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Roundtable on Sustainable Palm Oil

Supply Chain 3rd Surveillance Audit Report Report no.: SCCS-ASA3-14005

Assessment against RSPO Supply Chain Certification Systems 2014

FELDA IFFCO OIL PRODUCTS SDN. BHD.

Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate,

81700, Pasir Gudang Johor Malaysia Date of 3rd surveillance audit: March 28-29, 2016

Report prepared by: Riki Harpan

(RSPO Lead Auditor)

Certification decision by: Abdul Qohar

(Head of Certification Body of PT TUV Rheinland Ind onesia)

Certification Body: PT TUV Rheinland Indonesia

Menara Karya, 10th Floor Jl. H.R. Rasuna Said Block X-5 Kav.1-2

Jakarta 12950,Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575

www.tuv.com/id

TABLE OF CONTENTS

1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT 3

1.1 Executive Summary and Scope of Assessment 3

1.2 Certification Details 3

1.3 Organisational Information / Contact Person 3

1.4 Actual production volumes and projected outputs. 4

1.5 Summary of Previous Assessment 5

2.0 ASSESSMENT PROCESS 6

2.1 Certification Body 6

2.2 Qualifications of Lead Assessor and Assessment Team 6

2.3 Assessment Methodology & Agenda 7

3.0 ASSESSMENT FINDINGS 9

3.1 Description of Supply Chain Management System 9

3.2 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 22

3.3 Conclusion and Recommendation for RSPO Supply Chain Certification 27

4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL

RESPONSIBILITY 28

4.1 Date of Next Surveillance Visit 28

4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 28

APPENDICES 29

Appendix 1: Details of Supply Chain Certification Certificate 29

Appendix 2: List of Abbreviations 31

Appendix 3: Observations and Opportunities for Improvement 31

Appendix 4: Supply Chain Certification Audit Closing Meeting Summary 32

Appendix 5: List of Certified List of Suppliers and Buyers 33

RSPO 3rd Surveillance Audit Report

- FELDA IFFCO – Johor Bahru Malaysia

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QMF: RSPO-007c-13 rev.2

1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT

1.1 Executive Summary and Scope of Assessment

The operations of FELDA IFFCO Oil Products Sdn. Bhd. were assessed against Module B and Module C of the RSPO Supply Chain Certification Systems (SCCS) document (November 2014). The scope of the Supply Chain Certification System assessment covers the implementation of the Segregation and Mass Balance supply chain model of FELDA IFFCO Oil Products Sdn. Bhd. This is not a multi-site certification. The 3rd surveillance audit was carried out on March 28 to 29, 2015 and a total of 5 non-conformities were found.

1.2 Certification Details The details of RSPO certification of FELDA IFFCO Oil Product Sdn. Bhd. are as per the table below Table 1: RSPO Certification details of FELDA IFFCO Oil products Sdn. Bhd.

Refer to Appendix 1 for further details of the RSPO Supply Chain certificate.

1.3 Organisational Information / Contact Person

Contacts details of the company are as follows:

RSPO Membership no.: 2-0142-10-000-00

RSPO Certificate no.: 824 503 14005

Date of RSPO certificate & validity: 28/05/2013 – 27/05/2018

Date of RSPO certification audit: March 13 & 14, 20 13

E-Trace RSPO Member ID: RSPO_PO1000000705

Company Name: FELDA IFFCO Oil Products Sdn. Bhd.

Address: Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate, 81700, Pasir Gudang, Johor, Malaysia

Contact Person: Mrs. Tan Siew Chin

Position: Head of QA/QC

Telephone: +607-251 2811 ext 252

Email: [email protected]



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1.4 Actual production volumes and projected outputs .

Table 3: Certified tonnages claimed, certified tonn ages purchased or sold, total and projected from FELDA IFFCO for period of April 2015 to March 2016.

*Data

Table 4: Records of Certified Material Recived/ Pu rchased for Period of April 2015 to March 2016

Supplier RSPO Certificate

Number Product

UTZ Number

Volume (MT)

Stock Balance April 2015 2,782.916

Jengka 21 SPO571232 CPO-SG RSPO_PO1000000607 7,707.890

Jengka 3 C826788CU-RSPO.01.2013

CPO-SG RSPO_PO1000000514 2,365.260

KECK SENG (m) BERHAD

SGS‐RSPO/SCMY12/ 000973

CPO-SG RSPO_PO1000000259 54.69

Kota Gelanggi C813206CU-RSPO-01.2013

CPO-SG RSPO_PO1000000254 1,339.310

Penggeli C826924CU-RSPO-01.2014

CPO-MB RSPO_PO1000001310 1,024.18

Bukit Besar C826922CU-RSPO-01.2014

CPO-MB RSPO_PO1000001285 387.62

Kahang RSPO 0021 CPO-MB RSPO_PO100000131 490.43

Semenchu SGS-RSPO/PM-MY12/00969

CPO-MB RSPO_PO1000000227 204.57

Total 16.356.87

Table 5: Records of Palm Oil Product Sold for Peri od of April 2015 to March 2016

Buyer RSPO Certificate Number

Prod-uct

UTZ Number Volume

Atlantic Pacific Food (100% Bottling Company Pty Ltd)

MEMBERSHIP NO: 4-0630-15-000-00

PMF - 167.71

Pacific Oleochemical Sdn Bhd

RSPO SC 0039 Stearin RSPO_PO1000000834

475.86

PEERLESS HOLDINGS PTY LTD

SGS-RSPO/SC-MY13/01098

Olein RSPO_PO1000000253

1,797.34

PEERLESS HOLDINGS PTY LTD


Stearin RSPO_PO1000000253

590.24

GOLDEN AGRI INTERNATIONAL PTE LTD



848.57

FELDA IFFCO SDN BHD CU-RSPO SCCS-816033 PMF RSPO_PO1000000115

54.7

PACIFIC INTERLINK SDN BHD

MEMBERSHIP NO: 2-0115-09-000-00

Stearin - 250.04

Amount (MT)

Certified tonnages sold* 15,775.50 (RBDPO 1,997.96; RBD Stearin

9,677.79; RBD Olein 1,797.34; PFAD 2,080.00; PMF 222.41)

Certified tonnage sold under (Green Palm and UTZ System)

15,775.50

Certified tonnages purchased 16,356.87

Actual Certified Product Production 16,356.87

Projected total output for year 2016 400,000



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IFFCO (Malaysia) Sdn Bhd SGS-RSPO/SC-MY12/00708


7,513.08

IFFCO (Malaysia) Sdn Bhd SGS-RSPO/SC-MY12/00708

PFAD RSPO_PO1000001306

2,080.00

VANCE BIO ENERGY SDN BHD


RBDPO RSPO_PO1000000585

1,997.96

Total 15,775.50

1.5 Summary of Previous Assessment

The second surveillance audit was conducted on March 30 & 31, 2015. During the 2nd surveillance audit the implementation of RSPO supply chain certification was well. There were 6 (six) non conformities were raised during 2nd surveillance audit. The company could demonstate the system has fulfilled the RSPO requirements and was recommended as SCCS certified company.



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2.0 ASSESSMENT PROCESS

2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 490 locations in 62 countries on all five continents. PT TUV Rheinland Indonesia offers certifica-tion for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO (RSPO-ACC-013 dated on June 06, 2014), ISPO (LS-P&K-005-ISPO dated on May 10, 2012), ISCC, Timber Legality Verification System (SVLK), as well as CDM Validations and Verifications. PT TUV Rheinland Indonesia’s office is located in Jakarta, Indone-sia.

