Audit Report
App./Cert.
RSPO20006
Date
14/01/2012 Rev.02: 22/11/2012
PUBLIC SUMMARY REPORT
Client: Site Address:
Standard(s):
PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases Batu Ampar Mill: Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Its Supply Bases: Batu Ampar Estate Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Batu Mulia Estate Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Sungai Panci Estate Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Sungai Panci Plasma Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia
National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module E – CPO Mill: Module E Mass Balance November 2011
DISCLAIMER: This report has been prepared by SAI Global Indonesia (SAI Global) in respect of a Client's application for assessment by SAI Global. The purpose of the report is to comment upon evidence of the Client's compliance with the standards or other criteria specified. The content of this report applies only to matters, which were evident to SAI Global at the time of the audit within the audit scope. SAI Global does not warrant or otherwise comment upon the suitability of the contents of the report or the certificate for any particular purpose or use. SAI Global accepts no liability whatsoever for consequences to, or actions taken by, third parties as a result of or in reliance upon information contained in this report or certificate.
ACTIVITY ID: 363103 QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
© SAI Global Indonesia Copyright 2009
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Audit Report Table of contents Executive Overview Abbreviations Used
Page 3 3
1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13
SCOPE OF THE CERTIFICATION ASSESSMENT Introduction Audit Objective Scope of Certification Location of Mill and Estates Description of Supply Base Date of Plantings Other Certificates Held Organisational Information/Contact Person Time Bound Plan for Other Management Units Area of Plantation Approximate Tonnages Offered for Certification (CPO and PK) Partial Certification Date of Issue of Certificate and Scope of Certification
4 5 5 5 8 8 9 9 9 10 11 11 13
2.0 2.1 2.2 2.3 2.4 2.5
AUDIT PROCESS Certification Body Audit Methodology Qualification of the Lead Auditor and Audit Team Members Stakeholder Consultation Date of Next Surveillance Visit
3.0 3.1 3.2 3.3
AUDIT FINDINGS Summary of findings Recommendation Environmental and Social Risk for this scope of certification for planning of the surveillance audit Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings
3.4
16 45 45 46 Page
List of Tables 1 2 3 4 5 6 7 8
Mill and Estates GPS Locations Organisation FFB Production Age Profiles of Planted Palms Other Certificates Held by Mill and Estates RSPO Certification Time Bound Plan of Estates and Area Planted Plantation Hectare Statement List of internal and external stakeholder
6 8 8 9 10 11 11 15
List of Figures 1 Map of Mill and Estates Location
Page 7
List of Appendices A Audit Record B Nonconformities, Corrective Actions and Observations Summary C Stakeholder‟s issues and comment D Definition of, and action required with respect to audit findings
Page 49 52 62 68
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Audit Report Executive Overview SAI Global has audited PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases operations comprising one mill, four oil palm estates, support services and infrastructure. During the audit one major nonconformity was found against criterion 2.2 of the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008. It was found that the operations comply with the requirements of the RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module E – CPO Mill: Module E Mass Balance November 2011. The major nonconformity has been corrected. The corrective action taken was reported in the body of the report. Relevant data regarding partial certification requirements have also been completed in June 2012. Therefore the recommendation from this audit is that Batu Ampar Mill and Its Supply Bases be approved as a producer of RSPO Certified Sustainable Palm Oil and Palm Kernel.
Abbreviations Used AAA ANDAL BAME BAMM BHL BKM BMLE BLH BOD BPN CEO COD CPO CSR D&L DELH EFB FFB GAR GPS HCV HGU HPH IMT IPB IPM ISO KUD LD LOTO MAA MCAR MSDS MT NGO OHS
Agronomy Advisory Audit Environmental Impact Analysis (Analisis Dampak Lingkungan) Batu Ampar Estate Batu Ampar Mill Daily basis paid workers (Buruh Harian Lepas) Log book of group leader activity (Buku Kegiatan Mandor) Batu Mulia Estate Local Agency of Environmental (Badan Lingkungan Hidup) Biological Oxygen Demand National Land Agency (Badan Pertanahan Nasional) Chief Executive Officer Chemical Oxygen Demand Crude Palm Oil Corporate Social Responsibility Document and Legal Document of Environmental Evaluation (Dokumen Evaluasi Lingkungan Hidup) Empty fruit bunches Fresh Fruit Bunch Golden Agri-Resources Limited Global Positioning High Conservation Value Land Use Title (Hak Guna Usaha) Forest Authority Concession (Hak Penguasaan Hutan) PT. Ivo Mas Tunggal Bogor Agricultural University (Institut Pertanian Bogor) Integrated Pest Management International Standards Organisation Village Unit Cooperatives (Koperasi Unit Desa) Lethal Dosage Lock out tag out Mill Advisory Audit Management Committee Agronomy and Research Material Safety Data Sheet Metric Ton Non Government Organisation Occupational Health and Safety
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Audit Report OIA P2K3 PK PKB PKWT POM POME PPE RABQSA RKL RPL RSPO SA SCCS SHM SIA SKPM SKU SMD SMARTRI SOP SPM SPNA SPNE TLV VPA
Operation Internal Audit Safety Commitee Palm Kernel Mutual Working Agreement (Perjanjian Kerja Bersama) Contracted worker (Pekerja Waktu Tertentu) Palm Oil Mill Palm Oil Mill Effluent Personal Protective Equipment Quality Society of Australia Environmental Management Plan (Rencana Pengelolaan Lingkungan) Environmental Monitoring Plan (Rencana Pemantauan Lingkungan) Roundtable on Sustainable Palm Oil Social Accountability Supply Chain Certification System Land Own Title (Surat Hak Milik) Social Impact Assessment Sungaii Kupang Mill Permanent worker (Syarat Kerja Utama) Senior Managing Director SMART Research Institute Standard Operation Procedure Independent Worker Union (Serikat Pekerja Mandiri) Sungai Panci Plasma Sungai Panci Estate Threshold Limit Value Vice President of Agronomy
1.0
SCOPE OF THE CERTIFICATION ASSESSMENT
1.1
Introduction
SAI Global conducted an audit of PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases on 10/01/2012 to 14/01/2012. The purpose of this audit report is to summarise the degree of compliance with relevant criteria, as defined on the cover page of this report, based on the evidence obtained during the audit of PT. SMART Tbk. Batu Ampar Mill and Its Supply Bases.. SAI Global audits are carried out within the requirements of SAI Global procedures that also reflect the requirements and guidance provided in the international standards relating to audit practice such as ISO/IEC 17021, ISO 19011, RSPO Certification System and other normative criteria. SAI Global Auditors are assigned to audit according to industry standard or technical competencies appropriate to the organisation being audited. Details of such experience and competency are maintained in our records. The audit team is detailed in the attached audit record. In addition to the information contained in this audit report, SAI Global maintains files for each client. These files contain details of organisation size and personnel as well as evidence collected during preliminary and subsequent audit activities (Documentation Review and Scope) relevant to the application for initial and continuing certification of your organisation. Details of your primary contact persons and their contact details and site addresses are also maintained. Please take care to advise us of any change that may affect the application/certification or may assist us to keep your contact information up to date, as required by SAI Global Terms and Conditions. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Please note that this report is subject to independent review and approval. Should changes to the outcomes of this report be necessary as a result of the review, a revised report will be issued and will supersede this report.
1.2
Audit Objective
Certification Audit To determine the implementation of your organization‟s on RSPO system; the capability and effectiveness of the RSPO system in ensuring continual compliance with the requirements of the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 and in meeting its specified objectives (indicator); and the conformity of the RSPO system to stated principles, criteria and indicator. The audit also conducted to verify the volumes of certified and uncertified FFB entering the mill and volume sales of RSPO certified producers‟ inline with requirements of RSPO Supply Chain Certification System, November 2011 and RSPO Supply Chain Certification Standard, Module E – CPO Mill: Module E Mass Balance November 2011.
1.3
Scope of certification
The scope of certification is the CPO production from one (1) Palm Oil Mill and FFB supply bases comprising three (3) Estates owned by PT. SMART Tbk., PT. Tapian Nadenggan and PT. Sinar Kencana Inti Perkasa and one (1) “Gajah Mada” Cooperative as full managed plasma (managed by PT. Sinar Kencana Inti Perkasa). Batu Ampar Mill PT. SMART Tbk. Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Production (annual MT CPO): CPO: 45,072 MT in 2011, PK: 10,000 MT in 2011
Batu Ampar Estate PT. Tapian Nadenggan (PT. SMART Subsidiary) Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Batu Mulia Estate PT. SMART Tbk. Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia Sungai Panci Estate PT. Sinar Kencana Inti Perkasa Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia
Sungai Panci Plasma PT. Sinar Kencana Inti Perkasa Kecamatan Kelumpang Hilir, Kabupaten Kotabaru, South Kalimantan, Indonesia
1.4
Location of mill and estates
PT. SMART Tbk. mill and estates are located in South Kalimantan Province. The geographical coordinate of the mill and estates are shown on Table 1.
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Audit Report Table 1: Mill and Estates GPS Locations MILL AND ESTATE BAMM (Batu Ampar Mill)
EASTING
NORTHING
116°01'19"
3°11'53"
BAME (Batu Ampar Estate)
116 01'28''
3o14'07''
BMLE (Batu Mulia Estate)
116o06'17''
3o11'55''
SPNE (Sinar Panci Estate)
116o01'32''
3o09'16''
SPNA (Sinar Panci Plasma)
115o59'55''
3o09'44''
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o
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Audit Report Figure 1 Map of Mill and Estates Location
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Audit Report 1.5
Description of supply base
The FFB is sourced from three (3) Estate owned by PT. SMART Tbk., PT. Tapian Nadenggan and PT. Sinar Kencana Inti Perkasa, one (1) “Gajah Mada” Cooperative as full managed plasma (managed by PT. Sinar Kencana Inti Perkasa) which are audited during this audit. The FFB is also sourced from the other organisation and small holders which have not been audited. The areas and FFB production of the plantations are shown on Table 2. Table 2: FFB Production of the supply base ESTATE
TOTAL AREA (HA)
PLANTED AREA (HA)
FFB (TON/YEAR)
BAME
4,571.35
4,019.66
76,670.00
BMLE
2,929.04
2,683.19
46,538.00
SPNE
3,973.24
3,719.82
75,455.00
SPNA
3,822.17
3,259.29
67,486.00
Source: Data from PT. SMART Tbk. in March 2012
1.6
Date of plantings Table 3: Age Profiles of Planted Palms
YEAR
BAME (HA)
BMLE (HA)
SPNE (HA)
1991 1992 1993 Total Old Mature >18 years 1994 1996 1997 1998 1999 2000 2001 2005 Total Prime Mature (7-18 years) 2006
SPNA (HA)
499.39
SUM (HA)
% OF PLANTE D AREA 3.65
1,721.56
297.59 1,585.42
1,671.46 738.28
499.39 1,969.05 4,045.26
1,721.56
1,883.01
2,909.13
6,513.70
47.61
501.84 163.07
57.60
599.64 463.06 85.48
559.44 163.07 1,280.82 1,678.21 522.78 689.21 463.06 1,134.13
4.09 1.19 9.36 12.27 3.82 5.04 3.38 8.29
3,259.29
6,490.72
47.43
420.86
3.08
538.30 214.79
94.83 522.78
742.52 1,368.59
89.57 1,002.95 1,620.56
45.70 800.18
810.69
420.86
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14.39 29.57
Audit Report YEAR
BAME (HA)
2007 Total Young Mature (3-6 years) Total Planted Area
BMLE (HA)
SPNE (HA)
SPNA (HA)
256.68 677.54
4,019.66
2,683.19
3,719.82
3,259.29
256.68 677.54
% OF PLANTE D AREA 1.88 3.08
13,681.96
100
SUM (HA)
Source: Data from PT. SMART Tbk. in April 2012
1.7
Other certificates held Table 4: Certificates Held by Mill and Estates MILL/ESTATE
OTHER CERTIFICATION HELD
BAMM
ISO 14001:2004 by SGS, Certificate number: ID07/71712, Expire date: 23 April 2013
BAME
Nil
BMLE
Nil
SPNE
Nil
SPNA
Nil
Source: QEF15RSPO.02 – 21 November 2011
1.8
Organizational information/contact person
PT. SMART Tbk Plaza BII, Tower 2, 10th floor Jl. MH. Thamrin No. 51 Kav. 22, Jakarta 10350 Phone : (+62-21) 3181388 Fax : (62-21) 3181389 CP: Mr. Ismu Zulfikar Head of Environmental Department Email:
[email protected]
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Audit Report 1.9
Time bound plan for other management units
PT. SMART Tbk is committed to RSPO certification of all its Management Units located in North Sumatera, Jambi, Bangka, South Kalimantan, Central Kalimantan, and East Kalimantan. Time bound plan has been developed to achieve the RSPO certification for all its Management Units by 2015. The time bound plan is realistic and challenging. The plan is detailed on Table 5. The time bound plan was updated on January 16, 2012. Several Management Units was delayed to obtain RSPO certification due to RSPO Grievance Panel Process. Joint statement by GAR, SMART, IMT and RSPO Grievance Panel issued 28 October 28, 2010 mentioned that until 31 March 2011, RSPO will postpone approval of SMART and IMT certification. SAI Global accepted the reason of the delay.
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Audit Report Table 5: RSPO Certification Time Bound Plan
NO
NAME OF MILL
1
Batu Ampar Mill
2
Tanah Laut Mill
3
Langga Payung Mill
4
Hanau Mill
5
Leidong West Mill
6
Semilar Mill
7
Jak Luay Mill
8
Gunung Kombeng Mill/Muara Wahau Mill
9
Jelatang Mill
20
Pelakar Mill
11
Langling Mill
12
Sungai Bengkal Mill
SUPPLY BASE
Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate Sungai Panci KKPA Tanah Laut Estate Kintapura Estate Langga Payung Estate Paya Baung Estate Normak Estate Hanau Estate Tasik Mas Estate Tanjung Paring Estate Langandang Estate Medang Sari Estate Leidong West Utara Estate Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKPA Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA Gunung Kombeng Estate Gunung Kombeng KKPA Muara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA Batang Merangin Estate Kubang Ujo Plasma Pamenang Plasma Pelakar Estate Tiga Serumpun Estate Bukit Bungkul KKPA Bangko Inti Estate Bangko Plasma Sungai Bengkal Estate Batang Gading Estate Sungai Bengkal KKPA Batang Gading KKPA Kilis Estate
QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
COMPANY OF MILL
LOCATION
ORI RSPO TIME BOUND 2010
REVISED RSPO TIME BOUND 2012
PT. SMART Tbk.
South Kalimantan
PT. SMART Tbk. PT. Tapian Nadenggan
South Kalimantan North Sumatera
2010
2012
2010
2012
PT. Tapian Nadenggan
Central Kalimantan
2010
2012
PT. Leidong West Indonesia
Bangka
2011
2012
PT. Tapian Nadenggan
Central Kalimantan
2012
2012
PT. Tapian Nadenggan
East Kalimantan
2012
2013
PT. Kresna Duta Agroindo
East Kalimantan
2012
2012
PT. Kresna Duta Agroindo
Jambi
2012
2013
PT. Kresna Duta Agroindo PT. Kresna Duta Agroindo PT. Satya Kisma Usaha
Jambi
2012
2013
Jambi
2012
2013
Jambi
2012
2012
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Audit Report 13
Bukit Kapur Mill
Kilis KKPA Sungai Cantung Estate Bukit Kapur Estate
PT. SMART Tbk.
South Kalimantan
2014
2015
Source: Data from PT. SMART Tbk. in February 2012
1.10
Area of plantation
The areas details for organisation owned estates are shown on Table 6.
