FOREST MANAGEMENT CERTIFICATION REPORT€¦ · ad 36a-10 page 3 of 53 table of contents 1. scope of...

SGS QUALIFOR (Associated Documents)

Doc. Number: AD 36A-10 Doc. Version date: 9 April 2010

Page: 1 of 53 Approved by: Gerrit Marais

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SGS South Africa (Qualifo r Programme) 58 Melvil le Road, Booysens - PO Box 82582, Southdale 2185 South AfricaSystems and Services Certification Division [email protected] South Africa (Qualifo r Programme) 58 Melvil le Road, Booysens - PO Box 82582, Southdale 2185 -South AfricaSystems and Services Certification Division Contact Programme Director at t. +27 11 681-2500 www.sgs.com/forestrySGS South Africa (Qualifo r Programme) 58 Melvil le Road, Booysens - PO Box 82582, Southdale 2185 South AfricaSystems and Services Certification Division [email protected] South Africa (Qualifo r Programme) 58 Melvil le Road, Booysens - PO Box 82582, Southdale 2185 -South AfricaSystems and Services Certification Division Contact Programme Director at t. +27 11 681-2500 www.sgs.com/forestry

FOREST MANAGEMENT CERTIFICATION REPORT

SSEECCTTIIOONN AA:: PPUUBBLLIICC SSUUMMMMAARRYY

Project Nr: 5085-MY

Client: Sabah Forestry Department

Web Page: www.deramakot.sabah.gov.my

Address: Sabah Forestry Department

Locked Bag 68, 90009 Sandakan, Sabah, Malaysia

Country: Malaysia

Certificate Nr. SGS-FM-COC-000065 Certificate Type: Forest Management

Date of Issue 18 Feb 2003 Date of expiry: 20 April 2013

Evaluation Standard SGS Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia, version 02 of 5 June 2007

Forest Zone: Tropical

Total Certified Area 55,139 ha

Scope: Forest Management of 55,139 ha of natural forests in FMU 19A, Deramakot Forest Reserve in Sandakan, Sabah, Malaysia, for the production of tropical hardwood logs.

Location of the FMUs included in the scope

Sandakan, Sabah

Standard that the evaluation was conducted against

SGS Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia, version 02 of 5 June 2007

Company Contact Person:

Frederick Kugan

Address: Sabah Forestry Department

Locked Bag 68, 90009 Sandakan, Sabah, Malaysia

Tel: 6089-660 811

Fax 6089-669 170

Email: [email protected]

Dates:

AD 36A-10 Page 2 of 53

Main Evaluation 29 Oct – 2 Nov 2007

Surveillance 1 2 – 6 March 2009

Surveillance 2 1-5 March 2010

Surveillance 3 7 – 11 Feb 2011

Surveillance 4

Date the current version of the report was finalised

15 Feb 2011

Copyright: © 2010 SGS South Africa (Pty) Ltd

All rights reserved


TTAABBLLEE OOFF CCOONNTTEENNTTSS

1. SCOPE OF CERTIFICATE .......................................................................................................................... 5 2. COMPANY BACKGROUND ........................................................................................................................ 7

2.1 Ownership .......................................................................................................................................... 7 2.2 Company Key Objectives ................................................................................................................. 9 2.3 Company History ............................................................................................................................... 9 2.4 Organisational Structure ................................................................................................................ 10 2.5 Ownership and Use Rights ............................................................................................................ 10 2.6 Legislative, Administrative and Land Use Context ..................................................................... 10 2.7 Other Land Uses ............................................................................................................................. 11 2.8 Non-certified Forests ...................................................................................................................... 11

3. FOREST MANAGEMENT SYSTEM .......................................................................................................... 12 3.1 Bio-physical setting ........................................................................................................................ 12 3.2 History of use .................................................................................................................................. 14 3.3 Planning process ............................................................................................................................ 14 3.4 Harvest and regeneration ............................................................................................................... 15 3.5 Monitoring processes ..................................................................................................................... 15

4. SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT ....................................................................... 16 4.1 Social aspects ................................................................................................................................. 16 4.2 Environmental aspects ................................................................................................................... 18 4.3 Administration, Legislation and Guidelines ................................................................................. 18

5. CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING .......................... 19 6. PREPARATION FOR THE EVALUATION ................................................................................................ 19

6.1 Schedule .......................................................................................................................................... 19 6.2 Team ................................................................................................................................................. 19 6.3 Checklist Preparation ..................................................................................................................... 20 6.4 Stakeholder notification ................................................................................................................. 20

7. THE EVALUATION .................................................................................................................................... 20 7.1 Opening meeting ............................................................................................................................. 20 7.2 Document review ............................................................................................................................ 20 7.3 Sampling and Evaluation Approach ............................................................................................. 20 7.4 Field assessments .......................................................................................................................... 21 7.5 Stakeholder interviews ................................................................................................................... 21 7.6 Summing up and closing meeting ................................................................................................ 22

8. EVALUATION RESULTS ........................................................................................................................... 22 8.1 Findings related to the general QUALIFOR Programme............................................................. 22

9. CERTIFICATION DECISION...................................................................................................................... 40


10. MAINTENANCE OF CERTIFICATION ...................................................................................................... 40 11. RECORD OF CORRECTIVE ACTION REQUESTS (CARs) .................................................................... 41 12. RECORD OF OBSERVATIONS ................................................................................................................ 49 13. RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS ........................................................... 51 14. RECORD OF COMPLAINTS ..................................................................................................................... 53

ASSOCIATED DOCUMENTS (not part of the Public Summary)

Please delete what is not relevant to this project:

AD 20: Evaluation Itinerary

AD 21: Attendance Record

AD 26: Corrective Action Requests

AD 36-B: Evaluation - Observations and Information on Logistics

AD 36-C: Evaluation – Information on Group Members

AD 38: Peer Review Report

AD 40: Stakeholder Reports

Evaluation team CV’s

List of stakeholders contacted

Complaints and Disputes

Procedures for submitting complaints, appeals and disputes, and the SGS processing of such are published on www.sgs.com/forestry. This information is also available on request – refer contact details on the first page.


INTRODUCTION

The purpose of the evaluation was to evaluate the operations of Sabah Forestry Department against the requirements of the QUALIFOR Programme, the SGS Group’s forest certification programme accredited by Forest Stewardship Council.

1. SCOPE OF CERTIFICATE The scope of the certificate falls within the Tropical Forest Zone and includes one of Forest Management Units (FMUs) as described below.

Description of FMUs: Description Ownership Area (ha) Longitude E/W Latitude N/S

Deramakot Forest Reserve Sabah Forestry Department

55,139 ha 117o 20’ E – 117o 42’ E

5o 19’ N – 5o 20’ N

Size of FMUs:

Nr of FMUs Area (ha)

Less than 100ha

100 to 1000 ha in area

1001 to 10000 ha in area

More than 10000 ha in area 1 55,139 ha Total 55,139 ha

Total Area in the Scope of the Certificate that is:

Area (ha)

Privately managed

State Managed 55,139 ha

Community Managed

Composition of the Certified Forest(s)

Area (ha)

Area of forest protected from commercial harvesting of timber and managed primarily for conservation objectives

3,473

Area of forest protected from commercial harvesting of timber and managed primarily for production of NTFPs or services

0

Area of forest classified as “high conservation value forest” 18,098

Area of non-forest managed primarily for conservation objectives

Total area of production forest (i.e. forest from which timber may be harvested) 51648

Area of production forest classified as “plantation” 0


Composition of the Certified Forest(s)

Area (ha)

Area of production forest regenerated primarily by replanting or copicing

0

Area of production forest regenerate primarily by natural regeneration

55,139

List of High Conservation Values Description Notes

Forest areas having high biological and ecological values

Conservation of fauna (fresh water fishes such as Polian and Kalui, Crocodylus porosus, Elephas maximus, Pongo pygmaeus, Bos javanicus, Nasalis larvatus).

Forest bordering other forest area forming contiguous forest. Location of salt licks.

Watershed and areas with steep slopes Areas above 25 degrees slope contiguous exceeding 2 hectares or rocky areas known as unloggable areas.

Areas of ecological and economic significance to local communities

Hunting ground or fishing sites

Water supply

Ecotourism and historical value

Wildlife observation site

Pristine jungle Virgin forest area containing large trees.

List of Timber Product Categories Product Class Product Type Trade Name Category Species

Wood in the rough

Logs of tropical hardwood

Yellow seraya White seraya Red seraya

Hardwood Shorea sp

Selangan batu Hardwood Shore sp.

Melapi Hardwood Shorea sp.

Keruing Hardwood Dipterocarpus caudiferus

Kapur Hardwood Dryobalanorps lanceolata

Kembang semangkuk

Hardwood Scaphium sp.

Merbau Hardwood Koompasia

Nyatoh Hardwood Palaquuim sp.

Annual Timber Production Species (botanical name) Species (common name) Area (ha) Maximum Annual Sustainable Yield (m3)

Projected Actual

Shorea leptoclados, Dryobalanops lanceolata, Dipterocarpus

Keruing, selangan batu, seraya, obak suluk, White/red/yellow Seraya, keruing, kapur,

17,600 15,000


Annual Timber Production Species (botanical name) Species (common name) Area (ha) Maximum Annual Sustainable Yield (m3)

Projected Actual

caudiferus, Scaphium sp., Palaqiuum sp..

selanagn batu, merbau, nyatoh, kembang semangkok, melapi etc

1Totals 17,600 15,000

Approximate Annual Commercial Production of Non-Timber-Forest-Products Product Species Unit of measure Total units

Botanical Name Common Name)

None

Lists of Pesticides Product Name Quantity Used Area of application

MA SA1 SA2 SA3 SA4 MA SA1 SA2 SA3 SA4

None X X X X X X X X

2. COMPANY BACKGROUND

2.1 Ownership

Deramakot Forest Reserve (DFR) is a gazetted Class II forest reserve within the Permanent Reserve Forest (PRFs) of the State of Sabah. The production forest area is under the management of Sabah Forestry Department, a state government agency.

The original DFR consists of 55,083 ha within forest management unit 19 (FMU 19) which contains a total of 112,323 ha forest area. The remaining portion of FMU 19 comprise of Segaliud Lokan Forest Reserve, which is under different management. Recently an additional 56 ha has been gazetted as Forest Reserve, thus making the current total area for DFR is 55,139 ha. Location of the DFR is as illustrated below:


The Sabah Forestry Department is responsible for forest management and exploitation activities within the State of Sabah. The primary piece of legislation relating to forestry in the State is the State Forest Enactment 1968 and amendments, which classify the Permanent Forest Estates into different categories as follows:

Class I : Protection Forest

Class II : Commercial Forest

Class III : Domestic Forest

Class IV: Amenity Forest

Class V : Mangrove Forest

Class VI : Virgin Jungle Reserve

Class VII: Forest for Wildlife

For management purposes, the Class II FRs in Sabah has been divided into 27 FMUs, of approximately 100,000 ha each FMU. These units essentially mean administrative districts decided based on its historical management, relationship to existing administrative districts, natural boundaries etc.. Long-term licenses have been issued to 10 licensees under Sustainable Forest Management License Agreement (SFMLA) which addresses the issue of security of tenure, which is an essential element for implementation of sustainable forest management. Under the system, the concessionaire takes responsibility for the full range of forest management activities, including management planning, silvicultural tending as well as harvesting operations. The Forestry Department would remain as monitoring and enforcement agency to ensure continuous compliance to the policy and legislative requirement.

Management of Deramakot FR is currently being administered by a Deramakot District Forest Officer (DFO) assisted by an Assistant DFO. Resource inventory, pre-harvest planning and post harvest monitoring are conducted by trained Forestry Department staff while harvesting operation and silviculture treatments is contracted out.


2.2 Company Key Objectives

Objective Notes

Commercial • DFR will be managed under sound forest management

practices in accordance with the FSC Principles and the biological, social and economic principles defined by the International Tropical Timber Organisation (ITTO), Malaysian Criteria and Indicators (MC&I), and in conformity with the existing State forest policies, environmental policies, legislation and regulations.

• Every effort would be undertaken by the SFD to optimize economic returns to the State on a long-term basis by maximizing utilization, efficient use of raw materials from DFR, and good marketing strategies of DFR’s ecotourism potentials.

Social • On the social aspect, the SFD would continue to provide

job opportunities and socio-economic development activities, particularly to the local communities living adjacent to DFR, so as to improve their living standard.

Environmental • The SFD would continue to demonstrate to all relevant

stakeholders, national, and international clients, on its efforts towards quality environmental management in DFR. Our internal and external auditors shall monitor this.

• The SFD would maintain and enhance the high conservation value forests (HCVF), biodiversity, wilderness, soil, and water resources that are ecologically justified, technically and financially feasible within the framework of the SFD’s regular operations.

• The SFD would escalate research and development (R&D).

2.3 Company History

DFR and areas around it were virgin forest until the mid 1950s after which the area was been logged several times. A portion of the area bordering the FMU has been converted to oil palm plantation. A significant portion of the forests in DFR is considered to be in poor quality due to repeated logging since 1980s.

Conventional logging commenced in DFR in 1956 under the Special License of United Timbers. The Company ceased operations in 1976, but at the same year, another license was issued to Seranum Sdn. Bhd. covering an area of 945 ha. In the following year, another area of 1,204 ha was given to Lai Fook Kim (Brothers). By the end of 1979, there were 5 Special Licenses issued in DFR, which covered approximately 16,914 ha. Elopura Maju was given the balance of virgin forests at the north-eastern part of DFR in 1979. In 1987, a Special License was issued to Abadi Mewah Sdn. Bhd., and an annual license to Syarikat Jaimi Sdn. Bhd. for relogging.

The DFR is directly managed by the SFD as a model forest area under a sustainable forest management project with the German Technical Assistance programme (GTZ) and has been subjected to assessment by Qualifor Programme for certification under FSC. The area has been

AD 36A-10 Page 10 of 53

certified as responsibly managed since 1997 and re-certified in 2002 for another 5 year. Current forest management certificate (SGS-FM/COC-0065) will ends in February 2008.

2.4 Organisational Structure

DFR was under the jurisdiction of the Sandakan District Forestry Officer from 1995 to 1998. However, from 1999 onwards, DFR was placed under the Deramakot District Forestry Officer, a new DFO, based in Deramakot Base Camp. The current structure and composition of Deramakot District Forest Office is as follows:

2.5 Ownership and Use Rights

DFR has been administered as a forest reserve since 1961, and in 1984, it was re-constituted as part of the permanent forest estate as a Commercial Forest Reserve. gazetted under the State Forest Enactment 1968. The area is a Class II FR which is set aside for production purposes. DFR is under direct management of Sabah Forest Department who is the guardian and protector of forestry resources in Sabah State. The land area within DFR belongs to the State Government of Sabah.

