· PT Agro Lestari Mandiri Pekawai Mill Sungai Kupang Estate, Sungai Kupang KKPA West Kalimantan...

PT. MUTUAGUNG LESTARI

ASSESSMENT REPORT

Roundtable on Sustainable Palm Oil Certification

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

Plantation Management/Owner : GOLDEN AGRI RESOURCES Ltd. Plantation Name : PT SUMBER INDAH PERKASA (SUNGAI

RUNGAU POM), PT BINASAWIT ABADIPRATAMA (Sungai Rungau Estate, Terawan Estate, Sungai Seruyan Estate, Tangar Estate and Bukit Tiga Estate)

Location :

Rungau Raya Village, Danau Seluluk Sub District, Seruyan District, Kalimantan Tengah Province

Certificate Code : MUTU-RSPO/029 Date of certificate issue : August 26th, 2013 Date of expiry of certificate : August 25th, 2018

Assessment Assessment Date

PT. Mutuagung Lestari Auditor

Review by

Approved by

S-1 05 – 09 May 2014

Bukti Bagja (Lead Auditor Witnessed by ASI), Taufik Margani (Auditor), Muardi

Marwas (Auditor), Naila Karima (Auditor) James Sandom (ASI Witnesser), Aisyah

Sileuw (ASI Auditor)

Octo HPN Nainggolan

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 • Accredited by Accreditation Services International on March 12th, 2014

Assessment Approved by Certification Body on:

S-1 July 10th, 2014

http://www.mutucertification.com/�


ASSESSMENT REPORT

SPO – 4006a.5 ii Prepared by Mutuagung Lestari for Sungai Rungau POM (PT Sumber Indah Perkasa –Golden Agri Resources)

TABLE OF CONTENT

FIGURE Figure 1. Location Map PT Sumber Indah Perkasa

Figure 2. Operational Map PT Binasawit Abadi Pratama

2 3

1.0 SCOPE of the SURVEILLANCE ASSESSMENT 4 1.1 National Interpretation Used 4 1.2 Organization Information 4 1.3 Type of Assessment 4 1.4 Location of Plantations, Mill and Area Statement 4 1.5 Description of Supply Base 5 1.6 Dates of Plantings and Cycles 6 1.7 Tonnage Certified 6 1.8 Other Certifications 7 1.9 Time-Bound Plan for Other Management Units 7 2.0 ASSESSMENT PROCESS 9 2.1 Certification Body 9 2.2 Assessment Team 9 2.3 Assessment Methodology, Assessment Process and Locations of Assessment 9 2.4 Stakeholder Consultation and List of Stakeholders Contacted 12 2.5 Date of Next Surveillance Visit 12 3.0 ASSESSMENT FINDINGS 13 3.1 3.2

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

13 37

3.3 Conformity Checklist of Certificate and Logo Use 42 3.4 Summary of RSPO Partial Certification 43 3.5 Identification of Findings, Corrective Actions, Observations, Opportunity for Improvement and

Noteworthy Positive Components 45

3.6 Summary of Arising Issues from Public, Management and Auditor Responses 59 4.0 CERTIFIED ORGANIZATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY 64 4.1 Formal Signing of Assessment Findings 64 APPENDICES 1. List of Stakeholders Contacted in the RSPO Certification Process 65 2. Assessment Program 67 3. Glossary 69

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 2 Prepared by Mutuagung Lestari for Sungai Rungau POM (PT Sumber Indah Perkasa –Golden Agri Resources)

Figure 1. Location Map PT Sumber Indah Perkasa

Sungai Rungau POM

PT MUTUAGUNG LESTARI

ASSESSMENT REPORT

SPO – 4006a.5 3 Prepared by Mutuagung Lestari for Sungai Rungau POM (PT Sumber Indah Perkasa –Golden Agri Resources)

Figure 2. Operational Map PT Binasawit Abadi Pratama


ASSESSMENT REPORT

SPO – 4006a.5 Page 4 Prepared by Mutuagung Lestari for Sungai Rungau POM (PT Sumber Indah Perkasa –Golden Agri Resources)

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 Golden Agri Resources Ltd. 1.2.2 Contact person Ismu Zulfikar 1.2.3 Company address and site address Company Address :

Sinar Mas Land Plaza, Tower II, 30th Floor Jl. MH Thamrin No. 51, Jakarta 10350, Indonesia Phone: +62-21-5033 8899. Fax: +62-21-5038 9999 Site Address: Rungau Raya Village, Danau Seluluk Sub District, Seruyan District, Kalimantan Tengah Province

1.2.4 Telephone (+62-21) 318 1388 1.2.5 Fax (+62-21) 318 1389 1.2.6 E-mail [email protected]

1.2.7 Web page address www.smart-tbk.com 1.2.8 Company status Private 1.2.9 Management Representative who completed the application for

certification Ismu Zulfikar (Head of Environmental Department)

1.2.10 Registered as RSPO member 31 March 2004 (1-0096-11-000-00)

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 Sumber Indah Perkasa – PT Binasawit

Abadipratama 1.3.4 Number of management unit 1 (one) Palm Oil Mill unit PT Sumber Indah Perkasa

and 5 (five) supply bases (PT Binasawit Abadipratama)

1.4 Locations of Mill, Plantations and Area Statement

1.4.1 Location of Mill

Name of Mill Location GPS Latitude Longitude

Sungai Rungau Mill Rungau Raya Village, Danau Seluluk Sub district, Seruyan District, Kalimantan Tengah Province

20 19’ 14,16” S 1120 20’ 2,97” E

1.4.2 Location of Supply Base

mailto:[email protected]�

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ASSESSMENT REPORT


Name of Supply Base Location GPS Latitude Longitude

Sungai Rungau Estate Rungau Raya Village, Danau Seluluk Sub district, Seruyan District, Kalimantan Tengah Province

20 19’ 43” S 1120 18’ 58” E

Sungai Seruyan Estate Rungau Raya Village, Danau Seluluk Sub district, Seruyan District, Kalimantan Tengah Province

20 18’ 32” S 1120 15’ 28” E

Terawan Estate Selunuk Village, Seruyan Raya, Seruyan Sub district, Kalimantan Tengah Province

20 20’ 43” S 1120 22’ 43” E

Tangar Estate Rungau Raya Village, Danau Seluluk Sub district, Seruyan District, Kalimantan Tengah Province

20 13’ 45” S 1120 17’ 34” E

Bukit Tiga Estate Rungau Raya Village, Danau Seluluk Sub district, Seruyan District, Kalimantan Tengah Province

20 11’ 1” S 1120 19’ 20” E

1.4.3 Tenure • Private • State 20,152.79 Ha • Community 1.4.7 Area Statement • Total area 20,152.79 Ha • Mature area 18,062.09 Ha • Immature area - Ha • Mill & Emplacement 180 Ha • Road & Bridge 678.99 Ha • Swamp & Drain 516.47 Ha • Nursery 9.18 Ha • HCV 706.06 Ha*) *) Referring to the analysis of HCV, HCV areas overlap with plantations on certain lands planted before 2007 but treated as a special treat HCV

1.5 Description of Supply Base 1.5.1 Description of Mill

Name of Mill Capacity (tones/ hour)

FFB Processed

(tonnes/ year)

CPO Palm Kernel PKO Out put (tones)

Extraction (%)

Out put (tones)

Extraction (%)

Out put (tones)

Extraction (%)

Sungai Rungau Mill 80 505,481.08 116,674.40 23.08 27,571.26 5.45 - -

* Production data on May 2013 – April 2014 1.5.2 Description of Estate(s)

Name of Estate(s) Total Area (Ha)

Planted Area (Ha)

FFB (tones/year)

Yield (tones/ha/year)

Supplied to Mill FFB

(tonnes/year) %

Sungai Rungau Estate 3,073.15 2,881.28 92,728.20 32.18 92,056.04 99.28

Sungai Seruyan 4,870.84 4,209.65 120,210.00 28.56 107,032.43 89.04


ASSESSMENT REPORT


Estate Terawan Estate 4,481.87 4,327.91 125,094.63 28.90 125,608.04 100.41 Tangar Estate 4,445.15 4,014.84 116,063.65 28.91 113,437.44 97.74 Bukit Tiga Estate 3,281.78 2,628.41 71,734.79 27.29 63,992.56 89.21 TOTAL 20,152.79 18,062.09 525,831.27 29.11 502,126.51 95.49 * Production data on May 2013 – April 2014 1.5.3 Smallholder(s) and other source Name of

source(s) Member(s) Location Total Area (Ha)

FFB (tones/year)

Supplied to Mill FFB

(tones/year) %

PT Tapian Nadenggan-PT Buana Artha Sejahtera

SMART, Tbk. Kalimantan Tengah 15.064 _ 1,708.10 _

PT Mitra Karya Agroindo

Golden Agri Resources, Ltd.

Kalimantan Tengah 14.212 _ 1,646.47 _

Total 29.276 3,354.57 - Source : Production Data May 2013 – April 2014 The company does not receive FFB from other sources such as independent smallholders PT Tapian Nadenggan - PT Buana Artha Sejahtera are under manage of SMART, Tbk PT Mitra Karya Agroindo is under manage of Golden Agri Resource (GAR)

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 Sungai

Rungau Estate (Ha)

Sungai Seruyan Estate

(Ha)

Terawan Estate (Ha)

Tangar Estate (Ha)

Bukit Tiga Estate (Ha)

Total (Ha)

1996 249.51 852.98 1,102.49 1997 490.48 1,667.79 883.41 333.02 3,374.70 1998 621.20 1,061.53 1,283.60 1,411.72 444.54 4,822.59 1999 582.05 1,230.82 360.73 764.61 575.77 3,513.98 2000 933.21 934.81 1,046.99 84.72 2,999.73 2001 183.31 85.34 311.26 579.91 2004 148.34 415.32 563.66 2005 71.03 178.61 796.80 1,046.44

2006 12.38 12.38 2007 46.21 46.21 TOTAL 2,881.28 4,209.65 4,327.91 4,014.84 2,628.41 18,062.09 1.6.2 New Planting area after November 2007 46.21 Ha 1.6.3 Planting Cycle 1st 25 Years

1.7 Approximate Tonnage Certified


ASSESSMENT REPORT


1.7.1 Past Annual Claim Certified Product

• FFB Production 480,464 Tonnes/year • CPO Production 119,155.07 Tonnes/year • Palm Kernel (PK) Production 24,023.20 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 (tones/year)

Yield (tones/ha/year)

Sungai Rungau Estate 3,073.15 2,881.28 98,846.93 34.31 Sungai Seruyan Estate 4,870.84 4,209.65 120,834.84 28.70 Terawan Estate 4,481.87 4,327.91 133,351.36 30.81 Tangar Estate 4,445.15 4,014.84 113,996.06 28.39 Bukit Tiga Estate 3,281.78 2,628.41 75,824.01 28.85 TOTAL 20,152.79 18,062.09 542,853.20 30.05 * Budget Production data on January – December 2015 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 (%)

Sungai Rungau Mill 80 542,853.20 129,144.78 23.79 30,888.35 5.69 - -

* Budget Production data on January – December 2015 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 ISCC (International Sustainability Carbon Certification) 1.9 Time Bound Plan for Other Management Units

Management Unit Location

Time Bound Plan

Status Company Mill Estate (Supply Base)

PT Forestalestari Dwikarya Tanjung Kembiri Mill

Tanjung Kembiri Estate, Tanjung Rusa Estate

Belitung 2014 Certified

PT Binasawit Abadi Pratama

Sungai Rungau Mill

Sungai Rungau Estate, Sungau Seruyan Estate, Terawan Estate Tangar Estate, Bukit Tiga Estate

Central Kalimantan 2013 Certified

PT Sumber Indah Perkasa Sungai Buaya Mill

Sungai Buaya Estate, Mesuji KKPA, Gedong Aji Lama KKPA

Lampung 2014 Audited

PT Sumber Indah Perkasa Sungai Merah Sungai Merah Estate, Lampung 2014 Audited


ASSESSMENT REPORT


Mill Gedong Aji Baru KKPA PT Sawit Mas Sejahtera Pangkalan Panji

Mill Sawit Mas Sejahtera Estate

South Sumatera 2014 -

PT Bumi Sawit Permai Bumi Sawit Mill Bumi Sawit Estate South Sumatera 2014 - PT Djuanda Sawit lestari Muara Kandis

Mill Muara Kandis Estate, Muara Tawas Estate, Pendawa KKPA, Pendawa Plasma

South Sumatera 2014 -

PT Agro Lestari Mandiri Pekawai Mill Sungai Kupang Estate, Sungai Kupang KKPA

West Kalimantan 2014 -

PT Kencana Graha Permai Kenanga Mill Sungai Kupang Estate, Sungai Kupang KKPA


PT Sinar Kencana inti Perkasa

Kasuari Mill Cendrawasih Estate, Nuri Estate, Rajawali Estate, Mambruk Estate

Papua 2014 -

PT Bumi Permai Lestari Bukit Perak Mill Bukit Perak Estate, Bukit Permata Estate

Bangka 2014 -

PT Sinar Kencana Inti Perkasa

Sungai Kupang Mill

Sungai Kupang Estate, Sungai Kupang KKPA

South Kalimantan 2015 -

PT Sinar Kencana Inti Perkasa

Senakin Mill Senakin Estate South Kalimantan 2015 -

PT Mitra Karya Agroindo Tangar Mill Katayang Estate, Nahyang Estate, Sulin Estate, Sungai Ayawan Estate, Sungai Nusa Estate

Central Kalimantan 2015 -

PT Binasawit Abadi Pratama

Perdana Mill Perdana Estate, Muara Dua Estate, Semandau Estate, Lenggana Estate


PT Agrokarya prima Lestari Kuayan Mill Kuayan Estate, Mentaya Estate, Bukit Santuhai, Tajur Beras Estate, Seranau Estate, Sapiri Estate


PT Paramita Internusa Pratama

Belian Mill Belian Estate, Tengkawang Estate, Muara Tawang Estate, Kapuas Hulu Estate


Implementation Time Bound Plan

There is evidence of a change in time bound plan for Golden Agri Resources Ltd., mainly at 6 corporate entities in it (PT Sawit Mas Sejahtera, PT Bumi Sawit Permai, PT Djuanda Sawit Lestari, PT Bumi Permai Lestari, PT Sinar Kencana Inti Perkasa-Sungai Kupang Mill and PT Sinar Kencana Inti Perkasa-Senakin Mill). However, not enough evidence to justify the revised time bound plan. Referring to the RSPO Certification Systems Point 4.2.4. Minor Non-Conformity see CAR 2014.07 Sustainability Division Head of PT SMART, Tbk issued a Memorandum No. 169/EL/SMART-RSPO CB/VII/2014 dated July 7, 2014 regarding the explanation of changes in time bound RSPO 2014 and Memorandum No. 170/EL/SMART-RSPO CB/VII/2014 dated July 7, 2014 regarding the explanation of changes in time bound RSPO 2013. Justification In The memorandum stated time bound plan changes are decided by the Top Management and related preparedness unit Mill and Estate in dealing with the certification audit. Based on the improvement evidence, the auditor team concluded that the Non-Conformity of Minor (RSPO Certification Systems Point 4.2.4) was closed.


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 S-1 1. Bukti Bagja (Lead Auditor). Master of Science majoring environment, Indonesia University. He had involved in

RSPO assessment and HCV for GIS. The training he has followed namely. ArcGIS, MAPInfo, Global Mapper, ER MAPPER, ERDAS Imagine, Indonesian Sustainable Palm Oil auditor and Awareness RSPO

2. Taufik Margani (Auditor). Bachelor of Science in Forestry, majoring in Forest Management. Specialist in Ecology and Environmental. He has led several audits for Sustainable Forest Management in Indonesia (under LEI- Indonesian Ecolabel Institute and FSC- Forest Stewardship Council) and he is a Lead Auditor for FSC chain of custody and Forest Management. Other experience: He is IRCA Lead auditor IRCA registered for Environment Management System and Quality Management System. Since 1999 he has been working for independent certification body and has conducted Environment Management System audits in Indonesia and Malaysia. Currently he is the General Manager of Management System Certification

3. Muardi Marwas (Auditor). Bachelor of Agriculture Bogor Agriculture Institute. Attended RSPO and ISPO Assessment in Indonesia. He had been trained Lead Auditor RSPO and Witness Distribution Quality Management Process (DQMP) APMEA...Right now he works as auditor in independent Certification Body.

4. Naila Karima (Auditor). Bachelor of Public Health, Department of Occupational Health and Safety. Faculty of Public Health, University of Indonesia. She had experience working in private oil palm plantation companies in Indonesia. She had followed training such as ISPO Lead Auditor, awareness training RSPO certification system, awareness training Occupational Health and Safety Management System (PP No. 50 year 2012), and Integrated Management System (OHSAS 18001:2007, ISO 14001:2004, and ISO 9001:2008).

5. James Sandom (ASI Lead Auditor). Lead Auditor of Accreditation Services International (ASI) RSPO witnessing conducting performance RSPO Auditor Team

6. Aisyah Sileuw (ASI Auditor). Auditor of Accreditation Services International (ASI) RSPO witnessing conducting performance RSPO Auditor Team

2.3 Assessment Methodology, Assessment Process and Locations of Assessment 2.3.1 Figure of person days to implement assessment S-1 05 – 09 May 2014

Number of auditors : 4 (four) auditors Number of days for S-1 on site : 5 (five) days Number of working days for S-1 on site: 20 (twenty) working days

2.3.2 Detail process of assessment S-1 The assessment was conducted by measuring the sufficiency of implementation with the consistency done by the

Sungai Rungau POM and its supply base (PT Sumber Indah Perkasa). 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-1 delivered by the auditors to the management unit and the results are the subject will be verified at the next assessment.

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ASSESSMENT REPORT


Improvement of findings from first surveillance assessment findings were observed by auditors at this S-1 assessment. All information obtained was recorded in Check List of PT Mutuagung Lestari (MUTU) and part of S-1. Please find Appendix 2 for the assessment program

2.3.3 Locations of Assessment S-1 Sungai Seruyan Estate

Location 1 Block S21 Division 2. Observation on herbicide spraying activity with an active Glyphosate material with a dozen of 250 ml/Ha. Spraying team is equipped with PPE (helmet, face shield, mask, rubber gloves, apron, and shoes), medical examination such as cholinesterase is conducted periodically, and there is neither pregnant nor lactating female worker, the salary/wage is in line with minimum wage regulation and all personnel are registered in Jamsostek.

Location 2 Block R21/R22 Division 6. Observation on harvesting FFB. Personnel are equipped with PPE (helmet, glasses, and shoes) and tools (sickle, sickle gloves, ‘gancu’ and rickshaw). Personnel understand the procedure and ripe fruit criteria. The wage consists of main salary, harvesting allowance and all personnel are registered in Jamsostek.