Table 6: Estates and Area Planted ESTATE
MATURE (HA)
IMMATURE (HA)
BAME
4,019.66
0
BMLE
2,683.19
0
SPNE
3,719.82
0
SPNA
3,259.29
0
Source: Data from PT. SMART Tbk. in April 2012
Table 7: Plantation Hectare Statement AREA
HECTARES
Mature area
13,681.96
Immature area
0
Total area planted
13,681.96
Emplacement and Mill
95.38
Nursery
0
Effluent, Isolation Drain
323.35
HCV
836.02
Road
537.05
Runway
3.69
Other area
582.62
Total leased area
15,295.80
Source: Data from PT. SMART Tbk. in April 2012
1.11
Approximate tonnages offered for certification (CPO and PK)
The approximate tonnages certified are: CPO/year: 56,001.00 ton, PK/year: 13,511.00 ton QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report 1.12
Partial Certification Requirements
The British Standards Institution (BSI) has been engaged to verify the SOP and implementation against the National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production, Republic of Indonesia, May 2008 across all of SMART operation, i.e. PT. SMART Tbk. in South Kalimantan (15-16 June 2012), PT. Leidong West Indonesia in Bangka (3-6 May 2011), PT. Tapian Nadenggan in Central and East Kalimantan (19-23 December 2011), PT. Kresna Duta Agroindo in East Kalimantan and Jambi (8-12 August 2011 and 19-21 July 2011) and PT. Satya Kisma Usaha in Jambi (28 March – 1 April 2011). The verification was conducted in 2011. Results are given below. The assessment team consists of some experts among other: Technical Expert of Ecology and Wildlife Management, Technical Expert of Social Aspects and Technical Expert of Environmental Management System. SOPs and documents which were verified during the assessment among others: AMDAL (Environmental and Social Impact Analysis), report of RKL RPL implementation, SOP of HCV Assessment, SOP of Peat Conservation, SOP of Community Engagement, SOP of New Planting Procedure. Some of the verification reports were issued in February and March 2012. According to verification report: No replacement of primary forest or any area identified as containing HCVs or required to maintain or enhance HCVs in accordance with RSPO criterion 7.3. There were new planting in several area and new planting procedure has been implemented. Land disputes were found in PT. Tapian Nadenggan and PT. Kresna Duta Agroindo. These cases have been followed up and closed out. No labour dispute. Minor nonconformities were found in legal compliance, e.g. environmental monitoring was not conducted inline with RKL RPL document in PT. Tapian Nadenggan and PT. Kresna Duta Agroindo. Action plan has been established and action taken is verified during internal audit. Action plan to all nonconformities has been established and communicated to each organisation. Peat Restoration Team (PRT) for the deep peat restoration project led by the Bogor Agricultural Institute (IPB) and assisted by the Indonesian Center for Agriculture Land Resource Research and Development (Balai Besar Penelitian dan Pengembangan Sumberdaya Lahan Pertanian) was engaged. The team is expected to identify mitigation plan and mitigation action on oil palm planting activities in peat lands of Central and West Kalimantan. The project has been finished. The report “Mitigation Plan and Mitigation Action on Oil Palm Plantation in Peat Lands of Central and West Kalimantan” was finished in April 2011. The report was submitted to RSPO Panel on May 31, 2011 and has not been published by the organisation. Tanjung Pura University (UNTAN), Faculty of Agriculture, West Kalimantan and Palangka Raya University, Faculty of Agriculture, has been engaged to conduct the social research. The research study was conducted in 2011 to 8 organisations across of GAR and SMART operation. Report of research study was finished on June 28, 2011. The report concluded that: Criterion 2.3: Land acquisition did not diminish the legal rights or customary rights of other users without their free, prior and informed consent. However, the negotiation process was not well recorded in writing. Criterion 7.3: Land preparation for plantation development was not carried out in primary forest but in secondary forest, degraded land, shrub land, former logging sites or forest concessions, land previously cleared by natural fire and land left by shifting cultivators. Criterion 7.5: New plantings were conducted with prior approval from the local people. Criterion 7.6: Identification and evaluation of land ownership based on legal and traditional land rights were already conducted. Compensation payment was discussed in negotiations between the organization and traditional land owners witnessed by local government representatives. The presence of the organization in the rural area creates positive impacts on surrounding areas, such as creating new jobs for the local community, increasing the local community‟s income, increasing the circulation of cash in the rural market and stimulating the growth of businesses. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report
CSR: The organization had conducted various activities with their CSR projects in the sectors of infrastructure, health, education, disaster relief and local economy empowerment. The report of research study is published in GAR website. PT. SMART Tbk. and Faculty of Forestry, IPB performed historical HCV assessment in 2011. The report was submitted to RSPO Panel on June 28, 2011 and has not been published by the organisation. GAR and PT. SMART Tbk. established Social and Community Engagement Policy on November 10, 2011. The policy was established to ensure that operations of palm oil can improve the living of the communities in its operational area. The policy covers commitment from FPIC to indigenous and local communities, responsible for complaints handling, to attain a responsible resolution of any conflicts, an open and constructive role of local, national and international stakeholders, empowerment of the community development program, respect for human rights, recognize, respect and strengthen worker‟s rights, comply with all relevant laws and regulations and principles and criteria of international recognise certification. The organisation committed to use multistakeholder approach in developing and in the implementation of Social and Community Engagement Policy. SAI Global concluded that partial certification requirements have been fulfilled. 1.13
Date of issue of certificate
The scope of certification is the CPO production from one (1) palm oil mill and three (3) Estates owned by PT. SMART Tbk., PT. Tapian Nadenggan and PT. Sinar Kencana Inti Perkasa and one (1) small holder. Date of issue of certificate will be the date on approval of this Assessment Report by the RSPO Secretariat.
2.0
AUDIT PROCESS
2.1
Certification body
PT. SAI Global Indonesia Graha Iskandarsyah, 4th floor Jl. Iskandarsyah Raya No. 66 C Kebayoran Baru, Jakarta 12160, Indonesia Phone : +62 21 720 6186, 720 6460 Fax : +62 21 720 6207 Contact person : Mr. Joko Prayitno Certification Manager Email :
[email protected] SAI Global is one of the world‟s leading business providers of independent assurance. SAI Global provides organisations around the world with information services and solutions for managing risk, achieving compliance and driving business improvement. We provide aggregated access services to Standards, Handbooks, Legislative and Property publications; we audit, certify and register your product, system or supply chain; we facilitate good governance and awareness of compliance, ethics and policy issues and provide training and improvement solutions to help individuals and organisations succeed. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report The SAI Global business is driven by two equally important client needs - the mandated need for organisations to conform to regulations, standards and legislation in all their locations, and the operational need for organisations to improve business processes and procedures as well as corporate culture. As we are a global company, we can meet these needs for any client - those operating within one country's borders and in one language or those operating across borders and in many languages. There are three business units/divisions within SAI Global namely the Information Services Division, the Compliance Division, and the Assurance Division. The Assurance Division helps organisations manage risk, achieve process or product certification and drive improvement by providing training, registration audits and supplier management programs that can improve business performance. We provide independent audits, assessments and certification of your products or business processes to ensure they comply with industry standards or customer specific requirements. We understand how compliance with those standards can improve the efficiency, economy and profitability of your operation. With auditing and assessment staff located around the world, our clients include large global corporations as well as single site organisations.
2.2
Audit methodology
SAI Global performed a pre-audit to RSPO Principles and Criteria on 15 to 16 December 2010 to review PT. SMART Tbk.‟s RSPO system, confirm the scope for certification, determine organisation‟s preparedness for Stage 2 (Certification) Audit; review the adequacy of the SAI Global audit program and resources for Stage 2 (Certification) Audit including confirming and preparing the draft audit plan. The Certification Audit was performed on 10 to 14 January 2012. The audit programme was included in the body of report. The audit methodology for collection of objective evidences is site inspection, documentation and record review and interview with staffs, workers, and other stakeholders. Objective evidences from documentation/record review in one area may also be cross checked with other objective evidences in other areas and with the evidence of implementation on site during the audit. Inputs from stakeholders via letter, email, or other communication media were also considered for this certification audit. Stakeholder consultation is described in section 2.4.
2.3
Qualification of the lead auditor and audit team member
Ria Gloria – Lead Auditor Ria Gloria graduated with Bachelor of Chemical Engineering degree from Bandung Institute of Technology in 1994. She has working experience as Environmental Consultant for many years. She has completed ISO 14001 (1995), ISO 9001 (2004), and RSPO (2009) lead auditor training courses, and SCCS (2010). For the last 8 years she has been involved in quality (ISO 9001) and environmental (ISO 14001) management system audits for very broad industrial and in the palm oil sector since 2003 for several plantations and mills. She has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009). Sigit Yulianto – Audit Team Member Sigit Yulianto graduated with Bachelor of Metallurgical Engineering degree from University of Indonesia in 1993 and Master of Occupational Health and Safety from the same university in 2006. He has working experience in the manufacturing industry for many years. He also certified OHS Expert in Indonesia. For the last 14 years he has been involved in quality (ISO 9001) and QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report occupational health and safety management system audits for very broad industrial and service sectors including in the palm oil sector since 2008 for several plantations and mills. He has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009). Fadjar Deniswara – Audit Team Member He graduated with Bachelor of Industrial Engineering degree from National Institute of Technology in Malang. He is a Lead Quality Auditor for ISO 9001:2008 with SAI Global. He has an experience for more than 11 years in auditing. He has an experience in audit with company with labour intensive type (e.g. textile, garments, shoes, etc). He has also qualified as SA 8000 auditor. He has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009).
Irawan Y Bawono– Audit Team Member Irawan Y Bawono graduated with Bachelor of Food Technology from Gadjah Mada University on 1992. He has completed ISO 9001 (2008), ISO 22000 (2005) lead auditor training courses, RSPO auditor (2008), and SCCS (2010). For the last 5 years he has been involved in quality (ISO 9001) and food safety management system (ISO 22000 and HACCP) audits including in the palm oil sector since 2007 for several plantations and mills. He has received training for good agricultural practices including integrated pest management and high conservation value (2008-2009). Resit Sözer – Technical Specialist for HCV Issues Dutch nationality Biologist, since 1994 active in Indonesia in the field of Endangered Species research (Bornean Peacock Pheasant, Javan Hawk-eagle), Endangered Species surveys (Sumatran Rhino, Orang Utan, Javan Tiger), habitats surveys (conservation areas, HPH, oil palm plantations), wildlife trade surveys, wild animal rescue, reintroduction and restocking of wildlife, endangered species breeding programs (Bornean Peacock Pheasant, Javan Warty Pig, Blackwinged Starling), scientific publications and community involvement.
2.4
Stakeholder consultation
Stakeholder consultation was performed to internal and external stakeholders. Internal stakeholders included staffs and workers. External stakeholders were notified by placing an invitation to comment on the RSPO, PT. SMART Tbk. and SAI Global websites and sending an invitation letter to comment. Letters were also sent to external stakeholders to invite for comment or one on one interview. External stakeholders were selected by considering that they have an interest in the organisation activities, directly border with organisation, area which the workers live. External stakeholders included governments, and civil societies. Comment from Greenomics was submitted to SAI by mail on 16 January 2012. The comment has been taken into account during audit at the relevant criteria and indicator. One on one interview with stakeholders was conducted during audit, to verify compliance against relevant criteria and indicator related to land status and conflict, environmental, social aspect and HCV. Serongga Village has been chosen to represent societies affected by BAMM and BAME, Langadai Village has been chosen to represent societies affected by SPNE and SPNA, and Pantai Village has been chosen to represent societies affected by BMLE. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Table 8: List of internal and external stakeholder STAKEHOLDERS Internal stakeholder Head of SPM Head of Gender Committee Representative of worker External Stakeholder Environmental Agency of Kotabaru District Plantation Agency of Kotabaru Distric Social, Labour and Transmigration Agency of Kotabaru Distric Police Office of Kotabaru District PT. Jamsostek (Persero) Camat Simpang Empat Camat Kelumpang Hilir Camat Kelumpang Selatan Kepala Desa Pantai Kepala Desa Langadai Kepala Desa Pulau Panci Kepala Desa Sei Kupang Kepala Desa Serongga Kepala Desa Batu Ampar Kepala Desa Tegal Rejo Youth leader of Desa Serongga MUI Chairman of Desa Serongga Youth leader of Desa Langadai
METHOD OF CONSULTATION One on one interview One on one interview One on one interview One on one interview Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment and one on one interview Sending an invitation letter to comment and one on one interview Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment Sending an invitation letter to comment One on one interview One on one interview One on one interview
Comment from Department of Labour and Transmigration of Kota Baru District was submitted to SAI by mail #566/069/Disosnakertrans dated on 12 January 2012. This letter was received by SAIG Office on 17 January 2012, after closing meeting in Batu Ampar and Mill Estate. So this is not asked at the time of public consultation. SAIG requested SMART to follow up charges from Department of Labor and Transmigration of Kota Baru District. See appendix C for detail of stakeholder issues and comment. 2.5
Date of next surveillance visit
The next surveillance visit will be conducted 9 to 10 months after approval of this report by RSPO QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report and issuance of certificate by SAI Global.
3.0
AUDIT FINDINGS
3.1
Audit findings
PRINCIPLES 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. Criterion 1.1 Indicator Major 1 Oil palm growers and miller have provided sufficient information to relevant stakeholders. Information covers for CSR (corporate social responsible) activities, report of Social Impact Assessment, workers data, RKL and RPL report. Provision of information provided to stakeholders was used in appropriate language and it was understood by the stakeholders. Criterion 1.1 Indicator Major 2 All information requests from stakeholders have been collected and followed up in timely manner by the Growers and Miller, including verified document request from Jamsostek (Social Security) Office, Man Power Office and assistance request from communities. Criterion 1.1. Indicator Major 3 Retention time of recording request and response information has been determined at 5 years and is already determined in SOP/SPO/SMART/LH-02 dated 1 July 2010 - Control of the document.
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. Criterion 1.2 Indicator Major 1 Management documents are publicly available, such as: HGU (Land Use Title), AMDAL (Environmental and Social Impact Analysis), Occupational Health and Safety Management Plan and CSR (Corporate Social Responsibility) Program. Organisation documents are generally available by the organisation and available to the stakeholders by request. Several documents have been requested by?? stakeholders such as the number of workers by?? the Department of Labor and Social Security. The documented procedure SOP/SPO/SMART/LH-01 dated 1 July 2010 was established, it‟s mentioning the process and responsibilities and authorities in regard to responding the request on information from the public. The coverage of request on information as stated in the procedure including information on legal documents, environmental documents, social activities documents, occupational health and safety programme documents and continual improvement documents. The form to record the request on information from public has been established as attached in the procedure. This form is also intended to record the company‟s response on the request as well. Confidential information request such as financial data, cost and revenue was described in the procedure. Top Management in Head Office Jakarta will review each request whether it could be followed up or not. Up to the time of this audit, there was no request on information or confidential information from stakeholders, as reported. Criterion 1.2 Indicator Major 2 SOP/SPO/SMART/LH-02 dated 01 July 2011 described that retention time of such records QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report including record of information requests and its responses is 5 years.
PRINCIPLES 2: COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS
Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations. Criterion 2.1 Indicator Major 1 Evidence of compliance with applicable local, national and ratified international laws and regulations of BAMM, BAME, BMLE, SPNE and SPNA stated in ANNEX 1 of National Interpretation of RSPO Principles and criteria for Sustainable Palm Oil Production have been provided, including valid permits (hazardous waste temporary storage and land application permit), provision of required infrastructure (waste water treatment ponds, hazardous waste temporary storage), availability of MSDS, periodic environmental parameter monitoring (stationary emission, ambient emission and ambient noise, moving source emission, waste water discharge quality and surface water quality), pesticide management, system of plant cultivation, oil palm plantation, list of flora and fauna protected, management of guard area, minimum wage, labour law, occupational safety, employee social benefit. Criterion 2.1 Indicator Major 2 Updating of law and regulations change activities were well documented and last update was performed in July 2011 for mill and all estates. Register of contact for assessing and updating information of all applicable local, national and ratified international laws and regulations has been provided. Regular contact to government institution is conducted regularly. Criterion 2.1 Indicator Minor 1 Information on applicable legal and other requirements have been reviewed and summarised. Applicable legal and other requirements were registered and dated on July 20, 2011 Criterion 2.1 Indicator Minor 2 Evidence of compliance with applicable laws and regulations which concern the operation of BAMM, BAME, BMLE, SPNE and SPNA has been evaluated internally as required by the procedure SOP/SPO/SMART/LH-03 dated 1 July 2010. The procedure also describes the mechanism to ensure that information of applicable environmental legal and other requirements were accessed, reviewed and applied. The compliance with applicable local, national and ratified international laws and regulations was respectively performed by related personnel, e.g. D&L, OHS Officer, HCV Officer, RSPO Officer of mill and estate. Evaluation of compliance was documented within “Evaluation of Compliance with Laws and Regulations”. Last evaluation of compliance was performed on July 20, 2011. The accuracy of evaluation of compliance results and associated evidences of compliance were examined during this audit and in general was found sufficient. There were some gaps identified for the permit of surface water utilisation against Act #7/2004. The gap was already completed with action plan that described action to be taken, delegation of responsibility and time frame. Permit of surface water utilisation was applied to Mining and Energy Official of Kota Baru District in April 2011. The permit is still in process. Assistant of Estate and Document Controller are responsible to review most suitable application of the requirements. Minor nonconformity against criterion 2.1 BAME, SPNE Several containers of hazardous material or waste were not completed with label and or hazard symbol, e.g. container of pesticide solution stored in Division Warehouse (BAME), container of diesel fuel in diesel generator set room in Division Office and workshop (SPNE and BAME), container of medical waste in Clinic (SPNE). Opportunity for improvement QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report SPNA Workers at the KUD (Village Unit Cooperatives) Gadjah Mada has committed to comply with all the requirements of the PKB (Joint Work Agreement), but it is needs to be considered, to be approved by the Department of Labor.