2.6 Legislative, Administrative and Land Use Context

Laws and regulations on forest legislation are the legal instruments, which are necessary in the implementation of the objectives of a forest policy. Forest legislation reflects the principles of sustainability in order to support implementation of forest policy. Management guidelines, on the other hand, provide advice and promote more extensive application of forest management practices. In this context, the following are the legal frameworks and management guidelines, which the SFD would refer to: • Federal Constitution • State Forest Policy, 1954 • Forest Enactment, 1968 • Forest Rules, 1969 • Conservation of Environment Enactment, 1996 • Parks Enactment, 1984

DISTRICT FORESTRY OFFICER

ASSISTANT DFO

PROTECTION

1 Forester

BALAT

3 GW

1 Boatman

LININGKONG2 GW

1 Boatman

GATEKEEPERS2 GW

ADMINISTRATION

1 GW

1 Driver

STORE

1 GW

FOREST ROADS

Maintenance

3 Operators

6 GW

WORKSHOP

2 GW

HARVESTING

Monitoring & Control

1 FR,

2 Foresters

4 GW

Planning

1 FR

5 GW

SILVICULTURE

Tending

1 Forest Ranger (FR)

6 General Worker (GW)

Planting/Maintenance

1 FR

AD 36A-10 Page 11 of 53

• Wildlife Conservation Enactment, 1997 • Water Resources Enactment, 1998 • Cultural Heritage (Conservation) Enactment, 1997 • Biodiversity Enactment, 2000 • Occupational Safety and Health Act, 1994 • Land Ordinance, 1930 (Sabah Cap. 68) • Labour Ordinance (Sabah ) Cap 67 • Sustainable Forest Management Licence Agreement • Environmental Quality Act, 1974 • Native Court Ordinance, 1952 (Cap 86) • Interpretation of the Native Ordinance, 1952 • All Adats recognised and enforceable by the Native Courts, including relevant decisions of the

Civil Courts

Deramakot FR is classified as Permanent Reserve Forest (PFR) that is to be managed on sustainable manner. Its management and operation is subjected to multi-layers of regulations and guidelines established by the authorities. The management of Deramakot is being seen as a model for the management of other FMUs in Sabah.

2.7 Other Land Uses

The whole DFR is a secondary forest which has been logged many times since 1950s.

2.8 Non-certified Forests

Sabah Forestry Department is directly managing two more areas in Sabah which is currently under specific programme moving towards FSC certification. The Ulu Segama – Malua forest management area and Tangkulap FR are two areas which is under direct management of the Sabah Forestry Department that are being prepared for certification in the near future.

Other forest areas within Sabah has been divided into several Forest Management Unit and managed by private sectors who has to signed a sustainable forest management license agreement (SFMLA) making commitment towards responsible forest management. Sabah Forestry Department is the authority that regulates and monitor progress of each license holder towards achieving the commitment made.

Sabah Forestry Department’s policies are as follows:

• DFR will be managed under sound forest management practices in accordance with the FSC Principles and the biological, social and economic principles defined by the International Tropical Timber Organisation (ITTO), Malaysian Criteria and Indicators (MC&I), and in conformity with the existing State forest policies, environmental policies, legislation and regulations. • The SFD would maintain and enhance the high conservation value forests (HCVF), biodiversity, wilderness, soil, and water resources that are ecologically justified, technically and financially feasible within the framework of the SFD’s regular operations. • The SFD would continue to demonstrate to all relevant stakeholders, national, and international clients, on its efforts towards quality environmental management in DFR. Our internal and external auditors shall monitor this. • Every effort would be undertaken by the SFD to optimize economic returns to the State on a long-term basis by maximizing utilization, efficient use of raw materials from DFR, and good marketing strategies of DFR’s ecotourism potentials. • On the social aspect, the SFD would continue to provide job opportunities and socio-economic development activities, particularly to the local communities living adjacent to DFR, so as to improve their living standard. • The SFD would escalate research and development (R&D).

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3. FOREST MANAGEMENT SYSTEM

3.1 Bio-physical setting

DFR consists of a secondary natural tropical forest with undulating topography. Floristically the forest belongs to the Parashorea tomentella/Eusideroxylon zwageri forest type and dominated by species Shorea leptocladus, Dryobalanops lanceolata and Dipterocarpus caudiferous. The western border of Deramakot is bounded by Tangkulap Forest Reserve. The eastern border is the Segaliud Lokan Forest Reserve, also a part of FMU 19. A small portion of the northern boundary is bordering with an oil palm plantation while the southern area is bordering with state-land areas along Sg Kinabatangan, the longest river of Sabah.

Apart from some small human settlements that are located in the vicinity and outside of DFR along Sg Kinabatangan, the forest areas are not inhabited. Kg Balat, located just outside the DFR along the Kinabatangan River is the closest human settlement.

Geography & Soils:

DFR is located on land with elevations of 200m rising to a maximum of 1,079m above sea level (a.s.l). A large part of the area is on elevation ranging from 250m to 700m a.s.l. The landforms are mainly undulating (71% of the area) with slopes varying from 6º to 24º. The higher elevation and steep slopes (>25º), which cover 5% of the area, are mostly located on the southeast and southwest of the reserve. The rest of the reserve (approx. 24%) is flat (< 5º slope).

The geology of DFR is dominated by tertiary sedimentary formations. The most prominent rock types are red and purple silt (mud) and sand stone. Smaller patches of ultra basic rocks like serpentinite are also reported. The big valleys of the Rawog and the Lokan Rivers are made up of old alluvial deposits. Gravel and stone beds are found along the banks of both rivers to respectable depths. The soils derived from these rocks are infertile with limited stocks of plant-available nutrients.

DFR is located on land with elevations of 200m rising to a maximum of 1,079m above sea level (a.s.l). A large part of the area is on elevation ranging from 250m to 700m a.s.l. The landforms are mainly undulating (71% of the area) with slopes varying from 6º to 24º. The higher elevation and steep slopes (>25º), which cover 5% of the area, are mostly located on the southeast and southwest of the reserve. The rest of the reserve (approx. 24%) is flat (< 5º slope).

The geology of DFR is dominated by tertiary sedimentary formations. The most prominent rock types are red and purple silt (mud) and sand stone. Smaller patches of ultra basic rocks like serpentinite are also reported. The big valleys of the Rawog and the Lokan Rivers are made up of old alluvial deposits. Gravel and stone beds are found along the banks of both rivers to respectable depths. The soils derived from these rocks are infertile with limited stocks of plant-available nutrients.

Acrisols comprise 91.1% in DFR while 6.9% are made up of Leptosols and other soil types. Leptosols found on steep slopes are shallow, limiting root penetration. Generally these soils are dry due to high rock content. The Soil Families found (Kapilit, Paliu and Lithosols) are among the most impoverished in terms of plant-available nutrients. More than 99% of the soils in DFR have less than 5,000 kg/ha of exchangeable macro-nutrients and can be classified as poor to very poor.

Acrisols developed on old land surfaces and prolong weathering lead to a general loss of nutrients. Moreover, they are easily erodible. These two factors are the major serious limitations to any type of land management.

Since Leptosols found on steep slopes limit root penetration, and they are dry due to high rock content, logging is restricted in these areas because erosion may wash away the already thin soil layer. Approximately 85% of the area is affected by erosion. More than 71% show only slight erosion with no formation of rills and gullies. However, the RIL logging adopted in DFR would reduce the occurrence of compaction in the area.

Ecology:

The lowland dipterocarp forest of DFR belongs to the Parashorea tomentalla/Eusideroxylon zwageri Forest type dominated by Parashorea (20%), and its principal associate species are

AD 36A-10 Page 13 of 53

Shorea leptoclados, Dryobalanops lanceolata and Dipterocarpus caudiferus. Together, these four dipterocarps account for about 40% of the large trees (> 50 cm dbh).

Evaluation of wildlife habitat in DFR is based on data gathered during the management inventory of the area. In general, DFR provides good wildlife habitats because 71% of its landscape is undulating with slopes 6º < 24ºand 24% is flat (< 5ºslope). This condition provides better habitat contiguity and long-term prospects for viable populations of wildlife in DFR. Elephants (Elephas maximus) and Tembadau (Bos javanicus) appear to use the generally flatter parts of north DFR and a small portion at the southern part especially near Kg. Balat. Elephant’s range in the area extends from the Pinangah hills in the west through parts of the Tangkulap Forest Reserve (west of DFR), into Segaliud Lokan Forest Reserve (SLFR), stateland and the Lokan VJR (east of DFR). Most boundaries of these forest reserves to the north are shared with oilpalm plantations. Orang-utans (Pongo pygmaeus), on the other hand, are fairly widespread in DFR but significantly higher in the southern part (disturbed habitat: stratum 3). Nest concentration is low in strata 4 and 5 and is intermediate in the northern part (stratum 2). Nests are commonly built in Laran and Binuang trees, which grow along streams.

Wildlife surveys and monitoring in DFR carried out by the Forestry Department shows that DFR harbored remarkable wildlife diversity, including significant populations of highly endangered species such as the orang-utan, the tembadau and the Asian elephant. It was reported that there were at least 75 species of mammals (excluding bats), 220 species of birds and over 100 species of reptiles, amphibians and fish. Among mammals, primate diversity is relatively rich. Orang–Utans are found through out the area, while gibbons (Hylobates muelleri) are heard calling frequently. Two sympatric colobines (proboscis monkey and the maroon langur) are found in Sungai Lokan.

The Asian elephant (Elephas maximus) occurs in the entire area and its range extends to the adjoining reserves. Tembadau (Bos javanicus) together with large populations of sambar deer (Cervus unicolor) and bearded pig (Sus barbatus) occur in the flat areas where grass is more prolific. The most common large carnivore is the Malay sun bear (Harlctos malayanus). Clouded leopards are also found in DFR. Small carnivore diversity found in DFR includes the leopard cat, marbled cat, Malay badger, yellow-throated marten, several species of civet and smooth otters.

Six species of hornbill found in Sabah are also found in DFR. Large flocks of rhinoceros hornbill (Anthrococeros coronatus) have been sighted. The Rawog River is part of the last undisturbed breeding grounds for the estuarine crocodile (Crocodylus porosus).

In 1999, the SFD consultants (Dr. Isabelle Lackman-Ancrenaz and Marc Ancrenaz) carried out a reconnaissance survey in DFR to corroborate the above findings. Qualitative assessment was carried based on seven components (Footpath Monitoring, Night Roadside Monitoring, Riverside Monitoring, Saltlick Monitoring, Elephant Monitoring, Orang–Utan Aerial Survey, and Opportunistic Observations).

The results of the survey show that: • Different cervid species living in DFR are mostly solitary individuals. However, it is

possible to encounter groups of small size at certain places like natural mineral sources. They are most common in degraded habitats and gently sloping terrain. They are mostly seen along roads, skid trails and skyline corridors.

• The bearded pigs are widespread in DFR, and migrations occur according to fruit availability and season. Their population in DFR appears to be high.

• Tembadau population (< 50 individuals) in DFR consists of several small groups (females and their young: 5-10 individuals) and solitary males. They are attracted to natural saltlicks (up to 11 individuals together).

• A population of approximately 100 individuals of elephants exist in DFR. Groups usually contain between three and forty individuals. Groups split and merge, but usually contain one or more adult females with young of both sexes and various ages.

• A population of a few hundred Orang-Utans live in DFR. Significantly high number of nests was sighted in the southern part of DFR (disturbed habitat). This is because fruit productivity is higher in degraded habitats than in more intact forests. Orang-utan nest counts carried by the SFD with assistance from the Sabah Wildlife Department from 1999 to 2002 (based on aerial surveys) indicated that there was an increase of nest numbers from 1.4 individuals per km²in 1999 to 1.8 individuals per km²in 2002.

AD 36A-10 Page 14 of 53

• Avifauna found in DFR is very rich and diverse. Globally threatened bird species found within DFR include hornbills, Storm’s stock, Malaysian Peacock-pheasant, crested fireback, etc.

Based on the survey results, it was reported that animal biodiversity in DFR is high compared to other similar habitats found in Sabah.

3.2 History of use

DFR and areas around it were virgin forest until the mid 1950s after which the area was been logged several times. A portion of the area bordering the FMU has been converted to oil palm plantation. A significant portion of the forests in DFR is considered to be in poor quality due to repeated logging since 1980s. The DFR is currently managed by the SFD as a model forest area under a sustainable forest management project with assistance from the German Technical Assistance programme GTZ.

DFR has been certified under Qualifor Programme demonstrating compliance FSC P&C requirement since 1997, the first FMU to be certified in Malaysia. Before the expiry of the 1st term period, a reassessment was conducted in 2002 and with the expiry of certificate in February 2008, a second reassessment is scheduled in October-November 2007.

3.3 Planning process

In terms of management planning, the DFR is subjected to the following:

• 10 year forest management plan This is long term planning which is based on comprehensive resource inventory. For DFR, the long term planning was conducted through a cooperation programme between Sabah Forestry Department and the German Agency for Technical Co-operation (GTZ) which is carried under the Malaysian-German Sustainable Forest Management Project (MG-SFMP) which commenced in 1989. Through the cooperation, a Medium-Term Management Plan for the DFR covering period of 1995 – 2004 has been produced.

The management system being adopted is targeted at maintaining a high degree of species and structural diversity through natural regeneration, rehabilitation of degraded forest area, tending of the forest stands and low impact harvesting. Reduced Impact Logging (RIL) methods are used for harvesting operations.

An annual allowable cut of 20,000 m3 was initially established based on simulated growth projections of timber inventory collated from 490 sampling plots using DIPSIM model. By limiting the AAC to 20,000 m3, it was anticipated that the forest would be able to achieve a target growing stock of 220 m3/ha in about 50 years.

• Mid-term Review Report A mid-term review is carried out after five years to re-evaluate the earlier planning. For DFR, a mid-term review was carried out in 1999 by looking into data gathered to date comparing it with the current condition of the forest.

The mid-term review has resulted in the revision of the AAC to 15,000 m3.

• Annual Work Plan Annually, a work plan is prepared, as part of monitoring of performance of the previous year, as well as planning for the following year. Harvest planning, infrastructure planning, silvicultural treatment planning as well as financial planning is made on annual basis.

• Comprehensive Harvesting Plan Prior to harvesting of a logging block, comprehensive harvest planning is developed. The CHP comprises : identification of productive area, a resource inventory of the productive area, identification of harvestable trees as well as infrastructure development. Harvesting methods that include skyline and tractor skidding are determined based on factors such as topography, existing roads, streams, etc.

AD 36A-10 Page 15 of 53

• Monitoring Monitoring is continuously conducted during and after harvesting operation. A closing report is prepared for harvested areas. The report contains statistics of the harvest level, extent of roads and skid trails constructed, residual stand condition and environmental elements such as drainage etc.

3.4 Harvest and regeneration

A Comprehensive Harvest Plan is developed through a system of an initial evaluation of the harvest compartment for basic stocking in relation to old skid trails. A basic plan is the developed on the net production area and method of harvesting and extraction (Skyline, Combination skyline / tractor, or tractor only). A 100% tree marking of harvestable trees are identified within cabling distance of the existing skid trials. New skid trails (if any) are proposed and aligned in the field. A map is developed identifying the production area, conservation areas (over 25o slope), buffer zones, skyline corridors, roads, old skid trails, new skid trails, bridges, culverts, etc. All key forestry operations are covered by guidelines and standard procedures.

Typically SFD uses either a combination system or tractor only system in harvesting compartments. A tree harvest list is compiled that include identification of route for extraction such as skid trail number or skyline corridor

Silviculture treatment prescribed for the area is climber (liana) cutting, girdling to release future crop trees as well as enrichment planting. No chemicals are currently used in the system. The climbers are predominantly pioneer species which have grown to dominate the forest after pioneer logging. Enrichment planting is conducted in areas with poor stocking identified in the FMP. The FMP identifies approximately 3000 ha of areas within strata 1 & 2 to be planted within the first ten year. Contractors carry out silviculture treatments and rehabilitation planting. SFD is currently re-evaluating the need for planting based on existing stocking in the compartments identified for planting in the FMP.

