rspo - roundtable on sustainable palm oil · 2014. 11. 2. · 21, jalan gelenggang 50490 bukit...

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

[ ]Stage-1 [ ] Stage-2 [√] Surveillance [ ] Re-Assessment

Plantation Management/Owner : SIME DARBY Plantation Sdn Bhd

Plantation Name : Sukamandang POM, Sukamandang Estate, Sapiri Estate, Baras Danum Estate, Kuala Kuayan Estate (PT Kridatama Lancar-Minamas Plantation)

Location :

Seruyan Tengah and Kotawaringin Timur District

Province of Central Kalimantan, Indonesia

Certificate Code : MUTU-RSPO/003

Date of certificate issue : July 14, 2011

Date of expiry of certificate : July 14, 2016

Assessment Assessment

Date PT. Mutuagung Lestari

Auditor Review

by Approved

by

ST-2 20-25

September 2010 Deni A. Novendi; Taufik Margani; Muardi

Marwas, Ibnu Prabudi Reny

Rustianingsih Tony

Arifiarachman

S-1 13 – 19

January 2012 Octo H.P.N Nainggolan; Ibnu Satria

Prabudi; Muardi marwas Taufik

Margani Tony

Arifiarachman

S-2 10 – 13

April 2013 Octo H.P.N Nainggolan; Marsudi Eko

Santoso; Ardiansyah Taufik

Margani Tony

Arifiarachman

Mutuagung Lestari • Raya Bogor Km 33,5 Number 19 • Cimanggis • Depok 16953• Indonesia

Telephone (+62) (21) 8740202 • Fax (+62) (21) 87740745/6

Email : [email protected] ● www.mutucertification.com

MUTU Certification • Approved by RSPO Secretariat on June 2008

Assessment Submitted

to RSPO on: Approved

by RSPO on: Approved

by Certification Body on:

S-2 22 – May – 2013 - 21 – May – 2013

http://www.mutucertification.com/

PT. MUTUAGUNG

LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 ii Prepared by Mutuagung Lestari for Sukamandang POM (PT Kridatama Lancar) –Sime Darby

TABLE OF CONTENT

FIGURE

Figure 1. Location Map Figure 2. Operational Map

3 4

1.0 SCOPE of the SURVEILLANCE ASSESSMENT

1.1 National Interpretation Used 5

1.2 Organization Information 5

1.3 Type of Assessment 5

1.4 Location of Plantations, Mill and Area Statement 5

1.5 Description of Supply Base 6

1.6 Dates of Plantings and Cycles 7

1.7 Tonnage Certified 7

1.8 Other Certifications 8

1.9 Time-Bound Plan for Other Management Units 8

2.0 ASSESSMENT PROCESS

2.1 Certification Body 10

2.2 Assessment Team 10

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 10

2.4 Stakeholder Consultation and List of Stakeholders Contacted 13

2.5 Date of Next Surveillance Visit 13

3.0 ASSESSMENT FINDINGS

3.1 3.2

Summary of Assessment Report of the RSPO Certification Summary of Assessment Report of Supply Chain Requirement

14 31

3.3 Conformity Checklist of Certificate and Logo Use 35

3.4 Summary of RSPO Partial Certification 36

3.5 Identification of Findings, Corrective Actions, Observations, Opportunity for Improvement and Noteworthy Positive Components

38

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 43

4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Signing of Assessment Findings 40

APPENDICES

1. List of Stakeholders Contacted in the RSPO Certification Process 44

2. Assessment Program 45

3. Glossary 47

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 3 Prepared by Mutuagung Lestari for Sukamandang POM (PT Kridatama Lancar) –Sime Darby

Figure 1. Location Map of PT Kridatama Lancar

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 4 Prepared by Mutuagung Lestari for Sukamandang POM (PT Kridatama Lancar) –Sime Darby

Figure 2. Operational Map of PT Kridatama Lancar

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 Page 5 Prepared by Mutuagung Lestari for Sukamandang POM (PT Kridatama Lancar) –Sime Darby

1.0 SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 National Interpretation Used National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil Production, Republic of Indonesia - RSPO INA-NIWG, May 2008

and RSPO Supply Chain Certification Standard November 2011.

1.2 Organization Information

1.2.1 Company name SIME DARBY Plantation Sdn Bhd – Sukamandang POM (PT Kridatama Lancar, Minamas Plantation)

1.2.2 Contact person Mohamad Pirabaharan

1.2.3 Company address and site address Organization address: 21, Jalan Gelenggang 50490 Bukit Damansara, Kuala Lumpur

Company adreess (Indonesia) : The Plaza Office Tower Lantai 36 Jl MH Thamrin Kav. 28-30 Jakarta 10350

1.2.4 Telephone +62-21-29926000

1.2.5 Fax +62-21-29922686

1.2.6 E-mail [email protected]

1.2.7 Web page address www.simedarby.com

1.2.8 Company status Private

1.2.9 Management Representative who completed the application for certification

Mohamad Pirabaharan (Head of PSQM Minamas Plantation, Sime Darby)

1.2.10 Registered as RSPO member 8 December 2004 Registration number: 1-0008-04-000-00

1.3 Type of Assessment

1.3.1 Scope of Assessment Palm Oil Mill and supply base

1.3.2 Type of certificate Single

1.3.3 Company names listed in the certificate PT Kridatama Lancar

1.3.4 Number of management unit 1 (one) Palm Oil Mill and 4 (four) Estates: Sukamandang POM, Sukamandang Estate (SME), Sapiri Estate (SIE), Baras Danum Estate (BDE) and Kuala Kuayan Estate (KKE).

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location

GPS

Latitude Longitude

Sukamandang

Village of Sukamandang, Sub-district of Seruyan Tengah, District of Seruyan.

112°17’07” – 112° 20’ 19” 1°02’09” - 2°07’03”

mailto:[email protected]://www.simedarby.com/


ASSESSMENT REPORT


1.4.2 Location of Supply Base

Name of Supply Base Location

GPS

Latitude Longitude

Sukamandang Village of Sukamandang, Sub-district of Seruyan Tengah, District of Seruyan.

112°17’07” – 112° 20’ 19” 1°02’09” - 2°07’03”

Baras Danum Village of Biring Kapuk, Sub-district of Mentaya Hulu, District of Kotawaringin Timur.

112°21’47” – 112° 26’ 34” 2°02’48” - 2°06’58”

Sapiri Village of Sapiri, Sub-district of Mentaya Hulu, District of Kotawaringin Timur.

112°18’40” – 112° 23’ 08” 1°59’48” - 2°02’50”

Kuala Kuayan Village of Kuala Kuayan, Sub-district of Mentaya Hulu, District of Kotawaringin Timur.

112°17’07” – 112° 26’ 34” 2°02’49” - 2°07’02”

1.4.3 Tenure

Private

State 14,779.92 Ha

Community

1.4.7 Area Statement

Total area 14,779.92 Ha

Mature area 13.380.00 Ha

Immature area - Ha

Mill 16.00 Ha

Infrastructure 202.00 Ha

Roads and bridges 575.00 Ha

Occupation 62.00 Ha

Others area 463.00 Ha

HCV 783.54 Ha

1.5 Description of Supply Base

1.5.1 Description of Mill

Name of Mill Capacity

(tonnes/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Sukamandang POM

60 346,130.76 77,248.53 22.32 14,908.37 4.31 - -

* Production data on April 2012 – March 2013

1.5.2 Description of Estate(s)

Name of Estate(s) Total Area

(Ha)

Planted Area (Ha)

FFB (tonnes/year)

Yield (tonnes/ha/year)

Supplied to Mill

FFB (tonnes/year)

%

Sukamandang 3,935.89 3,635.89 93,448.34 25.70 92,056.20 26.6

Kuala Kuayan 3,664.61 3,455.00 83,105.80 24.05 82,893.26 24.0


ASSESSMENT REPORT


Sapiri 3,531.42 3,288.98 86,742.69 26.37 86,457.33 25.0

Baras Danum 3,648.00 3,000.00 57,476.28 19.16 57,292.15 16.6

Total 14,779.92 13,379.87 320,773.11 23.97 318,698.94 92.2

* Production data on April 2012 – March 2013

1.5.3 Smallholder(s) and other source

Name of

source(s) Member(s) Location

Total Area (Ha)

FFB (tonnes/year)

Supplied to Mill

FFB (tonnes/year)

%

Pemantang Minamas Plantation PT Teguh Sempurna 3,818 75,055.97 9,519.89 2.8

Hatan Tiring Minamas Plantation PT Teguh Sempurna 3,811 85,128.14 5,864.83 1.7

Kawan Batu Minamas Plantation PT Teguh Sempurna 4,400 97,224.60 11,530.10 3.3

Batang Garing Minamas Plantation PT Teguh Sempurna 4,573 53,032.57 209.25 0.1

Total 310,441.28 27,124.07 7.8

* Production data on April 2012 – March 2013 * The Estates of PT Teguh Sempurna are RSPO certified