Criterion 2.2 The right to use land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights. Criterion 2.2 Indicator Major 1 The availability of legal documents for use of land and operation of estate and mill were verified. Evidences were mentioned as follows: BAME and BMLE: Site permit #SK.02/PL.84/1989/AGR.43, dated 15 March 1989 +/1 10,000 Ha, permit was given to PT. Inti Gerak Maju. Site permit No. SK.02/PL.61/7 Forest land release permit (Izin pelepasan kawasan hutan) No. 151/Kpts-11/1993, +/4,789 Ha, dated 18 April 1993 and No. 115/Kpts-11/1996, +/- 3,080Ha, dated 27 March 1996. A total is +/- 7,799 Ha. HGU #23 dated 28 July 2000, 4719 Ha and HGU #24, dated 28 July 2000, 2,929.037 Ha, permit was given to PT. Inti Gerak Maju. PT. Inti Gerak Maju was taken over by PT. Tapian Nadenggan in 2007, based on Notary Letter, Suhartini SH, dated 20 April 2007. Plantation permit previously was given to PT Inti Gerak Maju No. 464/Menhutbun-VII/2000 total 7,648.71 Ha and transferred to PT Tapian Nadenggan, dated 11 October 2011. SPNE: Site permit: No. SK.04/PI-84/1989/AGR-43 issued by Governor of South Kalimantan, to PT. Sinar Kencana Inti Perkasa, dated 11 April 1989 for a total of +/- 14,000 Ha. Forest land release permit (Izin pelepasan kawasan hutan) No. 326/Kpts-11/1994 dated 5 August 1994 issued by Minister of Forestry of the Republic of Indonesia for a total of +/13,358.83 Ha. Plantation permit No. 465/Menhutbun-VII/2000 for a total of 14,972.39 Ha to PT. Sinar Kencana Inti Perkasa. HGU #01, to PT. Sinar Kencana Inti Perkasa, dated 23 September 1996 for a total of 5,566.0 Ha. SPNA: SPNA consists of 4 villages in Kotabaru Distric (Kabupaten Kotabaru) i.e. Mandala, Sukamaju, Telagasari and Plajau Baru. First stage permit issued by Bupati Kotabaru No. 6/2000, in regard decision on location for land consolidation in Kotabaru District (penetapan lokasi pelaksanaan konsolidasi tanah di Kabupaten Kotabaru). This permit was strengthened with the permits from BPN (National Land Agency) in regard decision approval on state land for agricultural land consolidation for respective village and then finally by issuance of land own title (SHM) for each farmer. The land own certificates were sighted during this audit and all evidence except for land within Plajau Baru Village. For Plajau Baru village, the permit was issued by BPN #32-XI-2002 in regard decision approval on state land for agricultural land consolidation, in Plajau Baru village +/- 625 Ha was sighted. This permit is under process to increase to land own certificate (SHM) for each farmer. BAMM: Site permit: issued by Bupati Kotabaru #04/1999 to PT. SMART Tbk. Building use title issued by BPN #03 and #04, dated 23 October 2000 PT. SMART Tbk Palm oil mill building title issued by Bupati Kotabaru, dated 05 February 2000 PT. SMART Tbk QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 2.2 Indicator Major 2 Legal boundaries are indicated with the marking on the map as attached in each land use title permit and land own title permit. Marking of legal boundaries were verified during this audit and it were evidence for all estates and mill except for SPNA, see finding below. Regular maintenance of marking of legal boundaries were also performed, evidences were verified. Criterion 2.2 Indicator Major 3 It was confirmed from the public consultation that there were no land conflict at all land within estate and mill. Criterion 2.2 Indicator Minor 1 Evidences of land acquisition before 2000 were sampled and verified during this audit; it was sighted that land acquisition was completed with documents approved by two parties with witnessed by local authority and/or community leader. No land acquisition after 2005. Criterion 2.2 Indicator Minor 2 A mechanism to resolve conflict which is accepted by all parties was described under criterion 6.3 and 6.4. Major nonconformity against criterion 2.2 indicator 2 (Refer to NCR 2012-01): SPNA consists of 4 villages i.e. Telaga Sari, Mandala, Sukamaju and Plajau Baru. Legal boundaries for 3 villages i.e. "Telaga Sari, Mandala dan Sukamaju" could not been seen during the audit as stated/required by land own title certificates. Major nonconformity closed: Based on the map and pictures, it was verified the marking of legal boundaries for SPNA has been provided. The maintenance programme to legal boundaries was also sighted. (22/02/2012). See attached Non-conformance report NCR 2012-01.
Criterion 2.3 Use of land for oil palm does not diminish the legal rights, or customary rights, of the other users, without their free, prior and informed consent. It was confirmed during public consultation that no land within mill and estates are encumbered by legal or customary rights.
PRINCIPLES 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. Criterion 3.1 Indicator Major 1 Management plan for period 2010-2014 was established in order to achieve long-term economic and financial viability. This plan was in line with the certification scope i.e. covering all supply bases signed off by CEO PT. SMART Tbk. The parameters stated in the management plan includes revenue and profit, crop projection (FFB yield trends), CPO and PK extraction rate; estimated estate cost (upkeep, manuring, harvesting, transport, overhead and depreciation) as well as mill cost (processing, repair and maintenance, overhead and depreciation). This plan was established by considering economical parameters/assumptions such as inflation, US Dollar and Indonesian Rupiah (IDR) rate, CPO price, and FFB price. The management plan is reviewed annually and revised as appropriate; based on the achievement against the plan and other parameters may change. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 3.1 Indicator Minor 1 The replanting plan 2010-2020 has also been established and sighted during this audit. The replanting plan was in line with scope of certification i.e. covering all supply bases. This plan was also reviewed annually and updated as necessary.
PRINCIPLES 4: USE OF APPROPRIATE BEST PRACTICES BY GROWERS AND MILLERS
Criterion 4.1 Operating procedures are appropriately documented and consistently implemented and monitored. Criterion 4.1 Indicator Major 1 Standard Operating Procedures for Estates were developed in Management Committee Agronomy and Research (MCAR) Book SMA/MCAR/06/05-07 dated 1 May 2007. The SOPs consist of procedures for several processes including land clearing, preparation before planting, fertilising, road maintenance, peat land management, drainage system, mature and immature upkeep, integrated pest management and harvesting. Other than there were also other procedures, e.g. IK/SKIP-SPNA/PNN/01 for harvesting, IK/SKIP-SPNA/TM/05 for fertilising. Criterion 4.1 Indicator Major 2 BAMM has developed best practice SOP for all of its operations from receiving of FFB through production and processing and despatch of the CPO and palm kernel. SOP describes quality control including its reporting from reception of fresh fruit bunch up to dispatch of CPO and palm kernel. The SOP includes reference to the corporate best practice SOP. Work Instructions in the local language has been developed and are posted at work stations in the mill. The company has well implemented internal monitoring processes that check and report on the implementation of the Management Guidelines. These include independent checks of the mill by the corporate internal audit. Criterion 4.1 Indicator Minor 1 Operation is checked and monitored regularly. Mill Advisory Audit (MAA) and Agronomy Advisory Audit (AAA) are performed twice a year. The findings including its follow up were well documented. The mill is ISO 14001:2004 certified, a regular environmental management system audit have been taken. Last audit by certification body was performed on February 23-24, 2011. Findings were followed up. Criterion 4.1 Indicator Minor 2 Estates activities are programmed in Division Work Program annually. Activities program are such as pest and diseases detection and census, weed controlling, maintenance of beneficial plant, fertilising, spraying and road maintenance. Site observation was performed during audit to some activities: spraying, land application and harvesting. Activities have been performed at defined interval and records of activities were sighted, e.g. BKM (Log book of group leader activity). FFB that was processed by BAMM is received from own Estate (BAME, BMLE and SPNE), smallholders (SPNA) and out growers. The third party was not included in the scope of certification. All of the FFBs are processed in same facility (BAMM). See the capacity on scope certification above. Criterion 4.1 Indicator Minor 2 The mill maintains records of monitoring reports, such as shift log sheets with records of operating conditions at each of the mill work stations. A review operation daily report (November 2011 – January 2012) and site observation found that in general the documented procedures described QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report above has been consistently implemented and monitored. CPO and palm kernel are delivered to “Tarjun” bulking terminal. A review to January 2012 delivery records found that it has been conducted according to defined arrangement. Minor nonconformity against criterion 4.1 BAMM It was found that thermometer on screw press #2A and kernel silo #4 was not functioned. Calibration of laboratory balance (Sartorius & Ohaus) was not done using calibrated weight scale. Oven (Memmert) used for moisture analysis has not been calibrated. It was indicated that “Clarification Process (Clarification is a process station to purify the crude CPO. The step is between crude oil tank and vacuum dryer)” daily report at the day audit was not made in proper. The report was not made yet up to the time of audit (11.00). The process has started on 09.00. Opportunity for improvement BAMM Consider to identify and calibrate the measurement devices used in mill; thermometer on screw press, pressure gauge on vacuum drier and thermometer on kernel silo.
Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. Criterion 4.2 Indicator Minor 1 Soil and leaf sampling is analysed regularly by SMARTRI to determine the nutritional status of soil, to assist and to be guided in the preparation of annual fertilising programme recommendation. Soil is analysed when the age of the plant is 3, 5, 8 years and continued with age of the plant is added by 5 years. Leaf is analysed annually. Soil and leaf sampling was taken from each division.
BAME: The soil analysis was in January 2009 and 2010 to 444 samples. The leaf analysis was in February, March and April 2011. BMLE: The soil analysis was in September 2010 to 513 samples. The leaf analysis was in March 2011 to 60 samples. SPNE: The soil analysis was in January and November 2009 to 747 samples. The leaf analysis was in March, April and June 2011 to 85 samples SPNA: The soil analysis was not performed. The leaf analysis was in February, March, April 2011 to 54 sample
The soil analysis was not performed in SPNA. Based on letter from KUD Gajah Mada #035/KUD.GM/EXT/VIII/2010 on August 05, 2010, KUD Gajah Mada is not willing to follow soil analysis program because the cost of analysis was huge and SPNA area was still in one plot to SPNE therefore soil analysis result can refer to soil analysis of SPNE. Leaf and soil visual analysis was conducted by agronomy staff to identify leaf deficiency and drainage or pyrite problem.
Criterion 4.2 Indicator Minor 2 Fertilising programme was developed by SMARTRI for all Division of Estates based on the result of soil and leaf sampling analysis. Fertilising programme covers type of soil application, area and time of application, method of application and type and dosage of fertiliser. Fertilising is performed manually, mechanically using tractor or aerial using airplane. Aerial fertilising is performed in some area of BAME and BMLE and only for Urea, MOP and TSP. Aerial manuring was performed to QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report mineral soil, far from housing and village and no river. The memo with regards to aerial application mentions that fertilising is prohibited over a 5-palm wide buffer strip along the river and the main drain, swamp area. Procedure of aerial manuring was established in SOP/SMA/Pupuk pesawat on December 01, 2011. There was permit to operate airplane from Ministry of Transportation, Directorate General of Civil Aviation – Air Operator Certificate #AOC/137-001 dated 19 June 2011 and valid for three years. Result of fertilising was well recorded including date of application. It was noted that all of fertilising activity in 2011 has been applied. Result of aerial manuring was completed with map of airplane route to ensure that aerial manuring was not performed at housing, village and river. Based on sample map of airplane route there was no aerial manuring along the river. Empty fruit bunches (EFB) are applied as nutrients. EFB was applied based on the recommendation from SMARTRI in terms of quantity and location. EFB were applied in BMLE, BAME and SPNE by manually and mechanical using tractor. Realisation of EFB application was well recorded and good evidence of EFB application on site. Palm Oil Mill Effluent (POME) is applied in BAME where the mill is located. POME is also applied in SPNE. The POME was come from SKPM (Sungai Kupang Mill). POME was only applied in several blocks based on permit obtained by the organization from government which then being distributed to several ponds with depth 12.5 cm by pipeline. Flow rate of land application is 375 m3/ha/year with three time rotation to each block. Flow rate and quantity of POME and area applied are recorded daily. The organisation had permit of land application from local government to BAME #188.45/395/KUM/2011 and to SPNE #188.45/394/KUM/2011 and valid for 5 years.
Criterion 4.3 Practices minimise and control erosion and degradation of soils. Criterion 4.3 Indicator Minor 1 Maps of soils survey from Plantation Monitoring and Planning Division were available for all estates The maps included maps of fragile soils. BAME: Planted area has slopes 0-30o. 8.4% area is potential acid sulphate soils. BMLE: Planted area has slopes 0-15o. SPNE: Planted area has slopes 0-30o. 1.3% area is potential acid sulphate soils. SPNA: Planted area has slopes 0-22o. 3% of area has slopes 12-22o. Criterion 4.3 Indicator Minor 2 MCAR chapter 3 “Preparation before Planting” describes procedure for minimising and controlling erosion, peat land management. The organisation do not recommend plantings on slopes >40% or >22o. When the slope area was planted, system for planting on slopes area is provided by considering soil and climate specific through terracing, determining of base line, levelling of terrace, and determining of planting space. To minimise and control erosion in slope area, several practices have been implemented such as terracing and growing of legume cover crops . Criterion 4.3 Indicator Minor 3 Procedure for road maintenance is described in MCAR book chapter 4.5. Estates have established road maintenance programme for main road, collection road and access road by manual and mechanical maintenance. Road maintenance includes road hardening. Manual road maintenance programme was provided in Division Work Programme. Manual road maintenance was implemented based on Division Work Programme or road condition. Mechanical road maintenance uses heavy equipment – grader and the mechanical road maintenance programme was provided for all division. Manual and mechanical road maintenance realisation was recorded including complex area maintained, distance of road maintained and quantity of gravel. Criterion 4.3 Indicator Minor 4 There is not peat soil in BAME, BMLE, SPNE and SPNA QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 4.3 Indicator Minor 5 Acid sulphate soils were well managed. Fertilising to acid sulphate soils was performed twice in 1 st semester while fertilising to mineral soil was only performed once in 1 st semester. Dosage of EFB application in acid sulphate soils was twice more than mineral soils. The dosage of fertiliser and EFB was recommended by SMARTRI. Opportunity for improvement SPNA Realization of road maintenance has been recorded. It could be considered to improve the record by mentioning block area where road maintained not only mentioning complex area.
Criterion 4.4 Practices maintain the quality and availability of surface and ground water. Criterion 4.4 Indicator Major 1 MCAR book section 3.2 describe drainage system in Estates including requirement for making ditches of main drain, collection drain, and field drain, and its dimension. The MCAR also describe ditch maintenance. Procedure SOP/SPO/SMART/LH-06 and SOP/SPO/SMART/LH-07 was established for protection and management of riparian buffer zones at or before replanting. Procedure mentioned that in 50 m on the left and right sight of riparian buffer zones, Estates are prohibited to apply agrochemical, used manual fertilising and river bank was planted by erosion barrier crop (planting of reed grass). The organisation has policy “Memo #002/SMD Ops/I/2009” with regard to “Watershed Protection” from SMD Operation on 6 January 2009. The policy prohibits Estates for planting in 50 m on the left and right side of riparian buffer zones at or before replanting. Warning board was placed in regard to the prohibition of applying agrochemicals and aerial fertiliser in the buffer zone. Riparian buffers of small natural water courses are 50 metres wide on both sides of the rivers. In all estates, all individual oilpalm within the riparian buffer zone are individually marked with white paint as to avoid the use of agrochemicals in this particular zone. Program to manage wetland covered cleaning of main and collection drain and making of field drain. The program was provided in BMLE. Ditch is managed based on programme or ditch condition which is monitored regularly. Programme of ditch management using heavy equipment was established for BMLE includes cleaning of main and collection drain and making of field drain. Result of ditch management using heavy equipment was recorded. However program and realization of cleaning of main drain, collection drain and making of field drain was not clear which block area was cleaned. Criterion 4.4 Indicator Minor 1 Water management procedure is established to control water table within range of 50-70 cm below ground surface. This procedure was only implemented in BMLE. Water gates and dike which were made from sand sacks are constructed to maintain water level in main drain and collection drain. Water level is monitored by checking the level meter which was provided in main and secondary drain and piezometer which was provided in each block. Piezometer and level meter are checked weekly. Condition of water gate and dike (open or close) was according to water level result. Water supply for BAMM comes from Mekarsari River which one of the creeks of Serongga River. Water was collected in reservoir prior to be treated and used for process in POM and staff housing. Flow meters were installed to monitor water usage. The volume of water usage is monitored monthly both for process and domestic usage. Water consumption data period 2010 and 2011 was sighted. Since cooling water from turbine was reused for cooling process in the laboratory, water consumption could be saved around 450 M3 in 2011. The organisation also developed program in 2011 to reduce water consumption 5% for oil cooler turbine and 5% from 2011 budget for domestic usage. The achievement of these targets is being evaluated. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Surface water quality is monitored six monthly. Surface water quality was analysed both for upstream and downstream. There are also three “monitoring wells” which are monitored six monthly to ensure that POME used in land application did not affect the quality of ground water. Monitoring result of surface water quality of Mekar Sari River in BAME, Babi Tributary in SPNE, Landas River, Kalibening River and Amir Tributary in SPNA was reviewed for 2nd semester of 2010 and 1st semester of 2011 against Regulation of South Kalimantan Governor #5/2007 class II. Quality of downstream surface water exceeded Regulation of South Kalimantan Governor #5/2007 class II for parameter BOD, COD and pH in Mekar Sari River. Downstream surface water measured was mixed with other sources not only from POM. Monitoring result of “monitoring wells” was reviewed for 2nd semester of 2010 and 1st semester of 2011 against Degree of Health Ministry #416/MENKES/PER/IX/1990 in BAME and SPNE. pH of water from “monitoring wells” was not met the standard. It was noted that pH of initial environmental quality stated in the AMDAL document ground water was not met the standard. Criterion 4.4 Indicator Minor 2 POME is monitored monthly as required by permit of land application by external laboratory. The result of POME monitoring were reviewed including measurement of BOD for period 2 nd semester of 2010 to 1st semester of 2011. The Ministry of Environment #29/2003 and permit of land application required that BOD of POME flowed to land application is less than 5,000 mg/litre. The result of POME quality during this period was under 1,500 mg/litre. Criterion 4.4 Indicator Minor 3 Mill water use per tonne of FFB is monitored monthly. Actual mill water use was well recorded. Result of monitoring of mill water use per tonne of FFB was sighted for 2010 and 2011. Result in 2011 was decreased compared with 2010. Minor nonconformity against criterion 4.4 BMLE Program of cleaning of main drain, collection drain and making of field drain has been established. However program and realization of cleaning of main drain, collection drain and making of field drain was not clear as to which block area was cleaned. One of water management is using piezometer. Water level of piezometer is monitored daily. However action to be taken was not clear when the water level exceeded the standard. Opportunity for improvement BAMM Quality of surface water has been measured upstream and downstream. Quality of downstream surface water exceeded Regulation of South Kalimantan Governor #5/2007 class II for parameter BOD, COD and pH. Downstream surface water measured was mixed with other sources not only from mill. It could be considered to measure quality of river water after mill outlet without mixing with other sources.
