rspo audit report · 2014. 11. 2. · cakra kernel crushing plant crushes kernel from both perdana...

RSPO Principles & Criteria Annual Surveillance Assessment Report

Report Number CU816882

RSPOPC-ASAREPORT.F01 EN (01) DEC2011 of 24

Control Union Certifications Meeuwenlaan 4-6, 8011 BZ Zwolle, P.O. Box 161, 8000 AD Zwolle, Netherlands

Tel: +31 (0)38 - 426 0100, Fax: +31 (0)38 - 423 7040, E-mail: [email protected]

Annual Surveillance Assessment (01) Report

PUBLIC SUMMARY

Palm Oil Mill

Cakra POM

PT Rea Kaltim, Eastern Kalimantan Province, Indonesia. 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: David Ogg (Lead Assessor)

Certification decision by: Gerben Stegeman (Certifier)

Control Union Certifications (Head office)

Meeuwenlaan 4-6, P.O. Box 161.

8000 AD Zwolle. The Netherlands.

[email protected] Phone: 0031 38436 0100

Local Office 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 (Indonesia) Jl Kramat 3A, Cilandak Timur

Jakarta Selatan 12560 Phone: 062-21-7884 2016

[email protected]

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, GLOBALGAP, 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 GLOBALGAP program. When requested a copy of the accreditation certificate can be

obtained from CU.

www.controlunion.com

mailto:[email protected]



http://www.controlunion.com/






Table of Contents

PART 1: SCOPE OF THE CERTIFICATION AUDIT ......................................................................................... 4

1.1 COMPANY AND CONTACT DETAILS ................................................................................................... 4 1.2 RSPO MEMBERSHIP DETAILS .......................................................................................................... 4 1.3 ANNUAL SURVEILLANCE ASSESSMENT DETAILS ................................................................................... 4 1.4 ASSESSMENT TYPE. (MILL AND SUPPLY BASE) .................................................................................... 4 1.5 LOCATION OF THE PALM OIL MILL .................................................................................................... 4 1.6 PALM OIL MILL OUTPUT AND APPROXIMATE TONNAGES CERTIFIED ........................................................ 4 1.7 GENERAL DESCRIPTION OF SUPPLY BASE ........................................................................................... 5

1.7.1 Location of the Supply Base ............................................................................................ 6 1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per Year ............ 6 1.7.3 Percentage of Planted Oil Palm by different Age Ranges .............................................. 6 1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill ................... 7

1.8 PROGRESS OF ASSOCIATED SMALLHOLDERS OR OUT-GROWERS TOWARDS COMPLIANCE WITH RELEVANT

STANDARDS - SHOULD BE IN ACCORDANCE TO THE 3 YEAR IMPLEMENTATION PLAN ................................................ 7

PART 2: PARTIAL CERTIFICATION ............................................................................................................ 10

2.1 MANAGEMENT STRUCTURE. .......................................................................................................... 10 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE............................................................................... 10 2.3 SUMMARY OF THE TIME BOUND PLAN ............................................................................................ 10 2.4 UN-CERTIFIED UNITS OR HOLDINGS................................................................................................ 11 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION .................................................................. 12 2.6 PARTIAL CERTIFICATION AUDIT AGENDA ......................................................................................... 12

PART 3: AUDIT PROCESS .......................................................................................................................... 12

3.1 ABOUT THE CERTIFICATION BODY ................................................................................................... 12 3.2 AUDIT TEAM .............................................................................................................................. 12

3.2.1 Qualifications of the Lead Auditor ......................................................................................... 13 3.3 AUDIT METHODOLOGY ................................................................................................................. 13

3.3.1 General Overview .......................................................................................................... 13 3.3.2 Audit Agenda ................................................................................................................. 14

PART 4 ASSESSMENT FINDINGS .............................................................................................................. 14

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION .......................................... 14 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLE AND A SAMPLE OF THE CRITERIA ........................................... 15 4.3 SAMPLE CRITERIA FOR INCLUSION IN THIS REPORT ON AN ANNUAL BASIS DURING THE LIFETIME OF THE

CERTIFICATE ............................................................................................................................................ 18 4.4 NON-CONFORMITY REGISTER AND REPORTS ON PREVIOUS NCS ........................................................... 19

4.4.1 Annual Audit NC Summary ..................................................................................................... 19 4.4.2 Status of non-conformities (both Minor and Major) previously identified, even if already Closed Out ....................................................................................................................................... 19

4.5 NON-CONFORMITY REPORT FOR NC IDENTIFIED DURING THIS ASA ............................................................. 20 4.6 OBSERVATIONS .................................................................................................................................. 21 4.7 ISSUES THAT WERE RAISED DURING THE STAKEHOLDER CONSULTATION AND COMPANY RESPONSES .......... 21

PART 5: RSPO SUPPLY CHAIN CERTIFICATION ....................................................................................... 21