1.5.4 Product categories FFB/CPO/PK/PKO

1.6 Dates of Plantings and Cycles

1.6.1 Age profile of planted palms*

Planting Year

Hectarage

Sukamandang Estate (Ha)

Kuala Kuayan Estate (Ha)

Sapiri Estate (Ha)

Baras Danum Estate (Ha)

Total (Ha)

1994 104.02 - - - 104.02

1995 177.61 - - - 177.61

1996 1,223.16 887.00 - - 2,110.16

1997 2,131.10 1,299.00 142.53 - 3,572.63

1998 - 573.00 536.77 - 1,109.77

1999 - - 408.20 - 408.20

2000 - 124.00 737.08 - 861.08

2004 - 101.00 485.89 - 586.89

2005 - 363.00 787.13 350.00 1,500.13

2006 - 108.00 191.38 1,332.00 1,631.38

2007 - - - 880.00 880.00

2008 - - - 438.00 438.00

Total 3,635.89 3,455.00 3,288.98 3,000.00 13,379.87

1.6.2 New Planting area after November 2007 438 Ha

1.6.3 Planting Cycle 1st 25 Years

1.7 Approximate Tonnage Certified

1.7.1 Past Annual Claim Certified Product

FFB Production 302,857 Tonnes/year

CPO Production 67,386 Tonnes/year


ASSESSMENT REPORT


Palm Kernel (PK) Production 11,811 Tonnes/year

Palm Kernel Oil (PKO) Production - Tonnes/year

1.7.2 Claim Certified Tonnage of FFB

Name of Estate(s) Total Area

(Ha) Planted Area

(Ha) FFB

(tonnes/year) Yield

(tonnes/ha/year)

Sukamandang 3,935.89 3,635.89 96,354 26.5

Kuala Kuayan 3,664.61 3,455.00 86,375 25.0

Sapiri 3,531.42 3,288.98 88,803 27.0

Baras Danum 3,648.00 3,000.00 63,000 21.0

Total 14,779.92 13,379.87 334,532 25.0

1.7.3 Claim Certified Tonnage of Palm Product

Name of Mill

Capacity (tonnes/ hour)

FFB Processed

(tonnes/year)

CPO Palm Kernel PKO

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Out put (tonnes)

Extraction (%)

Sukamandang POM

60 334,532 76,942.36 23.0 15,053.94 4.5 - -

1.8 Other Certifications

1.8.1 ISO 9001:2008/ISO 14001: 2004 -

1.8.2 OHSAS 18001:2007 -

1.8.3 HACCP -

1.8.4 Others -

1.9 Time Bound Plan for Other Management Units

Management Unit Location

Hectarage (Ha)

Time Bound Plan

Status

Mills Estates

Sekunyir PT. Indotruba Tengah District of Seruyan and Kotawaringin Barat – Province of Central Kalimantan

7,734.60 2009 Certified 2010

Manggala PT. Tunggal Mitra Plantations

District of Rokan Hilir – Province of Riau

13,836.00 2009 Certified 2010

Bukit Ajong PT. Sime Indo Agro District of Sanggau – Province of West Kalimantan

11,652.00 2009 Certified 2010

Teluk Siak PT. Aneka Inti Persada City of Pekanbaru and District of Siak – Province of Riau

11,134.00 2010 Certified 2011

Sungai Pinang PT. Bina Sains Cemerlang District of Musi Rawas – Province of South Sumatera

6,513.00 2010 Certified 2012

Sukamandang PT. Kridatama Lancar District of Seruyan and Kotawaringin Timur – Province of Central Kalimantan

14,779.92 2010 Certified 2011

Pemantang PT. Teguh Sempurna District of Seruyan and Kotawaringin Timur – Province of Central Kalimantan

16,601.66 2010 Certified 2011

Alur Dumai PT. Lahan Tani Sakti District of Rokan Hilir – Province of Riau

3,759.02 2010 Certified 2012

Teluk Bakau PT. Bhumireksa Nusasejati District of Indra Giri Hilir – Province of 25,662.00 2010 Certifed 2011


ASSESSMENT REPORT


Mandah Riau 2013 -

Mustika PT. Sajang Heulang District of Tanah Bumbu – Province of South Kalimantan

7,794 2012 Certified 2011

Angsana Mini 2010 Certified 2011

Full Manage Plasma (KKPA)

16,000 2013

Audited 2013

Angsana PT. Ladangrumpun Suburabadi

District of Tanah Bumbu – Province of South Kalimantan

6,077.00 2010 Certified 2011

Gunung Aru PT. Bersama Sejahtera Sakti

District of Kotabaru – Province of South Kalimantan

12,704.54 2010 Certified 2011

Ladang Panjang

PT. Bahari Gembira Ria District of Muaro Jambi – Province of Jambi

1,202.04 2010 Certified 2012

Bebunga PT. Langgeng Muaramakmur

District of Kotabaru – Province of South Kalimantan

16,361.77 2011 Certified 2012

Pondok Labu PT. Paripurna Swakarsa District of Kotabaru – Province of South Kalimantan

14,892.00 2011 Certified 2012

Selabak PT. Swadaya Andika District of Kotabaru – Province of South Kalimantan

10,361.18 2011 Certified 2012

Rantau PT. Laguna Mandiri

District of Kotabaru – Province of South Kalimantan 15,299.80

2011 Certified 2011

Betung 2013 -

Ungkaya PT. Tamaco Graha Krida District of Morowali – Province of Central Sulawesi

4,145.00 2011 Certified 2012

Rantau Panjang

PT. Guthrie Pecconina Indonesia

District of Musi Banyuasin – Province of South Sumatera

10,139.91 2011 Certified 2012

Lembiru PT. Sandika Natapalma District of Ketapang – Province of West Kalimantan

8,406.21 2011 Audited 2011

PT. Budidaya Agrolestari District of Ketapang – Province of West Kalimantan

2011 Audited 2011

MAS PT. Mitra Austral Sejahtera District of Sanggau – Province of West Kalimantan

8,741.29 2011 Audited 2011

Blang SImpo PT. Perkasa Subur Sakti PT. Padang Palma Permai PT. Perusahaan Sri Kuala

District of Aceh Tamiang and District of Aceh Timur- Province of Nanggroe Aceh Darussalam

6,451.99 1,128.90

2011 Certified 2013


ASSESSMENT REPORT


2.0 ASSESSMENT PROCESS

2.1 Certification Body

PT Mutuagung Lestari

Jl. Raya Bogor Km 33,5 No. 19, Cimanggis - Depok 16953

Telp. +62-21-8740202; Fax +62-21-87740745/46

Website: www.mutucertification.com Email : [email protected]

2.2 Assessment Team

2.2.1 Lead Assessor and Assessment Team

ST-2 1. Deni Novendi (Lead Auditor). 2. Taufik Margani (Auditor) 3. Ibnu Satria P (Auditor). 4. Muardi Marwas (Auditor).

S1 1. Octo Nainggolan (Lead Auditor). 2. Ibnu Satria P (Auditor). 3. Muardi Marwas (Auditor).

S-2 1. Octo Nainggolan (Lead Auditor). Indonesian citizen, Bachelor of Agriculture, majoring of Social Economics of Agriculture (Agribusiness). Working experience since 2004 at oil palm Plantation Company in Indonesia. Trainings attended namely: Training of Conservation of Natural and Biological Resources in supporting HCV, Basic Plantation Management Program, Plantation Integrated Pest Management training, Followed the Management System Certification (ISO 9001-2008/SNI 19011-9001:2008), Environment Management System (ISO 14001:2004), SMK3 based on OHSAS, RSPO Lead Auditors Training Course, Indonesian Sustainable Palm Oil (ISPO) Lead Auditor training course, supply chain certification system training and RSPO Renewable Energy Directive Lead Auditor training. Currently, he worked at Professional Certification Body. In the assessment activity, he assessed on legal aspect, best practices, environment aspect, social aspect, workers welfare, FFB Processing and supply chain requirement.

2. Marsudi Eko Santoso (Auditor). Indonesian citizen, Bachelor of Agriculture, majoring in Agro technology. Followed the Management System Certification (ISO 9001-2008), Awareness HACCP certification, training of RSPO auditor and training of RSPO Lead Auditor training, ISPO Lead auditor training and distribution quality management process - APMEA. He had involved several time in RSPO certification assessment activities as an auditor. Currently he works for Independent Certification Body. In this assessment activity, he assessed on Best Practices, Soil and water conservation, Integrated Pest Management and safety and health.