Criterion 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Criterion 4.5 Indicator Major 1 Procedure for IPM to control pests, diseases, weeds and invasive introduced species has been established in MCAR chapter 6. This includes setting out of technique to be implemented, chemical to be used, locations to be applied, and time frame for implementation. Estates establish Division Work Program annually for IPM in each division. IPM programme includes detection and census of pest and diseases, weeds controlling, planting and upkeep of beneficial plant, use of pesticide and herbicide. IPM programme is performed based on determined frequency in a year. Criterion 4.5 Indicator Minor 1 QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report The implementation of IPM is monitored. Detection of caterpillar (Setora nitens, Darna trima, Metisa plana) is performed two monthly. When caterpillar was detected, census of caterpillar was performed. Census of rodent is conducted quarterly. Result of census determined further controlling. Controlling was performed when the caterpillar and rodent attack were higher than the critical point. Application of rodenticide during rodent attack was monitored. Beneficial plant upkeep was performed by cleaning from weeds. Chemical is used if attack is uncontrolled. Routine use of chemicals is programmed including area applied, their dosage, and rotation. Training of IPM was performed to BAME, BMLE, SPNE and SPNA employees on 30 December 2011. The workers who involved in IPM technique were attended the training. List of participant attendance was sighted. Criterion 4.5 Indicator Minor 1 Pesticide toxicity units (a.i. / LD 50 / FFB tonnage) were monitored to Paraquat dichloride, Isopropilamine glyphosate, Methyl metsulfuron and Fluroksifir. The records were provided for 2009 and 2011.
Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented. Criterion 4.6 Indicator Major 1 Agrochemicals used by the organisation has been approved and registered by Agriculture Department, e.g. Rolixone 276 SL – license RI 01030120062467 expired in 2016, Erkafuron 20 WG – license RI 01030120062405 expired on 23 June 2016, Ally 20 WP – license RI 837/4-2009/T expired on 30 April 2014, Starare 200EC – license RI-854/7-2009/T expired in 2014, Garlon – license RI 695/9-2008/T expired on 6 October 2013. It was noted that there were no agrochemicals being used which are not on this register during this audit. Agrochemicals use and their register number refer to Pesticide Commission Book “Buku Komisi Pestisida” year 2011. Criterion 4.6 Indicator Major 2 Agrochemicals use was well recorded in “Recapitulation of agrochemical use” including active ingredients used, area treated, amount applied per ha and number of applications. The documents were also recorded dosage of agrochemical use, target species. The records were sighted in all Estates. Criterion 4.6 Indicator Major 3 Several BKM of weed spraying using agrochemicals was sighted. It was noted that agrochemicals (Rolixone, Erkafuron) use were approved and registered agrochemical. Dosage of agrochemical use, target species was inline with MCAR section 6.3. BKM recorded target species, dosage and trained spraying officer. PPE used during spraying of pesticides are boots, apron, safety glass, respiratory mask and hand gloves. Agrochemicals have been applied by trained spraying officers who have received usage of limited pesticide training. Training was delivered by Pesticide Regulatory Commission of South Kalimantan on 2 February 2011, 30 July 2011 and 24 December 2011. Training record including training certificate was sighted for all sprayers in all estates. Training covered handling of concentrate chemical/agrochemical and spraying method including pesticide hazard. Agrochemicals are stored in the determined area separated from fertiliser and other chemicals. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Agrochemicals storage is provided in each Division of all Estates. Agrochemicals storage is locked areas with limited access. The storage is ventilated through cross flow ventilation. MSDS and hazard symbol label are provided nearby of agrochemicals. Emergency shower and eyewash are also provided to anticipate in case of an emergency of agrochemical handling. PPE for handling of chemicals are provided including boots, apron, safety glass, respiratory mask and hand gloves. The possible spill is managed. Secondary containment is provided around the chemical storage area. Spill kit was also provided in the area. Prior to be used in the field, agrochemical was diluted in designated area of mixing which was completed with roof, secondary containment and information of agrochemical hazard. Notice was displayed in the area treated with highly toxic pesticides, e.g. pesticides warehouse and facility to mix agrochemical. All application of agrochemicals were in accordance with the product label and storage instruction Criterion 4.6 Indicator Major 4 Handling of agrochemical containers was described in work instruction IK/SMART/LBH/01. All agrochemical containers were triple rinsed and disposed in the designated area and separated with organic and inorganic waste landfill. The agrochemical containers are disposed regularly. Records of chemical containers quantity disposed and photograph of disposal activity were evident. The other agrochemical containers were reused for agrochemical solution container during spraying. It was noted that PT. Sinar Kencana Inti Perkasa has agreement with supplier of agrochemical to manage (i.e. reuse) agrochemical container #028/RKN-PER/PER/VIII/2011 on August 01, 2011. So far the agreement has not been implemented yet since all containers were triple rinse and disposed by PT. Sinar Kencana Inti Perkasa. Criterion 4.6 Indicator Minor 1 The organisation did not use agrochemicals listed by the Stockholm Convention. Paraquat is still used in the estates. The organisation has policy “Memo #015/ADH3-INT/BNJO/03/2010” with regard to “Using of Paraquat Active Ingredient” from VPA. The policy covers paraquat use to a minimum, reduction of paraquat for circle, harvesting road, FFB collection area. Data of paraquat used has been provided since 2009. It was observed that paraquat use was increased in 2011 compared with 2010 even though paraquat use was still less than 2011 budget. Paraquat use was increased in 2011 due to weed of Stenoclaena Palustris was found and crash program was performed. Use of paraquat is targeted to be reduced in 2012. Criterion 4.6 Indicator Minor 2 The provisions for medical check up was described in the procedure SOP/SMK3/SMART/LH-23 which covers pre employment medical check up, regular medical check up and special medical check up. Implementation of medical check up was also verified during this audit; records December 2011. It was noted that medical check up has been implemented to workers who apply agrochemicals. Special medical check up for workers at estates have not been properly performed, see finding below. Criterion 4.6 Indicator Minor 3 Records showing that no work with pesticides for pregnant and breastfeeding women. List of female workers in all estates was available including who work in spraying and fertilizing activities. From the results of interviews with female workers, it was informed that they were not pregnant and breastfeeding women who work in spraying and fertilizing activities. Minor nonconformity against criterion 4.6 and 4.7 All Estates In general, medical check-up has been performed. However, several key parameters were not performed during medical check-up e.g. Rontgen and spyrometry test for employees exposed to chemical hazards (e.g. sprayer, chemical mixer and warehouse operator, fertilizer warehouse operator) and evaluation of musculoskeletal disorders (MSDs) to the employees with ergonomic exposed to ergonomic hazard (e.g. fertilizer warehouse QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report operator). Noted: a program to cover these parameters has been established and the results will be verified during next SAI Global audit.
Criterion 4.7 An occupational health and safety plan is documented, effectively communicated and implemented. Criterion 4.7 Indicator Major 1 It was a good system when auditor team provided an OHS induction by Safety Officer. With this induction, auditor team was made aware on the situation of mill and estates, the risk may exist, the basic OHS rules at mill and estate and emergency preparedness and response procedure, etc. Audit was then performed both on documentations/records and site visit/observations. Occupational health and safety policy has been established by respective Estate Managers and Mill Manager. The policy was displayed at strategic locations of estate and mill and communicated to employees including contractor workers. The occupational health and safety program 2011/2012 has also been established among other consist of training activity, safety committee meeting, medical check up, etc. Criterion 4.7 Indicator Major 2 The boilers, sterilisers, steam vessel, air compressor, generator set, electrical installation, heavy equipment, lightning arrestor have been inspected by local authority, the permits were evidence. Boiler operation monitored its parameters including pressure, temperature and water level, these parameters were recorded. Boiler was completed with automatic water feeding to prevent over heat and explosion in case of less water level. Records of internal inspection and maintenance to the equipment were sighted e.g. electrical inspection, compressor inspection and welding equipment and heavy equipment. There was also safety patrol/inspection activity conducted monthly to identify any unsafe acts and conditions; findings were followed up as appropriate; based on verified reports November and December 2011. Safety valve of air compressors at mill and estates were tested during this audit; it was noted that not all safety valves were working properly and then re-setting was done and after that, they can work properly, see finding below. The procedure for critical activities was established, SOP/SMK3/SMART/LH-21. It covers the OHS control for working in confined space (e.g. cleaning of storage tank), working at height and welding. Work permit system was established and implemented for these works. It was noted that measurement of adequacy of oxygen and availability of dangerous gas were required before entering confined space and it was mentioned in the work permit; the portable gas detector was sighted during this audit. It was also noted that working at more than 2 meters from land or platform has been classified as working at height; this was mentioned in the procedure. LOTO procedure has also been established and implemented especially intended for risk control of maintenance activities. Moving parts of machine/equipment generally has been covered, however see finding below, although it has been immediately rectified. Safety sign was provided to make workers aware on this hazard and risk. In general, electrical installation was improving from previous SAI Global audit even though some substandard electrical installation still found, see finding below. Electrical hazard symbol was provided at electrical panel. In general, housekeeping at mill and estate (office estate, storage, and workshop) was good. Access for workers to workplace in general was good e.g. stair was provided with hand rail and platform at height was provided with border to prevent fall risk. Vertical stair has been provided with cover as well, e.g. chimney vertical stairs at mill and water torn vertical stair at estates. Opportunity for improvement was given below in regard to the design of harvesting bridge. Noise level has been measured by third party and used as justification for using ear plug/muff (mill, generator set area). It was noted that noise level at mill and generator set area was generally QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report higher than TLV. Safety sign for using PPE was provided at these areas. It was noted here that workers appear have a good discipline in wearing this PPE. Chemical factors measurement at workplace has been measured for mill; but the sample taking location was not proper, not inside where the workers work; see finding below. Chemical factors measurements for estates have not been performed, while there several areas at estate with suspected have high chemical exposure, e.g. chemical store and fertilizer store-event tough mask already required to enter these areas; see finding below. The procedure for management of PPE has been established. The PPE for each activity has been established, e.g. working at mill, working at generator set, welder, working at laboratory, harvester, sprayer, fertilizer storage, chemical storage, etc. Observation during this audit generally concluded that PPE has been well provided and implemented. Workers were interview during this audit and generally they understood the risk of their work and the purpose of using PPE. The safety committee (P2K3) for estates and mill has been established and had approval from local authority. The chairman of safety committee is Estate Manager or Mill Manager. The secretary of safety committee is an OHS expert as required by local regulation; OHS expert has responsibilities and authorities as OHS Officer. The members of safety committees are representing each area or function within estate and mill. Monthly safety committee meeting was held to review the OHS programme and performance. Records were sighted for September, October, November and December 2011 for all estates and Mill. Quarterly reports were submitted to local authority as required by local regulation. Criterion 4.7 Indicator Minor 1 Accident insurance was provided to workers including for daily base workers, under the scheme “Jamsostek” as required by local regulation. Samples of workers for mil and all estates were taken during this audit and found satisfactory-all sample taken have been provided with accident insurance. The contractor workers were also provided with “Jamsostek” as mentioned in the contract agreement between company and contractors. Criterion 4.7 Indicator Minor 2 The provisions for medical check up was described in the procedure SOP/SMK3/LH-23 which covers pre employment medical check up, regular medical check up and special medical check up. Implementation of medical check up was also verified during this audit; records December 2011. It was noted that medical check up has been implemented to workers of mill and estates. This covers general medical check up test for all workers. Special medical check up for workers of mill has been performed which including audiometric test for workers exposed to noise and spirometry test for workers exposed to chemicals and dust. Criterion 4.7 Indicator Minor 3 OHS risk assessment procedure SOP/SMK3/SMART/LH-02 was established and implemented for estates and mill activities both routine and non-routine activities. Hierarchy of control was considered in the planning of risk control. According to the procedure, at least OHS risk assessment document must be reviewed once a year. OHS risk assessment records 2011 were sighted for all estates and mill. Some activities were examined in regard to risk assessment including for boiler operation, sterilizer operation, generator set operation, loading ramp activity, cleaning of CPO storage tank, chemical mixing, fertilizer warehouse, herbicide and pesticide sprayer, harvesting, road maintenance, waste water treatment. Criterion 4.7 Indicator Minor 4 Training record and programme related to OHS were sighted and verified during this audit, e.g. boiler certificate and licence for boiler operator, licence for operator of generator set, licence of heavy equipment operator, pesticide training for sprayers, “hyperkes” training for medical doctor and paramedics, welder certificate and basic OHS training performed internally. OHS training has been programmed and provided appear balanced with OHS hazard and risk at mill and estates. Criterion 4.7 Indicator Minor 5 QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Emergency preparedness and response procedure has been established, SOP/SMK3/SMART/LH09. The emergency conditions have been identified including general fire, land fire, explosion, chemical spillage, and flood and earth quake. The team to handle emergency conditions has been established consists of fire fighting team, hydrant team, medical team/first aid, evacuation team, external relation, etc. Portable fire extinguishers have been sufficiently provided at mill and estate, fix hydrant was provided at mill, mobile water tank was provided at estate, first aid kits were provided sufficiently at each location of estate and mill and ambulance was provided at mill and estate. Regular inspection and maintenance of this emergency equipment were sighted. Simulation of emergency preparedness and response plan was scheduled once a year, result of simulation evaluation was sighted e.g. 23 January 2010 in regard flood, 22 October 2011 in regard to earth quake and fire, 22-23 February 2010 in regard to land fire in coordination with external fire brigade (Manggala Agni). During this audit, the warning sign system for evacuation at BAMM was examined and found well working. Staffs and workers including visitors were following evacuation guidance. Criterion 4.7 Indicator Minor 6 Emergency shower and eyewash in general has been provided at chemical warehouse, fertilizer warehouse and chemical mixing area both at mill and estates, only some locations of emergency shower/eyewash were not appropriate, i.e. too far from the chemical. The content of emergency kits and the function of emergency shower/eyewash was regularly checked, checklist was sighted. Clinic was available at mill and each estate, provided with paramedics and one medical doctor to cover mill and estates. Criterion 4.7 Indicator Minor 7 First aid kits were sufficiently provided at mill and all estates including each assistant at estate. Sufficient training in regard to first aid treatment has been provided by company doctor to assistant at estates and mill. During the audit, assistant was able to demonstrate the use of first aid kit. Criterion 4.7 Indicator Minor 8 Accident statistic was reported and reviewed on monthly basis. Quarterly accident statistic was also reported to local authority. The procedure SOP/SMK3/SMART/LH-10 has been established to report accident and to perform accident investigation. Statistic accident of mill and estates for 2011 were sighted during this audit, no fatality accident was reported so far; and in general the accidents have been followed up with investigation. The level of investigation needs to be improved, see opportunity for improvement below. Minor nonconformity against criterion 4.7 BAMM and all estates Found several substandard condition e.g. opened electrical connection, belt not covered, fuel tank not provided with grounding and venting system, safety valve of compressor vessel not working etc (BAMM, SPNE, SPNA, BMME, BAME). Immediate actions have been taken to rectify the issue and generally the finding can be closed. However, during surveillance audit, the issues will be checked again to verify the effectiveness of actions taken. All Estates Even though the pressurized vessel (compressor vessel) having the permit for operation for local authority, however, the justification for safe operation could not been fully given based on the following facts. o Inspection conducted by local authority limited to visual inspection. No wall thickness measurement has been reported and compared to the minimum thickness as designed (all estates). o There was no evidence that safety valve regularly tested (all estates). BAMM The measurement of chemical factors at BAMM has been performed however the location of measurement was outside of the factory, not at workplace. While for all estates, the QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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measurement of chemical factors at workplace has not been performed, e.g. fertilizer warehouse, chemical warehouse. Progress Noted: A programme to monitor and measure the chemical factors at workplace has been established by Environmental Department. Results to be verified during next SAI Global surveillance audit. The result of lighting level at BAMM indicated a non realistic result and has not been reviewed and compared to the minimum lighting level. The structure of follow up to the results of medical check up has not been established, e.g. statistical analysis, health promotion, preventive action and curative action to the employees having suspected health problem, e.g. some audiometric tests of employees of BAMM were classified not good.
Opportunities for improvement: Consider to review and improve the design of harvesting bridge. It was observed that at several locations, the width of bridge was 20 cm-even though the height of bridge from the land was below 2 m (best practice considered as working at height). Consider to improve the knowledge and skill for performing accident investigation and determining the immediate cause and basic cause.
Criterion 4.8 All staff, workers, small holders and contractors are appropriately trained. Criterion 4.8 Indicator Major 1 The training needs and programme has been well identified and recorded on personnel competency matrix “Matrix of personnel competency identification”. All functions were included in this training identification from mill manager, estate manager, assistant head, group leader, operator at mill, sprayer, welder, boiler operator including for contractor (civil, mechanic and transporter). The training needs identified appear sufficient and complete, this including training related to OHS, SCCS, environmental, social, training required by regulations, training related to operation of mill and estate. Training programme 2011 and 2012 were sighted, the training programme is established based on the training needs identification. Realization of training programme 2011 were sighed, e.g. first aid training, SCCS training, social impact assessment workshop, risk assessment. Criterion 4.8 Indicator Major 2 Evidence of training for key persons were verified and sighted, including for boiler operator, sprayer, and chemical mixing operator, assistant of estates, SCCS training for loading ramp operator and for mill assistant, pesticide and herbicide training, etc. The system to record personal training was established-in this record, the training which has been completed by each person was recorded, however the updating of this record still not consistent both for mill and all estates, see finding below. Criterion 4.8 Indicator Major 3 Occasionally, mill and estates were hiring contractor, e.g. for civil and mechanical contractor. The requirements for experienced and trained contractor were included in the contract agreement-this is in line with the competency matrix as mentioned above. Work permit system was implemented to ensure that the contractor meets the organizational requirements including trained and experienced workers and the use of appropriate PPE. Minor nonconformity against criterion 4.8 Even though the evidences of training of employees were evidence but the updating of personal training records still inconsistent, e.g. many training has been performed in 2011 but the personal training records has not been updated.