3.5 Monitoring processes

Monitoring process of DFR occur at macro and micro level. At macro level, monitoring on the commercial and administrative level is conducted. These include monitoring of harvest level from each compartment, manpower utilisation, financial cost etc on annual basis. Results of the monitoring are tabulated in the annual report as well as annual working plan which form basis for further planning.

At micro level, as part of RIL method, which emphasised on pre-harvest planning, proper implementation and post-harvest operation, monitoring is conducted daily for each logging block by SFD staff. Each skid trail is formally closed out as the contractor pulls out the final logs and water bars are constructed on sloping skid trails. A close-out report is prepared for each area when harvesting has been completed. The close-out report summarizes the actual field operations in post-harvest report that consists of the infrastructure developed in the area, list of trees felled and list of trees not felled etc. Damage level implicated in each block is also calculated.

Monitoring on illegal logging by local communities along Sg Kinabatangan is conducted by a patrol team stationed on site. Monitoring of social elements is conducted in collaboration with a local NGO, PACOS, which conducted programme with the communities living in the proximity of the DFR.

Wildlife monitoring is also conducted, for example aerial survey on the population of Orang-Utan is conducted in conjunction with aerial monitoring of the boundary to detect possible encroachment. Sightings of wildlife are recorded using special form to be completed by field staff during surveys and general field work.

Pre-harvest planning is conducted by the SFD staff, including boundary survey and tree location mapping. Harvesting operation, re-planting programme and silviculture treatment is contracted out with supervision by the SFD staff. Maintenance of road is also sub-contracted out.

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4. SOCIO-ECONOMIC AND ENVIRONMENTAL CONTEXT

4.1 Social aspects

Male Female

Number of own workers Total 44

Number of contract workers Total 80

Minimum daily wage for agricultural/forestry workers RM35.00

(about US$10.00)

Infant mortality rates (under 5 years) 20.96 per 1000 of live birth

Proportion of workers employed from the local population (%) 100 %

There are no villages located inside DFR. Villages are only located along the Kinabatangan/Millian River on the southern part of DFR. The social baseline surveys were carried out in 5 villages due to their close proximity with DFR. These villages are Kg Balat, Kg Desa Permai, Kg Tulang Tulang, Kg Tangkong and Kg Kuamut. Figure 5 shows the distribution of these villages.

Kg Kuamut is the most populated village, possibly due to its long existence, since 1824 followed by Kg Balat, which has been in existence since 1920. The other three villages were established in the 1980s. Some of the villagers in Kg Desa Permai were ex-Kg Pagar occupants, whose village is now abandoned. Almost all of the villagers are of the Sungai ethnic group. However, some Kadazan, Murut, Dusun, Bugis and Timor ethnic groups are also found, mainly through mixed marriages. The communities appear to adopt a one village-one religion concept. Islam is the major religion for Kg Balat, Kuamut and Desa Permai, while Kg Tangkong and Tulang-Tulang adopt Christianity. Education wise, only Kg Kuamut shows the highest literacy rate of more than 50%. The rest of the respondents in other villages scored less than 25%.

The villagers are in majority, subsistence farmers. Only a few are working in government agencies because finding employment in government agencies has been difficult. Unemployment becomes more serious due to the absence of logging companies nearby. More and more youngsters and middle-aged villagers immigrate to towns looking for proper employment, resulting in an energy-drain of the villages. The main economic activities of the local communities are timber salvaging or “cultural harvesting”, fishing and to a lesser extent, hunting, rattan collection, fruit and vegetables farming. Rattan is collected in DFR by the local communities in Kg. Balat and sold to a middleman. Fruit is a common perennial crop sold to a nearby market. Conceptually, all villagers would sell any perennial or annual crops available, but they are restricted by market accessibility.

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Figure 2: Location of Kampungs at the vicinity of DFR

Village Number of Households Population Major Religion

Year Established

Ability to Read (%)

Kg. Balat 44 230 Islam 1920 <25

Kg. Tangkong 12 75 Christian 1985 <25

Kg. Kuamut 128 269 Islam 1824 51-75

Kg. Desa Permai 12 110 Islam 1975 <25

Kg.Tulang-Tulang 22 100 Christian 1973 <25

The local communities still depend on nearby forests to get their supply of timber, rattan, firewood, wild vegetables, fish, wild animals, wild fruits, medicinal plants and others. Primarily, they are for own consumption, except for timber and rattan. To these communities, the latter two forest products are essential for their life sustenance. Together with other home (e.g. bread, etc.) and farm (e.g. hill rice, corn, durian) products, they are sold to logging companies, SFD staff at Balat Forest Checking Station, Kg Kuamut or at Bukit Garam.

On the average, the local communities in Kg. Kuamut and Kg. Tulang-Tulang own approximately 6.0 ha of land each, while those from the other 3 villages have less than 2 ha. However, all the local communities in Kg. Desa Permai have managed to secure Native Titles on their lands, whereas, about 18% and 5% of the villagers in Kg. Balat and Kg. Tulang-Tulang respectively, have managed to secure Native Titles on their lands. However, the villagers in Kg. Tangkong, are yet to get their land titles.

Amongst the 5 villages, Kg. Balat is considered the most “advanced” village with most of the basic infrastructure available. Telecommunication wise, the village is very near the Balat Forest Checking Station, where a satellite telecommunication set is available. This village also enjoys clean and continuous gravity water supply from Compartment 112 nearby. Kg. Kuamut is the largest village and has the most number of Government offices. It is the center for Mukim Kuamut. It is the only village that has a clinic. Kg. Tulang-Tulang has the least infrastructure and is the poorest amongst all.

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Residents of Kg Desa Permai and Kg. Tulang-Tulang have been requesting SFD to repair the Karis-Karis road, which links the villages to the DFR Base Camp and Telupid/Sandakan. However, due to cost and operational priorities elsewhere, the SFD has not been able to re-establish the old road. River is the main mode of transportation and every household owns at least one small paddleboat. For a one-way trip to Bukit Garam (3 hrs by 30 HP boat from Kuamut), one has to pay RM35.00 - RM50.00 depending on weight and the bulkiness of their goods. Renting a boat to Bukit Garam would cost RM200.00 –RM500.00.

The villagers are in majority, subsistence farmers. Only a few are working in government agencies because finding employment in government agencies has been difficult. Unemployment becomes more serious due to the absence of logging companies nearby. More and more youngsters and middle-aged villagers immigrate to towns looking for proper employment, resulting in an energy-drain of the villages.

4.2 Environmental aspects

As described earlier, DFR is a regenerating logged over forest important not only for continuation of timber supply but also for biodiversity conservation. It is home to a number of protected species such as Orang Utan, tembadau (wild cattle), elephant, sun bear, clouded leopard etc. Many other mammals (such as deer and pigs) and over 100 bird species occur. DFR is part of the larger continuous forest area with Segaliud Lokan (to the east), Tangkulap (west) and Malua (south), which together play significant roles in biodiversity conservation in the region.

The forest is also part of Kinabatangan watershed, which is subjected to various conservation and social development programme.

For large mammal populations, habitat contiguity in the form of natural forest cover is critical in determining the long-term prospects of viable populations. A rule of thumb of area required for large mammal population viability, for example, elephants, is approximately 70,000 - 100,000 ha. DFR is fortunate because it shares a common boundary with Segaliud Lokan FR (on the east) and Tangkulap FR (on the west), which provide better habitat contiguity. The RIL method, which is practiced in DFR, showed no significant impact on the reduction of the wildlife populations in DFR. This eco-friendly harvesting practice will be continued in DFR. However, more effective monitoring and controlling during logging operations will be carried out to ensure that the intensity of logging and harvesting method conforms with the prescriptions as prescribed in this plan.

4.3 Administration, Legislation and Guidelines

Laws and regulations on forest legislation are the legal instruments, which are necessary in the implementation of the objectives of a forest policy. Forest legislation reflects the principles of sustainability in order to support implementation of forest policy. Management guidelines, on the other hand, provide advice and promote more extensive application of forest management practices. The following table lists the key national legislation, regulations, guidelines and codes of best practice that are relevant to forestry in the commercial, environmental and social sectors. This list does not purport to be comprehensive, but indicates information that is key to the forestry sector.

Legislation and regulation Notes

• State Forest Policy of 1986 • Sabah Forestry Department Goals (issued 1989) • Forest Rules, 1969 • Forest Enactment, 1968 • Sustainable Forest Management License Agreement

(SFMLA) • Long Term Timber License Agreement • Conservation of Environment Enactment, 1996 • Wildlife Conservation Enactment, 1997 • Water Resources Enactment, 1998 • Biodiversity Enactment, 2000

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• Occupational Safety and Health Act, 1994 • Land Ordinance, 1930 (Sabah Cap. 68) • Labour Ordinance (Sabah Cap. 67) • Sabah Forest Management License Agreement • Environmental Quality Act, 1974 • Native Ordinance, 1930 (Sabah Cap. 68) • Native Court Ordinance, 1952

Guidelines and Codes of Best Practice Notes

o MC&I 2002;

o RIL Operation Guide Book – Code of practice for forest harvesting in Sabah, Malaysia – dated March 2009

5. CHANGES IN MANAGEMENT, HARVESTING, SILVICULTURE AND MONITORING The following table shows significant changes that took place in the management, monitoring, harvesting and regeneration practices of the certificate holder over the certificate period.

Description of Change Notes

SURVEILLANCE 1

No change in the management

Sabah FD is making plan to use ‘log fisher’ a modified excavator with long cable for harvesting in undulating areas. A new RIL guideline has been developed.

The log fisher is for replacing the cable yarding system which was found to be technically difficult and costly.

SURVEILLANCE 2

No change in the management. Log fisher has been used for harvest in one compartment. A new RIL guideline has been published for state wide implementation.

Cost for utilisation of logfisher is high. The management will used the machines in specific areas not for every compartment.

SURVEILLANCE 3

SURVEILLANCE 4

6. PREPARATION FOR THE EVALUATION

6.1 Schedule

DFR has been certified since 1997 and this is the 2nd re-assessment of the area in view of expiry of the certificate in February 2008. The last surveillance visit was conducted in March 2007.

Prior to re-assessment, key stakeholders were identified where an announcement on the re-assessment were made and stakeholders letter were issued.

6.2 Team

The table below shows the team that conducted the main evaluation and the independent specialist(s) that were selected to review the main evaluation report before certification is considered.

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Evaluation Team Notes

Team Leader Has a post graduate degree in environment and natural resource management, more than 15 years experience in forest conservation and environmental related field at international, regional and national level, more than 100 days of FSC auditing (including other schemes and chain of custody assessment), speaks local language (Bahasa Malaysia) and English fluently.

Lead Auditor Has a doctorate degree in forestry, more than 20 years experience in forestry and related field internationally, regionally or nationally, more than 100 days of FSC auditing (including CoC assessment), understand local language.

Social Specialist Has a post graduate degree and undergoing a doctorate programme in sociology, at least 5 years experience in social research both in forestry and oil palm plantation at national and regional level.

Trainee FM Auditor Has a Forestry Degree from local University, more than 15 years experience in forest operation and wood processing industry at national level, and is a lead CoC auditor under Qualifor Programme.

6.3 Checklist Preparation

At present there is no FSC-endorsed national or regional forest management standard for Malaysia.

The draft local standard was produced by incorporating elements of MC&I 2002 into the Qualifor checklist. MC&I 2002 is a considered as a local standard.

Standard Used in Evaluation Effective Date Version Nr Changes to Standard

SGS Qualifor: Generic Forest Management Standard (AD33) adapted for Sabah, Malaysia

5 June 2007 02 The revised standard incorporates indicators and verifiers from MC&I 2002 (Sabah) standard which has yet to be fully covered by the existing checklist

6.4 Stakeholder notification

A wide range of stakeholders were contacted 6 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant forest management issues, These included environmental interest groups, local government agencies and forestry authorities, forest user groups, and workers’ unions. Responses received and comments from interviews are recorded at the end of this Public Summary.

7. THE EVALUATION The Main Evaluation was conducted in the steps outlined below.

7.1 Opening meeting

An opening meeting was held at Sabah Forestry Department Headquarters in Sandakan, Sabah. The scope of the evaluation was explained and schedules were determined. Record was kept of all persons that attended this meeting.

7.2 Document review

A review of the main forest management documentation was conducted to evaluate the adequacy of coverage of the QUALIFOR Programme requirements. This involved examination of policies, management plans, systems, procedures, instructions and controls.

7.3 Sampling and Evaluation Approach

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A detailed record of the following is available in section B of the evaluation report. This section does not form part of the public summary, but includes information on:

Sampling methodology and rationale;

FMUs included in the sample;

Sites visited during the field evaluation; and

Man-day allocation.

The audit team begin the re-assessment with an opening meeting with the Sabah Forestry Department personnel that include a briefing from the SFD on the progress with Deramakot FR forest management planning and its implementation. Planning documents (10 year plan, annual plan, comprehensive harvest plan etc) and the SOPs were reviewed together with results of harvest etc. Visits were made to the active areas being harvested and areas where silviculture treatment were carried out. The audit team also visited and held discussion with local communities to gauge effectiveness of social programmes conducted / undertaken by the Sabah Forestry Department. Sample plots were also visited as part of evaluation on implementation of growth measurement.

To evaluate the Coc system, the audit team visited the main stumping point as well as evaluate Coc system implemented at the sawmill processing the residual logs from DFR.

7.4 Field assessments

Field assessments aimed to determine how closely activities in the field complied with documented management systems and QUALIFOR Programme requirements. Interviews with staff, operators and contractors were conducted to determine their familiarity with and their application of policies, procedures and practices that are relevant to their activities. A carefully selected sample of sites was visited to evaluate whether practices met the required performance levels.

7.5 Stakeholder interviews

Meetings or telephone interviews were held with stakeholders as determined by the responses to notification letters and SGS discretion as to key stakeholders that should be interviewed. These aimed to:

clarify any issues raised and the company’s responses to them;

obtain additional information where necessary; and

obtain the views of key stakeholders that did not respond to the written invitation sent out before the evaluation.

Nr of Stakeholders contacted

Nr of Interviews with

NGOs Government Other

MAIN EVALUATION

18

2

1 1

SURVEILLANCE 1

3 2 1 0

SURVEILLANCE 2

1 1 1

SURVEILLANCE 3

1 1 2

SURVEILLANCE 4

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Nr of Stakeholders contacted

Nr of Interviews with

NGOs Government Other

Responses received and comments from interviews are recorded under paragraph 13 of this Public Summary.

7.6 Summing up and closing meeting

At the conclusion of the field evaluation, findings were presented to company management at a closing meeting. Any areas of non-conformance with the QUALIFOR Programme were raised as one of two types of Corrective Action Request (CAR):

Major CARs - which must be addressed and re-assessed before certification can proceed

Minor CARs - which do not preclude certification, but must be addressed within an agreed time frame, and will be checked at the first surveillance visit

A record was kept of persons that attended this meeting.

8. EVALUATION RESULTS Detailed evaluation findings are included in Section B of the evaluation report. This does not form part of the public summary. For each QUALIFOR requirement, these show the related findings, and any observations or corrective actions raised. The main issues are discussed below.