2.2 Qualifications of Lead Assessor and Assessment Team

Name Position Qualifications / Experience

Riki Harpan Lead Audi-tor

Education: 2001 – State University of Jakarta (Universitas Negeri Jakarta) Bach-elor degree majoring in Germany language education 2010 – Budi Luhur University (Universitas Budi Luhur) Magisterial Management (not passed). Trainings attended : � January 19 to 20, 2015 – Training for Auditor RSPO Supply Chain

Certification Standard and Systems from David Ogg and Partners Ltd.

� December 12 to 16, 2014 – Training for Auditor CoC PEFC-IFCC from Indonesian Forestry Certification Cooperation (IFCC)

� September 29 until October 9, 2104 – Training for Timber Legality Verification (VLK) Auditor Mandatory from Ministry of Forestry

� September 28, 2014 – The Introduction of ISO 9001:2008 Work-shop with AJA Academy

� November 27, 2013 – FSC/PEFC-Chain of Custody Standard with Jobst Dustersiek (Lead Auditor QM/FSC/PEFC System LGA Inter-Cert GmbH

� August 27 to 28, 2012 - FSC/PEFC-Chain of Custody Standard with Jobst Dustersiek (Lead Auditor QM/FSC/PEFC System LGA InterCert GmbH

� May 17, 2012 - International Sustainability & Carbon Certification (ISCC) Sales Training with Dr. Rüdiger Meier Product responsible for sustainable Biomass and FSC TÜV Rheinland Cert GmbH at PT TUV Rheinland Indonesia

� August 18 to 19, 2011 – The Awareness Training for Health, Safety and Environmental Management Systems at PT TUV Rheinland In-donesia

� 2011 – Training for FSC/PEFC-Chain of Custody Standard with Mr. Klaus Schatt (LGA InterCert Gemany) at PT TUV Rheinland Indo-nesia

� 2011 – Training for FSC/PEFC-Forest Management Standard with Mr. Klaus Schatt (LGA InterCert Gemany) at PT TUV Rheinland In-donesia

� January 18 to 19, 2011 – Awareness Training Roundtable on Sus-tainable Palm Oil (RSPO) with Mrs. Dian S. Soeminta (Lead Auditor RSPO of TÜV Rheinland Indonesia) at PT TUV Rheinland Indone-sia.

� March 04, 2012 – Pelatihan Pengenalan SNI ISO/IEC 17021:2008 from National Standardization Agency of Indonesia (BSNI)



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� November 30 to December 04, 2009 – Training for Quality Man-agement Systems (QMS) Auditor/Lead Auditor at PT TUV Rhein-land Indonesia

Working experience: 2007 – 2012 Technical Support Assistance acting as Document controller for Quality Management System (QMS), Forestry Certification and Agriculture Cer-tification Department. 2012 – now VLO Auditor, VLK Trainee Auditor, CoC FSC Auditor, CoC PEFC-IFCC Auditor, RSPO SCCS Auditor, V-Legal Inspector and Facilitator Expert Panel I (pre-assessment) for Sustainable Forest Management (PHTL) & Chain of Custody (CoC) LEI certification.

2.3 Assessment Methodology & Agenda The supply chain 3rd surveillance audit was conducted between 28 & 29 March 2016 as per the assess-ment program below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Supply Chain Certification document. An on-site assessment was conducted and the assessment team carried out field and document as-sessments of compliance to RSPO Supply Chain Certification System requirements. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Verification of closure of non-conformances was conducted 1 month after the closing meeting of the 3rd surveillance audit. The 3rd surveillance agenda is as explained below. 2nd Surveillance audit Agenda.

Date From until Organization Unit

Processes Standard

28.03.2016 09.00 12.00

Management Representative

RSPO SCC team

Opening meeting Management commitment Verification for previous audit find-ings Documentation system Purchasing and goods in Outsourcing activities Sales and good out Registration of transaction Training Record keeping Claims Complaints Management review

RSPO SCCS 5.1 RSPO SCCS 5.2 RSPO SCCS 5.3 RSPO SCCS 5.4 RSPO SCCS 5.5 RSPO SCCS 5.6 RSPO SCCS 5.7 RSPO SCCS 5.8 RSPO SCCS 5.9 RPSO SCCS 5.10 RSPO SCCS 5.11 RSPO SCCS 5.12 RSPO SCCS 5.13 General Supply Chain Requirement

28.03.2016 12.00 13.00 Break

28.03.2016 13.00 15.00 RSPO SCC team

Mill Tour Interview with workers Production process

28.03.2016 15.00 17.00 RSPO SCC team

Continue document check for general supply chain requirements

29.03.2016 09.00 10.00 RSPO SCC team

RSPO SCCS Module C (MB) Record keeping Processing Mass balance system Conversion ratio Yield schemes

RSPO SCCS C.1; C.2 RSPO SCCS C.3 RSPO SCCS C.4; C.5 RSPO SCCS C.6



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RSPO SCCS C.7

29.03.2016 10.00 10.30 Preparing for closing meeting

29.03.2016 10.30 11.30

Management Representative

RSPO SCC team

Closing Meeting



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3.0 ASSESSMENT FINDINGS Felda Iffco Oil Products Sdn. Bhd. (FIOP) is a joint venture company with 37.45% shares owned by Felda Palm Industries Sdn. Bhd., 37.45% owned by Felda Iffco Sdn. Bhd., 17.1 % owned by Mitsui and Co. Ltd and 8 % owned by Asahi Denka Kogyo K.k. The company was incorporated on 27 October 1975 under the name Felda Oil Products Sdn. Bhd. with Manufacturing License no. 000626 dated 8 March 1977 for production of cooking oil for other oil derivatives. The company's name was changed to Felda Iffco Oil Products Sdn. Bhd. as per the approval certificate from the Companies Commission of Malaysia dated 24 December 2010. Now the company can produce 547,000 MT CPO per year. FELDA IFFCO Oil Products Sdn Bhd is mainly involved in refining and fractionating of palm oil leading to the production of its core products such as refined, bleached, deodorized (RBD) palm oil, RBD palm olein, palm mid fractions, rbd palm stearin, soft stearin and palm fatty acid distillate. The facility has received numerous accreditations such as ISO 9001:2008, ISO 14001, HACCP, OHSAS 18001 and and Halal cer-tifications. FIOP’s day-to-day operation is run and managed by more than 121 employees and profes-sionals. The company produces the following certified products: - RBDPO (Refined Bleached Deodorized) - RBDPL (Refined Bleached Olein) - RBDPS (Refined Bleached Sterin) - RBDOL IV 63 (Refined Bleached Olein IV 63) - RBSST IV II (Refined Bleached Stearin IV II) - PMF IV 45 (Palm Mid Fraction IV 45)

3.1 Description of Supply Chain Management System The following is a description of the findings pertaining to the company’s supply chain management sys-tem according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements:

Section 5: General Chain of Custody System Requirements for the Supply Chain

5.1. Applicability of the General Chain of Custody System Requirements for the supply chain

Findings: In the 3rd surveillance audit, the company have replaced previous Management Representative Mr. Zulkafli Bin Yasman that has been retired, and replaced by Mr. Muhammad Azhan Daud as Assis-tant QC Manager. Management FELDA Iffco still has commitment to implement RSPO SCCS and has a complete standard operation manual and standard operation procedure about supply chain for all operation units. All production process was conducted internally, except for bulking and transportation. For outsourcing activities, the company still not fulfilled some requirements of the new standard of RSPO SCCS. The company also has been implementing quality management system ISO 9001:2008, ISO 14001:2004, OHSAS 18001:2007, FSSC 22000: Version 3, 2013 and Halal certificate and has been providing complete standard operation manual and standard operation procedure for all stra-tegic operation units for daily operation activities and other standard operation procedure docu-ments. Considering the nature of incoming material, company decide to implement Segregation (SG) and Mass Balance system (Module B &C). The company decided to implement non physical segrega-tion for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives then sold under mass balance.