Location 3 Block R24 and S24. Observation on HCV management such as riparian area in Seruyan River 3, there is a ban board for spraying activity near the riparian area. Riparian area’s maintenance is conducted manually by applying empty fruit bunches. Moreover, company has cultivated hardwood vegetation at riparian area.

Location 4 Block R30. Observation on domestic waste management by using landfills, which located far away from personnel housing and clean water source.

Location 5 Hut 2. Observation on facility and infrastructure for personnel welfare, which are provided by the company. The entire facility and infrastructure are in good condition, such as housing type G2, religious infrastructures like mosque and church, educational facilities like kindergarten and elementary school, public facilities like personnel hall and child care.

Location 6 Fire Fighting Post. Observation on facility and infrastructure for fire extinguisher like water reservoir, pump machine, hose, nozzle, truck, sack, hook, fire hitter, knap sack, hoe, shovel are in a ready to use condition.

Location 7 Medical Post. Observation on medical service such as medical treatment, which has 1 midwife and infectious waste management. Infectious waste management will be sent to Imanuddin Hospital Pangkalan Bun.

Location 8 Washing place for spraying tools. Observation on knapsack washing place, used pesticide package and used fertilizer sack. The rinse water will be collected in a special reservoir and will be re used for land application.

Location 9 Division 1 & 2 office. Observation on morning briefing by division assistant, foreman and personnel. Foreman gave the instruction to personnel in accordance with their job description.

Location 10 HCV in Rungau riparian area; HCV area is in a good condition and well maintained. Signboard in a good condition, no damage. There is a feeding table for primate including Orang Utan.

Location 11 Nursery area for HCV vegetation; nursing area is in a good condition and well functioning. Nursery produces fruits and food for Orang Utan.

Location 12 HGU stake no. 141, 142, 143, 160, and 161 are in a good condition and clearly demarcated. In addition to the HGU stake, trenches and molding surround the estate area are assisting the demarcation.

Location 13 Blok S-21. Observation and interview regarding the spraying activity toward spraying personnel, occupational health and safety, the status of personnel including minimum wage, chemical application by considering the environment aspect.

Location 14 Housing 1. Washing house for chemical application. Observation and interview regarding washing procedure that in line with the applicable regulation and procedure by considering the environment aspect, followed by visit to elementary school (SD) and interview with personnel and local community.

Location 15 Block R 21 and 22. Observation and interview regarding the harvesting of FFB with foreman and harvesting personnel, and discussion over personnel status, minimum wage, PPE and personnel understanding on protective wildlife.

Location 16 Seruyan River III in Block S24, which disembogue in Rungau River. Observation and interview with SSRE staff regarding the boundary of riparian area, which set as HCV area and protection over surface water quality (river), treatment and maintenance for riparian area (for instance, no chemical application, only manual approach by applied empty fruit bunches and hardwood cultivation like Angsana.

Location 17 Final landfill (TPSA), inorganic domestic waste, SSRE. Observation and interview regarding the


ASSESSMENT REPORT


inorganic TPSA that far away from housing facility and water source; furthermore the periodic inorganic waste collection from the entire huts or houses inside Seruyan Estates area.

Location 18 Erosion stake Block T12. Observation and interview regarding the pointed spot for erosion monitoring, the result and erosion measurement. The erosion sample was determined by sloping category under or above 15%. For Seruyan estates area is categorized as sloping area under 15%.

Location 19 Material warehouse. Observation and interview regarding the placing process for types of chemical material, MSDS completeness, stock and chemical material utilization including the lubricant and type of fertilizer.

Location 20 Chemical mixing place. Observation and interview over environment aspect and impact from chemical mixing activity before land application.

Location 21 Fuel reservoir (BBM) Observation and interview regarding the placing and controlling over environment aspect.

Location 22 Workshop, generator hut, and vehicle washing place. Observation on environmental aspect from warehouse activity and generator operation, as well as vehicle washing activity.

Location 23 Hazardous waste landfill. Observation and interview regarding the environment aspect control from the activity, which produces hazardous waste and hazardous waste management.

Sungai Rungau Mill Observation and interview on processing FFB into CPO and palm kernel related to implementation of segregation supply chain model (SCCS), observation on environment aspect in each processing station (from FFB into CPO) including the control over environment aspect from workshop activity, boilers, temporary landfill for hazardous waste, POME and land application. Location 1 Process. Observation and interview with personnel in mill processing activity (grading, Sterilizer,

Boiler, and Workshop); personnel have understood the procedure and work instruction for each process. Periodic medical examination and high-risk work have been conducted. Personnel received training and socialization for safe work practice.

Location 2 Emergency response kits. APAR is available and hydrant is placed in high-risk spot in mill and everything is ready to use. The first aid box is available in the office, in the laboratory, in processing unit, workshop and temporary hazardous waste landfill.

Location 3 Workshop. Observation on maintenance activity, fabrication and welding, personnel are equipped with PPE that in accordance with the risk and danger.

Location 4 Temporary landfill for hazardous waste. Observation on hazardous waste collection such as used filter oil, etc.

Location 5 Installation for liquid waste management. Observation on mill’s liquid waste before being applied to the field, no leakage on IPAL pond.

Terawan Estate Location 1 Block E12/E13 Division 2. Observation on herbicide spraying activity with an active Glyphosate

material. Spraying team is equipped with PPE (helmet, face shield, mask, rubber gloves, apron, and shoes), medical examination such as cholinesterase is conducted periodically, the wages is inline with minimum wage regulation and all personnel are registered as Jamsostek’s member, personnel know the restriction to spray in riparian area, restriction to hunt protected wildlife surround estate area.

Location 2 Hut 1. Observation on facility and infrastructure for personnel welfare, which are provided by the company shows the entire facility and infrastructure are in good condition, such as housing type G2, religious infrastructures like mosque and church, educational facilities like kindergarten and elementary school, public facilities like personnel hall and child care, electricity comes from generator and clean water from water reservoir in block A10

Location 3 Block E14 Division 5. Observation on domestic waste management by placing the landfill far away from housing and clean water source.

Location 4 Oil, Agrochemical and fertilizer warehouse. Observation on hazardous material storage, which is completed with hazardous symbols, MSDS and work instruction and all personnel are equipped with PPE (mask and helmet).

Location 5 Fire extinguisher post. Observation on fire extinguisher facility and infrastructure warehouse, such as 5000 liter water tank and truck, which is completed with pump machine, hose, nozzle, fire hitter, hook, axe,


ASSESSMENT REPORT


machete, shovel and hoe, all tolls are ready to use. Location 6 Workshop. Observation on vehicle and heavy equipment maintenance, used oil waste

management, used accu and used filter. Location 7 Hazardous waste landfill. Observation on hazardous landfill, the availability of hazardous symbols,

the flow chart of leakage control, PPE and APAR. Location 8 Medical Post. Observation on medical service shows a good condition, with 1 midwife. Infectious

waste is well stored. Location 9 HGU stake. Controlling the management of HGU stake No 87 in block A11/12, No 90 in block A8/9,

No 88 in block A10, Terawan Estate. Location 10 Block G17. Monitor the management of riparian area in Terawan River. Signboard for protected

wildlife; boundary mark for spraying activity is 50 meters from right and left side. Guatemala, Meranti, verifier grass are cultivated along riparian area.

Location 11 Harvesting in Block C14. Monitor the harvesting. Interview with 3 harvesting personnel regarding the wage, insurance, personnel’s welfare, working tools, PPE, work accident report.

Tangar Estate Land application in Tangar Estate. Monitor the land application area in Block O52. WWTP installation, which belongs to Semilar Mill (Tapian Nadenggan) Stakeholder’s consultation: 1. Selunuk Village 2. Rungau Raya Village 3. Sebabi Village 4. Worker Union Mandiri Sungai Seruyan Estate and Terawan Estate. Interview with head of worker union

regarding the worker union activity and industrial relations between personnel and company. 5. Women commission of Sungai Seruyan Estate and Terawan Estate. Interview with chief and committee of

women commission regarding the sexual harassment socialization and activity as well as reproduction protection, POSYANDU and there is no report yet related to sexual harassment.

2.4 Stakeholder Consultation and List of Stakeholders Contacted 2.4.1 Summary of stakeholder consultation process. Consultation of stakeholders for PT Sumber Indah Perkasa – PT Binasawit Abadipratama was held by public

consultation meeting with internal stakeholders, by interviewing local stakeholders through visits to villages and interviews with local people. Input from stakeholders were clarified by PT Sumber Indah Perkasa – PT Binasawit Abadipratama

2.4.2 List of stakeholder contacted Please find appendix 1 2.5 Determining Next Visiting

The next visit (second surveillance) will be determined twelve months after the third surveillance (April 2015).


ASSESSMENT REPORT


3.0. ASSESSMENT RESULT 3.1. Summary of Assessment Report of the RSPO Certification MUTUAGUNG LESTARI has conducted an assessment of PT Sumber Indah Perkasa (PT SIP) and PT Binasawit Abadi Pratama (PT BAP). – Sungai Rungau POM, Golden Agri-Resources Ltd operation consisting of 1 (one) mill and 5 (five) oil palm estates. During the Surveillance-1 assessment, there were six (6) Nonconformities were assigned against Minor Compliance Indicators; one (1) nonconformity was assigned against SCCS Compliance and three (3) opportunities for improvement. 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. The corrective action consisting of six (6) Minor discrepancy indicator of unmet material and will be re-verification and observation at the next assessment visit. MUTUAGUNG LESTARI found that PT Sumber Indah Perkasa and PT Binasawit Abadi Pratama. – Sungai Rungau POM complies 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. Company has a mechanism for information request and response, which stated in SOP for information request and response (SOP/SPO/SMART/LH-01) on 1st July 2010. Record of information request and response is stated in “communication and consultation book”. Based on document’s review and public consultation with stakeholders, until April 2014 there is no information request from stakeholders, only grant proposal to improve road condition from local community. Company’s response over this request was by giving its approval to give a grant for instance, on 6th January 2014 as well as SMK and village road improvement on 12th February 2014. The information request and response record as well as other documents have been archived and stored in each sustainable palm oil secretariat unit. Based on Standard Operating Procedure (SOP) of document’s management and shelf life (SOP/SPO/SMART/LH-02) for information request and response record as well as other documents that related to sustainable palm oil implementation is 5 years.

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. Company able to present stakeholder information list, which contains the accessible information for stakeholder, such as: • Number of personnel and list of salary • List of personnel and tax number as well as the information to calculate the tax • Local tax payment / retribution • Establishment certificate and its changes, area and production’s data as well as the fertilization application


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• Land ownership certificate like HGU certificate • AMDAL study, RKL/RPL and LA license as well as the monitoring documents • HCV Assessment report • Social Impact Assessment report • CSR document • P2K3 three-month report, work accident and Jamsostek’s data.

Record of information request and response is stated in “communication and consultation book” and stored based on Standard Operating Procedure (SOP) of document’s management and shelf life (SOP/SPO/SMART/LH-02) for ±5 years. 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. The entire applicable local and national regulation, such as: 1. Legal land ownership with an HGU certificate that is in line with Law No. 5 in 1990. 2. Has plantation business permit that refers to Permenaker No. 26 in 2007. 3. Licensed Hazardous warehouse for estate and mill that in accordance with PP 18 in 1999 4. Hazardous waste collector has a license from ministry of environment based on SK 122 in 2010. 5. The P2K3 secretary is a K3 expert that refers to Permenaker No. 4 in 1987. 6. Operator for lift and transport vehicle has a license that refers to Permenaker No. 9 in 2012. Company has drafted the required regulation list that always been updated every 6 months. This document consists of obedience over required permits, K3, HCV, environment and manpower. There is evidence over company’s compliance toward local and national regulation, such as: − Decision letter from Kalimantan Tengah governor (No 188.44/952/2013) regarding district minimum wage (UMK)

and sectoral minimum wage in Seruyan district in 2014 − PP No. 50 in 2012 regarding the implementation over occupational health and safety management system in

estate, the implementation over K3 policy, socialization over K3 policy, the implementation over risk and hazard sources and its handling, the compliance to complete K3 facility and infrastructure, compliance over OSH license, monitoring and evaluation over OSH performance by P2K3.

− Government regulation No. 27 in 2012 regarding the environment permit, regulation’s compliance by providing the AMDAL document, company conducted the consultation with BLH on 5th November 2012 regarding the follow up of PT. BAP AMDAL.

Based on interview with boiler operator and chief/head of worker union (Terawan Estate and Sungai Seruyan Estate), payment over main salary and overtime are in accordance with Kalimantan Tengah governor’s regulation No. 188.44/952/2013.

Full Compliance 2.2

The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights In line with previous audit, company has had the land ownership certificate and business license in a form of: 1) location permit from government of Kotawaringin Timur district, 2) forest release permit from ministry of forestry in 1996, 3) Registration letter for plantation business from Menhutbun in 2000, 4) Recommendation to established mill from plantation agency of Kotawaringin Timur district in 2002, 5) permit to established building in 2002 from Kotawaringin Timur reagent, 6) HGU certificate in 2008, 7) HGB from head of national land agency in Kalimantan Tengah province. Based on verification with related institution during public consultation, the entire legality documents over land ownership certificate and business license, which belong to PT SIP and BAP, are still valid.


ASSESSMENT REPORT


Company also demarcating and maintaining its legal boundary such as HGU stake that in line with HGU certificate issued in 1998 and revised in 2008. Field evaluation in Sungai Seruyan Estate (HGU stake no. 141, 142, 143, 160, and 161) and Terawan Estate shows that the entire stakes are in a good condition and clearly demarcated. Moreover the demarcation is not only assisted by the HGU stake but also assisted by trenches and molding surrounds the plantation. For monitoring and stake’s maintenance, each estate has HGU stake monitoring form, assistant from each division conducts the monitoring every month. This form contains list of stakes and its condition. Based on area map statement, the entire area can be cultivated. There is no indication for land conflict. There is a public consultation with local village administrators and government institutions such as BPN and plantation agency to verify the conflict issue. The result of public consultation presents that there is no conflict between company and local community over land ownership. In line with previous audit, it’s known that the entire owned plantation area was achieved from forest release and during the land clearing there is no land that belongs to community. Document for land assessment (Committee B) Kalimantan Tengah province no. 01/PPTB/1996 on 10th July 1996 stated that the plantation area comes from state land (forest release) and there is no community’s land over the area, so there is no objection rose from any party. According to these findings, the committee B concludes that the HGU request can be granted. Public consultation has been conducted with local village administrator especially from Selunuk village, Sebabi village and Rungau Raya village, well as government institution like BPN and plantation agency in order to verify the land release. The public consultation presents that in general there is no objection from local community regarding the plantation area. Company has a land conflict resolution that stated in document No. SOP/SPO/SMART/LH-04 on 1st July 2010 and has been checked by Head of Environment Department & Sustainability division, in order to ensure the effective communication between local community and company especially for land ownership and conflict resolution that in line with the applicable regulation. 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. HGU decision letter document No. 16/HGU/BPN/97 states that based on history of land assessment (committee B) in Kalimantan Tengah province no. 01/PPTB/1996 on 10th July 1996, its known that the plantation area was come from state’s land (forest area that was released) and over the land/ area there is no land that belong to community and no objection rose from any party, so the committee B conclude that the HGU request can be granted. Public consultation on 6-7 May 2014 has been conducted with local village administrator especially from Selunuk village, Sebabi village and Rungau Raya village, as well as government institution like BPN and plantation agency in order to verify the traditional right over the land. The public consultation presents that in general there is no violation over traditional right during the land clearing. 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.

Guideline over company’s long-term plan is in line with previous assessment, like the profitability (2013 – 2020) by calculating the FFB production in each estate, the CPO/PK production, Revenue, estate production cost and net profit. In 2014, Sungai Rungau POM was planned to have supply from 5 estates, such as Sungai Rungau Estate, Sungai


ASSESSMENT REPORT


Seruyan Estate, Terawan Estate, Tangar and Bukit Tiga Estate with a budget of 464,701.71 ton/year and the generating CPO of 110,366.68 Ton/year and Palm Kernel amount 25,558.56 ton/year. On the planning, the quality over CPO and PK product have been set, where the FFA (CPO – 3% and PK 1.5%). Moisture CPO – 0.150% and PK – 7%, as well as Dirt CPO – 0.030% and PK – 6%. Based on work plan for palm oil mill and estate guidelines, the company able to present the projection over generating FFB (Ton) and CPO volume as well as palm kernel (PK) from 2014 to 2020. Furthermore, the generating projection over CPO and PK production has been calculated and the inflation level and exchange rate over dollar for about 5% every year, including the cost calculation for each Kg of generating FFB every year. Based on planting year’s data in each estate (5 estates) the early cultivation was in 1996 and the latest cultivation year was in 2005 (refers to basic information in table 1.6.1) and there is no replanting yet. Company explains that PT SIP/BAP has the regulation for replanting activity that stated in SOP/SMART/MCAR/II/TA-PRP Rev.0.0 in 2012. Point 2.2.1 explains that the replanting activity should have criteria’s like below: a. Plantation age over 25 years old. b. The average height of vegetation is more than 13 meters c. Annual production less than 14 ton per ha d. Number of plant less that 100 tress per ha In case there is a replanting activity, the annual replanting is 4% from the entire plantation in order to keep the production of unproductive plantation (TBM) and productive plantation (TM) stabile. In addition, the company presents work instruction for replanting program IK/SMART/MCAR/II/TA-RPL/01, which considers the occupational health and safety implementation as well as the zero burning.

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. Company has Standard Operational Procedure for cultivation that stated in Management Committee Agronomy and Research (MCAR) document on 1st September 2012, which mentions the aspect of palm oil cultivation like: new area cultivation planning, replanting planning, nursery, new land clearing, cultivation, insertion, replanting, pest and disease control, maintenance, fertilization, maintenance over unproductive vegetation, harvesting preparation, maintenance over productive vegetation, harvesting, FFB loading and dispatching, rainfall measurement with ombrometer. Company shows PT. SMART Tbk SOP management No 04-09/MCMD-SOP/438, forth revision that endorsed by Edwin Ng (Chairman MCMD) and comes into effect from 1st September 2010 which regulate the standard operational procedure in mill, like: FFB acceptance station, sterilization activity, thresher station, press station, clarification station (cleaning), clarification station; substation of Oil recovery tank, nut and kernel station, boiler and machine rooms, water treatment, final effluent, storage tank wash. There is also a procedure for FFB acceptance with a document No. PT SIP-SRGM/SOP/20 that endorsed on 01st May 2012 regarding the fruit acceptance, including accepting, grading and loading ramp. Plantation evaluation/ check at least conducted once a year, such as: • Agronomy Audit and Advisory Division, the latest audit was conducted from 21th January to 5th February 2013 with

scopes of audit are production and harvesting, FFB transportation, harvesting administration, plantation maintenance, rats pest and nettle caterpillar, ganoderma and broken shoots attack, inorganic fertilization, mechanical fertilization, organic fertilization, Ombrometer, environment and OHS. Company has conducted follow up actions over the audit’s findings.

