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SGS RSPO

(Principles & Criteria)

Doc. Number: GP 7003A

Doc. Version date: 01 April 2013

Page: 1 of 64

SGS RSPO, SGS (Malaysia) Sdn. Bhd., No. 26, Jalan Anggerik Vanilla, 31/93, Kota Kemuning, 40460 Shah Alam, Malaysia CONTACT PERSON: ABDUL HAYE SEMAIL Tel: +6 (03)5121 2320 - Fax: +6 (03)5122 5927

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RSPO PRINCIPLES & CRITERIA CERTIFICATION REPORT

Public Summary Information

Project Number: ID 3932 Certificate No.: SGS-RSPOPM-MY14/01351

Validity Period: 05th

Jan 2014 – 04th

Jan 2019

Report Ref. No.: RSPO Membership No.:

2-0215-11-000-00

Client Name: PT Harapan Sawit Lestari – Paku Juang Mill

Website: www.cargill.com

Scope: Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB) from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm Kernel Oil (PKO) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO INA-NI standard.

Type of Certificate Holder:

INDIVIDUAL

Number of Mill: 1 Number of Sites: 4 Estates ( Include the KKPA )

Mill Capacity: 60 MT/hour Annual CPO and PK Produced (MT):

73,392.56 MT (CPO)

14,925.75 MT (PK)

Address:

Street and number:

Town/City

State/Country

Zip/Postal code

Country

Mill Address Desa Air Upas Kecamatan Air Upas Kabupaten Ketapang 78864 Kalimantan Barat – Indonesia

Contact Person:

Name: Ms. Yunita Widiastuti

Position: Group Program Assurance Manager

Contact: (62) 21-5746168

Email: [email protected]

Country: Indonesia

Plantation Unit Being Evaluated:

Supply Base Name & Address

1. Paku Juang Estate

2. Kebanteng Estate

3. Keluwin Estate

4. Sungai Dabu Estate

Total Certified Area (Ha):

15,352.55 Ha

Total FFB Produced (MT):

357,989 MT

End of Public Summary

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BASIC EVALUATION INFORMATION

MAIN EVALUATION

Evaluation Dates: 18th

to 20th April 2013

Team Leader/Team: Lead: James Ong; Team member: Faisal Jaafar, Zaenal Abidin

Affiliate Project Manager: Date:

Report approved by: Haye Semail Date: 13 Jan 14

Certification approved by: Kenny Looi Date: 29 Jan 14

Database logged by: Othman Shahziela Date: 29 Jan 14

SURVEILLANCE 1

Evaluation Dates:

Team Leader/Team:


Report reviewed & approved by: Date:

Certification approved by: Date:

Database logged by: Date:

SURVEILLANCE 2

Evaluation Dates:

Team Leader/Team:





SURVEILLANCE 3

Evaluation Dates:

Team Leader/Team:





SURVEILLANCE 4

Evaluation Dates:

Team Leader/Team:





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TABLE OF CONTENTS

BASIC EVALUATION INFORMATION.................................................................................................................... 2

SUMMARY ............................................................................................................................................................... 4

List of Abbreviation ................................................................................................................................................ 6

1. scope of certification assessment ......................................................................................................... 8

1.1 National Interpretation Used ..................................................................................................................... 8

1.2 Certification Scope .................................................................................................................................... 8

1.3 Location and Maps .................................................................................................................................... 8

1.4 Description of Supply Base and Mill Processing Capacity ...................................................................... 12

1.5 Date of Planting and Cycle ...................................................................................................................... 12

1.6 Other Certification Held ........................................................................................................................... 13

1.7 Organizational Information and Contact Person ..................................................................................... 13

1.8 Time-bound Plan for Other Management Units ....................................................................................... 13

1.9 Area of Plantation.................................................................................................................................... 13

1.10 Date Certificate Issued and Scope of Certificate ................................................................................ 14

2. Assessment Process ............................................................................................................................. 14

2.1 Certification Body .................................................................................................................................... 14

2.2 Assessment Methodology, Programme, Site Visits ................................................................................. 14

2.3 Qualification of Lead Assessor and Assessment Team .......................................................................... 16

2.4 Stakeholder Consultation and List of Stakeholders Contacted ............................................................... 16

3. Assessment Findings ............................................................................................................................ 16

3.1 Summary of Findings .............................................................................................................................. 16

3.2 Corrective Action Request ...................................................................................................................... 52

3.3 Noteworthy Positive & Negative Observation .......................................................................................... 52

From the audit, 7 Observations were also raised as opportunities for improvement. ........................................ 52

3.4 Status of Non-Conformities Previously Identified .................................................................................... 52

3.5 Issues Raised by Stakeholders and Findings ......................................................................................... 52

4. Acknowledgement of Organization Internal Responsibility .............................................................. 52

4.1 Date of Next Surveillance Visit ................................................................................................................ 52

4.2 Date of Closing Non-Conformities ........................................................................................................... 52

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings........................ 52

APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS ............................................................. 54

APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED ..................................................................... 62

APPENDIX C: TIMEBOUND PLAN ....................................................................................................................... 63

APPENDIX D: LIST OF STAKEHOLDERS CONTACTED ................................................................................... 64

LIST OF TABLES

Table 1: Mill and Supply Base Estates GPS Location .................................................................................. 8

Table 2: Budgeted Yield from Supply Base Estates ( FY 2011/12 ) .......................................................... 12

Table 3: Mill Processing Data ( FY 2011 / 2012 ) .......................................................................................... 12

Table 4 : Planting Age Profile for all the Supply Base Estates .................................................................. 12

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Table 5: Area Statement of the Supply Base Estates ................................................................................. 14

Table 6: Assessment Programme ................................................................................................................. 15

Table 7: Auditors Profile ................................................................................................................................. 16

LIST OF FIGURES

Figure 1: Location Map for PT Harapan Sawit Lestari .................................................................................. 9

Figure 2: HSL East , HSL West and Mills Location Map ............................................................................. 10

SUMMARY

About Cargill Cargill provides food, agriculture, financial and industrial products and services to the world. Together with farmers, customers, governments and communities, we help people thrive by applying our insights and nearly 150 years of experience. We have 142,000 employees in 67 countries who are committed to feeding the world in a responsible way, reducing environmental impact and improving the communities where we live and work. Cargill in Indonesia Cargill’s activities in Indonesia started in 1974 with the establishment of a small feed mill in Bogor, West Java. Over the years, the company has enjoyed substantial growth, and today, their expansive operations comprise the origination, processing, handling, shipping and marketing of a wide range of agricultural and food products and related services. Cargill Indonesia employs over 11, 000 people and is headquartered in Jakarta with offices, manufacturing plants and facilities throughout the country. As a corporate citizen of Indonesia, Cargill is committed to addressing some of the economic, environmental and social challenges within the community. The company focuses on implementing programs, primarily in rural areas, that:

Foster responsible and sustainable development

Help protect the environment

Nourish people that reside in local communities Cargill Tropical Palm Cargill entered the palm oil plantation business in Indonesia in 1996 when it acquired PT Hindoli in South Sumatra. In 2005, Cargill expanded its palm plantation activities into West Kalimantan with the formation of Cargill Tropical Palm Holdings Pte Ltd, a joint venture with Singapore-based Temasek Holdings, an investment arm of the Singapore government. Today, Cargill’s West Kalimantan operations span across nearly 32,000 ha of oil palm plantation in PT Harapan Sawit Lestari, PT Indo Sawit Kekal and PT Ayu Sawit Lestari. Collectively, Cargill’s Indonesian plantations cover around 42,000 hectares, and employ more than 11,000 employees. Within Indonesia today, Cargill owns and operates five palm oil mills with a total crush capacity of 380 tons per hour. Dedicated to sustainability Cargill believes that palm oil should be produced sustainably. At each of our plantations, we have clear social and environmental policies, and integrate responsible development into our operational plans. In addition, we are making substantial contributions to the development and empowerment of local communities through education, environmental sustainability and health and safety initiatives. Cargill became an RSPO member in June 2004 and has made significant progress in implementing the RSPO Principles and Criteria in their business operations. In February 2009, Cargill received RSPO certification for their PT Hindoli palm plantation.

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Smallholders at PT Hindoli also became the world's first smallholder scheme to become certified under the RSPO's Smallholder Principles & Criteria, another important milestone in Cargill's commitment to producing palm oil in an environmentally sustainable and socially responsible manner. At PT Harapan Sawit Lestari Fresh fruit bunches at PT Harapan Sawit Lestari’s are processed at the two company-owned mills - Manis Mata and Paku Juang. Cargill also works closely with about 4,300 smallholders in the management of more than 9,700 ha of plasma oil palm plantation in West Kalimantan. Cargill supports these smallholder farmers by ensuring that estates in West Kalimantan are managed under the KKPA (Kredit Koperasi Primer untuk Anggota) scheme. This also guarantees that all operational and administrative activities are the same as the Inti/Estate. RSPO certification for Cargill’s West Kalimantan plantations

After undergoing Stage 1 pre-audit in 2010, Cargill extended its commitment to sustainability by making a public announcement on the RSPO website in February 2013 that PT Harapan Sawit Lestari was undergoing the main assessment for RSPO certification. This certification covers HSL’s entire operations, including smallholder plantations managed by Cargill under the KKPA scheme and its mill operations. As part of its corporate responsibility initiatives, Cargill will help local farmers adopt sustainable agricultural practices, improve land use, increase the quality and quantity of their crops, and promote safe and efficient working practices. In rural areas where education and literacy levels are typically lower than urban cities, such initiatives can help increase the quality of life and incomes of the local community. To comply with the RSPO requirements for unit certification, PT Harapan Sawit Lestari’s mill of Paku Juang (its supply base estates and its smallholder scheme) and Manis Mata (its supply base estates and its smallholder scheme) will be audited separately.

The following are the breakdown of the number of employees:

Unit of Certification Indonesians / Local Expatriates

Male Female Male Female

Paku Juang 1594 597 0 0

Manis Mata 2153 702 5 0

Total 5046 5 5051

This report presents the results of an assessment against the RSPO, Principles and Criteria (P&C) – Indonesia National Interpretation Working Group (INA-NIWG) Standard, May 2008 and RSPO Supply Chain Certification Standard, November 2011 of PT Harapan Sawit Lestari – Paku Juang Mill (PT HSL-PJM) at Desa Air Upas , Kecamatan Air Upas, Kabupaten Ketapang , 78864 Kalimantan Barat – Indonesia carried out by SGS QUALIPALM on 15th -17th April 2013.

PT HSL-PJM is managing 4 estates (total area of 15,352.55 ha) and 1 mill (capacity 60 MT/hour). They have implemented management systems to support RSPO such as ISO 14001:2004 and ISO 9001:2008.

Paku Juang Mill has a palm kernel crushing plant facility to convert the palm kernel to palm kernel oil.

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LIST OF ABBREVIATION

Short Form Meanings

a.i. Active ingredient

AMDAL Analisis Mengenai Dampak Lindungan (Social and Environmental Impact Assessment)

ASEAN Association of South East Asia Nations

B3 Bahan Beracun dan Berbahaya (hazardous waste)

BOD Biochemical Oxygen Demand

CAR Corrective Action Request

CBD Convention on Biodiversity

CPO Crude Palm Oil

CSR Corporate Social Responsibility

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERP Emergency Response Procedure

ERT Endangered, Rare and Threatened species

FFB Fresh Fruit Bunch

FPIC free prior and informed consent.

g Gram

GHG Green House Gas

Ha Hectare

HCV High Conservation Value

HGU Hak Guna Usaha

IDR Indonesian currency Rupiah

ILO International Labour Organization

INA_NIWG Indonesia National Interpretation Working Group

Inti Estate

IPM Integrated Pest Management

IUP Izin Usaha Perkebunan (Plantation Operation Licence)

JAMSOSTEK Jaminan Sosial Tenaga Kerja ( Employment Fund )

Kg Kilogram

K3 Kesehatan dan Keselamatan Kerja (Occupational Health and Safety)

KBE Kebanteng Estate

KKPA Kredit Koperasi Primer Anggota – Estate or Inti - managed smallholder

KLE Keluwin Estate

L Litre

m Meter

mg Milligram

MR Management Representative

MSDS Material Safety Data Sheet

Mt Metric ton

NGO Non-Governmental Organization

OER Oil Extraction Rate

OSH Occupational Safety & Health

P & C Principles and Criteria

PJE Paku Juang Estate

PJM Paku Juang Mill

POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

PK Palm Kernel

PKO Palm Kernel Oil

RKL/RPL Rencana Kelola Lingkungan/Rencana Pemantauan Lingkungan (Environmental Management Plan/Environmental Monitoring Plan)

RSPO Roundtable on Sustainable Palm Oil

SCC Safety Checklist Contractor

SDE Sungai Dabu Estate

SIPA Sumur Izin Pemanfaatan

SGS Societe Generale de Surveillance

SIA Social Impact Assessment

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SKB Surat Kesepakatan Bersama

SOP Standard Operating Procedures

UKL/UPL Upaya Kelola Lingkungan/Upaya Pemantauan Lingkungan (Environmental Management Efforts/Environmental Monitoring Efforts)

WHO World Health Organisation

yr Year

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1. SCOPE OF CERTIFICATION ASSESSMENT

1.1 National Interpretation Used

The operations of the mill and their supply base of FFB were assessed against the Roundtable

on Sustainable Palm Oil (RSPO), Principles and Criteria (P&C) – Indonesia National

Interpretation Working Group (INA-NIWG) Standard, May 2008 and RSPO Supply Chain

Certification Standard, November 2011.

1.2 Certification Scope

The scope of this certification includes the operation of PT Harapan Sawit Lestari – Paku

Juang Mill and its supply base as “Receiving and processing of RSPO certified Fresh Fruit

Bunches (FFB) from its supply base, production and sales of RSPO certified Crude Palm

Oil (CPO) and Palm Kernel Oil (PKO) under Module D (CPO Mill: Segregation) of RSPO

Supply Chain and RSPO INA-NI Standard”.

1.3 Location and Maps

PT HSL-PJM is operating and located in Desa Air Upas, Kecamatan Air Upas, Kabupaten

Ketapang, Kalimantan Barat – Indonesia (Figure 1). Refer to Appendix E and attached for

the map with legend. More detailed information on the estates location and layouts is shown in

Figures 2. The GPS locations of the mills are shown in Table 1.

Within PT Harapan Sawit Lestari, PT HSL-Manis Mata is also known as PT HSL East whereas

PT HSL – Paku Juang is known as PT HSL West (previously PT – ASL).

Table 1: Mill and Supply Base Estates GPS Location

Mill/Supply Base Longitude Latitude

Paku Juang Mill E 110o49’3.04” S 2

o25’59.76”

Paku Juang Estate E 110o49’41.38” S 2

o27’20.46”

Kebanteng Estate E 110o52’25.62” S 2

o25’52.90”

Keluwin Estate E 110o48’23.28” S 2

o23’33.45”

Sungai Dabu Estate E 110o46’24.73” S 2

o23’40.02”

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Figure 1: Location Map for PT Harapan Sawit Lestari

PT Harapan Sawit Lestari

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Figure 2: HSL East, HSL West and Mills Location Map

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Figure 3: PT Harapan Sawit Lestari General Layout

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1.4 Description of Supply Base and Mill Processing Capacity

The FFB is sourced from four (4) estates which are directly managed by PT HSL-PJM. The

actual crop figures from each estate in the financial year 2011/2012 are listed in Table 2 below.