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FELDA IFFCO Oil Product Sdn. Bhd with membership number 2-0142-10-000-00. The company also has registered in e-trace with member ID RSPO_PO1000000705. Compliance status: Non Compliance, see NCR No 201 6-01 of 05 to NCR 2016-05 of 05

5.2. Supply Chain Model

Findings: The company decide to implement both SG and MB as their SCCS models. For period of year 2015, the company decided to implement non-physical segregation for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives which are then sold under mass balance (MB) model. Even though the company has prepared a mechanism and procedures for physical segregation, however this is only on standby in case of any inquiry for SG claim. The company has so far only claimed products under MB and not sold any products claimed as SG. For the period of April 2016 to March 2016 the company purchased 14,250 mt of certified material with SG claim and then sold 13,777.54 mt under MB claim. The company also downgrad-ed CPO SG to RBDPO MB with amount 67.640 mt. In 2015, the organization also purchased 2,106.8 mt of certified material with MB claim and then sold 1,997.96 mt under MB claim. Compliance status: Full Compliance

5.3.Documented procedures

Findings: To support implementation of RSPO supply chain, company has established their quality manual to include all RSPO SCCS requirements i.e. RSPO Manual/SM-001 Version 3, March 2014. The manual consist of 1. Documented Procedures 2. Purchasing and goods in 3. Purchasing and Incoming Materials (CPO Only)

a. Purchasing from Felda Mills b. Purchasing from non-Felda sources c. Receiving of RSPO Crude d. Receiving of CS RBDPO

4. Sales and Goods Out (Delivery) 5. Product substitution IP or SG to MB 6. Processing 7. Record Keeping 8. Training 9. Claims 10. Handling of non-conforming material 11. Outsourcing activities 12. Supplier verification The company also develop some additional manual, procedure and flow process related to RSPO SCC system such as 1. RSPO Manual/SM-002 Version 1 about how they control the production process from non-

certified to certified process , January 2016 consist of - Converting non-RSPO to CSCPO (Section 100) - Converting non-RSPO to CSCPO (Section 400P) - Converting non-RSPO to CSCPO (Section 110) - Converting non-RSPO to CSCPO (Deodorizing Plant) - Converting non-RSPO to CSRBDPO (Fractination Plant 1) - Converting non-RSPO to CSRBDPO (Fractination Plant 2) - Converting non-RSPO to CSRBDPO (Fractination Plant 3)



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2. Grievenance Procedure for Stakeholder Issues/SM-003 Verison 1, April 2015 consist of - Application (How the company receipt the complaint) - Jurisdiction and Repsonsibilities (Who is the person in charge to handling the complaint) - Procedure (How do the company solved the complaint) - Complaint and Grievances Flowchart A/SM-003 Version 1. April 2015

3. Flow process of RSPO Oil/RS002 Version 1, November 2013 4. Flow process of CSRBDPO-MB/SG/RS003 Version 1, November 2013

Beside RSPO Manual, for some of procedure are combined with other certification scheme for ex-ample 1. Product Identification and Traceability Doc. No. MSP-OD-05 2. Management Review Doc. No. MSP-GEN-06 3. Internal Audit Doc. No. MSP-GEN-03 Since the las Management Representative Mr. Zulkafli has retired, the company has appointed new Management Representative and RSPO Committee Member. Mr. Muhammad Azhan Daud (Assistant QC Manager) is appointed as new MR replacing Mr. Zukahfi refer to Decision Letter from Chief Exec-utive Officer dated January 1, 2016 and refer to Decision Letter from Chief Executive Officer dated March 22, 2016 signed by Mr. Charles Chan Tong San as CEO, the RSPO Committee members are

a. Mr. Zulhanafi Bin Paiman

b. Ms. Tan Siew Chin

c. Mr. Arulmurugu A/l Muniandy

d. Mr. Ratha A/P Subramaniam

e. Mr. Zamirul Bin Shamsuddin

f. Mr. Sazura Ismail

From the listed name of the person having overall responsibility for and authority over the implemen-tation of these requirements and compliance with all applicable requirements, there are no evidences that MR and RSPO Committee members have joined or trained of the new standard RSPO SCC to ensure these persons are able to demonstare awareness of the organization’s procedures for the im-plementation of this standard. The last training conducted on December 31, 2015 attended by RSPO SCC core team only (5 participants) and trained by internal training Mr. Zulkafli Yasman as formerly MR. The training material is still discussed about the old standard November 25, 2011.

Compliance status: Non Compliance

NCR 2016-01 of 05 There are no evidences that MR and RSPO Committee members have joined or trained of the new standard RSPO SCC to ensure these persons are able to demonstare awareness of the organiza-tion’s procedures for the implementation of this standard. The last training conducted on December 31, 2015 attended by RSPO SCC core team only (5 participants) and trained by internal training Mr. Zulkafli Yasman as formerly MR. The training material is still discussed about the old standard No-vember 25, 2011.

5.4. Purchasing and goods in

Findings: FELDA IFFCO Oil Products Sdn. Bhd. produce certified products such as oils and fats with palm and lauric oil or its admixtures and fractions as main component in shortenings, margarine, special-ity oils and fats, ghee, cooking oils and bulk oils from certified CPO and RBDPO. All certified CPO come from SCCS certified palm oil mill under FELDA group. Purchasing department is the section which is responsible to source for certified material from cer-tified supplier. According to the company’s certified material purchasing procedure, all purchased orders for certified material shall indicate the claimed supply chain model of the certified material to be purchase, whether it is Identify Segregation material, which will be processed as certified prod-



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uct under the Segregation (SG) mechanism or Mass Balance (MB) mechanism, while material with Mass Balance claim will be processed for certified product under the company’s Mass Balance mechanism. The mechanism for receiving certified material has also still not changed. To know the quantity or volume of incoming certified material, the road tanker will stop at the weighbridge, and the operator will check relevant documents and issue a weigh bridge ticket. The document to be verified from certified sources include delivery note stamped at the origin estate, as well as certificate code in-cluding selected SCC Model. All certified products will be transferred to assigned material storage tank, for Mass Balance material will be transfer to storage tank No. 101A, 101B and 101D while certified segregated material will be transferred to storage tank 101C. The operator will indicate in-formation regarding storage tank location on each weigh bridge ticket according to the relevant claim. The company has clear mechanism to check the validity of the Supply Chain Certification of sup-pliers and period to update supplier information. It was sighted during the 3rd surveillance audit, the company revised RSPO Manual SM-001 version 04 issued March 2015, section 2, it has been stated regarding the company’s mechanism to check validity of Supply Chain certification of sup-pliers. It is stated that the company will verify the validity of SCC of suppliers every six (6) month and check updates in the RSPO supplier list through RSPO website for current list of supply chain certified companies (http://www.rspo.org/). The last certified supplier list is issued on March 07, 2016. FELDA IFFCO Oil Products Sdn. Bhd. Now, has mechanism in place for handling non-conforming material/documents or to take appropriate steps when the Supply Chain certification of a supplier is found to be invalid. The company has defined non-conforming products for finished goods and ac-tions taken for next step. The company provides revised RSPO SCCS Manual version 04 issued March, 2015, in section 10. The manual has determined a mechanism for handling non-conforming material/documents. This mechanism has explained the steps to be taken when the Supply Chain certification of a supplier is found to be invalid. The company has been defined non-conforming product for finished goods and actions to be taken for next step in the new RSPO SCCS Manual. The company has been established mechanism to inform CB immediately if there is a projected overproduction. For the period of April 2015 to March 2016, FELDA IFFCO purchased 14,250.066 mt of CPO under SG claim and 2,106.8 Of CPO under MB claim from listed RSPO certified suppliers. Some example of delivery documentation are 1. Ticket No:MB000036/2015 dated 08/08/2015 for CPO MB, with following information:

a. Supplier : Semenchu Mill b. Tank No : 101B c. Product : Crude Palm Oil-RSPO/MB d. Contract No : FIOP-P/15/000608 e. Quantity : 37,830 Kg

2. Ticket No:RS000191/2015 dated 24/11/2015 for CPO SG, with following information:

a. Supplier : Jengka 21 Mill b. Tank No : 101C c. Product : Crude Palm Oil-RSPO/SG d. Contract No : FIOP-P/15/000910 e. Quantity : 42,020 Kg

In RSPO Manual/SM-001 clause 3.1 and 3.4.1 regulated that the weighbridge personnel have to check and verify the material category received and shall be stamped with the appropriate RSPO category for each incoming certified material in weighbridge ticket, however during field visit have been found that the weighbridge ticket number RS000039 dated 31 July 2015 and weighbridge ticket number RS000033 dated 28 July 2015 for material CPO SG claim still not identified with cer-tified stamp and some of weighbridge ticket that already stamped with certified identification still not informed the status of material claims whether MB or SG.