• Last Internal audit was conducted in Terawan Estate on 18 – 25th October 2013. The assessed things were bank and memorial cash administration, loan and credit administration and account detailed transaction, non-vegetation plantation and area maintenance, production, wage and manpower.

Meanwhile for mill, there is a mill audit advisory. In 2013 there had been 1 audit, which was conducted by internal audit


ASSESSMENT REPORT


team from Head Office Jakarta, on 21st – 24th October 2013. The audit was covering the production, planning and power usage and consumable management, controlling process, oil and kernel lost, quality control, maintenance, tool’s maintenance and grading.

Full Compliance 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield. Soil analysis activity was carried out by SMARTRI (SMART Research Institute); this activity is conducted every 5 years. The soil analysis report contains information about organic material/ soil unsure (sample on 26th October 2010). Company also annually analyzing leaf, which conducted by SMARTRI. Leaf analysis is a basis for considering the fertilization recommendation, in order to make the fertilization inline with the need of vegetation. Last leaf analysis was on 7th June 2013. Soil survey in Sungai Seruyan Estate

Sample Code

Water level

Acidity (Ph) C organic

N total C/N H2O KCL

0-10P 3.78 5,04 4.94 2.55 0,17 15 10-30P 2.97 4.52 4.2 1.72 0,13 13 30-60P 2.46 4.1 4.1 0.76 0.05 15 0-10GH 3.66 4.16 4.13 1.49 0.11 14

10-30GH 2.59 4.15 4.1 0.85 0.06 14 30-60GH 2.66 4.26 4.08 0.61 0.05 12 0-10GM 3.31 4.29 4.12 1.78 0.13 14

10-30GM 4.47 4.42 4.12 1.17 0.08 15 Description: 0 - 10P: soil with a depth of 0-10 cm in circle area 10 – 30P: soil with a depth of 10 – 30 cm in circle area 30 – 60P: soil with a depth of 30 – 60 cm in circle area 0 - 10GH: soil with a depth of 0-10 cm in harvesting path 10 – 30GH: soil with a depth of 10 – 30 cm in harvesting path 30 – 60GH: soil with a depth of 30 – 60 cm in harvesting path 0 - 10GM: soil with a depth of 0-10 cm in path 10 – 30GM: soil with a depth of 10 – 30 cm in path The fertilization was carried out to maintain soil fertility. Fertilization was based on soil analysis result leaf and visual sample. SMARTRI research team was carried out the analysis (the fertilization recommendation for period 2013 is available). Beside the inorganic fertilization, there also empty fruit bunch application as well as land application from liquid waste from mill. The entire activities were monitored and recorded. - In Terawan Estate for Period January – April 2014, the applied inorganic fertilizers are Urea, Kieserite Granular,

Rock Phosphate, MOP, Kieserite P, Dolomite, HGFB and CuSO4 (the realization data is available). - Meanwhile in Sungai Rungau Estate for period January – March 2014, the applied inorganic fertilizers are Urea,

TSP, Rock Phosphate, MOP, Kieserite G/P, Borat and CuSO4 (the realization data is available). Auditor monitors Block R24 and S24 Seruyan River, monitors the empty fruit bunch application in riparian area. The empty fruit bunches application in riparian area is used as fertilizer substitution because for riparian area it’s not recommended to use an-organic fertilization.

Status: Full Compliance 4.3 Practices minimize and control erosion and degradation of soils. There is semi detail map/LSC for 5 (five) estates with a scale of 1:50.000, which contains information about type of soil sloping area, soil’s texture, land suitability and soil fertility barrier, drainage and soil texture.


ASSESSMENT REPORT


The topography for 5 estates is quite flat (0%) with a mild wave 16% (Tangar Estates). Based on identification result in the entire estates, the average soil depth solemn is 100-150 cm (refers to LC review map), the survey result -which is conducted at least every 15 years and the last one in 2010- shows that there is no land being identified as a marginal soil or sandy soil that categorized as critical soil and there is no land being identified as a peat land and narrow area in PT SIP/BAP estate. Based on field visit in block T12 Seruyan Estates and monitoring from erosion control stake, the field condition is quite flat and midribs are placed surround the palm oil trees in order to reduce the erosion and land degradation. Based on LSC soil map review, there is a land being identified for 5 estates or estates PT SIP/BAP are dominantly flat (0-15%) and waving over 15-20% (404 ha in Tangar Estate). Land management with a certain sloping above 15%, in order to reduce erosion and land degradation is by maintaining terrace and place midribs surround palm oil trees, weed cleaning only applied surround palm oil trees and harvesting path or transporting road and company leaves other vegetation grow up in order to reduce erosion like Neprolephis tree and cultivating hardwood along riparian area. Based on field visit in riparian area in Seruyan River III in Block S24 Seruyan Estates, there is land application along riparian area that cultivated by hardwood vegetation (Angsana) and Neprolephis as well as placing empty fruit bunches to support soil structure. Moreover, company presents the record of vegetation treatment to reduce erosion and land degradation like cultivating guava trees (in Block G17 Terawan Estates – riparian area in Terawan II), Gliricidae and Trembesi in Block H Terawan Estates, riparian area in Terawan II). The cultivation of this vegetation is monitored and measured every 3 months (last record in April 2014) by HCV officer in each estate. Company shows the monitoring result over erosion stakes that are placed in each estate to represent the sloping area above 15% and below 15% to ensure land erosion in estate area. Based on field visit in erosion stake in block T12 Seruyan Estates, there is no change due to erosion. Furthermore, company also presents the monitoring record for erosion stake from October 2011 to 2014, which shows that there is no erosion in estate area. The guideline for erosion monitoring is PermenLH No. 7 / 2006 – guideline for measuring land damage criteria for biomass production and PP No. 50/2000 regarding erosion critical threshold. Company presents road planning and maintenance realization record every year (2011-2014) for each estate. This record describes land maintenance that consists of manual road maintenance, road grader, and road pavement. For instance: in 2013 road grader in Terawan Estates was planned for 206.04 Km and been realized for 263.75 Km; for Bukit Tiga Estate was planned for 41.25 Km and been realized for 41.25 Km. Based on field visit to Seruyan Estates, Terawan Estates and Tangar Estates main road, crossroad and transporting road shows maintenance over fruit and the harvested fruit has been transported in accordance with plan to Sungai Rungau POM. Based on erosion stake monitoring record and monitoring over river’s water quality in estate area shows that neither land erosion nor land degradation occur in estate area (measurement record over last erosion stake in April 2014 and UKL/UPL Semester II in 2013).

Status: Full Compliance 4.4 Practices maintain the quality and availability of surface and ground water. Company presents the monitoring record over plantation condition along riparian area or in each estate. The monitoring record was prepared every 3 months, which related to growth presentation to maintain river’s water quality and riparian condition as a protected habitat for wildlife (latest data in April 2014). Monitoring result shows the presentation of vegetation average growth along riparian area is 80% and until now still in a cultivation process. Based on observation in Block S24 Sungai Seruyan III, the riparian area has been treated by giving it right and left boundary for about 50-100 meter or between 5 trees from riparian area. The boundary is marked with red cross paint in palm oil tree in right and left side riparian area; other treatments by fertilizing with non chemical material but empty fruit bunches as fertilizer substitutions and cultivating the gliricidae vegetation, neprolephis and hardwood vegetation like angsana (vegetation that is not categorized as an exotic vegetation). Water flow protection and wet land including protecting and maintaining riparian area during and before replanting activity. The objects of company’s water management program are soil water and river’s water inside estate area and palm oil


ASSESSMENT REPORT


mill’s area. The water management program is carry out with below treatments: 1. Enrichment planting in the right and left side of riparian area, at least 5 palm oil trees or around 50 – 100 meters

from the left and right side of river. 2. Non-chemical fertilization such as organic fertilizer or empty fruit bunch along riparian area. 3. Boundary mark and some information board installation in riparian area to avoid land degradation in protective area

surround riparian area, which influence river’s water quality. 4. The monitoring and measuring of riparian area such as monitoring on enrichment planting. 5. Placing midribs surround palm oil tree and let the vegetation like neprolephis grow up in the outside of palm oil

tree’s circle area to reduce surface erosion and land degradation. 6. Monitoring and measuring the quality of land water with some sample spots from monitoring well as well as the

river’s water quality inside estate area and surround mill’s area. Based on field visit and interview with field officer in Seruyan Estate at Block S24 in riparian Seruyan III river, it’s known that some vegetation likes angsana tree and Neprolephis as well as gliricidae vegetation in order to protect river’s water quality from erosion. Furthermore, some efforts like placing midribs and non-chemical approach along riparian area by let this area covered by wild vegetation and applied empty fruit bunches. To ensure the condition of land water’s quality and river’s water quality, company has conducted periodic monitoring and measurement every semester in a form of environment management and monitoring report (RKL/RPL). The environment monitoring and measurement report for Semester II / 2013, river’s water quality along Sungai Rungau POM (watercourse from Rungau headwater and downstream) based on PP 82/2001 the entire parameters have been in line with the applicable standard threshold, but for BOD and Pb parameters area still above the quality standard. Company conducts the analysis is because of community’s activity, which from the beginning used the river’s water from headwaters and downstream with the parameters are above the quality standard. Environment monitoring and measurement in Semester II / 2013 for river’s water quality in estate area like in headwaters of Rungau river in Bukit Tiga Estate, headwaters of Sungai Rungau in Terawan Estate, downstream of Sungau Rungau Hulu (Seruyan Estate) and Sungai Rungau Hilir (surround palm oil mil) is exceptional for river’s water quality with BOD and COD parameters that not in line with standard quality (PP 82/2001), which based on the analysis result, the condition of river’s parameters already above the standard quality in the first place. Furthermore, based on water’s quality parameters in headwaters and downstream, the BOD and COD parameters are getting better, which means that company has implemented proper management to sustain water’s quality. In addition to river’s water quality, company also monitors and measures soil water’s quality (based on Kepmenlh No. 28/2003) regarding the impact from palm oil mill’s waste in Sungai Rungau or Land Application. 4 (four) sample spots from monitoring well and its known that the condition of soil water is un-pollute and not get any impact from land application activity. Related to OFI # 2012.02 regarding the water source management with a regulation from Permenkes No. 416/1990 is related to CAR no. 2014.5 – company has provided clean water facility, which comes from well and ponds in personnel’s housing and company also conducted the water quality examination in medical laboratory in Kotawaringin Timur district. However, there is not enough evidence for the parameters evaluation with the applicable standard quality parameters that based on legal regulation. Monitoring over mill’s liquid waste measurement and observation (Sungai Rungau mill) has periodically conducted. The generated liquid waste from mill comes from FFB, which processed into CPO and Palm Kernel (PK). This liquid waste is processed in liquid waste installation for further application in estate area (Division IV Sungai Rungau Estates). Meanwhile for liquid waste ponds (POME) such as 9 waste ponds with each pond has a volume of 10,000 m3 and using the multi feeding system, where the entire ponds have the same feeding, during feeding, the pH lab analysis and alkalinity and feed are regulated by opening pond’s tap with a certain duration. The liquid waste monitoring and measurement result is reported to environmental agency (latest data in semester II/2003), which based on KepmenLH No 28 and 29 in 2003. The liquid waste monitoring and measurement result such as:


ASSESSMENT REPORT


a. Monthly BOD for liquid waste monitoring and measurement (July - December 2013) that applied to land application is under the standard regulation which is less than 5,000 mg per liter

b. Liquid waste BOD for soil water that taken from 3 sample areas (area LA, area control, and community’s well) is under the standard regulation (< 5,000 mg per liter)

c. Liquid waste BOD over rivers in mill’s area such as in Rungau headwaters and downstream, the BOD are 3 and 4 mg per liter. (Compare with standard quality PP 82/2001 amount 3 mg per liter)

Company carried out the evaluation over measurement result and mentions that the BOD for liquid waste is still inside standard threshold. But Rungau river has noncompliance toward standard threshold because in river’s headwaters there is an activity outside company’s area (SIP/BAP) and from the beginning, the headwater’s BOD already above the standard threshold. Nevertheless, mill’s liquid waste always being processed and monitored and periodically evaluated. Company stated that the utilization of liquid waste for land application has no negative impact toward surround environment. Related to CAR 2012.05 – the BOD of monitoring record and parameters for river’s water quality is not fully measured and monitored by considering the river’s inlet (headwaters) and outlet (downstream), like block K29 (headwater of river) and Block A13 (river’s downstream). Company has set the root of the problem, the curative actions and preventive actions. Root causes: Company not specifically set the sample spots in headwaters and downstream. Corrective actions: To set the river’s water sample spots location by considering the headwaters (inlet) and downstream (outlet) like sample spots become 5 spots and each estate that passed by the river is represented (Sungai Rungau). Company has conducted the environment measurement and monitoring and river’s water quality that in accordance with PP No 82 in 2001 for class II (Sungai Rungau) such as inlet from Sungai Rungau headwaters in Estates BTGE, TNGE, Rungau creek in SRGE (M36-37) and Sungai Rungau Hilir Block N23 (SRGE) as an outlet. Moreover, the quality measurement and monitoring has been conducted in 1 (one) inlet spot in mill’s river and compared with the outlet of S Sungai Rungau Hilir. The result over river’s water quality measurement and monitoring, which related to BOD and COD is above the standard threshold where before the inlet, there is another company and residence. However, there is reducing tendency over water’s quality monitoring and measurement or in another word, a good indication. Preventive actions: Consistently implement the river’s water quality monitoring and measurement by considering the river’s water inlet and outlet (Sungai Rungau) Based on the improvement evidence, the auditor team concluded that the non-conformity of Minor 4.4.2 was closed. Mill presents the utilization data of water utilization for processing the FFB and for housing need. Water utilization is recorded every month (M3) and compared with the volume of processed FFB. Water utilization data in 2013 (January – December) shows water utilization for amount 677,753 m3 and processed FFB amount 503,924.530 Ton or 1.34 (M3 per Ton FFB). Moreover, for period January to April 2014, the utilization is amount 216,111 M3 and processed FFB amount 173,716.460 Ton or 1.24 M3 per Ton FFB. It explains that the target or standard for water utilization per ton FFB for PT SIP/BAP is 1.2 M3 per Ton FFB, but the actual data over water utilization per ton FFB is exceeding the applicable regulation. Regarding this issue, the company has proved that the water utilization per ton FFB had been evaluated to figure out the root of the problem, the curative actions and preventive actions. This issue is important because has a relation with sustaining water source. Non-conformity see CAR 2014.01

Minor 4.4.3 Status: Minor nonconformity see CAR.2014.01 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques. Pest and disease handling program is well documented and always being updated. The monitoring over pest attack by conducting census/ rats detection/fire caterpillar, owl breeding, and maintaining vegetation. Rat’s census is conducted in


ASSESSMENT REPORT


January, April, July and October every year. The monitoring for rats attack has been done in January and in April 2014. Detection over caterpillar attack is conducted once in 2 months period. Data in January and April 2014 shows rats attack in division I-IV in Terawan Estate was under the economic threshold, which is 5%. Within the same period, rat’s attacks were low in division I – IV in Sungai Seruyan Estate and were not make a deficit in economic term so there is no need to take chemical treatments. Rats attack was controlled by using Tyto Alba. Company effectively controls rats attack. Detection data over leaf-eater caterpillar in April 2014 shows there is no attack in Division I – VI of Terawan Estate. Pests and weed are continuously controlled by using the holistic pest management, also by breeding Tyto alba and cultivating beneficial plant. 1. Realization over Turnera subulata, Antigonon leptosus and Cassia cobanensis maintenance. Have been cultivated

in complex I 1,126 meters, complex II 1,835.44 meters, and complex III 1,561.72 meters – Division I Sungai Seruyan Estate.

2. Realization over Turnera subulata, Antigonon leptosus and Cassia cobanensis maintenance. Have been cultivated in complex I 1,516.32 meters, complex II 793.31 meters, and complex III 1,521.16 meters. Division I Terawan Estate.

3. Tyto Alba’s monitoring in Terawan Estate. From 65 nest boxes, 7 units have been used as a nest for owlet/Tyto Alba.

4. Tyto Alba’s monitoring in Sungai Seruyan Estate. From 88 nest boxes, 9 units are active. Training for holistic pest control officer on 24th April 2014 in Terawan Estate. Company monitors the toxicity of used pesticide, for Terawan Estate* 1. Isopropilamina Glyphosate 41% volume of application 120.41 liter, total active material 49.37 liter, the application

area 3.967,36 ha, active material/ha is 0,0125 liter/ha. 2. Paraquat Dichloride 42% volume of application 329.9 liter, total active material 138.56 liter, the application area

1,298.24 ha, active material /ha is 0.1 liter/ha. 3. Methyl Metsulfuron 20% volume of application 17.64 kg, total active material 3.53 kg, the application area 1,367.17

ha, active material /ha is 0.002 /ha. 4. Fluroksipir, volume of application 0.46, total active material 0.138, the application area 91.34 ha, active material

/ha is 0.0015 5. Brodifacum. There is no utilization of Rodenticide

*Data period January – April 2014.

Status: Full Compliance 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. Company use licensed and permitted agrochemical by relevant institution. The used pesticide in Sungai Seruyan Estate and Terawan Estate, such as: 1. Isopropilamina glyphosate 480g/l, trade brand: Roll up 480 SL. 2. Paraquat Dichloride 276 g/l. Trade brand: Rolixone 276 SL 3. Fluroksifir 295 g/l. Trade brand: Starane 290EC 4. Methyl Metsulfuron 20%. Trade brand: Erkafuron 20 WG

Record in a warehouse shows the appearance of Rodenticide with an active brodifacum material, which categorized as WHO1B, even though; this Rodenticide had never been used since 2012. Moreover, pesticide with an active paraquat material is still used in 2014. The usage of paraquat in 2012 (1119.27 liter), in 2013 (917.55 liter), in 2014 (April 509.09 liter) *data from Sungai Seruyan Estate. Pesticide usage is in line with the recommended doze and targeted species. For instance: Methyl metsulfuron is used to spray broadleaf weed (Borreria sp, Clidemia hirta, Micania micranta, Diodia sarmentoso) with a doze for circle area is 0,012 kg/Ha. Paraquat for controlling the Commelina benghalensis weed, Calopogonium mucunoides with a doze for circle area is 0.24 liter/ha. Regarding the usage of Paraquat, which is one of restricted pesticide, company has trained


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pesticide operator based on Permentan 07 in 2007. Training on 10th June 2013 in Sungai Rungau Estate, was attended by 26 spraying personnel from Sungai Seruyan Estate, 21 personnel from Terawan Estate. Evidence: training certificate on behalf of Herman Solem. Based on visit to hazardous warehouse in Terawan and Sungai Seruyan Estate, it shows directory/ guidelines for safety used of pesticide (Material Safety Data Sheet). Pesticide was stored in a safety location with a limited access. Company has managed pesticide package waste in accordance with mechanism and the applicable regulation (Doc. SOP/SPO/SMART/LH-09, 1st July 2010). Used pesticide package is washed 3 times and the rinse water for spraying, after being washed, used pesticide package will be stored and dispatched to supplier. The washed pesticide packages will be returned to supplier (PT Rolimex). The used pesticide packages will be collected in hazardous warehouse in each estate. Every material that in and out from hazardous warehouse is well documented. Binasawit Abadipratama send used pesticide package to supplier on 3rd January 2014. The 20-liter package is 115 units; 250-gram package is 262 units (Data from Sungai Rungau Estate). The 20-liter package is 62 units; 250-gram package is 717 units (Data from Terawan Estate). Company consistently implemented periodic medical examination for spraying team, covering physical and examination and special examination (cholinesterase) every 6 months. For instance: periodic medical examination for semester II in 2013, which has been conducted in December 2013 with collaboration with Hyperkes Kalimantan Barat. Company consistently implemented the regulation of banning pregnant and lactating female worker to work as spraying officer. This can be proved by the observation result over spraying activity in Block S21 in Division 2 Sungai Seruyan Estate, that there is neither pregnant nor lactating female worker who work with chemical material.