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY .............. 23

6.1 DATE OF NEXT ASA ..................................................................................................................... 23 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES.................................................................................... 23 6.3 SIGNING BY THE CLIENT ................................................................................................................ 23 6.4 SIGNING BY THE LEAD AUDITOR ..................................................................................................... 23






6.5 SIGNING BY THE CERTIFIER ............................................................................................................ 23

PART 7: APPENDICIES .............................................................................................................................. 24

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE ABOVE 1.9) ................................................... 24 APPENDIX 2: LIST OF ABBREVIATIONS ........................................................................................................... 24






PART 1: SCOPE OF THE CERTIFICATION AUDIT

1.1 Company and Contact Details Company name: PT Rea Kaltim

Business address: Jl. Hasan Basri No,21A, Samarinda 75117, Kalimantan Timur.

Group name if applicable: Not applicable.

Office telephone: +62 541 732898

Contact person: Geetha Govindan.

e-mail: [email protected]

Web site: www.rea.co.uk

1.2 RSPO Membership Details RSPO membership number: 1-0045-07-000-0 (10/11/07)

Parent company as applicable: R.E.A Holdings PLC

Date of original certification: 6th

June 2011

Certificate number: C816882CU-RSPO-01.2012 Please note, during the Main Assessment, both CAKRA POM and PERDANA POM were certified with one certificate. For and from ASA1 onwards, CAKRA POM will carry the same certificate number as per this report and PERDANA POM will be issued a new certificate number, C821449CU-RSPO-01.2012 and shall be tied to the main assessment certification.

Date of last audit: 28th

February 2011 to 4th

March 2011.

1.3 Annual Surveillance Assessment Details

Dates of the audit: 7th

May 2012 to 10th

May 2012.

ASA number (1 to 4). ASA 1.

1.4 Assessment Type. (Mill and Supply Base) Palm Oil Mill and estates owned by R.E.A Holdings PLC.

1.5 Location of the Palm Oil Mill

The 12 month output is the average over any 12 month period and the actual production for the 12 months from the date of certification will be included in the first annual summary. These figures exclude any output product from non-certified suppliers.

Palm Oil Mill (POM) Location address

GPS reference.

Name Longitude Latitude

Cakra POM Desa Kelekat, Kecamatan Kembang Janggut, Kebupaten Kutai Kartanegara, Kalimantan Timur

116º15'59,1” 0˚15’ 55,2”

1.6 Palm Oil Mill Output and Approximate Tonnages Certified

Projected Production from last 12 Months (MT)

Actual Production (MT) ending April 30

th 2012

Projected Production for next 12 Months (MT)

CPO PK PKO CPO PK CPO PK

71,416 13,094 9,745 85,697 17,237 101,692 20,338

Total RSPO FFB received for 12 month period: 410,736 MT (OER 23.5%)

Total non-RSPO FFB received for 12 month period: 22,000 MT The increase in the CPO/MB and CPO figures are accounted for as the figures at the main audit only included the tonnages that originated from certified FFB. ASA 1 includes the certified FFB as well as non-certified FFB to give figures for CPO/MB, CPO, PK/MB and PK. Cakra Kernel Crushing Plant crushes kernel from both Perdana and Cakra Palm Oil mills to produce PKO/MB and PKO. The projected figures for the next 12 months are 30% less than year ending 30

th April 2012 due to the new Satria Oil Mill

which will come into operation in August 2012 and will process FFB from both Satria and Lastari estates.


http://www.rea.co.uk/






1.7 General Description of Supply Base

PT Rea Kaltim is a company carrying out oil palm cultivation and processing based in East Kalimantan province. The operations were established in February 1993. The Company is producing Crude Palm Oil (CPO), Palm Kernel (PK) & Palm Kernel Oil (PKO) and has 6 estates as well as a PLASMA and PPMD scheme. The 2 mills (Perdana POM and Cakra POM) and the supply base mentioned above underwent an RSPO main assessment in March 2011 and were successfully awarded RSPO P&C Certificate of compliance. Tepian Estate is an additional supply base to Perdana Palm Oil Mill and was audited in January 2012. It is included in the results of this audit but all FFB from Tepian will be considered as non-certified until the peer review and certification process is completed Tepian Estate is owned by PT. Sasana Yudha Bhakti which is a subsidiary company of R.E.A Holdings PLC, who also own 4 other oil palm companies in East Kalimantan. (See section 2 – partial certification).

