RSPO Assessment Report PUBLIC SUMMARY

Report number: 814844RSPOCUCRPT-2010-01-SA RSPO Assessment Report PUBLIC SUMMARY PT Sukajadi Sawit Mekar Jl. Jend. Sudirman KM 85 Desa Sebabi, Kecam...
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Report number: 814844RSPOCUCRPT-2010-01-SA

RSPO Assessment Report PUBLIC SUMMARY

PT Sukajadi Sawit Mekar Jl. Jend. Sudirman KM 85 Desa Sebabi, Kecamatan Telawang, Kabupaten Kotawaringin Timur, Propinsi Kalimantan Tengah.

This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope of the certificate.

Report prepared by: Senniah A/L Appalasamy. (Lead assessor). Certification decision made by: David Ogg

Control Union (Indonesia) Jl Kramat 3A, Cilandak Timur Jakarta Selatan 12560 Phone: 062-21-7884 2016 [email protected]

Control Union (Malaysia) S/B Persiaran Raja Muda Musa, Off Jalan Sg Berith, Teluk Gadong, 41100, Klang, Selangor. Malaysia. Phone 03-3377 1600 / 1700 [email protected]

Control Union Certifications. (Head office) Meeuwenlaan 4-6, P.O. Box 161. 8000 AD Zwolle. The Netherlands. [email protected]

Phone: 0031 38436 0100 Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, Eurepgap, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

www.controlunion.com 4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA Contents 1. Scope of the Certification Assessment. 1.1 1.2 1.3

1.4

1.5 1.6 1.7

National Interpretation used for the assessment. Assessment type. (mill, estate and mill, plantation only etc. etc) Location maps. 1.3.1 Map to show geographical location. 1.3.2 Map to show the supply base and neighbouring entities. 1.3.3 Location of the mills and approximate tonnages certified. Description of supply base. 1.4.1 General description. 1.4.2 Location of the supply base including:  Control Union code for the certificate.  Location address.  GPS reference. 1.4.3 Statistics of supply base including:  Control Union code for the certificate.  Area of oil palm.  Mature area.  Estimated annual FFB production in tonnes.  Planting years.  Replanting Cycle. Contact person Audit against the rules for Partial Certification. 1.6.1 Introduction. Date certificate issued and scope of certificate

2. Assessment Process 2.1 Certification body. 2.2 Qualifications of the assessment team. 2.2.1 Qualifications of the lead assessor . 2.2.2 Qualifications of the assessment team 2.3 Assessment methodology. 2.3.1 General overview. 2.3.2 Assessment agenda including:  Assessment dates.  Sites visited.  Main activities.  Total number of person days spent on site. 2.4 Stakeholder consultation. 2.4.1 Summary of how stakeholder consultation was organised. 2.4.2 List of National and International stakeholders consulted. 2.5 Date of next surveillance visit.

3

Assessment Findings 3.1 3.2 3.3 3.4 3.5

Annex.

Lead assessor’s summary and recommendation for certification. Summary of the findings by criteria. Non conformity registers. Issues raised during stakeholder consultation and company responses. Formal sign-off of the assessment findings. 3.5.1 Acknowledgment of internal responsibility by the client. List of Abbreviations.

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA

1.

SCOPE OF THE CERTIFICATION ASSESSMENT. 1.1 National Interpretation used.

The management of the Palm Oil Mill (POM) and associated suppliers of Fresh Fruit Bunch (FFB) were assessed for compliance against the International RSPO criteria as interpreted and endorsed for Indonesia.

1.2 Assessment type. (Mill, Estate and Mill, Plantation only etc. etc). Palm Oil Mills and estates owned by PT Sukajadi Sawit Mekar (PT SSM)

1.3 Location maps. 1.3.1 Maps to show geographical location. 1.3.1.1 Location of PT SSM in Indonesia.

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA 1.3.1.2 Location of PT SSM in Central Kalimantan.

English translation of the legend

: SUNGAI: River : JALAN : Road : DESA: Village: KOTA KABUPATEN: District Township : KOTA PROVINSI: State Township

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA 1.3.1.3 Location of PT SSM and Palm Oil Mill.

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA

1.3.2 Location of PT SSM and neighbouring entities.

English translation of the legend

: SUNGAI: River : JALAN : Road : DESA: Village : KOTA KABUPATEN: District Township

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA

1.3.3 Location of mills and approximate tonnages certified. (These figures exclude any output product from non-certified suppliers). Name of Mill Location address CPO PKS Sukajadi Sawit Desa Sebabi, Kecamatan Telawang, 99,109 Mekar Kabupaten Kotawaringin Timur, Propinsi Kalimantan Tengah.

Annual output (tonnes) PK PKO 22,440 10,233

PKE 11,534

1.4 Description of supply base. 1.4.1 General description. The supply base is the 4 estates owned by PT Sukajadi Sawit Mekar. These estates are known as Estates Sebabi, Seranau, Bukit Linang and Bukit Limas. All the Fresh Fruit Bunches (FFB) are processed at Sukajadi Sawit Mekar Palm Oil Mill (PKS Sukajadi Sawit Mekar).

1.4.2 Location of the supply base. Plantation CU Code PO1 PO2 PO3 PO4

Location address

Name Estate Sebabi Estate Seranau Estate Bukit Linang Estate Bukit Limas

GPS reference. Longitude Latitude E 112° 32’ 01.5” S 2° 23’ 29.4” E 112° 32’ 11.9” S 2° 20’ 26.3” E 112° 34’ 58.6” S 2° 18’ 18.9” E 112° 35’ 36” S 2° 22’ 13”

Jl. Jend. Sudirman KM 85 Desa Sebabi, Kecamatan Telawang, Kabupaten Kotawaringin Timur, Propinsi Kalimantan Tengah.

1.4.3 Statistics of the supply base. CU Code

Name

PO1 PO2 PO3 PO4 Totals:

Estate Sebabi Estate Seranau Estate Bukit Linang Estate Bukit Limas

CU Code

Name

PO1

Estate Sebabi Estate Seranau Estate Bukit Linang Estate Bukit Limas

PO2 PO3

PO4

Area of oil palm (ha) Oil Palm Mature Immature

5,286 4.091 3,269 3,465 16,111

2002

5265 4091 3130 3460 15946

21 139 5 165

Estimate FFB/year (tonnes)

Planting years

Replanting Cycle (years)

136,787 107,788 63,497 65,926 373,998

2001-2009 2002-2008 2004-2009 2005-2008

25 25 25 25

Percentage of planted areas of different ages. 2003 2004 2005 2006 2007

Total 2008

2001

TOTALS FOR ALL THE ESTATES:

564 (10%)

564 (3.5%)

1419 (27%) 95 (2%)

1514 (9%)

965 (18%) 2202 (54%)

3167 (20%)

4.2 PT SSM public summary. August 2010.

781 (15%) 1112 (27%) 200 (6%)

2093 (13%)

642 (12%) 136 (3%) 1523 (47%)

258 (5%) 512 (13%) 873 (27%)

398 (7.5%) 31 (1%) 639 (19%)

250 (5%) 3 (0%)

1821 (53%)

1014 (29%)

559 (16%)

71 (2%)

4122 (26%)

2657 (16%)

1627 (10%)

324 (2%)

2009 (Infilling ) 9 (0.5%)

34 (1%)

5286 (100%) 4091 (100%) 3269 (100%) 3465 (100%)

43 (0.5%)

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16111 (100%)

Report number: 814844RSPOCUCRPT-2010-01-SA 1.5 Contact person. Principle Contact person: Business address:

Dr. Gan Lian Tiong PT Sukajadi Sawit Mekar, Spring Tower, 06 – 62 Jl. K.L. Yos Sudarso, Tanjung Mulia, Medan Deli, Medan, Sumatera Utara - 20241

Group name if applicable: Office telephone: Mobile telephone: Fax: e-mail: Web site:

+62 61 661 5511 +62 61 661 7386

[email protected] -

1.6 Audit against the rules for Partial Certification 1.6.1 Introduction. PT SSM is a subsidiary company of PT Agrowiratama which was audited in June 2009. PT Agrowiratama is a member of RSPO and in the time bound plan submitted during the first audit, it was stated that PT SSM is scheduled for the RSPO certification in 2010. The main RSPO assessment conducted at PT SSM is as per the time bound plan. There are no subsidiary companies owned by PT SSM. Therefore the requirement for audit against the rules for partial certification and time bound plan is not applicable for PT SSM.