Status: Full Compliance 4.7 An occupational health and safety plan is documented, effectively communicated and implemented. Company has a policy for personnel occupational health and safety, which was updated on 1st November 2013 and endorse by chief director. As a proof over its commitment, company consistently set, implemented, and documented its K3 policy through K3 work program in its work unit’s operation, such as: • K3 policy is communicated during morning briefing and through information board in division office. • SOP document of SMK3 implementation that summarized in Smart Safety manual book (SSMS/M/001), which

valid from 01st July 2010. The manual book consists of the policy and description for implementing company’s K3 policy.

• Company set committee for occupational health and safety, who responsible for occupational health and safety program, periodic meetings have been conducted every month, for instance: meeting in March 2014 with an agenda of manpower regulation and BPJS socialization, as well as commemoration of occupational health and safety month. Report has been periodically submitted every 3 months to manpower agency of Seruyan district.

• Company has consistently register its personnel on social insurance scheme (manpower BPJS), which consist of pension allowance, death insurance, occupational accident insurance for fix term personnel and for daily workers covers work accident insurance and death allowance. Bur based on periodic medical examination, there is officer that has hearing problem and until now received no compensation from manpower BPJS/Jamsostek (non-conformity see CAR.2014.2)

• Company has consistently implementing periodic medical examination for high risk personnel, like audiometric examination every 6 months, but based on periodic medical examination in December 2013, there is a case of hearing problem on officer from Sungai Rungau Estate due to noise (clarification station, Engine Room, Nut & Kernel, Press, Boiler) and Sungai Seruyan Estate (Operator of grass cutter machine and operator of water pump). However, no sufficient proof over company’s evaluation has been effectively protecting its personnel from negative impact from operational activity. (non-conformity see CAR. 2014.3)

• Company conducts risk analysis in a kind of record over hazard source assessment and risk control for the entire operation activity in Mill and Estate, and has been periodically monitored every year.

• Training record and OHS socialization have been consistently documented in a form of minutes of meeting and attendance sheet, for instance on 03rd May 2014, first aid training for foreman, analyst and OHS committee in


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Sungai Rungau Mill. • The implementation of providing OHS and first aid tools, for instance:

• Company has provided the PPE for personnel in accordance with the risk of each work, for instance PPE for spraying officer such as (helmet, face shield, mask, rubber gloves, apron, and shoes).

• Company provided first aid box, which contains 21 items that in line with Permenaker No. 15 in 2008 in each estate and mill’s working unit, first aid equipment/ tools that placed in high risk building and first aid bags for foreman in the field. Based on interview, foremen have received first aid training and have understood the usage of first aid.

• Company has consistently documented the work accident, stored it, as well as periodically reviewed it.

Minor 4.7.1 Minor 4.7.2

Status: Minor non-conformity see CAR.2014.02 Status: Minor non-conformity see CAR.2014.03

4.8 All staff, workers, smallholders and contractors are appropriately trained. Company consistently once year makes training programs for mill and estate personnel that in line with personnel competency and position. This program is documented in each mill and estate-working unit. For instance first aid training for foreman from Terawan Estate, training and emergency response simulation for personnel, foreman, and emergency response staffs in Sungai Rungau Mill, etc. Training program for the manager, supervise, staff and employees based on their respective job competence is available at each work unit. Training record is well stored in personnel file. For example : • On 28th April 2014, Supply Chain certified System training for staff, analyst, grading, dispatch operator, laboratory,

and security guards, weighing officer and office staff in Sungai Rungau Mill. There was an evaluation to identify strengths or weaknesses from worker as member of training.

• On 15th January 2014, training Hazard Identification Risk Assessment Control and safe working practices for Mill’s workers with high risk.

The evidence that company has used licensed contractor is stated in mutual labor agreement document, for instance: agreement for transporting palm oil fruit No. 008/TRWE/LKL/04/14-ATBS on 01st April 2014 on behalf of Bugis Ongo, with address at Sampit, Kalimantan Tengah. In the agreement, article 7 point 11 states that contractor will provide experience and well-trained personnel. Required documents for vehicle and driver such as BPKB, STNK, SIM, KIR letter, etc. should be completed. Moreover, there is company profile and business license for CV Samaco as a contractor for construction work in mill.

Status: Full compliance 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. Company has an environment impact analysis document and environment management and monitoring plan, which are endorsed by regulator based on letter from ministry of agriculture RI No. 015/ANDAL/RKL-RPL/BA/VIII/1997 on 7th Augustus 1997 and head of Bapedalda Kotim, head of AMDAL regulator commission Kotim No. 42/komisi-Kotim/VII/2004 on 8th July 2004 for PT SIP and BAP. The AMDAL, RKL/RPL mentions about environment aspect and impact that can rise from palm oil estate and mill’s operation. Company also uses these documents as a guideline to monitor and manage environmental aspects. Company periodically submits its environment aspect and impact report to relevant government’s institutions (every 6 months), such as Environment Agency of Seruyan district and Environment Agency of Kalimantan Tengah province through environment monitoring and management plan report (RKL/RPL). PT SIP and BAP submitted their latest report for semester II/ 2013 on 20th and 29th January 2014. The environment monitoring and management plan report points out PT SIP and BAP measurement and monitoring result, which is based on the actual condition in the field, such as:


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1. Chemical physical component – micro climate (quality of water, quality of air/noise, ambient air, emission from boiler and generator)

2. Component of soil chemical type. 3. The chemical type of surface and soil water. 4. Biological component (biodiversity over water wildlife) and social, economic and culture (work opportunity, potency

of conflict and work accident). Regarding the AMDAL in 1997, which states a different board between the report and the actual condition in PT BAP 20.152 Ha, company has showed the improvement of its AMDAL report by revising it based on letter from ministry of environment on 27th December 2013 about the guideline to implement article 121 UU 32/2009 regarding the environment protection and management. This regulation explains that every company which does not have an environment document but already operated will be fined with written administrative penalty, such as: - Required the responsible person/ party to draft the environment document. - Written warning letter, 18 months at the latest since the distribution letter was issued. - Responsible person/ party have to make the environment document at the latest by 6 months since the warning

letter was issued. Furthermore, PT BAP has sent the letter to Environment agency of Seruyan district on 24th March 2014 regarding the request for guideline to revise environment document as a follow up action to make the AMDAL report in line with the actual condition. The environment monitoring and management plan report has periodically submitted per semester and the latest report was submitted on 20th and 29th January 2014 for report on semester II/2013. Based on consultation with Environment agency of Seruyan district, company has mentioned that the environment report has been in line with the actual condition. PT Sumber Indah Perkasa (SIP) has periodically submitted its environment aspect and impact plan (RKL/RPL) per semester or every 6 months, which related to palm oil mill’s operation with a capacity of 80 ton per hour and PT Binasawit Abadi Pratama (BAP) related to its estate operation with a broad of 20,152.79 ha. PT Sumber Indah Perkasa (SIP) has an environment impact analysis document (ANDAL) and environment aspect and impact plan (RKL/RPL) with a capacity of 80 Ton per hour and approved and endorsed by head of Bapedalda Kotawaringin Timur, head of AMDAL regulator committee of Kotawaringin Timur No. 42/komisi-Kotim/VII/2004 on 8th July 2004. This document is still relevant with the actual operation condition, but the environment impact analysis document (ANDAL) and environment aspect and impact plan (RKL/RPL) for PT Binasawit Abadipratama (BAP), which is endorsed by ministry of agriculture of republic of Indonesia No. 015/ANDAL/RKL-RPL/BA/VIII/1997 on 7th Augustus 1997 states the board of plantation area is 17.780 Ha, but in estate operation the board is 20,152.79 Ha. Related to CAR 2012.02, PT BAP cannot present the revision over environment monitoring and management document with a scope of 20.152 Ha. Company has showed its compliance by set out the root of the problem, the curative actions and preventive actions Root causes: The previous development of AMDAL document was not entirely accurate, where the actual broad in the field and the broad stated in AMDAL document is similar or no revision needed but the number stated in the HGU is different. The AMDAL was issued in 1997 and HGU BAP in 2005 and in 2006.

Furthermore, BAP sent a letter on 7th May 2013 regarding the advice for PT BAP to complete its environment document. Response letter from KLH was sent on 24th June 2013 regarding the response over environment document, which mentions that they are waiting for collective distribution letter from ministry of environment and ministry of home affair

Corrective actions Company sent letter to BLH agency of Seruyan district on 15th Feb 2012 regarding the advice on AMDAL document of PT BAP. The letter recommends conducting the environment monitoring and management. The letter also sent to KLH on 15th Nov 2012 with the same subject. KLH gave a response letter on 25th Jan 2013, which describes that PT BAP has not have the required environment document based on UU 32/2009 regarding the environment protection and management.


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regarding the difference of area’s broad amount 2,753 ha. There is a letter from ministry of environment on 27th December 2013 about the guideline to implement the article 121 UU 32/2009 regarding the environment protection and management. The letter explains that for every company who has not have the environment document will get penalty and will receive written administrative penalty, such as: - Required the responsible person/ party to draft the environment document. - Written warning letter, 18 months at the latest since the distribution letter was issued. - Responsible person/ party have to make the environment document at the latest by 6 months since the warning

letter was issued. PT BAP has sent the letter to BLHD agency of Seruyan district on 24th March 2014 regarding the request for guideline to revise environment document as a follow up actions to make the AMDAL report inline with the actual condition. - The RKL RPL report has periodically submitted per semester and the last report was submitted on 20 and 29th Jan

2014 for report on semester II/2013. - Based on consultation with BLHD agency of Seruyan district, company has mentioned that the environment report

has been inline with the actual condition. Preventive actions: Consistently conduct the environment monitoring and management in accordance with the actual field condition. Conducting monitoring over AMDAL revision Based on the improvement evidence, the auditor team concluded that the non-conformity of Minor 5.1.1 was closed Status: Full Compliance 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. Internal assessor team from environment department of PT. SMART, Tbk (registered in RSPO) has identified the high conservation value area in July 2011. Based on the identification result, there are a HCV area and protective or endangered wildlife, such as: 1. HCV 1, HCV 2, HCV 4 with total broad 1.503 hectare, such as riparian area (Rungau, Merah, Seruyan, Serindu,

Terawan), water absorption and reservoir area, secondary forest and cemetery. 2. There are 52 types of wildlife and vegetation being identified and 4 type of protective vegetation (Keruing carpus

grandiflorus, Asam Putar/Mangifera pajang, Ulin/Eusideroxylon zwagerii, Kayu arang/Diospyros sp.) 3. Based on HCV identification and observation, there are some wildlife, such as: 12 types of birds, 7 types of

mammals, and 4 types of reptiles. Some protective species like: a. Birds: Honey bird (Endangered), Cekakak belukar (Endangered), eagle (Endangered/App II), Kerangkeng

Hitam (Endangered/App II), pijantung kecil (Endangered),king shrimp (Endangered), rangkong (Endangered/App II), tiong emas (App II), black eagle (Endangered/App II), pekaka emas (Endangered).

b. Mammals: Bear (Endangered/App II), Macan akar, the Long-tailed Macaque, Orang-utan, the Silvery Gibbon, Deer

c. Reptiles: Lizard, Cobra, Python, Gharial As a follow up actions over the HCV identification, there are some steps like: 1. Drafting the policy and SOP for HCV management especially for riparian area. 2. Drafting the HCV management and monitoring plan for 3-year duration (2012 – 2014), which explains the detail of

annual HCV management and monitoring, plan. 3. The implementation report over HCV management activity • Internal and external socialization • Regular patrol in HCV area in each estate of PT BAP • Installation of HCV symbols and symbols maintenance like Poster of protective species, boundary/stake in HCV

location, installation of banned board and HCV board in riparian area. • Rehabilitation over HCV area by nursing hardwood vegetation and cultivation of beneficial plants.


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• Monitoring over protective species in HCV area. 4. PT. BAP annually develops the HCV management and monitoring report. For instance HCV monitoring and

management report in PT. BAP in 2013 Generally speaking, the steps for managing HCV area as mentioned above are in line with the applicable regulation, especially law No. 5 in 1990 regarding the conservation over vegetation and its habitat, President decree No. 32 in 1990 regarding the management for protective area. In line with the available document, company also made posters and ban boards regarding the protective species. Socialization on the presence of HCV area and protective species to personnel and community is in line with the socialization evidence in 2012. Field visit to HCV area in Sungai Seruyan and Terawan Estate shows the installation of ban boards in some locations, for instance: in conservation area along Rungau River, HCV area for cemetery, HCV area in riparian of Rungau River. Based on public consultation with local community, it’s confirmed that company has conducted socialization over HCV management for local community. Officers in charge are available in capital and field level. In capital level, EHS Department (chief: Mr. Ismu Zulfikar) who supervise BCOS Section (chief: Norman Farid Mustaqim) conducted the HCV management and assisted by 10 trained HCV staff. In field level (estate) there are special trained officers in each estate to supervise HCV related activity that are appointed by Estate Manager.

Status: Full Compliance 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner. Company has identified source of waste and source of pollution in estate and mill. Type of activity that produce pollution, environment aspects (pollutant and waste) and potency of impact. For instance: type of pollution source (spraying), waste from herbicide leakage and used pesticide packages, the potency of impact toward soil and water. Source of Medical waste that come from polyclinic, generating major medical waste (used syringe, ampoule) and non major medical waste (cotton and expired medicine). Solid and liquid waste management Domestic waste like plastic, used can, iron can produce water and soil pollution. Domestic waste will be collected in final landfill, which located in Block E14 Terawan Estate and Block R30 Sungai Seruyan Estate. Solid waste from shell and fiber will be change into boiler fuel; meanwhile sludge will be managed as liquid waste for land application in estate. Field visit in Block R30 Sungai Seruyan and Block E14 Terawan Estate. Domestic waste is collected in a location that far away from personnel housing and clean water source. Field visit to knapsack washing place, used pesticide package and rinse water are collected in special reservoir and re used for field spraying activity. Hazardous waste management Hazardous waste will be sent to licensed hazardous waste collector. Total generating hazardous waste from mill’s activity will be recorded, including the oil, cloth rags, filter and accu. Hazardous waste is sent every 3 months or less in accordance with required regulations. PT Nazar is a collector for hazardous waste, who got the license from ministry of environment based on decision letter 122 in 2010 and SK BLH Kalimantan Selatan No. 78 in 2012. Auditor monitors the location of hazardous waste warehouse in Rungau POM. The warehouse is completed with hazardous symbols, limited/restricted access only for certain officers, reservoir for leakage; personnel are equipped with PPE, sufficient air ventilation. Special officer monitors the in and out waste from warehouse and ensure that the waste is delivered to licensed collector within 90 days. Delivery process of hazardous waste to PT Nazar: a. Delivery on 8th March 2014, used accumulator 10 units, filter 174 units, cloth rags 228 kg, used oil 2193 liter.


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b. Delivery on 10th December 2013, used oil 2587.5 liter, used filters 191 units, cloth rags 285 kg, used accumulator 8 units.

c. Delivery on 6th September 2012, used oil 400 liter, cloth rags and filter waste 80 kg, used accumulator 70 Ampere. d. Delivery on 28th November 2012, used oil 700 liter, cloth rags and filter waste 40 kg, used accumulator 70

ampere. e. Delivery in June 2012, used oil 400 liter, cloth rags and filter waste 200 kg, used accumulator 370 ampere (3ea).

Infectious waste management Medical waste can be categorized in 2 (two); one is major medical waste (used syringe, ampoule) and non major medical waste (cotton and expired medicine). Medical waste is collected in polyclinic in Sungai Rungau Estate. Based on observation in polyclinic of Sungai Rungau Estate, there are major and non major medical waste bin in a closed condition. To eliminate medical waste, company has collaboration with Imanuddin Hospital. Based on information from staff, BAP’s medical waste will be sent to PT Tapian Nadenggan amount 5 kg (5/5/2014), 10 kg (26/3/2014). Furthermore, the waste will be sent to Imanuddin Hospital, on 24th April 2014. A minute of hand over from Hospital is available, major waste amount 11 kg and non-major waste amount 30 kg.

Major 5.3.2 Status: Closed with observation 5.4 Efficiency of energy use and use of renewable energy is maximized. Company presents monthly shell and fiber utilization data as a substitution for fossil fuel. This data will be analyzed to figure out the difference of fossil fuel utilization or fuel saving from shell/ fiber or renewable energy. Record over generating renewable energy from shell/ fiber for period 2013 is 286,355,114.173 KCAL and is utilized amount 108,536,991.804 KCAL. Furthermore, the required utilization of fossil fuel is 2,187,476 liter but the real utilization is 289,274 liter or there is a saving about 1,898,202 liter or 86.78% Data for period January – April 2014 shows the generating energy from shell and fiber is 98,714,378.395 KCAL and the utilized energy is 36,233,878.555 KCAL. Furthermore, the required utilization of fossil fuel is 761,211 litter but the real utilization is 93,242 liter or there is a saving about 667,969 liter or 87.75% Based on monitoring data over the utilization of renewable energy and its monthly efficiency analysis, it shows efficiency or saving on the utilization of renewable energy for operational activity especially in mill. Company presents the record of monthly fossil fuel utilization. This data will be analyzed to figure out the difference between using fossil fuel and shell/fiber fuel or renewable energy. Data for period January – December 2013, the required fossil fuel utilization should be 2,187,476 liter but the actual utilization is 289,274 liter or there is saving amount 1,898,202 liter or 86.78% Furthermore, data for period January – April 2014 shows the required fossil fuel utilization should be 761,211 litter but the actual utilization is 93,242 liter or there is saving amount 667,969 liter or 87.75% Based on monitoring data over the utilization of renewable energy and its monthly efficiency analysis, it shows efficiency or saving on the utilization of renewable energy, such as shell and fiber utilization. Status: Full Compliance 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. In line with Sinar Mas Palm Oil Cultivation Guideline/ Pedoman Teknis Budidaya Tanaman Kelapa Sawit (Management Committee Agronomy and research) Point 5 regarding the land clearing and cultivation, document no. SMA/MCAR/05/05-07 it states that in order to perform land clearing, company should implement the zero burning approach. Operational wastes such as used pesticide packages and fertilizer should not be burned. PT. BAP used zero burning approach when clear its plantation area. Field visit in Terawan and Sungai Seruyan Estate shows that there is no more land preparation/ clearing. Company compiles the data over facility and infrastructure for handling fire in the field. Fire facility and infrastructure condition is periodically monitored. Based on information from staff, the monitoring is conducted every 2 weeks.