3. Ardiansyah (Auditor). Indonesian citizen, Bachelor of Forest Resources Conservation, Department of Forestry, Bogor Agricultural University. He has Followed the Management System Certification (ISO 9001-2008), followed several activities such as preparing EIA document for plantation and plantation forest; contribute on several HCV identification and several times following audit activities related to sustainable palm oil certification system as an auditor. In this Assessment assessed the environmental aspects, HCV, soil and water conservation.

4. Steve Mualim (Observer) Master of Environmental and Natural Resources Management, Bogor Agricultural University . He had experience as Freelance in Consultant. He had followed training such as Awareness RSPO, Indonesian Sustainable Palm Oil auditor.

2.3 Assessment Methodology, Assessment Process and Locations of Assessment

2.3.1 Figure of person days to implement assessment

ST-2 Number of auditors : 3 (three) auditors Number of days for ST-2 on site : 6 (six) days Number of working days for ST-2 on site: 18 (eighteen) working days

S-1 Number of auditors : 3 (three) auditors Number of days for S-1 on site : 5 (five) days Number of working days for S-1 on site: 15 (fifteen) working days

S-2 Number of auditors : 3 (three) auditors Number of days for S-2 on site : 4 (four) days

http://www.mutucertification.com/mailto:[email protected]


ASSESSMENT REPORT


Number of working days for S-2 on site: 12 (twelve) working days

2.3.2 Detail process of assessment

S-2 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the Sukamandang POM and its supply base (PT Kridatama Lancar). to the requirements of National Interpretation of the Republic of Indonesia from RSPO Principles and Criteria for Sustainable Palm Oil Production (RSPO INA-NIWG, May 2008 and Scheme Smallholders October 2009) and Supply Chain Requirement for CPO Mill. The assessment was conducted in three methods: (1) document review, aiming to observe the sufficiency of types or substances from required documents; (2) interview, aiming to obtain more detailed information and cross check the information; and (3) field observation, aiming to observe directly the sufficiency of implementation on site. Several opportunities for improvement of the results S-2 delivered by the auditors to the management unit and the results are the subject will be verified at the next assessment. Improvement of findings from first surveillance assesment findings were observed by auditors at this S-2 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of S-2. Please find Appendix 2 for the assessment program

2.3.3 Locations of Assessment

ST-2 The locations in this certification activity are 1 POM with four Estates, which supply the raw material (FFB), namely the Sukamandang Estate, Kuala Kuayan Estate, Sapiri Estate and Baras Danum Estate. In conducting the assessment, the team of auditors used the 0.8√y formula to determine the management units sampling to be focused on. Based on this formula, the team of auditors determined that the estates sampling locations are two estates which are Kuala Kuayan Estate and Sukamandang Estate. Sukamandang POM: 1. The processing (from loading ramp to dispatch). Observation of the processing of FFBs into crude palm oil

(CPO) and the fire emergency response facilities in the mill. Interviews with mill workers (boiler operator, engine room operator) regarding medical check-ups, operator licenses, wages, complaint delivery, Occupational Health and Safety implementation, training, work safety practices, the availability of Personal Safety Equipment and the mass balance model supply chain mechanism.

2. Chemical warehouse. Observation of the handling of chemicals and interviews with the warehouse workers regarding chemical handling procedures, emergency procedures, and Occupational Health and Safety implementation.

3. Water Treatment Plan. Observation of clean water supply management. 4. Workshop. Observation of emergency response equipment and Occupational Health and Safety (first aid kits)

and interviews with the welding workers regarding training, medical check-ups, Occupational Health and Safety implementation, complaint delivery, safe occupational practices, complaint delivery, freedom to join unions, and waging system.

5. Diesel Tank. Observation of the availability of fire emergency facilities. 6. The Hazardous Material waste material temporary storage at the Sukamandang POM. Observation of

Hazardous Material waste material handling in accordance to the existing regulations and interviews with the hazardous waste storage workers regarding medical check-ups, Hazardous Material waste material handling procedures, and the availability of contamination and exposure handling equipment.

7. Waste Water Treatment Plant (WWTP). Observation of the processing of the mill’s wastewater and the pollution reduction procedures.

Kuala Kuayan Estate: 1. Operational boundaries, Land Use Title boundary poles number 36. Observation of the maintenance of the

demarcation of the land boundary poles. 2. HCV area blocks N-47. Observation of secondary forest and HCV area management 3. block H-39 & block H-40. Observation HCV area of Bukit Batu. 4. Hazardous material storage. Observation of Hazardous Material waste material handling in accordance to the

existing regulations and interviews with the hazardous waste storage workers regarding medical check-ups,


ASSESSMENT REPORT


Hazardous Material waste material handling procedures, and the availability of contamination and exposure handling equipment.

5. KKE Central Warehouse. Observation of the availability of hazardous control facilities, land fire equipments and the emergency procedures.

6. KKE mechanical workshop. Observation and interview with mechanics related to safety practice, oil spill management, training and work instructions.

7. Lesatri Kidergarten and KLR Elemtary School. Observation to worker education childrens facilities and interview with the teachers regarding payments, emergency reponse socialization and gender committee existence.

8. KKE Landfill. Observation domestic waste management. 9. Division III, L-013. Observation and interviews with the chemical spraying workers and supervisors regarding

work procedures, the use of personal protective equipment, Emergency First Aid, occupational hazards, routine check-ups, the implementation of reproductive rights (maternity leave, menstrual period leave, and other special treatments), the presence of signs for areas being sprayed, the prohibition for pregnant and breastfeeding women to be involved in spraying, the payments, the prohibition of spraying near riparian areas, the housing facilities provided, gender-related complaint delivery mechanism and the freedom to join unions.

10. Division I, blocks I-013. Observation and interviews with the fertilizing worker fertilizing supervisor regarding working procedures, the use of personal protective equipment, the fertilizer dosage is suitable, routine checking has not yet been done, the implementation of reproductive rights (maternity leave, menstrual period leave, and other special treatment), wages, and housing facilities provided.

11. Division 2, blocks K-011. Observation of the harvesting process and the compliance to good harvesting standards ripeness criteria of loose palm fruit > 10. Interviews with the harvesting workers regarding the waging system, safe working practices, the availability of personal protective equipment, the complaint delivery mechanism, the implementation of Occupational Health and Safety, health assurance, and the freedom for joining unions.

12. Division 1-B, block 92-D. Observation of the fresh fruit bunch transportation mechanism from the field (the harvested block) and an interview with the bookkeeper regarding the transportation of FFBs to the palm oil mill and contractors workers accordance to worker regulation.

13. Divisions 2, block K-42. Observation of the Integrated Pest Control through the keeping of owls (Tyto alba). 14. Divisions 2, block K-44. Observation empty fruit bunch application to sandy area with 45 tons/ha EFB by one

layer between two oil palm tree application. 15. Divisions 2, block K-011. Observation of erosion control by Siltpit and U-shape Frond Staking application on

sloping and sandy area, Neprolephis as beneficial plant application. 16. KKE housing complex. Observation of the housing facilities, religious facilities, and clean water facilities

provided, and the handling of domestic/household waste. Sukamandang Estate: 1. Block I-30 (Land Application) – Observations related to managemenr of Land Application 2. Storage of Hazardous Waste in SME – Observations and interview with the storage operator regarding

hazardous waste management, handling of waste, and nearaca of hazardous waste 3. Boudary Poles. Observations related to the company's work area boundaries are maintained. 4. Sukamandang hosuing complex. Observation of the housing facilities, religious facilities, and clean water

facilities provided, and the handling of domestic/household waste. 5. Sukamandang Health Clinic. Interview with the company doctor pertaining to the mechanism for handling of

spraying and manuring workers who are pregnant/breastfeeding, the management of medical waste, medical waste management and routine medical check-ups.

6. Divisions 1. Observation and interviews with the harvesting workers and the harvesting supervisor regarding working procedures, the ripe criteria of loose palm fruit > 10, the use of personal protective equipment, emergency first aid, occupational hazards, waging system, the availability of First Aid Kits, the housing facilities provided, the school bus, and the complaint delivery mechanism.

7. Divisions I, block J-28. Observation of HCV area management Villages: 1. Tajur Beras Village. Interviews with village representatives regarding the relationship between KLR to Villagers,


ASSESSMENT REPORT


aspirations and KLR’s social responsibility contribution to the village. 2. Tabion village. Interview with the public figure of Labuhan Keudeh Village related to the company's relationship

with the communities around the village, mechanisms of communication and public complaints to the company, community employment opportunities around the estate, and indigenous rights in the community around the estate.