1.7 Date certificate issued and scope of certificate PT Sukajadi Sawit Mekar

Name of Client: Client number: Certificate number: Certification Decision Date: Issued by Address Telephone Fax Email Website

Scope Name of Mill: Scope (Summary of suppliers of FFB):

Projected mass balance CPO: Certificate registration code: Type of certification: Certifier (contact person) Signature

CU 814844 CU Control Union Certifications Group scheme: Yes Meeuwenlaan 4-6 8025 BS Zwolle 0031 (0) 38 426 0100 0031 (0) 38 423 7040 [email protected] www.controlunion.com/certification

Sukajadi Mekar Sawit POM  PO1  PO2  PO3  PO4 99,109 tonnes CU- D01 Single site: Yes

Group scheme: Yes

David Ogg

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA

2.

ASSESSMENT PROCESS. 2.1 Certification Body.

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs assessments and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, Eurepgap, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.

2.2 Qualifications of the assessment team. 2.2.1 Qualifications of the lead assessor: Senniah A/L Appalasamy REQUIREMENT A minimum of post high school (post secondary school) training in either agriculture/forestry, environmental science or social sciences; At least 5 years professional experience in area of work relevant to the assessment (e.g., palm oil management; agriculture/forestry; ecology; social science); Training in the practical application of the RSPO criteria, and RSPO certification systems; Successfully completion of an ISO 9000:19011 lead assessors course; A supervised period of training in practical assessmenting against the RSPO criteria or similar sustainability standards, with a minimum of 15 days assessment experience and at least 3 assessments at different organisations.

QUALIFICATIONS Post graduate qualification in human resource management with more than 10 years working experience in plantation. More than 10 years working experience in plantation. Involved in RSPO auditing since April 2009. Fully trained in similar agriculture certification programmes such as RSPO SCCS, Global Gap, ISCC and GMP. Involved in RSPO assessment since April 2009. Member of CUC RSPO audit team. Involved in audits conducted in Malaysia and Indonesia. Completed ISO 9001:2008 lead auditor course in September 2009. Member of CUC RSPO audit team since April 2009. Involved in audits conducted in Malaysia and Indonesia since April 2009 in 8 different companies in Malaysia and Indonesia.

2.2.2 Qualifications of assessment team. RSPO REQUIREMENT ASSESSOR Fluent in main local Senniah A/L Appalasamy languages and English. Pratama Agung Sedayu Field working experience in the palm oil sector, or a demonstrable equivalent.

Senniah A/L Appalasamy

Pratama Agung Sedayu

Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use.

Senniah A/L Appalasamy

Pratama Agung Sedayu

Kongpichit Na Nakhonphanom

4.2 PT SSM public summary. August 2010.

QUALIFICATIONS Able to understand local language and English. Able to understand local language and English. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Lead auditor for RSPO SCCS, FSC and organic farming. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Fully trained in other agriculture programme such as RSPO SCCS, FSC and organic farming. RSPO auditing experience in palm oil sector since October

Compliance Yes

Yes

Yes

Yes Yes

Compliance Yes Yes Yes

Yes

Yes

Yes

Yes

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Report number: 814844RSPOCUCRPT-2010-01-SA

Health and Safety assessment on the farm and in processing facilities. (For example OHSAS 18001 or occupational. Health and safety assurance system).

Senniah A/L Appalasamy

Pratama Agung Sedayu

Kongpichit Na Nakhonphanom

Workers welfare issues and social assessment experience. (For example with SA8000 or related social or ethical accountability codes).

Senniah A/L Appalasamy

Pratama Agung Sedayu

Kongpichit Na Nakhonphanom

Environmental and ecological assessment. (For example experience with organic agriculture, ISO 14001 or environmental management systems).

Senniah A/L Appalasamy

Pratama Agung Sedayu

Kongpichit Na Nakhonphanom

Economic issues.

Senniah A/L Appalasamy

Pratama Agung Sedayu

4.2 PT SSM public summary. August 2010.

2009. Fully trained in other programmes such as Global Gap, GMP and Organic farming. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Fully trained in other agriculture programme such as RSPO SCCS, FSC and organic farming. RSPO auditing experience in palm oil sector since October 2009. Fully trained in other programmes such as Global Gap, GMP and Organic farming. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Fully trained in other agriculture programme such as RSPO SCCS, FSC and organic farming. RSPO auditing experience in palm oil sector since October 2009. Fully trained in other programmes such as Global Gap, GMP and Organic farming. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Fully trained in other agriculture programme such as RSPO SCCS, FSC and organic farming. RSPO auditing experience in palm oil sector since October 2009. Fully trained in other programmes such as Global Gap, GMP and Organic farming. Working experience in palm oil plantation. Involved in RSPO audits since April 2009. RSPO auditing experience in palm oil sector since January 2009. Fully trained in other agriculture programme such as RSPO SCCS, FSC and organic farming.

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

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Report number: 814844RSPOCUCRPT-2010-01-SA 2.3 Assessment methodology. 2.3.1 General overview. The assessment was carried out in conformity with the procedures as laid down in the CUC RSPO Procedure Manual and the program manual for the assessor and certifier. During the assessment the qualified CUC assessors used the RSPO standard as endorsed for the country in which the assessment took place and recorded their findings. Due to the location and proximity of the estates and mill, combined with the common management systems and information derived during the pre-assessment, it was possible to carry out both field and office assessments of all estates within the time frame without compromising the integrity of the assessments in anyway. Pre-assessment (5-9 April, 2010) identified area for improvement through gap analysis. The company addressed the issues raised during the pre assessment positively as one of the continuous improvement measures. All the estates and mill as detailed 1.3.2 and 1.4.2 above were visited and the assessment team carried out field and office assessments of compliance for all the RSPO principles and criteria. Common systems were identified and specific evidence was recorded for individual estate and mill. Interviews with managers took place in both formal and informal environments and worker interviews were conducted in all estates and in the mill. Subsequent to the stakeholders meeting, the surrounding communities were visited and interviewed so as to capture more feedback from the stakeholders. 2.3.2 Assessment agenda. Date Location /main sites 30th May 2010 KLIA – JKT (Sunday) Bangkok - JKT 31st May 2010 JKT – (Monday) Palangkaraya Palangkaraya Location 1st June 2010 (Tuesday)

SSM Training Centre Morning: Sebabi & Seranau Estates (Audit team: Senniah & Sedayu)

Afternoon: Bk Linang & Bk Limas Estates

4.2 PT SSM public summary. August 2010.

Main activities  Travelling  Travelling  Discussion with the management on the audit plan and company structure.  Review of Standard Operating Procedures of all the estates and mill.  Opening meeting. Introduction by team leader. Introduction of team members and assessment agenda. Presentation by PT SSM (Estate and SSM Palm Oil Mill)  Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security.  Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.  Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness.  New planting sites. Zero burn.  HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.  Riparian zones. Width. Current and future management. Non maintenance regimes.  Boundaries inspection.  Water management. Water courses. Water monitoring.  Road maintenance. Run off.  Social amenities. Social Impact Assessments.  Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.  Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmental waste management.  Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.