Table 2: Actual Yield from Supply Base Estates (FY 2011/12)

Name of estate

Plantation area Annual FFB Production (MT)

Production

(ha) Conservation

(ha)

Paku Juang Estate 3,064.73 152.86 84,717

Kebanteng Estate 4,352.60 26.07 122,722

Keluwin Estate 2,715.12 1,241.49 82,025

Sungai Dabu Estate 2,787.80 52.31 68,525

Total 12,920.25 1,472.73 357,989

Table 3 below shows the mill production figures for FY2011/2012. The mill is receiving FFB

from four (4) estates and KKPA (partnership with local communities).

Table 3: Mill Processing Data (FY 2011 / 2012)

Financial Year

(FY11/12)

Mill Production Figures (MT)

FFB Received FFB Processed CPO Produced PK Produced

PT HSL – Paku Juang

Mill

Capacity : 60tph

357,989 357,989 73,392.56 14,925.75

1.5 Date of Planting and Cycle

The age profiles for all the estates are summarized in Table 4 below.

Table 4 : Planting Age Profile for all the Supply Base Estates

Name of supplying

estate

Planting Age (Ha)

Immature >4 - 14 years >14 - 25 years >25 years

Paku Juang Estate 0 2,523.68 541.05 0

Kebanteng Estate 0 1,414.2 2,938.4 0

Keluwin Estate 0 783.68 1,931.44 0

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Sungai Dabu Estate 0 1,903.65 884.15 0

Total 0 6,625.21 6,295.04 0

1.6 Other Certification Held

PT HSL-PJM was recertified in 2013 under ISO 9001:2008 and ISO 14001:2004

In addition they are also re-certified under Halal in 2011. They have been VREG (Belgium)

compliance since 2008 and was approved for ISCC certification in 2013.

1.7 Organizational Information and Contact Person

The company contact person details are as follows:

Name: Yunita Widiastuti

Designation: Group Program Assurance Manager

Address: Desa Manis Mata Kecamatan Manis Mata Kabupaten Ketapang 78864

Kalimantan Barat – Indonesia

Contact No.: (62) 21-5746168

Email address: [email protected]

1.8 Time-bound Plan for Other Management Units

PT HSL-PJM is a part of Cargill Tropical Palm Holdings Pte Ltd. CTP is a subsidiary

company of Cargill Incorporated who has been a member of RSPO since 28 July 2004. The

membership number with RSPO is 2-0215-11-000-00.

CTP owns and operates with oil palm plantations covering approximately 42,000 ha in

Indonesia. They have developed a time-bound plan (Appendix C) for the phased

implementation of the RSPO P&C, commencing with mills and estates. CTP will use the

experience gained from achieving certification of the first few mills and estates to implement the

RSPO P&C in parallel with the remainder of its operations. The SGS assessment team

considers that CTP is on the right track which is reasonable and challenging, given the

widespread geographic locations of its properties and the resources required.

1.9 Area of Plantation

The areas of supplying estates for this operating unit are listed in Table 5. Details of production

area (mature/immature) are also listed.

mailto:[email protected]

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Table 5: Area Statement of the Supply Base Estates

Estate KBE KLE PJE SDE Total

Init- Immature 0.00 0.00 0.00 0.00 0.00

Inti – Mature 4,155.02 2,405.21 1,669.25 1,626.35 9,855.83

KKPA -Immature 0.00 0.00 0.00 0.00 0.00

KKPA- Mature 197.58 309.91 1,395.48 1,161.45 3,064.42

Conservation 26.07 1,241.49 152.86 52.31 1,472.73

Sungai, Rawa dll 153.40 132.30 67.50 61.80 415.00

housing, office 24.49 12.23 27.24 10.08 74.04

road, culvert, drainage 183.38 125.68 82.83 78.63 470.53

Total 4,739.94 4,226.82 3,395.16 2,990.62 15,352.55

1.10 Date Certificate Issued and Scope of Certificate

The certificate issue date is the date of RSPO approval of this assessment report. This

certification scope is “Receiving and processing of RSPO certified Fresh Fruit Bunches (FFB)

from its supply base, production and sales of RSPO certified Crude Palm Oil (CPO) and Palm

Kernel Oil (PKO) under Module D (CPO Mill: Segregation) of RSPO Supply Chain and RSPO

INA-NI Standard”.

2. ASSESSMENT PROCESS

2.1 Certification Body

Founded in 1878, the SGS Group is the world’s largest auditing, inspection, testing and

verification organization. Truly global and benefiting from unique international network of more

than 1,180 offices, 321 laboratories and 70,000 full time staff, the SGS Group is able to provide

its international clientele with a comprehensive range of services in more than 145 countries.

SGS has no manufacturing, trading or financial interests which could compromise its

independence. Its guarantee of independence, its reputation for professionalism, integrity and

impartiality, as well as it’s remarkable international network, place the SGS Group in a unique

position.

The RSPO Programme is the SGS Group’s RSPO Certification Programme internationally

accredited by the RSPO Executive Board to carry out oil palm plantation and supply chain

certification/verification and accreditation for global RSPO certification.

2.2 Assessment Methodology, Programme, Site Visits

The assessment was conducted in three (3) audit days and involving two sampled estates and

1 mill (Sungai Dabu Estate, Paku Juang Estate and Paku Juang Mill) of PT HSL-PJM. The

audit covers documentation review, internal procedures, management system, field inspection

as well as identification of any significant issues for both environment or social issues.

The assessment was conducted based on random samples and therefore nonconformities may

exist which have not been identified. The methodology for objective evidence collection

included physical site inspection, observation of tasks and processes, interview with workers,

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families and stakeholders, documentation review and monitoring data. The assessment

program is included as shown in Table 6 below.

Table 6: Assessment Programme

Date Location Activities

15th

April 2013 PT HSL Office (Meeting Room) and Paku Juang Estate

• Opening Meeting

• Introduction to the audit by SGS & PT HSL

• Formulation of audit schedule

•

16th

Apr 2013 a) Central Office

b) Paku Juang Mill

c) Paku Juang Estate

• Briefing by the HSL Estates and Mill on the operations and activities

• P 1-3,6,8 Document review (legal, land title, HGU, laws, time-bound plan, replanting programme, SOP)

• Mill - Supply Chain Certification

• SOP

• Record keeping

• Training

• Site & facilities visit

• Mill records on production

• Estate- Field work inspection

- spraying, harvesting, riparian/ buffer zone, HCV, boundary stones, road maintenance, waste disposal, storage area, line- site, interview with workers and stakeholders, OSH, land application

• Documentation Review

• Landfill

• Clinic

• Women group

17th

Apr 2013 Sungai Dabu Estate • Document review ( legal, land title, HGU, laws,

timebound plan, replanting programme, SOPs)

• Good Agricultural Practices ( IPM, Operations - harvesting, spraying, fertiliser) ,

• Interview workers & worker reps - OSH

• HCV Area

• Boundary Stone & road maintenance

• Buffer Zone

• Storage facilities

• Landfill & waste disposal

• Line Site

• Landfill

• Clinic & Creche

Meeting with PT HSL stakeholders - Desa Petuakan – Meeting with local communities

18th

– 19th April PT HSL – Manis Mata

Unit Audit • PT HSL – Manis Mata Unit Audit ( Estates and Mill )

20th

Apr 2013 PT HSL Training Centre

• Document review - Relevant P&C in particular OSH

aspects and waste management;

• Presentation of Audit Findings and Closing Meeting (

combined closing meeting with Manis Mata Mill )

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2.3 Qualification of Lead Assessor and Assessment Team

SGS Qualipalm holds copies of educational qualifications, certificates and audit logs for each of

the audit team members. SGS has evaluated the qualifications and experience of each audit

team member and has registered the following designations for conducting RSPO Assessment.

Summary of auditors’ educational background and experience are listed in Table 7 below.

Table 7: Auditors Profile

Evaluation Team Notes

Lead Auditor James S H Ong, a Bachelor of Agriculture Science holder and agronomist in SGS (M) Sdn Bhd. He has many years working experience in agriculture sector in Malaysia and has been working in estates as well in the agrochemical and fertilizer industry. He is well versed with agrochemical and fertilizer applications. Has undergone ISO 14001 and RSPO Lead Auditor training and involved in a number audits on oil palm plantations.

Auditor Mohd Faisal Jaafar is a degree holder in forestry from Universiti Putra Malaysia. Faisal has a 7 years experience in operating Malaysian Timber Certification Scheme with specialization in forest management certification and forest plantation management certification. Has undergone the necessary ISO 9000 Lead Auditor course and has gathered substantial auditing experience pertaining to forest certification.

Auditor Zaenal Abidin has a degree in Forestry, 18 years national experience in forestry sector in Indonesia. Has undergone the necessary ISO 14001, ISO 9001, RSPO and ISPO Lead Auditor course and involved in a number audits on oil palm plantations and forest certification.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

Some of the stakeholders met during the visit were interviewed and no issues raised regarding

the performance of PT HSL-PJM.

3. ASSESSMENT FINDINGS

3.1 Summary of Findings

3.1.1 Principles & Criteria

As outlined, objective evidence was obtained separately for each of the RSPO Indicators and criterion

for the mills and estates. The results for each indicator from each of the operational areas were

evaluated to provide an assessment of conformity. A statement is provided for each of the RSPO

indicators in order to support the findings of the assessment team.

There were 6 Major Non-conformities identified (1 under the P&C and 5 under the Supply Chain

Assessment) and 3 Minor Non-conformities identified during this assessment. Some areas identified

with potential areas for improvement has led into 7 Observations raised. Details for each Non-

conformities and observations are given in Appendix C.

Major Non-conformities are to be closed out within the period of 60 days after the assessment. Minor

Non-compliances and Observations will be followed up during the next Annual Surveillance Audit

which is scheduled to be conducted within the period of twelve months after RSPO approval of this

report.

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Principle 1: Commitment to Transparency

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

1.1.1 Records of requests and responses must be maintained Major

Findings In compliance: Yes: X No:

Objective evidence:

The company has established procedure for providing information to stakeholders (transparency), as per reflected in the SOP document entitled communication, Participation and consultation (REP-SOP-REP.03-R.02) dated 01 March 2009 revised 08 January 2013. The document specifies the objectives of the document that is to manage, mechanism, communicate, (internal and external), participation, health and safety, and environment (SMK3) so that it can be understood by stakeholders effectively.

Records of requests from stakeholders are available and recorded individually at estates and mill levels that include land dispute and donation requests. Requests from the stakeholders are mainly for donation for the villages, for examples road construction and maintenance, agricultural equipment, book package, etc. in addition, other assistance such as assistance in providing fuel/diesel is also observed to be recorded.

Nevertheless, until the date of the audit, there were some requests from stakeholders for company’s documents (legal, environmental and social) like information request such as Request from Dinas Perkebunan Kabupaten Ketapang through a letter Ref: 525/070.1/DISBUN-E dated 19 Feb 2013 on the submission of the Laporan Triwulan Organisme Pengganggu Tanaman

Perkebunan (Quarterly Report of Plantation Pest Organisms). The company has responded on

such request through a letter ref: D24/PAGL-HSL/II/2013 dated 21 Feb 2013.

1.1.2 Records of responses to information requests. Major


Objective evidence:

As mentioned earlier, records of requests from stakeholders are available and recorded individually at estates and mill levels that include land dispute and donation requests. Requests from the stakeholders are mainly for donation for the villages, for examples road construction and maintenance, agricultural equipment, book package, etc. in addition, other assistance such as assistance in providing fuel/diesel is also observed to be recorded.

Nevertheless, until the date of the audit, there is no request from stakeholders for company’s documents (legal, environmental and social) except information request such as Request from Dinas Perkebunan Kabupaten Ketapang through a letter Ref: 525/070.1/DISBUN-E dated 19 Feb 2013 on the submission of the Laporan Triwulan Organisme Pengganggu Tanaman Perkebunan

(Quarterly Report of Plantation Pest Organisms). The company has responded on such request

through a letter ref: D24/PAGL-HSL/II/2013 dated 21 Feb 2013.

1.1.3 The records mentioned in 1 and 2 must be maintained for a period of time determined by the company, taking into account their relative importance.

Major


Objective evidence:

Procedure for document control and storage has been established and made available to the auditing team during the Main Assessment. As reflected in para 4.3.2 of the documented procedure Ref: REP-SOP-REP.01-R.02 dated 01 March 2009 revised on 03 Aug 2010, retention time of records of request information and its response is 3 years.

Criterion 1.2: Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.

1.2.1 Land titles / user rights (C 2.2)

1. Information and responses must include any relevant or required documentation, in accordance with applicable national laws, such as:

• Legal: Land titles/user rights (Site Permit (Izin Lokasi), Plantation Operation Permit (IzinUsaha Perkebunan), Land Use Title (Hak Guna Usaha) or other documentation relating to application for Land Use Title in accordance with relevant procedures)

• Environmental:Environmental andSocial ImpactAssessment (AMDAL / UKL-UPL) and environmental management and monitoring reports (Laporan RKL-RPL)

• Social: Documentation of social activities and community programs.

• Health and Safety Plan

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• Continuous improvement plan


Objective evidence:

In practice, all relevant stakeholders can access to the company’s legal, environmental and social documents upon request as follows:

- Land titles/use rights

- Plantation operation permit

- Land title

- Analisis Dampak Lindungan (AMDAL) – Environmental Impact Assessment (EIA)

- Social Impact Assessment (SIA)

- Environmental Management & Monitoring reports (RKL-RPL)

- Corporate Social responsibility programs

- Business Plan

- EHS plan/program Assurance Goals

- EHS & Policy

- Policy for freedom of association

- Policy on the protection of reproductive rights

- Policy on minimum wages

- Policy on minimum age

- Policy on equal employment opportunity

- Complaint & dispute resolution procedures

- Grievance mechanism and industrial relations

- Zero burning policy

- Continuous improvement plans

1.2.2 The records must be maintained for a period of time determined by the company, taking into account their relative importance.

MAJOR


Objective evidence:

In general, records of the above documents that are made publicly available are controlled and monitored using the Procedure for Document Control and Storage through paragraph 4.3.2 of the documented procedure Ref: REP-SOP-REP.01-R.02 dated 01 March 2009 revised on 03 Aug 2010 that specifies retention time of records of request information and its response is 3 years.

Principle 2: Compliance with Applicable Laws and Regulation

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

2.1.1 Evidence of compliance with legal requirements. Major


Objective evidence:

The company has permits and documents to comply with all applicable legal requirements, for examples:

Environmental Impact Assessment (AMDAL), approved by head of environmental agency West Kalimantan Province # 660.1/171/Bapedalda-A dated 10 March 2003 for PT. HSL.

Site Permit, approved by Head of Land Office of Ketapang Regency # 02/1993 dated on 8 December 1993, total area of 9,700 ha.

Site Permit, approved by Head of Ketapang Regency # 21/2004 dated on 26 January 2004, total area of 4,750 ha.

Forest Release Permit, approved by Minister of Forestry # 776/Kpts-II/1999 dated on 27 September 1999, total area of 5,056.60 ha.