2.4 Stakeholder Consultation and List of Stakeholders Contacted

2.4.1 Summary of stakeholder consultation process.

Public consultation process was carried out Consultation of PT Kridatama Lancar stakeholders was held by public consultation meeting with internal (workers and labour union), external (villagers, local peoples, non government organization and district agencies) by interviews and visits. Numbers of input from stakeholders were clarified by PT Kridatama Lancar management. Numbers of inputs from stakeholders both positive and negative were received by the audit team as a material of consideration and observations in the second surveillance assessment. The consultation result present on 3.6 (Summary of Arising Issues from Public, Management and Auditor Response)

2.4.2 List of stakeholder contacted

Please find appendix 3

2.5 Determining Next Visiting

The next visit (third surveillance) will be determined twelve months after the second surveillance (April 2014).


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT

3.1. Summary of Assessment Report of the RSPO Certification

MUTUAGUNG LESTARI has conducted an assessment of PT Kridatama Lancar – Sukamandang POM, SIME DARBY Plantation Sdn Bhd operation consisting of 1 (one) mill and 4 (four) oil palm estates.

During the second assessment, there were two (2) Nonconformities were assigned against Major Compliance Indicators

4.8.1 and 5.3.2; Three (3) nonconformities were assigned against Minor Compliance Indicators 4.7.3, 4.7.6 and 5.3.1 ;

two (2) non conformance against supply chain requirement for CPO mill Segregation model 3.4 and 4.1 and two (2)

opportunities for improvement were identified.

Further explanation of the non-conformities raised and corrective actions taken by the company are provided in section

3.5. The company prepared and implemented corrective action that was reviewed and accepted by MUTU in form of

documents and photographic evidence. Those corrective actions taken that consist of two (2) Major non-conformities;

three (3) Minor non-conformities and two (2) non conformance of Supply Chain requirement had been closed out shall

be verified during next assessment.

MUTUAGUNG LESTARI found that PT Kridatama Lancar – Sukamandang POM comply with the requirements of RSPO

Principles & Criteria and National Interpretation, RSPO Principles and Criteria (P&C) for Sustainable Palm Oil

Production, Republic of Indonesia - RSPO INA-NIWG, May 2008. Therefore MUTUAGUNG LESTARI recommends a

certificate of compliance is maintained.

Ref Std.

VERIFICATION RESULT of MUTU-Certification

PRINCIPLE #1 COMMITMENT TO TRANSPARENCY

1.1 Plantation and Palm Oil Factory have to give adequate information for stakeholders in appropriate language and forms, to ensure the effective participation of stakeholders in decision-making.

SOP of Communication (398/KLR/KOM-SOP/41/12) on date November, 02nd 2011 pertaining to Information Request and Feedback which was approved by the Senior Manager is available; the information available is, among others:

Every written information request from stakeholders must be recorded in “The Information Request and Feedback Logbook”

The time limit for responding to the information request is 14 days Besides that, the effort to ensure transparency of information, KLR also made a leaflet related to general overview of the company stating that the management sustainable palm oil in terms of the environment.

To conduct information requests from internal or external refers to SOP of communications. Communications SOP was recorded and stored in a period of 5 years. Untill the second surveillance there have been no requests for information made by stakeholders. There have only been records of requests for assistance. Nevertheless, the company records all requests for information and they are responded according the pre-determined procedures.

Full compliance

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.

The company has determined that the documents can be accessed by the public as the EIA documents, RKL / RPL, Policy & Manual Company, K3 and the protection of the Environment Program, HCV document & SIA document, as well as the Continual Improvement Program document and each document has set the shelf (set out in the SOP document


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control number 398/KLR/DOC-SOP/42/12).

Full Compliance

PRINCIPLE #2 COMPLIANCE WITH APPLICABLE LAWS AND REGULATIONS

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

KLR has complied to the existing regulations such as: a. KLR has determined protected areas and HCV areas in accordance to the President’s Decree Number 32 Year

1990 pertaining to the management of protected areas. b. KLR has a plantation business permit in compliance to the Regulation of the Minister of Agriculture (Permentan)

Number 26 Year 2007 pertaining to the plantation business permit guidelines. c. There has been an assessment of the plantation business in compliance to the Regulation of the Minister of

Agriculture (Permentan) Number 7 Year 2009 pertaining to the assessment of plantation businesses. d. KLR has a location permit in compliance to the Agrarian Affairs Regulation Number 2 Year 1999 pertaining to

location permits. e. KLR has rights for the land/soil in compliance to Government Regulation Number 40 Year 1996 pertaining to the

Land Use Title. f. KLR has managed hazardous material in compliance to Government Regulation Number 18 Year 1999 pertaining

to the management of hazardous material. g. KLR owns Environmental Impact Assessment documents (Environmental Impact Assessment, Environmental

Management Plan/Environmental Monitoring Plan) in compliance to Government Regulation Number 27 Year 2012 pertaining to environmental permits.

h. Wages in accordance with the minimum wage plantation sector in accordance with the Decision of Governor Central Kalimantan about the minimum wage province plantation sector.

KLR has made efforts to adjust to the changes in regulations, for example the Minimum Pay Regulations for the Plantation Sector accordance to Kalimantan Tengah Governor Decree year 2013. KLR has a mechanism of compliance regulatory evaluation. The evaluations conducted periodically at least 6 months and each time the meeting (monthly) conducted an evaluation of its progress. To update its regulations, the company has consulting with relevant agencies.

Full Compliance

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

Document of land acquisition have shown in a list of RSPO document, which is principal permit by governor, location permit by Head of District no 2056.460/BPN/XII.1993, explanation letter of forest area released no. 762.KPTS-II/1996 and explanation letter of land use permit of land no 6487.1999.3571/1999, certificate no. 11. During the surveillance there are no new planting or expansion applied by KLR. Based on the field observations in Kuala Kuayan Estate (pole number 36) it is known that the poles and boundaries are well maintained and well demarcated. There were evidence of conflict resolution with finishing process which agreed by two side: Case of land claim by Amat/Usup (by word) are closing of the road as many as 1,3 ha. Amat/Usup claim of land on block of J59 till K62 Baras Danum Estate as long as 1.039 meter x 8 meter in Tajur Beras village, Kawan Batu village, Sub District of Mentayan Hulu. The company invites Usup to discuss the solution of it... Usup have released the land to the company based on free, prior, informed consents of two sides without any inforcement of any side. Until the surveillance-2 conducted there was no land claims on KLR operational area. The company has procedure of land conflict resolution RSPO/B.5.23/KLR with step of which is negotiation between company and the claimer. If the both side does not agreed, then the both will point 3rd party (Muspika). The company has shown evidence of conflict resolution which is acceptable by two sides.


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Full Compliance

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.

Within the operational area of PT Kridatama Lancar, there is no area under traditional rights recognized, so there are no available maps or documents related to it. This information was obtained through interviews with community elders around the area of PT Kridatama Lancar, i.e.: 1. Information from village apparatus and public figure which stated that the land use permit of Kridatama Lancar were

ex of forest company cultivation and changed into oil palm plantation. Information letter which declared on May, 3, 2010 by M. Dirin (Head of Tabion house hold, Pemantang village), I Suryado (Public figure of Pemantang village), Tatui (Head of Tajur beras household, Kawan Batu village) and Osong (Public figure of Kawan Batu).

2. Public consultation with stakeholders describe that there were no traditional right/customary rights in the land use permit of PT Kridatama Lancar. At the previous, the KLR areas were ex-cultivation of some forest company right and changed into oil palm plantation. In the KLR land use permit, there were no traditional forest which controlled by indigenous people, but there are some personally cultivation by communities in the KLR location (Occupation/enclave). There are no lands with traditional right so there is no land map of traditional right

It was discovered that there are no areas within PT Kridatama lancar operational area which are set aside as Traditional

Rights.

Full Compliance

PRINCIPLE #3 Commitment to long-term economic and financial viability

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

KLR has a long term plan documents for the Estate and Palm Oil Mill which are stated in the 2012/2013 Financial Year Estimate (June 2012 – July 2013) which locates funds to, among others for Sukamandang estate, Kuala Kuayan estate, Sapiri estate and Sukamandang POM. 1. For the estates there are operational cost planning that has been approved by the Estate Manager, Estate General

Manager, Plantation Operation General Manager and Head Plantation Operation and distribution of the work plan include: a. Forecast production, the production yield (ton / ha), administration cost, labour cost, mature upkeep (manuring,

IPM control, road maintenance, weeding upkeep, boundaries upkeep, sanitation & pruning), labour, running account analysis (wheels, heavy equipment), wages, total cost analysis, general cost analysis (estate administration - staff, legal, building upkeep, Environmental Safety and Health; road and bridges; Labor overhead - medical, social activity, transport), etc..

b. For the environmental management plan company has to allocate expenses activities such as the budget for employees’ clean water supply, cost of OHS, RSPO, HCV, EIA, etc.

c. Social management plan, the company has plans to allocate those costs include expenses for the activities of religious holidays, the wages of teaching staff, the cost of CSR programs and social contribution to society, etc.