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Report number: 814844RSPOCUCRPT-2010-01-SA SSM POM (Auditor: Kong)

2nd June 2010 (Wednesday)

SSM Meeting Room (Audit team: Sedayu, Senniah & Kong)

3rd June 2010 (Thursday) 4th June 2010 (Friday)

5th June 2010 (Saturday)

(Audit team: Senniah & Kong) (Auditor: Sedayu) (Auditor: Sedayu) SSM Training Room (Full audit team. SSM Training Room (Full audit team)

Palangkaraya JKT

 Mill and workshop inspections. Worker interviews.  Mills. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.  OSH. Training. Management structure. First aiders.  Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts.  Stakeholders consultation and feedback, any disputes.  Independent interviews.  Social amenities. Social Impact Assessments.  Local communities. Contributions made. Employment opportunities. Any conflicts  Discussion with the management team on stakeholders’ feedback.  Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s.  Visit Villages and stakeholders interviews  Visit Villages and stakeholders interviews (cont’d)  Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s.  Audit team discussion and finalise the finding report.  Closing meeting. Chaired by the assessment team leader. Welcome and introduction by the team leader. Presentation of findings by the assessment team. Questions and answers.  Final summary by team leader.  Travelling

Number of assessors participating: 3 Number of days spent for the assessment on site:5 Total number of person days used for the assessment on site:15 2.4 Stakeholder consultation 2.4.1 Summary of how the stakeholder consultation was organised. Number of stakeholders included in the companies application form to CUC and who were 52 included in the stakeholder consultation process: Number of additional National and International stakeholders identified by the company and by As above CUC and who were also included in the stakeholder consultation process: Number of responses received: 2 Notification of the planned assessment was also posted on the CUC and RSPO web sites in accordance with the RSPO requirements. All stakeholders were sent a letter which included full details of the company to be assessed, the names and addresses of all the mills and supply base, the dates of the assessment and the date time and place of an open stakeholder meeting. They were invited to make any comments and given the following bullet points to assist them.  Environmental protection.  Biodiversity conservation.  Opportunities for employment.  Provision of housing, sanitation, amenities and educational support.  Company approach to community development.  Participation in decision making.  Any other issue, both positive and negative that you consider may be of relevance to the assessment. Issues relating to other plantations owned by the company not included in this assessment as this is not applicable i.e. PT SSM does not own any subsidiary companies. Number of persons who attended the open stakeholder meeting: 47 Subsequently to the stakeholder meeting, the audit team discussed the issues raised with management representatives of the company and follow up visits to specific sites were conducted. (See 3.4 below)

4.2 PT SSM public summary. August 2010.

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Report number: 814844RSPOCUCRPT-2010-01-SA 2.4.2 List of the National and International stakeholders contacted. WWF Agriculture Department Sawit Watch Labour Department Scale Up National Land Department LSM Duta Sampit Police Save Our Borneo Local Traditional Community Leaders LINKS Journalist Association of Indonesia, Kotim Environmental Department Head of village, Kandan Local Army Head of village, Desa Penyang Head of village, Desa Sebabi Head of village, Desa Kenyala Head of village, Desa Tangar Head of village, Tanah Putih Head of village, Hanjalipan Head of village, Trans Sumber Makmur Head of village, Baampah University of Palangkaraya Head of village, Palangan Neighbouring Plantation Representatives Labour Union

2.5 Date of next surveillance visit:

3.

One year from the date of certification.

ASSESSMENT FINDINGS.

3.1 Lead assessor’s summary and recommendation for certification: The main assessment was carried out through field visits to all the estates and SSM Palm Oil mill, and interviews with workers and stakeholders as well as visits to the social facilities, infrastructures and document review. The company demonstrated commitment to the implementation of the principles and criteria of the RSPO P&C NI for Indonesia and this commitment is apparent at all levels of management. The stakeholders’ consultation meeting during the main audit was extensive with a very productive meeting attended by 47 stakeholders comprising representatives from NGOs (Sawit Watch, LINKS, SOB, WALHI, and Scale Up), Government officials, Village Heads, representatives from surrounding communities, worker union representatives and representatives from neighbouring plantations. The stakeholders’ feedbacks were followed up with site inspections, meetings with Village Heads and local communities. Inspection of social amenities and infrastructures were carried out as result of the stakeholder meeting. The feedbacks from the stakeholders were discussed with management and this is summarised in section 3.4 below. HCV assessments have been conducted by consultants and a comprehensive management and monitoring plans have been prepared. Management and monitoring action plans were also developed and implemented. Monitoring records of the HCV areas are available on site. HCV consultants reported that studies of satellite images and previous land use have concluded that no primary forests and HCV areas have been cleared since November 2005 for new plantings. HCV areas are located in riparian zones and areas with rubber belonging to the local communities. There was a concern raised by a stakeholder during stakeholder meeting on identifying rubber area in enclave area as HCV 5 by the consultant. This was highlighted to the management and the management are regularly reviewing the monitoring results and will consider this issue in the process of re mapping these areas through consultative manner. PT SSM has demonstrated compliance with all applicable laws and regulations that related to the estate and mill operations. Compliance with the regulations including permit requirements, regulations on environmental, worker issues and tax payment inspected during the audit. The evidence is well documented and maintained. It is summarised in 3.2 below. There is a commitment from the management for continuous improvement. It was observed that noncompliance raised during the main audit had been fully addressed by taking positive and well thought corrective and preventive measures in advance of the closing meeting. There is a budgeted plan available to further improve in key area such as social and environmental. The audit team found that overall compliance is found against the RSPO P&C approved for Indonesia. Therefore the recommendation of the lead assessor is that:  A certificate of compliance is awarded Signed:

Senniah A/L Appalasamy th Date: 4 June 2010

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Report number: 814844RSPOCUCRPT-2010-01-SA 3.2 Summary of the findings by criteria: The assessment team conducted a thorough assessment of all the principles, criteria and indicators. Evidence was sought for conformity with the RSPO NI of both systems and their implementation. The findings column reflects the findings in accordance with each criteria and indicator and the comments column includes some of the evidence found. (The full and complete checklist contains some confidential information and is an extensive document used for peer review and by the certification decision panel and certifier). Where non conformity was found, a summary of the non-conformity is included. Findings: Summary evidence / additional comments: Compliance Yes 1.1 All the estates and the palm oil mill have their  Records of all requests for information individual records of all the information are maintained. requested and responses or information given. The records include date, name of the person who requested information, organisation, type of information requested, requester’s signature, person who handled the request, information given and acknowledgement from the estate manager. SOP number SSM-POD/0.1.0.1/1.4.0 states that all the related documents and records should be kept as per the importance of the documents. Minimum retention period is 1 year. A documents store is available for storing all the old documents. Records checked during document audit showed that records dated since the estate was developed in 2001 were kept. Records are kept as per local law requirement such as UU No 8 Tahun 1997. Yes 1.2 All the management documents listed in the  Public documents are available and include legal, social and environmental principle and criteria are available for public examination. Confidential financial documents documents and current and past FFB are not available f but were made available to prices. the audit team during the audit for verification. Current and past FFB prices are available in the mill and are posted on the notice board at the mill for stakeholders’ reference. The following documents were checked during the audit: 1. HGU Nº 12 issued by BPN Kabupaten Kotim on 16/10/1999 for 35 years as per UU Nº 5 Tahun 1960 for 7416.074ha 2. HGU Nº 27 issued by BPN Kabupaten Kotim on 28/04/2005 for 35 years as per UU Nº 5 Tahun 1960 for 12,386.27ha 3. Building permits 648/359/UPT/CKPU/2009 for the housing, Mosque, store, Polyclinic, Church, Genset room, Schedule waste store, crèche. 4. POM building permit 647/132/UPT/CK-PU/2005 5. 504/140/BANG for school, office, central store, workshop, guest house, and housing complex of executive and staff. 6. Local tax payment records are available and checked i.e. tax payment for building Nº 196/UPPT/CK-PU/VI/2008. Other tax payments checked are for the land, vehicle, building, income tax payment. 7. Izin usaha tetap 1068/T/Pertanian/Industri/2009

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Report number: 814844RSPOCUCRPT-2010-01-SA 8.

2.1

 Clear compliance with the law in all areas sampled.  Good systems in place to track and implement changes in the law.  The laws affecting the oil palm industry are listed and available to all managers.

2.2

 Land titles / country leases for all properties in accordance with the law of the land.