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Monitoring data for Sungai Seruyan Estate is available, especially for fire extinguisher, which shows there are 35 units of Fire extinguisher and all Fire extinguishers are in a good condition. In case the Fire extinguisher needs to be refill; company will immediately refill the Fire Extinguisher. For instance refill and reinstallation of Fire Extinguisher at assistant house on 7th May 2014. Sungai Seruyan Estate: Fire extinguisher powder 40 units, water tank 1 unit, first aid facility like litter 4 units, first aid bag 84 units and other supporting facilities. Terawan Estate: Fire extinguisher 41 units being installed, 6 units’ backup Fire extinguisher, water tank 1 unit, water pump, wet sack/sand and other supporting facilities. In addition to the above information, emergency response team has been established in each estate. Simulation on fire in housing location also performed to anticipate the fire. Fire simulation was conducted on 10th February 2014. The fire simulation has a scenario for fire in housing location and completed with its evaluation. Fire simulation also carried out in Sungai Seruyan Estate housing facility on 3rd May 2013. This simulation involves fire extinguisher team. For this year, the fire simulation is scheduled in May.

Status: Full Compliance 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored. Identification over environment aspect and impact is carrying out annually. Identification for pollution and emission source, which come from palm oil mill was carried out in 2013. The identification over environment aspect is carrying out in each activity stage in palm oil mill, such as: entrance gate, weighing bridge, parking lot, grading, loading ramp, sterilizer, thresher, press, but and kernel, clarification, storage tank, CPO dispatch, engine room, boiler, Water Treatment Plant, chemical warehouse, hazardous waste landfill, diesel fuel storage, vehicle washing place, housing and oil or fuel warehouse. The identification over environment aspect is managed and controlled by procedure and direct actions in the field in order to minimize the pollution and emission, for instance: emission in boiler will be managed by procedure and chimney examination activity and periodic machine maintenance; pollution from oil leakage in vehicle washing place will be managed with oil trap and using cloth rags before collected to hazardous landfill. Company periodically (every 6 months) monitors the emission as a source of pollution like air and noise quality parameters. The objective of emission monitoring is to find out the impact of palm oil mill’s activity to the declining of air quality surround mill and housing area. Some identified sources are emission form boiler and generator that operated in mill. Monitoring also carry out inside mill’s area. The monitored environment parameters related to air emission and air ambient are based on government regulation No. 41 in 1999 regarding the control over air pollution, for boiler is based on KepmenLH No. 7 in 2007, Generator emission based on PermenLH No 21 in 2008 and noise based on Kepmenaker No 51 in 1999. Based on monitoring and observation and analysis over airs ambient (RKL/RPL report for semester II in 2013), which located near mill and housing area, the air ambient still under standard threshold and inline with PP No 41 in 1999 and is controlled. Monitoring and observation and analysis result over Boiler’s emission such as 3 unit boilers (RKL/RPL report for semester II in 2013), the boiler’s emission is still under standard threshold of PermenLH No. 7 in 2007 for emission standard threshold is unmoving and is controlled. Monitoring and observation and analysis result over Generator’s emission with 2 unit sample of generator (RKL/RPL report for semester II in 2013) is controlled because still under standard threshold of PermenLH No. 21 in 2008. Noise examination is conducted in some potential places, which will ruin the operation in mill, such as in Sterilizer station, Nut and Kernel station, Press station, Engine Room station, Boiler and Clarification station. Noise examination result except for Sterilizer station shows that the noise is in line with the regulation from Kepmenaker No 51/in 1999, which is under 88 db. (A). For other stations are mandatory to wear PPE and it’s mandatory for periodic medical examination. Company shows its effort and plan to reduce or minimize noise and air quality degradation that related to pollution and emission. Some efforts/ actions to reduce pollution and emission are stated in environment management and monitoring


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document, like: a. Periodic maintenance and improvement as well as efficiency toward machine and tools, where the machine can

perform maximum and able to reduce air pollution. b. Conducting periodic air quality analysis for air ambient and air emission in boiler’s chimney. Based on field observation in palm oil mill, the boiler and generator condition is good which can be proved by monitoring and measurement result for boiler’s emission, generator and air’s ambient. The result shows that the entire measurements are under environment standard threshold. Information from mill’s staff also stated that the periodic maintenance for machine and other tools in mill (boiler and generator) is carried out regularly. POM performs liquid waste management that generated from processing and the production of CPO from FFB as well as palm kernel by using installation for liquid waste management or Palm Oil Mill Effluent (POME). The processed liquid waste in IPAL (POME) will be used and be utilized as land application in estate area. The applied POME methodology is by using 9 ponds and each pond has a volume of 10,000-m3. The management system for liquid waste by using multi feeding system, where the entire ponds will be equally feeding and each feeding is managed to open pond’s tap in certain period/ duration. Flowing system to land application is from pond’s underflow. Liquid waste will be monitored and the BOD will be measured every month before applied to estate area and its compliance will be analyzed and documented. BOD monitoring result before applied to estate area (data by the end of April 2014) is in line with standard threshold (KepmenLH No 28 and 29 in 2003 regarding the utilization of liquid waste in palm oil mill). To guarantee that there is no pollution that generating from land application, company has conducted monitoring and measurement over river’s water quality (Rungau River) and soil’s water (monitoring well). The monitoring and measurement result will be analyzed and be evaluated and for semester II /2013, the result shows that the parameters for river’s water and soil’s water quality is quite good, only BOD and COD parameters in river’s headwater and soil’s water are above standard threshold due to their beginning condition that already above standard threshold. This condition will continuously be monitored and managed.

Status: Full Compliance 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. Company has the social impact analysis, which stated in: 1. AMDAL document that was drafted in 1997, which contains positive and negative impact from plantation operation

that will be monitored and be managed. 2. Identification report over social impact from PT. Binasawit Abadi Pratama palm oil estate and mill (Danau Seluluk

sub district, Seruyan district, Kalimantan Tengah) by team from PT. SMART Tbk. Environment department in March 2012, which covers positive and negative impact from plantation operation. Analysis and management plan and social monitoring are drafted by involving community who receive an impact from BAP plantation operation as presented in the evidence of community engagement on field data collection.

There is also periodic social impact management and monitoring document that drafted every 6 months. The latest RKL-RPL document was drafted for semester 2 in 2013, which consists of environmental and social impact management and monitoring that in line with AMDAL guideline document. Moreover, in RKL-RPL, company has had social impact monitoring document as a follow up from social impact identification. Nevertheless, the record not contains the implementation evidence over social impact management and monitoring that were carried out with local community participations in order to eliminate community restlessness, for instance community’s restlessness over the absence plasma scheme issue in Selunuk and Sebabi village, social jealousy issue between original community and transmigrate community.


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On previous audit, PT. BAP can’t present the revision over social impact management and monitoring document, which covers an area of 20.152 Ha, that in line with the applicable regulation. As an improvement actions, company has prepare the revision over AMDAL document, which covered social circumstance monitoring as presented in letters for AMDAL revision document that were submitted to regulator party. Based on consultation with Environment Agency of Seruyan district, the report has been in line with the actual condition. By this revision, the non-compliance CAR.2012.03 is closed, and will become a subject for next surveillance. PT. SIP and PT. BAP have environmental management and monitoring implementation report for semester 2 in 2013. This document has been reported to related institution (BLH) on 20 and 29th January 2014 that in line with receipt note. In general, RKL-RPL report contains the entire aspect of environment that requested by the AMDAL document. Based on consultation result with Environment agency of Seruyan district, company has made a report that in line with the actual condition. Document’s review points out that until surveillance 1, plantation does not has plasma plantation scheme for local community. Nevertheless, verification over some local villages like Sebabi, Selunuk, and Rungau Raya village shows that company has an effort to establish plasma plantation scheme through establishment cooperative and identification over community’s land that can be developed into plasma plantation scheme.

Status: Full Compliance 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. As a guideline for communication and consultation with community, there is an SOP No. SOP/NP/SMART/XIV/MCAR003 regarding the communication and consultation on 01st July 2010, which explain internal and external communication and consultation mechanism, the responsible party/ person, as well as necessary actions. In general, the communication is carry out by conducting meeting or suggestion box, which is placed in the office. The entire incoming written communication will be recorded in communication and consultation book and will be processed within one-week period, meanwhile for the response will be issued no more than 3 weeks. As an effort to communicate, company has been involved in MUSRENBANG (Musyawarah Perencanaan Pembangunan/Development Planning Meeting) at sub district and district level. This meeting is regularly conducted every year. The MUSRENBANG implementation report in Seruyan district presents MUSRENBANG record, which was conducted on 18th March 2013. Company’s representative to follow the MUSRENBANG meeting was Estate Manager Seruyan, Mr. Albert Y. Makanuai. In 2014, Estate Manager Tangar represented company from Kalteng 3 region conducted sub district MUSRENBANG in February 2014. The objective of MUSRENBANG is to eliminate overlapping in development activity. To make the communication easier, there is stakeholders list and contact person list, which come from some institution (head of sub district, head of village, police department, related institution), community leader, contractor, local NGO and regional NGO, worker organization and plantation surround PT SIP-BAP. As evidence for implementation of communication policy, there is a record over community’s aspiration that follows up by company, which stated in communication and consultation book in each estate. In general, these aspirations are in a form of grant proposals, which are submitted to company in written and verbal. There is a complete documentation over letters and internal process to answer incoming aspiration. From public consultation with local villages (Selunuk, Sebabi, and Rungau Raya village), it’s known that company properly answers community’s aspirations. Estate Manager is person in charge on communication and consultation with community. Estate Manager responsibilities on communication, such as: • Responsibility to ensure the implementation of communication process and report to top management. • Act on behalf of top management to conduct communication and consultation with stakeholders. • Ensure the implementation of communication and consultation process is in line with SOP of communication and

consultation with stakeholders.


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• Conducting coordination with related supporting unit if necessary and in accordance with type of problem to gain inputs.

Status: Full Compliance 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties. There is an SOP for complain and dissatisfaction, with a document no. SOP/NP/SMART/XII/MCAR001 on 1st July 2010 with an objective to ensure the harmony of communication with internal and external party that in line with the applicable regulation and law. There is also an SOP for land tenure/conflict resolution No. SMART/LH-04 on 1st July 2010 with an objective to ensure the harmony of communication between company and local community especially on land ownership issue that in line with the applicable regulation and law. Record over complain and dissatisfaction from stakeholder are recorded in complain and dissatisfaction book based on written complain and dissatisfaction or complain from suggestion box. For instance incoming letter book and suggestion box in Seruyan and Terawan Estate. Based on these books, it’s known that until the implementation of surveillance, there is no complaint/ dissatisfaction from any party. Verbal complain is followed up in LKS Bipartite meeting between company and personnel, as presented in minutes of meeting between company and LKS Bipartite. In line with previous audit’s findings; there is a procedure for land compensation document No. SOP/NP/SMART/VII/D&L002, which start into effect since 1st July 2010. Scope of this SOP is the entire activities that have a relationship with land compensation procedure and process within company’s HGU. In part 6. Work procedure, point 6.2, it explains that after Pra-inventory, company will conduct physically inventory such as land measurement in a systematic way, such as: measurement over the broad of land, the calculation over vegetation’s number and type as well as type of vegetation per-Persil that inline with land ownership letter. This activity is conducted and witnessed by land tenure team and local government.

Status: Full Compliance 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. There is a procedure for land compensation, document no. SOP/NP/SMART/VII/D&L002, which start into effect since 1st July 2010. Scope of this SOP is the entire activities that have a relationship with land compensation procedure and process within company’s Land Use Title. Based on PT. Binasawit Abadi Pratama environment impact analysis guideline (KA- ANDAL) 1996 page II-6, it’s known that the entire plantation area that belongs to company is come from ministry of forestry. This area originally is forest area and there is no area that belongs to community. Decision letter Land Use Title Document No. 16/HGU/BPN/97 states that based on area’s assessment history (Committee B) Kalimantan Tengah province No. 01/PPTB/1996 on 10th July 1996, its known that the land is originally come from state (forest area that was released). Company requested HGU over this area and there is neither land belongs to community in this neither area nor objections from community, which made committee B granted the HGU request from company. To verify land tenure, company has hold public consultation on 6-7th May 2014 with village administrator especially in Selunuk, Sebabi, and Rungau Raya village, as well as government institutions like Land National Agency and Plantation agency. Public consultation result shows that in general there is objection from community regarding the plantation area.

Status: Full Compliance 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. Based on observation over personnel’s salary record in March 2014, interview with boiler’s operator in Sungai Rungau


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Mill as well as interview with head of Mandiri worker union (unit Terawan Estate and unit Sungai Seruyan Estate), the payment over main salary and overtime is in accordance with the applicable regulation. Main salary is based on decision letter from Kalimantan Tengah governor No. 188.44/952/2013 that set on 21st November 2013 regarding district minimum wage and sector minimum wage for Seruyan district in 2014, meanwhile for overtime allowance is based on Kepmenakertrans No 102 in 2004 regarding overtime schedule and overtime allowance. Company’s regulation has been endorsed by Seruyan Manpower, Transmigration and Tourism Agency, which in line with the applicable regulation. Decision letter from Disnakertranspar No. 560/897/Disnakertranspar/V/2012 regarding the endorsement of PT Binasawit Abadi Pratama’s regulation on 24th May 2012 is valid until 10th May 2014 and decision letter from Disnakertranspar No. 560/1084/Disnakertranspar/VII/2012 regarding the endorsement of PT Sumber Indah Perkasa company’s regulation on 16th July 2012 that valid until 30th June 2014 Based on field observation in hut 1 Terawan Estate, company has provided facility such as housing type G2, religious facility like mosque and church, education facility like kindergarten and primary school, and other facilities like personnel hall and childcare. Based on interview with one of residence in housing facility, the house condition is good and appropriate for living, electricity is sufficient and health facility also available like polyclinic with a good service, there is also school for free. To provide clean water, company has conducted water examination in district health laboratory; however there is no evaluation from the water examination in housing location with standard threshold that in accordance with the applicable regulation. (Non-conformity see CAR 2014.05) Labor agreement for FFB’s transport No. 008/TRWE/LKL/04/14-ATBS on 01st April 2014 on behalf of Bugis Ongo who resides at Sampit, Kalteng. The agreement states the requirement for contractor to obey manpower regulation, like stated in article 6 point 1 (contractor is mandatory to pay salary in accordance with manpower regulation and in line with minimum wage), article 6 point 2 (company is restricted to hire personnel under 18 years old), and article 7 point 1 (contractor should provide working tools and PPE like helmet, safety boots, glove and ‘tojok’). Minor 6.5.1 Status: Minor Non-conformity see CAR 2014.05 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. Company has implemented the policy related to freedom for establish union that is regulated in distribution letter No. 020/HR PSM6/01/11, which endorsed on 03rd January 2011, by establishing Mandiri Worker Union in each mill and estate unit. The establishment of Mandiri Worker Union has been recorded in accordance with the applicable regulation, for instance decision letter from Manpower, Transmigration and Tourism Agency of Seruyan District No. 560/815/Disnakertranpar/VII/2013 on 30th July 2013 regarding the record over Mandiri Worker Union in Terawan Estate unit. Minutes of meeting on 29th April 2014 with an agenda to discuss the establishment of Mandiri Worker Union in Terawan Estate unit 2014 – 2016, which was attended by Mandiri Worker Union committee, vice federation of KT II and management.

Status: Full Compliance 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 program. Children are not exposed to hazardous working conditions. Company has stated general age requirement policy in director’s human resources distribution letter No. 002/SE-HRDV/03/2009 on 31st March 2009 regarding the minimum age requirement in accordance with the implementation of law No. 13 in 2003 regarding manpower, article 68 that the minimum age for recruitment is 18 years old. During the Surveillance-1, the implementation over general age requirement can be proved on: • Observation over personnel list in Sungai Rungau Mill, Sungai Seruyan Estate and Terawan Estate for period

March 2014 fix term personnel (Monthly Worker and Daily Worker) and non-permanent personnel (certain time workers and non-permanent daily employee), based on their date of birth and working starting date, there is no personnel under 18 years old when they start to work for company.


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• Field visit in some locations, such as capital office, division office and agrochemical warehouse and fertilizer in Terawan Estate, there is a ban/ restriction to hire children and the general age requirement for recruitment process is 18 years old that in accordance with Law No. 13 in 2003 regarding to manpower.

• Observation over operational activity in Sungai Rungau Mill, Sungai Seruyan Estate and Terawan Estate, shows that there is no personnel under 18 years old.

Status: Full Compliance 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. Distribution Letter No. 034/HR OPS/01/11 on 03rd January 2011 regarding the implementation of industrial relation in PT BAP unit, distribution letter No. 042/HR OPS/01/11 on 03rd January 2011 regarding the implementation of industrial relation in PT SIP nit, and company’s regulation period 2012-2014 Chapter II article 5 point 4. Distribution letter and company’s regulation explain that each operation unit should implement the industrial relation with no discrimination against race, religion, ethnicity and gender on the entire type of work. Equal opportunity and treatment in company can be proved in personnel list record that shows information like race, gender and religion. For instance: personnel record in Terawan Estate shows that personnel come from various race like java, Banjarnese, Nias, Dayak, and Bataknese. Status: Full Compliance 6.9 Policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied. Distribution letter No.118/HR PSM 6/08/2011, which issued by director on 1st Augustus 2011 regarding the restriction over sexual harassment with a penalty like indiscipline penalty or termination. Policy over reproductive protection is stated in: a. Company’s regulation for period 2012-2014 that endorsed by head of Disnakertranspar of Seruyan district on 24th

May 2012, such as: − Article 7 point 6 regarding policy for female worker

• Company gave a leave permit for female worker in filed and office who experience menstrual pain during first and second day of menstrual period. The granted menstrual leave should be based on physician examination or company’s paramedic examination.

• Lactating female worker has an opportunity to feed her baby. If the lactating time is during work hour, the permit should come from her direct supervisor for maximum 2 hours. The lactating permit last until the baby turns 2 years old.

− Article 21 regarding pregnancy leave/miscarriage leave/labor leave, consist of: • For pregnant personnel/ personnel with due date for labor will receive 1.5 months leave before labor

date and 1,5 months after labor based on physician or midwife calculation. Subscriber still entitle for full salary.

• For miscarriage personnel, she will entitle for 1.5 months leave based on physician or midwife’s letter.