8.1 Findings related to the general QUALIFOR Programme

PRINCIPLE 1: COMPLIANCE WITH LAW AND FSC PRINCIPLES

Criterion 1.1 Respect for national and local laws and administrative requirements

Strengths

Weaknesses

Compliance Being a government agency, Sabah Forestry Department has a register of all relevant laws and regulation and monitors internal and subcontractor compliance.

There was no evidence of non compliance with laws and regulation. List of laws, regulation and international agreements pertaining to forestry and forest operation in Sabah are as follows:

• State Forest Policy of 1986 • Sabah Forestry Department Goals (issued 1989) • Forest Rules, 1969 • Conservation of Environment Enactment, 1996 • Wildlife Conservation Enactment, 1997 • Water Resources Enactment, 1998 • Biodiversity Enactment, 2000 • Occupational Safety and Health Act, 1994 • Land Ordinance, 1930 (Sabah Cap. 68) • Labour Ordinance (Sabah Cap. 67) • Sabah Forest Management License Agreement • Environmental Quality Act, 1974 • Native Court Ordinance, 1952

Criterion 1.2 Payment of legally prescribed fees, royalties, taxes and other charges

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Strengths

Weaknesses

Compliance DFR is government owned land and managed by SFD for logs production. SFD is not subjected to any premium payment for the land. Only royalty payment are need to be paid to the government based on the logs produced. For each cubic meter of log produced, a community cess fee (CCF) is also collected.

Evidence of payment on the royalty and CCF were available in the file maintaining records for each batch of auction.

For sawmill operation, the operator need to obtain occupational permit (OP) based on area used.

A new 10 year FMP covering the period of 2006 – 2014 has been prepared. The plan includes estimated cost for the whole operation for the next 10 years. Annual planning and budget is included in the Annual Plan

Evidences that royalty for logs sold are paid.

Criterion 1.3 Respect for provisions of international agreements

Strengths

Weaknesses

Compliance Sabah Forestry Department (SFD) as the manager of DFR is fully aware of the requirement made under CITES. Similarly, SFD is aware of the requirement stipulated under the ILO conventions. As one of the implementing agencies, SFD is aware of commitment made by Malaysia under ITTA where its implementation is being monitored by ITTO. SFD is also mindful of the requirement and commitment under the biodiversity convention. As a government agency responsible for the management of forest resources in the State of Sabah, SFD has designated officer to handle policy and the implementation of strategies and action plan for specific elements.

Criterion 1.4 Conflicts between laws and regulations, and the FSC P&C

Strengths

Weaknesses

Compliance No conflicts identified between FSC P&C and SFD regulations and management systems in DFR.

Criterion 1.5 Protection of forests from illegal activities

Strengths

Weaknesses At the time of the assessment, it was observed that the road contractor occupied an area close to the quarry without appropriate approval and permits from the SFD. There was no proper planning of the area to be occupied (workers camp, workshop, sanitary, waste management etc.) and control over its use.

Inadequate control of subcontractor activities and occupancy within DFR for road maintenance in regards to compliance to the requirement for getting approval from SFD to occupy an area within DFR (Minor CAR-001).

Compliance No evidence of illegal encroachment or illegal harvesting. Proactive action by the DFR management to engage local communities in boundary clearing activities helps in creating awareness as well as financial support to villagers.

Sabah Forestry has established a monitoring team to patrol Sg Kinabatangan by boat to conduct observation along the DFR boundary. The audit team also visited the boundary and observed that the outer boundary (along the Sg Kinabatangan) was marked with red paint and a 1 metre clearing was in place.

The SFD also has engaged local communities to carry out boundary clearings in areas near

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their village. Such an activity is not only for security purposes but more important to get the local community involvement in the management of the area as well as generate income to them.

During surveillance 01, it was observed that the contractors operating in DFR need to obtain prior approval from the DFO for any activities or carrying out specific activities. Occupational Permit (OP) is issued to the contractor involved after satisfactory evaluation report from the field team (based on requirement under Forest Rules, 1969) (Minor CAR-01 is closed).

For the relevant area raised in the CAR, the contractor has been fined and advised to relocate and apply for the OP for occupying an area. An OP was granted to the contractor to occupy 0.53 ha within Tangkulap FR in December 2007.

Criterion 1.6 Demonstration of a long-term commitment to the FSC P&C

Strengths

Weaknesses

Compliance SFD has a policy that makes commitment to good forest management emphasis not only on sustainability of the resource but also to the conservation of environment and improvement of socioeconomic status of local communities.

The policy statement is printed in the annual plan, posters etc which is publicly available. The policy statement is also available on the website. SFD is the authority for forest and forestry in Sabah and the Department has been actively promoting good forest management throughout the state.

There are 25 FMUs in Sabah which are privately managed for production purposes according to requirement stipulated under the SFMLA, where its compliance is monitored by the Department. SFD is also directly managing operations in a number of forest areas in the state of Sabah particularly those classified as protection. As the authority, SFD has been proactive in ensuring that the private sectors comply to the requirement of the Agreement as well as to encourage them to move towards responsible management of the resource.

SFD is also managing a number of forest areas which is now under support programme moving towards FSC certification.

PRINCIPLE 2: TENURE AND USE RIGHTS AND RESPONSIBILITIES

Criterion 2.1 Demonstration of land tenure and forest use rights

Strengths There is evidence of documentation which shows Deramakot Forest Reserve’s legal rights over the land. The legal rights are also explicitly mentioned in the FMP. Maps are also available at the DFR office, clearly demarcating the forest reserve boundary. This long-term commitment is clearly demonstrated through the Second 10-year Forest Management Plan covering the period of 2005-2014.

Weaknesses

Compliance At present, there are no formal land claims from the local communities. Representatives of the local communities at the Deramakot Forest Reserve Social Forestry Committee (DFRSFC) did not raise any claims to the land within the DFR (as observed in the minutes of meetings).

Criterion 2.2 Local communities’ legal or customary tenure or use rights

Strengths There have been no formal land claims by the local communities within the DFR, hence, the unavailability of documentation showing the local communities’ tenure and use rights. However, the FMP records the native titles possessed by households in the five settlements south of the DFR (outside of the DFR).

Weaknesses FR management inadequately documented and mapped the customary tenure and use rights of the community even though the social baseline survey captured oral claims of the local communities of ancestral land within the DFR. Currently, there was an inadequate communication with respect to DFR boundary near Kg. Balat despite

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the boundary demarcation exercise. There is inadequate communication with local communities on the status of the 18 ha area known as ‘kaki Deramakot’ area and plans for community forestry in the area (Minor CAR-02). Interviews with local communities reveal that they are unaware of the provision for licenses to harvest non-timber forest products in DFR. This has not been communicated during the DFRSFC meetings. The DFR management also asserts that the local communities have yet to apply for any licenses. The communities are allowed to apply for licenses under Section 24 of the Sabah Forest Enactment 1968, whereby licenses need to be obtained from Sabah Forestry Department. To date, no such licenses have been issued to the local communities.

Compliance No holders of duly recognized legal and customary tenure or use rights identified within the DFR as there have not been any formal land claims and use rights disputes. Evidence gathered during surveillance 01 shows that the DFRSFC meeting is continued on quarterly basis where in 2008, four meeting have been held. Minutes of the meeting are available. For example, in the last meeting held on 13 December 2008, attended by 25 people (including 4 SFD and 1 observer from PACOS) discussed among others:

Boundary clearance near Kg Balat Tree planting along the boundary, including the HSBC project Water gravity feed pipe system for Kg Balat and Karis-karis Application for harvesting rattan

Minor CAR-002 is closed

Criterion 2.3 Disputes over tenure claims and use rights

Strengths There are no major unresolved disputes relating to tenure and use rights in the forest. The Deramakot Forest Reserve Social Forestry Committee (DFRSFC) is a mechanism to resolve potential tenure claims and use rights disputes. The minutes of meetings of the DFRSFC are documented and filed in the DFR office. There have been no formal land claims by the local communities within the DFR.

Weaknesses

Compliance The Deramakot Forest Reserve Social Forestry Committee (DFRSFC) was established in 2001 to promote dialogue between the five villages adjacent to the DFR, i.e. Kg. Balat, Kg. Tangkong, Kg, Kuamut, Kg, Desa Permai and Kg. Tulang-Tulang with the DFR management and to resolve any disputes and concerns raised by the local communities.

PRINCIPLE 3: INDIGENOUS PEOPLES’ RIGHTS

Criterion 3.1 Indigenous peoples’ control of forest management

Strengths There have been no formal land claims by the local communities within the DFR. Nonetheless, the FMP has adequately captured the customary title to land in all five villages adjacent to the DFR, which is outside of the DFR. The use rights of Kg. Kuamut and Kg. Balat, which existed prior to the establishment of the forest reserve in 1961 has not been adequately captured.

Weaknesses Interviews with forest managers revealed inadequate knowledge on the status of the Orang Sungai as indigenous peoples

However, there is no evidence of land dispute as there have not been any formal land claims or formal assertions to use rights in the FMU.

Compliance The Deramakot Forest Reserve Social Forestry Committee (DFRSFC) was established in 2001 to promote dialogue between the five villages adjacent to the DFR, i.e. Kg. Balat, Kg. Tangkong, Kg, Kuamut, Kg, Desa Permai and Kg. Tulang-Tulang with the DFR management and to resolve any disputes and concerns raised by the local communities.

Local communities also freely approach the staff at the Balat station to air their grievances, which would then be channelled to the DFO.

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Criterion 3.2 Maintenance of indigenous peoples’ resources or tenure rights

Strengths Local communities, through the DFRSFC have been informed about the prohibition to hunt or harvest any kind of forest produce in the DFR. Interviews with local communities indicate a high level of awareness of the impacts of forest management on the resources which they used to rely on.

Weaknesses

Compliance Social Baseline Surveys are conducted prior to the formulation of the 10 year second FMP.

Criterion 3.3 Protection of sites of special cultural, ecological, economic or religious significance to indigenous peoples

Strengths

Weaknesses

Compliance Rights of access not permitted to harvesting for subsistence use unless it is licensed to avoid possible illegal activities. This is to avoid illegal practices such as felling of trees or unauthorised hunting which is a problem prior to the control and boundary patrolling along Sg Kinabatangan.

The DFRSFC meetings is a mechanism for conflict resolution. Issues outside of the jurisdiction of the DFR management can be referred to the native and civil courts.

Local communities consulted during social baseline survey in 2004 on areas of ecological, economic, cultural and religious importance. No sacred sites within the DFR were reported by the local communities. With respect to HCVF, only the ecological importance of the areas has been demarcated through consultations with local people. Rights of access available for water resources, whereby a gravity feed system has been provided for Kg. Balat from Compartment 112 and a study is being carried out to ascertain the most viable route to build a gravity feed system to Kg. Tulang-Tulang from Sg. Karis-2.

Criterion 3.4 Compensation of indigenous peoples for the application of their traditional knowledge

Strengths No evidence of records of identification, documentation or utilisation of traditional knowledge relevant to forest operations. There was also no evidence of use of traditional knowledge in the current forestry operation that originated from the local communities.

Weaknesses

Compliance Traditional knowledge not used in forest operations.

PRINCIPLE 4: COMMUNITY RELATIONS AND WORKERS RIGHTS

Criterion 4.1 Employment, training, and other services for local communities

Strengths Several work opportunities were given to the local communities living adjacent to the DFR. Evidence of employment opportunities disseminated to local communities through the DFRSFC such as:

o Boundary clearing exercise along the southern border of the DFR: o Planting of Binuang/Laran Seedlings as Boundary Indicator at the boundary

of Kaki Deramakot. o Work opportunities with silviculture contractor o Contract worker PRA R1 which is still in the process of selection. o Interviews with the logging and sawmill contractor reveal employment

opportunities and preference to local communities. There is file dedicated to community forestry, especially related to employment for

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local communities in the DFR office. Weaknesses Inadequate training to forest workers and local communities involved in forestry operation. Last

training record available was those conducted in 2005). Member of communities involved in boundary clearing not properly trained and supervised resulting in bodily injuries - (Minor CAR-003)

Accommodation for DFR staff is provided both in the main camp as well as the patrol camp located near Kg Balat. The accommodation for the patrol team near Kg Balat however was not in good condition (Minor CAR-07).

It was found during surveillance 03 that awareness and training programmes to cover communities in other villages (apart from Balat) not regularly carried out. Comments from Desa Permai report inadequate communication and training activities with FD (Observation 010).

Compliance Housing is provided for the DFR staff. Basic medical facilities available. Emergency cases need to be referred to Telupid or Sandakan. Under age worker is not allowed to be used within DFR operation. During surveillance 01, the audit team observed that training were conducted both for SFD staff and the local communities. Training records for DFR staff are kept in JPHTN/DFR 500-8/klt 10 file. Trainings were conducted on various subjects such as harvesting (RIL), planting, boundary cleaning, silviculture etc.

Trainings records for local communities were kept JPHTN/DFR 700-2/1/1/Klt 1 file. The trainings include boundary cleaning, enrichment planting (mosaic and line planting) and TSI.

Minor CAR-003 is closed.

On the condition of the accommodation at Kg Balat, the SFD has obtained an allocation through the Sabah Development Corridor (SDC) where RM250,000 per year (2009 & 2010) was obtained to upgrade facilities in Balat Patrol Station including a construction of a new jetty.

Another allocation is through Heart of Borneo (HOB) fund where a total of RM150,00 is allocated to build staff accommodation in Balat Station.

Both project are scheduled to begin in 2nd quarter of 2009 and will be completed with 2 years. The SFD now is requesting quotation from the prospective contractor. Minor CAR-07 remains outstanding.

During surveillance 02, it was observed that a new staff quarters has been built in Kg Balat at the cost of RM150,000 under HOB programme (Minor CAR-007 is closed). Construction of other facilities such as jetty etc is scheduled to begin early 2010.

Criterion 4.2 Compliance with health and safety regulations

Strengths The medical facilities available at the DFR are very basic. Emergency cases are referred to the government healthcare centre in Telupid. DFR staffs are provided with accommodation.

Weaknesses Written procedures pertaining to health and safety of forest workers was incorporated into the RIL guidelines. Other guidelines in the form of forestry manual is also available. Interview with forest workers reveal that briefing on health and safety are conducted on a regular basis by field foresters.

The following was observed with regard to health and safety aspects:

• Policy, and guidelines on health and safety of forestry operation are available However, there was a lack of documentation on records, and reports of accidents.

• There is inadequate training on H&S for contractor, although the DFR management conducts regular monitoring of the logging sites and camp.

There was no evidence of direct liaison with Department of Occupational Safety and Health - Observation 04 was recorded.

Interviews with SFD field employees during surveillance 02 have revealed complained about inadequate and safe transportation in carrying out their task efficiently. There are now insufficient number of vehicles to transport the workers to the field and most of the vehicles provided are old and not in good and safe conditions. There are no evidence available to show that SFD has systematically carried out risk assessment for each forestry activities and machinery used and make recommendations on the safe procedures and PPEs to be used by

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the workers (Minor CAR-012).

Workers operating in the quarry area, harvesting area and carrying silviculture treatment were observed without hard helmet (Minor CAR-013).