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Compliance status: Non Compliance NCR 2016-02 of 05 During field visit have been found that the weighbridge ticket number RS000039 dated 31 July 2015 and weighbridge ticket number RS000033 dated 28 July 2015 for material CPO SG claim still not identified with certified stamp and some of weighbridge ticket that already stamped with certi-fied identification still not informed the status of material claims whether MB or SG. This is not in accordance with the RSPO Manual/SM-001 clause 3.1 and 3.4.1 That presupposed the weigh-bridge personnel to check and verify the material category received and shall be stamped with the appropriate RSPO category.

5.5. Outsourcing activities

Findings: In this surveillance audit, FELDA IFFCO still outsources storage of a certain volume of products at Felda Johor Bulkers Sdn. Bhd. The products are stored in 9 tanks with total capacity of all tanks adding up to 12,300 MT. As explained by management, all tanks are cleaned and inspected by FELDA IFFCO Oil Products Sdn. Bhd. before transferring in new material and there will be no mix-ing of segregated and mass balance material in same tanks. The company also outsourced the transportation for raw material and finished good products deliv-ery, including transportation of palm olein 63, and palm mill fraction (PMF) 45 is also subcontract-ed. The tanks are inspected before filling and in case it is found to be not adequately clean, the tank will be rejected. Records of tank inspections are maintained by lab assistants or analysts. The last surveillance audit reported that the company only have one transporter company i.e. Yogeswary Agency Sdn Bhd and now there are four (4) transporters used as contractor. There are no evidences that the company already informed certification body of the names and contact de-tails of the three (3) as required in RSPO Supply Chain Standard clause 5.5.4 and Company RSPO SCCS Manual version 04 issued March, 2015, in section 10. For each outsourcing activities, the company already have agreement that covering the outsourced process signed by two parties involved and the agreement will be reviewed every year. In addition to agreement the site also prepared the declaration of approval from relevant transporter to ensure that independent third party comply with the requirements of the RSPO SCC standard. Sample of agreement and declaration of approval are 1. Agreement and declaration of bulkers

a. Declaration of approval from relevant bulkers with following information - Company : Felda-Johore Bulkers Sdn Bhd - Product : CSRBDPO/CSRBDPL/CSRBDPS/CSRBDPL IV63/CSRBD IV11/CSRBDPS

IV-45 - Contract Agreement No. : LT UA 2016-2017-03 - Contract Term : Commencing on 1 January 2016 and Expiry on 31 December 2016 - Signed by : Hj. Kamaradin Bin Selamat as Senior General Manager (Operations)

b. FJB Users’ Agreements with reference number LT UA 2016-2017-03 dated 13 January 2016 between Felda-Johore Bulkers Sdn. Bhd and Felda Iffco Oil Products Sdn. Bhd. signed by Mr Azman Bin Ahmad as Senior Vice President/CEO and Mrs. Hj, Kamaradin Bin Selamat as Senior General Manager (Operations) from Felda-Johore Bulkers Sdn. Bhd. And from Felda Iffco Oil Products Sdn. Bhd. signed by Mr. Chan Tong San as Chief Execu-tive Officer and Mr. Arulmurugu Al Muniandy as Head of Supply Chain.

2. Agreement and declaration of transporter

a. Declaration of approval from relevant bulkers with following information - Company : Yogeswary Agency Sdn. Bhd. - Product : CSRBDPO/CSRBDPL/CSRBDPS/CSRBDPL IV63/CSRBD IV11/CSRBDPS

IV45 - Signed by : Manickam Ail Supan as Operation

b. Agreements For Carriage of Bulk/Liquid Cargo between Yogeswary Agency Sdn. Bhd. and



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Felda Iffco Oil Products Sdn. Bhd. signed by Manickam Ail Supan as Operation and signed by Mr. Chan Tong San as Chief Executive.

The company provides addendum contract with their outsourced companies i.e. Felda Johor Bulkers (FJB) Sdn. Bhd. and the transporter company. The contract between FELDA IFFCO and outsourcing companies has been renewed, however in the agreement still not regulated that the transporter willing to be audited and certification bodies have access to the outsourcing contractor if an audit is deemed necessary.

Due to document check for outsourcing activities, the company has no specific documented control system with explicit procedures for outsourced process from supplier selection process until as-signment of agreement and there are no evidences that the company already communicated the procedures to the relevant contractor. Compliance status: Non Compliance NCR 2016-03 of 05 In the last surveillance audit reported that the company only have one transporter company i.e. Yogeswary Agency Sdn Bhd and now as stated in the transporter list there are four (4) transporters used as contractor. There are no evidences that the company already informed certification body for the new three (3) transporter companies as required in RSPO Supply Chain Standard clause 5.5.4 and company RSPO Manual/SM-001 section 11. Outsourcing activities, that regulated FIOP shall in-form the names and contact details of any new contractor used for processing or production of RSPO certified materials.

NCR 2016-04 of 05 For each outsourcing activities, the company already have agreement that covering the outsourced process signed by two parties involved and the agreement will be reviewed every year. In addition to agreement the site also prepared the declaration of approval from relevant transporter to ensure that independent third party comply with the requirements of the RSPO SCC standard. However in the agreement still not regulated that the transporter willing to be audited and certification bodies have access to the outsourcing contractor if an audit is deemed necessary.

NCR 2016-05 of 05 Regarding outsourcing activities, the site does not have documented control system with explicit pro-cedures for outsourced process and there are no evidences that the company already communicated the procedures to the relevant contractor.

5.6. Sales and goods out

Findings: The sales and goods out mechanism of the company are described in RSPO Manual/SM-001 Ver-sion 3, March 2014 section 4 that only covered the following minimum information for RSPO certi-fied products and documentation marking with stamp with the appropriate RSPO category. There are no specific documents or procedure that explained about the delivery process. According to the sales person, there are two mechanisms for sales of out-going finished goods and products in FELDA IFFCO Oil Products Sdn. Bhd., i.e. by road tanker and vessel. Certified product from dedicated storage tank will be dispatched through dispatch pipe directly to the truck tank, while if the product will be transported using vessel, certified product from dedicated storage will be pumped using pipe line to bulker at Pasir Gudang Port then to the Vessel. Information for outgoing certified product will be recorded in several type of records depend on the transfer method used, such as: - Vessel: Trade confirmation; Shipping Instruction (SI); tanker Bill of lading (B/L); Certificate of



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Analysis; Commercial invoice; Custom form No.02; Tanker Form No.02; Packing List; Survey Report (Certifying Suitability and Cleaning); certificate of weight/analysis. Specification of Poram. Commercial invoice /Sales Contract/Shipment Tender/Bill of Lading/Certificate of Origin/Surveyor report/Certificate of Analysis/Custom Declaration are also part of sales docu-ments has been indicate FELDA IFFCO SCCS selected model.