Plantation Operation Registration Letter, approved by Minister of Forestry and Plantation # 705/Menhutbun-VII/2000 dated on 21 June 2000, total area of 9,082 ha.

Plantation Operation Permit (Izin Usaha Perkebunan-IUP), approved by Head of Ketapang

Regency # 227/Disbun-D/2012 dated on 4 May 2012, total area of 5,242 ha.

Land Use Title (Hak Guna Usaha), approved by National Land Bureau # 35/HGU/BPN/1997 dated on 3 January 1997, total area of 3,502.67 ha.

Land Use Title (Hak Guna Usaha), approved by National Land Bureau # 5/HGU/BPN/2000

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dated on 3 February 2000, total area of 5,000.76 ha.

Land Use Title (Hak Guna Usaha) Release Permit, approved by National Land Bureau # 2-

VIII/2000 dated on 12 July 2000, total area of 579.33 ha.

Industry Operation License (Ijin Usaha Industri), approved by Head of Cooperation, UKM, Industry and trading Agency, Ketapang Regency # 535/005/Kop.UKM.Perindag-B/KBLI.15144/VIII/2009 dated on 11 August 2009.

Industry Operation License (Ijin Usaha Industri), approved by Head of Cooperation, UKM, Industry and trading Agency, Ketapang Regency # 535/002/Kop.UKM.Perindag-B/KBLI.15144/IX/2011 dated on 13 September 2011.

Industry Operation License (Ijin Usaha Industri), approved by Head of Cooperation, UKM,

Industry and trading Agency, Ketapang Regency # 535/001/Kop.UKM.Perindag-C/KBLI.15144/VII/2012 dated on 30 July 2012.

PJM

a) Izin masuk Ruang Tertutup available . Dated 14/2/13. Area : Clarification – continuos settling tank No. 3. Personnel who attended: Ledy , supervisor, Hadi S , work supervisor, Rizal – personnel who entered . for emergency, personnel who standby : Ibnu

b) Stack emission for boiler – date tested – Nov 20,2013. Date of report : Jan 25/2013. Certificate No: 00902/BCEBAG. Result show the emission is within the limits

c) Land application : Izin Pemanfaatan air Limbah pada Tanah kpd Perkebunan PT Ayu Sawit Lestari .Ref: Nomor 375 Tahun 2009

2.1.1 A documented system, which includes written information on legal requirements that the palm oil company should comply with.

Minor


Objective evidence:

The company has established procedure for identification of legal and other requirement and evaluation of compliance (REP.SOP.REP.02 rev.02). The company has registered all applicable regulations and other requirements into list of legislation and regulation for plantation (REP-SOP-REP.02-F.01), last update on 30 May 2012. The list covered plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues.

Register of law and other requirements includes local laws, national laws, international laws and conventions related to plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues.

The personnel employed possess the necessary qualification and certificate for them to carry out their responsibilities in the oil mill

As per the local Undang-Undang , there is no need for engineers to have a steam certificates but

operators of boilers are required to have boiler certificates.

The following are the personnel having electrical and boiler certificates.

Name Certificates / Licenses

Niko Prayitno Industrial Electrical Safety

Bahrun Alfatah Industrial Electrical Safety

Abdul Bar Sertifikat Operator Boiler & Lisensi K3 Operator Pesawat UAP

Alipudin Sertifikat Operator Boiler & Lisensi K3 Operator Pesawat UAP

M. Hatta Sertifikat Operator Boiler & Lisensi K3 Operator Pesawat UAP

Syarif Suripto Sertifikat Operator Boiler & Lisensi K3 Operator Pesawat UAP

Tri Wahyudi Lisensi K3

Operator Pesawat UAP

Agus Wahidin Lisensi K3


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Sugiono Lisensi K3


Jalilludin Lisensi K3


Maiko Wijoyo Lisensi K3


2.1.2 Evidence of efforts made to comply with changes in the regulations. Major


Objective evidence:

According to procedure for identification of legal and other requirement and evaluation of compliance (REP.SOP.REP.02 rev.02), the company identifies and evaluates compliance of the applicable regulations and legislation and its changes periodically (6 monthly). The company has documented system to comply with changes in the applicable regulations and other requirements related to plantation and mill issues, land use issue, environmental issues, labour issues and health and safety issues.

Based on list of legislation and regulation for plantation (REP-SOP-REP.02-F.01), some new regulations and legislations have been updated into the list (last updated on 30 May 2012).

Criterion 2.2: The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.

2.2.1 Documents showing ownership or lease of the land in accordance with relevant laws.

Major


Objective evidence:

The company has land use titles as follows:

Land Use Title (Hak Guna Usaha), approved by National Land Bureau # 35/HGU/BPN/1997

dated on 3 January 1997, total area of 3,502.67 ha.

Land Use Title (Hak Guna Usaha), approved by National Land Bureau # 5/HGU/BPN/2000 dated on 3 February 2000, total area of 5,000.76 ha.

Land Use Title (Hak Guna Usaha) Release Permit, approved by National Land Bureau # 2-

VIII/2000 dated on 12 July 2000, total area of 579.33 ha.

2.2.1 Evidence of land acquisition resolution with free prior and informed consent. Minor


Objective evidence:

The company conducted communication with local community related to land acquisition resolution with free prior and informed consent. Based on data of land acquisition, PT HSL has acquired the community land as follows:

- Kebanteng Estate = 5,024.15 ha

- Sungai Dabu Estate = 1,803.36 ha

- Keluwin and Paku Juang Estate = 5,977.42 ha

Agreements letters have been verified, for example: Mr. Kartono land of 11.38 ha within the Sungai Dabu Estate was acquired and that compensation was paid base on cost agreement made and by all parties involved (company, smallholders and local authorities) based on FPIC.

.

2.2.2 Evidence that legal boundaries are clearly demarcated and visibly maintained.

[This indicator is to be read with Guidance 2].

Major


Objective evidence:

Observed during field visit, all plantation areas have been clearly demarcated and maintained through clearance along the boundary line and also maintenance of boundary poles. Poles were made by National Land Bureau using concrete material. The Agronomy Service Department of PT HSL checks and maintains the boundary monthly and the report is available and verified. .

The company built road along the boundaries. Poles condition and border are clear visible and maintained, for example: Pole 74 (coordinate: 110

o 44’ 49.5” E and 02

o 22’ 23.2” S) at Sungai

Dabu Estate in Block AQ6BO. Coordinate between plantation map and on site is found in order.

2.2.2 A mechanism to resolve conflict which is accepted by all parties. Minor

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Objective evidence:

The company has established procedures for dispute resolution as follows:

1. List of social land dispute (updated 01 April 2013).

2. SOP for social problem solving (HSL-SOP-PSS.04-R.00)

3. SOP for land claim resolution (HSL-SOP-PSS.02-R.00)

According to the above-mentioned procedures, when there is a dispute/conflict, the company shall communicate the mechanism highlighted within the procedure to the interested stakeholders (local governments and local community, etc) for dispute resolution mechanism. If there is input from the stakeholders regarding this procedure, the company will review the procedure accordingly. Furthermore, the procedure also specifies stages of dispute resolution are identification of dispute, clarification, compromise, decision. Based on data, the company conducted land compensation for conflict resolution than the legal means.

2.2.3 Where there are, or have been, disputes, proof of resolution or progress towards resolution by conflict resolution processes acceptable to all parties are implemented. CF 2.3.3, 6.4.1 and 6.4.2.

Major


Objective evidence:

No land dispute in the company area. The company maintains record of land dispute resolution (updated 01 April 2013).

In general, dispute resolution processes were conducted by consensus agreement between two parties by way of compensation. Records of resolution process were kept by Public Affair and Government Liaison.

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

2.3.1 Records of any negotiated agreements between traditional owners of land and plantation companies (if any), supplemented with maps in appropriate scale

Major


Objective evidence:

Records of negotiations detailing process of consent are available, clearly demonstrating an agreement between local community and PT.HSL, for example: official report of land compensation dated 29 October 2011 which clearly demonstrates the free, prior and informed consent from local community to sell their land to PT.HSL for a stipulated price which is agreed by the both parties witnessed by local government. This document is complete with maps showing the extent of the land and photographs of the local community receiving the compensation amount. A copy of the land payment cheque is also attached in the document as an additional proof of payment made to the traditional land owners.

2.3.2 Maps of an appropriate scale showing extent of recognized customary rights. Major


Objective evidence:

Refer to Indicator 2.3.1. PT HSL and its supplying estates are complying with the requirement of this Indicator.

2.3.3 Copies of negotiated agreements detailing process of consent. (C2.2, 7.5 and 7.6). Major


Objective evidence:

Refer to Indicator 2.3.1. PT HSL and its supplying estates are complying with the requirement of this Indicator.

Principle 3: Commitment to Long-Term Economic and Financial Viability

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

3.1.1 A documented working plan of the company for a minimum of 3 years period. Major


Objective evidence:

A documented business plan i.e. Tropical Oil Asia Business Plan has been made available to the auditing team during the Main Assessment. As reflected in the document, budgets and implementation measures for the mill and estate operations (for a period from 203 to 2019 are found to be listed within the document as follows:

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Safety index;

Hectarage of planted palm oil;

Potential yield articulated;

OER extraction;

KER extraction;

CPO production;

Employee/human resources engagement; and

Environmental covering improvement on the energy efficiency and GHG emission.

The unit uses the annual budget to monitor cost of expenditure of each operation. Each estate and mill has their own budget. In addition in terms of KPI , the estates and mill monitors a internal software system in Excel format known as ‘ESTATE OPERATIONAL EXCELLENCE INPUT SHEET’ that gives a scoring on production and operation against target.

However, the business plans for environmental only limited to the improvement on energy efficiency and GHG emission. In the PJE and SDE business plan for conservation area was not included although the company has designated area for conservation and buffer zones purpose and has conducted a wildlife surveys for detecting the presence of wildlife within such areas

Observation 01

3.1.2 Annual replanting programme, where applicable projected for a minimum of 5 years with yearly review.

Minor


Objective evidence:

There is no replanting program planned for the next five years as currently the area within the plantations consist of young and immature palm. The forthcoming replanting program scheduled to be conducted in 2020.

Principle 4: Use of Appropriate Best Practices by Growers and MIllers

Criterion 4.1: Operating procedures are appropriately documented and consistently implemented and monitored.

4.1.1 Standard Operating Procedures (SOPs) for estates, from land clearing to harvesting.

Major


Objective evidence:

The Standard Operating Procedures (SOPs) for the estate operations at the sampled estates of PJE and SDE are available.

It includes the operations related to Estate Management e.g.

Operation include :

a) Land clearing

b) Harvesting

c)Upkeep & cultivation

d)Manuring

4.1.1 Records of checking or monitoring of operations. Minimum requirement: once a year.

Minor


Objective evidence:

Ref: Field Agriculture appraisal file available at both PJE & SDE and is done twice yearly.

Records kept.

Operation include :

a) Harvesting

b) Upkeep & cultivation

c) Manuring

Scoring record is kept as the monitoring tool. A score of 80% is targeted for compliance

All this information is keyed into the management software system , OMP8 Harapan SL West ( all

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the 4 estates )

4.1.2 Standard Operating Procedures (SOPs) for mills, from reception of FFB to dispatch of Crude Palm Oil and Palm Kernel Oil.

Major


Objective evidence:

At PJM , Standard operation procedures for the mill are in place.

It includes SOPs like :

a) ENG-SOP-PJM.001-R.03 Jembatan Timbang

b) ENG-SOP-PJM.002-R.03 Loading Ramp Station

c) ENG-SOP-PJM.011-R.03 Storage Tank

d) ENG-SOP-KCP.038-R.03.Palm Kernel Reception

4.1.2 Records of operational results. Minor


Objective evidence:

All operational records are kept and up-to-date and that includes:

a) Surat penghantar Buah ke PKS

b) Weigh bridge ticket receive ( FFB )

c) Log sheet ( kernel, tippler, press station, clarification Station, Powerhouse Station, Boiler station, Raw Water Treatment Station, Despatch Logistic ,

d) Daily Production report ( includes the Daily FFB report for Inti & KKPA, Stock updates, PKO produced, FFB Processed, kernel Production, Screw Press hours, Mill hours, Oil tank measurement , Oil & kernel Quality etc )

e) Mass Balance of receive, process and delivery

f) Weigh bridge ticket dispatch and reception ( CPO & PK )

g) Sales Amendment

h) Delivery Order

Latest monitoring done in Feb 2013.

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

4.2.1 Records of regular soil, leaf, and visual analysis. Minor


Objective evidence:

The Agronomist Service Department of their own Group , CTP, collect the samples of foliar and submit the samples to the research group AAR for analysis. This was done for both the Paku Juang , Manis Mata supply base estates and KKPA

Soil was analysed by Central Plantation Services, Pekanbaru.

Documented record shows that foliar is done yearly and soil is done every 5 years. Records show that the :

a) Latest foliar results were obtained in July 2012.

b) Latest soil results obtained in Sept 2012.

4.2.2 Records of efforts to maintain and increase soil fertility (e.g. the use of fertilizer, legume cover crops, compost, and land applications of POME or EFB) based on the results of analysis carried out as in Point 1 above.

Minor


Objective evidence:

Ref : Fertiliser Application file

It records the application of both

a) Chemical fertiliser

b) Organic fertiliser – EFB , Decanter Cake & POME

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Chemical fertiliser application is on scheduled.

Land application of POME on flat –bed was visited in Field A I6060 (or previously known as Field 23)

Daily records kept at site. On15/3/2013, application was 1,504 m3.

Agronomist Service Dept CTP does the recommendation yearly after receving the foliar and soil results from the respective laboratories.

SDE applied 1 kg MOP in field AN8130 as per recommended in the ‘Fertiliser application Programme year 2012/13

EFB application is also recorded in the OMP fertiliser application system.

The application is based on individual block e.g. in AP5120, 45 MT of EFB was applied

Criterion 4.3: Practices minimize and control erosion and degradation of soils.

4.3.1 Maps of fragile soils must be available. Minor


Objective evidence:

Soil map available at PJE & SDE

Ref: Estate Maps

Soil type:

a) Deep Tropept

b) Pale Udult

c) Plin Udult

d) Qrtz PSament

e) Shal Tropept

f) Trop Humod

Data source:

a) Pengukuran GPS Trimble Geo XT,XM

b) Satellite Ikonos Imagery May 2002

c) Satellite QuickBird Sept 2004

d) Map register No. : 008/1/0/4

4.3.2 A management strategy should exist for plantings on slopes above a certain limit (needs to be soil and climate specific).

Minor


Objective evidence:

SOP for soil conservation and water : EST-SOP-ASD.41-R.00 ( date revision – 20/3/2013 )

Topography map available in the Estate Maps.

According to the ‘Estate Layout ‘ map Paku Juang & SDE

Records of map show that the maximum contour grid recorded are 80-90 m and some a small percentage area > 90m above sea level.

4.3.3 Presence of road maintenance programme. Minor


Objective evidence:

Maps of planned road maintenance and repaired road available.

Road maintenance is part of PT HSL Corporate Responsibility as the community of the surrounding area uses the roads regularly.

In MME, based on the Budget , the budgeted amount was Rp 240 million. However due to the bad weather affecting the road condiiton in 2012/13, the actual used was Rp 510 million.