Sabah FD staff and the harvesting contract workers stay at accommodation provide at the main camp. The accommodation built are reasonable made of wood and concrete and raised above ground. Workers involved in silviculture works lives in temporary camps located near to their work area, made of tarpaulin, normally near a stream for water supply. The accommodation need to be improved for safety and health reasons to comply with section 10 of the ILO CoP on Safety and Health in Forestry (Observation -07).

Observed that there was insufficient demarcation of hazardous areas within the camp as well as in the forest. There was no warning sign near the diesel tank nor there were any sign to warn others of quarying and felling/harvesting operation (Observation-08).

Compliance Field observation and workers report that the forestry operations comply with the minimum ILO Code of Practice on Safety and Health in Forestry. The SFD has carried out maintenance and repair of the vehicles as well as conducted a full investigation looking into the current status of the vehicles resulting in full analysis of the operability and safety of the machines. The report (Laporan status kenderaan Jabatan Perhutanan Daerah Deramakot) dated 1 Feb 2011 prepared by the Jabatan Kerja Raya (JKR) [Public Works Department] resulting in 6 vehicles with efficiency below 50 % are considered ineffective and recommended to be replaced (Minor CAR-012 is closed).

Standard operation procedures (Doc # SFD/DFR/SOP-009 – revised 29 Sept 2010) has been revised to provide more clarity on PPE to be used for specific activities. The SOP is supported by SOP for specific activities (e.g SOP Prosedur Kerja Selamat Pelerja Rawatan Silviculture – Doc SFD/DFR/SOP-014; Rehabilitasi Hutan -015; Penabur Baja -06 etc).

Workers were observed with proper protective clothes. PPEs such as hard helmets were made available to the workers with evidence of actual use (Minor CAR-013 is closed).

During surveillance 03, it was verified that SFD has conducted an evaluation of all temporary camp sites developed by contractors on site against the SOP on Campsite and Health (SFD/DFR/SOP-010). A new procedure has been developed (Prosedur Mendirikan Khemah Sementara di Dalam Hutan Simpan Deramakot) and disseminated to all contractors that explains methods and precautions to be taken in erecting temporary camps.

Observations made during the surveillance show that the temporary camp provided for the silviculture workers in Compt 58 was found to be in general compliance to the requirement stipulated under section 226 of the ILO CoP (Observation 07 is closed).

Criterion 4.3 Workers’ rights to organise and negotiate with employers

Strengths The DFR staff report directly to the District Forestry Officer who in turn relays the information to the headquarters in Sandakan. The DFR staffs are government employees who are subjected to the regulations stipulated by the Public Services Department.

Weaknesses

Compliance The DFR staffs are not members of any union. However, they have the right to participate in unions based according to the regulations of the Public Services Department.

The DFR staffs are government employees who are subjected to the regulations stipulated by the Public Services Department. Forest workers report directly to their supervisor who relays the information to the contractor.

Criterion 4.4 Social impact evaluations and consultation

Strengths The DFRSFC meetings, provides such a mechanism for consultation with stakeholders. Issues raised by local communities are treated constructively and objectively.

Weaknesses There is limited communication with oil palm owners bordering the DFR. Formal communication with local communities and NGOs are conducted through the DFRSFC meetings, the minutes of which are well documented.

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However, the meetings are infrequent and stakeholders reported inadequate dissemination of information pertaining to the date and venue of meetings - refer also the Minor CAR-02 raised under criterion 2.2.

Compliance Social Baseline Surveys was conducted by the Social Forestry Division within the Sabah Forestry Department. Consultations with community-based organisations such as PACOS and NGOS such as WWF Malaysia are conducted through the DFRSFC.

Criterion 4.5 Resolution of grievances and settlement of compensation claims

Strengths Issues outside of the jurisdiction of the DFR management can be referred to the native and civil courts.

Weaknesses

Compliance The DFRSFC meetings, provides such a mechanism for consultation with stakeholders. Records of minutes of meetings of DFRSFC meetings available which shows that the DFRSFC makes effort to resolve disputes with the consent of the members of the committee who comprise local leaders and NGOs.

PRINCIPLE 5: BENEFITS FROM THE FOREST

Criterion 5.1 Economic viability taking full environmental, social, and operational costs into account

Strengths Income from log auctions average about RM 10 million/year. There is also some income from log residues and ecotourism where about 100 people visited DFR annually.

Weaknesses Silviculture treatments are being carried out in compartment 27, 61 & 64 in 2008 planned for continuing of 27 compartment. Procedures are for silviculture to be carried out 6 months after logging by contractors. SFD has not clearly defined restoration activities in areas that are considered very poorly stocked or degraded by fire etc. (Observation)

Compliance Annual budget for the operation and estimate on profit/loss is tabulated in the Annual Work Plan (AWP). The planning and estimate include cost for harvesting operation, road maintenance, re-planting programme as well as management expenditures for the year 2007 is estimated to be about RM 5-6 million.

Significance portion of the DFR budget is allocated for silvilculture treatment programme. The annual plan prepared provide schedule for the silvilculture treatment activities focusing more on climber cutting and planting open areas On this aspect, as observed during surveillance 01 new contractor for enrichment planting has been hired where significant progress has been achieved in 2008. Many areas within Deramakot are subjected to silviculture treatment (climber cutting). Forest restoration activities are now centered in Tangkulap FR where 2 contractors are operating. Observation raised is closed.

Criterion 5.2 Optimal use and local processing of forest products

Strengths Deramakot forest logs are mostly processed locally in Malaysia to manufacture downstream products for export. Some logs were exported.

Sentosa Jaya Fruit Farm sdn Bhd has set up a small sawmill adjacent to the DFR log yard to process log residues that include tops and stumps to reduce harvesting waste and maximise utility of wood.

Weaknesses

Compliance Deramakot material being FSC certified attains a greater local demand from wood processing facilities due to global demand for certified products. Buyers from Sabah and Peninsular Malaysia have been buying DFR logs through auctions carried out three or four times a year.

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Criterion 5.3 Waste minimisation and avoidance of damage to forest resources

Strengths Reduced Impact Logging (RIL) practice that emphasise on directional felling are being implemented in DFR. Comprehensive harvest plan (CHP) were prepared prior to logging where individual tree to be harvested are identified, mapped and marked on the ground. Tree which would produce low quality logs or that will highly likely to be damaged during felling will not be marked for harvesting.

Weaknesses SFD needs to utilizes appropriate RIL technology to minimize damage to the forest (pls see minor CAR-05). SFD has not started to require the logging contractors to use long distance cable systems that are now widely available locally and being used as the main system for RIL (Observation).

Compliance License were issued to a local operator to extract log residue (tree branches, hollow logs, splits etc) to be processed at local sawmill located just at the boundary of DFR. The royalty rates for such logs are at the minimum.

In view of difficulties of using cable system, SFD has made a decision to use a modified excavator with long cable system for implementing RIL in Deramakot. Harvest planning in Compt 86B is made using combination of ground skidding and ‘log fisher’ that minimise construction of skid trails within the block.

During the surveillance, A revised ‘RIL Operation Guide Book – Code of Practice for Forest Harvesting in Sabah, Malaysia’ 2009, has been produced incorporating use of log fisher for harvesting. The procedures include methods for documenting Comprehensive Harvest Plan and subsequent monitoring after the harvesting.

The compartment 86B is yet to be harvested. The operation will be carried out on experimental basis. Its results will be used for policy decision making on furtherance of such method through out Sabah.

Using the combined method, the damage level in Compt 86B is estimated as follows: Damage to PCTs – 25 % Skidding damage – 6 % Road – 1.3 % Temporary log yard – 0.7 %

Location of trees to be harvested is mapped. Trees located 30 m or less from the road will be harvested using tractor while those that are more will be winched using log fisher.

With the use of an alternative modified excavator system for RIL, Minor CAR-05 is closed.

Criterion 5.4 Forest management and the local economy

Strengths The main product is logs but there are collections of rattan by the local communities. Communities are hired for cleaning the boundary and some planting near the villages.

Weaknesses

Compliance SFD permits collection of non-timber forest products though formal application though the committee.

Criterion 5.5 Maintenance of the value of forest services and resources

Strengths Deramakot staff are trained and aware of the forestry services have been practicing reduced impact logging systems through development of CHP to plan and reduce impacts along with use of skyline systems to protect habitat, watershed, soil protection etc.

Weaknesses Areas over 25 degree slope are identified on compartment level harvest plans (CHP) and protected from harvesting. Buffer zones around streams are also identified and protected from felling. However that was some areas along feeder road in where several patches of soil from road maintenance have been pushed into the adjacent stream (please see minor CAR-06).

Compliance The Comprehensive Harvest Plan (CHP) is the main feature that defines RIL system in Deramakot as it defines the areas to be harvested and protected as well as details

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all trees to be felled or protected. The CHP defines the protection elements within the compartment to be harvested but lacks reference to use of appropriate technology such as long distance cable systems.

As at the time of surveillance 01, it was observed that Department has issued a new contract for upgrading forest roads (graveling) in Deramakot FR for a total distance of 15 km including construction 2 bridges. The Department now maintain a ‘Road Maintenance Record Book’ that maintain record of forest road maintenance & construction schedule sheet. A ‘Perancangan dan Gerak Kerja Unit Jalan’ schedule is also maintained where areas that need to be maintained and allocation of machinery is made for the whole year. Currently in Deramakot, the Department has allocated 5 tractors, 3 excavators, 2 backhoes, 2 motor grader, 2 compactors, one crane, 3 lorries/dump truck and 3 vehicles. It was observed that the road conditions has improved and there was no evidence of bufferzone infringement. (Minor CAR-06 is closed)

Criterion 5.6 Harvest levels

Strengths After a mid term review, SFD have revised the AAC from 17,000 m3/year to 15,000 m3/year for Deramakot as a sustainable harvest volume based on a net production area of 37,000 ha over a 40 year cutting cycle. The calculations of sustained yield are based on 30 PSP plots (20 m radius) established prior to harvesting measured after logging and measured annually for growth up to 5 years. The measurements were used within a growth simulation program (Myrlin – Methods of Yield Regulation with Limited Information) based on measuring basal area growth developed by Alder, Baker & Wright (2002). The PSP data has been recorded for 4-5 years resulted in projecting cumulative growth over the net production area to be 17,585 m3 over a 35 year period and 23,577m3 over a 40 year cycle.

Damage measurements of plots prior to logging and following logging over the 30 sample plots average 5% of total stand volume. Growth measurements over the 4-5 year period average 4.1 m3/ha/yr.

Weaknesses Forest management plan (2005 – 2014) does not clearly describe the system to verify sustained yield through measurement of harvest damage and growth of residual stands and growth of the strata (Minor CAR-04).

Compliance Harvest in DFR (over a plan period) has not gone over the allocated AAC. For example for the last 10 year plan period where it was estimated to produce 175,000 m3 of logs, but in actual, only 117,840 m3 were produced. Deramakot maintains both a compartment record book that details the number and volumes of trees harvested within the compartment. SFD sell all log through a public auction.

After the re-assessment, the SFD has carried out an analysis of the MAI and compare it with the harvest and residual damage (through PSP) rates since 2002. From 2002 – 2007, the average net area logged was 165.9 ha/yr where average volume is 61.2 m3/ha. Based on PSP inventory, the damage to residual trees were 14.4 m3/ha. Therefore the average volume of timber harvested is 10,153 m3/yr and those damaged were 2,389 m3/yr. Based on total productive area of 42,789 ha (whole of DFR) and MAI of 3.54 m3/ha/yr (for all trees above 10 cm DBH), total timber growth is 501,680 m3/yr. As such, it is deduced that the annual harvest rates is 40 times less than the forest growth rate (over the FMU).

A document analysing the estimated MAI comparing it with the harvest and damage level has been prepared. The information will be incorporated into the revision of the management plan (Minor CAR-04 is closed).

Growth plot measurements continue to be recorded with reliable results based on sampling of PSP plots.

PRINCIPLE 6: ENVIRONMENTAL IMPACT

Criterion 6.1 Environmental impacts evaluation

Strengths Environmental evaluation have been carried out and incorporated into the long term FMP. At harvesting level, the environmental elements are incorporated into the comprehensive harvest plan (CHP).

Weaknesses The revised management plan has yet to be submitted to the Environmental and Conservation Department for acceptance and approval as functional equivalent to the EIA report under the

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legal requirement.

Some sections of feeder roads were observed to be not properly maintained where excessive earthwork and pushing of earth were evident resulting in excessive damage and non compliance to the road guidelines particularly on drainage and soil erosion control (Minor CAR-006).

Observed during the surveillance 03 that site-specific assessments of the potential environmental impacts of the proposed construction of a reception office and 4 chalets to cater for visitors within the base camp area has not been carried out prior to commencement of site preparation operations (Minor CAR-015).

Compliance The 2nd 10 year FMP for DFR (for the period of 2005 – 2014) contains a section / description on environmental impact assessment. The FMP adequately contain description on the existing resource as well as activities undertaken. The list of management standard applicable for each activity is identified. Matrix on mitigation of environmental impact of forest management activities is also tabulated. Potential impact are identified and measures to mitigate the impacts are described.

As in 2008, the Department has issued a new contract for upgrading forest roads (graveling) in Deramakot FR for a total distance of 15 km including construction 2 bridges. The Department now maintain a ‘Road Maintenance Record Book’ that maintain record of forest road maintenance & construction schedule sheet. A ‘Perancangan dan Gerak Kerja Unit Jalan’ schedule is also maintained where areas that need to be maintained and allocation of machinery is made for the whole year. Currently in Deramakot, the Department has allocated 5 tractors, 3 excavators, 2 backhoes, 2 motor grader, 2 compactors, one crane, 3 lorries/dump truck and 3 vehicles. During the surveillance visit, it was observed that the access and feeder roads have been properly maintained. Collapsed bridges and culverts were repaired (Minor CAR-06 is closed).

Criterion 6.2 Protection of rare, threatened and endangered species

Strengths RTE species presence within the DFR have been identified through joint projects with relevant authorities and NGOs. Areas are set aside for conservation purposes. RIL harvesting method used does not provide significant impact to the ecosystem. The Annual Work Plan specifies activities for HCVF and wildlife monitoring to be carried out throughout the year.

Weaknesses At the time of surveillance 02, the audit team observed that saplings within the FMU are being collected for replanting programmes either within Deramakot or elsewhere. There were no record of number of saplings and species collected nor systems to guide and monitor the activities. The collection of saplings from DFR for replanting/forest rehabilitation are not adequately managed and monitored to ensure they do not exceed sustainable levels and inappropriate activities are prevented (Minor CAR-014).

Compliance RTE species likely to occur in DFR have been identified. A number of studies were carried out in association with local and international institution not only in identifying and estimating the density of their presence in the DFR but more importantly in the biodiversity management aspects of the wildlife. No hunting policy is being strictly implemented in DFR. Trees important for survival of certain wildlife species are protected and identified not for felling.

A Directive has been issued by the Forestry Director to stop all collection activities by the contractors within DFR (Ref #: JPHTN/DFR 600-2/1/1/Klt.1/2 dated 1 March 2010). The decision was made based on the poor survival rates of the saplings collected that led to the discontinuation of a non-productive activity (Minor CAR-014 is closed).

Criterion 6.3 Maintenance of ecological functions and values

Strengths The 2nd 10 year FMP document contains summary analysis of the DFR. Sample plots were established to monitor forest growth with annual monitoring conducted since 2002.