- Road tanker: Commercial Invoice, Malaysian Palm Oil Board Format L.3 (MPOB Borang L.3) Weight Bridge Ticket and delivery Note.

- Container or ISO Tank: Packing list, Bill of Lading (B/L), Certificate of Analysis (F-WINA/QA/011); Weighbridge Ticket.

All product dispatched to buyer for every certified product delivered has information about: Refer-ence Number, date of issuance, Delivery Order number, Contract Number, buyer name including the address of buyer, the quantity of the products delivered and reference to related transport doc-umentation. Information about the name and address of the seller has been attached on every de-livery documents e.g. letter head and information inside documents, including information about loading/delivery date. The company has implemented this system for their regular products while the company will in-clude certified product claim and SCC certificate number on each delivery document i.e. “Mass Balance (MB)” or Segregation (SG) as selected product module. It was clearly stated on RSPO SCCS Manual, that company will use certification number in all doc-uments once certified by TUV Rheinland. The evidence of implementation was sighted during this surveillance audit, some of delivery documentation sample are 1. E-trace transaction announcement with following information

a. Seller : Felda Iffco Oil Products Sdn. Bhd. (Member ID RSPO_PO1000000705) b. Buyer : Peerless Holdings Pty Ltd (Member ID RSPO_PO1000000253) c. Seller Contract Number : FIOP-S/14/001153/1378 d. Product : Olein (MB) e. Volume : 598.31 MT f. Ship name : MT STOLT TSUBAKI VOY 033ANZ g. B/L Number : PG36-040-02 dated 05/06/2015 h. Transaction ID : TR-b18353b7-25d1

2. Sales Order a. Performing Vessel : MT Stolt Tsubaki Voy 033 Anz b. Buyer : Peerless Foods Pty Ltd c. Contract No. : FIOP-S/14/001153 & FIOP-S/14/001378 d. Product : RBD Palm Olein/MB e. Quantity : 400.000 MT & 198.306 MT f. Bill of Lading No. PG36-040-02 g. Date of loading : 06.05.2015 h. Port of Loading : Pasir Gudang i. Destination : Melbourne, Australia

3. Tax Invoice No. : INV(S)/2015-020 dated 06.05.2015 a. Vessel name : MT Stolt Tsubaki Voy 033 Anz b. Loading port : Pasir Gudang c. Discharge port : Melbourne, Australia d. B/L No. : PG36-040-02 e. B/L Date : 06.05.2015 j. Description of goods : RBD Palm Olein/MB f. RSPO Cert No. : 824 503 14005 g. Contract No. : FIOP-S/14/001153 h. Quantity : 400.000 MT

4. Tax Invoice No. : INV(S)/2015-021 dated 06.05.2015 a. Vessel name : MT Stolt Tsubaki Voy 033 Anz b. Loading port : Pasir Gudang c. Discharge port : Melbourne, Australia d. B/L No. : PG36-040-02 e. B/L Date : 06.05.2015 k. Description of goods : RBD Palm Olein/MB



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f. RSPO Cert No. : 824 503 14005 g. Contract No. : FIOP-S/14/001378 h. Quantity : 198.306 MT

5. Tangker Bill of Lading B/L No. PG36-040-02 dated 06.05.2015 a. Vessel name : MT Stolt Tsubaki Voy 033 Anz b. Loading port : Pasir Gudang c. Discharge port : Melbourne, Australia d. Consignee : Peerless Foods Pty Ltd e. Commodity : RDB Palm Olein/MB f. Quantity : 598.306 MT

All delivery documentation will be stamped with RSPO Certification number and SCCS selected model (SG or MB) and company’s registration number 24499-V. Compliance status: Full Compliance

5.7. Registration & Transaction

Findings: FELDA IFFCO Oil Products Sdn. Bhd. is producing derivative products from CPO and RBDPO, company has established a specific SOP for registration of every transaction to RSPO E-Trace as required by the RSPO-SCC standard.The sample of e-Trace transaction are 1. Transaction ID : TR-750c3fc6-8afa

a. Seller : Felda Iffco Oil Products Sdn. Bhd. (Member ID RSPO_PO1000000705) b. Buyer : Golden Agri International Pte Ltd (Member ID RSPO_PO1000001130) c. Seller Contract Number : FIOP-S/15/000310 d. Product : Strearin e. Program : Mass Balance f. Volume : 848.57 MT g. Ship name : MT GINGA LEOPARD V 1502 h. B/L Number : TKMALEP1502PGSVE dated 05/13/2015

2. Transaction ID : TR-45e9a085-f804 (Local delivery) a. Seller : Felda Iffco Oil Products Sdn. Bhd. (Member ID RSPO_PO1000000705) b. Buyer : IFFCO (Malaysia) Sdn. Bhd (Member ID RSPO_PO1000001306) c. Seller Contract Number : FIOP-S/15/001564 d. Product : Strearin e. Program : Mass Balance f. Volume : 120 MT

3. Transaction ID : TR-ee382d60-a992 a. Seller : Felda Iffco Oil Products Sdn. Bhd. (Member ID RSPO_PO1000000705) b. Buyer : Peerless Holdings Pty Ltd (Member ID RSPO_PO1000000253) c. Seller Contract Number : FIOP-S/15/001155 d. Product : Strearin e. Program : Mass Balance f. Volume : 299.59 MT g. Ship name : MT STOLT TSUBAKI VOY 033ANZ h. B/L Number : PG36-060-02 dated 05/06/2015

Compliance status: Full Compliance

5.8. Training

Findings: The training that FIOP has conducted in 2015 are offline training for RSPO eTrace Training Manual on 17 February 2015 for Mrs. Atikah Saleh and RSPO SCCS Certification Requirements on 31 De-cember 2015 attended by RSPO SCC core team only (5 participants) and trained by internal training Mr. Zulkafli Yasman as formerly MR. The training material is still discussed about the old standard



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November 25, 2011. The company also still not conducted the training for all employees involved in RSPO SCC systems in accordance with relevant job.

In 2016, the company has created training plan related to RSP SCCS such as

1. RSPO endorsed RSPO Supply Chain Certification Training Course 2016 by David Ogg & Partners on May 2016

2. RSPO e-trace Training by internal trainer (in-house training) on June 2016

3. RSPO SCC Standard Training by internal trainer (in-house training) on August 2016 Compliance status: Non Compliance, See NCR 2016-01 of 05

5.9. Records Keeping

Findings: As stated in the RSPO Manual the company stated the retention time of records related SCCS RSPO implementation shall be at least five (5) years. The storage and maintenance of documents is the responsibility of the respective departments. The company has developed a procedure to trace the source of certified materials received, as de-fined in document name “Process Flow of RSPO Oil document dated November 7th 2012 Doc. No RS 002, and also developed related documentation to apply the procedure. This procedure and documentation will be applied after the company get SCCS certificate and produces certified prod-uct. The company will clearly indicate the supply chain model used with trade names in relevant docu-ments, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Compliance status: Full Compliance

5.10. Conversion Factor

Findings: FELDA IFFCO implements non-physical segregation for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives then sold under mass balance (MB) claim. The company decided to use RSPO rules to set their own conversion rates i.e. 100% or match. The volume of purchased certified SG material are used it to match the sales of equal volumes of palm product derivatives, which is then is sold under mass balance. The conversion factor for certified MB material refer to material balance records in July 2015 the rate is 95.42% from total 1,011.22 MT produce to RBDPO 964.91 MT and PFAD 46.31 MT and in August 2015 the rate is 94.95% from total 1,016.86 MT has produced to RBDPO 965.41 MT and PFAD 51.45 MT. In February 2016 the conversion rate is 94.87% from 78.72 MT the company can produce 74.68 MT RBDPO (94.87%) and 3.34 MT PFAD (4.24%). Compliance status: Full Compliance