2. Sukamandang POM, there is operational cost planning that has been ratified by Mill Manager, Mill General Manager, Plantation Operation Region Kal/Sul Senior General Manager, Head Plantation Operation, Finance Budget & Tax General Manager and distribution of the work plan include: a. Forecast mill intake (FFB), palm oil extraction, kernel extraction, processing cost, admin cost, training cost,

Environment cost, Health cost, transport cost, etc.. b. For the environmental management plan company has to allocate expenses among other activities of the

manufacturing cost of installation and maintenance of OHS bulletin boards, the cost of laboratory analysis services for the analysis of CPO, waste management to an outside party, etc...

c. Social management plan, the company has plans to allocate those costs include expenses for the activities of Donations to a third party such as honorariums, religious celebrations proposals, Socialization of OHS, RSPO, HCV, Social Security, Safety and Health, etc.

PT Kridatama Lancar has implemented the SAP program for financial monitoring. Based on the document observation the company has projected several activities such as production, CPO extraction, palm kernel extraction until the year 2016/2017.


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KLR has a Long Range Replanting Program on Replanting Work Schedule (RWS) and replanting Plan Map explaining estate replanting location, hectarage, soil type information and stand per hectare of oil palm. The replanting scheduled on 2014/2015 at Sukamandang estate for 329.3 Ha, Sapiri Estate for149.9 ha and Kuala Kuayan Estate for150 Ha with replanting toal area for 629.2 Ha with the 93,122 seeds. Untill 2029/2030 the toal area for replanting activity plan for 11,361.9 ha with amount of 1,681,557 seeds. Replanting cost plan has been compiled on Analysis Cost To Maturiry document explaining the land preparation, road and bridges, water management, terracing, planting, covers crop, weedings, boundaries, path, pest and disease, supplying, sanitation and manuring. The requirement and consideration to determine the replanting area, are: 1. Age of plant > 25 year 2. Production yield < 18 tonnes/ha/year 3. Plant height > 15.1 metre 4. Carried out systematically (centralize) and followed the operational pattern such as BHS (Block Harvesting

System), BMS (Block Management System), BSS (Block Spraying System). 5. Field with limitations – floodd prone, accessibility, inadequate soil conservation practices like terraces, high risk to

accidents, boundary with plasma and theft prone.

Full Compliance

PRINCIPLE #4 Use of appropriate best practices by growers and millers

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

KLR has operational procedures of the SOP Agricultural Reference Manual document 110/EST-ARM/08, ratified on December 22, 2008 contains on planting materials, nursery technique, replanting, land preparation, planting density, maturity age, field upkeep, manuring, canopy management, water management in coastal soil / peat on oil palm plantations, ablation, ripeness standard, harvesting interval, traceability, plant protection. For the procedures from FFB receipt, processing until the dispatch of CPO & PKO for Sukamandang POM operations has SOP 110/POD-FAC/07, SOP 130/POD-FAC/07 ratified on July 26, 2010. Operasional control conducted by Advisor division every six month wich covered Plantation Quality Report, Crop Production, Cost of Production, Areas of Concern/Main Findings/Key Issues. Available the latest inspection, for example: 1. Plantation Advisory Report Kuala Kuayan Estate No. MINAMAS/KKE/01/2012-13 conducted on 9-10 August 2012. 2. Mill Advisory Report Sukamadang factory No. SOU MINAMAS/SMF/01/2012-13 conducted on 19 – 20 November

2012. KLR showed monthly report by the management unit to a Minamas Plantation management. Laporan Unit Kebun document for Estate which contains Area statement, organizational structure, infrastructure data, rainfall data, FFB production, fertilization data, general expenses, details of material supplies and Laporan Unit Pabrik document for Sukamandang POM which contains manager's comments, FFB received, production data, losses of quality and production, costs and employee housing, inventory and cost recapitulation.

Full Compliance

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

Company has had record of soil analysis for the all estates (Sukamandang, Sapiri, Baras Danum, and Kuala Kuayan). Activity of soil analysis was conducted with the systematic method use which the measurement among the points were 100 m x 100 m (1 point was for 2 Ha representative areas). Result of soil analysis was soil map, land map units, land class map and limiting factors for land map units. Activities of soil analysis and leaf analysis already have routinely for each year. Records of leaf analysis for each estate were available. For example: Result of leaf analysis on period 2012, the visual monitoring conducted a line with leaf sampling unit and pest census. The practices conducted to increase and maintain soil fertility through fertilization, EFB application, and land application. Company had recording and evaluating correlation among EFB application towards the FFB productivity. Based on the result of evaluation correlation obtained the information that there was a positive correlation among the EFB application


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towards the FFB productivity. Data of the fertilization, EFB Application and Land Application were following as:

- Fertilising application has been accordance with management plan, for example on second semester 2012 at block H-008/H-34 applicated on September 2012.

All fertilisng and EFB application record were available and well recorded in every estate offices.

Status: Full Compliance

4.3 Practices minimize and control erosion and degradation of soils.

Marginal soil maps obtained from the detailed soil survey activities. The survey results are considered marginal land suitability classes are the N1 (currently unsuitable), the slope above 40%. Marginal land maps made with the scale of 1:1,000. There are no peat soils in the work area of PT. KLR. The company has had a strategy for managing a particular area with a slope that is by making silt pits, road side pits, U-shape Nephrolepis Front stacking and planting. Until the surveillance activities conducted realization of these activities is as follows:

- Realizations of silt pits made are 77,581 units - Realizations of Nephrolepis made are 3,402 ha - Realizations planting of Individual terrace are 66,834 units. In addition the company also had been monitoring of soil erosion using the erosion poles as much as 5 points at KKE (KBlok J010, K010, K011, K012, K013). Company consistently performs to road maintenance. Available documents plan and the realization of road maintenance program in 2011-2012 PT Kridatama Lancar. For example in the work area Sukamandang Estate. Road maintenance namely access road, Main road, and road collection. During the surveillance visit known the road condition area well maintained. Based on the results of soil detailed survey has identified the company's areas with a particular slope class at KKE. For example, the area identified as slopes area the company to apply for an EFB application, making terraces, siltpit and individual terrace. For areas that are known to have low organic matter content the company added an EFB application and land application to add the soil organic to plants


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

In order to protect it’s wetlands and riparian area, KLR has issued management plan as HCV 1 area (HCV 1.2 endngered species and HCV 1.3 thretened species habitat) and HCV 4 (HCV 4.1Ecosystem water and flood contro provider for downstream communities, HCV 4.2 important areas for erosion and sedimentation control and HCV 4.4 Important area to meet the basic needs of agriculture and fisheries). HCV coverage area on KLR is 783.54 (5.3% from total operational area).

Determining the area is also supported by Memo from Head of TQEM to all General Manager Estate date 13 May 2009, in order to determine protective water sources area. Based on field observation to KKE block N-47 known that the riparian of Manggis river has been marked as HCV area and has been reforested support by planting the forest plants and not apply the chemical application (spraying and manuring) along the riparian.

At KKE has management plan to protected the buffer zone, for example:

- Planting the Sungkai tree on march 2013 has been carried out for 200 trees. - Monitoring the buffer zone area known that the plant has been achieved for 5,081 trees. - Replacement and installation of signboards for non chemical usage on riparian and buffer zone areas on March

2013.

- Maintaining the boundaries of buffer zone with repaints the poles. - Water quality monitoring program of surface and ground water is periodically carried out every 3 (three) months by

accredited laboratory services (Balai Riset dan Standarisasi Industri).

KLR has 15 ponds at the Wastewater Management Treatment Plant (WWTP) at Sukamandang POM and has


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conducted BOD mill effluent monitoring, water samples taken each month in the pond no.1 (inlet) and pond no.15 (outlet). There are Wastewater effluent testing report in November 2011 conducted by the Center for Industrial Standards and Research, pond no.15 (outlet) the highest quality test on november 2013 was BOD 525 mg/l. Water usage data is monitored everyday and it’s in DAYLY MILL APPENDIX document and water usage budget at Sukamandang POM is 1.93 M3/tonnes FFB every month. The distributions for water usage are for boilers and processing 1.15 M3/tonnes FFB and domestic need 0.8 M3/tonnes FFB and since January 2011 has been using a FIKERS boiler which lowers water usage. Based observation to Sukamandang POM at Water Treatment Plant known theto support the water usage data was equipped by flow meter that well function.