Pt Rea Kaltim has appointed a management team called the “PLASMA team” to manage and to further develop the area of plasma. The team is also involved with the day to day management of the PPMD farmers. The PPMD was set up by the company and the land development and planting stock were supplied free of charge. The company fully appreciates that they now has a moral and invested interest in ensuring that the PPMD plantations are both well managed and produce good quality FFB and , even though the PPMD are now independent growers and suppliers of FFB to the Pt Rea Kaltim POMs, the PLASMA team is able to assert considerable influence and have a direct management input on a daily basis. Pt Rea Kaltim has undergone a full RSPO audit against the RSPO Principles and Criteria and managers at all levels have been included in the process. The PLASMA team was fully included in this process and they all demonstrated sound knowledge of the RSPO principles and criteria. Whilst the PLASMA is effectively fully managed in the same way that the main Pt Rea Kaltim plantations are managed, the PPMD plantations are over seen by the same managers and all herbicide and fertilisers are stored in the Pt Rea Kaltim stores and distribution is carefully regulated and controlled. The PPMD areas tend to be more widespread than the PLASMA and there is a greater variety of tree and fruit species which add to their conservation value. The auditor included both PLASMA and PPMD growers in the pre-assessment in December 2010 and the main assessment in March 2011. The ASA 1 audit comprised an opening meeting with the PLASMA team and then site visits to the growers. The risk assessment of the internal control systems indicated that at least 40 farmers should be included. In reality many more were visited as the PLASMA areas comprise many hundreds of hectares in each block and are managed as single contiguous units. Individual PPMD farmers were also included in the audit and a meeting was held with PPMD co-operatives. The full implications of RSPO were discussed. It was clear that there is a strong desire to ensure continued management in accordance with RSPO P&Cs and, as many farmers have both PPMD and PLASMA plantations and may also be employed by the company in the main plantations, management continues to be in compliance with the RSPO. The farmers already have valuable and on-going input from the PLASMA team and it is also clear that farmers wish to convert from PPMD to PLASMA as they realise that the quality of their crops will be enhanced.






1.7.1 Location of the Supply Base

Oil Palm Plantation (OPP)

Location address GPS reference.

CU Code Name Longitude Latitude

PO2 Lestari Desa Long Beleh Modang, Kecamatan Kembang Janggut, Kebupaten Kutai kartanegara, Kalimantan Timur

116˚ 10’ 55,1”

0˚ 23’ 17, 8”

PO4 Cakra Desa Muai, Kecamatan Kembang Janggut, Kebupaten Kutai Kartanegara, Kalimantan Timur

116˚ 15’ 55,1”

0˚ 17’ 7, 6”

PO5 Damai Desa Kelekat, Kecamatan Kembang Janggut, Kebupaten Kutai Kartanegara, Kalimantan Timur

116˚ 10’ 36,2”

0˚ 14’ 57, 6”

PO6 Berkat Desa Kembang Janggut, Kecamatan Kembang Janggut, Kubupaten Kutai Kartanegara, Kalimantan Timur

116˚ 22’ 22,1”

0˚ 13’ 11, 3”

PO7 Plasma Desa Pulau Pinang, Kecamatan Kembang Janggut, Kubupaten Kutai Kartanegara, Kalimantan Timur

116º 10' 00" 0º 15' 00"

PO8 *PPMD Desa Perdana, Kecamatan Kembang Janggut, Kabupaten Kutai Kartanegara, Kalimantan Timur

116º 12'46,5”

0º 15' 36,4"

1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per Year

CU Code Name Area of oil palm (ha) EstTonnes FFB/yr

Planting years Cycle (years)

Total area Mature area

PO2 Lestari 3,849 3,849 106,551 1994 - 1998 25

PO4 Cakra 4,675 4,675 116,242 1998 - 2004 25

PO5 Damai 2,005 1,973 39,104 2005 - 2006 25

PO6 Berkat 4,460 4,460 94,031 2006 - 2007 25

PO7 Plasma 2,376 - 0 2009 - 2010 25

PO8 *PPMD 1,561 1,026 11,304 2001 - 2008 25

*PPMD: Program Pemberdayaan Masyarakat Desa or PPMD. There has been an increase in the area planted at Damai of 144ha in 2011 and 2012. The plasma area has increased by 456ha.

1.7.3 Percentage of Planted Oil Palm by different Age Ranges

CU Code Planting years by 5 year ranges.

Name Before 1990 1991 – 1995 1996-2000 2001 - 2005 2006 – 2012

PO2 Lestari - 27.85% 72.15% - -

PO4 Cakra - - 31.90% 68.10% -

PO5 Damai - - - 63.70% 36.30%

PO6 Berkat - - - - 100.00%

PO7 Plasma - - - - 100.00%

PO8 *PPMD - - - 59.90% 40.10%






1.7.4 Calculation of the Number of Production Units (N) to Sample for the Mill

N = 0.8√y, where y is the number of units, with the result always to be rounded UP to the next whole integer. Where only a sample of the supply base is assessed, units not previously assessed, or assessed earlier in the certification programme, are to be preferred over those more recently assessed.

For the mill, how many units make up the production base?

Owned estates (Y) N = 0.8√Y Smallholders (Z) N = 0.8√Z

4 2 PPMD / Plasma PPMD / Plasma

Explanation as to the selection of estates sampled.

Cakra was chosen as the main estate. Damai was randomly selected and the Plasma and PPMD were included automatically.