4.2 PT SSM public summary. August 2010.

Surat keputusan izin tempat usaha 501/284/KPTS-SITU/KOTIM/2009 9. Ijin Usaha Perkebunan 525.26/38/I/EKBANG/2005 (12,386.27) and HK.350/70/Dj.Bun 5/II/2002 (7,416.074ha) 10. Ijin Lokasi 1068.460.42 and 193.460.42 11. Ijin Prinsip 525.26/54/II/EKBANG/2004 and 050/1191/EKBANG/2005 12. Minimum wage secular Nº 560.568/1223/HI.KESJA/2009 dated 30/11/2009: minimum wage Rp 1, 058, 838. 13. ANDAL Nº 42/Komisi-Kotim/X/2005 dated 28/10/2005 14. Land application permit Nº 660/539.1/BLH-PP/VIII/2009 15. Central Schedule waste storage permit B-2721/Dep.IV.4/LH/04/2009 16. Ijin Kenderaan is checked. 17. Tranporting permit Nº551.21/2335/DRT/Dishub 18. Heavy vehicle permit 19. Permit to operate school Nº421.2/2123/Dikdas-TK/2007 20. Ijin Lokasi Pelabuhan Nº550.1/632/Ek.Bang/XII/2008 and Ijin to build the jetty Nº504/141/BANG/2007 Legal requirement to operate the estates and mill is based on local applicable law and the sample documents are listed in 1.2 above. The summary of the permits is recorded in a booklet with the details of applicable laws.This summary gives the details of the law and made it easy to make reference and to confirm compliance during the audit. There are checklists at the estates and POM office for internal control which consist of the relevant laws that are applicable to the plantation operations and mill practices such as on labour legislation, permits and license, and laws related to conservation area. The implementation is coordinated between HUMAS (Public Relation Department) Plantation and Operational Departments (Estate and Mill) at the location. Once the changes in laws are identified, the HUMAS will analyse the applicability to the operation. If applicable, the new regulation is forwarded to the director of the company to get approval for implementation at site. The operational departments will implement and report back to the head office. Evaluation of implementation is carried out by the head office to ensure it is implemented. E.g. changes in the stamp duty design was identified by the HUMAS and implemented in the location. Documents such as sample of old design and new design were checked during document audit. Land titles are listed in 1.2 above. Legal boundaries are clearly demarcated on the map. Boundary stones were inspected during

Yes

Yes

Page 15 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA  Boundary stones visibly maintained.  The company has mechanism for the resolution of conflicts and where there have been disputes; there is proof of progress in an acceptable manner to all parties.  Land acquisition has been with free prior and informed consent.

2.3

 No customary rights but traditional owners from the local communities are sited.

3.1

 Annual budget with a minimum 2 year projection.  Annual planting programme projected for a minimum of 5 years with yearly review.

4.2 PT SSM public summary. August 2010.

field visit. They are clearly maintained and there is record of quarterly inspection of these boundary stones, inspected by estate survey department. There are a total of 263 boundary stones for the whole PT SSM. There is a policy document and SOP available for any land disputes and compensation which includes the process for identifying the location (whether located inside the HGU or not.). the Ensuring legal ownership by checking the land ownership documents, verification whether any other family members have any ownership (if there is evidence of ownership by other family members, consensus letter is checked: sample ownership document checked: Nº 10/KNA/SKT/Pemdes.2007), verification by the company is carried out at the local government such as district office, village head, head of sub district. Once all the documents are checked, the HUMAS, surveyor, owner and the neighbours are involved in measuring the area which is identified with the help of GPS. Mapping is based on the details of owners to the North, South, East and West of the plot. Compensation document includes land compensation details (owner detail, witness details). The document is signed by the owner, a representative from company, the district officer and head of the village. There is also a declaration form signed by the owner that he understands and agreed to take the compensation and in a free and informed way with no force. . Although the development is on government land which was leased to the company under HGU, negotiation records with the traditional owners inside the HGU are kept and maintained by the HUMAS. All agreements made were witnessed by the district officers, village head and representative from the company. Documents checked during the audit includes maps, agreements, ownership documents and details of the owner. There are traditional owners within the PT SSM HGU and these areas have been identified as enclaves. Mapping is available and these areas have been demarcated in the field. Map includes GPS reference, total area and details of vegetation in these areas. Records of minutes of negotiations and agreement letter detailing the process of giving consent are available where the traditional owners had surrendered the land to the company. Annual budget and 10 years long term projection includes projection for FFB, CPO, PKO, area statement, OER, strategies to achieve the projection targets. The long term projection include selection of seedling, land preparation, planting, best management practises in the field and mill, road maintenance, harvesting, quality control, collection of FFB, road and transport, internal monitoring, training, and continuous

Yes

Yes

Page 16 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

4.1

 The company has generic SOP’s, which are up to date and which cover all plantation and mill activities from seedling to the despatch of CPO and PK or PKO.  The company has comprehensive annual monitoring records.

4.2

 The company has records of regular soil, leaf and visual analysis. Leaf analysis is conducted on an annual basis to determine fertiliser regimes.  All fertiliser regimes are well planned; implemented and recorded.  Legume cover is used.  EFB application to areas determined by the foliar analysis.  POME is used for land irrigation.  Good monitoring of fertiliser inputs.

4.3

 Documented evidence of practices to minimise soil erosion.  Weeding programmes minimise bare or exposed soils.  Comprehensive road maintenance programme.  Peat soils noted in Bukit Limas and Bukit Limang estate.

4.2 PT SSM public summary. August 2010.

improvement. The company organisation chart is headed by the President director and divided into Estate operation and mill operations. Replanting is schedule in 2026. It is too early to develop the 5 years replanting programme. Estates have Group Agriculture procedure (SSM-SOP / 02.03/2.0) covering all the estate operational activities such as selection of seedling, planting, maintenance, P&D (Pest and Disease), manuring, harvesting, FFB grading, transport to the mill. SaOP (Safe Operating Procedure) is developed for safety procedure which covers all the area of OSH (SSM-OSH/02.02/1.4) such as training, medical check up, pollution prevention, chemical handling, emergency response plan etc. For the mill SOP (SSM-SOP/03.01/1.0) covers receiving of FFB, grading, processing, maintenance and dispatching. (SOP covers technical and administration). SaOP (SSMOSH/03.01/4.0) covers all the safe operating procedure such as occupational safety, management, work instruction, electrical handling, mechanical handling, boiler handling, schedule waste handling and etc. All the operational results recorded and monitored in monthly progress report. Cross check by the head of departments and head office. All the daily operational details are documented and sent to the Head office through intranet. Operational result captured through monthly management report. Report for the month of April 2010 was checked. Report covers all the estate map, production report and expenditure against the budget. Soil and leaf sampling yearly, agronomist visit before the fertilizer recommendation is finalised. Soil and leaf analysis conducted at external laboratory. There is a continuous improvement to build own laboratory in Medan which will be headed by a Chemist. Fertilizer application is based on annual recommendation by the agronomist. Immature area established with LCC (Legume Cover Crop), EFB application (200kg/palm) and POME land application carried out is selected area. POME application at an area of 180ha. Located near the mill and BOD below the standard of 5000mg/L. Every fertilizer application operation is monitored by full time mandor and assistant. Soil maps are available in all estates. Majority is mineral soil and 5% of total PT SSM area is peat soil, depth below 3 metre located at Bukit Linang and Bukit Limas estate). Legume Cover Crop (LCC), soft grass and frond staking is practiced to avoid surface exposed to erosion. LCC (mucuna) is established to assist in erosion control in immature area. Neprolophis is maintained as part of erosion control. Slope planting Policy no. SSMSOP/01.01/2.3.1. No planting on slopes more

Yes

Yes

Yes

Page 17 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

4.4

 Water courses (and wetlands) are identified on maps and management plans are in place for restoring riparian buffer zones.  No construction of bunds/weirs/dams across the main waterways.  Water management includes the monitoring of all water courses as they enter and leave the estate(s).  Rainfall monitored.  Good levels of water usage per tonne of FFB processed.  No drainage into protected areas.  Water management plans in place.