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According to the management and Manager Dwi, the 2012/13 budget was underestimated.

In SDE ,based on the Budget , the budgeted amount was Rp 526,059,675 million. As of to-date 2012/13, the actual used was Rp 469,376,011 million

4.3.4 Subsidence of peat soils should be minimised through an effective and documented water management programme.

Minor

Findings In compliance: Yes: x No:

Objective evidence:

Based on the soil report and field visit (to PJE and SDE ) there are no peat in this Unit.

4.3.5 A management strategy should be in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils)

Minor

Findings In compliance: Yes: No: x

Objective evidence:

The soils are about 30 -70 % sand.

No management strategy are in place for the sandy soils for both PJE and SDE

Minor CAR 01

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

4.4.1 Protection of watercourses and wetlands, including maintaining and restoring appropriate riparian buffer zones at or before replanting.

Major


Objective evidence:

Ref: EST-SOP-ASD.13-R.02 SOP Buffer zone ( Being review )

Well protected with markings and signs along the watercourses. Palms are also marked and no spraying and fertiliser application seen.

However in SDE Field B6 buffer zone , the area was manually weeded till bare ground that may cause erosion due to the sandy soil type.

Observation 02

4.4.1 An implemented water management plan. Minor

Findings In compliance: Yes: No: X

Objective evidence:

The plantations and the mill do not have a ‘Water Management Plan’, although they monitor and analyses the water and the usage.

Water usage is monitored monthly.

In PJE, the water is sourced from a man-made reservoir. ( waduk buatan ).

Records of usage is recorded in the ‘ Data Penggunaan Air Estate setiap bulan’

Quantity used at the housing, office ( kantor ) and other buildings ( TPA, clinic, Schools, mosque and churches, workshop ) are recorded.

Month Usage m3

Jan 2013 2,809

Feb 2013 3,384

Mar 2013 2,552

The mill monitors their water usage separately from the estate.

Raw water and the domestically supplied water are both analysed quarterly .

The result on 20 /2/2013 (No. Lapuran : 464/AL/II/2013 ) of the analysis of the raw water and domestic water was not interpreted ( although the coliform was 0 /100ml )

In SDE, in addition, although the water is treated yet it still recorded a Feacal coliform count of 4 per 100ml sample.

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Water from SDE is abstracted from bore water. The raw water is not analysed.

According to the regulations, water abstracted from the borehole requires a permit.

SDE has the permit,’ Pemberian Pengambilan dan Pemanfaatan Air Tanah kepada PT. Ayu Sawit Lestari Nomor 35 Tahun 2011. They receive the permit on 7/2/2011, renewable every 3 year.

Capacity in permit: 456,615 m3/MT

In the Water Usage records for 2011/12 was 8,351 m3 and as of 2012/13 usage was recorded as 7,074 m3.

A Minor CAR is raised as due to the fact that

a) No water management plan at the estates

b) In PJE, although the raw water and domestically supplied water are analysed, there was no interpretation to confirm its classification

c) In SDE, the raw water from the bore is not analysed and although the water is treated, the analysis recorded faecal coliform count

(Minor CAR 02)

4.4.2 Monitoring of effluent BOD. Minor


Objective evidence:

According to the permit for effluent discharge , for land application, the BOD permitted is 5,000 mg/lit

Monthly Submission is available.

The latest submission was done on March 15, 2013 with reference No.: 014/ASL-ENG/III/2013 – Laporan bulanan pemanfaatan air limbah ke lahan perkebunan PT. ASL Periode Bulan Feb 2013

Records show that the BOD of the effluent was within the permitted level.

Lab reference: 446/AL/II/2013

Parameter Result of analysis

pH 6.84

BOD5 545 mg/l

TSS 1,300

COD 1,752 mg/l

Minyak dan Lemak 16.9 mg/l

Kadmium ( Cd) <0.001 mg/l

Tembaga ( Cu ) 0.081 mg/l

Timbal (Pb) < 0.002 mg/l

Seng ( Zn ) 0.172 mg/l

4.4.3 Monitoring of mill water use per tonne of FFB. Minor


Objective evidence:

Monitoring done daily, month and YTD.

Records kept since 2008.

Month m3/ MT FFB

Jan 2013 1.197

Feb 0.967

Mar 0.948

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

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4.5.1 An IPM plan is documented and current Major


Objective evidence:

The estate adopt the ‘Early Warning System’ of

a) Detection

b) Census

c) Observation

d) Treatment

e) Evaluation

They will refer to the document –

a) EST - SOP – TSD.07-R.02 SOP Pengendalian Hama Ulat Api dan Ulat Kantong

b) EST - SOP – TSD.08-R.02 SOP Pengendalian Hama oryctes rhinocerous

c) EST - SOP – TSD.09-R.02 SOP Pengendalian Hama tikus

4.5.1 Monitoring extent of IPM implementation including training. Minor


Objective evidence:

Monitoring records available : Hasil Deteksi Hama Ulat Kantong & api

Latest records of detection did in Feb –March 2013 for all the blocks in PJE and SDE. .

Intervention is applied when the 5 % threshold is reached.

In PJE For the leaf eating pest control , intervention was applied in Field 42M22 on 1/3/13 when the count recorded was more than 10 caterpillar.

Pesticide Used : Virus from infected larva are collected and applied using Mistblower and Turbo-Mizer

In SDE , For the leaf eating control , intervention was applied in Field A12 ( KR 5100 ) in 29/1/13 when the count was more than 10 larvae were recorded. One round of application of Bacillus thuringiensis (or Bt) kurstaki using the turbo-mist equipment was done.

4.5.2 Monitoring of pesticide toxicity units (a.i. /LD 50 per tonne of FFB or per hectare). Minor


Objective evidence:

Records kept both in hard and Soft copy.

Ref: OMP8 – Oil palm Management programme software .

For PJE the following was recorded for the monitoring of pesticide toxicity

2012/ 2013 Lit /ha a.i g Per MT FFB

Glyphosate 178 1.6

For SDE Field AN6120

The following are example of some of the monitoring of pesticide :

2012/ 2013 Lit /ha a.i g Per MT FFB

Glyphosate 1.82 0.02

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

4.6.1 Evidence of use of only approved and registered agrochemicals permitted by the relevant authorities.

Major

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Objective evidence:

All registered in Indonesia under the Pesticide commission Agriculture Dept of Indonesia

Eg:

Foltus 400 SL Dimehipo 400 g/l 52207-48-4

RondaPlus Glyphosate

Methyl metsulfuron

38641-94-0

7423-64-6

4.6.1 Documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated.

Minor


Objective evidence:

Aluminium phosphide fumigant can was found in PJE waste store

Minor CAR 03

4.6.2 Records of pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications).

Major


Objective evidence:

In PJE Recorded in the OMP – Active Ingredient by Estate

E.g.

Field 41124

Pesticide used : Glyphosate

Area treated : 31.2 ha

Amount applied : 21 lit

Records are kept per block basis in the OMP software system

4.6.2 Records of the results of health check-up for those who apply agrochemicals. Minor


Objective evidence:

Records of the results of health check-up for those who apply agrochemicals available.

Ref: Chek up Karyawan Semprot CDA

3 female spray workers were interviewed and their records checked.

a) Fatimah

b) Saikem

c) Nur Rubiah

Done on 11/3/2013. By the Certified Estate ‘Dresser’ Nurul

Result of the tests show that the workers are allowed to continue with their agrochemical operation.

The health check up was done by PT HSL Certified Estate ‘Dresser’ . They are checked every 3 month internal medical check for all sprayers and also external medical check-up from HIPERKES. Medical reports of the sprayers were accessible.

4.6.3 Documentary evidence that usage of agrochemicals is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and storage instructions.

Major


Objective evidence:

In the SOP EST-SOP-ASD.28-R.02’ Pencampuran Bahan Kimia ‘

The use of Ronda Plus of 160ml / 20lit was confirmed from the SOP as well as interviewed with

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the pre-mixer in the sprayed field F 21-22H

4.6.3 Records showing that no work with pesticides for pregnant and breastfeeding women.

Minor


Objective evidence:

Records of evidence that spray workers are tested for pregnancy available.

Ref: Pemantauan Kehamilan – Karyawan Semprot and Pupuk

3 female spray workers were interviewed and their records checked.

a) Fatimah

b) Saikem

c) Nur Rubiah

Latest test done in March 2013, show that the result to be negative.

4.6.4 Waste material from agrochemicals including pesticides containers is properly disposed in accordance with laws and regulations.

Major


Objective evidence:

In PJE, waste material from agrochemical are recorded in the BA ( Berita Acara ) Pengambilan Limbah B3, and records in ‘Data keluar masuknya limbah B3’ show that on 27/3/2013, scheduled

waste B3 was collected by PT Qimbuls Bara Internasional for disposal.

For SDE, in the BA ( Berita Acara ) ‘Pengambilan Limbah B3’, records show that on 26/3/2013, scheduled waste B3 was collected by PT Qimbuls Bara Internasional for disposal.

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented

4.7.1 Evidence of documented Occupational Safety & Health (OSH) policy and its implementation.

Major


Objective evidence:

Documented Occupational Safety and Health (OSH) is integrated within the Environment, Health & Safety Quality and Food Safety Policy dated 05 December 2011, signed by the top management of the company i.e. the Chief Executive Officer, Chief Operating Officer and the President Director. The policy which is available in both Indonesian and English language specifies that the company is committed to comply with all applicable occupational health and safety, process safety, and procedure safety requirements, continually improve performance on criteria relevant to its businesses and operations, and insist that all work, however urgent, be done safely.

Policy is found to be communicated to employee and contractors through a letter signed by all employees dated on 15 August, 12 October, 15 October, 17 September, 17 October, 20 October, 29 October 2011. Such policy also is found to be communicated to the new employees during their induction training.

Nevertheless, in SDE, the following was a safety issue that was not implemented

• Housing Contractor using used chemical container as storage water (for ablution water).

(Observation 03)

4.7.1 Provision for accident insurance for workers Minor


Objective evidence:

All workers within the company is covered within the insurance scheme i.e. Workers Compensation Scheme [Jaminan Sosial Tenaga Kerja (Jamsostek)]. Observed during the audit the policy for workers are available as follows:

Jamsostek for estates – 1100000017719; and

Jamsostek for mill – 03HP0004.

Member cards of “Jamsostek” are also verified and that are still valid.

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4.7.2 Responsible person for health and safety programmes are to be identified and records of regular meetings to discuss health, safety and welfare issues must be kept.

Major


Objective evidence:

Organization of OSH is also available that chaired by the President Director. In general OSH Meeting is held every month. For example, OSH Meeting held for Sungai Dabu Estate for 2012 has been conducted as follows:

27 Jan 2012;

23 February 2012;

29 March 2012;

26 April 2012;

24 May 2012;

28 June 2012;

27 July 2012;

30 August 2012;

28 September 2012;

31 October 2012;

29 November 2012;

28 December 2012.

Records of the above meetings are kept individually at estates and mill level. Issues discussed during the meeting, in summary are as follows:

Endorsement of the Minutes of the Last Meeting;

Arising Matters;

Report on the accident records as well as near-miss incident;

Review of the risk assessment;

Safety and Health in the working environment; and

Other matters.

Following to the meeting, the OSH report (quarterly) is submitted to Manpower Agency covering OSH analysis and accident report.

Currently, there is one Safety and Health Officer dealing matters pertaining to health and safety in both mill and plantation. The OSH officer has been assigned by top management with having an overall responsibility for control and monitor of health and safety program in PT HSL. Based on records, the OSH officer has been legally registered by Manpower Agency with a registration number 8905/PK3/AJ/61/2011 and trained by the agency on 13-25 June 2011. Record of training in the form of training certificate is made available to the auditing team during the Main Assessment.

4.7.2 Regular health examination by a doctor for workers in station or exposed to high risk work.

Minor


Objective evidence:

Medical Health Examination is conducted according to the SOP for Employees Health Monitoring (HRD-SOP-BPC.01-R.02) dated 01 October 2012. As reflected in the procedure, all workers are bound to be examined at least once a year.

The auditor observed that all workers in station or exposed to high risk work (e.g: manuring, spraying, chemical warehouse staff, boiler operator, power house operator, production operator, etc) have been conducted a health examination by company’s doctor every three months and that there was not found workers exposed to occupational diseases. Evidence of health examination conducted by the health assistant for Sungai Dabu Estate are as follows:

Harvesting – Dec 2012 & March 2013;

Manuring – Nov - Dec 2012 & March 2013;

Spraying – November 2012 & February 2013; and

Contractor – December 2012 & April 2013.

For the mill , the Unit has also SOP on training for workers exposed to high noise levels . Refer to SOP “HSL-SOP-EHS.13-R.01_Program Perlindungan Pendengaran”. ( hearing conservation program ) and SOP “HSL-SOP-HRD-02-R.04_Kompetensi, Kepedulian, dan Pelatihan”. Evaluation is done again every 3 months.

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4.7.3 A documented risk assessment for Occupational Health and Safety (OHS). Minor


Objective evidence:

Risk Assessment is conducted on a yearly basis as reflected in Procedure document Identification and Evaluation of Occupational Safety and Health (REP-SOP-REP.09-R.05) dated 01 March 2009 revised 02 April 2012. The documented assessment is available for various working fields i.e. Clinic, Field Operations (spraying, manuring and harvesting), Workshop, Office and other estates environment (road areas). for any revision of the risk assessment, such process is conducted against the Procedure document Accident, Incident, Corrective Action and Prevention (REP-SOP-REP.06-R.05) dated 01 March 2009 revised 02 April 2012.

The auditing team observed that the latest risk assessment available is dated 01 April 2013.

4.7.4 Record of OHS Training Minor


Objective evidence:

Training Plan for financial year 2012/2013 is available to the auditing. In summary, the company has conducted OHS training during 2012, for examples:

- First aid training dated on 19 February 2013, 16 participants.

- OHS training for sprayer and fertilizer dated on 22 Feb 2013, 59 participants.

- OHS training for harvesters dated on 03 December 2012, 13 participants.

- OHS training for contractor dated on 30 March 2013, 6 participants.

- OHS training for fire fighting at plantation dated on 19 October 2012, 22 participants.

- OHS training for fire fighting at mill dated on 1-5 March 2013, 83 participants.

- OSH training for technician in the mill on 26 December 2012, 25 participants.

Handout and attendance sheet are maintained and be verified during the Main Assessment.

4.7.5 Accident and emergency preparedness procedure Minor


Objective evidence:

The company has established procedures related emergency response and preparedness as follows:

Accident and Emergency Preparedness Procedure (REP-SOP-REP.04-R.05) dated 20 Feb 2013.

In general the procedure specifies mechanism in handling emergency covering as follows:

Fire occurrence in estate;

Fire occurrence in buildings;

Explosion;

Normal emergency i.e. injury;

Emergency relating to injury causes by chemicals;

Road accidents;

Injury caused by poisonous animals;

Leakage of chemicals and fuels;

Leakage of water tank;

Leakage of CPO in the mill and from the tank;

Occurrence in riots and bomb threats; and

Outbreak of plague disease.

4.7.6 Evidence of OHS and first aid equipments available at worksites Minor


Objective evidence:

Personal protective equipments (PPEs) and OHS equipments are adequate and made available at the work place. In general, the following PPEs are evident:

- Personal protective equipments for spraying worker: masker, glass, glove, apron, safety boot.