1.8 Progress of associated Smallholders or Out-growers towards Compliance with relevant Standards - should be in accordance to the 3 year implementation plan

The PPMD was included in the audit as it is included in the scope of the main audit.






1.9 Location Map for this Certification Unit

Pt Rea Kaltim.






PART 2: PARTIAL CERTIFICATION

The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure.

The reason a time bound plan was not included in the main RSPO audit of 2011 was that at that time the 5 separate companies under the ownership of R.E.A Holdings PLC were to become members of the RSPO as individual management companies. They are registered as separate companies and so it was considered that the rules for partial certification were not applicable. Another factor is that the estates that make up 4 additional separate companies have a very young age class. 3 of the companies are reliant on independent palm oil mills to purchase their crop and so there was not a Palm Oil and Supply base to form a unit of certification. The situation has changed with the new rules for partial certification introduced in 2011 and the decision to construct a new mill to serve the 3 companies.

Section Criteria Yes/No If “Yes”. If “No”.

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company?

No Section 2 is N/A.

Go to 2.1.2

2.1.2 Is the certified operation part of a simple structure of operations owned by one company?

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

Yes Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

Yes Go to 2.3 Go to 2.2.2

2.1.5 Is there a time bound plan in place for all subsidiaries, estates and palm oil mills?

- Go to 2.3 2.2.3

2.1.6 Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO.

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised. Category

2.2.1 There is no explanation as to the company’s structure and therefore it Is not possible to conduct an effective audit against the rules for partial certification.

- Major.

2.2.2 There is no statement of commitment to complying with the spirit of the RSPO for all companies within the company structure.

- Major.

2.2.3 There is no time bound plan in place for the certification for all subsidiaries, estates and mills.

- Major.

2.2.4 No applicable membership of the RSPO. Major.

2.3 Summary of the Time Bound Plan

Section Requirement. Findings and any action required. Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

Yes. See table below. Yes






Company name Total area Plantable Planted Mature at 1/1/2012

POM commission

Date for RSPO

PT. Sasana Yudha Bhakti (SYB) 7,395 4,700 2,805 654 Aug 2012 January 2013

PT. Cipta Davia Mandiri (CDM) 22,500 7,000 1,216 190 2014 2014

PT. Putra Bongan Jaya (PBJ) 11,602 8,400 327 - 2014 2014

PT. Kutai Mitra Sejahtera 7,321 4,235 39 - 2014 2014

2.3.2 Is the time bound plan challenging? Age of plantations. Location. Mill development. Infrastructure. Compliance with applicable law.

Yes. As can be seen from the above table, the area of productivity is very low with young crops.

Yes

2.3.3 Have there been any changes since the last audit? Are they justified?

The time bound plan is now in place. Yes

2.3.4 If there have been changes, what circumstances have occurred?

See 2.1 above. Yes

2.3.5 Have there been any stakeholder comments?

No. Yes

2.3.6 Have there been any newly acquired subsidiaries?

No Yes

2.3.7 Have there been any isolated lapses in the implementation of the plan?

No. Yes

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?

No Yes

2.3.9 General statement as to progress made since the last audit:

The planted area of the 4 companies is now 4,387 out of a total plantable area of 24,335 ha. One new mill is due for commissioning in August 2012 and plans are in place for a new mill to be commissioned in 2014.

Yes

2.4 Un-Certified Units or Holdings

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and palm oil mills.

Section Requirement. Findings and any action required.

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

The 4 companies have completed all legal requirements for the new plantings such as i) Legal: • Land titles/user rights (Site Permit Izin Lokasi), • Plantation Operation Permit (Izin Usaha Perkebunan). • Land Use Title (Hak Guna Usaha). ii) Environmental: • Environmental and social impact Assessment (AMDAL / UKL-UPL) and environmental management and monitoring reports. (Lapran RKL-RPL) iii) Social: • Documentation of social activities and community programs. • Health and Safety Plan. • Continuous improvement plan.

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing

There is a conservation team that conduct an intensive survey of the sites and identify all conservation areas. No replacement of any primary forest or HCV areas.






High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

2.4.3 Any new plantings since January 1st

2010 must comply with the RSPO New Plantings Procedure.

The NPP was applicable to PT. Kutai Mitra Sejahtera only as the other companies had already started work prior to the 1

st Jan 2010.

PT. Kutai Mitra Sejahtera has completed the NPP.

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

No land conflicts were noted.

2.4.5 Any Labour disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

No labour disputes noted.

2.4.6 Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

No legal non-compliance found.

2.5 Summary of the findings for Partial Certification

The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension.

The company has taken a very responsible approach to all of their plantation development with particular regard to conservation and social issues. With all legal steps taken for the development of the plantations

2.6 Partial Certification Audit Agenda

Date Location Agenda

9th

May Perdana Central Discussion and review of the plans and the associated documents.

PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, 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.

3.2 Audit Team

Lead auditor: David Ogg FICFor.

Team member 1: Haeruddin

Team member 2: Selvanathan






3.2.1 Qualifications of the Lead Auditor

David Ogg (Lead auditor). Field working experience in the palm oil sector, or a demonstrable equivalent. Good agricultural practices (GAP), integrated pest management (IPM), pesticide and fertilizer use. Health and Safety auditing on the farm and in processing facilities. Environmental and ecological auditing. Economic issues. POM audits for Supply Chain Certification. Haeruddin. Fluent in local language. Environmental and ecological auditing. Fluent in local language. Economic issues. Selvanathan Grapragasem. Workers welfare issues and social auditing experience. Auditing against Labour Standards. Working conditions and payment of wages. Fluent in local language. Working experience in palm oil plantation. Involve in RSPO auditing since March 2010. Involve in OHSAS 18001:2007 auditing since 2009. Involve in EMS 14001 auditing since 2009.

3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the assessors and Certifier. During the Audit the qualified CUC assessors used the RSPO standard as endorsed for the country in which the Audit took place and recorded their findings. For each estate identified to be included in the sample for this audit, the original main Audit checklist was used, which includes any updates from previous main audit. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

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.

Re-planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

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.

Documentation review. Palm Oil Mill audits include:

Mill and workshop inspections. Documentation. Worker interviews.

Mill. 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.

Full document review. Completion of the checklist. Review and documentation of evidence. All aspects of RSPO P&C’s applicable.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarised above.

3.3.2 Audit Agenda

Day Time Location Auditor Action

7th

May Monday

1500 Training school. All Opening meeting.

1600 Perdana POM All SCC and sample criteria.

8th

May Tuesday

0800 Perdana Estate David and Haeruddin Field operations followed by all P&Cs.

Selva Social and principle 6.

1400 Setakan Estate David and Haeruddin Sample of principles and criteria as shown above.

Selva Social and principle 6.

9th

May Wednesday

0900 Cakra POM David and Haeruddin SCC and all P&Cs.

0900 Damai and Cakra Selva Social and principle 6.

1400 Damai and Cakra David and Haeruddin Field operations and sample of P&Cs. Conservation.

10th

May Thursday

0800 Plasma schemes All Document review and field audits of Plasma scheme.

0900 Partial certification.

David Review of plan and associated documents.

0900 Plasma schemes Selva and Haeruddin. Various sites. If necessary, the team will split to ensure Plasma audit is complete.

1100 Central office David Prepare for closing meeting.

1400 Central office All Prepare for closing meeting.

1600 Training school. All Closing meeting.

11th May Friday

0600 Jetty All Depart.

PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The company continues to manage their estates in an environmentally and socially responsible way. This audit revealed areas for improvement and the company has already implemented measures in response to the findings.

It is therefore the recommendation of the lead assessor that:

A certificate of compliance is maintained. Signed:

Name: David Ogg FICFor. Date: 10

th May 2012






4.2 Summary of the findings by principle and a sample of the Criteria

Over the 5 year period of the life of the certificate, there will be 4 annual surveillance audits

Identified Non-Conformities and noteworthy Positive and Negative Observations.

The RSPO require that this report contains findings by each principle and some example criteria. Please see table below.

4.2.1 Principle 1

Each estate and the mill maintain records of all parties that request information and have a comprehensive system for recording any action taken. All public documents are available upon request.

1.1 There is a procedure for handling of requests at central office level, at local office level and for all internal and external communication. This is also covered by the policy: “Commitment to Transparency”. Ref No. 092/REA-VPD/RSPO/I/2010.

1.2 Public documents are available and include legal, social and environmental documents and current and past FFB prices.

All records are maintained for a minimum period of 5 years.

All the estates and mills make all the documents available as required by this criterion.

4.2.2 Principle 2

There is a legal department with offices in Jakarta and Samarinda. Most of the company documents are located in Jakarta. The department uses external lawyers and contacts in government department, including agricultural and environmental ministries, and other societies to keep up to date with all changes. Once a month a legal brief is prepared and circulated to all managers. Likewise, specific requests from managers can be investigated and legal advice given. In the legal department, personnel are appointed to ensure implementation of the laws and to ensure that licences are renewed and deadlines for reporting to the government are met. It was noted that a land dispute at Damai was fully reconciled and covered some 144ha. The process was documented and all records are in order. There are signed agreements and a record of compensation paid.

4.2.3 Principle 3

The company has operational plans for both the plantations and mills for the period 2011 to 2015. Their mission is to reduce costs through the implementation of the latest technology available in the agribusiness and to be a cost efficient producer of FFB and palm oil. The plans include targets and objectives in terms of yields and costs and specific projects to achieve their mission. The executive summary covers, for example Planting plans, Bio-gas project, Electricity supply from renewable fuels, Internal communications, composting project, Certification to RSPO and ISO standards.