• For personnel who want to take pregnancy leave, they should submit their request letter to company and attaching the letter from physician or midwives.

b. Distribution letter No. 045/HR OPS/01/11 on 3rd January 2011 regarding 2 days leave permit during menstruation period, the granted leave should be based on physician and company’s paramedic letter.

c. Distribution letter No. 067/HR OPS/01/11 on 3rd January 2011 regarding occupational health and safety for spraying officer, company has a policy to restrict pregnant and lactating worker to work as spraying officer.

Based on interview result with head of Sungai Seruyan Estate and Terawan Estate gender committee and its personnel, its known that until now there is no sexual harassment case being reported to gender committee. Meanwhile for gender committee’s regular activity such as conducting socialization on sexual harassment and reporting mechanism in case of the occurrence of sexual harassment. In addition, gender committee also conducting POSYANDU (integrated service post) activity, Quran reading and regular sport activity.


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Based on interview with midwife in health post in Sungai Seruyan Estate, regarding the implementation of H1 (menstrual leave) and H2 (pregnancy and labor leave) have been running in accordance with company’s regulation. Moreover, based on interview with spraying personnel in Division 2 Sungai Seruyan Estate, she mentioned that she received H1 (menstrual leave) and being permitted to take day off for maximum 2 days and still entitle for full salary. Based on observation on spraying activity in block S21 Division 2 Sungai Seruyan Estate, there is neither pregnant nor lactating worker. Based on interview with personnel, for instance spraying personnel in division 2 Sungai Seruyan Estate, they understand about complaint mechanism and procedure, such as: first step to make a report to direct supervision (foreman) or to gender committee. Second step further report to assistant and manager.

Status: Full Compliance 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses. Document over FFB acceptance in Rungau mill shows that there is no FFB stock from plasma plantation scheme/ independent smallholder. Field visit and interview point out that mill does not receive FFB from other company like from plasma plantation scheme or independent smallholder. Company hiring local contractor to perform certain task like facility’s construction, providing vehicle for transporting FFB. There is a labor agreement with contractor for each task. Both parties agree on labor agreement. Labor agreement No 233/BAP/SSRE/PK/II/2014 for fogging task. Both party agreed to comply the applicable manpower regulation especially in term of salary, minimum age (18 years old), and the mandatory to use PPE. Payment disbursement will be made after the completion of task. Contractor has received its salary on 1st March 2014. PO 440.021.0256 and payment receipt are available. SPK No 005/SSRE/I/2014 for transporting FFB. Both party agreed to obey the applicable manpower regulation especially the mandatory usage of PPE and JAMSOSTEK. Payment disbursement is made every month on date 25.

Status: Full Compliance 6.11 Growers and millers contribute to local sustainable development wherever appropriate. There is an evidence record, which shows company’s contribution toward local development. Record over company’s contribution toward local development can be seen on: 1. Tax payment receipt; tax payment receipt for PT. BAP (NPWP: 01.644.830.0-712.001) amount IDR. 2.013.082.460

for period 2012, which paid on 4th December 2012, and amount IDR. 2.140.288.400 for period 2013 which paid on 28th October 2013.

2. Tax payment receipt/ local retribution; tax payment receipt for vehicle operation (tax, KIR retribution, transportation permit, etc) in 2012 and in 2013 amount IDR. 155.321.672 for Seruyan Estate and IDR. 2.475.000 for Terawan Estate.

3. Local purchase: company buys operation material from local vendors or community surround plantation area. For Terawan Estate, local purchase in 2014 has reached IDR. 418.332.050 for material like: building material, wood, office equipment, furniture, service, rice, etc. For Sungai Seruyan estate, local purchase in 2013 had reached IDR. 148.4474.520 and in 2014 has reached IDR. 10.180.620.

4. Local vendors are involved in supporting plantation operation, such as: for FFB’s transportation, maintenance and housing construction, CPO dispatch, road pavement, fogging, etc. In Terawan Estate, there are 6 local vendors in Seruyan district (Asam Baru and Pembuang) and Sampit. For Seruyan Estate, total active local vendors in Seruyan Estate are 14 contractors in 2014. There is payment evidence for contractors, such as service agreement between company and contractor, purchase order, receipt, and payment request for local contractor’s service. The average payment for local contractor in each estate is IDR. + 10 billion per year.

5. Corporate Social Responsibility (CSR) for Sungai Seruyan Estate, CSR disbursement in 2013 amount + IDR. 87.023.625 and amount IDR. 38.310.000 in 2014. For Terawan Estate, CSR disbursement is IDR. 16.745.000 in 2013 and IDR. 12.655.430 in 2014 (April). CSR activity covers assistance on village facility and infrastructure,


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scholarship, educational assistance and so on.

Status: Full Compliance PRINCIPLE #7 Responsible development of new plantings

7.1 A comprehensive and participatory independent social and environmental assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations. Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007. Status: Full Compliance 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. Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007. Status: Full Compliance 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. Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007.

Status: Full Compliance 7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided. PT SIP /BAP area is in line with previous area statement (20), neither new plantation area nor development of new area. PT SIP/BAP neither makes extension over current operation area nor open new plantation or replanting after November 2007. Moreover, company does not make any replanting activity, because the first panting year was in 2005 or still under the 25 years’ regulation There is semi detail map/ LSC for 5 (five) plantation or estate with a scale of 1:50.000, which contains the information about soil type, sloping area, soil’s texture, land suitability and soil fertility barrier and drainage. Topography condition for 5 estates is quite flat (0%) up to wave 16% (Tangar Estate). Based on identification result on the entire estates, the average soil solum is 100-150 cm (refers to LC review map, 15 years survey result and the last survey was conducted in 2010, survey result shows that there is neither marginal nor sandy not critical soil condition).

Status: Full Compliance 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. Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007.

Status: Full Compliance 7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements. Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007.

Status: Full Compliance 7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the


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ASEAN guidelines or other regional best practice.

Company neither makes extension over its operation area nor opens new plantation area or replanting after November 2007.

Status: Full Compliance PRINCIPLE #8 Commitment to continuous improvement in key areas of activity 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. The utilization of chemical material is periodically monitored and evaluated. The objective of monitoring is to control and reduce the utilization of chemical material in order to minimize the pollution in accordance with the applicable regulation. Environment impact controls such as water pollution, soil pollution and air emission control were conducted in line with action plan and procedure. Action plans were periodically evaluated to see the progress, for instance: based on monitoring and measuring result, there are parameters that exceeding the standard threshold, which required corrective actions in the field. For instance: regular maintenance over processing machine and boiler and actions to reduce emission by cultivating vegetation. Furthermore, company has action plans to control social impact, which stated in procedure (for instance: complaint and dissatisfaction mechanism, conflict resolution) and social program like Corporate Social Responsibility (CSR), assistance for community, and work opportunity.

Status: Full Compliance


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3.2. Summary of Assessment Report of Supply Chain

Clause (Module D) CPO Mills - Segregation Requirements

1 Documented Procedures 1.1 The facility shall have written procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date procedures covering the implementation of all the elements in these requirements. b) The name of the person having overall responsibility for and authority over the implementation of these

requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

There is an SOP regarding SCCS RSPO segregation model (PT BAP-SRUM/SOP/27 on 1st May 2014, which is drafted by document controller, reviewed by Mill Manager and approved by Production Controller. This SOP covers the SCCS RSPO that refers to RSPO SCCS 25th Nov 2011 and RSPO SCC Standard, 25th Nov 2011 and PT SMART SOP for palm oil mill’s operation in 2010 (MCMD#1). The mentioned personnel in procedure part 3 such as security guard, weighing officer, grading foreman, dispatch operator, Kernel Storage Bin, Laboratory analyst, production clerk, plantation/mill/KCP staff, head of administration, head of mill, Production Controller and Support Department. During field visit, traceability officer or head of TU, security and weighbridge clerk explain that the accepted FFB is the certified one that inline with SCCS model, which us the SG model. They also stated that the declaration and socialization were set by PT BAP Sungai Rungau Mill management unit, since 1st May 2014 PT BAP Sungai Rungau Mill states that company has implemented the SCCS SG system. Status: Full Compliance

1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

As explained in point 6.1. The accepted raw materials and point 6.4 the processed raw materials SOP SCCS PT BAP-SRUM/SOP/27 on 1st May 2014. Vice management of Sungai Rungau Mill on 1st May 2014 mentioned that the implemented segregation model is SCCS segregation model and since 1st May 2014 have effectively implemented. Company able to present the evidence that the accepted fruit is certified and in line with vendor list and being processed into CPO and Palm Kernel (PK). Daily production report and weight balance of processed FFB show that CPO Mill has a documented procedure and segregation supply chain model. Status: Full Compliance

2 Purchasing and goods in 2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. Documentation over certified and non-certified FFB is verified through FFB acceptance letter (point 6.1.1). The FFB acceptance letter identify FFB’s origin and list of vendors that pointed by company as stated in signed document by Factory Manager on 10th April 2014. The pointed certified FFB vendor is come from PT Binasawit Abadi Pratama, which consist of Sungai Rungau Estate, Seruyan Estate, Tangar Estate, Terawan Estate, and Bukit Tiga Estate. Fruit acceptance form identifies the origin of fruit and is recorded. Weight bridge also identifies the origin of fruit (estate), vehicle identification, weight of accepted FFB, SPB number and total certified product. Company has computerized system to record FFB and whether it’s possible to accept the certified or non-certified FFB.


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2.2 The facility shall inform the CB immediately if there is a projected overproduction. SOP for reporting Certified Product RSPO PTBAP-SRUM/SOP26 on 1st May 2014 point 6.2. Preparation of mass balance daily report. Certified CPO RSPO product is amount 119,155.07 Ton (period Augustus 2013 - Augustus 2014) and actual CPO production until March 2014 was 76,603.566 Ton or under the claimed amount; meanwhile for certified PK that can be claimed as certified PK is 24.023,20 Ton (period Augustus 2013 - Augustus 2014) while the generating PK is amount 17,922.242 Ton or under the claimed certified PK. CPO and PK that can be claimed as RSPO product area less than 1-year period and cannot be claimed as RSPO certified product. To ensure the generating product is not exceeding the projected volume, company should make a report to certification body and company needs to have transparent mechanism to ensure CPO and PK production. OFI#2014.02 Status: Full Compliance

3 Record keeping 3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements. The entire record, which related to CPO and PK production, is kept in production administration clerk’s room. This record is set every 5 months. During field visit (CPO Mill) mill able to present some records and reports, which have been stored for the past 1 year (2013) such as fruit acceptance letter, weight ticket, daily production report, balance record for processed FFB, dispatch and Delivery Notes. Status: Full Compliance 3.2 Retention times for all records and reports shall be at least five (5) years.

Shelf life for document (SPO/SPO/SMART/LH-02 1st July 2010 in point 6.i) is stated in paragraph 3. The entire RSPO related documents would be kept for 5 years. During field visit (CPO Mill) mill able to present some report and record which have been stored for 1 year (2013) such as fruit acceptance letter, weight ticket, daily production report, balance record for processed FFB, dispatch and Delivery Notes. Status: Full Compliance 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. Mill presents weight balance or processed FFB balance by using Mass Balance model for period 2013 and segregation model (SG) for period 2014 (January – March 2014). Certified fruit from PT BAP is in line with certified FFB’s vendor, the processed certified FFB into CPO and PK, OER percentage for CPO and KER for Palm Kernel and CPO and PK dispatch. The accepted certified FFB for period Jan-March 2014 amount 126,250.240 kg. In March 2014, the processed FFB is amount 46,279.220 Kg and turned into CPO amount 10,441.560 Kg, and generating PK amount 2,558.61 Kg. CPO dispatch amount 9,464.510 kg and PK amount 588,800 Kg.



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3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/MB or Mass Balance. The supply chain model used should be clearly indicated. Since company earning RSPO certificate until surveillance-1, there is no product with RSPO certified claim. Based on review over procurement and sales contract, the entire status of products is RSG, ISCC and EPA (not RSPO). Sample of Sales Contract: a. On 29th October 2013 No. DISC/3253/191013/002 and Purchase Order No. 4800019283 on 29/10/2013 with customer

PT Sinarmas Agro Resources and Technology Tbk. with, 300 Ton CPO, status of the product is CPO ISCC. b. Sales Contract on 7th February 2014 No. DIC/3253/070214/001 and Purchase Order No. 4800020459 on 7th February

2014 with Customer Sumber Indah Perkasa for CPO with 1,000 Ton CPO, status of CPO product is ISCC. c. Sales Contract on 4th April 2014 No. DIC/3253/40414/0001 and Purchase Order No. 4800 21247 on 4th April 2014 with

customer Simar Agro with 5,000 Ton CPO, status of CPO product is ISCC. In case there is a request for CPO RSPO product, then it will be written with special code for SG supply chain model in sales contract. Status: Full Compliance

4 Sales and goods out 4.1 The facility shall ensure that all sales invoices issued for RSPO palm oil 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 product delivered (e) Reference to related transport documentation Since being granted with certificate, CPO Mill never makes a certified claim over CPO and PK products. Based on observation, the issued invoice only mentions RSG, ISCC and EPA product status (not RSPO). For instance, invoice No. DII/3253/0214/00012 on 13rd Feb 2014, with contract No. DIC/3253/070214/001 on 7th Feb 2014, with customer Sumber Indah Perkasa, total CPO volume is 1,000 Ton. Regarding the requested product to be dispatched from CPO Mill, there is a delivery note in each CPO or PK dispatch. The delivery note is marked with Mass Balance stamp and weight ticket. Both documents will be marked with ISCC ID code, such as 13-104-07781373-1404174 GHG Emission 938.77 Kg CO2 eq/ton on 30th April 2014 amount 6,670 Kg. Another sample is Delivery Note on 29th March 2014 amount 7,340 Kg (CPO) stamped ISCCC EPA, on 29th Jan 2014 for PK amount 8,460 Kg (is stamped with ISCC). In case there is a request for CPO RSPO product, then it will be written with special code for SG supply chain model in product status. Status: Full Compliance

5 Processing 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 material9; up to 5 % contamination is allowed. There is minute meeting for tank clearance CST No. 2 on 29th April 2014, which done on 27th April 2014, to ensure the SG supply chain model. This method starts into effect on 2nd May 2014 and valid until now for SCCS supply chain Model SG.


ASSESSMENT REPORT


Based on daily production record on 5th May 2014, the SCCS SG model has been implemented. The accepted FFB amount 2,044.750 Kg (comes from PT BAP or certified plantation). Processed FFB 1,523.380 Kg. CPO 345,618 Kg, generating PK amount 63,146 Kg. Stock for certified CPO in tank-2 amount 770.272 Kg and PK stock not yet included to certified product. Based on description and field visit, the entire processed FFB comes from certified plantation (BAP) and the generating CPO and Palm Kernel can be claimed as certified product.


5.2 The facility shall provide documented proof that the RSPO certified palm oil can be traced back to only certified segregated material. CPO and PK’s product dispatch is completed with D/O and are traceable through daily production report, such as whether the origin of estate is certified or whether the FFB is certified. Based on daily production record on 5th May 2014, the SCCS SG model has been implemented. The accepted FFB amount 2,044.750 Kg (comes from PT BAP or certified plantation). Processed FFB 1,523.380 Kg. CPO 345,618 Kg, generating PK amount 63,146 Kg. Stock for certified CPO in tank-2 amount 770.272 Kg and PK stock not yet included to certified product. There will be a summary over daily production report in a form of monthly production summary or balance report with a status for dispatched product. The status of product is traceable through daily production report, from its raw material or accepted FFB to processed FFB Based on description and field visit, the entire processed FFB comes from certified plantation (BAP) and the generating CPO and Palm Kernel can be claimed as certified product. Status: Full Compliance

5.3 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that: • The crush operator conforms to these requirements for segregation • The crush is covered through a signed and enforceable agreement Not applicable (NA). Sungai Rungau Mill does not produce palm kernel oil (PKO) and the entire Palm Kernel is sent or sold to Kernel Crushing Plan (KCP) Hanau and KCP Perdana, for instance: D/O on 29th Jan 2014 amount 8,460 kg to KCP Hanau. Status: Full Compliance

6 Training 6.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems SCCS training was conducted on 28 – 30th April 2014 with an agenda of SCCS SG. The training has SCCS SG topic, which delivered by SPO Office from Jakarta and from related unit. All key personnel were attending the training in mill ad estate and some sub contractors (transporter). For instance: Production Controller, Mill Manager, Traceability Officer, coordinator of SPO Unit, Certification Section EHSD, foreman, Security, Lab, Process I, weighing clerk; but neither sales personnel nor related marketing staff able to presents evidence over their understanding on segregation supply chain model. (see CAR 2014.06) To ensure personnel’s understanding on implementation of segregation supply chain system and standard (SCCS) in CPO Mill, company should conduct evaluation after the training or socialization related to SCCS RSPO topic, including for transportation subcontractors (transporter) CPO, PK and TBS. OFI# 2014.03


ASSESSMENT REPORT


In order to guarantee good implementation over SCCS, company has conducted related training for subcontractor, such as socialization over SCCS (attendance sheet on 28th April 2014) and contract between company and subcontractor should regulate loading vehicle for CPO, the requirement to put the name of Transporter company, for instance: CV Bina Perkasa, cooperative Mifta Husalam, Permata Seruyan, and PT SJA; and the restriction for volume deduction above 0.2% and cannot be transferred to other transporters. The similar regulation is applied to FFB transporter. The eligible FFB transporter to enter mill is based on contract/ agreement and transporter should has an identity, for instance: TRWE Div I for Terawan Estate area. Related to CAR 2014.06, has been verified and can be fulfilled on 30th May 2014, such as: Root Causes: There is no formal schedule on SCCS training for sales and IT division, especially related to sales handling in SIP/BAP. Corrective Actions: 18 staff from sales and IT division attended SCCS-RSPO training on 21st May 2014 in Jakarta (attendance sheet is available). The training was conducted in two session, first at 09.00-12.00 and second at 1400-17.00 with SCCS-RSPO training topic and entrance simulation was delivered by personal who has received SCCS-RSPO training (training topic/ material is available). Proof of SCCS training is documented. Preventive Actions: Company should make schedule for periodic training to ensure personnel’s understanding over SCCS topic. (Schedule for training plan in 2014) Based on the improvement evidence, the auditor team concluded that the non-conformity of CAR No. 2014.06 was closed Status: Full Compliance

7 Claims 7.1 The facility shall only make claims regarding the use of or support of RSPO certified oil palm products that are in compliance with the RSPO Rules for Communications and Claims. Not applicable. SOP for RSPO product with segregation Supply Chain model (PT BAP-SRUM/SOP/27 on 1st May 2014), Point 6.7.4 regarding product dispatch, product dispatch letter states the delivered product is CPO, which sent to Bumihardjo bulking and PK, which sent to KCP Hanau and KCP Perdana. This product dispatch has not put a symbol, trademark and RSPO label as regulated in RSPO Rules for Communications and Claims, because the deliverance still under one roof and the end product still in a form of raw material like CPO and Palm Kernel.