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Audit Report PRINCIPLES 5: ENVIRONMENTAL RESOURCES AND BIODIVERSITY
RESPONSIBILITY
AND
CONSERVATION
OF
NATURAL
Criterion 5.1 Aspect of plantation and mill management, including replanting, that have environmental impacts are identified, and plant to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement. Criterion 5.1 Indicator Major 1 Initial Environmental Impact Assessment documents (ANDAL, RKL and RPL) #15/ANDAL/RKLRPL/BA/IV/1998 of PT. Inti Gerak Maju which were approved by Department of Agriculture of Republic of Indonesia on April 30, 1998 for BAMM, BAME and BMLE were available. The documents cover District of Batu Licin, South Kelumpang, Upper Kelumpang and Centre Kelumpang. Initial Environmental Impact Assessment documents (ANDAL, RKL and RPL) #104/ANDAL/RKLRPL/BA/VIII/1996 of PT. Sinar Kencana Inti Perkasa which were approved by Department of Agriculture of Republic of Indonesia on August 9, 1996 for SPNE were available. SPNA activities are covered in DELH Plasma KUD Gajah Mada, PT. Sinar Kencana Inti Perkasa. DELH (Document of Environmental Evaluation) is in the process for getting approval from BLH (Local Agency of Environment) Kota Baru District. The organisation also requested approval of DELH to Ministry of Environment and BLH Kota Baru District on 24 October 2011 based on letter #217/KUD.GM/Ext/X/2011. BAMM, BAME, BMLE, SPNE and SPNA identified environmental aspect and evaluated its impact. The result of environmental aspect and impact identification and evaluation was documented within “List of Environmental Aspect Identification and Evaluation” Control measures of each environmental impact were defined and implemented to ensure that negative environmental impact were prevented and mitigated. Criterion 5.1 Indicator Major 2 Implementation of RKL RPL is reported six monthly. Report for 2 nd semester of 2010 and 1st semester 2011 was sighted and sent to Kota Baru District Environmental Agency, South Kalimantan District Environmental Agency and Ministerial Office Environment. Receipt note was also sighted. Report for 2nd semester of 2011 is being developed. Criterion 5.1 Indicator Minor 1 Based on letter from Bapedalda #660/480-APDL/Bapedalda on September 28, 2006, ANDAL, RKL and RPL is still valid even though the ownership of organisation was changed to PT. SMART Tbk. The letter required organisation to make submission of a statement of responsibility with regards to environmental controlling from PT. Inti Gerak Maju to PT. SMART Tbk. Handing over responsibility of environmental controlling was stated in the letter #1066/SK/LGL/TN/X/2006.
Criterion 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations Criterion 5.2 Indicator Major 1 An HCV area assessment has been carried out by the HCV Team of the Environment Department of PT. SMART Tbk., and consist of 6 people, three of which are RSPO approved discipline specialist, and the report is available. The report has been commented on by a reviewer, and a Peer Review has been carried out. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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BAME: HCV 1.2, HCV 1.3, HCV 4.1 and HCV 4.3 were identified and none for other HCV: two species of birds (Anthracoceros malayanus, Butastur lIventer), one species of mammals (Nasalis larvatus), and HCV 4.1 and HCV 4.3: Marsh BMLE: HCV 1.2, HCV 1.3, HCV 4.1 and HCV 4.3 were identified and none for other HCV: one species of plant (Nephentes sp), one species of bird (Anthracoceros malayanus), one species of mammals (Nasalis larvatus), and HCV 4.1 and HCV 4.3: River and marsh. SPNE and SPNA: HCV 1.3 and HCV 4.1 were identified and none for other HCV: two species of birds (Alcedo meninting, Anthracoceros malayanus), one species of mammals (Felis viverrina), HCV 3: Forest on Limestone Rocks, HCV 1.1, HCV 4.1 and HCV 4.3: River and marsh and HCV 6: Cemetery In SPNA, the rivers have not been identified as HCV areas, but nevertheless, the riparian zones (50m wide on both sides of the river) are being managed as HCV areas to prevent pollution and erosion. No agrochemicals are being used in this buffer zone.
Criterion 5.2 Indicator Major 2 The management of HCV areas is presently based on the management recommendations in the HCV report and on the company‟s SOP of HCV area management. HCV management areas maps were established. Circular form SMD Operation #002/SE-SMD Ops/IX/2010 on September 20, 2010 was developed with regards to protected species. Criterion 5.2 Indicator Major 3 All employees and surrounding communities have been informed about the HCV areas and their management HCV areas are being enriched enhanced with natural occurring three species. Besides the erection of sign boards and the production of posters, Commitment to discourage any illegal or inappropriate hunting, fishing or logging activities or to develop responsible measures to resolve human wildlife conflicts has been provided. All employees and surrounding communities have been informed about the HCV areas and their management. HCV areas are being enriched/ enhanced with naturally occuring tree species Criterion 5.2 Indicator Minor 1 Posters and sign boards concerning HCV areas and protected species are available in the necessary places. All staff and employees are informed about HCV areas and ERT species. Public Consultation and dissemination of information to the employees and local communities has been carried out. Criterion 5.2 Indicator Minor 2 The responsibility of HCV area management is part of the job description of the different Division Managers. These ”HCV Officers” have no particular background for HCV management, and knowledge and skills are still sub-standard. Minor nonconformity against criterion 5.2 All Estates HCV management plan has been established however the plan has not address the issues (threats) present and not considered sufficient to conserve the HCV within the concession area. Opportunity for improvement All Estates Even though the HCV report has been commented by a reviewer, it could be considered to carry out formal Peer Review. A review of the HCV report was carried out by an HCV discipline specialist from the Agricultural Institute of Bogor (IPB), however, it does not follow RSPO peer review standards.
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It could be considered to improve knowledge and skills of HCV Officer, e.g. give particular background for HCV management. The HCV officer have been trained internally on HCV and management, but their knowledge and skills need improvement
BMLE A waste final disposal was newly constructed within the 50m buffer zone of a nature reserve but not operation yet. It could be considered to relocate the waste final disposal further away from nature reserve.
Criterion 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. Criterion 5.3 Indicator Major 1 The mill and all estates have identified and documented all wastes and sources of pollution from their activities. Result of identification was recorded in “List of Environmental Aspect Identification and Evaluation”. Criterion 5.3 Indicator Major 2 Procedure waste handling was established and implemented, SOP/SPO/SMART/LH-09. Waste management and disposal plan to avoid and reduce pollution was described in the procedure. Wastes are divided into three types: organic, inorganic and hazardous waste. Fiber and shell from POM were used for boiler feed. EFB and boiler ash were used for fertiliser in BAME and BMLE. The quantity of EFB generated is recorded daily and estimated about 21 % of FFB. Record of EFB was sighted for January to December 2011. Waste water from clay bath has been disposed to waste water pond. Water contaminated with boiler ash was collected in sedimentation tank. Chemical container from water treatment plant was cleaned and the waste water was collected in neutralisation tanks. Regeneration water from water treatment plant was also collected in neutralisation tanks. Waste water from sedimentation and neutralisation tanks was disposed to surface water. The waste water quality from sedimentation tank was monitored prior to be disposed to surface water. Monitoring result of waste water quality from sedimentation tank was reviewed for 2nd semester of 2010 and 1st semester of 2011 against Ministry of Environmental Decree #51/1995. The result was meets the regulation standard. The waste water from neutralisation tank was monitored for parameter pH prior to be disposed to surface water. Sample waste from laboratory was returned to process in fat pit. Chemical container from laboratory was returned to supplier. Receipt note of returning chemical container to supplier was sighted. It was observed that organic and inorganic waste was segregated at point of source. Organic waste from housing was disposed to hole located at the backyard of each house. Inorganic wastes from Mill and Estates including housing were disposed to landfill in the Estates area. Areas of inorganic wastes disposal was far from housing, in the flood-free area and not in swamp area. The other hazardous wastes such as used oil, used battery, used filter oil, and contaminated rags from workshop activities have been handled properly as hazardous wastes. Quantity of hazardous wastes was recorded. According to letter of agreement between Mill and Estate Managers of BAMM, BAME, BMLE, SPNE and SPNA #LBH/BAMM/01/01/2010, the hazardous wastes from BAME, BMLE, SPNE and SPNA activities were sent to BAMM temporary hazardous waste storage prior to be disposed to authorised institution. In actual, hazardous waste from SPNE and SPNA was sent to SKPM. Letter of agreement between SKPM and SPNE and SPNA #LBH/SKPM/12/01/2012 mentioned that hazardous wastes from SPNE and SPNA was sent to SKPM prior to be disposed to authorised institution. Hazardous wastes were collected, stored and disposed inline with Procedure SOP/SPO/SMART/LH-18. Temporary storage of hazardous waste was provided to collect hazardous waste prior to be disposed to licensed vendor. The organisation had permit of temporary storage of hazardous waste #188.45/220/KUM/2010 from local QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report government and valid for 5 years. The hazardous wastes balance was made for each type of hazardous waste: waste oil, waste battery, waste fuel and oil filters and contaminated rags. Theses hazardous wastes were managed by licensed vendor. Disposal of hazardous waste was completed with manifest. Manifest of disposal were sighted for 2011 and January 2012. Medical wastes were disposed to hospital to be burnt in the incinerator. Criterion 5.3 Indicator Minor 1 Handling of agrochemical containers was described in work instruction IK/SMART/LBH/01. All agrochemical containers were triple rinsed and disposed in the designated area and separated with organic and inorganic waste landfill. Records of chemical containers quantity disposed and photograph of disposal activity were evident. The other agrochemical containers were reused for agrochemical solution container during spraying. Fertiliser sacks were cleaned prior to be reused for collecting piece of FFB during harvesting. Quantity fertiliser sacks cleaned and reused was recorded. All divisions in all estates have been completed with area to clean agrochemical containers and fertiliser sacks. Liquid waste from cleaning was reused for agrochemical dilution during spraying or gardening. Criterion 5.3 Indicator Minor 2 Record of all wastes monitoring was sighted. Minor nonconformity against criterion 5.3 BAMM pH of water from neutralizing pond is checked daily. Result mentioned that it was inline with Ministry of Environment Degree #51/10/1995. Last measurement of quality of water from neutralizing pond with complete parameter was performed on 9 April 2007. Measurement result exceeded Ministry of Environment Degree #51/10/1995 for parameter BOD and COD. Complete measurement has not been performed any longer. SPNE Based on official report of pesticides containers land-filling, pesticides containers was landfilled once in 2011, on 2 December 2011. Permit of temporary storage of hazardous waste mentioned that hazardous wastes are not allowed to be kept more than 180 days. Record of contaminated rags was not provided. Contaminated water from pit at area of diesel fuel loading pipe was overflowed due to pit was filled with rain water. Contaminated water from emergency shower or eyes wash was connected directly to open drainage.
Criterion 5.4 Efficiency of energy use and use of renewable energy is maximised. Criterion 5.4 Indicator Minor 1 Fiber and shell was used as boiler feed. Volume of fiber and shell used for boiler feed is estimated monthly. The quantity fiber generated from the mill was estimated about 12.50% of FFB processed and shell about 5.75% of FFB processed. Record of fiber and shell used for boiler feed was sighted for 2010 and 2011. Use of renewable fuel was increased in 2011 than in 2010. Total energy generated by steam turbine generator was recorded as total energy (kCal) per ton CPO. Criterion 5.4 Indicator Minor 2 Fossil fuel was used for heavy equipments and emergency diesel generator. Total fuel consumption is summarised monthly as litre of diesel fuel per ton of FFB processed. Record sighted for 2010 and 2011. To reduce fossil fuel, when boiler was not in use for mill operation, boiler was used to operate steam turbine generator to change diesel electricity generator operation to generate electricity for QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report housing leads to 85% saving of fossil fuel from 2010 budget and 93% from 2011 budget. Diesel fuel in the estates is used for operation of heavy equipments, vehicles and diesel electricity generator to supply electricity for office and housing including transport of FFB. The consumption of diesel fuel is recorded and monitored monthly and evaluated for each litre of diesel fuel/FFB tonnage. It was noted that consumption of diesel fuel/FFB tonnage in 2011 was decreased compared to 2010 in BMLE. Consumption of diesel fuel per FFB tonnage in 2011 was increased compared to 2010 in SPNE and SPNA due to additional heavy equipments were needed in this Estates for construction and maintenance projects such as road maintenance, trench maintenance, etc. The Estate‟s Management was aware of this condition and has defined target to reduce fuel consumption per FFB tonnage in 2012.
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. Criterion 5.5 Indicator Major 1 Fire was not used during land preparation for conversion coconut to oil palm in 2006 and neither for waste disposal. Criterion 5.5 Indicator Major 2 The organisation has policy of zero burning documented in circular letter #071/SMD Ops/IX/2007 form SMD Operation. Zero burning activities were also required in MCAR chapter 5. MCAR mentioned that land preparation was performed by overthrowing and chipping. Conversion of plant was performed in 2006 from coconut to oil palm in block F7, F8, F9, G8, G9 and G17 BAME. Land preparation used “Enviro Mulcher”. Realisation of replanting activities was well documented. The procedure for land fire emergency preparedness and response was established, SOP/NP/SMART/XI/LH-02. The training to handle land fire has involved external organization i.e. Mandala Agni, an organization established by the government specialist in land fire. The facilities to handle land fire have been provided including portable fire extinguishers, mobile water tank completed with pump, fire cloth, etc. The provision of the fire fighting facilities appeared to be inline with the risk assessment. Regular inspection on this equipment was sighted. The simulation to handling land fire has been performed to all estates, evaluation records were sighted e.g. 19 December 2011 for BAME, 23 July 2011 for BMLE, 13 January 2012 for SPNE, 19 July 2011 for SPNA.
Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gasses, are developed, implemented and monitored. Criterion 5.6 Indicator Major 1 Identification of pollution and emission sources at BAMM activities was evident. The source of pollution and emission was recorded within “List of Environmental Aspect Identification and Evaluation” including ambient air (particulate, dust, COx, NOx), boiler emission, diesel electricity generator emission, vehicle and heavy equipments emission. Identification of pollution and emission sources at BAME, BMLE, SPNE and SPNA activities was evident. The source of pollution and emission was recorded within “List of Environmental Aspect Identification and Evaluation” including diesel electricity generator emission, vehicle and heavy equipments emission. Diesel electricity generator was used for electricity in housing. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 5.6 Indicator Major 2 Monitoring of pollution and emission quality of sources identified were performed inline with Environmental Monitoring Plan. In addition, annual monitoring and measuring plan was established. Monitoring and measurement results for 2 nd semester of 2010 and 1st semester 2011 were sighted in Mill and Estates for boiler emission against Environment Ministry Decree #07/2007, diesel electricity generator against Environment Ministry Regulation #21/2008, vehicle and heavy equipment emission against Environment Ministry Regulation #05/2006, odour emission against Environment Ministry Decree #50/Menlh/11/96, also ambient air quality against Government Regulation #41/1999. Monitoring and measurement results for 2 nd semester 2011 have not been finished yet. Criterion 5.6 Indicator Minor 1 To reduce pollution and emission, the organisation performed efforts and strategies, e.g. boiler was completed with dust collector, multi cyclone and dust conveyor to reduce particle and ash and prevent particle and ash pollution to waters, planting of several vegetations was performed around waste water pond. Criterion 5.6 Indicator Minor 2 POME was processed through multi feeding to 8 ponds. Capacity of each pond is 10,000 M3. The operation of waste water treatment ponds is described in procedure MCMD #1/2010. Process parameter monitoring and maintenance of the ponds were sighted. POME is monitored monthly as required by permit of land application by external laboratory. The result of POME monitoring were reviewed including measurement of BOD for period 2 nd semester of 2010 to 1st semester of 2011. The Ministry of Environment #29/2003 and permit of land application required that BOD of POME flowed to land application is less than 5,000 mg/litre. The result of POME quality during this period was under 1,500 mg/litre.