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

The IPM program has consistently been performing and implementing by KLR. The IPM programs undertaken by the company is planting beneficial plants, and maintenance of an owl. The Company has had a beneficial ratio of standard achievement of planting of plant which is 10 meters / ha with the composition 60% Cassia; 20% Turnera subulata and 20% antigonon leptosus. Up to the surveillance activities carried achievement standard ratio still reached 6.96 meters / ha. For the maintenance of the company also has owl monitoring. Monitoring is done by maintain both a nest (box) and saw an owl presence. Inspection checklist is available and the conditions of an owl nest. Owls used as a natural predator rat in oil palm plantations At KKE available the IPM program which has been implemented, for example:

a. Owls monitoring at blockI-015 known there were 2 owl eggs and 3 owlets monitored by IPM officer. b. Nest owl bos has been realised until March 2013 at KKE 122 boxes. c. Benficial plant implementation at KKE until the surveillance for Cassia Cobanensis (Ratio 7 M/Ha), Turnera

adalah (ratio 11 Meter/Ha), Antigononwith the planting success rate 99.92%. d. Fire caterpillar monitoring and census, for example at block K-008 coverage area of 90 ha.

The Company also has conducted training related to the internal IPM conducted by the company, followed by the census teams and foremen IPM on 25 March 2013. In addition the company also has appointed officers at KKE (Frinsep Matii) is responsible for the implementation of IPM program (based on the Memorandum of Estate Manager). All the implementation of IPM has been well recorded and update. Available the toxicity of pesticides monitoring records for each estateat KKE and SKME were well recorded.


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.

Available list of registered agrochemicals uses at KKE and SKME , for example:

- STARANE 200 EC, active material: Kloroksipir. No registrasi: RI. 854/7-2009/T. - Dejavu, active material: Isopilamina glifosat. No registrasi: RI. 010301/2010/T. - SUPREMO, active material: Isopropil amina gliphosat. No. Registrasi: RI. 1712/I-2008/T. All the pesticide uses are well recorded on realisastion pesticide usage document which explaining coverage application area, amount of pesticed use and spraying cycles. The company has consistently used the agrochemical material in accordance with the target species and dose Based on observation to chemical storage and interview with the officer known that all chemical material uses are well recorded and all the records are well kept in the chemical storage office. The company has also provided training to staff relating to how the good spray. The company has had a permit of temporary Storage of hazardous waste material by the regent through decision number 303 in 2010. There are 4 points


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of storage hazardous waste (SME, KKE, SIE, and BDE). Based on the results of field visits in Sukamandang Estate and Kuala Kuayan Estate, the management of pesticide packaging used is in accordance with the company operating standards and regulations. Pesticide packaging used waste has been stored in a temporary storage area. The company has a policy to no use chemicals that are categorized as Type 1A or 1B is listed by the Stockholm and Rotterdam, and paraquat. Such as the use klerat (brodifacum active ingredient) and Decis (deltamethrin active ingredient) are included in the class 1A and paraquat. For the use of paraquat company is not using it anymore since it was issued MEMO HPO. POD-UM-127/X/2008 November 4, 2008. This is evidenced by the absence of agrochemical use in the report year 2008-2011 for the use of paraquat, Decis and klerat. The company has routinely conduct medical check for spray and fertilizer operators. Activities of medical check performed every 6 months (records of the results medical check at the central clinic PT KLR were available). Medical check for spray and fertilizers operators undertaken by the doctor who has gained recognition (HYPERKES) by the competent authority. During the surveillance the last medical checkup was conducted on 21 December 2012 to spraying workers of Division I KKE. All the medical shcekup records were available on Sukamandang Estate Central clinic. The company has had a policy on the prohibition for pregnant or lactating women working as a spray. The company conducts regular checks to ensure that pregnant or lactating female workers not work related to chemicals area. In addition the company has a policy of granting paid leave H-1 (for menstruation) and H-2 (for pregnant women) for women workers.


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

Available OHS policies endorsed by Minamas Plantation CEO On July 5, 2008, which contains the commitment that the company is responsible in carrying out the OHS program throughout operations in the plantation and mill and has objectives and targets:

1. Provide protection to everyone involved in the activities of the company (Zero accident) along with company assets.

2. Realize that safe and healthy business activity and to increase employee awareness toward safety culture.

3. Implement the Indonesian Regulation related to Occupational Health and Safety KLR has set policy is a SOP on Occupational Health and Safety document such as the Guidelines of K3 i.e.: 1. Hazard Identification Risk Assessment and Control SOP No. 7301/PSQM-ESH/11, ratified on July 7th, 2011. 2. SOP of OHS Pictorial, No Policy: 722/PSQM-PSS/10 ratified on Desember 13th, 2010. 3. SOP of Occupational Health and Safety SOP no.711/TQEM-P2K3/07, ratified on May 31st, 2007, Administration

and Management, P2K3, Accident Reports, Communication and Media Communication, Personal Protective Equipment, safe work system.

Availability Occupational Safety and Health Committee (P2K3) at the estate and mills, for example at KKE based on Labour Agency decree KEP.560.566/40/KEP/WAS.KK/P2K3/IV/2013 chaired by Paruhum Tampubolon and secretary by Yulius Alex Koilam (certified OHS officer No. Ser.12.3303/AK3/U/X/2012 dated 25 October 2012) and conducted regularly meetings for example the last meeting on 2 April 2013 attend by 36 persons discusses the evaluation of Accidents, PPE fulfillment, hygiene of housing and earth quake emergency simulation. KLR routinely have sent a P2K3 report to the relevant agencies such Period January-March 2013 to Kotawaringin Timur District Labour and Transmigration Department, Central Kalimantan on 4 April 2013. All the company workers were included on Social Security, for example in Kuala Kuayan Estate with a total of 479 workers in January 2013. Alll the registration social security record available at every estates office. KLR has conducted periodic inspections every 6 months for high-risk workers and mill workers conducted by the Samarinda Province HIPERKES doctor who have obtained the training (SK DirJen Pembinaan Pengawasan Ketenagakerjaan, Kementerian Tenaga Kerja dan Transmigrasi RI No. Kep. 159/PPK-PNK3/KK/XI/2010 valid untill November 2013). Several medical checkup have been conducted, for example to spraying wokers on 21 December 2012, manuring workers on 188 January 2013, chemical storage officers on 10 April 2013, mill works on 29-30 November 2012. All the medical check records were available at Sukamandang Central Clinic and based on health


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identification by company doctor there were no workers recommended to stop work due to health problems. KLR has Hazard Identification Risk Assessment and Risk Control (HIRARC) document related all KLR operational activities as the activity in the Estate i.e. harvesting, pruning, fertilizing, spraying, workshop, road maintenance, FFB transportation, Loader Operations and activities at each station in the mill is operating Station, Water Treatment, empty bunch station, workshop, warehouse, Application of Wastes, Laboratory. This document contains descriptions of work activities, hazards potential, risk assessment and risk control. Based on field visits, the company had socialized with placing the risk analysis document at each station in the mill and warning signs on each estate, however several non conformities found during the surveillance-2 conducted not accordance to HIRARC document, there are: 1. At Sukamandang POM found worker is stand on the operate wheel loader bucket, that was unsafe condition and

high risk accident potential. 2. At workshop found woker do not use PPE (safety glove) when doing iron drilling. Based on those condition Minor non conformity raised (CAR.2013.01). KLR has shown evidence of risk improvement for the non conformance: 1. Statement letter of the related worker who stand in the operate whell loader bucket explaining for not doing the

same mistake 2. Safety briefing of for non conformance conducted on 12 April 2013 on Sukamandang POM by safety officer and