4.2 PT SSM public summary. August 2010.

than 25°. Map showing the slope profile is available At the moment the planted area slopes is at 12° maximum (2% of the total area). Other area is flat. Although there is no extreme slope, policy includes all the details to avoid planting on such slope. Road maintenance programme covers all four estates. Machinery available includes road grader, compactor and excavator. Monthly road maintenance report is documented and mapped to monitor the progress. Water management plan for peat area includes weekly water table monitoring, desilting, and water gate maintenance. There are more than 50 watergates in each estate. Water table maintained at maximum 60cm below ground level. Other aspects checked are water condition, water movement at the main drain and collection drain. Boiler ash applied to improve the soil condition in peat area. Area applied demarcated on the map. At the moment the width of riparian zone is 15m-50m as per the SOP. The palms in the riparian buffer zones are not maintained i.e cessation of fertiliser application and no herbicide spraying. Jungle trees are planted in open areas along the river banks to enhance the biodiversity of these riparian zones . Species planted are Kangkareng hitam (Anthracoceros albirostris), sungkai (Peronema canescens), terantang (Campnosperma spp.), jambu hutan (Syzgium spp.), jangkang (Sterculia foetida), laban (Vitex pubescens), pulai (Astolnia scolaris), galam (Melaleuca leucadendron) , bamboo (Bamboo spp.). Total planted to date is 2,139 saplings and planting is ongoing. The tree species were selected in consultation with the BKSDA (Balai Konservasi Sumber Daya Alam), the Natural Resource Conservation Office under the Forestry Department. The saplings are collected from surrounding area. There is a tree nursery at Sebabi to provide the trees for planting in the riparian zones. Riparian zone enhancement is carried out by the individual estates under the supervision of the HCV officer. In addition to water management in the peat area, water quality monitoring of river water is also carried out. River water analysis is carried out by the Health Department every 6 months once. Last report dated 23/12/09. Beside river water quality, effluent BOD levels were checked during the audit and it is below the standard of 5000mg/L, Upstream and downstream river water quality is monitored twice a year as per RKL and RPL requirement.. Parameters checked are BOD, COD, Oil and grease, pH and total dissolved solid (TDS). Last report dated 21/12/2010 for the main river water quality shows BOD (mg/L): 5.76(inlet), 6.72(outlet) COD (mg/L) : 119.7(inlet), 65.3(outlet) Oil and Grease (mg/L): 18 (inlet), 18(outlet) Plankton

Yes

Page 18 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

4.5

 Documented and implemented IPM system.  Monitoring of IPM used, which includes the training of staff and workers.  Planting of beneficial plants.  Record of pesticide use per ha or tonne.  Monitoring of pesticide toxicity units.

4.6

 Written justification for all agrochemicals used.  All pesticides are officially registered.  Well ventilated and secure chemical stores with MSDS leaflets and first aid.  Annual medical checkups.  No work with pesticides for confirmed or breast feeding woman.  The use of WHO type 1a or 1b chemicals, such as paraquat is being reduced and replaced with glyphosate.  No aerial spraying.  CPO testing for residues.  Records of use of pesticides.

4.2 PT SSM public summary. August 2010.

population: 105 (inlet), 126(outlet). Drinking water analysis carried out in Health department Laboratory. Last report dated 21/4/2010 shows that ecoli and coliform are not detected in the drinking water. POME goes to land application. No discharge to any water course. BOD allowed is 5000mg/L. BOD result by the Health department is 3,763mg/L. Report dated 23/12/09. Ground water at this area is also monitored. Water usage in mill is monitored daily. Average usage is 1.09m³/mt FFB processed. Beneficial plants i.e. tunera, cassia, antigonon are planted to encourage predator populations in the control of leaf eating pests. Barn owl, P&D census and rat population monitoring are part of the IPM practices in the estate. Barn owl houses are erected at a rate of 1/30ha and there is a plan in place for expansion to 1/20ha. Barn owl census is carried out monthly to check and ensure there is an increase in owl population and breeding. At the time of visit, a sample barn owl house was checked (Block L12, Division C, Bukit Linang Estate) and there were two chicks in the house and skeletons of rats were found on the ground at the base. There is no rat baiting as the damage level is below 5%. Rat damage census and bagworm census are carried out quarterly. There was no outbreak reported. An IPM Consultant Mr. Chung Gait Fee from Malaysia was enlisted to train the executives and assistants on 8-13/3/2010. Training also includes internal training on site given by the agronomist. Pesticide spraying is monitored through daily records. The indicator i.e. a.i/LD50 per tonne FFB is monitored. As a check, the latest record of Feb 2010 shows glyphosate usage was 0.0000107 litres per ton FFB. (The RSPO P&C NI for Indonesia of May 2008 Criterion 4.5 provides flexibility to use either per ton FFB or per hectare (The Generic RSPO P&C of October 2007 provided the same flexibility)). A list of registered chemical is available under CHRA report. Besides identifying the target species, the justification includes the hazard level, current control, recommendation and person responsible. The rating is categorised as high, medium and low. Chemical store inspections and field observations confirmed that only approved agrochemicals are used. Approved agrochemical list from local Labour Department dated 24/3/2010 was checked. Recommendation and approval is given base on the UU Nº 1 Tahun 1970. There are 13 approved herbicides (i.e. metal Metsulfuron, Glyphosate etc) Record of usage is recorded daily with details of field, chemical used, amount, area treated and man days. Record dated 10/4/2010 shows records of herbicide use at block E53, 30ha, mandays, and type of herbicide used, and supervisors signature.

Yes

Yes

Page 19 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

4.7

   

OSH plan in place. Accident records kept and reviewed. Accident insurance in place. Minor non compliance raised under 4.7.8 Evidence of OHS and first Aid equipment available at worksite.

All the agrochemical containers are triple rinsed and punctured. Collected at the schedule waste store and disposed through licensed waste collector CV. Nazar. A log book records all movements in and out of the store. Health checkups twice a month for all agrochemical applicators and fertilizer applicators. Conducted at internal clinic by female qualified doctor. Interviews with female workers confirmed that no work with pesticide for pregnant and breast feeding women. This was also confirmed by the clinic nurse. Records checked and verified. They are assigned light duty as office helpers. OSH policy for all the estates and mills checked. Implementation includes clinic, first aid kits, OSH committee, workers trained for first aid, worker training on OSH and safety awareness training. Self audit on OSH conducted by site safety executive. It covers inspection on Safe Work Location, Safe Work procedure implementation, Safe Operating Procedures, Material and Chemical Safety Data Sheet etc. Chemical Hazard and Risk Assessment carried out to identify new hazards. Accident Report and Investigation report prepared by each operating units covers details of accident and action to be taken to eliminate or minimise all accidents. Accident report summary sent to Labour department at every quarter. Personal Protection Equipment provided by the company. A minor NC was raised on the evidence that OHS implementation related to PPE for the chemical sprayers, it is noted that rubber boots are required to be worn by all workers who apply agro-chemicals. Workers have to provide their own boots and it was observed that all workers comply with the PPE requirements. However, a minor non-conformity is raised as it considered the duty of the company to supply the correct PPE including rubber boots. The company has implemented a procedure to address this minor non-conformity which has subsequently been closed. (See section 3 below)

Yes (Minor NC under 4.7.8)

There are two Safety and Health Executives (male and female) available on PT SSM and assisted by the head office sustainability department. For the whole PT SSM, the safety meeting is conducted quarterly. All the employees are covered by the Jomsostek Insurance scheme. Workers exposed to high risk undergo annual medical check up. Medical check up twice per month for pesticide sprayers. For those in the mill, annual medical check up conducted for those working in lab, crushing station, store, boiler, and water treatment plant and power house by external doctor.

4.2 PT SSM public summary. August 2010.

Page 20 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

4.8:

 Training plans and records are in place as appropriate for all staff and workers.  Contractors are trained in accordance with company procedures.

5.1

 Documented and implemented impact assessments in accordance with

4.2 PT SSM public summary. August 2010.

For the estate and mill quarterly risk assessment covered in CHRA file. Conducted by the internal Sustainability team for weighbridge, ramp, sterilizer, trashing, pressing, clarification, pressing station, kernel plant, water treatment plant, boiler, power house, kernel crushing plant, workshop, laboratory, warehouse, diesel storage area, despatch, vehicle washing bay, schedule waste store, effluent pond and office. Risk is identified as high/low/medium and action taken to improve the condition. Daily briefing to workers at the muster ground is carried out to minimise risk at work. Training needs are identified through risk assessment. New training is identified when new machinery is installed. Training records are available. Training includes first aid, safe working procedure, fire fighting, emergency response plans, defensive driving etc. Each employee has individual training records. Trainer gives a report on the evaluation of the training conducted. Accident and emergency preparedness procedure covers fire; Chemical exposure; Diesel spills; Effluent leeks; Water contamination and First aid procedures etc. Mill includes all operational requirements and the action to be taken in the event of emergencies. Emergency siren is located at the mill and estate facilities (store and workshop). Simulation training is conducted. First aid equipment available at all the work site. Workers trained in first aid available at work site and have been trained in basic first aid. Training is incorporated in the training programme and conducted by the doctor. Training programme for all the employees’ is available including contractor’s workers. Schedule of training programme available in file Internal Training which includes OSH training, Safe Operating Procedure Training, Standard Operating Procedure, emergency Response training, Fire fighting etc. Training record is kept in internal training file. Both internal and external training are conducted. External training are conducted mainly by the suppliers and attended by staff and workers. Training on RSPO for PT SSM conducted on 28/12/2009 and attended by 50 employees. Training conducted by the Sustainability Manager. The Head of Sustainability also conducts training on all aspects of RSPO requirements. The training programme is developed from internal audits and progress in the estates and mill. Contractors are selected based on the experience of the contractor for the specific job. Selection by head office based on tender. All the contractors sign contract agreement where all the safety instruction included as per operation unit’s practise. AMDAL document and Social Impact Assessment are available for verification.

