implementation of all the elements in these requirements

All the requirements for controlling the FFB receipt, processing, sale and CPO dispatch, training and claims for Mass Balance (MB) Module for the Palm Oil Mill has been addressed in the SOP . Implementation complied with all the requirements.

b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

POM’s Mill Assistant Manager, Mr. Nuril Azwa Bin M.Salleh has been appointed as the person responsible for the Supply Chain aspects of FFB receipts, processing and shipping of CPO, PK and palm products. Interview of the Mill Manager and other relevant staff confirmed their knowledge of the RSPO Supply Chain Certification requirements for the respective areas of operations.

Complied

The Mill Weighbridge procedure covers the receiving of FFB supply from FELDA’s own estates and also the outgrowers. All supplies of FFB were subjected to verification of documents and quality checks by weighbridge personnel.

Complied

All Storage tanks at the POM are designated as Mass Balance (MB) CPO.

Complied

Indicators

Findings and Objective Evidence

Compliance

E.2.1 The facility shall verify and document the volumes of certified and noncertified FFBs received.

The Mill verifies and records tonnages and supply source of FFB received at the weighbridge in the delivery notes and weighbridge tickets and these are reported on monthly basis to the Head Office. Production Report for FY2013 is verified to be Mass Balance palm products.

Complied

Bukit Mendi POM has an internal monitoring and reporting mechanism for advising the CB of production variations. So far, there is no projected overproduction.

Complied

Indicators

Findings and Objective Evidence

Compliance

E.3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

Inspection of records at the Mill confirmed these were updated daily.

Complied

E.1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

Complied

E.2 Purchasing and goods in

E.2.2 The facility shall inform the CB immediately if there is a projected overproduction.

E.3 Record keeping

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

As per the SOP, the records are archived and stored for a minimum of 5 years.

E.3.3 a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a threemonthly basis.

Transaction documents and bookkeeping of CPO and PK are done daily and monthly summary submitted to Head Office based in Kuala Lumpur.

MICM RSPO Report: July 2013

There is no PKO and Palm Kernel mill at the said POM

Complied

Complied

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

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facility.

Complied

b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

Deduction and conversion ratios for the volumes of CPO delivered from the Palm Oil Mill have been appropriately done and recorded.

Complied

c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

All deliveries of the MB sales are from positive stock.

E.3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated.

Bukit Mendi POM has prepared an appropriate stamp for the use of identification of RSPO certified CPO and PK. Documents have been stamped ‘RSPO – MASS BALANCE appropriately for CPO and PK products. Traceability was verified for the production reports for FY 2013 which was verified from the related records (FFB Delivery Note, Weigh Ticket, FFB & Truck Daily Summary, Production Report, CPO Storage Report, and CPO Delivery Orders.

Complied Complied

Complied

There is no such outsourcing activity done at the Bukit Mendi POM.

Complied

Indicators

Findings and Objective Evidence

Compliance

E.4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information:

Items (a) to (e) are included in the company’s invoices and export documents to all CPO buyers as stipulated in the SOP for RSPO/MB module.

Complied

Indicators

Findings and Objective Evidence

Compliance

E.5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

FELDA Bukit Mendi Mill has maintained records of training on the Supply Chain Certification System for Mass Balance (MB) Module. Interview with mill personnel confirmed their awareness of how the MB module is being implemented and maintained.

Complied

Indicators

Findings and Objective Evidence

Compliance

E.6.1

FELDA Bukit Mendi Mill has not made any claims outside of the RSPO Rules for Communications and Claims.

Complied

E.3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement.

E.4 Sales and good out

a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated or Mass Balance) d) The quantity of the products delivered; e) Reference to related transport documentation.

E.5 Training

E.6 Claims

The facility shall only make claims

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

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Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims.

3.1.2 Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the FELDA POM has been able to comply with the requirements of the RSPO SCCS under the ‘MB’ module and is thus eligible for ‘MB’ trading for its palm products for year 2012/2013. 3.2

Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements.

3.2.1

Noncompliances

The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance Indicators is as per the details below: Assessment Type

Year

Noncompliance (NCR)

Observations (OBS)

Initial / Main Assessment

2011

2 Minor

Nil

Annual Surveillance Assessment (ASA-01)

2013

2 Minor

Nil

•

Year 2011 – Main Assessment

NCR #

Indicator/ Category

Details of NCR ( in year 2011)

1 of 2

5.3.2 Minor

Date issued: 7 Dec 2011

st

Date due: 1 Surveillance

st

Date closed: 1 Surveillance

Nonconformance: 1)

Lack of operational implementation plan on waste (decanter solid waste) and liquid boiler ash leakage control to monsoon drain of oil mill.