- Personal protective equipments for welder: masker, glass, glove, apron, safety shoes and helmet.

- Personal protective equipments for harvester: glove, protective boots, hard hat; and

- Personal protective equipments for manurer: apron, safety shoes, masker and glove

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- In the mill , they have issued ear plugs and ear muffs for the employees who exposed to high noise areas. They will also refer to the SOP on PPE as well as SOP “HSL-SOP-EHS.13-R.01_Program Perlindungan Pendengaran”. ( hearing conservation program )

In addition, emergency facilities such as fire fighting tank, fire extinguisher, hydrant, alarm, ambulance, evacuation route and assembly point is also established at the work place. First aid kits and its content are found to be adequate and available at worksites as well as with the authorized person at the field.

PJE & SDE

It was found that the there were inconsistency in items found in the First Aid Kit and they vary

amongst the kits and amongst the estates

Observation 06

4.7.7 Workers trained in first aid should be present in both field and mill operations Minor


Objective evidence:

All workers who work at the field and mill have observed to have received adequate basic first aid training to cater accident such as burns, snake bites, broken bones, chemical related injury, etc. Field assistants and mandores have specific responsibility for the handling emergency situation. Trainings are given based on the working station and recorded accordingly as reflected in Indicator 4.7.4.

4.7.8 Records of the occurrence of any work accidents are maintained and regularly reviewed.

Minor


Objective evidence:

The company has made reports of accident and occurrence diseases at plantation and mill on monthly. Latest record for March 2013 is available. All records maintained are compiled and submitted to Manpower Agency every three months as required by the law.

Criterion 4.8: All staffs, workers, smallholders and contractors are appropriately trained.

4.8.1 A documented training programme for staff, employee and scheme smallholders in accordance with workers’ positions and competences.

Major


Objective evidence:

Training programme for the financial year 2012/2013 is available for various workers and working level including contractor such as PPE, housekeeping, LK3 basic, permit system, lock out-tag out, welding, boiler operator, SCC, ERP, hazardous chemical and waste, fire fighting, first aid, risk management, etc. Training program is in accordance with workers’ position and competences.

4.8.2 Records of training for each employee are kept. Major


Objective evidence:

Record of trainings given to all employees is kept in the Training Record File. In general, all trainings has been conducted integrated with the occupational safety and health of the respective working environment and is recorded individually. First Aid Training is also given to the workers covering sprayers, manurers, medical team, harvester as well as the supervisors for each of the working field. The training is conducted by the Health Officer (Refer Indicator 4.7.4).

Briefing to workers handling pesticides and fertilizer and the Material Safety Data Sheet (MSDS) are covered within the training programme. The records of briefing given are also evident. For 2012, briefing to sprayers and manurers held on 20 October, 17-19 & 27 November and 19 February 2013.

Health Officer is also found to be trained by the Department of Manpower (DINAS Tenaga Kerja). Evidence of training given through training certificate dated March 2008 is available. The training on Safety and Health of Medical Doctor in Industries is given on 18-23 February 2008.

4.8.3 Evidence that the company uses experienced or trained contractors Major


Objective evidence:

Employment of contractors is limited to building and renovating of buildings in the estate. Evidence of training given to contractors is available dated 30 March 2013 relating to Occupational Safety

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and Health, RSPO Awareness and HCV training.

Principle 5: Environmental Responsibility and Conservation of Natural Resources and Biodiversity

Criterion 5.1: Aspects of plantation and mill management, including replanting, that have environmental impacts are identified and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.

5.1.1 Documented impact assessment Major


Objective evidence:

A documented impact assessment, i.e. Analisis Mengenai Dampak Lingkungan (AMDAL) dated January 2003 is available, which consists of the following documents

1. The actual environmental impact assessment report, i.e. Analisis Dampak Lingkungan (ANDAL)

2. Rencana Pemantauan Lingkungan – Perkebunan dan Pabrik Pengolahan Kelapa Sawit – PT Harapan Sawit Lestari

3. Rencana Pengelolaan Lingkungan – Perkebunan dan Pabrik Pengolahan Kelapa – PT Harapan Sawit Lestari

5.1.1 Revisions to environmental management document if there are changes in companies operating areas or activities.

Minor


Objective evidence:

Refer to 5.1.1 (Major)

5.1.2 Records of regular report on environmental management in accordance with relevant regulations.

Major


Objective evidence:

Records of regular reports of environmental management and monitoring are available (RPL and RKL).

The bi-annual environmental management and monitoring plan is formulated and sent to the Dinas Lingkungan Hidup. The latest report was sent in January 2013 for a report covering period June to December 2012.

A time-bound monitoring plan based on the RPL and RKL is available in both plantations and the mill that is formulated on a bi-annual basis.example of the document e.g. document titled “Matriks Hasil Pelaksanaan – rencana pengelolaan Lingkungan (RKL) dan Rencana Pemantauan Lingkungan (RPL) for July - 2012” is available.

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

5.2.1 Records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat

Major


Objective evidence:

No High Conservation Value assessment conducted covering the following:

identification of any protected, rare, threatened or endangered species, and HCV habitat;

Maps designating the identified areas;

Ground demarcation (signage) reflecting the identified areas;

Stakeholder consultation with the relevant stakeholders pertaining to the identified HCVs; and

Management plan established for the identified HCVs.

Major CAR 04

5.2.1 Posters and signs warning of the presence of protected species are to be produced, distributed, and made visible to all workers and the community, including guidelines in handling them

Minor


Objective Verification during the field visit evidenced that several areas identified as bufferzone has been

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evidence: placed with signage indicating the status of such area as the conservation area as well as the specific statement indicate that any encroachment, trespassing, hunting, fishing, collecting activities are prohibited within such areas.

In addition, there are also posters picturing the protected species found to be posted on company’s notice board both at the mill as well as at the estates.

PJE & SDE

• Insufficient signages established in relation to the ERT and HCV/conservation habitat.

(Observation 05)

5.2.2 If, rare, threatened or endangered species, or high conservation value habitats are present, appropriate measures to preserve them are to be taken.

Major


Objective evidence:

Refer to 5.2.1 (Major) – Major CAR

5.2.2 Companies are to appoint dedicated and trained officers to monitor any plans and activities as above.

Minor


Objective evidence:

There are dedicated and trained officers to monitor any plans and activities pertaining to identified conservation areas. The officers in PT. HSL receive training and constant support from senior officers from the company’s top management.

Based on records, Several trainings has been conducted to the dedicated personnel as follows:

October 2012 – Transect Survey Training and Identification of Animal’s Foot Prints;

September 2012 – Inventory of Trees and Plant.

5.2.3 Measures taken for protecting species and their habitats must be in accordance with relevant laws and included actions to control any illegal or inappropriate hunting fishing or collecting activities

Major


Objective evidence:

Refer to 5.2.1 (Major) – Major CAR

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

5.3.1 All waste and pollutions sources are identified and documented. Major


Objective evidence:

Standard Operating Procedures for Management of Waste including of Hazardous and Toxic Waste [Pengelolaan Limbah termasuk B3 (Bahan Berbahaya dan Beracun)] (HSL-SOP-EHS.32.R-01) dated 02 April 2012 and revised on 14 January 2013 is available. In summary the documented procedure specifies the following procedures:

General Requirements for Waste Management Procedure;

Identification and Segregation of Waste;

Temporary Collection and Storage Area;

Special Requirement for the Management of Non-scheduled Waste;

Special Requirement for the Management of Scheduled Waste;

Landfill;

Emergency Procedure;

Waste Management Inspection and Audit;

Management of Waste Documentation.

The procedures also specifies the identified wastes as follows:

Liquid Waste:

o Palm Oil Mill Effluent;

o Domestic liquid waste;

Organic Waste;

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o Waste derived from mill such as EFB, decanter cake etc.

Non-organic Waste;

o Recyclable material such as plastic, bottle, glass and paper;

o Scrapped iron

Liquid Scheduled Waste such as oil lubricant, transmission oil etc.

Soild Scheduled Waste;

o Empty pesticides container;

o Oil filter and diesel container;

o Used PPEs contaminated with oil;

o Battery, thinner container etc;

Officer waste such as toner, cartridge etc;

Clinical waste.

5.3.1 Management plan of hazardous waste and instruction of disposal of agrochemicals and their containers waste in accordance with the product label and existing regulations.

Minor


Objective evidence:

Standard Operating Procedures for Management of Waste including of Hazardous and Toxic Waste [Pengelolaan Limbah termasuk B3 (Bahan Berbahaya dan Beracun)] (HSL-SOP-EHS.32.R-01) dated 02 April 2012 and revised on 14 January 2013 is available and documenting all the wastes in estate and the procedures such as storage, reuse and send to the contractor for disposal. As reflected in the document, the above mentioned identified waste is managed and disposed in according to the local laws.

5.3.2 Estates and mills waste management and disposal are implemented to avoid or reduce pollution.

Major


Objective evidence:

Procedures for the management of wastes derived from the estates and mill is reflected integrated within the Standard Operating Procedures for Management of Waste including of Hazardous and Toxic Waste [Pengelolaan Limbah termasuk B3 (Bahan Berbahaya dan Beracun)] (HSL-SOP-EHS.32.R-01) dated 02 April 2012 and revised on 14 January 2013. The SOP specifies the identification and handling of the waste, management of identified waste and the establishment of the landfills for the disposal of the wastes. In general, the SOP stated that the landfills shall be constructed at the minimal of 300m and 500m distance from the housings and water sources respectively.

Verification during a field visit at the line site evidenced that proper recycle bin is allocated within the line site area to separate the wastes and thus promoting and encouraging recycling among workers at the estate.

5.3.2 Records of waste monitoring/analysis. Minor


Objective evidence:

All domestic waste sent to the landfill e.g. in Field D3 ( TPA Limbah ) in SDE within the plantation

area located distant from the residential area. According to the procedures, all wastes dump in the landfill shall be buried to prevent smell.

With regard to the disposal of the hazardous waste, the company has appointed PT Qimbuls Bara Internasional to dispose the hazardous waste. The contract between the company and PT Qimbuls is made available to the auditing team during the Main Assessment. The company has monitored the disposal of the hazardous waste at a three months basis with the latest update covering a period of January – March 2013 encompassing Solid Waste, Liquid Waste and Clinical Waste.

In the Berita Acara Pengambilan Limbah B3 of PJE dated 27/3/13 collection by the PT Qimbuls Bara Internasional was documented

Example of items disposed:

items Quantity

Botol Garlon 19 bottles

Ken roundup 213

Fuel filter & Oil filter 2 + 2

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Inner plastic fertiliser bags 200 pcs

Waste Oil 52 lit

Neon bekas 119

Paint ( Kaleng cat ) 8 tins

Damaged apron and gloves 40 pcs

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximized.

5.4.1 Records of monitoring renewable energy use and its efficiency analysis (energy/ton CPO, or energy/ton palm product).

Minor


Objective evidence:

PT Harapan Sawit Lestari uses fibre as a renewable energy source in the boiler which produces steam that drives the turbine to generate electricity to be utilize within the mill operation during normal operating conditions.

The fuel used for all operations is measured and monitored with a view to reducing use of non-renewable energy. Records of monitoring of renewable energy used for the production of CPO are recorded in the document Data Penggunaan Energy that is recorded on a monthly basis. The auditing team observed that such record has been maintained since FY 2010/20111 whereby the amount of energy usage per MT per year has been recorded as follows:

FY 2010/2011 – 0.38 KwH/MT/year;

FY 2011/2012 – 0.43; and

FY 2012/2013 – 0.32 (until February 2013)

5.4.2 Records of monitoring of fossil fuels use for operational reason and its efficiency analysis.

Minor


Objective evidence:

Records of monitoring of fossil fuels used is found to be recorded Mill Monthly Report Input Form that is recorded on a monthly basis covering total diesel usage for power supply in term of liter, monetary and total usage for every metric tonne FFB processed .

0.50 ltr/mt/year;

0.56 ltr/mt/year; and

0.62 ltr/mt/year (until March 2013)

Ref: Diesel usage of PJM

Records : monthly monitoring available

Lit / MT ( usage for genset only )

Dec 2012 0.46

Jan 2013 0.92

Feb 2013 1.20

Higher usage per FFB was partly due to :

a) Low crop

b) Operating the kernel crushing plant

In the Monthly summary Executive PJM report , the manager has reported the reasons for the fluctuating and increase in diesel usage.

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

5.5.1 Documented assessment where fire has been used for preparing land for replanting.

Major


Objective evidence:

There is no replanting evidenced during the Main Assessment. As mentioned earlier, the forthcoming replanting is scheduled to be conducted in 2020. However, the company has placed their commitment to prohibit any burning during replanting through its No Burning Policy signed by

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the President Director dated 30 October 2010.

5.5.1 Presence of appropriate fire extinguishers and facilities, depending on the risks assessment

Minor


Objective evidence:

Inventory record for fire extinguisher and relevant equipment (until March 2013) is available.

Observation made during field visit evidenced that the company has placed adequate fire extinguishers and fire fighting facilities at the designated area that is visible and easily access to cater any emergency relating to fire. Allocation and placement of the fire extinguishers and fire fighting facilities is made according to the recommendation made within the risk assessment.

5.5.2 Records of implementation of zero burning policy. Major


Objective evidence:

Statement of zero burning is available in the company’s No-Burning Policy dated 30 October 2010 and signed by the President Director. Observation made during the audit evidenced that signage for “no burning” can be observed along the plantation area and within the line site as well as in the plantation areas.

5.5.3 Procedures and records of emergency responses to land burning (Tanggap Darurat Kebakaran Lahan)

Major


Objective evidence:

Procedure in dealing with fire is specified in the Section 4.13.1. of the Accident and Emergency Preparedness Procedure (REP-SOP-REP.04-R.05) dated 20 Feb 2013. The document specifies the proper procedures such as situation assessment & evaluation when dealing with fire.

In addition training in relation to fire fighting has been conducted in estates and mill respectively as follows:

- Fire fighting at plantation dated on 19 October 2012, 22 participants.

- Fire fighting at mill dated on 1-5 March 2013, 83 participants.

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases are developed, implemented and monitored.

5.6.1 Evidence of identification of pollution and emissions sources at mills. Major


Objective evidence:

Evidence of identification of pollution and emissions sources at mills is incorporated within the Standard Operating Procedures for Management of Waste including of Hazardous and Toxic Waste [Pengelolaan Limbah termasuk B3 (Bahan Berbahaya dan Beracun)] (HSL-SOP-EHS.32.R-01) dated 02 April 2012 and revised on 14 January 2013 is available. The procedures also specifies the identified wastes as follows:

Liquid Waste:

o Palm Oil Mill Effluent;

Organic Waste;

o Waste derived from mill such as EFB, decanter cake etc.

Non-organic Waste;

o Recyclable material such as plastic, bottle, glass and paper;

o Scrapped iron

Liquid Scheduled Waste such as oil lubricant, transmission oil etc.

Solid Scheduled Waste;

o Oil filter and diesel container;

o Used PPEs contaminated with oil;

o Battery, thinner container etc;

Officer waste such as toner, cartridge etc.