Yes

Yes

Page 21 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA RSPO and legal requirements.  Environmental improvement plans in place.

5.2

 HCV assessments completed.  Management plans in place.  Inappropriate hunting, fishing and collecting activities are discouraged.

AMDAL dated 28/10/2005. Internal SEIA is carried out before every new project such as construction of new housing, research centre and community hall. Half yearly reports are being prepared on estate and mill. Latest RKL/RPL for JulyDecember 2009 received by various departments i.e. received by Environmental department on 23/2/2010. Social and Environmental Impact Assessment (SEIA) is carried out when there is a change in operation. Revision was made when the POM installed aero-flow system at the effluent pond to reduce the BOD level faster than normal condition. AMDAL and HCV reports are available. HCVF assessment states that no forest areas have been converted since November 2005. There are two HCV reports available dated July 2007 by Head of Sustainability Department and May 2008 by Aksenta, the HCV consultant. HCV assessment includes result from the Forestry department Nº 826/Kpts-II/1997 dated 31/12/1997 states that this area is released for cultivation. Letter from district department dated 27/2/2004 states that the remaining area is released for cultivation. The HCV report by Aksenta stated that based on the satellite image analysis before PT SSM started operation, the area did not consist any primary forest. HCV1, HCV 4, HCV5 and HCV 6 have been identified by the consultant. HCV mapping is developed from this information. There is report on protected species : Mammals: hylobates agilis albibarbis (Borneon agile gibbon) and presbytis rubicund (maroon langur). Birds: anthracoceros malayanus (Kangkaren hitam) (hornbill) and alcedo meninting (king fisher)

Yes

The generic HCV Management Plan was peer reviewed by two independent consultants, Bapak Ferdinandus Agung, a Forest Management & Certification expert (LEI/FSC) and Bapak Suriadi Ali from Sylva Consult, both from Indonesia. The generic monitoring plan was peer reviewed by Dr Koh LianPin from university ETH Zurich (Switzerland Institute of Technology). Reporting on the implementation of management conservation plan takes place every six months. Identification of HCV report contains specific management plan for individual species. Monitoring of species takes place and reported every three months.HCV management plan is available, and includes monitoring, training, socialization, technical design and best practices. Explaining HCV to the local communities records are available. Evidenced by attendance list of socialization meetings with local communities. Prominent signs to control and create awareness of any illegal hunting are placed around the HCV areas.

4.2 PT SSM public summary. August 2010.

Page 22 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA A list of all local laws related to conservation is prepared and the evidence of implementation on the location is recorded. i.e. UU Nº 5 Tahun 1990 Article 21 is related to conservation of natural resource and ecosystem. Animal and habitat protection plan based on relevant law and regulation is available. The requirements by laws were matched against the action required and taken in the HCV management plan and SOP on HCV management. Evidence in the field and documents are recorded in this checklist. Posters and signages are available to create awareness and socialised with communities. PT SSM has a HCV officer in location. He is trained by consultants from Aksenta and by the Head of sustainability department on monitoring and management of HCV.

5.3

5.4

 Waste products have been identified and documented.  Plans to avoid pollution are in place.  Biomass is recycled.  Minor Non Compliance raised under 5.3.3 Management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance to the product label and existing Regulations. Bukit Limas Estate: Used filters and used oil have been identified as hazardous waste. Despite identifying as hazardous waste, the used filters were kept at the workshop area rather than storing in the schedule waste store which is located nearby. A minor Non Conformity was raised during the audit. The company has implemented a procedure to address this minor nonconformity which has subsequently been closed. (See section 3 below)

 All energy used in the mills is

4.2 PT SSM public summary. August 2010.

Regular review of the HCV monitoring results are carried out by the management at site and by the Head of Sustainability Department. New action plans are developed periodically. A report on Palm Oil Plantation Development (Laporan Peninjauan Ulang-2 Lokasi Pembangunan Perkebunan Kelapa Sawit) showed that the top management team including the Associate Director, Regional GMs, GMs and Senior Estate Managers were present during the review meeting conducted th on 12 October, 2009 in PT SSM by the Head of Sustainability Department Dr Gan Lian Tiong. All waste pollutions sources are identified and documented. For the estate and mill, examples of the wastes identified were: Drier solid Generator set Blower Used/lubricant oil Fat fit, Fiber, Drain Clay & boiler, Boiler ash, Shell. Smoke Noise EFB and POME

Yes (Minor NC under 5.3.3)

Housing and office area. Plastic and aluminium can Organic waste Waste paper The SOP SSM-SOP/03.01/1.11.2 describes procedure on how to handle the schedule waste and the SSM-SOP/03.01/1.11.1 Storage procedure. SSM-Sop/03.01/1.11.4 is about how to dispose the schedule waste through authorised and licensed waste collector to avoid any pollution. Log book in monitoring the waste, dry battery, sand waste, used oil, used container, used chemical bottle is maintained at all the operating units. EFB, shell and fibres are recycled in the mill. There is kernel crushing plant located within the mill. PKE is exported as animal feed. Estate and mill monitors the use of renewable

Yes

Page 23 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA monitored.  Fossil fuel records are maintained and trends shown.

5.5

 The use of fire is not allowed for any land preparation or for replanting.  No evidence of burning waste.

5.6

 Documented plans to mitigate all polluting activities. – reviewed annually.  Records of identification, monitoring, and treatment methodology for POME.

6.1

 Documented and implemented social impact assessments prepared in participation with affected parties, for plantations and mills.

4.2 PT SSM public summary. August 2010.

energy and fossil fuel. This is monitored in the form of data which records use of diesel per tonne of FFB. The fuel used for all operations is measured and monitored with a view to reducing the use of fossil fuel. The Company has zero burning policy. There was no replanting at the time of auditing. The zero burning policy is socialised with all the employees through meeting and morning briefing. The policy statement is placed at all the notice boards located at office, housing and other infrastructure. During interviews with employees it was confirmed that they are aware of this policy and that no burning takes place. Emergency response plan and policy for the land burning, including standard procedures’SOP/01.01/7.9.0 is available. Fire fighting team has regular simulation training on fire fighting using the equipment available. Fire extinguishers are located at all the strategic places to ensure they are easily available during emergency. They are checked monthly to ensure they are functional by checking the pressure level. Emission identification includes smoke (gen set, boiler), air quality (housing area, gate house and effluent pond), noise. Other waste such as POME and EFB applied into the field. Pollution sources identified by the estates and palm oil mill. Daily monitoring of smoke density is carried out and records are available in the “smoke density file”. Monitoring of boiler emissions, generator set, air quality and noise levels are recorded in the “AMDAL, RKL, and RPL file”. Management plan for estates and paml oil mill contains action plan to reduce pollution and emissions among other environmentally related issues. Monitoring record available for smoke emission and surrounding air quality (within the local environmental department’s standard). Smoke emission monitored daily. Monitoring data available for POME application and BOD levels are monitored once per month. Application to 180 ha at Sebabi estate. BOD level confirmed during the audit to be below the standard of 5000mg/L. Social Impact Assessment for PT. SSM is available and was conducted by external consultant. Positive and negative issues were identified and the SIA includes details on positive and negative impacts and documented affected parties. The SIA management plan incorporates recommendations from AMDAL as well as from the SIA reports. SSM-POD/01.01/4.1.0 Stake holder consultation procedure. Stakeholder meeting conducted every six month. Records available of all meetings. Last meeting recorded on 30 April 2010. Information provided about the Corporate Social Responsibility (CSR)

Yes

Yes

Yes

Page 24 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA

6.2

 Clear and transparent systems of consultation and communication with local stakeholders.  Identified lines of communication.