2)

FELDA Bukit Mendi’s dumpsite/landfill (point of disposal of municipal solid waste) was noted to be not well controlled, sited near a water body and no specific operational procedures or equivalent established during audit

Corrective Action (replied): 1)

Decanter solid cake and Boiler Ash Management Plan established and approved to control the waste appropriately

2)

Guidelines on proper location, size, guarding, waste disposal and operational procedures for the future landfill established and approved. Management Plan updated to mitigate the potential pollution from the old, existing and new dumpsites appropriately.

Verification: Field verification during this surveillance assessment confirmed that decanter solid cake and boiler ash management plan has been established and implemented to control the waste appropriately. Guidelines on proper location, size, guarding, waste disposal and operational procedures for the future landfills have been established and approved. Management Plans have been updated to mitigate the potential pollution from the old, existing and new dumpsites appropriately. NCR #

Indicator/ Category

Details of NCR ( in year 2012)

2 of 2

4.4.7

Date issued: 7 Dec 2011

MICM RSPO Report: July 2013

st

Date due: 1 Surveillance

st

Date closed: 1 Surveillance

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) Minor

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Nonconformance: Overall water management plan for FELDA Bukit Puchong was inadequate. Corrective Action (replied): Water Management Plan For FELDA Bukit Puchong has been reviewed and improved appropriately. Verification: Field verification during this surveillance assessment confirmed that a revised Water Management Plan For FELDA Bukit Puchong has been reviewed and improved appropriately.

•

Year 2013 – Annual Surveillance Assessment (ASA-01)

NCR #

Indicator/ Category

Details of NCR ( in year 2013)

1 of 2

4.1.2

Date issued: 16 May 2013

Date due: (Within 30 days)

(Minor)

Date due for verification: (Next surveillance )

Nonconformance: On Bukit Mendi Estate, some of the records of monitoring and actions taken were not well maintained as the details were incomplete. Corrective Action (replied):

Bukit Mendi estate manager has issued instructions for supervisors to enforce complete and accurate recording of monitoring records specified above. Verification (for effective closure):

Physical verification will be done in the next on-site surveillance assessment. NCR # 2 of 2

Indicator/ Category

Details of NCR ( in year 2013)

4.4.4

Date issued: 16 May 2013

(Minor)

Date due: (Within 30 days)

Date due for verification: (Next surveillance )

Nonconformance: The rainfall data for Palm Oil Mill and Group Estates were inaccurate due to non-calibration of the rain gauge measuring cylinder. Corrective Action (replied): The rain gauge measuring cylinder for monitoring the rainfall data for Palm Oil Mill and Group Estates will be replaced and calibrated to ensure accurate measurement of rainfall data. Verification (for effective closure):

Physical verification will be done in the next on-site surveillance assessment. 3.2.2 Identified Positive Elements 1) There was an increase in awareness and welfare for gender related activities – e.g. the establishment of Persatuan Kemajuan Wanita building for social and welfare activities for women at the Bukit Mendi PMU and neighbouring communities. 2) There was generally an improved awareness and commitment towards implementation of 5S , social , environment and safety issues in the estates audited.

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 3.3

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Summary of Issues Raised by Stakeholders and Findings

MICM had obtained some written and verbal feedback from the stakeholders on the environmental and social performance of KKS Bukit Mendi Grouping operations in the course of assessment and consultations. During the Annual Surveillance Assessment (ASA-01), all pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the report findings. See table below:

Stakeholders’ Feedback Government Agencies Comunication done via email on 27 April 2013. See list under para 2.5.

PMU Response

MICM verification / comments

Ongoing consultations will be maintained.

Verified during on-site assessment that the PMU that that no response needed.

No feedback received.

No response needed.

Non-Governmental Organizations Comunication done via email on 27 April 2013. See list under para 2.5.

Ongoing consultations will be maintained.

No feedback received. Local Communities 9 stakeholders has been interviewed during the assessment on 15 May 2013 (incl local community, employee) and it was confirmed that: PMU has basicly covered technical, environmental and socio economic issues Few issues was raised: Delay in road maintenance Slight pollution at Sg Tuang River Disposal of oil at few drains Other Interested parties Comunication done via email on 27 April 2013. See list under para 2.5. No feedback received.

MICM RSPO Report: July 2013

Verified during on-site assessment that the PMU that that no response needed.

No response needed.