Weaknesses

Compliance RIL harvest method is used to minimise damage to residual stands. Pre-harvest planning is carried out where infrastructure (roads and skid trails) are properly planned as to avoid crossing of waterways, steep slope etc. Natural regeneration is the preferred method in DFR management.

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Criterion 6.4 Protection of representative samples of existing ecosystems

Strengths Even though the DFR is rather homogenous in nature, however certain areas contain more specific elements. Such areas have been identified and protected on the ground where no harvesting will be carried out. Location of salt licks were also identified and mapped.

Weaknesses

Compliance DFR has been divided into 135 compartments and zoned into conservation and production. A total of 3,473 ha have been set aside as protection and additional 18 ha is set for community forestry. Ground observation shows that the area set aside for conservation are important for certain species such as the Orang-Utan, elephant etc.

Criterion 6.5 Protection against damage to soils, residual forest and water resources during operations

Strengths

Weaknesses DFR management now only used tractor logging system without any plan for alternative use to reduce impact (see minor CAR-005).

Current harvesting in Compt 61 and 40 are using only tractor. Evidence that cable-yarder was left unattended near the landfill area. No evidence that the cable crane or yarding system is being planned for harvesting in 2008.

Observed that major sections of the main roads (Tangkulap and Balat) were repaired and now in good conditions but sections of feeder roads within DFR were in a bad condition.

Some sections of feeder roads were observed to be not properly maintained where excessive earthwork and pushing of earth were evident resulting in excessive damage and non compliance to the road guidelines particularly on drainage and soil erosion control (see minor CAR-06).

During surveillance 01, it was observed during the surveillance visit that there was inadequate

• containment for diesel, evidence of diesel spillage (leaking).

• oil trap for workshop.

(Minor CAR-08) Compliance The DFR management emphasises RIL through combination system of ground skidding and

cable yarding. The buffer zones are identified on the CHP, marked on the ground and protected during harvesting. Field checks shows that no trees are marked for felling within the buffer zones.

At the surveillance 01, it was observed that the Department has include log fisher system as the alternative RIL to replace the cable yarding method. Also, a number new machinery and equipment for road construction and maintenance have been purchased resulting in good road condition with proper drainage to facilitate surface runoffs and minimise soil erosion. During surveillance 02, it was observed that a new containment has been built around diesel tank and oil traps have been constructed to deal with possible spillage at the workshop (Minor CAR-08 is closed).

Criterion 6.6 Chemical pest management

Strengths Operation in DFR does not use any chemicals.

Weaknesses

Compliance It is a natural forest management, as such no chemical were used. Sylvilcultural operations are done manually.

Criterion 6.7 Use and disposal of chemicals, containers, liquid and solid non-organic wastes

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Strengths Containers were collected and re-used for other purposes or taken outside of the FR. Waste oil generated by the workshop are re-used by the chainsaw operator. The audit team observed collection points for such waste oil which was kept in a container.

Weaknesses Observed during surveillance 02 that waste oil generated by the workshop is kept in the drums prior to disposal by registered disposer. Currently, there was no inventory of the waste oil and no records of disposal (Observation-09).

Observed during surveillance 03 that domestic wastes were disposed of at a landfill but there was evidence of burning of the waste inside the landfill (Minor CAR-016).

Compliance Observed that non-organic waste is collected and disposed off-site.

Observed during surveillance 03 that SFD has maintained an inventory of the waste oil generated at the main camp and keeps the waste materials in drums at a designated location prior to collection by the contractor (Observation-09 is closed).

Criterion 6.8 Use of biological control agents and genetically modified organisms

Strengths

Weaknesses

Compliance No use of biological control agents or GMOs.

Criterion 6.9 The use of exotic species

Strengths Operation in DFR is a natural forest management not a plantation. Natural regeneration is preferred. Only is poor areas, replanting were carried out using local species.

Weaknesses

Compliance No evidence of use of exotic species for enrichment planting.

Criterion 6.10 Forest conversion to plantations or non-forest land uses

Strengths

Weaknesses

Compliance There are no forest conversions occurring within the DFR.

PRINCIPLE 7: MANAGEMENT PLAN

Criterion 7.1 Management plan requirements

Strengths DFR has prepared a new 10 year FMP covering the period of 2005 – 2014. The plan contains details of the area, its management objectives and plan for harvest and silvicultral operation. Annual management plan was also prepared that outline the planning for the coming year. At the time of assessment for example, the audit team reviewed annual plan for year 2007. At harvesting block/compartment level, a comprehensive harvest plan (CHP) was prepared. Twenty-five (25) compartments covering an area of about 10,759 ha are scheduled for harvesting in the planning period 2005 – 2014. Assuming that the net harvestable area is 48 % of the gross harvestable area – calculated average proportion from the previous planning period – and the minimum economic cut, i.e., 40 m3ha-1 is taken as the average yield per hectare, then the AAC is calculated as 17,600 m3.

Weaknesses Forest management plan (2005 – 2014) does not clearly describe the system to verify sustained yield through measurement of harvest damage and growth of residual stands and growth of the strata (Minor CAR-004). Justification for yield regulation describe in the 2nd FMP is based on growth model without clear determination of the parameters used to obtain the result. Measurement on harvest damage and mean annual increment growth of the residual stand from PSPs were not incorporated in the revision of the FMP to clearly demonstrate that the volume harvested is not more then the growth within a harvest cycle.

Compliance Second 10 year plan covering the period of 2005 – 2014 was prepared. Annual harvesting plan is also available. Comprehensive harvest plan (CHP) was prepared prior to harvest in a specific compartment. SFD has adequate mapping of the forest reserve that includes forest

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types, infrastructure, local communities, wildlife and HCVF elements. Also there are detailed compartment level maps for controlling harvesting operations that define production and protection of areas within harvesting compartments. Maps also show planned skid trails and location of all trees marked for harvest. The SFD has since carried out an analysis of the MAI and compare it with the harvest and residual damage (through PSP) rates since 2002. From 2002 – 2007, the average net area logged was 165.9 ha/yr where average volume is 61.2 m3/ha. Based on PSP inventory, the damage to residual trees were 14.4 m3/ha. Therefore the average volume of timber harvested is 10,153 m3/yr and those damaged were 2,389 m3/yr. Based on total productive area of 42,789 ha (whole of DFR) and MAI of 3.54 m3/ha/yr (for all trees above 10 cm DBH), total timber growth is 501,680 m3/yr. As such, it is deduced that the annual harvest rates is 40 times less than the forest growth rate (over the FMU).

A document analysing the estimated MAI comparing it with the harvest and damage level has been prepared. The information will be incorporated into the revision of the management plan (Minor CAR-04 is closed).

Criterion 7.2 Management plan revision

Strengths Revisions include input from wildlife research and social meetings as well as through continuous forest inventory plots to monitor growth of the forest strata. SFD allows a number of research studies in Deramakot from Japan and Germany where by results are included in the FMP. This has been shown through work conducted for Orang-utan and in respect to identification and preserving salt licks used by wildlife. Social elements are identified and incorporated in the management plans such as use of village communities living along the Kinabatangan River, to engage these communities in the planting operations. It is expected that the restoration program in these compartments will also prevent boundary encroachment in the south.

Weaknesses The 10 year plan is subjected mid term review in 2010. As observed during surveillance 01, there was no plan for 5 year review of the FMP that should include description on the folllowing :

Monitoring results

Data from PSPs and CFIs

Use of new RIL

Minor CAR-09

Compliance The long term FMP was revised every 10 years. The first plan covered the period of 1995 – 2004 while the second plan covered the period of 2005 – 2014. Mid term review was carried out every 5 year as evident in year 2000 where the AAC was reduced to 15,000 m3.

At the time of surveillance 02, it was observed that a mid term review for the 2nd FMP has been produced and finalized (Minor CAR09 is closed). The review contains summary of the progress and records of achievement for the first five year. There was no recommendation for major change in the management system. The review recommended the following:

• use of modified excavator to replace cable yarding

• Restoration focused on planting in open areas

• Continuation of silviculture treatment focusing on climber cutting

• DFR is economically viable but must ensure that the target harvest level is achieved

• Continue monitoring of wildlife with collaboration with experts

The mid term review is available for public upon request and will be eventually placed on the web.

Criterion 7.3 Training and supervision of forest workers

Strengths Sabah Forestry Department and Institut Perhutanan Sabah (IPS) carry out scheduled training for forest workers in RIL, health and safety and generic forestry operations. SFD issues training certificates to forest workers that attend the Reduced Impact Training that include SFD staff and contactors staff.

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Weaknesses During surveillance 03, evidence of training for forest workers are available; however, no training was given to contractors since 2008 (Observation-012)

Compliance SFD managers are college graduates and are trained both eternally and internally in various forestry operations. SFD staffs are trained according to their work level such as supervisory staff and field rangers. SFD staff monitor all contractor harvesting and sylvilcultural operations to ensure compliance with RIL guidelines and contractual agreements.

Criterion 7.4 Public availability of the management plan elements

Strengths

Weaknesses

Compliance The FMP summary is available to the public upon request and is posted on the Deramakot website.

PRINCIPLE 8: MONITORING AND EVALUATION

Criterion 8.1 Frequency, intensity and consistency of monitoring

Strengths SFD identifies several types of monitoring including harvesting, field operations, road works, resource development, environmental impacts, wildlife monitoring, and social monitoring through regular meetings. Frequency of monitoring is dependent on the type of monitoring being conducted. Operational monitoring is continuous, Wildlife monitoring is conducted on periodic and annual surveys, while social monitoring is scheduled over regular meetings.

Weaknesses

Compliance Deramakot has developed several operational procedures that include monitoring for resources, environmental elements and social issues. Wildlife trends are being analyzed along with growth of resources through continual forest inventory and permanent sample plots. The SFD at HQ and Forest Research Centre level carry out periodic and continuous formal and systematic internal auditing to be carried out by experienced forestry officers who are specialized in one or more fields of forestry.

Criterion 8.2 Research and data collection for monitoring

Strengths Deramakot staff have established nearly 50 permanent sample plots measuring all trees over 10 cm DBH before and following logging that can be used to measure changes in flora due to logging activities. SFD also measures wildlife populations for a number of species and supports research work conducted by several universities on RTE species.

Harvest yields are recorded in the compartment record book that identifies all trees marked for felling and actually felled during harvesting operations. There are clear records of logs traceable to the harvest tree and stump.

Weaknesses Records of harvest and cost are available, however it was not adequately analysed so that comparison between productivity and efficiency of forest management activities is know and the results of such analyses are incorporated into plans (Minor CAR-010).

Compliance Research data and results of monitoring carried out to date have been incorporated into the revised FMP. Raw data were evidently available. Growth rates were obtained through sampling carried out using PSPs as described elsewhere in this report. SFD has several methods of inventory that include pre-harvest inventory, continuous forest inventory and a 100% tree marking inventory to develop a comprehensive harvest plan Analysis on the cost, productivity and efficiency of the operation within DFR has been conducted and presented in the mid term review, as evident during surveillance 02 (Minor CAR-010 is closed).

Criterion 8.3 Chain of custody

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Strengths All trees to be harvested are identified and tagged. The logs produced are numbered and chiselled onto the log’s end that reflects the tree number. Compartment number is also hammered marked on the log along with records for the skid trail used to extract the log. Documentation for logs includes the daily felling record and disposal permits.

Weaknesses SFD issues a receipt to buyers of the log batches but is not consistent on stamping the SGS FM/COC # on the receipt (Observation).

Compliance All logs are clearly traceable back to the stump within each compartment harvested. All logs are numbered and chiselled into the log that reflects the tree number. Compartment number is also hammered marked on the log along with records for the skid trail used to extract the log. Logs are sold in a public auctioned that announces the FSC logs available for sale and SGS FM/COC certificate number.

Criterion 8.4 Incorporation of monitoring results into the management plan

Strengths A Memorandum of Understanding between FRC and Centre for Ecological Research, Kyoto University (CERKU) was signed on March 17, 2003 to work on 'Tropical forest disturbance and recovery' in DFR. In this respect, a laboratory is to be built in DFR base camp by CERKU to facilitate the on-going research in Deramakot under this programme. Through monitoring and research work being conducted in Deramakot the management has shifted emphasis from harvesting operations to more holistic management including ecotourism.

Weaknesses

Compliance Results of monitoring that have been carried out to date in Deramakot have been incorporated into the 2nd 10 year FMP. The current FMP will be reviewed in 2009 where results of monitoring will be incorporated into and used to plan for the next 5 years. The review process provides for the refinement of management prescriptions and zoning scheme in response to new information or changes in the SFD and/or government policies, technology and market conditions.

Criterion 8.5 Publicly available summary of monitoring

Strengths SFD personnel also incorporate the monitoring results into research paper which were presented at a number of symposiums and conferences. The results also incorporated into the SFD annual report which has a dedicated section on DFR management.

Weaknesses

Compliance Summaries of the management plan and monitoring results are available to the public and are posted on the SFD Deramakot web site.

PRINCIPLE 9: HIGH CONSERVATION VALUE FORESTS

Criterion 9.1 Evaluation to determine high conservation value attributes

Strengths In 2003, the SFD revised its first DFR FMP by incorporating HCVFs through an assessment conducted with the support of WWF Malaysia. The HCVF concept focuses on the values, which make the forest important in a particular social, biological, cultural and geographical context. It is these values, which must be identified and protected. For instance, if the identified conservation value is the highly endangered Orang-Utan, then the forest in which these Orang-Utans live becomes a high conservation value forest and management activities in that forest must protect Orang-Utans.

Weaknesses Interviews with local community leaders in Kg Desa Permai during surveillance 03 revealed that an old orchard, planted by their ancestors, with some fruit trees (durian etc) is located within DFR where the communities are prevented from entering. No review of the HCVF report to identify, map and prescribe conservation for possible new areas with HCVs (Minor CAR-017).

Compliance SFD management prescriptions for protecting HCVF is through non disturbance of the areas in which they are identified. Protected areas and reduced impact logging activities are conducted to minimize impacts to the forest and to maintain HCVF. Deramakot only opens 2-3 compartments of 200-400 ha annually that limits the operations to a very small portion of the 53,000 ha forest reserve.

AD 36A-10 Page 38 of 53

Criterion 9.2 Consultation process

Strengths SFD was supported by WWF Malaysia in the assessment for HCVF. SFD has also consulted with several local environmental and social organizations on HCVF in Deramakot.

Weaknesses

Compliance The Sabah Forestry Department in consultation with experienced SFD field staff of DFR, relevant government agencies, NGOs (WWF Malaysia and PACOS), and the local communities, has made an assessment to determine the presence of the HCVF attributes in DFR.

Criterion 9.3 Measures to maintain and enhance high conservation value attributes

Strengths In Deramakot North, Compartments 17, 18, 19 and 20 are recognized to have mixed peat swamp forests. The most localized species found here is the Kapur paya (Dryobalanops rappa Becc.) species. The species is gregarious in nature, but after the previous logging, is now in pockets at the edge of shallow peat swamps, or scattered on sandy hillsides and ridges.

The Upper Rawog Besar River (Cpts 12, 13, 14, 26, 25 and 24) has been relatively untouched, and is recognized to have a high concentration of fresh water fishes and particularly, the much sought after fish, locally known as Polian and Kalui. Their abundance has attracted crocodiles (Crocodylus porosus) into these areas and the areas have become the crocodiles’ safe breeding ground.