5.11. Claims

Findings: The company has an SOP for making claims certified product according RSPO communication and claims. The implementation of SOP has been consistent and complies with RSPO SCCS require-



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ment, such as claim for purchased SG material with non physical processing claimed as MB certi-fied products and already indicated on sales documents and export documents. While for incoming MB material processed for MB product also, it has been indicated in all incoming certified material documents. Compliance status: Full compliance

5.12. Complaints

Findings: The organization has created documented procedures for collecting and resolving stakeholder complaints in Grievenance Procedure for Stakeholder Issues/SM-003 Verison 1, April 2015. The procedure described about 1. Application (How the company receipt the complaint) 2. Jurisdiction and Repsonsibilities (Who is the person in charge to handling the complaint) 3. Procedure (How do the company solved the complaint) 4. Complaint and Grievances Flowchart A/SM-003 Version 1. April 2015

During document check verification and interview with responsible person, there are no complaints regarding to RSPO SCCS in 2015. Records complaints will be discussed more detail in the Man-agement Review Meeting Compliance status: Full Compliance

5.13. Management review

Findings: The company has created procedure for Management Review (MSP-GEN-06) Rev.01 issued on August 17, 2012. The procedure covered the review of the quality, food safety, environmental and safety & health management system to ensure that its continuing suitability, qdequacy and effec-tiveness and the factory’s objectives are achieved. MR is the person who responsible to lead this management review meeting and the commmitte member is department head and internal auditor team. The last management review meeting conducted on April 13, 2015 located in FIOP Daily Morning Meeting Room Doc. No RSPO/01/2015 attended by 8 participants. The management review meet-ing result are: 1. Objective of MR meeting 2. Abbreviations used in report 3. Communication and claim 4. RSPO policy 5. Result of any action from previous RSPO MRB meeting 6. Costumer complaint 7. Training and competency 8. Conclusion 9. Result of audit

- Internal audit - External audit

10. Costumer feedback 11. Process performance and product conformity 12. Status of preventive and corrective actions 13. Follow up actions from management review 14. Changes that could affect the management system 15. Recommencations for improvement 16. Review Output



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- Improvement of the effectiveness of the management system and its processes - Resource needs


Section 2: Modular Requirements: Module B Segregation

B.2 Supply Chain Requirement

Findings: FELDA IFFCO has established a set of standard operation procedures to implement Segregation approach which requires that the RSPO certified oil palm products from certified etates/plantations is kept separate from material from non-RSPO certified estates/plantations at every stage of pro-duction, processing, refining and manufacturing throughout the supply chain. As determined on the procedure company will not allow the mixing of RSPO certified palm oil and its derivatives with non certified material. However for actual implementation to date, the company has only implemented non-physical processing for SG material and has claimed all producted sold as MB only, not SG. Compliance status: Full Compliance

B.3.Processing

Findings: FELDA IFFCO has documented procedures to process RSPO certified oil palm product and distin-gusih them from non-RSPO certified products, covering incoming material, processing, storage and transport. The objective is for 100% segregated material to be reached. However management has so far decided to implement non physical proceses. All SG material has been processed with out-put as 100% MB product. The mill receives certified and non-certified material, management decided to implement mass bal-ance for their certified product. The mill has established a clear system and standard operation procedures including record system to ensure that the supply chain model implemented by the fa-cility shall be the same as the model used by their supplier or a less strict system. The mill also has mechanism to prove that the certified product can be traced back to only certified material. The organization has established a mechanism for control and maintenance of the data and docu-ments used in production process i.e. Flow Process of RSPO Oil with document number RS002 is the mechanism to produce certified product from certified CPO material. The process/mechaniam to produce certified product from RBDPO is in accordance with document RS003-Process Flow of RSPO Oil. The mill has records and balances of all receipts of RSPO certified material and non certified mate-rial and deliveries of RSPO certified product on daily basis. All volumes of product that are deliv-ered are deducted from the material accounting system according to actual daily conversion ratios. The material balance can show delivered product sales from a positive stock within the past three months, such as records from July to September 2015; October to December 2015 and January to March 2016. Only in period April to June 2015 the stock is negative. The company has identified all locations and/or process categorized as critical controlled point (CCP), this is applicable if the company produce certified product with SG claim. According to Risk Identification of mixing CSCPO-SG/CSRBDPO-SGwith CSCPO-MB or CSRBDPO-MB or Non RSPO Material, there are two location categorized as CCP i.e :



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1. CPO and RBDPO unloading bay , because there is tendency of mishandling the RSPO SG

materials supply from RSPO SG certified mill/refinery to FELDA IFFCO, contamination be-tween certified material and non certified material might happen during unloading from tankers to dedicated RSPO SG tank. If any mishandling or equipment had broken, the certified materi-al/product will be downgraded to non certified material/product.

2. Feed tank to Pre Treatment Plant The RSPO dedicated tank for segregated (SG) material is VE 101C. Contamination might be hap-pen during feeding the CPO from RSPO dedicated tank to the Pre treatment plant if there is any valve leaking or mishandling during changeover the feed tank. For both potential CCP areas, the company have defined counter measure such as provide training to operator relevant to the process. Pipeline will be activated to blow with air to clear the line be-fore receiving certified material to avoid contamination. The operator will check for any abnormali-ties during the process and this will be verified by project engineer. All plants must run segregated material to avoid contamination. Project engineer will verify the pro-cess line. Compliance status: Full Compliance

Section 2: Modular Requirements: Module C Mass Balance

C.1 Definition

Findings: FELDA IFFCO implements the mass balance system for incoming MB material, and currently also for SG material since to date, the company has decided not to carry out any physical separation. For Mass Balance (MB) supply chain model administration, FELDA IFFCO monitors the trade of RSPO certified oil palm products throughout the entire supply chain, as a driver for mainstream trade in sustainable palm oil. Compliance status: Full Compliance

C.2. Record keeping

Findings: As stated in their RSPO Manual, the company stated the retention time of records related SCCS RSPO implementation shall be at least five (5) years. The storage and maintenance of documents is the responsibility of the respective departments. The company has developed a procedure to trace the source of certified materials received, as de-fined in document name “Flow process of RSPO Oil/RS002 Version 1, November 2013, and also developed related documentation to apply the procedure. This procedure and documentation has been applied by the company since obtaining their SCCS certificate and producing certified prod-ucts. The company has been indicating the supply chain model used clearly with trade names in relevant documents for their certified products, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Compliance status: Full Compliance



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C.3. Processing

Findings: FELDA IFFCO has a monitoring system to ensure that the quantity of physical RSPO mass bal-ance material inputs and outputs (volume or weight) are processed following the standard opera-tion procedure and RSPO SCCS requirement. All input material that processed are recorded on Material Balance Report every 3 months to en-sure that the output of RSPO mass balance material supplied to customers from the physical site does not exceed the input of RSPO certified material received at the physical site with 3 months in-ventory period. From April 2015 to March 2016 FELDA IFFCO had processed 14,250.07 tonnes of SG level CPO, which final product claimed only as MB Up until this 3rd surveillance audit, Felda IFFCO has not purchased any certified palm kernel to produce their certified product, hence requirement C.3.5 is not applicable for FELDA IFFCO. Compliance status: Full Compliance C.4. Continuous accounting system Findings: During the period of April 2015 to March 2016 FELDA IFFCO recorded quantities of non-physical RSPO SG material inputs and become MB outputs, total processed material are are monitored on a real-time basis. The company implement a continuous accounting system is in operation, it was sighted that the material accounting system from period April 2015 to March 2016 is never overdrawn. The data has been recorded in the material accounting system. All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. Accord-ing the latest material balance records, for period April 2015 to March 2016, the total input of certi-fied material is 16,356.87 mt, processed material is 16,366.87 mt to produce 15,775.50 ton prod-ucts i.e. RBDPO 1,997.96; RBD Stearin 9,677.79; RBD Olein 1,797.34; PFAD 2,080.00; and PMF 222.41. In the beginning of April 2015, stock of certified material carried from previous period was 2,782.92 mt plus incoming certified purchased from April 2015 to March 2016 are 12,960.24 mt. From the records it was sighted that the company can deliver sales from the positive stock. At the 3rd surveillance audit, the company sighted did not sell short any of their products. The com-pany will inform CB if facing condition to make sell short. All volumes of palm oil fractions and derivatives that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO, and the record are keep main-tained by the document controller. Compliance status: Full Compliance