Ongoing consultations will be maintained. Further improvement on road maintenance, monitoring of rivers & signages, and and control of disposal of waste oils at the estate will be progressively made.

Verified during on-site assessment that the PMU has a mid and long term management plan for the imporvement of social and environmental needs of the local community. See report details under P&C 4, 5, 6 & 8)

Ongoing consultations will be maintained. No response needed.

Verified during on-site assessment that the PMU that that no response needed.

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01)

Page 37 of 38

4.0 Assessment Conclusion and Recommendation Based on the findings above, Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping had been able to demonstrate its compliance with the RSPO Principles and Criteria (October 2007), Malaysian National Interpretation (MY-NI 2010) and the RSPO Supply Chain Certification Standard (November 2011) for Palm Oil Mill. Therefore, it is recommended that the certification of Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping be approved and continued. Signed for and on behalf of Moody International Certification (Malaysia) Sdn Bhd

Mohan Thavarajah Mr. Mohan Thavarajah Lead Assessor Date: 30 July 2013

4.1 Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings This is to acknowledge and confirm the assessment visits described in this report and the acceptance of the contents and findings in this assessment report. Signed for and on behalf of Felda Plantations Sdn Bhd (FELDA)

Mr. Norazam Abdul Hameed General Manager, Plantation Sustainability And Quality Management (PSQM) Department Date: 30 July 2013

MICM RSPO Report: July 2013

MOODY INTERNATIONAL CERTIFICATION (M) SDN BHD (188296-W)

Page 38 of 38

Report No.: R2529/11-3 Felda Plantations Sdn Bhd KKS Bukit Mendi Grouping: Annual Surveillance Assessment (ASA-01) 4.2

MICM RSPO Certificate details for KKS Bukit Mendi Grouping

Certificate No:

RSPO 927988

Issue date:

5 October 2012

Expiry date:

4 October 2017

Organization

Felda Plantations Sdn Bhd (FELDA)

Address of Head Office:

8th Floor Balai Felda, Jalan Gurney Satu, 54000 Kuala Lumpur, Malaysia

RSPO Membership No:

1-0013-04-000-00

Plantation Management Unit:

KKS Bukit Mendi Grouping

Address of POM:

Kilang Sawit Bukit Mendi,28320 Triang, Pahang Darul Makmur, Malaysia

Standards:

RSPO Principles and Criteria (October 2007); Malaysian National Local Indicators (November 2010); RSPO Supply Chain Certification Standards (November 2011) for the Palm Oil Mill.

Certification scope:

Production of Crude Palm Oil and Palm Kernels

Supply Chain model for CPO & PK:

Mass Balance (MB)

Details of the Mill and Supply bases covered by this certificate and the tonnage approved are: Name

GPS Reference

Address

Felda Palm Industries Sdn Bhd, Kilang Sawit Bukit Mendi - POM

Latitude

Longitude

3° 12’20.89” N

102° 18’12.39” E

Kilang Sawit Bukit Mendi,28320 Triang, Pahang Darul Makmur

(Capacity: 30 mt/hr) Felda & FTPSB Bukit Mendi

Pejabat Felda Bukit Mendi,28320 Triang, Pahang Darul Makmur,

3° 12’20.89” N

102° 18’12.39” E

Felda & FTPSB Bukit Puchong

Pejabat Felda Bukit Puchong,28320 Triang, Pahang Darul Makmur

3° 13’39.41” N

102° 19’45.15” E

Felda & FTPSB Mengkuang

Pejabat Felda Mengkuang,28320 Triang, Pahang Darul Makmur

3° 11’59.67” N

102° 23’1.03” E

Felda & FTPSB Kemahal

Pejabat Felda Sungai Kemahal,28320 Triang, Pahang Darul Makmur

3° 12’20.89” N

102° 18’12.39” E

The annual certifiable tonnages of CPO and PK production by KKS Bukit Mendi Grouping from the supply base/suppliers as assessed and verified during the current Annual Surveillance Assessment (ASA-01) (based on FY July 2012 / June 13 data) are detailed as follows: POM

FY July 2010 / June 2011

Total FFB Processed (MT)

FY July 2012 / June 2013 Actual & Projected 124,901.48

127,580.84

FY July 2013 / June 2014 - Projected 119,395.26

Total CPO Production (MT)

25,898.91

OER: 20.30%

25,604.8

OER: 20.5%

24,476.03

OER: 20.5%

Total PK Production (MT)

6,965.91

KER: 5.46%

6,819.62

KER: 5.46%

6,686.13

KER: 5.60%

MICM RSPO Report: July 2013