The wide range of compartments (north and south of DFR) that physically connect DFR with Segaliud Lokan FR (east of DFR) and Tangkulap FR (west of DFR), are fairly low ground and thus, become the wildlife (elephants and also wild ox) corridors. Co-incidentally, at the northern corridor, there are saltlick areas located in Cpt 9 and at the southern corridor, which are located in Cpts 108, 88 and near 120 (at the mouth of Sg. Deramakot), the northern part of Kg. Balat, western part of Malubuk River, and the eastern part of Kg. Tangkong. These are usually wetland areas or swamp forests where concentration of animals increases during the dry season. However, saltlicks are also reported to occur in Cpt. 49 and 63 in Deramakot Central.

Weaknesses

Compliance SFD has prescriptions to protect HCVF with the management planning system to ensure the values are protected across the landscape within the forest reserve. HCVF for biological values are defined as they occur within Deramakot and are protected to avoid fragmentation, but are encouraged to spread throughout the forest.

Deramakot does not have critical landscapes that must be completely protected. However, Deramakot identifies significant areas for protection due to slopes over 25 degrees and for buffer zones of streams and riparian areas.

Criterion 9.4 Monitoring to assess effectiveness

Strengths

Weaknesses Lack of assessment on the effectiveness of the measures in the management of HCVFs

Compliance SFD conducts annual monitoring for wildlife as well as operational monitoring to minimize impacts and protect HCVF within production areas. Many commitments in the SFD strategic directions outline the need for greater scientific knowledge and technological innovation in the forest sector. The SFD has demonstrated its commitment to increase its understanding of the impacts of human and natural disturbances on forest ecosystems, develop appropriate forest management tools and techniques, and enhance the forest sector's international competitiveness. Structuring research and development in this way, enables experts from diverse disciplines, to focus on complex problems and supports the development of more integrated techniques and approaches to resource management. This process brings in various disciplines in the natural and social sciences, as well as, traditional knowledge.

PRINCIPLE 10: PLANTATIONS

Criterion 10.1 Statement of objectives in the management plan

Strengths

Weaknesses

AD 36A-10 Page 39 of 53

Compliance Not Applicable – no plantation areas within Deramakot Forest

Criterion 10.2 Plantation design and layout

Strengths

Weaknesses


Criterion 10.3 Diversity in composition

Strengths

Weaknesses


Criterion 10.4 Species selection

Strengths

Weaknesses


Criterion 10.5 Restoration of natural forest

Strengths

Weaknesses


Criterion 10.6 Impacts on soil and water

Strengths

Weaknesses


Criterion 10.7 Pests and diseases

Strengths

Weaknesses


Criterion 10.8 Monitoring of impacts, species testing and tenure rights

Strengths

Weaknesses


Criterion 10.9 Plantations established in areas converted from natural forests after November 1994

Strengths

Weaknesses


AD 36A-10 Page 40 of 53

9. CERTIFICATION DECISION SGS considers that Sabah Forestry Department’s forest management of Deramakot Forest Reserve forests, Sandakan, Sabah, Malaysia, can be certified as:

i. There are no outstanding Major Corrective Action Requests

ii. The outstanding Minor Corrective Action Requests do not preclude certification, but Sabah Forestry Department is required is required to take the agreed actions before August 2008. These will be verified by SGS QUALIFOR at the first surveillance to be carried out about 6 months from the date of the issuance of the certificate. If satisfactory actions have been taken, the CARs will be ‘closed out’; otherwise, Minor CARs will be raised to Major CARs.

iii. The management system, if implemented as described, is capable of ensuring that all of the requirements of the applicable standard(s) are met over the whole forest area covered by the scope of the evaluation;

iv. The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certificate.

10. MAINTENANCE OF CERTIFICATION During the surveillance evaluation, it is assessed if there is continuing compliance with the requirements of the Qualifor Programme. Any areas of non-conformance with the QUALIFOR Programme are raised as one of two types of Corrective Action Request (CAR):

01. Major CARs - which must be addressed and closed out urgently with an agreed short time frame since the organisation is already a QUALIFOR certified organisation. Failure to close out within the agreed time frame can lead to suspension of the certificate.

02. Minor CARs - which must be addressed within an agreed time frame, and will normally be checked at the next surveillance visit

The full record of CARs raised over the certification period is listed under section 11 below.

The table below provides a progressive summary of findings for each surveillance. A complete record of observations demonstrating compliance or non-compliance with each criterion of the Forest Stewardship Standard is contained in a separate document that does not form part of the public summary.

SURVEILLANCE 1

Issues that were hard to assess

Sabah Forestry Dept has requested the surveillance visit to cover assessment of an additional area within FMU17A. Some major non compliances were observed resulting in Sabah FD to exclude the area for the time being while the issues are addressed.

Number of CARs closed 6 Outstanding CARs were closed.

Nr of CARs remaining open 1 Outstanding CARs from previous evaluations were not closed.

New CARs raised 0 New Major CARs and 4 new Minor CARs were raised.

Certification Decision The forest management of the forests of Deramakot FR remains certified as:

The management system is capable of ensuring that all of the requirements of the applicable standard(s) are met over the whole forest area covered by the scope of the evaluation; and

The certificate holder has demonstrated, subject to the specified corrective actions, that the described system of management is being implemented consistently over the whole forest area covered by the scope of the certificate.

SURVEILLANCE 2

Issues that were hard to There was no hard issues to assess. Sabah FD has used a log fisher to harvest

AD 36A-10 Page 41 of 53

assess in one compartment and a new RIL guideline has been published for state wide implementation.


Nr of CARs remaining open 1 Outstanding CARs from previous evaluations was not closed.

Nr of New CARs raised 0 New Major CARs and 4 new Minor CARs were raised.




SURVEILLANCE 3


There was no hard issues to assess. Sabah FD has used a log fisher to harvest in one compartment and a new RIL guideline has been published for state wide implementation


Nr of CARs remaining open 0 Outstanding CARs from previous evaluations was not closed.

Nr of New CARs raised 0 New Major CARs and 4 new Minor CARs were raised.




SURVEILLANCE 4


Number of CARs closed

Nr of CARs remaining open

Nr of New CARs raised

Certification Decision

11. RECORD OF CORRECTIVE ACTION REQUESTS (CARS)

047 Date Recorded> 21 June 05 Due Date> Surv 05 Date Closed> 2 Nov 2007

Non-Conformance:

Inadequate monitoring and maintenance of roads system

Objective Evidence:

AD 36A-10 Page 42 of 53

Motor grader was broken down for a period of 8 months causing roads to deteriorate. There is lack of additional gravel and drainage to maintain the road. Inadequate equipment to maintain road system that is now being shared with Tangkulap FR.

SA2006: Sabah FD has engaged two contractors for maintenance of two stretches of roads. A quarry has been identified and under operation inside DFR for rock supply. New machineries are being purchased for road maintenance work. While some stretches of the roads have been repaired however, in general, road condition still require proper monitoring and maintenance, particular the stretch of roads leading to the log landing at the cable yarding in Compt. 86 (CAR remains outstanding – 24 March 2006)

Close-out evidence:

Sabah Forestry Department has purchased a number of machines for road maintenance which were used to repair an upgrade main forest road leading into Deramakot main camp, road to Kg Balat etc. Road and bridges were evidently in good condition.

048 Date Recorded>

21 March 06 Due Date> Surv 05 Date Closed> 2 Nov 2007

Non-Conformance:

Use of off-product logo without approval from the certification body.

Objective Evidence:

Sabah Forestry Department has printed FSC logo on the auction and sales document of the certified log. No approval was sought from the certification body prior to use.

Close-out evidence:

Sabah Forestry Department has stopped using the off product logo on the auction and sales documentation.

New CARs

001 1.5.2 Date Recorded> 2 Nov 2007 Due Date> 1st

surveillance Date Closed> 6 March 2009

Non-Conformance:

DFR Forest Manager has not taken reasonable measures to ensure that all activities within DFR are carried out through appropriate approval activities.

Objective Evidence:

The road contractor occupied an area close the quarry without appropriate approval and permits from the SFD. There was no proper planning of the area to be occupied (workers camp, workshop, sanitary, waste management etc.) and control over its use.

Close-out evidence:

Contractors operating in DFR need to obtain prior approval from the DFO for any activities or carrying out specific activities. Occupational Permit (OP) is issued to the contractor involved after satisfactory evaluation report from the field team (based on requirement under Forest Rules, 1969).

For the relevant area raised in the CAR, the contractor has been fined and advised to relocate and apply for the OP for occupying an area. An OP was granted to the contractor to occupy 0.53 ha within Tangkulap FR in December 2007.

002 2.2.2 Date Recorded> 2 Nov 2007 Due Date> Nov 2008 Date Closed> 6 March 09

Non-Conformance:

Inadequate implementation of communication system with local communities through DFRSFC.

AD 36A-10 Page 43 of 53

Objective Evidence:

The local community is not fully informed on the status of the 18 ha area known as ‘kaki Deramakot’ area and plans for community forestry in the area

Currently, there was an inadequate communication with respect to DFR boundary near Kg. Balat despite the boundary demarcation exercise.

Close-out evidence:

The DFRSFC is continued on quarterly basis where in 2008, four meeting have been held. Minutes of the meeting is avialble. For example, in the last meeting held on 13 December 2008, attended by 25 people (including 4 SFD and 1 observer from PACOS) discussed among others:

Boundary clearance near Kg Balat Tree planting along the boundary, including the HSBC project Water gravity feed pipe system for Kg Balat and Karis-karis Application for harvesting rattan


Non-Conformance:

Inadequate training to forest workers and local communities involved in forestry operation

Objective Evidence:

Last training record available was those conducted in 2005

Evidence that the inventory team conducting inventory in CFI plots not properly trained where errors were made in tree identification and dbh measurement. Member of communities involved in boundary clearing not properly trained and supervised resulting in bodily injuries.

Close-out evidence:

Training records for DFR staff are kept in JPHTN/DFR 500-8/klt 10 file. Trainings were conducted on various subjects such as harvesting (RIL), planting, boundary cleaning, silviculture etc.

Trainings records for local communities were kept JPHTN/DFR 700-2/1/1/Klt 1 file. The trainings include boundary cleaning, enrichment planting (mosaic and line planting) and TSI.

004 7.1.1 & 7.1.5

Date Recorded> 2 Nov 2007 Due Date> 1st

Surveillance Date Closed> 6 March 09

Non-Conformance:

Forest management plan (2005 – 2014) does not clearly describe the system to verify sustained yield through measurement of harvest damage and growth of residual stands and growth of the strata.

Objective Evidence:

Justification for yield regulation describe in the 2nd FMP is based on growth model without clear determination of the parameters used to obtain the result. Measurement on harvest damage and mean annual increment growth of the residual stand from PSPs were not incorporated in the revision of the FMP to clearly demonstrate that the volume harvested is not more then the growth within a harvest cycle.

Close-out evidence:

AD 36A-10 Page 44 of 53

The SFD has carried out an analysis of the MAI and compare it with the harvest and residual damage (through PSP) rates since 2002. From 2002 – 2007, the average net area logged was 165.9 ha/yr where average volume is 61.2 m3/ha. Based on PSP inventory, the damage to residual trees were 14.4 m3/ha. Therefore the average volume of timber harvested is 10,153 m3/yr and those damaged were 2,389 m3/yr. Based on total productive area of 42,789 ha (whole of DFR) and MAI of 3.54 m3/ha/yr (for all trees above 10 cm DBH), total timber growth is 501,680 m3/yr. As such, it is deduced that the annual harvest rates is 40 times less than the forest growth rate (over the FMU).

A document analysing the estimated MAI comparing it with the harvest and damage level has been prepared. The information will be incorporated into the revision of the management plan.


Non-Conformance:

DFR management has not adequately implement RIL method of combination system of ground skidding and cable yarding.

Objective Evidence:

Current harvesting in Compt 61 and 40 are using only tractor. Evidence that cable yarder was left unattended near the landfill area. No evidence that the cable crane or yarding system is being planned for harvesting in 2008.

Close-out evidence:

In view of difficulties of using cable system, SFD has made a decision to use a modified excavator with long cable system for implementing RIL in Deramakot. Harvest planning in Compt 86B is made using combination of ground skidding and ‘log fisher’ that minimise construction of skid trails within the block.

A revised ‘RIL Operation Guide Book – Code of Practice for Forest Harvesting in Sabah, Malaysia’ 2009, has been produced incorporating use of log fisher for harvesting. The procedures include methods for documenting Comprehensive Harvest Plan and subsequent monitoring after the harvesting.

The compartment 86B is yet to be harvested. The operation will be carried out on experimental basis. Its results will be used for policy decision making on furtherance of such method through out Sabah.

Using the combined method, the damage level in Compt 86B is estimated as follows: Damage to PCTs – 25 % Skidding damage – 6 % Road – 1.3 % Temporary log yard – 0.7 %

Location of trees to be harvested is mapped. Trees located 30 m or less from the road will be harvested using tractor while those that are more will be winched using log fisher.

006 6.1.2 Date Recorded> 2 Nov 2007 Due Date> 1st

surveillance Date Closed> 6 March 09

Non-Conformance:

Inconsistent implementation of guidelines for forest road lay-out and construction particularly on drainage requirements.

Objective Evidence:

Observed that major sections of the main roads (Tangkulap and Balat) were repaired and now in good conditions but sections of feeder roads within DFR were not in good conditions. Inconsistent compliance to road construction guidelines particularly drainage and erosion control

Close-out evidence:

AD 36A-10 Page 45 of 53

The Department has issued a new contract for upgrading forest roads (graveling) in Deramakot FR for a total distance of 15 km including construction 2 bridges. The Department now maintain a ‘Road Maintenance Record Book’ that maintain record of forest road maintenance & construction schedule sheet. A ‘Perancangan dan Gerak Kerja Unit Jalan’ schedule is also maintained where areas that need to be maintained and allocation of machinery is made for the whole year. Currently in Deramakot, the Department has allocated 5 tractors, 3 excavators, 2 backhoes, 2 motor grader, 2 compactors, one crane, 3 lorries/dump truck and 3 vehicles. During the surveillance visit, it was observed that the access and feeder roads have been properly maintained. Collapsed bridges and culverts were repaired

07 4.1.5 Date Recorded> 2 Nov 2007 Due Date> Nov 2008 Date Closed> 5 March

2010

Non-Conformance:

Accommodation for the patrol team near Kg Balat is not consistent with meeting management objectives.

Objective Evidence:

Accommodation for DFR staff were provided both in the main camp as well as the patrol camp located near Kg Balat. The accommodation in Kg Balat however was not in good condition.

The SFD has obtained an allocation through the Sabah Development Corridor (SDC) where RM250,000 per year (2009 & 2010) was obtained to upgrade facilities in Balat Patrol Station including a construction of a new jetty.

Another allocation is through Heart of Borneo (HOB) fund where a total of RM150,00 is allocated to build staff accommodation in Balat Station.

Both project are scheduled to begin in 2nd quarter of 2009 and will be completed with 2 years. The SFD now is requesting quotation from the prospective contractor. Minor CAR-07 remains outstanding.

Close-out evidence:

A new staff quarters has been built in Kg Balat at the cost of RM150,000 under HOB programme. Construction of other facilities such as jetty, etc. is scheduled to begin early 2011

08 6.7.3 Date Recorded>

6 March 2009 Due Date> Surv 02 Date Closed> 5 March 10

Non-Conformance:

Observed during the surveillance visit that there was inadequate

• containment for diesel, evidence of diesel spillage (leaking).