PRINCIPLES 6: RESPONSIBLE CONSIDERATION OF EMPLOYEES AND 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. Criterion 6.1 Indicator Major 1 Social Impact Assessment (SIA) for the mill and estates has been done in July 2010 and was conducted by the SMART team from Head Office Jakarta. Methods of SIA have been done by interviews with 'key person' such as village head, traditional leader, youth lease and Estates community. Assessment was carried out on rural communities around the mill and estates, e.g. Serongga Village. Assessment is also conducted to the affected parties such as the community around the estate and actively participative in social programs that carried out by estate. Serongga Village is in the survey due to this village location is borders with BAMM and BAME. The positive and negative impacts were obtained by compilation of perception of community and respondents. Some of the impacts identified were: SIA results did not indicate any negative impact to the surrounding community mill and estates. Positive impacts were identified such as: Additional income communities, as some residents work at the mill and estates. Additional education, because the company provides scholarships for community. Criterion 6.1 Indicator Minor 1 Action plan to implement and monitor social impact was focus to the improvement of CSR to the QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report community. And this CSR program is implemented annually. Monitoring of realization action plan was conducted by the SIA Team according determined period. Also status of action plan was determined and it was mentioned in the „Rencana Pengelolaan Dampak Sosial (Sosial Impact Management Plan) dated 02/01/2011. Criterion 6.1 Indicator Minor 2 Based on letter from Bapedalda #660/480-APDL/Bapedalda on September 28, 2006, existing ANDAL, RKL and RPL that encompasses social impact assessments is still valid even though the ownership of organisation was changed to PT. SMART Tbk. Criterion 6.1 Indicator Minor 3 Implementation of RKL RPL is reported six monthly. Report for 2 nd semester of 2010 and 1st semester 2011 was sighted and sent to Kota Baru District Environmental Agency, South Kalimantan District Environmental Agency and Ministerial Office Environment. Receipt note was also sighted. Report for 2nd semester of 2011 is being developed. SIA also included for the small holder. The results of assessment identified no negative impact. It was identified many positive aspects for the out growers such as, improvement of out grower' income and ability to manage the estate. Development of small holder was made by the SMART, among others, fertilizing, planting and harvesting. Opportunity for improvement: Mill and Estates Considered to perform peer review to SIA document to ensure that all impacts are identified. BAMM Social Impact Assessment Report is available, considered to create a map with the position of the mill, estates and stakeholders
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. Criterion 6.2 Indicator Major 1 Procedure for communication and community consultation has been properly established in SOPs / Y / SMART / XIV / MCAR 03 - Communication and Consultation. Mechanism of collaboration with local community and other interested party also was described in the procedure. This procedure was implemented by the estate. Communication and consultation for community was recorded. E.g. minutes meetings with community leaders, minutes lending of heavy equipment to the village. Criterion 6.2 Indicator Minor 1 List of stakeholders was already available, the results of interviews conducted was explained that the stakeholder communities affected directly from this impact. List of stakeholders was divided into groups: government, community leaders, youth leaders and others. This list also included the name and address of its stakeholders. Criterion 6.2 Indicator Minor 2 Communities‟ aspirations have been followed up; most of the aspirations of these communities contain requests for assistance to educational facilities, houses of worship, etc. These aspirations were followed up and recorded. Criterion 6.2 Indicator Minor 3 In accordance with the decree SK: 003/MR/BAMM/01/0 determined that the Mill Unit Head and Estate Manager was appointed as the official responsible for consultation and communication with the community QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Opportunity for improvement BAMM List of stakeholders are available, considered to create a verification method of stakeholders list. It is needed to ensure that the lists of stake holders are the community directly affected by mill and estates.
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 Criterion 6.3 Indicator Major 1 The mechanism of dispute settlement procedures have been defined in SOP / NP / SMART / XII / MCAR 001. Problem solving is done in consultation with affected parties. Mechanisms of conflict settlement are conducted by mutual consent and no coercion of any party, and it has been described in the procedure. Criterion 6.3 Indicator Minor 1 According interview with stake holders and complaint list, there is no complaint from stakeholders. Criterion 6.3 Indicator Minor 2 Procedures for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly made and mentioned in the - SOP / NP / SMART / XII / MCAR 001. According interview with stake holder, there is no negotiation process related to use of palm oil plantation.
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 view through their own representative institutions. Criterion 6.4 Indicator Major 1 Procedures for identification, calculation and provision of compensation for the loss of legal and customary rights by involving the community and relevant agencies already established in the procedure. Criterion 6.4 Indicator Minor 1, 2 and 3 It was noted that there was no acquired new land after 2007.
Criterion 6.5 Pay and condition for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages Criterion 6.5 Indicator Major 1 Refer to worker list and interview with the worker; there is no worker from overseas/migrant. All worker form local. Mill and estates use local workers. List of wages to employees was available for the estates or for mills. Wages for these employees were divided into groups of permanent employees - SKU (Permanent worker – Syarat Kerja Utama), PKWT (Contracted worker – Pekerja Waktu Tertentu) and BHL (daily basis paid workers – Buruh Harian Lepas). From pay checks received was proved that the pay conformed to that set out QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report in the PKB and the minimum wages defined by Governor of Central Kalimantan. Wages are calculated base of the working day plus rice, rice given was 15 kg/person. Based on interview with worker it was noted that there is no worker wage deduction. Criterion 6.5 Indicator Major 2 The company and workers have arranged mutual working agreements as described in PKB document. PKB was established in accordance with Act #13/2003 that provides some additional requirements for clearer interpretation in work practice. PKB (Mutual Working Agreement – Perjanjian Kerja Bersama) has been established in mill and estates. The agreement was made by SPM (Independent Worker Union – Serikat Pekerja Mandiri). This Agreement contains the rights and obligations between workers and firms. PKB has been validated by the local Labor Office Criterion 6.5 Indicator Minor 1 Public facilities were provided by the company and covered residential facilities, day care, education, clean water and medical clinic and their medicines. From the observations in the field, all the facilities described in the above procedures are adequate. All workers were provided leaving house and agreement for approval for stay in the leaving house was made for workers. Residential facilities were periodic maintained; schedule for periodic maintenance was evident and implemented. Some of repair was conducted by the Engineering according request from the worker. Criterion 6.5 Indicator Minor 2 Some work was done by contractor for FFB transportation to mill and civil works. Work agreement with the contractor was mentioned requirement to comply with workers regulations. Opportunity for improvement ALL Number of employee status conversion has been reported annually ( in summary ) to present transparency that company do have good will to improve social degree of BHL workers to permanent worker . Consistency of such produced report will be checked again in the next audit. Criteria & requirements for BHL conversion to SKU status might be also formalised in a documented reference. BAME, SPNA It could be considered to communicate organization labour policies to local contractor.
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. Criterion 6.6 Indicator Major 1 A published statement in local languages recognizing freedom of association was stated in the Memorandum from VPA. Memorandum stated that the company respect to comply with regulation pertinent to freedom of association. Also PKB was stated that freedom of association can be conducted by the worker through SPM. SPM for mill and estates was available and chairman and his administrator of PUK (Caretaker unit – Pengurus Unit Kerja) was selected by the workers. Criterion 6.6 Indicator Minor 1 Meeting with the SPM have been done by the company and its outcomes are recorded QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions. Criterion 6.7 Indicator Major 1 Organisation has policy for minimum age for worker was implemented and mentioned in the PKB. List of worker and related document was verified and there is no worker under 18 years old. The compliance in accordance with national laws has been evaluated by the organisation as described in criterion 2.1. Criterion 6.7 Indicator Minor 1 Age of workers was determined by the Estates and Mill, as well as working hours. And also use of 'family harvesting' is also allowed, but not currently implemented by Plantation.
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. Criterion 6.8 Indicator Major 1 Company policy related to the discrimination was determined and documented. And it was communicated to all workers in the estate and mills. Criterion 6.8 Indicator Minor 1 All discrimination is prohibited for all area in estate and mill. PKB also mentioned ban of discrimination for all workers in the organization.. Procedure for worker recruitment was available and mentioned there is no discrimination treatment during recruitment process. No evidence of discrimination found during the audit.
Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied. Criterion 6.9 Indicator Major 1 and 2 Company policy related to the prevention of sexual harassment and violence and protection of reproductive rights has been defined by Top Management and is applied to mill and all estates. PKB also mentioned this policy. It was communicated to all workers at mills and estates but this policy has not been communicated to contractors as mentioned/recommended in criterion 6.5 indicator minor 2. Criterion 6.9 Indicator Minor 1 Evidence of implementation of sexual harassment prevention policy is available, and this has been communicated by the HR Corporate to all workers. Committee for gender has been established by the company. Records of meetings and the Committee for gender socialization were available. Each estate and mill has appointed representative for gender committee, meeting gender committee was conducted monthly according minutes some issues were discusses such as women rights, counselling for women affected by violence, women to be allowed to breastfeed up to nine months before resuming chemical spraying or usage of tasks, and women to be given specific break times to enable effective breastfeeding. Criterion 6.9 Indicator Minor 2 Implementation of policy for the protection of reproductive rights has been made by the company. And female employees are given an explanation related to the rights of reproduction. All female QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report worker are checked periodically and recorded in the medical record, it was evidence that company has implemented protection of reproductive rights. The Committee for gender also monitored its implementation. Criterion 6.9 Indicator Minor 3 Procedures for handling complaints already established all complaints about sexual harassment and reproductive rights will be submitted to the Gender Committee to follow up. Mechanism of complaint handling was described started from reporting her complaint to the Committee Representatives at estate, gender grievance by the Committee, reporting to the company and the final decision of the gender committee and the company. According interview with gender committed there is no complaint related to sexual harassment.
Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other local business. Criterion 6.10 Indicator Major 1 and 2 Pricing mechanisms for FFB was described in FFB purchase procedure. Price mechanism of FFB, CPO and palm kernel is determined by province government and reviewed in monthly basis. The price is applied for all growers in the province. The company updates the information on the FFB pricing formula that includes details of transport, milling and shipping costs, each month and provides it to smallholders. Annual contract are made between FFB suppliers and mill, describing FFB specification required, contract period, determination of FFB pricing, and term of payment. Information of FFB set was available to the FFB suppliers and the commitment was stated in the procedure. Criterion 6.10 Indicator Minor 1 The selection and evaluation of supplier/vendor was based on capability of supplier and vendor to supply required inputs and or services. Specification of inputs and or services required was communicated to the supplier/vendor through tender document or request for quotation. Access for grievance has been provided and detailed in the each contract (statement letter). In case there is dissatisfaction with grower, growers also have access to the estate for settlement of complaint, e.g. FFB price does not comply with market rates. Also it was described in the FFB Purchase Procedure. Criterion 6.10 Indicator Minor 2 A review to the current FFB purchase records (December 2011 to current) shows that the price set was consistently used as recorded in the record of FFB receiving. The payment of FFB received were planned and executed in timely manner in line with term of payment agreed within the contract. Also during public consultation with grower, it was explained by the grower that purchased FFB was complied with the price that determined by the province government. Minor nonconformity against criterion 6.10 BAMM The contractual agreement between mill and local business (smallholder) for FFB purchase was expired in December 2011; the new contract was only “Statement Letter” that did not clearly described the payment term.
Criterion 6.11 Growers and millers contribute to local sustainable development wherever appropriate. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Criterion 6.11 Indicator Minor 1 Records of company contribution to regional development was evident, among other churches and mosques of development assistance, aid to needy communities around the garden, the school books. And this assistance is identified at the time of public consultation. And also estates were given opportunity to the community to obtain employment in the estate. According SIA result, community is not interested to work at estate, they are more interested to work in other sectors e.g. mining, civil servants, trader, etc. Some activities were conducted by the local contractors such as building houses, road maintenance (road hardening). Agreement contract with local supplier was evident. Opportunity for improvement BAME In CSR program for year 2011 mentioned a program for eye glasses in 3 villages, considers to record distribution of glasses the villages for Serongga, Batu Ampar and Langadai villages.
PRINCIPLES 7: RESPONSIBLE DEVELOPMENT OF NEW PLANTINGS
Procedures regarding the responsible development of new plantings are in place, e.g. Manual of Land Preparation and Cultivation PT. SMART Tbk (dated 1 July 2010). The manual covers flow process for land preparation and cultivation which completed with “Matrix of New Land Clearing Requirements”, procedures and work instructions to each stage of land preparation and cultivation. Plantation in BAME, BMLE, SPNA and SPNE was performed in 1991, 1992, 1993, 1994, 1996, 1997, 1998, 1999, 2000, 2001, 2005, 2006 and 2007. Plantation in 2005 to 2007 was located in BAME. These areas were conversion from the organisation‟s Coconut into Oil Palm (within the same concession/license area). Conversion from Coconut to Oil Palm has been communicated to local government. The government said that the conversion did not change the AMDAL. Based on HCV assessment report, there were no HCV areas or forests were present here between November 2005 and November 2007.
PRINCIPLES 8: COMMITMENT TO CONTINUOUS IMPROVEMENT IN KEY AREAS OF ACTIVITY
Criterion 8.1 Growers and miller regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations Criterion 8.1 Indicator Major 1 The commitment for continual improvement was shown through innovation system involving all levels within the organisation. There were several events for innovation system including Regional conference and PSM conferences. The innovation project then shared to other estates. Evidences of application of the innovation project were sighted for the mill and all estates: BAMM: cleaning cracker mix (kernel and shell) with hot water to reduce CaCO 3 in clay bath process installation of resin trap to minimize resin loss BMLE, SPNE, SPNA: clean house project, tools making which can cut to the roots from regrowth to control Aspelium Nidus, tools making for fertilising to improve the accuracy of dosage and eliminate losses. BAME: tools making for fertilising to improve the accuracy of dosage and eliminate losses, improve land application by using the pipe between the flatbed, solver tool fertiliser making to improve fertiliser material so fertiliser can be more rapidly absorbed by root. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report The mill implemented ISO 14001:2004 and established environmental management objectives and targets with were supported with environmental management program. ISO 14001:2004 audit by certification body was conducted on 23-24 February 2011. Its findings were followed up. Regular evaluation of plantation and mill operation was performed through several levels of audits e.g. Operation Internal Audit (OIA) and MAA which performed twice a year, the coverage of the audit including production planning, production, power generation and utilization, consumable, process control, quality control – including waste water treatment, maintenance, occupational health and safety, FFB incoming and inspection, and laboratory, AAA that was performed twice a year, RSPO Internal Audit that was performed minimal once a year. All application of RSPO Principles and Criteria and Indonesian National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production was covered in this audit. The above audit reports indicated that any gaps against standard operation procedure of plantation and operation were noted. Corrective action plan was issued and implemented to demonstrate effort for compliance as well as continual improvement. Criterion 8.1 Indicator Minor 1 RSPO internal audit has been conducted in January and April 2011 for the mill and all estates, the auditors assigned from Environmental Department of PT. SMART Tbk. Internal audit report was generated, and internal audit findings were followed up by the mill and all estates. A list of negative findings and its corrective action plan was used for monitoring their status. Internal verification has been taken prior to this certification audit. Matrix of action plan has been established for negative findings rose during SAI Global RSPO preliminary audit. Corrective action plan has been established and implemented. The effectiveness of the corrective action taken has been internally verified.
RSPO Supply Chain Certification Standard – Module E - CPO Mill: Mass Balance BAMM received FFB from its own Estates and from the third party supply base. All of the FFBs are processed under the same facilities; therefore the supply chain model that can be applied is Mass Balance (MB) model. Records for period January – December 2011 were reviewed. Below are the detail estimation of CPO and Kernel produced (certified and non certified). CPO produced (certified) CPO produced (non-certified) Kernel produced (certified) Kernel produced (non-certified)
: 45,072 MT : 10,928 MT : 10,000 MT : 2,450 MT
1. Documented Procedures BAMM has established and documented written procedure incorporated to the implementation of RSPO SCCS. It is described in SOP Supply Chain (SOP/BWLM/SC) and written internal procedure (SOP). Receiving FFB, including the grading up to CPO and Kernel delivery are described in the procedure. The procedures were look up dated and covering the implementation of all elements in RSPO SCCS requirements. The person having overall responsibility for and authority over the implementation of RSPO SCCS has been assigned (Mr. R Silitonga). Assignment letter was sighted (dated 1 December 2011). He demonstrated awareness of the facilities procedures for the implementation of this standard.
2. Purchasing and Goods In BAMM has a clear system for recording FFB received from certifiable supply base and non certifiable supply base. It was verified that the receipt of FFB was traceable to the supply base unit. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Weighing slip and receiving report issued clearly stated weight off FFB received and its source. A review to the last two months records found that they were well maintained and retrievable. The mechanism for handling non-conforming material/documents include inform to certification body if there is overproduction is described in SOP/BWLM/SC. This mechanism should also be used to take appropriate steps when there is a projection of overproduction.
3. Record Keeping A review to the records and related documentation of the implementation of the SCCS found that accurate, complete and up to date records and report have been maintained by BAMM. The records and reports are easily accessible both in hard copy and soft copy. Retention time for these records and reports has been determined (5 years). Balance among all FFB, CPO and PK receipts, produced and delivered are conducted in daily basis. The record has been well maintained. The mechanism for delivering product only from positive stock was in place and the sales records reviewed (see below) compare against stock report demonstrated that the site only delivered RSPO certified product from positive stock. Product name (CPO or Kernel) and supply chain model (MB) were notified in sales records. During on site observation was found that the kernel is crushed in the facility under PT Tapian Nadenggan.
4. Sales and Goods Out BAMM‟s CPO is delivered to Tarjun bulking terminal while the kernel is delivered to Tarjun Kernel Crushing Plant. Procedure SOP/BAMM/DO and SOP/BAMM/PK describe the process of delivery and its recording. A review to delivery records January 2012 found that result of the delivery (CPO and PK) was well recorded and maintained. Delivery records found that information of who buyer is, quantity delivered, product description, remarks regarding applied supply chain model (Mass Balance model) and the transporter were included.
5. Training Qualification of personnel for each job function has been defined and documented, including training requirements necessary for Supply Chain. Procedure has been established and implemented for identifying training needs, programming training, delivering training, and evaluating effectiveness of training. Training for Supply Chain requirements have been delivered to personnel in BAMM. The training records were made including training material, training attendance and individual training record. Individual training record, for personnel in relation to implementation of Supply Chain requirements was sighted, e.g. Mill Manager, Supervisors and administration.
6. Claims The system complies with RSPO Rules for Communication and Claims. Opportunity for improvement System of recording of stock and delivery has been clearly separated between certified CPO (and kernel) and non-certified CPO (and kernel) in manual system; however in SAP (computerized record) it has not been clearly separated yet.