C.5. Fixed Inventory Periods

Findings: FELDA IFFCO implements 3 monthly fixed inventory period is in operation, The company has rec-ords that the quantity of RSPO mass balance material inputs and outputs (volume or weight) are balanced within a fixed inventory period which does not exceed 3 (three) months. The minus stock only happen during period April – June 2015, the stock -1,127.064 mt and in the beginning of July the company purchased 1,360.03, so the stock already positive on July with amount 232.966 mt.



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C.6. Conversion Ratios

Findings: During this 3rd surveillance audit, FELDA IFFCO could show that all volumes of palm oil fractions and derivatives that are delivered are deducted from the material accounting system according to conversion ratios as set out by RSPO. Since FELDA IFFCO implement non physical process for SG material, refining losses are neglected for the sake of simplicity in the Mass Balance system FELDA IFFCO purchase segregated sustainable palm and use it to match the sales of equal vol-umes of palm product derivatives that then carry a Mass Balance i.e. for example as determine by RSPO "Segregated to Mass Balance Supply Chain Model Yield Scheme (SG oil palm products : 1,000 mt to MB refined oil palm products : 1,000 mt). For CPO MB, based on annual balance sheet in 2015 the riil conversion ration is 95.18% for RBDPO and 4.23% for FPAD and losses 0.59%. Compliance status: Full Compliance

C.7.Yield Scheme

Findings: As explained on the C.6. FELDA IFFCO implement non physical process for SG material, refining losses are neglected for the sake of simplicity in the Mass Balance system. FELDA IFFCO purchase segregated sustainable palm and use it to match the sales of equal vol-umes of palm product derivatives that then carry a Mass Balance i.e. for example as determine by RSPO "Segregated to Mass Balance Supply Chain Model Yield Scheme (SG oil palm products : 1,000 mt to MB refined oil palm products : 1,000 mt). For CPO MB, based on annual balance sheet in 2015 the riil conversion ration is 95.18% for RBDPO and 4.23% for FPAD and losses 0.59%. Compliance status: Full Compliance

3.2 Previously Status Identified of RSPO SCCS Requi rement Non-conformities

SCCS Non-conformance 2015-01of 06: req. 5.4.1 There some certified suppliers are not included on the List of Suppliers and Buyers, such as:

- FELDA Jengka 8 - FELDA Jengka 18 (Seroja Palm Oil Mill)

In addition, one buyer with company name Atlantic is still not listed as certified buyer. Correction The management representative (MR) has revised their list of supplier to include Felda Jengka 8 & Jengka 18 as seen from the RSPO Buyers and Suppliers List. Corrective Action To review the list of suppliers & buyers with RSPO team member and to update any changes Verification result: The company provided a new RSPO Buyer and Suppliers List. It was sighted all suppliers including FELDA Jengka 8, FELDA Jengka 18 (Seroja Palm Oil Mill) and Atlantic had been included on the list.



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Auditor Conclusions: Closed

SCCS Non-conformance 2015-02 of 06: req. 5.4.1 Information about current validity status for all certified suppliers is not included on the list of certified supplier instead of validity of certificate. Correction The MR has revised the list of suppliers and buyers to include validity status of all certified suppliers as seen on RSPO buyer and supplier List Corrective Action To review all list of suppliers & buyers with RSPO team member and to update any changes on validity status during management meeting. Verification Result: The company provided a new RSPO Buyer and Suppliers List. It was sighted that updated information about certification status for all supplier has been has been included in the list. Auditor Conclusions: Closed SCCS Non-conformance 2015-03 of 06: req. 5.5.2 The contract between FELDA IFFCO and two outsourcing companies (Bulking and product tanker) has been renewed, however declaration about commitment to RSPO requirement RSPO SCCS 5.5.2 b, c & d were not included on the new contracts.

FJB as FELDA IFFCO’s subcontractor for product storage has no copy of agreement stating specific con-ditions for RSPO requirements to which they must comply. Correction: To include declaration about commitment to RSPO requirement from two outsourcing company (FJB and transporter), as seen on document Addendum Transporter and Bulking Agreement (FIOP) Corrective Action To include declaration from any other outsourcing company during contract review Verification result: The company provided the copies of addendum contract for FJB and other transporter companies, in-cluding statement about requirement to give access to FIOP RSPO certification Body in relation to FIOP’s operation, system, and any other information in outsource location when it is notified in advance and subject to approval. Auditor Conclusions: Closed SCCS Non-conformance 2015-04 of 06: req. 5.12 FIOP has no documented procedure for collecting and resolving complaints from stakeholders. Correction The MR has prepared a documented procedure for collecting and resolving complaint from stakehold-ers as determined on RSPO Manual SM003 & Flow Chart A. Corrective Action To review the document with RSPO team members and update any changes during management meeting Verification result: The company provided a revised RSPO SM003, RSPO Manual and Flow chart that includes a mecha-



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nism for collecting and resolving complaints from stakeholder related to RSPO SCCS implementation in FIOP. Auditor Conclusions: Closed SCCS Non-conformance 2015-05 of 06 : req. 5.13 FIOP has not conducted management reviews at planned intervals. Correction: The MR conducted management review as required as reported on RSPO report 2015 Corrective Action: To conduct management review on annual basis Verification Result: The company provided a copy of their management review report. Management review was conducted on April 13, 2015. Auditor Conclusions: Closed. SCCS Non-conformance 2015-06 of 06: req. C.5 Information stated on material balance period March 2014 to March 2015 is not consistent with infor-mation about incoming CPO stated on FELDA weighbridge report received for period of March 2014 to March 2015. Material balance stated total incoming CPO is 6731.44 Mt while the summary of weighbridges ticket documents stated 6,152.220MT Correction To review material balance period March 2014 to March 2015 C 5 BAL CPO SG OTHER SUPPLIER 2015 C5 CPO RSPO Report from Supply Chain Dept. Corrective Action To review RSPO material balance monthly and to tally with weighbridge report Verification result: The company provided their revised material balance, actual material balance from April ‘14 to March‘15 = 6,977.06 mt/ Auditor Conclusions: Closed

3.3 Identified Non-conformances against RSPO SCCS R equirements, Corrective Actions Taken and

Auditors Conclusions

SCCS Non-conformance 2016 - 01 of 05: There are no evidences that MR and RSPO Committee members have joined or trained of the new standard RSPO SCC to ensure these persons are able to demonstare awareness of the organization’s procedures for the implementation of this standard. The last training conducted on December 31, 2015 attended by RSPO SCC core team only (5 participants) and trained by internal training Mr. Zulkafli Yasman as formerly MR. The training material is still discussed about the old standard November 25, 2011. Correction: The company will delegated MR and QA/QC person to joined the training from David Ogg on May