staff, explaining to workers hav to follow the safety instruction and monitoring by safety officer of the work area. All the evidences given by KLR have been shown to auditors in form of photograpic, wokrker statement, safety monitoring and safety briefing document; However the status of non conformance will be an observation objects during the next surveillance. (CAR.2013.01 is closed with observation) KLR has shown the Occupational Safety and Health training, for example certified safety officer training on 8-12 October 2012, earthquake emergency response training on 2 April 2013 and first aid training on 1 April 2013. All the training records were available on the estate and mill offices. Companies have emergency response procedures, such as SOP of preparedness, responses and recovery emergency condition (policy number 712/TQEM-KRKD/10) date approved 12 November 2011. The procedure contains about PIC, procedure, Organization Structure of Emergency Response of Minamas Plantations. PT KLR has conducted the simulation of emergency response of Earthquake on January 5th 2012 attended by 20 peoples at Mill office and simulation emergency response of land fire on 2 April 2013 attended by 36 peoples at KKE. Based interviews kown the KKE administration workers were understand with the emergency response mechanism. The company owns the OHS equipment such as fire extinguisher, Hydrant and First Aid Kit Box at estate and mill in, Workshop, stations at Sukamandang POM. KLR has conducted routine checks on OHS equipment every month. Based on field visits to KKE there were 13 fire extinguisheron site and at Sukamandang POM stations there is equipment such as 40 unit’s fire extinguisher and 7 units first aid kit box, 9 units hydrant in workshops and mill operating stations and 2 units uniform of firefighting; However there were found several non conformances during the field observation, which are: 1. Hydrant hose equipment at loading ramp station found the not in the well fuction condition (torn) 2. First aid kit at process station office not accordance to the equipment list Based on those condition Minor non conformity raised (CAR.2013.02). KLR has shown evidence of emergency equipment fulfillment for the non conformance: 1. Equipe the new hydrant hose follow with Nozzle and Handle Valve Hydrant. 2. Equipe and completing the first aid kit box and monitoring document. All the evidences given by KLR have been shown to auditors in form of photograpic, emergency equipement monitoring document; However the status of non conformance will be an observation objects during the next surveillance. (CAR.2013.02 is closed with observation). Based on field visits known that harvesting supervision (mandor) have been trained to and equipe with first aid bag equipment for handling the initial act of workplace accidents to employees and interviews with the harvesters and spraying workers at Kuala Kuayan Estate and Sukamandang Estate are known that the company facilitate of safety and health such as boots and safety glasses to spray chemicals.


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KLR has monitoring for workplace accidents in estates and mill in Laporan Investigasi & Evaluasi Kecelakaan Kerja document which describes the time incident, location of the incident, the victim's identity, due to an accident, injury details, the source of accident, danger condition, danger action, conclusion, a brief chronology of the events of the accident, improvements suggestion to prevent similar accidents happening again, the discussion.

Minor 4.7.3 Minor 4.7.6

Status: Closed with observation Status: Closed with observation

4.8 All staff, workers, smallholders and contractors are appropriately trained.

Training records for each employee has been well documented by the company. To support the employees competencies KLR also have training centre of Minamas plantation to all new field assistant; However not all the related training program has been planned by KLR, fo example there is no training for welder competency training to improve the welder worker at KKE workshop which has not have evidence of welder competency document. Major non conformance raised CAR.2013.03 To improve and fulfill the workers competency for example welder, KLR has made training program: 1. Revised the training program by add the welder training plan on May 2013 for 5 (five) workers in every estates. 2. KLR has shown the request for welder training document to Distric Labour agency on 15 April 2013 to conduct the

welder training program. All the evidences given by KLR have been shown to auditors in form of document; However the implementation of the program will be an observation objects during the next surveillance. (CAR.2013.03 is closed with observation) The company uses the services of contractors on some types of work, such as transport services of FFB. In conducting the selection of contractors, the company already has the mechanisms and specifications that guarantee a contractor who used the company's standard operations and comply with the government regulations, such as ensuring that the contractor use PPE at work and comply with the rules of employment. KLR also have conducted safety briefing every day to contractors workers. Based on interviews with contractor wokers they understand the safety regulation on KLR.

Major 4.8.1 Status: Closed With Observation

PRINCIPLE #5 Environmental responsibility and conservation of natural resources and biodiversity

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

During the surveillance process, KLR showed its Environmental Document (AMDAL) compiled in 1998 for 15,500 ha and there is no change of environmental impact assessment scope. PT KLR (15,500 hectares) and PT TSA (16,000 hectares) and plan to build POM with the capacity of 40 tons/hour, approved by Agriculture Minister Head of Agribusiness Board No. 35/ANDAL/RKL-RPL/BA/X/1998 dated 9 October 1998.

KLR has shown information letter from Kalimantan Tengah Environmental Agency no. 660/614/II/BLH, dated10 August 2012 explaining increase palm oil mill capacity by 60 tons FFB / hour does not require any changes or preparation of the environmental document because it was included in the EIA study of existing documents.

Report on implementation of environmental management activities are submitted regularly to local authorities in the form of: 1) RKL - RPL report every 6 months, which contains all of environmental aspects including social aspect. Report for first semester of 2012 available, 2) Report on mills waste water test and control wells water quality test every 6 months, 3) Annual soil quality test report.

Since there is no changes in business specification (plantation area and processing capacity), therefore no revision of existing environmental document is necessary to be done.


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


ASSESSMENT REPORT


HCV (High Conservation Value) findings of PT KLR are available on location, January 2010, prepared by Aksenta. Information in the document are among others: existence of animal species comprising of 13 fish species, 8 amphibious species, 19 reptile species (11 species included in Appendix II CITES), 73 bird species (13 species included in Appendix II CITES), and 35 types of mammals (5 species included in Appendix I CITES and 13 species included in Appendix II CITES). KLR has shown evidence of consultation involving stakeholders to determinate of HCV area such as conducted public hearing in relation to HCV establishment involving stakeholders, such as Youth Association, Local Development Board, Head of Village and community/religious leaders and Department of Conservation Agency of Natural Resources (BKSDA) Central Kalimantan on November 22, 2011. HCV are on KLR operational area is 783.54 ha and available the HCV location map.

Company has prepared SOP for Animal Protection (RSPO/B.5.6/KLR) dated 01 May 2009 among others are: Clause 5.1 Doing preventive actions through socialization; Clause 5.2 Doing seizure of animals caught in the company operational area.

HCV management program has been prepared by company, covering all areas in each estate, among others are: construction of sign boards, planting of buffer zone (riparian) and monitored.

Several efforts have been made by KLR to protect endangered species, such as installation of rare species posters, o hunting signboards in several locations for example HCV 6 and coordination with Natural Resources Conservation Agency if there were found endangered species.

KLR has realized the signboards installation for endangered species (orang utan, rangkong bird, etc..) identified as HCV in KKE (Bukit Batu) block H-39, H-40 and Socialization to all workers was conducted periodically, once in 2 weeks through "safety briefing" - directly by Assistant or supervisor in each estate. KLR has appointed HCV officers for every estate in, Hadlani Sukamandang estate and Prisep B Matali in Kuala Kuayan estate.

All estates HCV personnel has taken training as proofed by Attendance List and Module of training related to HCV management in collaboration with Centre for conservation and natural Resources, Pangkalan Bun. The training was conducted from 25-26 August 2010.

Comply with observation

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

Source of waste and contamination have identified by mill and estate, example : generator house, manuring, workshop, chemistry storage, spraying which cause into pollution of water source, office, housing, policlinic, and process in mill and also hazardous waste and non hazardous waste result of estate activity have been documented, like : ex lubricant oil, air pollution emission, filter, battery, tire, etc. The identification result of Kuala Kuayan estate Hazardous waste stored and will sell to hazardous waste licensed collector. Meanwhile, non hazardous waste thrown at the landfills. KLR has waste management procedure on SOP 131/OPR explaining medical hazardous waste and SOP RA-012 explaining hazardus waste and non hazardous waste management accordance to regulations. The company manages hazardous waste and non hazardous waste based on identification of source and kind of waste produced by estate and mill. The management of hazardous material with:

Ex lubricant oil, ex filter, the pesticide packaging, ex battery gathered then delivered to licensed collector.

Hand gloves, apron, and waste from housing thrown into the landfills.

The pesticide package collected and delivered into licensed collector.

Liquid waste from mill used for land application.

Solid waste like shell and fibre: 3% shell for power source, 7% fibre for water source. During the surveillance-2 found KLR has hazardous licensed storage from the authority Seruyan regent no.303 31 August 20- and valid for five years; however at KKE found the hazardous waste (cloth rags and used oil container) putin the landfill which direct contamination of the soil. Raised Major non conformance CAR.2013.04 KLR has shown records of hazardous waste collecting from the KKE landfill and reidentification document of hazardous waste mangement. KLR has conducted resocialisation related to hazardous waste mangement to all workers and satff at KKE on 13 April 2013.


ASSESSMENT REPORT


All the evidences given by KLR have been shown to auditors in form of photoprapic and documentation; However the implementation of the hazardous waste management socialisation will be an observation objects during the next surveillance. (CAR.2013.04 is closed with observation) During field visit to Sukamandang POM and KKE there were found hazardous wastes has been stored at non licensed warehouse. Raised Minor non conformance CAR.2013.05 KLR has shown evidence of temporary closed the hazardous storage at KKE and Sukamdang POM on 13 April 2013 by head of SOU manager and minutes of hazardous waste removal from KKE and Sukamandang POM to licensed hazardous waste warehouse at Sukamandang Estate (10 unit of used oil containment, 2 unit of air cleaner, 37 units of used brake fluid containment, cloth rags, 144 units of used pait containment, etc..) and hazardous waste removal manifest records. All the evidence given KLR have been shown to auditors in form of photoprapic and documentation However the implementation of the hazardous waste management socialisation will be an observation objects during the next surveillance. (CAR.2013.05 is closed with observation) KLR has implement the waste monitoring and analisys, such as:

Monitoring the use of water effluent from mill to land application

Monitoring the use of shell and fiber for boiler fuel.