3.2
Recommendation
The recommendation from this audit is approval as a producer of RSPO Certified Sustainable Palm and Palm Kernel. Audit recommendations are always subject to ratification by RSPO. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report This report was prepared by: Ria Gloria, Sigit Yulianto, Fadjar Deniswara and Irawan Bawono
3.3 Environmental and Social Risk for this scope of certification for planning of the surveillance audit
Mill and Estates: SIA update and execution plan, BHL issues, communication and consultation between growers and/or millers local communities and other affected or interested parties Estates: HCV management plan, SPNA: Legal boundary of SHM and its maintenance SPNA: PKB of worker SPNA: Progress of DELH (Document of Environmental Evaluation) BAMM: Permit of surface water abstraction BMLE: Water management
3.4 Acknowledgement of Internal Responsibility and Formal Sign-off of Assessment Findings Please sign below to acknowledge receipt of the assessment visit described in this report and confirm the acceptance of the assessment report contents including assessment findings. Signed for and on behalf of PT. SMART Tbk.
Mr. Ismu Zulfikar Head of Environmental Department Date Signed for and on behalf of PT. SAI Global Indonesia
Mr. Joko Prayitno Certification Manager Date
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Appendix “A” – Audit Record Date
Auditor
10.01.2012
Audit meetings plus functions/ processes/ areas/ *shifts audited: Batu Ampar Mill (BAMM)
Ria, Sigit, Denis, Bayu Resit
Sigit
Sigit
Ria
Ria
Denis & Bayu
Denis & Bayu Denis & Bayu
Opening meeting BAMM and its supply bases: Document review: Principle 3: Criterion 3.1 (BAMM and its supply bases) Principle 8: Criterion 8.1 (BAMM and its supply bases) BAMM: Document review and site visit: Principle 1: Criterion 1.2 (OHS, HGU and record) Principle 2: Criterion 2.1 (evaluation of compliance with OHS regulation), Principle 4: Criteria 4.7, 4.8 SCCS: Module E.5.1 / D.6.1 Clarification: Time bond plan Requirements for uncertified management units and/or holdings BAMM: Document review and site visit: Principle 1: Criterion 1.2 (AMDAL) Principle 2: Criterion 2.1 (evaluation of compliance with Mill regulation) Principle 4: Criterion 4.4 Principle 5: Criteria 5.1, 5.3, 5.4, 5.6 Principle 6: Criteria 6.1 (6.1.2, 6.1.3 Minor) BAMM: Document review: Principle 1: Criteria 1.1, 1.2 (Social document and record) Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation) Principle 6: Criteria 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 Interview with labour union: Labour Union and Gender Committee Interview with employees of BAMM Criteria 5.1, 5.2, 6.3, 6.4, Community Development: Interview with local community: Community leader, Religion leader and Youth leader BMME, BMLE, SPNA, SPNE
Resit 11.01.2012
Document review: Principle 5: Criterion 5.2 Batu Mulia Estate (BMLE)
Sigit
Denis & Bayu
Denis & Bayu Denis & Bayu Denis & Bayu
Document review and site visit: Principle 1: Criterion 1.2 (OHS, HGU & Estate permit and record) Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2, 2.3 Principle 4: Criteria 4.6 (4.6.2 minor) 4.7, 4.8 Principle 5: Criteria 5.5 (5.5.3 major and 5.5.1 minor) Document review: Principle 1: Criteria 1.1, 1.2 (Social document and record) Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation) Principle 4: Criterion 4.6 (4.6.3 minor) Principle 6: Criteria 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 Site visit: Observation of Facility Interview with labour union: Labour Union and Gender Committee Interview with employees of BMLE Criteria 5.1, 5.2, 6.3, 6.4, Community Development: Interview with local community: Community leader, Religion leader and Youth leader
Audit Report Ria
Ria & Resit 12.01.2012
Document review and site visit: Principle 2: Criterion 2.1 (evaluation of compliance with Estate regulation) Principle 4: Criteria 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 Principle 5: Criteria 5.1, 5.3, 5.4, 5.5 Principle 7 (when applicable) Document review and site visit: Principle 5: Criterion 5.2 Sungai Panci Estate (SPNE)
Sigit
Denis & Bayu
Denis & Bayu Denis & Bayu Denis & Bayu
Ria
Ria & Resit 13.01.2012
Document review and site visit: Principle 1: Criterion 1.2 (OHS, HGU & Ijin Perkebunan and record) Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2, 2,3 Principle 4: Criteria 4.6 (4.6.2 minor) 4.7, 4.8 Principle 5: Criteria 5.5 (5.5.3 major and 5.5.1 minor) Document review: Principle 1: Criteria 1.1, 1.2 (Social document and record) Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation) Principle 4: Criterion 4.6 (4.6.3 minor) Principle 6: Criteria 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 Site visit: Observation of Facility Interview with labour union: Labour Union and Gender Committee Interview with employees of SPNE Criteria 5.1, 5.2, 6.3, 6.4, Community Development: Interview with local community: Community leader, Religion leader and Youth leader Document review and site visit: Principle 2: Criterion 2.1 (evaluation of compliance with Estate regulation) Principle 4: Criteria 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 Principle 5: Criteria 5.1, 5.3, 5.4, 5.5 Principle 7 (when applicable) Document review and site visit: Principle 5: Criterion 5.2 Sungai Panci Plasma (SPNA)
Sigit
Denis & Bayu
Denis & Bayu Denis & Bayu Denis & Bayu
Ria
Ria & Resit
Document review and site visit: Principle 1: Criterion 1.2 (OHS, HGU & Estate permit and record) Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2 (2.2.2. major) Principle 4: Criteria 4.6 (4.6.2 minor) 4.7, 4.8 Principle 5: Criteria 5.5 (5.5.3 major and 5.5.1 minor) Document review: Principle 1: Criteria 1.1, 1.2 (Social document and record) Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation) Principle 4: Criterion 4.6 (4.6.3 minor) Principle 6: Criteria 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 Site visit: Observation of Facility Interview with labour union: Labour Union and Gender Committee Interview with employees of SPNA Criteria 5.1, 5.2, 6.3, 6.4, Community Development: Interview with local community: Community leader, Religion leader and Youth leader Document review and site visit: Principle 2: Criterion 2.1 (evaluation of compliance with Estate regulation) Principle 4: Criteria 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 Principle 5: Criteria 5.1, 5.3, 5.4, 5.5 Principle 7 (when applicable) Document review and site visit: Principle 5: Criterion 5.2 Batu Ampar Mill (BAMM)
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Audit Report Irawan 14.01.2012
Principle 4: Criterion 4.1 Principle 6: Criterion 6.10 SCCS except SCCS: Module E.5.1 / D.6.1 Batu Ampar Estate (BAME)
Sigit
Denis & Bayu
Denis & Bayu Denis & Bayu
Ria
Ria & Resit
Document review and site visit: Principle 1: Criterion 1.2 (OHS, HGU & Ijin Perkebunan and record) Principle 2: Criteria 2.1 (evaluation of compliance with OHS regulation), 2.2 (2.2.2. major) Principle 4: Criteria 4.6 (4.6.2 minor) 4.7, 4.8 Principle 5: Criterion 5.5 (5.5.3 major and 5.5.1 minor) Document review: Principle 1: Criterion 1.1, 1.2 (Social document and record) Principle 2: Criterion 2.1 (evaluation of compliance with Social regulation) Principle 4: Criterion 4.6 (4.6.3 minor) Principle 6: Criteria 6.1, 6.2, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.9, 6.11 Site visit: Observation on Facility Interview with labour union: Labour Union and Gender Committee Interview with employees of BAME Interview with Head of Koperasi Tekad Maju Document review and site visit: Principle 2: Criterion 2.1 (evaluation of compliance with Estate regulation) Principle 4: Criteria 4.1, 4.2, 4.3, 4.4, 4.5, 4.6 Principle 5: Criteria 5.1, 5.3, 5.4, 5.5 Principle 7 (when applicable) Document review and site visit: Principle 5: Criterion 5.2 Batu Ampar Mill (BAMM)
Irawan
SCCS (continue)
Ria, Sigit, Denis, Bayu, Resit, Irawan
Auditor review
Ria, Sigit, Denis, Bayu, Resit, Irawan
Closing meeting
All applicable requirements of relevant standards are covered during the audit of the „Functions/Processes/Areas. * Enter shift details only where applicable.
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Audit Report Appendix “B” – Nonconformities and Opportunity for Improvement Summary RSPO Principe and Criteria, Indonesian National Interpretation Major Nonconformity QEF08E.RSPO.01 Non-Conformance Report CLIENT ATTENTION – IMPORTANT
Failure to provide action plans as arranged with SAI Global and/or to implement correction and corrective action within the nominated time frames may lead to a recommendation that your certification be suspended.
Note to Auditors: Use one page per „deficiency‟. For extra pages use to select all (ctrl+A) put curser at the bottom of the last page and select copy (ctrl+C)
Activity #:
PT. SMART Tbk. Batu Ampar Mill and its supply bases Site: 2. Compliance with applicable laws and regulations
363103
RSPO Principle: RSPO Criteria and Indicator(s):
Client:
Criterion 2.2 Indicator 2
NCR#:
2012-01
Category:
App/Cert:
RSPO20006
Batu Ampar Mill Major
Section 1- Details of non-conforming situation:
No evidence that legal boundaries are clearly demarcated and visibly maintained at SPNA Objective evidence: Sungai Panci Plasma (SPNA) consists of 4 villages i.e. Telaga Sari, Mandala, Sukamaju and Plajau Baru. Legal boundaries for 3 villages i.e. "Telaga Sari, Mandala dan Sukamaju" could not been seen during the audit as stated/required by land own title certificates. (Sungai Panci Plasma (SPNA) terdiri dari 4 desa yaity Telaga Sari, Mandala, Sukamaju dan Plajau Baru. Batas-batas legal lahan tidak ditemukan pada ke tiga desa "Telaga Sari, Mandala dan Sukamaju" sebagaimana dinyatakan dalam dokumen kepemilikan tanah SHM (Sertifikat Hak Milik). Ria Gloria Audit Team Leader
Organization’s acknowledgement of receipt of NCR
Name
Date:
14 January 2012
Name
Ismu Zulfikar
Date:
14 January 2012
Section 2- Organization’s Proposed Action Plan including Root Cause Analysis, Correction and Corrective Action with completion date(s) (Attach separate sheet if required)) Root Cause Analysis (how/why did this happen?): Village boundary was not sign of land ownership but can be made as outer boundary from SPNA which legality of the ownership is collective
Correction with completion dates (what will be the immediate fix?): The organisation has been coordinated and has gotten approval from KUD Gajah Mada to provide legal boundaries of Desa Telaga Sari, Mandala, Sukamaju and Plajau Baru The organisation has performed consultation with BPN with regards to provision of village legal boundaries Provide and maintain legal boundaries Completion Date:
15 February 2012
Corrective Action with completion dates (what action will be taken to prevent recurrence?): Determine legal boundaries for each small holder with collective ownership Completion Date:
15 March 2012
SAI Global Verification Method and date due: QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Audit Report Off site verification, verifying document and pictures. Due Date: Organization Representative
14 April 2012 Name: Date:
H. Suhardi 10 February 2012
SAI Global review and acceptance of Corrective Action Plan
Name: Date:
Sigit 22 February 2012
Section 3- Details of SAI Global verification of organization’s implementation of action plan:
Based on the map and pictures, it was verified the marking of legal boundaries for SPNA has been provided, approved by BPN. The maintenance programme to legal boundaries 2012 was also sighted. (22/02/2012).
Section 4- NCR closed out by SAI Global on (date): 22 February 2012
QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
SAI Global Team Leader Name: Ria Gloria
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Audit Report
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Audit Report
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Minor Nonconformities XXXXXXXXXX No RSPO Details Criterion 1 2.1 BAME, SPNE Several containers of hazardous material or waste were not completed with label and or hazard symbol, e.g. container of pesticide solution stored in Division Warehouse (BAME), container of diesel fuel in diesel generator set room in Division Office and workshop (SPNE and BAME), container of medical waste in Clinic (SPNE). 2
4.1
BAMM It was found that thermometer on screw press #2A and kernel silo #4 was not function. Calibration of laboratory balance (Sartorius & Ohaus) was not done using calibrated weight scale. Oven (Memmert) used for moisture analysis has not been calibrated. It was indicated that Clarification daily report at the day audit was not made properly.
3
4.4
BMLE Program of cleaning of main drain, collection drain and making of field drain has been established. However program and realization of cleaning of main drain, collection drain and making of field drain was not clear as to which block area was cleaned. One of water management is using piezometer. Water level of piezometer is monitored daily. However action to be taken was not clear when the water level exceeded
Corrective Action Plan Label and hazard symbol has been completed in each hazardous material and waste containers. Label and hazard symbol is monitored monthly using checklist.
Thermometer on screw press #2A and kernel silo #4 has been changed on 26 January 2012 through work order #3351991 for kernel silo and #3351992 for screw press. Monitoring is conducted regularly. Calibrate weigh scale to Metrology Agency Banjarmasin. Calibrate oven (Memmert) with Mercury Thermometer Stick Re-develop and re-train with regards to filling of daily Log-sheet Program data of cleaning of drain year 2011 has been completed with block Program and monitoring of level water has been made based on weekly monitoring of Piezometer. Action plan has been stated in the program.
Completion Date 18 Jan 2012
16 Jan 2012 15 Jan 2012 15 Jan 2012
PIC
Environment Officer BAME & SPNE, UH BAME & SPNE
Assistant of M&R, BAMM, UH BAMM, Assistant of Laboratory Assistant of Process, Head of Assistant of BAMM
18 January 2012 31 January 2012
Environment Officer BMLE, UH BMLE Environment Officer BMLE, UH BMLE
AUDIT REPORT the standard. 4
5
6
4.6
4.7
4.7
All Estates In general, medical checkup has been performed. However, several key parameters were not performed during medical checkup e.g. Rontgen and spyrometry test for employees exposed to chemical hazards (e.g. sprayer, chemical mixer and warehouse operator, fertilizer warehouse operator) and evaluation of musculoskeletal disorders (MSDs) to the employees with ergonomic exposed to ergonomic hazard (e.g. fertilizer warehouse operator). Noted: a program to cover these parameters has been established and the results will be verified during next SAI Global audit.
Program of medical checkup with regards to Rontgen and MSDs for employees exposed to chemical and ergonomic hazard year 2012 has been provided and will be conducted according to determined schedule by Doctor of South Kalimantan 1 Region
18 Jan 2012
Doctor of South Kalimantan Region 1, Safety Officer All Estate
BAMM and all estates Found several substandard condition e.g. opened electrical connection, belt not covered, fuel tank not provided with grounding and venting system, safety valve of compressor vessel not working etc (BAMM, SPNE, SPNA, BMME, BAME). Immediate actions have been taken to rectify the issue and generally the finding can be closed. However, during surveillance audit, the issues will be checked again to verify the effectiveness of actions taken.
Grounding and venting system of fuel tank has been installed. Safety valve of compressor vessel has been worked during inspection. Electrical connection and van belt has been covered. Monitoring and checklist is conducted regularly.
18 Jan 2012
Safety Officer, UH All Unit Mill & Estate
All Estates Even though the pressurized vessel (compressor vessel) having the permit for operation for local authority, however, the justification for safe operation could not been fully given based on the following facts.
Inspection of compressor vessel including measurement of wall thickness is conducted at the same time with extension of permit by local authority. Work program or inspection checklist
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15 April 2012
Safety Officer, UH All Unit Mill & Estate
o
o
7
4.7
AUDIT REPORT Inspection conducted by local authority of safety valve is conducted monthly limited to visual inspection. No wall by safety officer and head of thickness measurement has been reported mechanical. and compared to the minimum thickness as designed (all estates). There was no evidence that safety valve regularly tested (all estates).
BAMM The measurement of chemical factors at BAMM has been performed however the location of measurement was outside of the factory, not at workplace. While for all estates, the measurement of chemical factors at workplace has not been performed, e.g. fertilizer warehouse, chemical warehouse. The result of lighting level at BAMM indicating a non realistic result and has not been reviewed and compared to the minimum lighting level. The structure of follow up to the results of medical check up has not been established, e.g. statistical analysis, health promotion, preventive action and curative action to the employees having suspected health problem, e.g. some audiometric tests of employees of BAMM were classified not good.
Measurement program of chemical factors at working area in Mill and Fertiliser and Chemical Warehouse has been established. Measurement is conducted in March 2012 by independent laboratory. Confirmation will be conducted to laboratory during site visit to BAMM in March 2012. Make purchase request of lamp for factory lighting to inline with lighting level in working area. Recapitulate and recommend resulting of medical checkup and following up the result of audiometric test which not met the standard. Establish program to follow up result of statistical analysis of the highest diseases
Update the personal file to include realization of training conduct
15 March 2012 15 March 2012 20 Feb 2012
Staff LH BAME, Environment Officer & Uh All Unit Mill & state Safety Officer, UH BAMM Doctor of South Kalimantan Region 1, Safety Officer & UH All Unit Mill & Estate
Progress Noted: A programme to monitor and measure the chemical factors at workplace has been established by LH Section. Results to be verified during next SAI Global surveillance audit. 8
4.8
Mill and all estates Even though the evidences of training of
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18 Jan 2012
Safety Officer All
AUDIT REPORT employees were evidence but the updating of personal training records still not consistent, e.g. many training has been performed in 2011 but the personal training records has not been updated.