• oil trap for workshop.

Objective Evidence:

Workshop at the main camp.

Close-out evidence:

A new containment has been built around diesel tank and oil traps have been constructed to deal with possible spillage at the workshop.


6 March 2009 Due Date> Surv 02 Date Closed> 5 March

2010

Non-Conformance:

Procedures to periodically revise the forest management plan every 5 years is not diligently implemented.

Objective Evidence:

AD 36A-10 Page 46 of 53

There was no plan for 5 year review of the FMP that should include :

Monitoring results

Data from PSPs and CFIs

Use of new RIL

Close-out evidence:

Mid term review of the 2nd FMP covering the period of 2005-2009 has been produced. The review contain details of the area worked, volume harvested, organisational set up, budget and revenue, silviculture activities, social programmes, monitoring works etc. The review recommend for the new RIL to be implemented but no change to AAC etc.


6 March 2009 Due Date> Surv 03 Date Closed> 5 March

2010

Non-Conformance:

Inadequate records and analyses of data on the costs, productivity and efficiency of forest management activities to be incorporated into review of the management plans

Objective Evidence:

There was no analyses on the cost effectiveness of the operation in DFR.

Close-out evidence:

Analysis on the cost, productivity and efficiency of the operation within DFR has been conducted and presented in the mid term review.


6 March 2009 Due Date> Surv 02 Date Closed> 5 March 10

Non-Conformance:

Lack of assessment on the effectiveness of the measures in the management of HCVFs

Objective Evidence:

No assessment on the effectiveness have been conducted, as such no reports / records are available.

Close-out evidence:

In the preparation of mid term review, SFD has conducted evaluation on the actions taken to safeguards the HCVs within Deramakot and recommend for continuation of the management prescription.


5 March 2010 Due Date> Surv 03 Date Closed> 11 Feb 2011

Non-Conformance:

There are no evidence available to show that SFD has systematically carried out risk assessment for each forestry activities and machinery used and make recommendations on the safe procedures and PPEs to be used by the workers.

Objective Evidence:

Interviews with SFD field employees have revealed complaints about inadequate and safe transportation in carrying out their task efficiently. There are now insufficient number of vehicles to transport the workers to the field and most of the vehicles provided are old and not in good and safe conditions.

Close-out evidence:

The SFD has carried out maintenance and repair of the vehicles as well as conducted a full investigation looking into the current status of the vehicles resulting in full analysis of the operability and safety of the machines. The report (Laporan status kenderaan Jabatan Perhutanan Daerah Deramakot) dated 1 Feb 2011 prepared by the Jabatan Kerja Raya (JKR) [Public Works Department] resulting in 6 vehicles with efficiency below 50 % are considered ineffective and recommended to be replaced.

AD 36A-10 Page 47 of 53

013 4.2.5 Date Recorded


Non-Conformance:

Appropriate PPEs were not available at the worksite.

Objective Evidence:

Workers operating in the quarry area, harvesting area and those carrying out silviculture treatment were observed without hard helmet.

Close-out evidence:

Standard operation procedures (Doc # SFD/DFR/SOP-009 – revised 29 Sept 2010) has been revised to provide more clarity on PPE to be used for specific activities. The SOP is supported by SOP for specific activities (e.g SOP Prosedur Kerja Selamat Pelerja Rawatan Silviculture – Doc SFD/DFR/SOP-014; Rehabilitasi Hutan -015; Penabur Baja -06 etc).

The contractor has submitted their SOP and list of PPEs used by the workers. List of workers is also submitted.

Workers were observed with proper protective clothes. PPEs such as hard helmets were made available to the workers with evidence of actual use.



Non-Conformance:

Collection of saplings from DFR for replanting/forest rehabilitation are not adequately managed and monitored to ensure they do not exceed sustainable levels and inappropriate activities are prevented.

Objective Evidence:

Observed that saplings within the FMU are being collected for replanting programmes either within Deramakot or elsewhere. There were no record of number of saplings and species collected nor systems to guide and monitor the activities.

Close-out evidence:

A Directive has been issued by the Forestry Director to stop all collection activities by the contractors within DFR (Ref #: JPHTN/DFR 600-2/1/1/Klt.1/2 dated 1 March 2010). The decision was made based on the poor survival rates of the saplings collected that led to the discontinuation of a non-productive activity.

Records of sapling collection in 2010 were:

Compt Species Number Contractor

Various Laran seeds 5,100 gram Maxland

86 Urat Mata saplings 5,193 Bumi Hijau

58 Kapur saplings 23,580 Bumi Hijau

57 Kapur 19,432 Bumi Hijau



15 6.1.2 Date Recorded 11 Feb 11 Due Date Next surv Date Closed

Non-Conformance:

Site-specific assessments of the potential environmental impacts of the proposed construction of a reception office and 4 chalets to cater for visitors within the base camp area has not been carried out prior to commencement of site preparation operations.

AD 36A-10 Page 48 of 53

Objective Evidence:

Observed that ground works for the reception office construction has started prior to evaluation / documentation of its potential impacts.

Close-out evidence:

16 6.7.2 Date Recorded 11 Feb 11 Due Date Next surv Date Closed

Non-Conformance:

Domestic wastes were disposed of at a landfill but there was evidence of burning of the waste inside the landfill.

Objective Evidence:

Evidence of burning of domestic waste observed at the landfill.

Close-out evidence:

17

9.1.2 Date Recorded

11 Feb 2011 Due Date Next

surveillance Date Closed

Non-Conformance:

No review of the HCVF report to identify, map and prescribe conservation for possible new areas with HCVs.

Objective Evidence:

Interviews with local community leaders in Kg Desa Permai revealed that an old orchard, planted by their ancestors, with some fruit trees (durian etc) is located within DFR where the communities are prevented from entering.

Close-out evidence:

AD 36A-10 Page 49 of 53

12. RECORD OF OBSERVATIONS OBS #

Indicator Observation Detail

01 2.2.1 Date Recorded> 2 Nov 2007 Date Closed> 6 March 2009

Observation:

Current system for allowing forest used through permits etc are not clearly communicated to the community in line with use of HCVF.

Follow-up evidence:

A number of DFRSC meeting was conducted where the concept was explained to the community. No application from community for harvest of minor forest products. Communication has improved and there was no new complaints recorded from the community (Observation1 is closed).


Observation:

FMP document to be submitted to authority and be recognised as functionally equivalent as an EIA report.

Follow-up evidence:

A letter from Sabah’s Environmental Protection and Conservation Department accepting the FMP as equivalent to an EIA is available


Observation:

Social committee provides a system for communication and address grievances by local community, The committee needs to meet regularly and contain broad input from the entire community (including women) where all key issues can be raised within the committee such as the Kaki Deramakot (compt D 109) and use permits.

Follow-up evidence:

The social committee met every 3 month now. Evidence of minutes of meetings are available. Attendance records shows that women representatives were also presence during the meeting.


Observation:

Inadequate liaison with Department of Occupation Safety and Health as part of effort to enhance continuous compliance to health and safety requirement.

Follow-up evidence:

SFD has made contact with DOSH (evidence through letters) where it is being planned that DOSH officer will conduct briefing / training on contractor workers operating within DFR on health and safety


Observation:

Documents for ‘sales’ of residual logs to Sentosa Jaya (Resit AM) and logs sold through auction need to consistently and clearly state certificate number on the invoice as well as other sales documents.

Follow-up evidence:

AD 36A-10 Page 50 of 53

OBS #


Observed that documentation issued by SFD to Sentosa Jaya contain adequate information (include FM certificate number) to indicate the materials are certified


Observation:

Silviculture treatments are being carried out in compartment 27, 61 & 64 in 2008 planned for continuing of 27 compartment. Procedures are for silviculture to be carried out 6 months after logging by contractors. SFD has not clearly defined restoration activities in areas that are considered very poorly stocked or degraded by fire etc

Follow-up evidence:

Significance portion of the DFR budget is allocated for silvilculture treatment programme. The annual plan prepared provide schedule for the silvilculture treatment activities focusing more on climber cutting and planting open areas On this aspect, a new contractor for enrichment planting has been hired where significant progress has been achieved in 2008. Many areas within Deramakot are subjected to silviculture treatment (climber cutting). Forest restoration activities are now centered in Tangkulap FR where 2 contractors are operating

07 4.2.11 Date Recorded> 6 March 2010 Date

Closed> 11 Feb 2011

Observation:

Sabah FD staff and the harvesting contract workers stay at accommodation provide at the main camp. The accommodations built are reasonable made of wood and concrete and raised above ground. Workers involved in silviculture works lives in temporary camps located near to their work area, made of tarpaulin, normally near a stream for water supply. Even though the temporary shelter provided to the workers in Deramakot are above industry average, however general improvement are required to enhance the safety and health of the workers and to demonstrate consistent compliance with section 10 of the ILO CoP on Safety and Health in Forestry.

Follow-up evidence:

SFD has conducted an evaluation of all temporary camp sites developed by contractors on site against the SOP on Campsite and Health (SFD/DFR/SOP-010). A new procedure has been developed (Prosedur Mendirikan Khemah Sementara di Dalam Hutan Simpan Deramakot) and disseminated to all contractors that explains methods and precautions to be taken in erecting temporary camps.

Observations made during the surveillance show that the temporary camp provided for the silviculture workers in Compt 58 was found to be in general compliance to the requirement stipulated under section 226 of the ILO CoP.

08 4.2.14 Date Recorded 6 March 2010 Date Closed 11 Feb 2011

Observation:

Observed that there was insufficient demarcation of hazardous areas within the camp as well as in the forest. While there are some signages in some areas, but it was observed it is not consistently done. For example, there was no warning sign near the diesel tank in the main camp nor there any sign to warn others of quarrying and felling/harvesting operation.

Follow-up evidence:

Signboards have been erected along the road reminding users of the forestry activities ongoing in the area and safety precautions to be taken in using the road. Safety signages were also placed at dangerous curves and hazardous areas along the road.

AD 36A-10 Page 51 of 53

OBS #


09 6.7.2 Date Recorded 6 March 2010 Date

Closed 11 Feb 2011

Observation:

Observed during surveillance that waste oil generated by the workshop is kept in the drums prior to disposal by registered disposer. Currently, there was no inventory of the waste oil and no records of disposal.

Follow-up evidence:

SFD has maintained an inventory of the waste oil generated at the main camp and keeps the waste materials in drums at a designated location prior to collection by the contractor.

010 4.1.2 Date Recorded 11 Feb 2011 Date

Closed>

Observation:

Awareness and training programmes to cover communities in other villages (apart from Balat) not regularly carried out. Comments from Desa Permai report inadequate communication and training activities with FD.

Follow-up evidence:

011 6 Date Recorded 11 Feb 2011 Date

Closed>

Observation:

SFD and contractors were observed using chemical containers for storing fuel and oil substances. The SFD should ensure that the handling and disposal of chemicals and chemical containers, including that generated by contractors working on the FMU, should comply, as a minimum, with the ILO publications ‘Safety & Health in the Use of Agrochemicals: A Guide’, and ‘Safety in the Use of Chemicals at Work’

Follow-up evidence:

012 7.3.3 Date Recorded 11 Feb 2011 Date

Closed>

Observation:

Evidence of training for forest workers are available; however, no training was given to contractors since 2008 (Obs-012)

Follow-up evidence:

13. RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS Nr Comment Response

Main Evaluation

AD 36A-10 Page 52 of 53

Nr Comment Response

Main Evaluation

No comments were received from stakeholders. Comments below are from interviews held during the evaluation.

1 Local communities met during the assessment want more information on the procedures for getting permits for harvesting NTFPs

The Sabah Forestry Dept will provide more information to the local communities on the procedure for applying the license. The DFO has been instructed to assist any individuals who wanted to apply for such licenses.

2 The leader of local communities commended on the effort taken by the SFD to engage villagers in boundary clearing which is not only provide income to those involved but also for closer relationship with the Department

Clearance of boundary is carried out once every 5 years. In the future, the same mechanism will be implemented and training / briefing on health and safety will be provided prior to such an exercise.

3 The operator of mobile sawmill involved in processing of residual logs commented that the model used should be copied in other areas in Sabah.

Sabah FD made a cautious statement that the possibility will be studies thoroughly prior to expanding such arrangement to other areas in Sabah to avoid unnecessary complication.

4 An NGO operating in rural Sabah focusing on working with local communities commented that the SFM model project in Deramakot provide awareness to the local communities on many aspect of forest operation and the need for justification of avoiding illegal encroachment or hunting.

Sabah FD will continue to work with local NGOs in all areas particularly the two areas to be brought to certification in the near future.

Surveillance 1

No comments or complaints received.

Surveillance 2

Discussion done with local community representatives shows positive comments on the DFR management now. The contract for boundary clearings and replanting programme not only continue to provide additional financial income to the community, but also awareness on the forest management.

The DFRSC are conducted quarterly and continue to be the bridge between the SFD and the local communities. Other FMU managers are encourage to adopt the same programme.

Local NGO has commented on the positive responds and actions taken by the SFD pertaining to good forest management in the state. Active participation and cooperation with all parties particularly NGOs are good overall forest conservation in the state.

SFD continue to work with all parties in the state, national and regional level to promote good forest management and environmental conservation.

The contractor workers complaints of strict regulation for operating in Deramakot FR compared to other forest.

SFD will continue to enforce regulation and ensure that all operators within the DFR adhere to it.

SFD staff complaints of some old vehicles used in the FMU which are not only slow down the activity but also compromised their safety.

Minor CAR 012 is raised

Surveillance 3

AD 36A-10 Page 53 of 53

Nr Comment Response

Main Evaluation

The group leader of the local community in Kg Balat hired to carry out planting and slashing in Compt 108 and 109 commented that the job given to them provide steady income closer to home. The association allow better understanding to the villagers the importance of forest to the their livelihood and local economy. GFS water supply provided to them by SFD is important as all this while the villagers are depending on water from the river.

SFD will continue to hire the local community for the enrichment planting, maintenance and boundary clearings.

Silviculture contractor commented that due to the certification requirement, all the workers has to use proper PPEs during work. The workers also were provided with better living quarters. Training were appropriately given. SFD has been prompted in payment, normally made as soon as the progress report is submitted. Nevertheless, he complained of slow progress due to the need to comply with all the guidelines and procedures on safety etc.

SFD will continuously monitor the contractor’s compliance to the requirement on safety and health of the workers.

Local communities in Kg Permai appreciate close rapport with SFD. They complained of the limited access given to them to enter and collect fruits from orchard located within the DFR boundary. The community also request for more programmes to conducted.

A minor CAR-017 is issued for SFD to carry out re-assessment of the HCVs near Kg Permai.

SFD will carry out more programmes involving the local communities.

The sawmill operator that bought and processed the residual logs complained difficulties in extracting and transporting of the residual logs to his sawmill.

The delay was mainly due to weather not on operational matter. Nevertheless, the SFD will work with the harvesting contractor to ensure the extraction and evacuation of the residual logs is done on prompt manner.

Surveillance 4

14. RECORD OF COMPLAINTS Nr Detail

Complaint: Date Recorded > dd MMM yy

No complaints to date

Objective evidence obtained:

Close-out information: Date Closed > dd MMM yy

End of Public Summary

Date post:	11-Oct-2020
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