4.2.4 Principle 4

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. There are comprehensive monitoring records and Safety and Health issues are well considered and implemented. However, the audit revealed areas relating to risk assessments that can be further improved.

4.1 All estates : SOP Of Agronomy Manual of Oil Palm which prepared on 10 March 2010 followed by section: 1.Land Clearing 2.Nursery Practice 3.Planting Density, Pattern, Technique of Planting 4.Soil Erosion, Terrain Conservation & Terrace Making 5.Weeding, Weed Control 6.Manuring, Leaf Sampling 7.Pests & Disease 8.Pruning of fronds 9.Harvesting The mill: SOP for mills prepared on 16 January 2008 documented as REA.EP.019 has following procedures: 1. Receiving of FFB.






2. Sterilizing of FFB. 3. Threshing & Pressing. 4. Purifying process. 5. Nut process. 6. Kernel process 7. Water Treatment. 8. Steam Energy & Electricity. 9. Machine Maintenance. Monitoring includes: House-keeping, warehouse, maintenance, harvesting. Monthly management report contains all activities regarding the estate operations and activities: detailed FFB production and expenses, fertilizer, pesticide and herbicide applications, pruning, harvesting, hand picking, stock balances of warehouses, operational expenses, visitors, management structure, clinic report, labour and employees, rainfall, workshop, inventories of company properties.

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. Monitoring of pesticide toxicity units. Minimal use of pesticide use due to very effective IPM controls. Since 2008 only rat bait has been used. There is a pest monitoring team that carry out on-going monitoring of rodents and leaf eaters. Training given to those handling the pest chemicals.

4.2.5 Principle 5

The company fully supports a full time conservation officer and support staff including outside consultants. The team was set up in 2008 but prior to this, the company actively identified all water courses, HCV habitats and worked with local communities and set aside conservation areas and conserved riparian zones amounting to about 25% of the total land holding. The conservation division is called Rea Kon. This is an abbreviation of the company name and the Indonesian word for Conservation “Konservasi”. Since 2008, extensive identification and research work has taken place and particular attention has been made to the identification of protected, rare, threatened or endangered species and HCV habitat. Using a combination of intensive field studies, satellite imagery and remote camera techniques, the conservation team has documented species as classified in accordance with CITES status. They recognise the importance of conserving and enhancing the habitats for all species and have a comprehensive documents and maps. Statistics of species identified from 2008: Flora: 545. Birds: 154. Fish: 117 (Including a new species unknown before). Herpetofauna: 74. Odonata: 66. Mammals: 41. Crustacae: 9. An Orangutan project has identified 15 individuals and on-going research is expected to identify more individuals and families. Habitats are conserved and enhanced with the planting of Duriam and other fruit trees. Across all the estates, there is a conservation plan to 2015 which has the clear mission to conserve or enhance landscape level biodiversity in all plantation sites and adjacent natural habitats. The objectives are: The original biodiversity of the landscape will be conserved. All negative human impacts originating within or adjacent to the plantation boundaries will






be reduced or eliminated. Long term benefits will be transferred to all concerned. There are also plantation conservation objectives including conservation boundaries and riparian zones, habitat enrichment, retention of natural vegetation and protection of fragile soils and investigation into major pests and their control. The Rea Kon staff also work closely with many organisations including the Singapore Botanical Garden and International Consultants and Universities.

5.6 Documented plans to mitigate all polluting activities - reviewed annually. The EFB and is spread out to a depth of about 2 metres and POME is sprayed directly from pond number 4 for 30 days. Careful monitoring takes place and a bacterial cocktail is added to speed up the decomposting process. This compost is applied at about 10 tonnes per ha. Pollution and emissions are recorded for: Gensets, boilers, Oil Purifier, Separator, Vacuum drier, oil tank, sand trap tank, transportation, jetty, workshops, waste store, loading kernel, kernel crushing plant, water treatment, grease tank, stores, fossil fuels store, chemical stores, waste oil stores, boilers, CPO tank, loading ramp, pressing, conveyors, sludge tank, clarifier, crude oil tank, vibrating screen, digester, threshing, tipper, condensation, steriliser, engine, POME. The type of pollution includes noise, air and potential water pollution. Regular monitoring of noise, vibrations, smell, smoke emissions as well as POME production. Monitoring is continual and in accordance with an annual schedule.

4.2.6 Principle 6

There is an implemented plan to improve worker housing and water quality and there is a documented and implemented social impact assessment. The audit revealed areas of improvement relating to contracts.

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. Water and electricity is provided free of charge. An on-going improvement programme for all houses. Each year the Government of East Kalimantan sets the minimum wage called the UMPS (Upah Minimum Propinsi Sektor Perkebunan). The basic salary for plantation workers is set as the same rate as the UMPS, or higher.

4.2.7 Principle 7

There has been an increase in the area planted at Damai of 144ha in 2011 and 2012. The plasma area has increased by 456ha.