6.3

 There is a complaints and dispute resolution procedures which is demonstrably accepted by potentially affected parties.  Procedure is fully available to all.

6.4

 Procedure in place for identifying legal and customary rights and a procedure for identifying people entitled to compensation.

6.5

 Documented pay and conditions.  Labour laws, union agreements and contracts of employment are in place and in the appropriate languages.  Adequate housing, water supplies, medical, educational and welfare amenities are provided.

6.6

 Published statement recognizing freedom of association.  Minutes of meetings with trade unions and worker representatives.

4.2 PT SSM public summary. August 2010.

activities, school scholarships, complaint procedure etc. Records are maintained of all movements of scheduled waste.(RKL/RPL) Policy and procedures of consultations with stakeholders is laid out. Records of communications and consultations are available. Stakeholder lists are available and are up dated. Minutes of meeting with stakeholders and record of requests are available. Record of responses and follow up on social impact assessment. Public Relation and Social Liaison GM and officer available. (HUMAS) at site and they are the communicators with the stakeholders. Complaint procedures for external and internal stakeholders are available in SSMSOP/01.01/5.1, procedures include flow chart of the actions to be taken and these are displayed at all the notice board and has been socialised with the stakeholders. Complaint and Grievance book is available and records of all the complaints are well documented. Complaints are first received by the manager and then send to the Public Relation and Social Liaison Officer to handle the complaint if these are related to communities. Internal complaints are attended by the manager or the representative responsible for the issue. Standard Operating Procedure on Land Compensations including procedures on identifications, calculations, and compensations is in place. All the compensation payment records are available and kept by the Public Relation and Social Liaison department (HUMAS) Documents showing details of wages, allowances paid and working days are available. The pay is more than minimum wage rate. Collective agreement for year 2010 – 2012 was posted in front of the mill communication board and the estate notice boards. Right and duties of the workers are well spelt out in the collective agreement. The worker contract include every details of the worker, housing contract, and acknowledge of the first training consisted of OHS, PPE usage, SOP for emergency. Company provide housing, electricity, water, medical facility, crèche, kindergartens, school, mosque, church, playground, community hall, field, ambulance, fire engine, school bus, family day, sundry shop. Surat Perjanjian Kerja (Working agreement) with external contractors including rights and obligation of both company and contractors, sanctions with annex Undang-Undang No.1 tahun 1970 regarding working safety. Policy for each mill and estate worker to Freedom of association including procedure based on Undang-Undang 1945 pasal 28. Minute of meeting conducted on 29 may 2010 between trade union and the management. File number SSM-OPI/02.03/4.2.1

Yes

Yes

Yes

Yes

Yes

Page 25 of 34

Report number: 814844RSPOCUCRPT-2010-01-SA 6.7

 There is a documented and published company policy on worker ages in accordance with national laws.

6.8

 There is a publicly available equal opportunities policy.  No evidence of discrimination. Workers are treated equally with regard to working opportunities.

6.9

 Well displayed and clear policy on sexual harassment and violence.  The company has set up a specific gender committee to facilitate the grievance mechanism.

6.10

 The pricing mechanism for FFB and other services provided to both the mill(s) and the estates is documented.  Current and past prices for FFB are publicly available.

6.11

 The company makes contributions for local development and records are maintained.  Observation raised. No new planting planned on any estate included in the scope of this assessment.  Clear evidence of continual improvement in key areas.

7.0 8.1

Policy about worker age under MMPOD/01.01/2.3.0 mentioned that the company’s will employ worker age above 18, document check on workers register reveal that the workers are above 18 years old. Policy equal opportunity under document no. MM-POD/01.01/1.3.4 date 15 April 2008 about equal opportunity for every worker to have the same treat e.g. opportunity to get promoted, chance to work overtime etc. Equal opportunities policy based on Undang-Undang no. 13 tahun 2003 pasal 31. All employees has the same opportunities for promotions regardless of race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliations or age. Records of new employees show that the company accepts new employees based on their capabilities. Policy on prevention of Sexual harassment and SOP on sexual harassment handling available and includes Policy on Gender committee. Gender committee is in place and comprised by all level of workers and it is for gender issues. Socialization with female workers was carried out and the gender committee meeting is held every month. Policy and SOP on protection of reproductive rights for each mill and estate. SSMSOP/03.01/3.18.1 dated 17 April 2008 Maternity leave before and after given birth is proof implementing reproductive rights. Maternity leave records available. Verified with interview with female employees. FFB prices are publicly displayed on the notice board at the mill and available for any stakeholder interested on the information. Pricing is based on government controlled pricing. Contract agreement includes details on price determination. All the pricing mechanism is documented and recorded. Details available at the mill. Records of Working Agreement Letters for contractors and suppliers available. Surrounding communities are given assistance such as cash money, construction items, teachers salary, educational equipment to school etc. Not Applicable.

Yes

PT SSM has implemented social and environmental management by conducting the assessment every half year with all the results and has followed the recommendation from the Department of Environment since 2005. Objectives and targets have been developed and an improvement plan prepared.

Yes

Yes

Yes

Yes

Yes

Yes

The DOE will periodically inspect the estate and mill e.g. on 10 January 2010 DOE took water sample from 4 wells to analyse and monitoring the land application system. Monitoring of air quality, water quality from well, effluent, river water quality before and

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Report number: 814844RSPOCUCRPT-2010-01-SA after mill/estate location, soil quality. The company is in the progress of implementing best practice for the segregation of wastes at source into composts, recyclables and non recyclable for disposal at landfills. This program will enable to reduce the quantity of waste disposed in landfills Riparian zones are being established on both sides of two main rivers running through the plantation by planting jungle tress to enhance the biodiversity and act as a trap to capture any sediment from being discharged into the river. No maintenance regime is maintained to strengthen river banks and to prevent erosion. Paraquat is reduced and being replaced with manual weeding and using alternative herbicide such as Glyphosate. “L’ shape frond staking is practiced to suppress the weed growth and to reduce water runoff. Aero flow system to improve the effluent pond lower the BOD level, will be completed end of this year. Budget for continuous improvement includes budget for construction of 30 new housings for workers, two new school buses (in addition to the existing there are 4 buses), Research & Development station, polyclinic, 1 unit mosque, new water tank to supply water to the housing site during drought season (in addition to the existing two units of water tanks)

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Report number: 814844RSPOCUCRPT-2010-01-SA

3.3 Non conformity register. This section gives an over view of new or revised non-conformities raised during this assessment and of action taken to close out non-conformities raised during the previous assessments. Major non-conformities raised during a main assessment will prevent CU from making a positive certification decision for the concerned units/products. The NC number is comprised of 2 parts to include the year in which the NC is raised as well as a sequential number.

Date: Number settled (See below): Number outstanding :

th

4 June 2010 2 None

NON CONFORMITY REPORT NC number: 1/2010 Client name: PT Sukajadi Sawit Mekar nd Date raised: 2 June 2010 Major or Minor: Minor Raised by: Senniah A/L Appalasamy Aspect of standard: 4.7.8 Evidence of OHS and first aid equipment available at worksites. Evidence of non-conformity: Rubber boots are required to be worn by all workers who apply agro-chemicals. Workers have to provide their own boots and it was observed that all workers comply with the PPE requirements. However, a minor non-conformity is raised as it is considered the duty of the company to supply the correct PPE including rubber boots Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010 Proposed corrective action / improvement action by company. The management took a pro active action to immediately address this non conformity by supplying rubber boot to all the chemical sprayers. Timeline for conformance: Review of corrective /improvement action: Documented evidence of receiving the rubber boot by the chemical sprayers checked and verified with the sprayers. It is confirmed by them that they have received the rubber boots. With this evidence the non conformity is closed. Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010

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Report number: 814844RSPOCUCRPT-2010-01-SA

NON CONFORMITY REPORT NC number: 2/2010 Client name: PT Sukajadi Sawit Mekar nd Date raised: 2 June 2010 Major or Minor: Minor Raised by: Senniah A/L Appalasamy Aspect of standard: 5.3.3 Management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance to the product label and existing regulations. Evidence of non-conformity: Bukit Limas Estate: Used filters and used oil have been identified as hazardous waste. Despite identifying as hazardous waste, the used filters were kept at the workshop area rather than storing in the schedule waste store which is located nearby. A minor Non Conformity was raised during the audit.

Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010 Proposed corrective action / improvement action by company. The management took a pro active action to immediately address this non conformity by placing all the used filters and used oil from the filters inside the nearby schedule waste store. Timeline for conformance: Review of corrective /improvement action: Documented evidence of storing the used filter and oil checked and verified. It is confirmed that these items were stored into the schedule waste store. With this evidence the non conformity is closed. Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010

Observations. Client name: PT Sukajadi Sawit Mekar th Date raised: 4 June 2010 Raised by: Senniah A/L Appalasamy The audit team noted that there are ongoing land compensation issues which are being addressed by the company. There is evidence on the part of company and community that they are open for discussion and negotiation. HUMAS department monitoring the progress. This will be reviewed again during the annual surveillance visit to verify the status of ongoing discussion and negotiation.

Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010

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Report number: 814844RSPOCUCRPT-2010-01-SA

Observations. Client name: PT Sukajadi Sawit Mekar th Date raised: 4 June 2010 Raised by: Senniah A/L Appalasamy During the audit it is noted that the local community raised concern over the HCV signages erected around the plantation which has been identified as HCV areas by the HCV consultant. Socialization meeting has been carried out by PT SSM to explain about the HCV to the local communities. The management is conducting stakeholder meeting to explain further the purpose of HCV area in PT SSM. The audit team will review the progress during the annual surveillance visit to verify the status of ongoing socialisation process.

Assessors signature:

Senniah A/L Appalasamy th Date: 4 June 2010 3.4 Issues raised during stakeholder consultation and company responses. (The subjects raised and responses by the company will be reviewed at the first annual surveillance assessment). Subject raised Company response and proposed Assessment team findings action to be taken. Need guidance from plantation Management has a Village project ( Projek Document related to the “KasDesa” company to its plasma or smallholder in KasDesa) whereby the management is project and related agreement managing their plasma or smallholder. developing the village land and managing it checked. The project was for them. implemented in Sebabi Village on 10ha land. Do not neglect comments from local The company is committed to ensure Continuous improvement plan community people and keep Principle 8 continuous improvement in all the aspects checked and verified during the of RSPO as the spirit in order to move of plantation operation. document audit. forward. If there’s any conflict, it doesn’t have to The company’s complaint and grievance Discussion with the management end up with payment or compensation; procedure is closely adhered to and the reveals that they are closely following Intensive attention for the economic gap HUMAS department monitors the up any ongoing issues. between oil palm company and the local grievances and ensure that they are solved community. in a win-win situation. Company’s Community development The company has carried out numerous Will be checked during the annual programs for the surrounding community projects and has annual surveillance audit. community are not very clear whether budgets for such programmes. funding and other assistance are available. How’s the building permit? Company have all the documents in place. During the document audit all these Clinic permit? Hospital permit? Heavy permits and related documents were machinery tax payment? FFB checked. The details have been transportation vehicle permit? included in the summary above. PT. SSM has fulfilled the requirement This is a positive comment. based on UU No. 13 year 2003; Worker The workers contract checked and union has been established; Worker found that there is no temporary payment meet the minimum wage worker. The entire work force standard; All worker are in payroll, no subscribes to JOMSOSTEK. contract or temporary worker; PPE has Company paying more than minimum been provided; Social insurance wage. PPE is provided. provided. All the signages are available in Management confirmed that it is already in Management conducting medical workplace; Need to check medical place. check up twice per month for all the check up minimum once a year for workers exposed to high risk and every worker? chemicals. Safety signages are seen throughout the estates and Mill. Worker union established; Occupational Health and safety

-

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Report number: 814844RSPOCUCRPT-2010-01-SA committee is established; Meeting with management related to working condition every 3 months; Facilities such as school, mosque, and church provided and scholarship; Worker can sound their grievances through complaint book; Worker payment similar or above minimum wage standard, transparent. People are concerned about the HCV signage located on the enclave, because the information/socialization from the company, people cannot work in that particular land since it’s consider as protected forest; Complained about the lack of work force coming from local village; Most of the worker coming from Java or Sumatra; There is no report of number of workforce from PT. SSM to village head; Proposal of Bina desa (village development) for road maintenance and ditch construction has not been responded. AMDAL document is available, need to check the RKL/RPL; Few things has not been implemented, i.e.: water quality checking in the village; Need to check land application permit Need to check the CPO port permit; Check the oil palm planted on peat area; Need to check the case of land conflict

Management is working internally to do remapping and intensify socialisation.

An observation has been raised to allow the management to address this issue continuously. The status will be verified during the annual surveillance audit.

The Company has manager and assistance coming from the local villages around here. The company will send the workers detail to the concern village head.

Interview conducted with the particular manager and assistance. It is confirmed that they are locals here.

Management said they did not receive any requests but they will check and respond accordingly

Will be reviewed during annual surveillance audit.

The management confirmed that they have all these documents.

The related documents checked and reported in the summary above.

Management said they have the port permit and best practices for peat planting and social issues.

The port permit detail is in the above summary report. Best practices for peat planting found during the field visit including water management and monitoring.

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Report number: 814844RSPOCUCRPT-2010-01-SA

3.5 Formal sign off of assessment findings. 3.5.1 Acknowledgement of internal responsibility by the client. I the undersigned, being the legal representative of the inspected company, agree with the contents of this report and accept the liability in execution of the instructions given in the report. Comments: I agree with the contents of the CUC report.

Name: Position: Signature:

Dr. Gan Lian Tiong Head of Sustainability Department

Date:

28 June, 2010

th

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Report number: 814844RSPOCUCRPT-2010-01-SA Annex : List of Abbreviation. AMDAL BOD BPN BRC SSM CHRA CoC COD CPO CSR CU DPPL EFB EUREPGAP FFB FSC FSC FM GGL GMP GTP GOTS GPS HACCP HCV HCVF HGU HUMAS IPM Jamsostek LCC MSDS NC NGO OE OSH OSHAS P&C P&D PEFC PK PKB PKS POD POM POME PPE PT R&D RKL RPL RSPO RSPO NI SA8000 SIA SOP SSM TDS UKL UPL WHO

Analisis Mengenai Dampak Lingkungan (Analysis on Environmental Impact) Biological Oxygen Demand Badan Pertanahan Nasional (National Land Body) British Retail Consortium PT. Sukajadi Sawit Mekar Chemical Health Risk Assessment Chain of Custody Chemical Oxygen Demand Crude Palm Oil Corporate Social Responsibility Control Union Dokumen Pengelolaan dan Pemantauan Lingkungan (Environmental Management and Observation Document) Empty Fruit Bunch Euro-Retailer Produce Good Agricultural Practices Fresh Fruit Bunch Forest Stewardship Council Forest Stewardship Council Forest Management Green Gold Label Good Manufacturing Practice Good Trading Practice Global Organic Textile Standard Global Positioning System Hazard Analysis and Critical Control Point High Conservation Value High Conservation Value Forest Hak Guna Usaha (Land Right) Public Relation Department (Hubungan Masyarakat) Integrated Pest Management Jaminan Sosial Tenaga Kerja (Social Insurance for Employees) Legume Cover Crop Material Safety Data Sheet Non Conformity Non Governmental Organisation Organic Exchange Occupational Safety and Health Occupational Safety and Health Assessment Scheme Principle and Criteria Pest and Disease Programme for the Endorsement of Forest Certification Palm Kernel Perjanjian Kerja Bersama (Collective Agreement) Pabrik Kelapa Sawit (Palm Oil Mill) Policy Document Palm Oil Mill Palm Oil Mill Effluent Personal Protective Equipment Perseroan Terbatas (Limited Company) Research and Development Rencana Pengelolaan Lingkungan Hidup (Environmental Management Plan) Rencana Pemantauan Lingkungan Hidup (Environmental Monitoring Plan) Roundtable on Sustainable Palm Oil Roundtable on Sustainable Palm Oil National Interpretation Social Accountability 8000 Social Impact Assessment Standard Operating Procedure Sukajadi Sawit Mekar Total Dissolved Solid Upaya Pengelolaan Lingkungan Hidup (Environmental Management Effort) Upaya Pemantauan Lingkungan Hidup (Environmental Monitoring Effort) World Health Organizations

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Report number: 814844RSPOCUCRPT-2010-01-SA

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