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2016, the organization has sent e-mail communication with David Ogg. Corrective Action: The company has created training plan in 2016 which included the internal training for all employees involved in RSPO SCC systems. For internal staff will be trained with internal trainer that already joined for training new standard of RSPO SCC and for all employees involved will be trained with each su-pervisor (internal staff). Auditor Conclusions: Closed / Evidence of immediate action taken was accepted. Effectiveness of implementation to verified at next audit. Date of closure: April 29, 2016 Verification Result: The organization has sent e-mail communication between FIOP and training provider David Ogg & Partners and plan to conduct the training on May 2016. And in 2016 the company has established training plan including internal training for all employees involved in RSPO SCC systems SCCS Non-conformance 2016 - 02 of 05: During field visit have been found that the weighbridge ticket number RS000039 dated 31 July 2015 and weighbridge ticket number RS000033 dated 28 July 2015 for material CPO SG claim still not iden-tified with certified stamp and some of weighbridge ticket that already stamped with certified identifica-tion still not informed the status of material claims whether MB or SG. This is not in accordance with the RSPO Manual/SM-001 clause 3.1 and 3.4.1 That presupposed the weighbridge personnel to check and verify the material category received and shall be stamped with the appropriate RSPO category. Correction: The company has revised the weighbridge ticket number RS000039 dated 31 July 2015 and weigh-bridge ticket number RS000033 dated 28 July 2015 with clearly identification of certified material status and send some of sample of implementation stamp in weighbridge. Corrective Action: The company has sozialised and warned to all person in charge in weighbridge the RSPO Manual re-garding the certified stamp specification. Auditor Conclusions: Closed Date of closure: April 29, 2016 Verification Result: The organization has revised the weighbridge and makes socialization to all person in charge in weighbridge the RSPO Manual regarding the certified stamp specification. SCCS Non-conformance 2016 - 03 of 05: In the last surveillance audit reported that the company only have one transporter company i.e. Yogeswary Agency Sdn Bhd and now as stated in the transporter list there are four (4) transporters used as contractor. There are no evidences that the company already informed certification body for the new three (3) transporter companies as required in RSPO Supply Chain Standard clause 5.5.4 and company RSPO Manual/SM-001 section 11. Outsourcing activities, that regulated FIOP shall inform the names and contact details of any new contractor used for processing or production of RSPO certi-fied materials. Correction: The company sent formal email to CB on 22 April 2016 regarding the changes of the new supplier in 2016. Corrective Action:



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The company will communicate with main office which handled transporter verification and tender and procurement regarding the new transporter to be informed to CB. Auditor Conclusions: Closed Date of closure: April 29, 2016 Verification Result: The email of new transporter has been sent to CB on 22 April 2016 and all new transporters will com-municate between FIOP and Main Office which handled transporter verification and tender and pro-curement. And FIOP will inform CB if there’s any new transporter informed from Main Office. SCCS Non-conformance 2016 - 04 of 05: For each outsourcing activities, the company already have agreement that covering the outsourced process signed by two parties involved and the agreement will be reviewed every year. In addition to agreement the site also prepared the declaration of approval from relevant transporter to ensure that independent third party comply with the requirements of the RSPO SCC standard. However in the agreement still not regulated that the transporter willing to be audited and certification bodies have ac-cess to the outsourcing contractor if an audit is deemed necessary. Correction: The company has created addendum of agreement to all transporter with adding information about Agreeable to being audited by certification bodies as and when the need arise in General requirement. Corrective Action: The company will revised all the contract of transporters with adding the all requirement in RSPO SCC including the willingness to be audited and certification bodies have access to the outsourcing contrac-tor if an audit is deemed necessary. Auditor Conclusions: Closed Date of closure: April 29, 2016 Verification Result: The organization has created addendum of agreement to all transporter with adding information about Agreeable to being audited by certification bodies as and when the need arise in General requirement. SCCS Non-conformance 2016 - 05 of 05: Regarding outsourcing activities, the site does not have documented control system with explicit pro-cedures for outsourced process and there are no evidences that the company already communicated the procedures to the relevant contractor. Correction: Actually the company already has procedure regarding the outsourced process, Felda Iffco Oil Prod-ucts Sdn. Bhd. (24499-V) for Tender and Procurement Procedures. This procedure has been social-ized during tender process. However the procedure is not in site during audit, the procedure handled in main office. Corrective Action: The company will communicate with main office regarding the tender process for all outsourced cop-many to ensure that the process are fulfil with all RSPO SCC requirements. Auditor Conclusions: Closed Date of closure: April 29, 2016 Verification R esult:



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The organization the company already has procedure regarding the outsourced process, Felda Iffco Oil Products Sdn. Bhd. (24499-V) for Tender and Procurement Procedures which handled by main office. The company also shown the evidence of tender process including the list of participant company that attended the tender.

3.4 Conclusion and Recommendation for RSPO Supply C hain Certification The audit team has confirmed through the audit process that FELDA IFFCO Oil Products Sdn. Bhd. has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certifi-cation System requirements year 2014. It is also confirmed that the company’s annual volume of certified product sold/ purchased for the period of April 2015 until March 2016 has not exceeded the certified an-nual tonnages as claimed in the organization’s RSPO certificate no. 82450314005 . PT TUV Rheinland Indonesia recommends that FELDA IFFCO to continue being certified to the RSPO Supply Chain Certification requirements.



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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance visit is planned for March, 2017

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

It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content. Signed on behalf of FELDA IFFCO Oil Products Sdn. Bhd. Mrs. Tan Siew Chin Head of Qa/QC Date: May 13, 2016

Signed on behalf of PT TUV Rheinland Indo-nesia Riki Harpan Lead Auditor Date: May 13, 2016



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APPENDICES

Appendix 1: Details of Supply Chain Certification C ertificate



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Appendix 2: List of Abbreviations

B/L CPO COC CCP EMS FIOP FJB FSC

Bill Of Lading Crude Palm Oil Chain of Custody Critical Control Point Environmental Management System FELDA IFFCO Oil Product Felda Johor Bulkers Forest Stewardship Council

IP LEI MB MPOB P&C

Identity Preserved Lembaga Ecolabel Indonesia (Indonesian Ecolabel Institute) Mass Balance Malaysia Palm Oil Board Principles & Criteria

PKO Palm Kernel Oil S PMF IV 45

QMS RBDPO RBDPL RBDPS RBDOL IV 63 RBSST IV II SCCS SG SI SFMC

Palm Mid Fraction IV 45 Quality Management System

Refined Bleached Deodorized) Refined Bleached Olein Refined Bleached Sterin Refined Bleached Olein IV 63 Refined Bleached Sterin IV II)

Supply Chain Certification System Segregation Shiping Instruction Sustainable Forest Management Certification

Appendix 3: Observations and Opportunities for Impr ovement

A. Positive Observations

No. Clause Postive observation

1 - The new RSPO SCC team has strong commitment to RSPO SCCS implementation

2 5.7 The company has good implementation for registration of transactions in RSPO IT platform (e-trace)

B. Negative Observations/ Potential For Improvement

No. Clause Negative observation/ Opportunity for Improvement

1 5.6.1 The company recommended revising RSPO SCC certification number in the stamp that will be used for identification of certified products.

2 5.3.1 The company recommended describing more detail the procedure into work instruction or guidance to make clearer about the handling process of certified material during produc-tion.

3 5.8.1 All people involved in RSPO SCC system, such as field operator recommended to get al-so the training or socialization about RSPO SCCS.

4 C.4 & C.5

In the Manual recommended to informed or regulated about the RSPO Mass Balance ac-counting records using either a continuous accounting system or a fixed inventory period



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Appendix 4: Supply Chain Certification Audit Closin g Meeting Summary



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Appendix 5: List of Certified List of Suppliers an d Buyers A) List of certified Suppliers



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B) List of certified buyers

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