7.1 There is full involvement of the local communities in the identification of suitable sites for plasma development. The area increase at Damai was not planned at the time of the last audit. However 144ha were disputed and there is a full record of agreements made, compensation made and maps. The are was then planted.

7.3 The conservation department conducts full HCV assessments. Land opened since Nov 2007 was fully surveyed by the ReaKon team. The new planting procedures are known and the company will implement these procedures when land is identified for new planting.

7.7 No use of fire.

4.2.8 Principle 8

The company demonstrated a clear commitment to continual improvement.

8.1 Fire monitoring tower for Sentekan estate.

Improved water treatment systems.

New boiler for Perdana mill.

Improved oil catchment and recovery traps.

Bio-gas plant in production for Cakra Mill and in construction of Perdana Mill.

Composting of EFB resulting in virtually zero POME discharge for land application.

Plastic crusher for recycling plastic bottle and containers.






Harvesting of rainwater for Cakra Estate, saving the cost of diesel pump. Use of rainwater at from discarded POME ponds which has resulted in a great reduction of diesel required to pump water from the river.

On-going worker housing improvements.

The planting of more Mucuna Bractetae to reduce herbicide use and erosion.

4.3 Sample Criteria for inclusion in this Report on an Annual Basis during the Lifetime of the Certificate

Criterion Year 1 Year 2 Year 3 Year 4 Criterion Year 1 Year 2 Year 3 Year 4

1.1 x x x x 6.1 x

1.2 x x x x 6.2 x

2.1 x 6.3 x

2.2 x 6.4 x

2.3 x 6.5 x

3.1 x x 6.6 x

4.1 x 6.7 x

4.2 x 6.8 x

4.3 x 6.9 x

4.4 x 6.10 x

4.5 x 6.11 x x

4.6 x 7.1 x

4.7 x 7.2 x

4.8 x 7.3 x

5.1 x 7.4 x

5.2 x 7.5 x

5.3 x 7.6 x

5.4 x 7.7 x

5.5 x 8.1 x x x X

5.6 x






4.4 Non-conformity register and reports on previous NCs

This section gives an over view of new or revised non-conformities raised during this audit and of action taken to close out non-conformities raised during the previous audits.

If a minor-non-conformity raised at the last audit, is not closed out, then this will be raised to Major status and the company given 60 days to close this out.

The NC number is comprised of 2 parts to include the year in which the NC was raised as well as a sequential number.

4.4.1 Annual Audit NC Summary

Annual audit date: 9th

May 2012

Number settled: 3

Number outstanding: 4

4.4.2 Status of non-conformities (both Minor and Major) previously identified, even if already Closed Out

NC number: 01/2011

Category: Minor

Aspect of standard: Aspect of standard: 4.7.5 A documented risk assessment for Occupational Health and Safety (OHS).

Evidence of NC: Risk assessments date back to 2005 and they need to be up dated to consider every operation and eventuality.

Comment at ASA: Risk assessments have now been updated and this NC is closed. However, a new NC is raised relating to risk assessments.

NC number: 02/2011

Category: Minor

Aspect of standard: 6.2.3 Records of local communities’ aspiration and responses or follow-up actions by companies to these requirements.

Evidence of NC: Issues raised during stakeholder consultation and as part of the on-site interviews are relatively minor but important to the individuals concerned. The fact that these issues were raised with us and not through a communication procedure or with management is indicative of an under-lying problem. The company must review the lines of communication and put into place clear systems to ensure communities aspirations and concerns reach the appropriate level of management and dealt with accordingly.

Comment at ASA: The lines of communication have been reviewed and interviews have confirmed that the situation is now greatly improved. NC closed.

NC number: 03/2011

Category: Minor

Aspect of standard: 1.3.6 (20.4 Group Checklist). The Group Manager shall demonstrate sufficient resources – i.e. Human, financial, physical and other relevant resources – to enable effective and impartial technical and administrative management of Group Certification.

Evidence of NC: Whilst there are 15 members of the plasma team, management must review the training and supervision required and consider if extra resources are required to ensure effective training and socialisation.

Comment at ASA: Continuous training. NC closed.






4.5 Non-Conformity Report for NC identified during this ASA

NC number: 01/2012

NC number: 01/2012

Client name: Pt Rea Kaltim

Date raised: 10th

May 2012

Major or Minor: Minor

Raised by: David Ogg

Aspect of standard: 4.7.5. A documented risk assessment for Occupational Health and Safety (OHS).

Evidence of non-conformity: It was noted that expectant mothers are not given hazardous jobs such as spraying. Expectant mothers are given so called “light work” such as weeding, cleaning and loose fruit collecting and it is not clear in the risk assessment if this work is suitable. The risk assessments do not include all routine (and non-routine) work and do not always take into account the reasons for sick leave. Auditors signature:

Date: 10

th May 2012.