ASSESSMENT REPORT


3.3. Conformity Checklist of Certificate and Logo Use

1. Evidence of permission or approval certificate and logo from Certification Body which submitted by Client X or√

S-1 The company has logo and certificate approval/permit number MUTU-RSPO/029 Status: Full Compliance 2. Implementation of certificate and logo used by Client comply with size and type (shape)

against Guideline of Logo Use X or√

S-1 The Company does not use the logo both on-product and off-product within the scope of PT Sumber Indah Perkasa

Status: Full Compliance 3. Implementation of Certificate and Logo is not used on product

X or√


Status: Full Compliance 4. Controlling of Certificate and Logo, including withdrawing inappropriate logo.

X or√




ASSESSMENT REPORT


3.4. Summary of RSPO Partial Certification. There are 17 management units are included in Golden Agri Resources Group, 1 unit has been audited by PT Mutuagung Lestari, and 16 others are still in the preparatory stage of certification. Management units belonging to the Golden Agri Resources Groups are:

1. PT. Bumi Sawit Permai 2. PT. Djuanda Sawit lestari 3. PT. Sawit Mas Sejahtera 4. PT. Bumi Permai Lestari 5. PT. Forestalestari Dwikarya 6. PT. Sinar Kencana Inti Pekasa 7. PT. Sumber Indah Perkasa (Lampung) 8. PT. Sumber Indah Perkasa (Lampung) 9. PT. Sinar Kencana inti Perkasa 10. PT. Purimas Sasmita 11. PT. Agro Lestari Mandiri 12. PT. Kencana Graha Permai 13. PT. Mitra Karya Agroindo 14. PT. Binasawit Abadi Pratama 15. PT. Agrokarya prima Lestari 16. PT. Paramita Internusa Pratama 17. PT. Sawit Mas Sejahtera

Total number of companies that are elected as samples are (0.5 √ Y) where Y is the number of companies incorporated into the same holding. Locations of samples for assessment are: PT Binasawit Abadi Pratama (Perdana Mill, Kalimantan Tengah), PT Sumber Indah Perkasa (Sungai Buaya Mill, Lampung) dan PT Forestalestari Dwikarya (Tanjung Kembang Mill, Bangka Belitung). Verification date: February 21, 2013. 2.1

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

Companies comply with the law and regulations related to the environment and prevailing land tenure. No complaints from stakeholders to the company. Based on the results of verification on 3 units as an example of the assessment, there was no non-compliance with regulations. PT Foresta Dwikarya Lestari. PT Foresta Dwikarya Lestari had estates and smallholders. Environmental impact assessment has been conducted by company. ANDAL, RKL and RPL covers an area of 15,000 ha estates and 60 tons FFB / hour mill capacity, while the environmental analysis for the plasma development has been approved by local Environment bodies. PT Sumber Indah Perkasa, Tulang Bawang, and Mesuji Permits related to land tenure are available i.e.:

− building construction permit for Mill No. 642/245/650/600/1993 dated March 13, 1993 − Location permit G/202/DA/HK/1989 ± 9522 ha dated 29 August 1990 from the Governor

of Lampung. − Environmental document in Sungai Buaya Estate and Sungai Merah Estate in 2008. The

document has been approved by Lampung Environment bodies.

Status: Full Compliance 2.2

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

PT. Binasawit Abadi Pratama (Perdana Mill, Central Kalimantan) Location permit from Seruyan Regent :

1. No. 87/2003, dated 29 Desember 2003 (Second revision No. 22/2004 dated 14 Februari for 15 Ha.

2. Third revision, No. 153/2004, dated 21 Desember 2004 for 15.000 Ha 3. Last revision, No. 03/2006, dated 07 Januari 2006 for 17.600 Ha


ASSESSMENT REPORT


4. Land use title on progress PT Foresta Dwikarya Lestari Estates can show land use title of 11,337.582 ha. Land use title no 1 for 1,082.2 ha concession dated December 16, 2004, land use title no 13 for 923.5 ha and 3,744.93 ha dated December 6, 2001, and land use title no 14 for 5,586.952 ha dated July 30, 1992. PT Sumber Indah Perkasa, Tulang Bawang and Mesuji Estates shown land use title for 9,046.63 ha.

Status: Full Compliance 6.3

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

SOP for grievance and complain are available (SOP/NP/SMART/XII/MCAR001), Revised July 1, 2010, and have been socialized on September 28, 2011 in Sumber Makmur Village, Telawang, attended by 30 peoples.

Status: Full compliance 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.

SOP/NP/SMART/VII/D&L002 SOP Land Compensation, revised July 1, 2010 is available. Some land restitution process has been done and recorded. The process of land acquisition was done by mapping, landowners identifying, negotiations between landowner and companies involving villager representatives for land compensation.


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

There are no new planted in primary forest area since November 2005 or every areal which required for maintain or improve the one or more HCV). Plantation of PT. Foresta Lestari Dwikarya planted in period 1995-1998. No more new plantings after that period. Plantation of PT Sumber Indah Perkasa planted in period 1999-2000. No more new plantings after that period.


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.

Plantation of PT. Foresta Lestari Dwikarya planted in period 1995-1998. No more new plantings after that period. Plantation of PT Sumber Indah Perkasa planted in period 1999-2000. No more new plantings after that period.


Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreements.

Plantation of PT. Foresta Lestari Dwikarya planted in period 1995-1998. No more new plantings after that period. Plantation of PT Sumber Indah Perkasa planted in period 1999-2000. No more new plantings after that period.

Status: Full compliance


ASSESSMENT REPORT


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

3.5.1 Identification of Findings, Corrective Actions and Observations at Stage-1 During the Stage 1, there was 1 (one) Nonconformity assigned against Major Compliance Indicators. 3 (three) Nonconformity were assigned against Minor Compliance Indicators, Further explanation of the non-conformities raised and corrective actions taken by the company are provided in this section. The company prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities shall be verified during next assessment.

CAR No Ref Std Finding Area Grade Time

Limits Corrective Action Observation Status Closing Date

2012.01

Major 5.1.2

Environmental Management and Monitoring. SIP and BAP have submitted their reports of environmental management and monitoring on a regular basis, although not all of their supporting evidence’s were reported in accordance with the RKL/RPL document. BAP: a. The density of vegetation, the

disappearance of certain types of vegetation, the species diversity of vegetation.

b. An employment opportunity resulting from the labor recruitment using a parameter that manages and monitors the numbers of local recruits as well as the total number of labors hired There were 12 villages that were chosen to be the locations of the monitoring and the managing

SIP &

BAP

Potential NC

ST-2 The company must keep the records of environmental management and monitoring reports on regular basis to comply with the current regulation.

The report of RKL/RPL Implementation that has been revised for PT BAP and PT SIP has been submitted to the Environment bodies of Seruyan District and Central Kalimantan Province. The evidance of handover of the reports is available.

Closed 21/12/2012


ASSESSMENT REPORT




process, i.e. Tanjung Hara, Tanjung Rangas, Asam Baru, Sebabi, Sandul, Kalang, Durian Kait, Sahabu, Batu Managis, Derewa, and Gantung Pengayuh.

SIP: a. The changes occurred in the

physical and chemical properties of the soil.

b. Nekton resulting from the management of POM’s contaminating waste.

c. The increased transmission and spread of disease.

d. The increased potentials of traffic accidents.

e. The increased potentials of occupational accidents.

2012.02

Minor 5.1.1

The revised version of environmental management and monitoring document. BAP has not been able to present the revision made to the management and monitoring document which covers an area of 20,152 Ha.

BAP Minor S1 The company must revise the document of environmental management for any changes in operational matters or company’s activities.

ST-2: BAP has conducted communication through by sending letter to BLH agency in Seruyan district, Palangkaraya and KepMenLH. But until now there is no response for the revised environment management and monitoring document. In addition, company also has action plan to fulfill the revision of this document. The condition is unclosed.

Closed

S-1 (May 2014)

08/05/2014


ASSESSMENT REPORT




Root of problem: Previous AMDAL document is not entirely accurate on plantation broad measurement, the measured broad stated in AMDAL document is inline with the actual condition; but the measured broad is different with measured broad stated in HGU document. The AMDAL document was prepared in 1997 while the HGU BAP was made in 2005 and 2006.

Furthermore, BAP sent a letter on 7th May 2013 regarding the guideline for environment document of PT BAP that need to complete its environment document. Response from KLH on 24th June 2013 regarding the environment document, which states: waiting for

Corrective Actions

Company sent a letter to BLH agency in Seruyan district regarding the guideline in AMDAL document of PT BAP to control and manage environment. Company also sent a letter to KLH agency on 15th Nov 2012 with similar subject. Furthermore, the response from KLH agency on 25th Jan 2013, states that PT BAP’s activity, which has no environment document, will start into effect based on law 32/2009 regarding environment protection and management.


ASSESSMENT REPORT




collective distribution letter between ministry of environment and ministry of home affair for 2,753 ha conflicted area. On 27th December 2013 there is a letter from ministry of environment regarding the guideline to implement article 121 from law 32/2009 regarding environment protection and management. The letter mentions that every company, which does not has environment document but already operated will receive written administrative warning, such as: - Order person in charge to prepare

environment document - Written complaint at least 18 months

after the issuance of SE - Person in charge should prepare

environment document 6 months after the issuance of written warning at the latest.

BAP was sent to BLHD agency in Seruyan district on 24th March 2014 regarding the request for revision on environment document as a follow up action regarding to document’s compliance. - RKL RPL report was regularly reported

per semester and the last one was sent on 20 and 29th Jan 2014 for semester II/2013 report.


ASSESSMENT REPORT




- Based on public consultation with BLHD agency in Seruyan district, it mentions that the environment report already in line with the actual condition

Preventive Actions:

The implementation of environment management and monitoring is inline with actual condition in the field, and monitor the implementation of AMDAL revision. Condition: CAR 2012.02 can be closed

2012.03

Minor 6.1.2

Revision of the Document of Social Management and Monitoring. BAP has not been able to present the revision on the document of social management and monitoring which covers an area of 20,152 Ha in accordance with the regulation.

BAP Minor S1 The company must revise the document of environmental management and monitoring, which covers the social impact assessment and its relation to the area changes.

ST-2: Similar to progress 2012.02. Related to status of document revision. Can’t be closed.

Company has conducted communication with regulator related to suggestion to make revision over AMDAL document in order to covers social environment monitoring. This suggestion is inline with letter on 27th December 2013 from ministry of environment related to the implementation of article 121 UU 32/2009 regarding the environment protection and management, where company is given time for 18 months

S-1 (May 2014) Refers to CAR 2012.02.

Closed 08/05/2014


ASSESSMENT REPORT




since the distribution letter has issued and 6 months after warning letter issuance. Furthermore, PT BAP sent a letter to BLHD agency in Seruyan district on 24th March 2014 regarding the request to revise environment document as follow up action toward document’s completion. RKL RPL report has regularly reported per semester and the last one has been sent on 20 and 29th Jan 2014 for semester II/2013 report. Based on public consultation with BLHD agency in Seruyan district, it mentions that the environment report already inline with the actual condition Condition: CAR 2012.03 can be closed

2012.04

Minor 6.1.3

Social management and monitoring. SIP and BAP has submitted the reports of the social management and monitoring in a regular basis, although not all of their supporting evidence’s are reported in accordance with the RKL/RPL document. BAP: a. An employment opportunity resulting

SIP &

BAP

Potential NC

ST2 The company must submit the reports of environmental management and monitoring on a regular basis and regular schedule, of which the format is referring to that of RKL/RPL that includes the

The company has submitted the reports on regular basis and has made necessary revision to the RKL/RPL report by including the social impacts in a form of employment opportunity for the people living in nearby villages.

Closed 21/12/2012


ASSESSMENT REPORT




from the labor recruitment using a parameter that manages and monitors the numbers of local recruits as well as the total number of labors hired. There were 12 villages that were chosen to be the locations of the monitoring and the managing process, i.e. Tanjung Hara, Tanjung Rangas, Asam Baru, Sebabi, Sandul, Kalang, Durian Kait, Sahabu, Batu Managis, Derewa, and Gantung Pengayuh.

SIP: a. The increased transmission and

spread of disease. b. The increased potentials of traffic

accidents. c. The increased potentials of

occupational accidents.

employment opportunity.


ASSESSMENT REPORT


3.5.2 Identification of Findings, Corrective Actions and Observations at ST2 Assessment During the Stage 2 assessment, there was 1 (one) Nonconformity assigned against Minor Compliance Indicators, 4 (Four.) opportunities for improvement were identified. Further explanation of the non-conformities raised and corrective actions taken by the company are provided in this section. The company prepared a corrective action that was reviewed and accepted by MUTU and corrective actions taken to close all non-conformities shall be verified during next assessment.



2012.05

Minor 4.4.2

Records of the Observation of BOD (Biological Oxygen Demand) The records of BOD observations and the parameters used have revealed that the river water quality, in its relation to the mill effluent, has not entirely been measured and observed by considering the specified inlet (upstream) and outlet (downstream), which is Block K29 (river upstream) and Block A13 (river downstream).

Estates and Mills

Minor S1 The company must keep BOD monitoring records of mill effluent for river water quality, by determining the inlet (upstream) and the outlet (downstream).

Root Causes: Company does not specifically choose sample spots in headwater and downstream. Corrective Actions: The selection over river’s sample spots should consider the headwater (inlet) and downstream (outlet) such as sample spot in 5 locations and each estate that flowed by representative river (Rungau River). Company has conducting river’s water measurement and monitoring that inline with PP No 82 in 2001 for class II (S. Rungau) such as inlet from headwater S Rungau in Estates BTGE, TNGE, creek of Rungau River in SRGE (M36-37) and the downstream of Sungai Rungau Hilir (Block N23 (SRGE) as the outlet. Moreover, quality monitoring and measurement has been conducted in 1 (one) inlet spot in mill’s river and compared to outlet S Sungai Rungau Hilir The result over river’s water quality monitoring and measurement related to BOD and COD, which already above the

Closed 08/05/2014


ASSESSMENT REPORT




standard threshold before the establishment of plantation and residential. However, there is a declining tendency over measured and monitored water’s quality or an improvement indication. Preventive Actions: Consistent with the implementation of river’s water quality monitoring and measurement by considering river’s water inlet and outlet (S Rungau) Condition: CAR 2012.05 can be closed


ASSESSMENT REPORT


3.5.3 Non conformities, Corrective action and observation on Surveillance-1



2014.1 Minor 4.4.3

Monitoring over water utilization per ton FFB Company has showed water utilization record for FFB processing activity inside and outside (domestic) mill’s location for each ton FFB; however company still can’t present the evidence of its effort to maintain water source, like proof on water utilization evaluation by comparing the utilization with the applicable standard, which is 1.2. Liter/Ton TBS.

Mill Minor S2 Company must present the compensation receipt (insurance) over work accident for its personnel.

Root Causes: Corrective Actions: Preventive Actions:

- -

2014.2 Minor 4.7.1

Insurance for work accident No sufficient proof over compensation/ insurance for personnel who have hearing impairment because of noise in work place.

Mill & Estate

Minor S2 Company must present the evaluation proof over periodic medical examination for personnel in each station and for high risk personnel


- -

2014.3 Minor 4.7.2

Periodic medical examination for high risk personnel Based on periodic medical examination in December 2013, there are some case of hearing impairment because of noise in work place at Sungai Rungau Mill (clarification station, Engine Room, Nut & Kernel, Press, Boiler) and at Sungai Seruyan Estate (operator for grass cutter machine and operator for water pump), however no evidence over effective evaluation to protect personnel from operation negative impact.

Mill & Estate

Minor S2 Company must present the evidence over periodic participatory social impact management and monitoring for sustainable improvement.


- -


ASSESSMENT REPORT




2014.4 Minor

6.1.1 Participatory social impact management and monitoring Company present periodic social impact management and monitoring. However, this record not presents the evidence over participatory social impact management and monitoring to anticipate community restlessness, such as community’s restlessness over the absence of plasma plantation scheme in Selunuk and Sebabi village and jealousy over social gap between original community and transmigrate community.

Mill & Estate

Minor S2 Company must ensure the provision of sufficient clean water facility for its personnel.


- -

2014.5 Minor 6.5.1

Provision over sufficient clean water facility Company has provided sufficient clean water facility, which comes from well and pond’s water in personnel housing facility. Company also conducts examination over water quality in health laboratory of Kotawaringin Timur district. However, no sufficient evidence on examination parameter result and standard parameter that inline with the applicable regulation.

Estate Minor S2 Company must provide training for its entire personnel that inline with the requirement to implement supply chain certification system, in this case sales unit personnel.


- -

2014.6 Point 6.1

SCCS Version Nov

Training Company has presented the evidence over SCCS supply chain model training implementation on 28 – 30th April 2014 with an agenda and SCCS module.

Mill NC 30 days

Company should be able to present justification over time bound plan that in line with RSPO certification

Root Causes: SCCS has not scheduled a formal training some personal Division Sales (Sales) and IT, particularly with respect to the handling of sales in the SIP / BAP.

Closed May 30th 2014


ASSESSMENT REPORT




2011 (Modul

D)

The entire key personnel in mill and estate attended this training. For instance: Production Controller, Mill Manager, Traceability Officer, SPO Unit coordinator, EHSD Certification Section, foreman, Security, Lab, Process I, weighing clerk, however there is no evidence that key personnel from sales unit have understand the segregation supply chain model.

system.

Corrective Action: Do-RSPO SCCS training on May 21, 2014 in Jakarta attended by 18 people from Division Sales and IT (a list is present). Training is conducted in two sessions i.e. at. 09:00 to 12:00 and 1400-17.00 with training materials and simulations RSPO SCCS-Etrace delivered by personal who have received training-RSPO SCCS (there are training materials). Documented evidence of training SCCS. Preventive Actions: Made scheduling periodic training for understanding the material SCCS. (The scheduled training plan 2014)

2014.7 RSPO Certification Syste

ms Point 4.2.4

(Minor)

Implementation over Time Bound Plan There is evidence over time bound plan revision for Golden Agri Resources Ltd, especially for 6 company entities. However, no sufficient evidence to justify the revision over time bound plan.

GAR Minor S2 Company must present the compensation receipt (insurance) over work accident for its personnel.

Root Causes: There are changes in the certification plan (time-bound plan) are included in the group of GAR subsidiary established by the Top Management. Corrective Action: Sustainability Division Head of PT SMART, Tbk issued a Memorandum No. 169/EL/SMART-RSPO CB/VII/2014 dated July 7, 2014 regarding the explanation of changes in time bound RSPO 2014 and Memorandum No. 170/EL/SMART-RSPO CB/VII/2014 dated July 7, 2014 regarding the explanation of changes in time bound

Closed July 10th 2014


ASSESSMENT REPORT




RSPO 2013. Justification In The memorandum stated time bound plan changes are decided by the Top Management and related preparedness unit Mill and Estate in dealing with the certification audit Preventive Actions: The company will be consistently monitoring Time Bound Plan and immediately inform the Certification Body if there is a change Time Bound Plan.