5.6.1 Records of efforts and strategies employed to reduce pollution and emissions Minor


Objective evidence:

Monitoring of the pollutions and emissions has been conducted through the implementation of the Environmental Management Plan. Latest plan covering a period for June to December 2012

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specifies the following management programme:

Erosion management plan;

Road maintenance programme;

Water quality management;

Land application management;

Surface water usage management;

Environmental Accident;

Implementation of the Clean Development Mechanism;

Maintenance of bufferzone.

5.6.2 Monitoring of pollution and emission quality of the sources identified Major


Objective evidence:

As mentioned earlier monitoring of pollutions and emission has been carried out on all recognised polluting activities that include gas and smoke emissions, particulate and soot emissions, effluent control, treatment and discharge. Any significant pollutants and emissions have been identified and monitoring has been conducted. Example of monitoring and sampling conducted within the estate and mill are as follows:

Erosion Establishing terraces and planting of cover crop on land with a slope> 20

o and no new planting to be done on land with a slope> 30

o.

Similarly, no replanting to be conducted on such areas for an areas that had been planted.

Safeguarding the estate road to avoid any erosion/siltation;

Planting of Vertiver plant along riverbanks and streams.

Application of EFB and palm fronds as a ground cover to avoid direct contact the soil with the rainwater.

Water quality Waste Water Treatment enhancement and maintenance

Land Application Application of POME as a fertilizer thus reducing the release of such waste into the river body and hence reducing the water pollution.

Daily monitoring of the application

Monitoring of Air Quality

Installation of CDM Plant-registered under the UNFCCC as project No.: 4394 Harapan Biogas Project. Such installation is part and parcel of the company’s commitment to comply with the Kyoto Protocol to reduce the emission of GHG gasses such as CO2, Methane, Nitrous Oxide, Sulphur hexaflurode, HFC and PFC.

In general the monitoring of the CDM plant is conducted on a monthly basis encompassing the following areas:

o Mixing pond

o Cascade pond

o Weir box

o Waste water to land application

o COD removal

o Flow waste water

o Flow biogas

o Biogas target

5.6.2 Records of identification, monitoring, and treatment methodology for POME Minor


Objective evidence:

POME Land Application Monitoring Report– monitored on a daily basis and recorded on a monthly basis. Such monitoring is conducted based on Kepmen LH No. 28 tahun 2003 dan SK Bupati Ketapang No. 375 Tahun 2010. In addition, there is an analysis conducted by the outsourcing laboratory i.e. Sucofindo Pontianak or Balai Riset dan Standardisasi Industri Pontianak that is conducted on a monthly basis (sample dated 20 February 2013 for the data month January 2013). Among the parameters verified are as follows:

Total suspended soil;

pH;

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BOD;

CODl

Oil and Grease;

Plumbum;

Copper;

Zinc; and

Cadmium

Principle 6: Responsible Consideration of Employees and of Individuals and Communities by Growers and Millers

Criterion 6.1: Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored to demonstrate continuous improvement.

6.1.1 Documented environmental and social impact assessment, including details of positive and negative social effects that may be caused by plantations and mills, and documented participation of affected parties and local communities.

Major


Objective evidence:

Dedicated social impact document which clearly identifies positive and negative social affects that maybe caused by plantation and mills are available as follows:

1. Social Impact Assessment (SIA) Document prepared by LINKS (dated November 2010);

2. The AMDAL (environmental impact assessment) document (ref: # 660.1/171/Bapedalda-A dated 10 March 2003).

Based on the social impact assessment conducted, the auditing team observed that the SIA is conducted in a participatory manner with relevant stakeholders. In addition, there is also evidence that a socialization programme with local communities is conducted as part of the social impact assessment. There is evidence of regular socialization with local communities.

6.1.1 Regular monitoring and management of social impact, with the participation of local communities.

Minor


Objective evidence:

The company has conducted regular monitoring and management of social impact, with the participation of local communities in term of Corporate Social Responsibility (CSR). Records of stakeholder consultation with local communities evidenced that there is no complaints received from the local communities regarding the operations of the company.

6.1.2 Results of revisions to the environmental management document that encompasses social impact assessments in the event there are changes to company’s operational scope, in accordance with existing regulations.

Minor


Objective evidence:

PT HSL has established its documented Environmental Impact Assessment (EIA/AMDAL) that is approved by Head of Badan Pengendalian Dampak Lingkungan Hidup Daerah dan Pemerintah Daerah Provinsi Kalimantan Barat (BAPELDALDA) dated on 10 March 2003. EIA document analysed environmental impact during activities processes such as biodiversity, water quality, ambient air quality, protected area, erosion and social-economic-culture of local communities.

6.1.3 A regular and scheduled environmental management and monitoring Report. Minor


Objective evidence:

There is evidence of a regular and scheduled environmental management and monitoring report as per reflected in the following documents:

1. The bi-annual environmental management and monitoring plan is formulated and sent to the Dinas Lingkungan Hidup (Environmental Agency). The latest report was sent in January 2013; and

2. A time-bound monitoring plan based on the RPL and RKL is available in both plantations and the mill. E.g. document titled of Matrix of monitoring and measurement (REP-SOP-REP.05-F.01) updated 01 April 2013. This matrix consist of monthly monitoring (waste water, general condition), 3 monthly monitoring (ambient air, noise, water quality), 6 monthly monitoring (flora fauna, emission, drink water) and yearly monitoring (soil quality).

6.1.4 Particular attention paid to the impacts of outgrower schemes (where the plantation includes such a scheme).

Minor


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Objective evidence:

Environmental management and monitoring for out growers is covered by PT HSL because all activity are controlled by PT HSL.

Criterion 6.2: There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties.

6.2.1 Documented procedures and records of communication and consultation with the communities.

Major


Objective evidence:

PT HSL has established procedure for communication, participation and consultation (REP-SOP-REP.03) and procedure for social communication & community development (HRD-SOP-CR-05)

PT HSL conducted monthly meeting with local communities to discuss about price information, social issues, CSR, etc.

Records of communication and consultation with the local communities are available and verified.

6.2.1 Maintenance of a list of stakeholders. Minor


Objective evidence:

Stakeholder list are available. The list dated April 2013 listed all relevant stakeholders identified within Indonesia especially Kalimantan Barat Region covering the relevant government agencies, relevant NGOs (both social and environmental, neighbouring estates, local communities and contractors, women group, that have direct and indirect impact with the plantation operations of the PT HSL.

However it was found that the list of stakeholder did not include religious heads of the community.

(Observation 06)

6.2.2 Records of local communities’ aspiration and responses or follow-up actions by companies to these requirements

Minor


Objective evidence:

All action taken following the communication with the local communities is responded and recorded in the external communication logbook detailing the date of the action taken as well as the appointed responsible person to handle each of the communications. Stakeholder consultation conducted prior to the audit evidenced no feedback received from the local communities. This is further verified during the audit whereby the stakeholders have received notification from SGS and they are aware of the audit and that no issues raised against the company’s operations.

6.2.3 A dedicated person responsible for consulting and communicating with local communities.

Minor


Objective evidence:

Public Affair and Government Liaison Manager has been assigned for consulting and communicating with local communities.

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

6.3.1 An open system, which is accepted by affected parties, to receive complaints and to resolve dispute in an effective, timely and appropriate manner.

Major


Objective evidence:

PT HSL has established open system to receive complaints and to resolve dispute in an effective, timely and appropriate manner, which is accepted by affected parties:

1. SOP for social problem solving (HSL-SOP-PSS.04-R.00)

2. SOP for land claim resolution (HSL-SOP-PSS.02-R.00)

3. SOP for communication, participation and consultation (REP-SOP-REP.03).

4. SOP for social communication & community development (HRD-SOP-CR-05)

PT HSL has also provided suggestion boxes and all workers can access to Cargill Ethics and Compliance (www.cargillopenlineethicspoint.com) to tell complaints.

6.3.1 Records of handling of the complaints. Minor


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Objective evidence:

There is a proper system in place for handling of complaints from the staff/workers and also local communities through the following documents:

Flowchart of the conflict resolution

Land acquisition document

6.3.2 Procedures for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available

Minor


Objective evidence:

PT HSL has established SOP for social problem solving (HSL-SOP-PSS.04-R.00) and SOP for land claim resolution (HSL-SOP-PSS.02-R.00) for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available. Record of land acquisition document is available and verified, for example: agreement letter with Kartono regarding land acquisition dated on 29 October 2011, with the involvement of public figure, local government and made publicly available.

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

6.4.1 Procedures for the identification, calculation and compensation for the loss of legal or customary rights of the land, with the involvement of local community representatives and relevant agencies.

Major


Objective evidence:

PT HSL has established SOP for social problem solving (HSL-SOP-PSS.04-R.00) and SOP for land claim resolution (HSL-SOP-PSS.02-R.00) for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available. Record of land acquisition document is available and verified, for example: agreement letter with Kartono regarding land acquisition dated on 29 October 2011, with the involvement of public figure, local government and made publicly available.

6.4.1 Records of identification of people entitled to receive compensation. Minor


Objective evidence:

PT HSL has land acquisition documents consist of identification of people entitled to receive compensation.

6.4.2 Records of negotiations processes and/or the details of compensation settlements. Minor


Objective evidence:

Record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 29 October 2011. This document consist negotiations processes and/or the details of compensation settlements.

6.4.3 Records of the implementation of compensation payment. Minor


Objective evidence:

Record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 29 October 2011. This document consist negotiations processes and/or the details of compensation settlements and official report of compensation payment accompanied with receipt.

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

6.5.1 Documentation of employee’s pay rates Major


Objective evidence:

A letter from the Governor of Kalimantan Barat was referred concerning the minimum wage for 2013. The minimum wage was stated at IDR 1,060,000.

Samples of payslip of employees are viewed to show that the workers have salary over the minimum wage.

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6.5.1 Growers and millers provide adequate housing, water supplies, medical, educational, and other facilities for employees where such facilities are not available or accessible.

Minor


Objective evidence:

All workers are provided adequate housing, water supplies, medical, educational, and other facilities for employees where such facilities are not available or accessible. For workers have children or babies, PT HSL have provided child care and kindergarten during working hour.

Nevertheless, it was found that shelter is not provided to workers at the workplace (field works) for during bad weather and for their rest/lunch break.

(Observation 07)

6.5.2 A company working regulations and work contracts, in accordance with existing regulations.

Major


Objective evidence:

Company working regulations and work contracts are in accordance with existing regulations as follows:

Government circular (ref: 05/2012; SKB/06/Men/VII/2012; 02/2012, ) titled, “Keputusan Bersama Menteri Agama, Menteri Tenaga Kerja dan Transmigrasi, Dan Menteri Negara Pendayagunaan Aparatur Negara dan Reformasi Birokrasi Republik Indonesia. Hari Libur Nasional dan Cuti Bersama Tahun 2013.” (Joint Decree of the Minister of Religious Affairs, Ministry of Manpower, and Minister of State for Administrative Reform and Bureaucratic Reform of the Republic of Indonesia. National Holidays and Leaves in 2013).

Act # 13/2003 regarding employment.

Collective Labour Agreement (CLA)

Some work contracts are verified and PT.HSL showed that the company has work contracts for staff and daily workers.

6.5.2 Agreements entered into with contractors are to specify that contractors abide by labor laws

Minor


Objective evidence:

Some activities are conducted by contractors such as transportation, road construction and maintenance and building construction. They must sign contract that contractors abide by labor laws, for example: Contract agreement # 0133-CO/2012-2013): Building construction by CV. MFT.

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

6.6.1 Documented company policy recognizing freedom of association. Major


Objective evidence:

PT HSL has documented company policy recognizing freedom of association. The policy is listed in Cargill Ethics and Compliance. There 2 labours union are Serikat Pekerja (Labour Union) PT HSL and Serikat Pekerja (Labour Union) Fokus.

6.6.1 Documented minutes of meeting with any labor union (if any). Minor


Objective evidence:

Monthly meeting is always conducted between labor unions and PT HSL. Records of minute of meetings are kept by each labor union. Based on minute of meeting, they discuss about employment issues and implementation of collective labor agreement (CLA).

Criterion 6.7: Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are not exposed to hazardous working conditions.

6.7.1 Documented company policy on worker age requirement, in accordance with national laws.

Major


Objective evidence:

PT HSL has documented company policy on worker age requirement, in accordance with national laws. The policy is listed in Cargill Ethics and Compliance. The policy stated that minimum worker

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age requirement is 18 years).

6.7.1 Records of implementation of company policy on worker age requirements. Minor


Objective evidence:

The CLA has also indicated minimum worker age requirement (18 years). List of employee (March 2013) is verified and based on interview result with workers, minimum worker age is 18 years (permanent staff and contractor).

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

6.8.1 A documented equal opportunities policy. Major


Objective evidence:

PT HSL has documented equal opportunities policy. The policy is listed in Cargill Ethics and Compliance. It stated that the company avoids any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation union membership, political affiliation or age.

6.8.1 Evidence of equal treatment in working opportunities for workers. Minor


Objective evidence:

Based on list of employees (March 2013) and interview result with employees and management note that the company is currently implementing the equal opportunities for workers through the following:

All workers come from local communities and outside the communities. They are many ethnic groups (Malayans, Javanese, Dayak ethnic, etc);

The workers are women and men (office and field);

Employment opportunities are provided fairly based on qualification and advertised in local mass media or local government office;

Training is given to the workers on a yearly basis covering training relating to their working station, personnel training such as communication skills and safety and health training.;

All employees are covered with working insurance; and

Termination is conducted based on local laws and is stated in the workers employment agreement and the collective labour agreement (CLA).

Criterion 6.9: A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.

6.9.1 A documented company policy on sexual harassment and violence. Major


Objective evidence:

PT HSL has a documented company policy on sexual harassment and violence. The policy is listed in Cargill Ethics and Compliance. It stated that the company prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights.

6.9.1 Proof of implementation of sexual harassment policy. Minor


Objective evidence:

There is women group in the company i.e: Jungle Queen established on 8 July 2010. Function of Jungle Queen is to provide consultation to women workers and housewife in the company regarding the rights and obligations of women workers, health, education, prevention of sexual harassment, etc.

6.9.2 A documented company policy on the protection of reproductive rights. Major


Objective evidence:

PT HSL has a documented company policy on the protection of reproductive rights. The policy is listed in Cargill Ethics and Compliance. It stated that the company prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights.

6.9.2 Proof of implementation of reproductive rights policy. Minor


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Objective evidence:

The CLA has also defined about reproductive rights. PT HSL provide clinic for examination of pregnant women and childbirth. Women workers granted leave during menstruation and childbirth. All women workers upon confirmed pregnant is transferred to section or department that has lesser workload until two months after the delivery of their child.

6.9.3 A specific grievance mechanism is available Minor


Objective evidence:

PT HSL has provided suggestion boxes for each estate and office and all workers can access to Cargill Ethics and Compliance (www.cargillopenlineethicspoint.com) to tell complaints. PT HSL and labour union companies regularly hold meetings with labor union (monthly). Minute of meetings are available and verified.

Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.

6.10.1 Current and past prices paid for FFB shall be publicly available. Major


Objective evidence:

The governments regularly hold meetings with all plantation companies and local community’s cooperative at Ketapang Regency to set the price of FFB. The result of meeting is publicly available. PT HSL paid FFB according to the result of meeting.