NC number: 02/2012


Date raised: 10th

May 2012



Aspect of standard: 6.5.4. Agreements entered into with contractors are to specify that contractors abide by labour laws.

Evidence of non-conformity: It was noted that a contract entered for Loading FFB approved on 30.4.2012, does NOT specify that contractors abide by the labour laws. Auditors signature:

Date: 10

th May 2012.

NC number: 03/2012


Date raised: 10th

May 2012



Aspect of standard: 6.8.2. Evidence of equal treatment in working opportunities for workers.

Evidence of non-conformity: It was noted that through the workers interview that if a new recruit is already pregnant at the time of work application, she will not be taken for employment. Further investigation with personnel department proves to be true, though no specified SOP is given at the time of audit. Auditors signature:

Date: 10

th May 2012.






4.6 Observations

Aspect of standard: 6.5.2. A company working regulations and work contracts, in accordance with existing regulations.

Under the pursuant of the Employment Law; an employee is entitled to a 30 minute rest after four hours of continuous work. [Fasa 79 (2) a] It was noted that some employees do not take the entitled rest of 30 minutes immediately after 4 hours continuous work. Example: Store Employees. Auditors signature:

Date: 10

th May 2012.

4.7 Issues that were raised during the Stakeholder Consultation and Company Responses

A stakeholders meeting was conducted during ASA1. The subjects raised and responses by the company are recorded below. Subsequent annual surveillance audit reports will include any subjects raised during the period of certification and during the annual surveillance audit.

Subject raised Company response and proposed action to be taken.

Audit team findings

Workers interview – request to give awareness / explanation on the annual assessment and pay increment.

Will do necessary arrangement. Positive comment

PART 5: RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011. RSPO Supply Chain Certification Standard. November 2011. As required, a separate SCC report and recommendation for certification has been prepared.

5.1 POM included in the scope of the audit

CU code: Name of facility Location address Supply chain model

POM Cakra POM Desa Kelekat, Kecamatan Kembang Janggut, Kebupaten Kutai Kartanegara, Kalimantan Timur

SG, MB






5.2 Summary report including a brief description of the scope of certification

A full RSPO SCC audit was conducted in April 2012 and the findings and 2 mills and 1 bulking station were awarded RSPO SCCS certification as a result. PT Rea Kaltim operates two palm oil mills: Perdana and Cakra. Both mills source the bulk of their FFB from Rea Kaltim properties but there is also a small element of crop from independent growers that are cleared tracked and monitored where quantities of certified and non-certified FFB processed are known on a daily basis. Both mills have been certified to use the SG and MB models. Although each POM has in place processes in producing Identity Preserved oils, these will only become “Segregated” if mixed together on the barge or if the PK is crushed together to produce PKO/SG. There is a kernel crushing plant at Cakra which crushes all kernels from both mills and is able to quantify the PKO produced. The oils are transported to a bulking station located at Sg. Meriam, Samarinda by barge where there are 5 tanks for CPO with a capacity of 10,500mt and one tank for PKO with a capacity of 2,500mt. All sales of CPO and PKO are co-ordinated by the bulking station and it is noted that to date no CPO or PKO has been sold as RSPO certified.

5.3 Confirmation of the company’s summary of annual certified volume of RSPO certified Palm Oil or Palm Kernel Oil over a specified period

Product: CPO (MT) PK (MT) Specified 12 month period:

CU Code

POM 85,697 17,237 April 30th

2011 to April 30th

2012

5.4 Final certification decision by Control Union for the RSPO SCCS Audit

Recommendations made: Yes

Summary of non-compliances:

Full compliance was found.

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.






PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next ASA

The provisional date for the next ASA is: May 2013

6.2 Date for Closure of Non-Conformities

See sections above for details of NC’s, if any

All major NCs to be closed by: June 8th

2012

All minor NCs to be closed by: Before or during the time of ASA2

6.3 Signing by the Client

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by:

Name: Geetha Govindan

Position: Vice President Director

Date: 10th

May 2012 Signature

6.4 Signing by the Lead Auditor

I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by:

Name: David Ogg FicFor.

Position: Lead Auditor

Date: 10th

May, 2012 Signature

6.5 Signing by the Certifier

I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by:

Name: Gerben Stegeman

Position: Certifier

Date: June 22nd

2012 Signature






PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit (see above 1.9)

Appendix 2: List of Abbreviations

BRC British Retail Consortium

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

EUREPGAP Euro-Retailer Produce Good Agricultural Practices

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MDC MDC Publishers Sdn Bhd ( Company Name)

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PK Palm Kernel

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

SA8000 Social Accountability 8000

SIA Social Impact Assessment

SOCSO Social Security Organisation

SOP Standard Operating Procedure

USDA/NOP United States Department of Agriculture – National Organic Program

MT Metric Tonnes

WHO World Health Organization

rspo audit report · 2014. 11. 2. · cakra kernel crushing plant crushes kernel from both perdana...

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