ASSESSMENT REPORT


3.5.4 Opportunity for Improvement Stage-1

No Ref Std Description Observation 1 SC

1.2 Procedure to record FFB’s acceptance and the processing of certified and non-certified FFB is not yet stated in product traceability procedure.

SOP for identification and traceability has regulated FFB traceability and the processing of certified and non-certified FFB

2 Minor 6.7.1

Company able to re evaluate the implementation of recruitment process, the minimum age for hiring personnel is 18 years old, which inline with the applicable regulation.

Recruitment process has been evaluated to ensure that there is no personal with age under 18 years old.

3.5.5 Opportunity for Improvement Stage-2

No Ref Std Description Observation OFI

2012.01

Major 2.1.1

Company is recommended to implement the effective communication with PT Tapian Nadenggan party, related to regulation compliance over liquid waste from PT. Tapian Nadenggan in Tangar Estate area (PT. BAP) that exceeding the eligible land application for 45,6 Ha area, even though the LA permit is not belong to PT BAP/PT SIP.

S1 (May 2014). PT SIP/BAP has conducted communication with PT Tapian Nadenggan (PKS Semilar) party related to land application inside Tangar Estate area. Examination result over monitoring well should be communicated to SIP/BAP and hand over the copy of mill’s permit for POME, which belongs to Tapian Nadenggan to SIP/BAP party.

OFI 2012.

02

Minor 4.4.1

It is recommended to measure water source management that inline with Permenkes regulation number 416/1990 regarding clean water quality I order to figure out the impact of company’s operation.

S1 (May 2014). Company presents identification over water source, however, water source from monitoring well. Surface water and reservoir have been periodically monitored.

OFI 2012.

03

Minor 6.2.1

Company is recommended to complete list of stakeholders by adding local NGO like Betang Membangun, Save our Borneo.

S1 (May 2014). List of stakeholder has been updated and completed with list of local NGO such as WWF, Save our Borneo, Orang Utan Foundation

OFI 2012.

04

SC 6

Company is recommended to manage and support the utilization over palm oil with RSPO certified, which inline with RSPO guideline for communication and claim.

S1 (May 2014). RSPO guideline for communication and claim has been adding to reference of SOP on SCCS RSPO segregation model (PT BAP-SRUM/SOP/27 on 1st May 2014).


ASSESSMENT REPORT


3.5.6 Opportunity for Improvement, Surveillance-1

No Ref Std Description

1 Major 5.2.2.

Protection over protected wildlife Company should consider efforts to avoid fragmentation over protected wildlife ecosystem due to converting HCV area into transporting roads.

2 Point 2.2 SCCS

Version Nov 2011 (Module

D)

CPO and PK product that can be claimed as RSPO product less 1 year period and even though CPO and PK product still not claimed as RSPO certified product. To ensure the product not exceeding the projected volume that been mentioned to certification body, at least company has a clear mechanism to ensure the generating CPO and PK product.

3 Point 6.1 SCCS

Version Nov 2011 (Module

D)

To ensure personnel’s understanding over SCCS segregation supply chain standard and system in CPO mill, company should conduct evaluation after SCCS RSPO training and socialization, including evaluation for transporter subcontractor for CPO, PK and FFB.

3.5.7 Noteworthy Positive Components

No Ref Std Descriptions 1 - Company’s commitment to implement sustainable palm oil management principles.

2 - The implemented and ongoing improvement efforts as a step for sustainable improvement.

3 - Personnel’s competency on their field.

4 - Sufficient supporting facility & infrastructure


ASSESSMENT REPORT


3.6 Summary of Arising Issues from Public, Management and Auditor Response

Issues from public Management response Auditor response

Selunuk Village

a. Positive Notes • Grants/ assistances for village are sufficient, such as:

- Land preparation/ land clearing, provision of seed and cultivation for village plantation

- Assistance to prepare land for school construction. - Heavy equipment assistance for village’s road

maintenance, which based on village’s requests. - Assistance for sewing training for housewives and

assistance to provide sewing machine (4 units) - Assistance to clean soccer field. - Assistance to provide cost for mass marriage (10

million) - Assistance to conduct MTQ - Assistance on electricity installation amount IDR 2

million per household - Assistance on clean water facility installation amount

20 million in 2013 - Free dental treatment - And so on

• Company has been involved in sub district MUSRENBANG meeting; even though no clear agreement because the result will be brought to district MUSRENBANG.

• Vacant position always been announced and no limitation for community to apply.


ASSESSMENT REPORT


• No land tenure over plantation area • No water pollution because limited number of river that

flow village and the entire water comes from well. • HCV socialization has been implemented • No traditional / indigenous right over plantation area • In general, request over assistance and grants were well

responded.

b. Negative Notes • Seruyan Raya sub district doesn’t have plasma plantation

scheme like other villages. Seruyan Raya community has asked about this issue to company and some meetings with local government have been conducted. However, there is no decision over plasma plantation scheme for this village. Related to plasma plantation scheme, community has established cooperative as requested by company, but no follow up actions from company.

• Total budget for regular CSR activity is not clear. This condition become a barrier to development of village work plan

• Dust pollution from estate road during dry season. • No socialization for complain and objection mechanism

• Plan to establish plasma plantation scheme for Selunuk village has entered land measurement stage and in an approval process with local government to choose location

• In 2014, total budget for CSR already in line with village work program.

• Will be communicated with responsible plantation in pilot village (Kalteng 3)

• Complain and objection mechanism will be socialized to village at semester 2 in 2014

Company need to revise the quality of communication and consultation with local community to ensure harmonious relationship and prevent restlessness amount villagers Consultation and communication is required and is part of participatory social impact management and socialization implementation (RKL-RPL) to prevent community’s restlessness, for instance: community’s restlessness in Selunuk and Sebabi village regarding the absence of plasma plantation scheme and social gap issue between local community and transmigrate community. Communication among estates is required, not only for pilot village in order to avoid impression of good and bad estate due to lack of communication amount estates/ villages.

Rungau Raya Village a. Positive Notes

• Company’s grants and assistances for local community are sufficient, such as:


ASSESSMENT REPORT


- Improvement over village hall - Scholarship - Company’s school receives students from outside

plantation - Establishing soccer field - Establishment of religious and sport facility - Assistance to provide teacher allowance - Company involves in sub district MUSRENBANG

meeting - Company always announcing vacant position - No major land tenure - No water pollution - Socialization on HCV has been conducted - No traditional/ indigenous right over plantation area - The MUSRENBANG meeting result is a plan - Assistance plan on electricity installation amount IDR

2 million per household

b. Negative Notes • There is no major negative aspect from company, only

sometimes the implementation of CSR quite slow • There is no socialization on complain/ objection

mechanism

• The implementation over CSR has been inline with company’s administrative procedure

• Complain and objection mechanism will be socialized to village at semester 2 in 2014.

Sebabi village

a. Positive note PT. BAP especially Sungai Seruyan Estate gave lot of assistance toward local community, for instance: • Assistance on religious facility (mosque) • Sport facility (soccer field) • Honorarium for primary school teacher • Treatment for harelip

-

-


ASSESSMENT REPORT


• Rice grants • Communication and consultation has been well

implemented especially in Sungai Seruyan Estate • Socialization on HCV has been well implemented

b. Negative Note

• Pilot village system produces confusion because hold up communication with other estates. For instance: unsatisfactory response over communication with Nihiang Estate, Sulin Estate, Tanjung Paring Estate, because Sebabi Estate is not a pilot estate. Different response comes from Seruyan Estate, which is a pilot estate.

• During plantation clearing by PT. BAP, community has no objection because company make a promise that company will establish plasma plantation scheme, even though this promise is not stated in agreement. After rotation in management (after ethnic conflict), the establishment of plasma plantation scheme was stop. Community still expecting the establishment of plasma plantation scheme in order to increase their economic condition. The area that has possibility to be established, as plasma plantation scheme is the one within Nihiang Estate HGU but this area can’t be established because community has no will to release this area. Sebabi community sees unfairness because transmigration community already able to harvest their estate, meanwhile the origin community has no plantation. Beside the area within Nihiang Estate HGU, there is no other area that can be established as plasma plantation scheme because most of land area already owned by company and another area is a peat area that has low economic value.

• Sub district government is in charge to allocate pilot village because Present pilot village allocation because this area’s (seluluk sub district) allocation is under sub district responsibility/ right.

• Plasma plantation scheme has been established in Kalteng region 4, mean while for PT. BAP region Kalteng 2 still looking for plasma plantation area.

• The identified area is located within Rungau Raya village, inside PT. BAP HGU area, which is the HCV area.

• Estate Nahiang located in region Kalteng 4. This complaint will be submitted to this region

• Complain and objection mechanism will be socialized to village at semester 2 in 2014.


ASSESSMENT REPORT


• At least, the way people ask woken effort to cultivate community gardens that exist in the concession area Nihiang yet undeveloped.

• Community considers the un-cleared area in Sungai Seruyan Estate (HCV along right side of Rungau river) belongs to them.

• Beside Seruyan River, some rivers also flow along Sebabi village and through Nahiang estate. So it makes sense that Nahiang estate should give contribution including for road improvement and clean water facility

• No socialization over complain, objection, aspiration mechanism.


ASSESSMENT REPORT


4.0 CERTIFIED ORGANISATION'S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

4.1 Formal Sign-off of Assessment Findings

Hereunder sign by management representative from inspected company to acknowledge a field assessment and agree for all content explained in this assessment report, included of non-compliance findings.

Signed on behalf of:

PT Sumber Indah Perkasa – Binasawit AbadiPratama Mutuagung Lestari

Head of Environmental Department Lead Auditor

Ismu Zulfikar Bukti Bagja Thursday, 09 May 2014 Thursday, 09 May 2014


ASSESSMENT REPORT


Appendix 1. List of Stakeholder Contacted in the RSPO Certification Process

No Institution/NGO/Community Address Phone/Email Form of Contact

Date of Contact

1 Selunuk Village Selunuk Village - Focus discussion

group

06 May 2014

2 Rungau Raya Village Rungau Raya Village

- Focus discussion

group

06 May 2014

3 Sebabi Village Sebabi Village - Focus discussion

group

07 May 2014

4 National Land Agency, Seruyan District

Kuala Pembuang, Seruyan District

Phone: 081348087670 (Mr. Bambang) Phone 081349047225 (Mr. Poly)

Mail and Focus discussion group

06 May 2014

5 Manpower, Transmigration and Tourism Agency of Seruyan District

Kuala Pembuang, Seruyan District

Phone. 081251562456 (Ibu Jariyah)


06 May 2014

6 Forestry and Plantation Agency, Seruyan District

Jl. Rimba Raya No. 55, Kuala Pembuang 74212

Phone. 0538- 21011, HP: 081352722049 (Maryoso) Email: [email protected]


06 May 2014

7 Environmental Agency , Seruyan District

Jl. A Yani, Kuala Pembuang, 74212

Phone . 0538-2707456, HP: 0811520611 (Primermen) Email: [email protected] .id


06 May 2014

8 Wahana Lingkungan Hidup Indonesia

[email protected]; [email protected]

Kuesioner 22 April 2014

9 Sawit Watch Indonesia Jl. Taman Sempur Kaler No.28, Bogor. Jawa Barat. 16129

Telp : 0251-8352171 Fax : 0251-8352047 Email : [email protected]


10 Aliansi Masyarakat Adat Nusantara

[email protected] Kuesioner 22 April 2014

11 Save Our Borneo Jl. Tumanggung Tilung XI, Gg. Savero Perum Borneo Indah No. 4 Palangkaraya, Kalimantan Tengah 73111

Telp. (0536) 3245196 Email : [email protected]


12 Borneo Climate Kantor Bappeda Kalimantan Tengah, Jalan Diponegoro No. 60 in Palangka Raya Kalimantan

[email protected] Kuesioner 22 April 2014



ASSESSMENT REPORT


Tengah

13 WWF Kalteng Balai Taman Nasional Sebangau Jl. Mahir Mahar Km. 1,2 Palangka Raya 73113, Indonesia WWF-Indonesia Jl. Krakatau No. 12 Palangka Raya, Indonesia

Telp +62 536 3327093 Telp: +62 536 3236997 Fax: +62 536 3227700 [email protected]


14 Yayasan Gibbon Indonesia Jl. Tumenggung Wiradireja No. 216 Cimahpar - Bogor 16155 Jawa Barat - Indonesia

Telephone: +62-251-8657220 Fax: +62-251-8656765 Email: [email protected]


15 Serikat Pekerja Mandiri unit Sungai Seruyan Estate

PT SIP – PT BAP - Interview 06 May 2014

16 Komite Gender unit Sungai Seruyan Estate


17 Serikat Pekerja Mandiri unit Terawan Estate


18 Komite Gender unit Terawan Estate



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DATE 05 – 09 May 2014 Program PROCESSES / CLAUSES TO BE AUDITED AUDITOR

Monday, 05 May 2014 08.30 - 11.00

13.00 – 16.00

16.00 – 17.00

Jakarta – Pangkalan Bun Pangkalan Bun – PT SIP (Seruyan) Opening Meeting

• BB / TFK / NK / MM • BB / TFK / NK / MM • BB / TFK / NK / MM

Tuesday, 06 May 2014 06.30 – 14.00

08.00 – 13.00

Stakeholders consultation to Related Government Institution (Seruyan District Government and local NGO) Stakeholders consultation to Nearest village and community leader (Selunuk Village) Field Observation to Sungai Seruyan Estate • Spraying, Harvesting, best agricultural practices, Worker Welfare (payments,

complaint mechanism) • Legal operational and Conservation Area • Worker facilities (housing, health clinic, clean water, etc) and Land Fire facilities,

Storage, ect.. • Hazardous Waste Material (LB3) management • Stakeholders consultation to labour union and gender committee.

• MM

• BB

• TFK/NK

13.00 – 14.00 BREAK 14.00 – 18.00 Field Observation to Sungai Seruyan Estate

• Legal operational and Conservation Area Field Observation to Sungai Rungau POM • WWTP (IPAL), Operational, K3 (OHS), Rantai Pasok (Supply Chain), Hazardous

Waste Material (LB3) management, Land Application. • Completion of checklist and Review Supply Chain Certificate System

• BB

• TFK / NK

Wednesday, 07 May 2014 08.00 - 12.00

08.00 - 12.00

Stakeholders consultation to Nearest village and community leader (Rungau Raya Village and Sebabi Village) Field Observation to Terawan Estate • Spraying, best agricultural practices, Worker Welfare (payments, complaint

mechanism) • Worker facilities (housing, health clinic, clean water, etc) and Land Fire facilities,

Storage, ect.. • Stakeholders consultation to labour union and gender committee. • Hazardous Waste Material (LB3) management • Legal operational and Conservation Area

Completion of checklist Supply Chain Certificate System and and Review of Previous Visit Non-conformance (Stage-2)

• BB

• NK

• NK

• NK • MM • MM

• TFK

12.00 – 14.00 BREAK 14.00 – 17.00 Continue of Checklist Review and Follow up from Field Observation • BB / TFK / NK / MM

Appendix 2. Assessment Program


ASSESSMENT REPORT


DATE 05 – 09 May 2014 Program PROCESSES / CLAUSES TO BE AUDITED AUDITOR

Thursday, 08 May 2014 08.00 - 12.00

• Continue of Checklist Review and Follow up from Field Observation • BB / TFK / NK / MM

12.00 – 14.00 BREAK 14.00 – 16.00

16.00 – 18.00

20.00 – 23.00

• Preparation of Audit Findings

• Closing Meeting

• PT SIP (Seruyan) – Pangkalan Bun

• BB / TFK / NK / MM



Friday, 09 May 2014 13.00 – 15.00 • Pangkalan Bun – Jakarta • BB / TFK / NK / MM


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Appendix 3. Glossary

APH : Agen Pengendali Hayati (Beneficial Plants) AMDAL (SEIA) : Analisis Mengenai Dampak Lingkungan (Social and Environmental Impact Assessment)

APD (PPE) : Alat Pelindung Diri (Personal Protective Equipment) B3 : Bahan Beracun dan Berbahaya (Hazardous Material Waste) BHL : Buruh Harian Lepas (Daily Worker) BOD : Biological Oxygen Demand BPN : Badan Pertanahan Nasional (National Land Agency) BTGE : Bukit Tiga Estate COD : Chemical Oxygen Demand CPO : Crude Palm Oil CSR : Corporate Social Responsibility EIA : Enviromental Impact Assessment FPIC : Free, Prior and Informed Consent HCV : High Conservation Value (Nilai Konservasi Tinggi) HGU : Hak Guna Usaha. (Land Use Permit) IK : Intruksi kerja (Work Instruction) ISCC ; International Suistanable Carbon Certification IUP : Izin Usaha Perkebunan (Plantation Operation Licence) IPAL (WWTP) : Instalasi Pengelolaan Air Limbah (Wastewater Treatment Plant) JAMSOSTEK : Jaminan Sosial Tenaga Kerja (Social Assurance of Labor) Jankos / EFB : Janjangan Kosong / Empty Fruit Bunch KK2 : Bentuk Laporan Kecelakaan Tahap 1 (work Accident report) K3 (OHS) : Keselamatan dan Kesehatan Kerja. (Occupational Health and Safety) KER : Kernel Extraction Rate LA : Land Application LSC : Land and Soil Capabilty LC : Land Clearing MSDS : Material Safety Data Sheet OER : Oil Extraction Rate P2K3

: Panitia Pembina Keselamatan dan Kesehatan Kerja (Guiding Committee of Occupational Safety & Health)

PHT (IPM) : Pengendalian Hama Terpadu (Integrated Pest Management) PK : Palm Kernel PKS (POM) : Pabrik Kelapa Sawit (Palm Oil Mill) POME : Palm Oil Mill Effluent PT BAP : PT Binasawit Abadipratama PT SIP : PT Sumber Indah Perkasa RKL/RPL : Rencana Kelola Lingkungan/ Rencana Pemantauan Lingkungan.


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(Environmental Management Plan/ Environment Monitoring Plan) RSPO : Roundtable on Sustainable Palm Oil SEL : Studi Evaluasi Lingkungan (Environment Evaluation Study document) SIA : Social Impact Assessment SIO : Surat Ijin Operator (Operator License) SKU : Syarat Karyawan Umum (Monthly Worker) SMARTRI : SMART Research Institute SOP : Standard Operating Procedure SRGE : Sungai Rungau Estate SSRE : Sungai Seruyan Estate ST-1 : Stage 1 ST-2 : Stage 2 S1 : Surveillance 1 TBS (FFB) : Tandan Buah Segar (Fresh Fruit Bunch) TRWE : Terawan Estate TNGE : Tangar Estate UKL/UPL : Upaya Kelola Lingkungan/ Upaya Pemantauan Lingkungan.

(Environmental Management Efforts/ Environmental Monitoring Efforts)

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