Monitoring balance sheet hazardous waste

Analysis of waster effluent at inlet and outlet A9application) each month

Major 5.3.2 Minor 5.3.1

Status: Closed with observations Status: Closed with observations

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

KLR has made a renewable energy use in the Renewable Energy Usage program by using fiber and shells to reduce the use of diesel as a source of power generation. The use of fiber and shells has been recorded, monitored and well-stored as the use of KWh/ton of Crude Palm Oil (CPO).

There have been records of the use of fossil fuels (diesel) in the monthly report for mill and estate at KLR as in 2012/2013 with an 78 MJ/tons CPO compare from last year period 2011/2012 the efficiency value is 120 MJ/tons CPO


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

The company has environment policy as of 30 april 2003, among others, part of 3.1 declared without burning (zero burning), while starting of land clearing or else re-planting. The preparing of land trough mechanically stacking. Recording of zero burning implementation was done in circum condition after receiving memorandum from the Head of Plantation Operation of Jakarta. Example: Memorandum No. POD-UM-0010/I/2009 dated January, 22, 2009, about dry season anticipation and preparation of fire hazard and dry season in 2009. The memorandum was published based on information result of controlling satellite of National Oceanic Atmospheric Administration (NOAA) by Meteorology and Geophisic Agency. There was no land clearing in the area since 2008. The company has procedure for countermeasures and fire preventing No Policy 398/KLR/KGD-IK/51/12. It was also made work instruction of preventing and countermeasures for land which includes preventing, countermeasures and evacuation after fire accident. Team of land fire accident emergency response had formed in each estate. This procedure gathered working steps when fire accident happened and how to control after it. There are identification note and monitoring of fire extinguishers in each estate. There are inventory of fire extinguishers in which sufficient and properly function: a. Sukamandang Estate and the result were fireswater flapper 70 piece, rake 8 piece, shovel 18 piece, chainsaw 8

piece, main hose pump 2,5 inch 1 piece, main hose pump 1,5 inch 1 piece and water pump 1 piece and other


ASSESSMENT REPORT


supporting tools. b. During the field observation to Kuala Kuayan Estate available 2 unit of fire hoses, 1 unit of water pump machine, 1

unit of water tank and trailer, 2 units of fire nozzles, etcc. The fire brigades have formed in each estate, the team of Kuala Kuayan estate; head of team: (Eko Susiyanto).


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

KLR has identify the emissions and pollution source that are identified on Boiler, Diesel Genset, Engine Room, Boiler, Kernel, Safety Valve, Chimney Boiler, Exhaust Genset, vehicles and WWTP. Implementation has been conducted by signbords for using ear plug and ear muff to reduce noise in workplace. KLR conducted the pollution and emission sources quality monitoring two times a year and take samples at locations Thresher station, Boilers station, Despatch Oil, sterilizer station, Kernel station, EFB station, Engine room, Genset, Employee housing and security post. KLR has made efforts to reduce pollution and emissions such as at Sukamandang POM have two units blowdown silencer to reduce noise at the sterilizer station and the engine room station and planted the bamboo in the WWTP pond area. Eventough threshold values and the results of ambient air quality testing showed values below the threshold, the company continues to make efforts for the prevention and reduction of air pollution. As for the steps of the company include:

Undertake planting of stands that serves as an absorber of pollution around employee housing and mill.

Establish provisions for employees and staff residential distance of at least 500-1000 m from the mill site, it aims to reduce the impact of exposure to emissions and pollution from sources such as boilers chimney.

Perform maintenance of machines is to sources such as vehicle emissions and pollution transport and operations, generators, and boilers.

Socialization periodically to discipline the use of PPE to employees on mill oeprations.. There is Sukamandang POM Wastewater Applications monitoring each day that shows the data out of the waste is measured by Flow meter (m3) all recrds of effluent application available at mill office.

There are 15 WWTP ponds in Sukamandang POM and wastewater testing effluent pond (outlet) data shows pH , BOD, COD, Amoniac were within the specified threshold.


PRINCIPLE #6 Responsible consideration of employees and of individuals and communities affected by growers and mills

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 the continuous improvement.

There is a document ANDAL of 1996 in the name of PT KLR (15,500 hectares) and PT TSA (16,000 hectares) and plan to build POM with the capacity of 40 tons/hour, approved by Agriculture Minister Head of Agribusiness Board No. 35/ANDAL/RKL-RPL/BA/X/1998 dated 9 October 1998. KLR also has conduted social impact assessment by consultant (Aksenta) on 9-13 August 2009 explaining the negative and positive social impact and recommendation to minimse the negative impact and improve the positive impacts. There is evidence in the process of (reporting) RKL / RPL used a list of questions involving the community such as livelihoods, water consumption, income, social, cultural, water resources, and air pollution. Monitoring of public unrest through direct observation and through a questionnaire on the community around the plantation area carried out regularly. Efforts of public unrest conducted by the company through the Community Development (CD) and employment opportunities at the company. Records of environment management reporting is available in the form of RKL/RPL Implementation Report prepared


ASSESSMENT REPORT


periodically, every 6 months and submitted to related institutions. For instance: there is an evidence of submission for Report first Semester 20012 (January-June 2012) dated July 1st, 2011 and was accepted by Environment Board/BLH Kotawaringin Timur District and Seruyan District. KLR doesn’t have smallholder scheme.


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.

Company already has procedures for public communication (398/KLR/KOM-SOP/41/12). Records of meeting between the community and companies in the socialization SOP on November 15, 2010 were available. The company already has a list of stakeholders consisting of community leaders (6 people), district and village government (7 institutions), district government (9 institutions), provincial government (6 institutions) and business partners (5 institutions). The company has recorded all the aspirations that go into the Log In and Log Out External consistently and periodically. Aspirations coming recorded and responded by the Estate Manager. Company through the PSD (Plantation Services Department - Mr. Toni Manurung) consultation and communication conducts with the public.


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

During the first surveillance until the second surveillance based public consultation with viilagers there was no takeover or expansion of the KLR operational area. However KLR has procedures of occupation of the land acquisition contained in the area HGU was available. In the procedure set about the flow of land acquisition. For example, starting from the survey of occupation land activities until the signing of the minutes of the land acquisition. All processing was done with discussion. Records of complaints / objections are recorded in the recording of people's aspirations. Recording people's aspirations were recap and responded in accordance with the procedures of PT KLR (14 days). Procedures for identifying and calculating fair compensation for the loss legal or traditional rights to land is done by reference to the Decree of the Regent Kotawaringin Timur No. 316 of 2007 about the price of land and crops.


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.

On the second surveillance assessment there was no land claim at KLR, the last compensation of land tenure conducted on 23 February 2011 covering an area of 9 ha in area Baras Danum Estate was available. The agreement was witnessed by Chairman of the RT Biring Kapuk, Head of Kawan Batu village and Head of Mentaya Hulu sub-district.. There is a record of compensation payment of land release dated February 23, 2011. There is evidence of receipt payment and the minutes of letter statement is paid.


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


ASSESSMENT REPORT


The payroll of Kuala Kuayan estate was available, in December 2012. Wages of employees adjusted with the District Sectoral Minimum Wage. The minimum wage of Kotawaringin Timur were IDR 1,697,892. The company has been paying employees according to regulations. List of payroll showing the amount of wages paid, bonus, rice, and social insurance. The company has had a Contract Labour Agreement (CLA) on 2012-2014 and approved by the labour agency on 19 June 2012. KLR also have Company Regulation and rpproved by labour agency on 29 June 2012. Both of document were accordance with applicable regulations and act no.13 year 2003 on employment. The labour agreement was explained the requirements of employment, labour welfare and discrimination analysis. The Company has provided facilities for employees include: housing, schools, places of worship (mosque and church), clinic and water supply.

The Company has required that contractors comply with labor regulations such as the use of Personal Protective Equipment. This is evidenced by the Employment Letter Agreement. The second party shall make available and to apply the use of PPE; b. Risk Work All work accident insurance is the responsibility of both parties.


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.

KLR has registered the Bipartit between company representative and workers representative to Labour agency on 11 April 2013 based on letter no. 031/SME-UM/IV/2013. The Company has a policy on chance for employees to express their opinions and

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