6.10.1 Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent. Agreed payments shall be made in a timely manner.

Minor


Objective evidence:

There is documented evidence that contracts are fair, legal and transparent. Agreed payments made in a timely manner. Interviews with contractors and suppliers conducted to determine if these third parties understand the contractual agreements they enter into and found in order.

6.10.2 Pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation).

Major


Objective evidence:

Pricing mechanisms for FFB and inputs/services are documented. Staff and supplier check and sort together FFB in field and weighing of FFB input conducted the mill to know quantity of FFB inputs. Contracts, FFB production report and payments are available and verified.

6.10.2 Agreed payments shall be made in a timely manner. Minor


Objective evidence:

Payments of FFB input are made based on sorting and weighing results. Contracts, FFB production report and payments are available and verified.

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

6.11.1 Records of company contributions to the local development. Minor


Objective evidence:

There is adequate evidence of the company’s contribution to the local development through the company’s corporate social responsibility cover education, employee opportunity, employment contract (building construction, road construction, transportation), health facility, etc.

Principle 7: Responsible Development of New Plantings

Criterion 7.1: A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.

7.1.1 Social and environmental impact assessments (AMDAL), which include details of both positive and negative social and environmental impacts, made with the participation of affected parties (local communities).

Major


Objective evidence:

AMDAL was submitted prior to the development of the field AP 5121, AP511 , AM8120, AN7121, AO8132 of a hectareage of 70.76 ha in 2006 in Sungai Dabu Estate

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Summary of plantings done in 2005-2006 are as follows:

Estate 2005 2006 2007

Keluwin Estate 21.76 ha - -

Paku Juang Estate - 16.5 ha -

Sungai Dabu Estate 29.6 ha 70.76 -

New plantings procedure would follow the ‘ Buku lapangan – Tanaman Belum Menghasilkan ‘by their consultant , Thomas Fairhurst as the guide

7.1.1 Appropriate management plan and operational procedures (RKL/RPL). Minor


Objective evidence:

Records of regular reports of environmental management and monitoring are available (RPL and RKL)

The bi-annual environmental management and monitoring plan for PT HSL is formulated and sent to the Dinas Lingkungan Hidup (Environmental Agency). The latest report was sent in January 2013 for a report covering period June to December 2012.

A time-bound monitoring plan based on the RPL and RKL is available in both plantations and the mill that is formulated on a bi-annual basis, example of the document e.g. document titled “Matriks Hasil Pelaksanaan – rencana pengelolaan Lingkungan (RKL) dan Rencana Pemantauan Lingkungan (RPL) for July - 2012” is available.

7.1.2 Where there are schemed smallholders, records of development program for smallholders are kept, in accordance with the scheme and relevant laws.

Minor


Objective evidence:

The fields planted are from the Inti estates , however if smallholders land are developed, records of development program for smallholders are kept, in accordance with the scheme and relevant laws.

Criterion 7.2: Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

7.2.1 Results of land surveys to determine suitability of soil are to be provided, including information on topography, climate, soil type, soil fertility, water table depth and drainage.

Major


Objective evidence:

The AMDAL reports the result of the land survey, soil type and fertility, suitability of soils, topography, climate, etc.

In addition , PT HSL has done land suitability mapping exercise in year 2000 ‘ GPS Mapping of PT Harapan Sawit Lestari Estates’ by Param Agricultural Soil Surveys Sdn Bhd to mapped out roads, rivers, block boundaries , planted and unplantable areas.

7.2.1 Evidence that plantations are developed in accordance with the suitability of the land.

Minor


Objective evidence:

PT HSL fields are developed in accordance to the AMDAL and with the land suitability mapping

report. They would follow would follow the ‘ Buku lapangan – Tanaman Belum Menghasilkan ‘by their consultant , Thomas Fairhurst as the guide for new planting

Criterion 7.3: New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.

7.3.1 New plantings within Nov 05 and Nov 07 must be in compliance with existing regulatory requirements that relate to social and environmental impacts management, and with the legalized land spatial planning.

Major


Objective Dedicated social impact document which clearly identifies positive and negative social affects that

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evidence: maybe caused by plantation and mills are available as follows:

3. Social Impact Assessment (SIA) Document prepared by LINKS (dated November 2010);

4. The AMDAL (environmental impact assessment) document (ref: 660.1/172/Bapedalda-A) dated 06 March 2003.


7.3.2 Maps showing plan and realization of land clearing in accordance with HCV identification.

Major


Objective evidence:

Map of estate layout are available and land clearing are in accordance with HCV identification , AMDAL and land suitability study report

Criterion 7.4: Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

7.4.1 Maps identifying marginal and fragile soils, including excessive gradients and peat soils, should be available.

Minor


Objective evidence:

Maps are available to identify soils and topography. There are no peat soils identified.

7.4.2 Where limited planting on fragile and marginal soils is proposed, plans shall be developed and implemented to protect them without incurring adverse impacts

Minor


Objective evidence:

This is already identified in Indicator 4.3.5

Criterion 7.5: No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions

7.5.1 Social and environmental impact assessment document which include analysis of both positive and negative environmental and social impacts, and made with the participation of affected parties.

Major


Objective evidence:

Dedicated social impact document which clearly identifies positive and negative social affects that maybe caused by plantation and mills are available as follows:

Social Impact Assessment (SIA) Document prepared by LINKS (dated November 2010);

The AMDAL (environmental impact assessment) document (ref: 660.1/172/Bapedalda-A) dated 06 March 2003.


7.5.2 Documented socialization programs prior to new plantings. Major


Objective evidence:

As above

7.5.3 Proof of payment to land owners and proper handing-over of the land for new plantings.

Major


Objective evidence:

As per the other land acquisition, PT HSL has established SOP for social problem solving (HSL-SOP-PSS.04-R.00) and SOP for land claim resolution (HSL-SOP-PSS.02-R.00) for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available.

Criterion 7.6: Local people are compensated for any agreed land acquisitions and relinquishment of rights,

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subject to their free, prior and informed consent and negotiated agreement

7.6.1 Documented identification and assessment of customary and legal rights with the involvement of relevant government agencies and local communities.

Major


Objective evidence:

PT HSL has established SOP for social problem solving (HSL-SOP-PSS.04-R.00) and SOP for land claim resolution (HSL-SOP-PSS.02-R.00) for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available. Record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 31 August 2010, with the involvement of public figure, local government and made publicly available.

7.6.1 Records of negotiation process and/or compensation settlements are available. Minor


Objective evidence:

As in 6.4.3 , record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 31 August 2010. This document consist negotiations processes and/or the details of compensation settlements and official report of compensation payment accompanied with receipt.

7.6.2 Procedures to identify people entitled to receive compensation. Major


Objective evidence:

As in 6.4.1 , PT HSL has land acquisition documents consist of identification of people entitled to receive compensation.

7.6.2 Documentation of calculation and payment for compensation Minor


Objective evidence:

As in 6.4.3 , record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 31 August 2010. This document consist negotiations processes and/or the details of compensation settlements and official report of compensation payment accompanied with receipt.

7.6.3 Communities that have lost access and rights to land for plantation expansion are given opportunities to benefit from plantation development.

Minor


Objective evidence:

Communities that have lost access and rights to land for plantation expansion are given job opportunities as they are employed as workers in the plantation.

They are provided equal opportunities as well as housing by PT HSL

7.6.4 The process and outcome of any compensation claims should be documented and made publicly available.

Minor


Objective evidence:

PT HSL has established SOP for social problem solving (HSL-SOP-PSS.04-R.00) and SOP for land claim resolution (HSL-SOP-PSS.02-R.00) for the identification and calculation of fair compensation for the loss of legal or customary right of the land, with the involvement of local community representatives and relevant agencies and made publicly available. Record of land acquisition document is available and verified, for example: agreement letter with Muslim regarding land acquisition dated on 31 August 2010, with the involvement of public figure, local government and where not confidential, made publicly available

Criterion 7.7: Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

7.7.1 Documented assessment where fire has been used for preparing land for planting. Major


Objective evidence:

No fire used for land preparation. PT HSL has placed their commitment to prohibit any burning during replanting through its No Burning Policy signed by the President Director dated 30 October 2010.

7.7.1 Presence of appropriate fire extinguishers and facilities, depending on the fire risks. Minor

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Objective evidence:

As in 5.5.1, Inventory record for fire extinguisher and relevant equipment (until March 2013) is available.

Observation made during field visit evidenced that the company has placed adequate fire extinguishers and fire fighting facilities at the designated area that is visible and easily access to cater any emergency relating to fire. Allocation and placement of the fire extinguishers and fire fighting facilities is made according to the recommendation made within the risk assessment.

7.7.2 Records of implementation of zero burning policy. Major


Objective evidence:

As in 5.5.2, Statement of zero burning is available in the company’s No-Burning Policy dated 30 October 2010 and signed by the President Director. Observation made during the audit evidenced that signage for “no burning” can be observed along the plantation area and within the line site as well as in the plantation areas.

7.7.3 Procedures and records of emergency responses to land burning (Tanggap Darurat Kebakaran Lahan)

Major


Objective evidence:

As in 5.5.3, Procedure in dealing with fire is specified in the Section 4.13.1. of the Accident and Emergency Preparedness Procedure (REP-SOP-REP.04-R.05) dated 20 Feb 2013. The document specifies the proper procedures such as situation assessment & evaluation when dealing with fire.

In addition training in relation to fire fighting has been conducted in estates and mill respectively as follows:

- Fire fighting at plantation dated on 19 October 2012, 22 participants.

- Fire fighting at mill dated on 1-5 March 2013, 83 participants.

Principle 8: Commitment to Continuous Improvement in Key Areas of Activity

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

8.1.1 A monitoring action plan based on the social environmental impact assessment, and regular evaluations of plantation and mill operations. As a minimum, these must include, but not necessarily be limited to: • Reduction in use of certain chemicals (criterion 4.6). • Environmental impacts (criterion 5.1). • Waste reduction (criterion 5.3). • Pollution and emissions (criterion 5.6).

• Social impacts (6.1).

Major


Objective evidence:

The management regularly monitor and review their social and environmental programmes annually to allow demonstrable continuous improvement.

PT HSL captures the performance and expenditure in social and environmental aspects through their budget which is reviewed and adjusted annually to cope with changes in requirement.

Below are examples of improvement that is done in one of the estates. Similar programme are also done in the other estates.

In the SDE continuous improvement plan the following are identified:

a) Replace the BBM store

b) Replacement security post

c) Shower facilities

d) Field Ranking amongst the estates. SDE has seen improvement from 19.5 MT/ha to 25.6 MT/ha . For PJE , 20.5 MT / ha to 28.5 MT/ha

According to SDE management, the improved field ranking is due to :

Improve management

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Improve Harvesting, upkeep & cultivation

Improve fertiliser application

8.1.1 Records of follow-up actions taken against RSPO audit findings, if any.

Minor


Objective evidence:

This is an initial audit

3.1.2 Supply Chain

For supply chain, Paku Juang Oil Mill has decided to adopt the Module D (CPO Mill: Segregation)

for this assessment. The findings and objective evidence found during the assessment are outlined in

the table below. The results for each indicator from each of the operational areas were evaluated to

provide an assessment of conformity. A statement is provided for each of the RSPO indicators in

order to support the findings of the assessment team. As to date, there is no any transaction for

RSPO certified product yet for Paku Juang Oil Mill.

Module D: Segregation

Module D.1: Documented Procedures

Criterion D.1.1: The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements.

D.1.1.1 Complete and up to date procedures covering the implementation of all the elements in these requirements


Objective evidence:

Ref: Standard Operation Procedure PT Harapan Sawit Lestari

The SOPs for the Mill from reception of FFB to dispatch of Crude Palm Oil and Palm Kernel Oil is available

At PJM , Standard operation procedures for the mill are in place.

It includes SOPs like :

a) ENG-SOP-PJM.001-R.03 Jembatan Timbang

b) ENG-SOP-PJM.002-R.03 Loading Ramp Station

c) ENG-SOP-PJM.011-R.03 Storage Tank

d) ENG-SOP-KCP.038-R.03.Palm Kernel Reception

D.1.1.2 The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements

Verifiers and guidance:

This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.


Objective evidence:

The mill manager ( appointed on 1 Oct 2012 ) of Paku Juang , Erikson Tobing , has been appointed to be the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. Ref : Nomor : 241/Pro/HSL-HRD/IX/2012.

In the Uraian Tugas ( Job Description ) Mill manager under (E) clause, he is responsible for the implementation of these requirements and compliance with all applicable requirements to RSPO supply Chain .

Criterion D.1.2: The facility shall have documented procedures for receiving and processing certified and non-

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certified FFBs.


Objective evidence:

The facility do not have documented procedures for receiving and processing certified and non-certified FFBs

NC - 01

Module D.2: Purchasing and Goods In

Criterion D.2.1: The facility shall verify and document the volumes of certified and non-certified FFBs received.


Objective evidence:

The facility will only receive from their Certified Group estates and KKPA.

Criterion D.2.2: The facility shall inform the CB immediately if there is a projected overproduction.


Objective evidence:

.The facility do not have procedures to inform the CB immediately if there is a projected overproduction

NC-02

Module D.3: Record Keeping

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


Objective evidence:

Records kept and up-to-date

i) Surat penghantar Buah ke PKS

j) Weigh bridge ticket receive ( FFB & PK )

k) Production report

l) Mass Balance of receive, process and delivery

m) Daily FFB Report ( Inti / KKPA )

n) Weigh bridge ticket dispatch ( CPO , PKO & PKE )

o) Sales contract Amendment

Delivery Order

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


Objective evidence:

Retention times according to the procedure and records will be kept for 10 years.

Criterion D.3.3: The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.


Objective evidence:

This is an initial certification, no receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal.

Nevertheless, no template record and balance was presented during the audit.

NC-03

Criterion D.3.4: The following trade names should be used and specified in relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). The supply chain model used should be clearly indicated.


Objective evidence:

No template provided to show in the purchase and sales contracts, that e.g. *product name*/SG or Segregated is specified

NC-04

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Module D.4: Sales and Good Out

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

a) The name and address of the buyer

b) The date on which the invoice was issued

c) A description of the product, including the applicable supply chain model (Segregated)

d) The quantity of the products delivered

e) Reference to related transport documentation


Objective evidence:

The name and address of the buyer; : PT Asian Agro Agung Jaya

The name and address of the seller; : PT Harapan Sawit Lestari

The loading or delivery date; : 11-12 April 2013

The date on which the documents were issued; : 14 Nov 2012 ( Sales contract amendment )

A description of the product, including the applicable supply chain model (Identity Preserved, Segregated or Mass Balance : Not described ( refer to NC – 04 )

The quantity of the products delivered; 3,000

Any related transport documentation :

Supply chain certification reference number

Module D.5: Processing

Criterion D.5.1: The facility shall assure and verify through clear procedures and record keeping that the RSPO certified palm oil is kept segregated from non-certified material including during transport and storage and be able to demonstrate that is has taken all reasonable measures to ensure that contamination is avoided. The objective is for 100% segregated material to be reached. The systems should guarantee the minimum standard of 95% segregated physical material; up to 5% contamination is allowed.


Objective evidence:

In an internal memo dated 5 /1/13, the Chief engineer informs the mill will not purchase non-certified FFB as the mill is going for the Segregation module.