Unit Mill & Estate
9
5.2
All Estates HCV management plan has been established however the plan has not address the issues (threats) present and not considered sufficient to conserve the HCV within the concession area.
Improve the HCV management plan to conserve the HCV within the concession area
28 Feb 2012
Environment Dept. JKTO Section HCV, SPO Officer PSM 3
10
5.3
BAMM pH of water from neutralizing pond is checked daily. Result mentioned that it was inline with Ministry of Environment Degree #51/10/1995. Last measurement of quality of water from neutralizing pond with complete parameter was performed on 9 April 2007. Measurement result exceeded Ministry of Environment Degree #51/10/1995 for parameter BOD and COD. Complete measurement has not been performed any longer.
Measure quality of water from neutralizing pond inline with Ministry of Environment Degree #51/10/1995
2 April 2012
Assistant Laboratory, UH BAMM
11
5.3
SPNE Based on official report of pesticides containers land-filling, pesticides containers was land-filled once in 2011, on 2 December 2011. Permit of temporary storage of hazardous waste mentioned that hazardous wastes are required to be kept within 180 days. Record of contaminated rags was not provided. Contaminated water from pit at area of diesel fuel loading pipe was overflowed due to pit
Establish program to land-fill pesticide containers in line with permit. Record of contaminated rags has been provided and monitored monthly. Report the record to Agency of Environment of Kota Baru quarterly. Improve the design of diesel fuel loading area by adding the roof. Improve the design of drainage and pit control in emergency shower area with cover.
18 January 2012 2 March 2012 15 March 2012 31 January 2012
Environment Officer SPNE, UH SPNE Environment Officer SPNE, UH SPNE UH SPNE Environment Officer SPNE, UH
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AUDIT REPORT was filled with rain water. Contaminated water from emergency shower or eyes wash was connected directly to open drainage.
SPNE
11
6.6
BAMM Record of the results of the meeting SPM cannot be shown, but this meeting is held periodically every month.
Record of meeting between organization and SPM has been provided
18 January 2012
UH BAMM
12
6.10
BAMM The contractual agreement between mill and local business (smallholder) was expired in December 2011; the new contract was only “Statement Letter” that was not clearly described the payment term.
Develop new “Letter of Agreement” between mill and local contractor including payment term, time frame and validation.
15 March 2012
KTU BAMM, UH BAMM
Mill Supply Chain Certification System No
SCCS Requirements
Details
Corrective Action
PIC
Completion Date
NONE Opportunities for improvement – RSPO 1. Criterion 2.1 Workers at the KUD (Village Unit Cooperatives) Gadjah Mada has committed to comply with all the requirements of the PKB (Joint Work Agreement), but it is needs to be considered, to be approved by the Department of Labor. 2. Criterion 4.1 Consider to identify and calibrate the measurement devices used in mill; thermometer on screw press, pressure gauge on vacuum drier and thermometer on kernel silo. 3. Criterion 4.3 QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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AUDIT REPORT Realization of road maintenance has been recorded. It could be considered to improve the record by mentioning block area where road maintained not only mentioning complex area. 4. Criterion 4.4. Quality of surface water has been measured upstream and downstream. Quality of downstream surface water exceeded Regulation of South Kalimantan Governor #5/2007 class II for parameter BOD, COD and pH. Downstream surface water measured was mixed with other sources not only from mill. It could be considered to measure quality of river water after mill outlet without mixing with other sources. 5. Criterion 4.7 Consider to review and improve the design of harvesting bridge. It was observed that at several locations, the width of bridge was 20 cmeven though the height of bridge from the land was below 2 m (best practice considered as working at height). Consider to improve the knowledge and skill for performing accident investigation and determining the immediate cause and basic cause. 6. Criterion 5.2 All Estates Even though the HCV report has been commented on by a reviewer, it could be considered to carry out formal Peer Review. It could be considered to improve knowledge and skills of HCV Officer, e.g. give particular background for HCV management. 7. Criterion 5.2 BMLE A waste final disposal was newly constructed within the 50m buffer zone of a nature reserve but not operation yet. It could be considered to relocate the waste final disposal further away from nature reserve. 8. Criterion 6.1 Mill and Estates Considered to perform peer review to SIA document to ensure that all impacts are identified. 9. Criterion 6.1 BAMM Social Impact Assessment Report is available, considered to create a map with the position of the mill, estates and stakeholders 10. Criterion 6.2 BAMM List of stakeholders are available, considered to create a verification method of stakeholders list. It is needed to ensure that the lists of stake holders are the community directly affected by mill and estates. 11. Criterion 6.5 BAME, SPNA Considers to mention local contractor into List of Stakeholder and his Socialization RSPO. Number of employee status conversion has been reported annually ( in summary ) to present transparency that company do have good will to improve social degree of BHL workers to permanent worker . Consistency of such produced report will be checked again in the next audit. Criteria & requirements for BHL conversion to SKU status might be also formalised in a documented reference. 12. Criterion 6.11 BAME The contractual agreement between mill and local business (smallholder) was expired in December 2011; the new contract was only “Statement Letter” that was not clearly described the payment term.
Opportunities for improvement – Mill Supply Chain Requirements System of recording of stock and delivery has been clearly separated between certified CPO (and kernel) and non-certified CPO (and kernel) in manual system; however in SAP it has not been clearly separated. QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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AUDIT REPORT
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Appendix “C” – Stakeholder’s issues and comment
Date Time Location Interviewee
: 10 & 14 January 2012 : 15.00 – 17.00 AM : BAMM and BAME : Grader Mechanics, Chairman of Union, Loading Ramp Operator, Boiler Operator Status of workers was determined in the employment contract, and mentioned wage and working hours. Calculation of wage and over time was understood. Status harvester is a SKU daily, and the amount of wages received are in accordance with government regulations Status of workers was determined in the employment contract, and mentioned wage and working hours. Calculation of wage and overtime was understood. Above personnel were worked in the organization more than 2 years. Started work at 6.30 am to 02.00 pm. Wage was paid according employment contract and paid on time. Accept the rice for his family every month Organization provided training for OSH, and communicated for sexual harassment policy. Above personnel said there are no complaints to organisation, in case any complaint it will be informed to „mandor‟ (foreman). Representative housing, and clean water and electricity provided by the organization
Date Time Location Interviewee
All gentlemen were lived around the estate is more than 10 years. Community around estate (75%) have their own oil palm plantation Request for rental of heavy equipment for road repairs very quickly followed by estate. Estate is very concerning about the environment around estate. Wage employees are paid in accordance with applicable regulations. Between estate with community estate established a good relationship. Improvement of school building even without being asked by the community. There is no conflict with farmers and plantation land. For religious activities, social and general repairs facilities, estate parties must be involved. Religious activities such as mass circumcisions are conducted periodically
Date Time Location Interview
: 10 January 2012 : 17 – 18.30 : Desa Serongga : Chairman MUI, Youth Leader
: 11 January 2012 : 16.00 – 17.00 : BMLE : Chairman of Union, Woman worker
Status of workers was determined in the employment contract, and mentioned wage and working hours. Calculation of wage and overtime was understood. Above personnel were worked in the organization more than 2 years.
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Started work at 6.30 am to 02.00 pm. Wage was paid according employment contract and paid on time. Accept the rice for his family every month Organization provided training for OSH, and communicated for sexual harassment policy. Above personnel said there are no complaints to organization, in case any complaint it will be informed to „mandor‟ (foreman). Representative housing, and clean water and electricity provided by the organization. Gender committee meeting was conducted periodically and attended from the representative gender committee from estate. There is no issue related sexual harassment for all workers.
Date and Time Location Interviewee
: 11 January 2012 : Desa Langadai : Community Leader, Youth Leader
All gentlemen have been living around the estate for more than 10 years. They did not work in the estate/mill. Community estate (75%) have their own oil palm plantation Request for rental of heavy equipment for road repairs very quickly followed by estate. Estate is very concerning about the environment around estate, Wage employees are paid in accordance with applicable regulations. Between estate with community estate established a good relationship. Improvement of school building even without being asked by the community. There is no conflict with farmers and plantation land. For religious activities, social and general repairs facilities, estate parties must be involved. Religious activities such as mass circumcisions are conducted periodically.
Date : 12January 2012 Time : 16.00 – 17.00 Location : SPNE Interviewee : 2 Workers Status of workers was determined in the employment contract, and mentioned wage and working hours. Calculation of wage and over time was understood. Status harvester is a SKU daily, and the amounts of wages received are in accordance with government regulations. Started work at 6.30 am to 02.00 pm. Wage was paid according employment contract and paid on time. Accept the rice for his family every month Organization provided training for OSH, and communicated for sexual harassment policy and reproductive rights. Above personnel said there are no complaints to organization, in case any complaint it will be informed to „mandor‟ (foreman). Representative housing, and clean water and electricity provided by the organization.
Date and Time Location Interviewee
: 12 January 2012 : Desa Pantai : Community leader
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All gentlemen were lived around the estate is more than 10 years. Community estate (75%) have their own oil palm plantation Request for rental of heavy equipment for road repairs very quickly followed by estate. Estate is very concerning about the environment around estate, Wage employees are paid in accordance with applicable regulations. Between estate with community estate established a good relationship. Improvement of school building even without being asked by the community. There is no conflict with farmers and plantation land. For religious activities, social and general repairs facilities, estate parties must be involved. Religious activities such as mass circumcisions are conducted periodically.
Date Time Location Interviewee
: 13 January 2012 : 16.00 – 17.00 : SPNA : Worker, Gender Committee
Status of workers was determined in the employment contract, and mentioned wage and working hours. Calculation of wage and over time was understood. Status harvester is a SKU daily, and the amounts of wages received are in accordance with government regulations. Started work at 6.30 am to 02.00 pm. Wage was paid according employment contract and paid on time. Accept the rice for his family every month Organization provided training for OSH, and communicated for sexual harassment policy and productivity rights. Above personnel said there are no complaints to organization, in case any complaint it will be informed to „mandor‟ (foreman). Representative housing, and clean water and electricity provided by the organization. Gender committee meeting was conducted periodically and attended from the representative gender committee from estate. There is no issue related sexual harassment for all workers
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Comment from Department of Labour and Transmigration of Kota Baru District Comment from Department of Labour and Transmigration of Kota Baru District was submitted to SAI by mail #566/069/Disosnakertrans on 12 January 2012. This letter was received by SAIG Office on 17 January 2012, after closing meeting in Batu Ampar and Mill Estate. So this is not asked at the time of public consultation. SAIG requested SMART to follow up charges from Department of Labor and Transmigration of Kota Baru District. Stakeholders accept this letter is the regent of Kota Baru, Head of Department of Labor and Transmigration Banjarmasin and Estate Manager Sinar Mas. The response of the SMART-related charges from the Office of Manpower and Transmigration of the Kota Baru has been answered by the party represented by the RC SMART Kalsel I. No. 01
02
03
04
Feedback and or request Labor with over 3 (three) months, or more than 1 (one) year, his status is still a BHL which shall be appointed as Permanent Employee. It is contrary to Article 58 paragraph (1). Article 59 paragraph (1), (3) and (4) of Law #13 year 2003 on Manpower Jo, Article 10 paragraph (2), (3), Decree of Minister of Labor Affairs #100/MEN/VI/2004 about Implementation Labor Agreement Provisions for specific time periods
The labor work in the period of work for 3 months even 1 (one) year are not registered in the program of Labor Social Security, Old Age Security, Employment Accident Insurance, Death Insurance, Health Insurance. This is contrary to Article 4 paragraph (1) of Law #3 year 1992 on Workers' Social Security Jo. Article (2) Paragraph (2) Government Regulation #14 year 1993 concerning Manpower Social Security Program.
Workforce with the period of work for 3 months even 1 (one) year is not given Religious Holiday Allowance (THR) and is given only the magnitude Lebaran package, it does not comply with the Minister of Manpower Regulation #4 year 1994 on the feast of religion for company workers. Workforce with the period of work for 3 months and more than 1 (one) year do not get the safety equipments in accordance with article 14 paragraph (c) of Act #1 of 1970 on occupational safety
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Organisation response and action to be taken The charge of the Office of Labor Law #13 of 2003 is not appropriate because the regulations for PKWT and not BHL The main provisions BHL the execution time is less than 21 (twenty one) days within 1 (one) month as in article 10 paragraph (2) Decree #100 year 2004. While in its implementation at PT. SMART Tbk, the working time of only 16 days in a month so there is no need to raise provisions for PKWT and BHL be done even if the contract for 3 months. The organization stated that t the Decree of the Ministry of Manpower #150 year 1999, section 9, references in paragraph 2 and 3 was actually fulfilled. The company has already registered all workers to Social Security of Labour, and including for labor by daily status basis (BHL). As of November 2011, the company continues to pay the liability for Social Security to BHL ½ package (work accident insurance and life insurance)
The organization already provided THR (Holiday Allowance) to all employees and this is in compliance with the Regulation of Secretary
SAI Global audit observation
Relevant documentation
SAI Global issued Opportunity for Improvement (OFI); detail of OFI was mentioned in the report in criterion 6.5.
SAI Global in this case made findings that are OFI; its detail can be seen in the audit report in criterion 6.5
SAI Global in this case made findings that are OFI; its detail can be seen in the audit report in criterion 6.5
Law #13/2003 article 58 and 58 Decision of the Minister 1000 - Chapter V Daily or Work Release Agreement
Ministerial Decree 100 of 2004, Chapter V of the Employment Agreement or Release Daily Article 9 dan10 Law No. 3 1992, Chapter II Organisation of Labor Social Security Article 4.
Regulation of Ministry of Labour #4 year 1994
of Labor #4 year 1994. All employees, BHL, or SKU PKWT had been given PPE for free of charge according to the type of work.
From the results of interviews and an audit conducted by SAI Global with employees, it is evident that the PPE is given free of charge to employees.
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Law #1 year 1970
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Comment from Non Government Organisation: Greenomics Comment from Greenomics was submitted to SAI by mail on 16 January 2012. Feedback and or request Based on Integrated Research Report in Proposed Changes in Forest Area, February 2009 as mandate of Act #41/1999 5 blocks of oil palm plantation of PT. Tapian Nadenggan was operated in conservation area. 2 bloks of oil palm plantation of PT. Tapian Nadenggan were operated in production forest. PT. SMART Tbk. and PT. Tapian Nadenggan were operated in production forest. Organisation response and action to be taken PT. SMART Tbk. has obtained HGU since 2003 and PT. Tapian Nadenggan has obtained HGU since 1999. PT. SMART Tbk. and PT. Tapian Nadenggan has been operated inline with permit owned and the result inline with procedure and applied regulation issued by central and local government. PT. SMART Tbk. and PT. Tapian Nadenggan has not been received the direction from local government and Ministry of Forestry with regards to Integrated Research Report According to Decree of Ministry of Forestry #435/Kpts-II/2009, forest boundary refer to Act #41/1999 article 15 has not been performed. SAI Global audit observation HGU of PT. SMART Tbk. and PT. Tapian Nadenggan have been reviewed. Forest land release permit (Izin pelepasan kawasan hutan) of PT. Tapian Nadenggan was provided. There was no legal case against the organisation in regards to these issues Relevant documentation PT. Tapian Nadenggan Forest land release permit (Izin pelepasan kawasan hutan) No. 151/Kpts-11/1993, +/4,789 Ha, dated 18 April 1993 and No. 115/Kpts-11/1996, +/- 3,080Ha, dated 27 March 1996. A total is +/- 7,799 Ha. HGU #23 dated 28 July 2000, 4719 Ha, permit was given to PT. Inti Gerak Maju. PT. Inti Gerak Maju was taken over by PT. Tapian Nadenggan in 2007, based on Notarise Letter, Suhartini SH, dated 20 April 2007 and HGU #24, dated 28 July 2000, 2,929.037 Ha PT. SMART Tbk. HGU #22 dated 1 October 2003, +/- 3,448 Ha. HGU #23 dated 20 January 2005, +/- 1,443.55 Ha. PT. SMART Tbk. is also in progress to add the land use title for around 636,33 Ha. The progress of this additional HGU process was sighted “Application of HGU #006/PL/DL-SMART/11/2011, dated 2 November 2011.
QEF08sa.RSPO.01 / Issue Date: 2009-Apr-15
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Appendix “D” – Definition of, and action required with respect to audit findings: Major Nonconformities occur when system is failing to meet a relevant compulsory indicator. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client‟s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. Correction and corrective action plan must be submitted to SAI Global for approval within 14 days of the audit. Follow-up action by SAI Global must „close out‟ the NCR or reduce it to a lesser category within 90 days or less where specified. Certificate of conformance to the RSPO Criteria cannot be issued while any major nonconformity is outstanding. Major nonconformities raised during surveillance audit shall be addressed within 60 days, or the certificate will be suspended. Major nonconformities not addressed within a further 60 days will result in the certificate being withdrawn. Minor Nonconformities occur when system is failing to meet other indicators. Action required: This category of findings requires SAI Global to issue a formal NCR; to receive and approve client‟s proposed correction and corrective action plans; and formally verify the effective implementation of planned corrections and corrective action. In this instance, a certificate may still be awarded providing the root cause of the problem is identified and an acceptable plan is put in place to achieve the outstanding requirements in an agreed time frame. Verification will be made at subsequent surveillance audits. Minor nonconformities will be raised to major if they are not addressed by the following surveillance audit. Opportunity for Improvement is a documented statement, which may identify areas for improvement, but shall not make specific recommendation(s). Client may develop and implement solutions in order to add value to operations and management systems. SAI Global is not required to follow-up on this category of audit finding.
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