The Mill only receives FFB from their own estates.

Criterion D.5.2: The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material.


Objective evidence:

The Paku Juang Mill only receive crop from their own estates and KKPA Plasma ( which is under 100% Inti management )

Criterion D.5.3: In cases where a mill outsource activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to separately certified. The mill has to ensure that:

a) The crush operator conforms to these requirements for segregation

b) The crush is covered through a signed and enforceable agreement


Objective evidence:

The Paku Juang Oil Mill crushes their own palm kernel as well as it receives palm kernel from Manis Mata Oil Mill.

Module D.6: Training

Criterion D.6.1: The facility shall provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System.


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Objective evidence:

The facility has a traceability training conducted on 6 Feb 2013, however it did not include the implementation of the RSPO supply chain Certification systems.

NC-05

Module D.7: Claims

Criterion D.7.1: The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.


Objective evidence:

No claims yet as this is an initial application

3.2 Corrective Action Request

A total of 6 Major Non - conformances ( 1 for P&C and 5 Non-conformance against Supply

Chain Requirement) were raised. Three (3) Minor Non-conformances were also raised under

the P&C Indicators. Please refer to the Appendix A for the details findings and relevant

correction actions have been taken.

3.3 Noteworthy Positive & Negative Observation

From the audit, 7 Observations were also raised as opportunities for improvement.

3.4 Status of Non-Conformities Previously Identified

This is an initial audit certification

3.5 Issues Raised by Stakeholders and Findings

During audit, some of the stakeholders met were interviewed. All interviewed stakeholders had

positive comments about PT Harapan Sawit Lestari.

4. ACKNOWLEDGEMENT OF ORGANIZATION INTERNAL RESPONSIBILITY

4.1 Date of Next Surveillance Visit

The next surveillance audit is planned within twelve months of the date approval of this report

by RSPO.

4.2 Date of Closing Non-Conformities

Date of closing non-conformance has been specified in RSPO Certification System, June 2007.

Major non-conformance raised during surveillance assessment must be addressed within 60

days, or the certificate will be suspended. Minor non-conformities will be raised to major if they

are not addressed by the following surveillance assessment. Details of due date for non-

conformities is attached in Appendix A.

4.3 Acknowledgement of Internal Responsibility and Formal Sign-off Assessment Findings

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SGS Malaysia acknowledges and confirms acceptance of the Report contents and including

the assessment findings. SGS Malaysia accepts the responsibility for addressing the

opportunities of improvement detailed in this report.

Signed on behalf of PT Harapan Sawit Lestari

Signed on behalf of SGS Malaysia Sdn Bhd

Date : 8

th November 2013

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APPENDIX A: CORRECTIVE ACTION REQUEST & OBSERVATIONS

CAR # Indicator CAR Detail

CAR 01

4.3.5

Date Recorded>

16-17/4/13 Due Date> Next surv Date

Closed> 4/6/13

Non-Conformance:

A management strategy was not in place for other fragile and problem soils (e.g. sandy, low organic matter, acid sulphate soils)

Objective Evidence:

The soils are about 30 -70 % sand.

No management strategy are in place for the sandy soils for both PJE and SDE

Minor CAR 01

Close-out evidence:

A SOP on management strategy on sandy soil was submitted. EST-SOP-ASD.43-R.01: PENGELOLAAN TANAH BERPASIR. In the document it provide :

a) Objective b) Responsibilities c) Purpose d) Standard & Reference

Minor CAR 01 closed

CAR 02

4.4.1

Date Recorded>


Closed> 4/6/13

Non-Conformance:

There was no implemented water management plan

Objective Evidence:

A Minor CAR is raised as due to the fact that

a) No water management plan at the estates

b) In PJE, although the raw water is analysed, there was no interpretation to confirm its classification

c) In SDE, the raw water from the bore is not analysed and although the water is treated, the analysis recorded faecal coliform count

(Minor CAR 02)

Close-out evidence:

Documented submitted

Water Management Plan / SOP : HSL-SOP-EHS.21-R.01 ‘RENCANA PENGELOLAAN AIR’ 24/4/2013

The SOP provides : a) Objective b) Responsibiities ( RUANG LINGKUP DAN TANGGUNG JAWAB ) c) Reference ( REFERENSI DAN INTERELASI ) d) Details of Plan (. RENCANA DETAIL ) - includes identification of

source, maps, usage, analysis and interpretation , monitoring frequency, protection from contamination , etc )

e) Forms to be filled

Minor CAR 02 – Closed

CAR 03

4.6.1

( Minor )

Date Recorded>


Closed> 4/6/2013

Non-Conformance:

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Documentary evidence that use of chemicals categorised as World Health Organisation Type 1A or 1B, or listed by the Stockholm or Rotterdam Conventions, and paraquat, is reduced and/or eliminated. The management was not aware of the product and its usage.

Objective Evidence:

Aluminium phosphide fumigant was found in PJE waste store

(Minor CAR 03)

Close-out evidence:

The management removed the product from the waste store and upon investigation found that it was not used and since it was an obsolete product and not used anymore , the management submitted proof ‘Bukti Serah Terima Limbah B3 – PJE 002/IV/2013 on 16/4/2013 that the product was sent to the Schedule Waste store ( Limbah B3 ) for official disposal. (Minor CAR 03) – closed

CAR Detail

CAR M04

5.2.1 Major

Date Recorded>

16-17/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

No records of results of identification of any protected, rare, threatened or endangered species, and HCV habitat

Objective Evidence:

No High Conservation Value assessment conducted covering the following:

identification of any protected, rare, threatened or endangered species, and HCV habitat;

Maps designating the identified areas;

Ground demarcation (signage) reflecting the identified areas;

Stakeholder consultation with the relevant stakeholders pertaining to the identified HCVs; and

Management plan established for the identified HCVs.

Major CAR 04

Close-out evidence:

The management submitted a HCV Peer review document :

‘Peer Review,Internal Report, Identifikasi High Conservation Value di Kawasan Konservasi PT. Harapan Sawit Lestari , Kecamatan Manis Mata Kabupaten Ketapang , Propinsi Kalimantan Barat’ compiled by the Team Assessment PT Harapan Sawit Lestari and it was reviewed by an independent Consultant reviewer , RACHMAD HERMAWAN dated May 2013

The report evaluated the completeness of the PT Harapan Sawit Lestari HCV report and provided the expert recommendations on the areas of compliance to the issues raised as well as to provide areas of improvement as listed under the description of ‘Temuan or Findings ‘ .

According to the consultant the report used the guideline based on : Panduan Identifikasi Kawasan Bernilai Konservasi Tinggi di Indonesia (Konsorsium Revisi HCV Toolkit Indonesia, 2008)

Major CAR 04 – Closed

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For the Supply Chain: Paku Juang Mill


NC - 01

Criterion

D.1.2

Date Recorded>

16/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

he facility did not have documented procedures for receiving and processing certified and non-certified FFBs.

Objective Evidence:

The facility do not have documented procedures for receiving and processing certified and non-certified FFBs

NC - 01

Close-out evidence:

Document submitted SOP REP-SOP-REP.11-R.03 IDENTIFIKASI, PERAWATAN DAN MAMPU TELUSUR PRODUK as documented procedures for receiving and processing certified and non-certified FFBs. The mills will not receive or process non-certified source. ‘Pabrik Manis Mata (MMM) dan Pabrik Pakujuang (PJM) hanya akan mengolah TBS dari sumber / kebun yang terdapat dalam daftar diatas. TBS yang berasalah dari kebun diluar daftar diatas tidak akan diterima oleh pabrik Manis Mata dan Pakujuang.’ NC – 01 closed


NC - 02

Criterion

D.2.2

Date Recorded>

16/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

Criterion D.2.2: The facility did not have procedure to inform the CB immediately if there is a projected overproduction.

Objective Evidence:

Paku Juang Mill do not have procedures to inform the CB immediately if there is a projected overproduction

NC-02

Close-out evidence:

Document submitted SOP REP-SOP-REP.11-R.03 IDENTIFIKASI, PERAWATAN DAN MAMPU TELUSUR PRODUK as documented procedure to inform the CB immediately if there is a

projected overproduction.

NC-02 closed


NC - 03

Criterion

D.3.3

Date Recorded>

16/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

The facility do not have a template to record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

Objective Evidence:

This is an initial certification, no receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal.

Nevertheless, no template record and balance was presented during the audit.

NC-03

Close-out evidence:

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Document submitted to show a template to to record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis ‘Template Mass Balance sustainable ( ISCC & RSPO ) ‘ NC – 03 Closed


NC - 04

Criterion

D.3.4

Date Recorded>

16/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

The following trade names was not presented in the relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). The supply chain model used should be clearly indicated.

Objective Evidence:

No template provided to show in the purchase and sales contracts, that e.g. *product name*/SG or Segregated is specified

NC-04

Close-out evidence:

a) Document submitted SOP REP-SOP-REP.11-R.03 IDENTIFIKASI, PERAWATAN DAN MAMPU TELUSUR PRODUK as documented procedure that the following trade names will be presented in the relevant documents (e.g. purchase and sales contracts, *product name*/SG or Segregated). Stated in 4.4.8 of the procedure

b) Template of Sales contract to show the supply chain module used is presented.

‘SALES CONTRACT

No. XXXX/CPO SG/HSL-xxx/IV/2013’

NC-04 Closed


NC - 05

Criterion

D.6.1

Date Recorded>

16/4/13 Due Date> 16/6/13 Date

Closed> 4/6/13

Non-Conformance:

Criterion D.6.1: The facility did not provide the training for all the staff as required to implement the requirements of the Supply Chain Certification System.

Objective Evidence:

The facility has a traceability training conducted on 6 Feb 2013, however it did not include the implementation of the RSPO supply chain Certification systems.

NC-05

Close-out evidence:

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The management submitted a) records that mill staff attended training on RSPO Supply Chain

Certification System & its requirement on 19/4/2013 b) records that relevant staff from the Cargo Logistic and personnel from the

Jambi Wharf attended training on RSPO Supply Chain Certification System & its requirement on 18/4/2013

c) other training material ‘ Komitmen Cargill untuk Minyak Sawit yang berkelanjutan’ were also submitted

NC-05 Closed

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OBSERVATIONS

OBS # Indicator Observation Detail

OBS 01

3.1.1

Date

Recorded> 16-17/6/13 Due Date>

Date

Closed>

Non-Conformance:

Documented working plan of the company for a minimum of 3 years period was incomplete

Objective Evidence:

However, the business plans for environmental only limited to the improvement on energy efficiency and GHG emission. In the PJE and SDE business plan for conservation area was not included although the company has designated area for conservation and buffer zones purpose and has conducted a wildlife surveys for detecting the presence of wildlife within such areas

(Observation 01).

Close-out evidence:

Observation Detail

OBS 02

4.4.1

Date


Date

Closed>

Non-Conformance:

Protection of watercourses and wetlands, including maintaining and restoring appropriate

riparian buffer zones at or before replanting was lacking in some area

Objective Evidence:

However in SDE Field B6 buffer zone , the area was manually weeded till bare ground that may cause erosion due to the sandy soil type. (Observation 02)

Close-out evidence:

Observation Detail

OBS 03

4.7.1

Date


Date

Closed>

Non-Conformance:

There were evidence of documented Occupational Safety & Health (OSH) policy and some

overlooked safety implementation.

Objective Evidence:

SDE

• Housing Contractor using used chemical container as a storage water (for ablution water).

(Observation 03)

Close-out evidence:

Observation Detail

OBS 04

4.7.6

Date


Date

Closed>

Non-Conformance:

Evidence of OHS and inconsistent items found in the first aid equipments at the worksites

Objective Evidence:

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PJE & SDE

It was found that the there were inconsistency in items found in the First Aid Kit and they vary

amongst the kits and amongst the estates

Observation 04

Close-out evidence:

Observation Detail

OBS 05

5.2.1

Date


Date

Closed>

Non-Conformance:

Posters and signs warning of the presence of protected species were insufficient to be

produced, distributed, and made visible to all workers and the community, including guidelines

in handling them

Objective Evidence:

PJE & SDE

• Insufficient signages established in relation to the ERT and HCV/conservation habitat.

(Observation 05)

Close-out evidence:

Observation Detail

OBS 06

6.2.1

Date


Date

Closed>

Non-Conformance:

Objective Evidence:

Stakeholder list are available. The list dated April 2013 listed all relevant stakeholders identified within Indonesia especially Kalimantan Barat Region covering the relevant government agencies, relevant NGOs (both social and environmental, neighbouring estates, local communities and contractors, women group, that have direct and indirect impact with the plantation operations of the PT HSL.

However it was found that the list of stakeholder did not include religious heads of the community.

Close-out evidence:

Observation Detail

OBS

07

6.5.1

Date


Date

Closed> 4/6/13

Non-Conformance:

Growers and millers did not provide adequate housing, water supplies, medical, educational,

and other facilities for employees where such facilities are available or accessible.

Objective Evidence:

Nevertheless, it was found that shelter is not provided to workers at the workplace (field works) for during bad weather and for their rest/lunch break.

(Observation 07)

Close-out evidence:

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Documented evidence of map showing location of the shelter planned to be constructed within the estate was provided. Pictorial evidence proof of the zinc roofed shelter was also submitted

Observation 07 closed

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APPENDIX B: NON-CONFORMITIES PREVIOUSLY IDENTIFIED

This is an initial certification

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APPENDIX C: TIMEBOUND PLAN

Plantation Company Location Target Date

PT. Hindoli South Sumatera, Indonesia Certified 25/02/2009

PT. Harapan Sawit lestari West Kalimantan, Indonesia Dec 2013

PT. Indo Sawit Kekal West Kalimantan, Indonesia Dec 2014


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APPENDIX D: LIST OF STAKEHOLDERS CONTACTED

Date Stakeholder met Issue raised and response

17th

April 2013

( Paku Juang )

Public Figures at Petuakan Village Local communities support and appreciate with PT HSL in CSR program (school, health, and other services). All services are provided free of charge for local communities.

Koperasi Sepakat Mekar They support and appreciate with PT HSL to help them in term of partnership in job contract and other services.

18th

April 2013

( Manis Mata )

Women group (Jungle Queen) Jungle Queen supports PT HSL. The company has provided facilities for their children during their parents work, for examples: creche for employee. So that their parents can be concentration in their duties.

Labour Unions (Federasi SP PT HSL and Fokus)

Labour unions support PT HSL. The company has given freedom for employees to form labour union.

Local Government of Manis Mata Village

1. Head of Manis Mata Village asked about progress of independent plasma development. The company responded that this progress has been preparing MoU (± 834 ha). There was a Bank to support this scheme. The target of MoU assignment at least in May 2013.

2. Head of Manis Mata Village asked about fee for contractors (waste, oilcake, kernel shells) for Village Cash. The company responded that it should be discussed with contractors, local government of village and PT HSL.

3. Head of Manis Mata Village asked about fire fighting unit for village. The company responded that their proposal has been submitted to management of PT HSL. However, management said that the village can use PT HSL’s fire fighting unit because the distance of village was closed from the PT HSL office.

4. Clean water sources for village. The company responded that PT HSL has built a deep well and toilet at Berian Church. If there is other source, PT HSL will bring this to the meeting of planning and development with local government.