MSPO CERTICATION SUMMARY REPORT - TUV NORD · Appointment of team members and reviewer 4 2....

MSPO CERTICATION SUMMARY

REPORT

HAP SENG PLANTATIONS (KOTA MARUDU) SDN BHD

STAGE 2 – CERTIFICATION AUDIT

Date: 11/07/2017 to 12/07/2017

TUV NORD (Malaysia)SdnBhd No. 20, Jalan Tiara 3

Taman Perindustrian UEP Subang Jaya 47600, Selangor,

Malaysia Phone:+603 8023 2124 Fax: +603 8023 4140

MSPO Certification Summary Report

Company Name: Hap Seng Plantations (Kota Marudu) Sdn Bhd

Certifying Unit: Pelipikan Estate

Client Number: 92-020

Audit Type: Stage 2 - Certification Audit

MSPO-F04b / Rev 1 2 of 32

Table of Contents

1

1. INTRODUCTION ............................................................................... 4

1.1. Objective 4

1.2. Scope 4

1.3. Appointment of team members and reviewer 4

2. METHODOLOGY ............................................................................... 8 Table 2-1: List Of Estates Selected 9

3. ORGANISATION INFORMATION ................................................... 10

3.1. Production volume 10

3.2. Planting Program for Each Estate 10

3.3. Replanting program for each estate 10

3.4. Maps of Company Location, Plantations and Organised Smallholders 10

4. CERTIFICATION ASSESSMENT .................................................... 13

4.1. Stage 1: 13

4.2. Stakeholders’ Consultation 13

4.3. Status of Non-Conformities Previously Identified 17

5. CONCLUSION ................................................................................. 18

Detail of Audit Findings Identified During This Audit 18

6. RECOMMENDATION ...................................................................... 28

7. REFERENCES ................................................................................ 29 Table 7-1: Documents provided by Hap Seng 29

Table 7-2: Background investigation and assessment documents 30 Table 7-3: List Of Interviewed Persons And Stakeholders 31

Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives 32

Annex / Enclosures 32







Abbreviations

GAP Good Agricultural Practice

MPOB Malaysia Palm Oil Board

MS Malaysian Standard

MSPO Malaysia Sustainable Palm Oil

NC Non Conformance

OBS Observations

P&C Principles & Criteria

PPP Plant Protection Product

SOP Standard Operating Procedure







1. INTRODUCTION

Hap Seng Sdn. Bhd. has commissioned TUV NORD Malaysia Sdn.Bhd. to conduct an initial certification audit for its Pelipikan oil palm estate according to MS 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

1.1. Objective

The objective of this certification audit is to assess the Pelipikan estate by an independent certification body with the aim for compliance of the standards.

1.2. Scope

The certification is based on the documentation developed by the group office and estates.

The supporting documents were provided to the audit team as well as information received by means of interviews and background investigation.

The documents and information were reviewed against the requirements and criteria based on MSPO 2530-3:2013 Part 3 General principles for Plantation and Organised Smallholders.

TUV NORD Malaysia has employed a risk-based approach in the audit, focusing on the identification of significant risks and reliability of the assessment and reporting.

In addition, the following reference was used as part of the assessment; the compliance of the requirements out of the guidelines applied was checked.

1. Malaysian Sustainable Palm Oil Part 3: General Principles for Plantation and Organised Smallholders audit guidance;

1.3. Appointment of team members and reviewer

A certification team consisting of one team leader was appointed. The onsite team members contributed to the review of documents, the assessment of the project activity and to the preparation of this report under the leadership of the team leader.

Qualification of the Lead Auditor: Terence Ang

Requirement Qualifications

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g. Environmental

Sciences, Life Sciences, Geological

Sciences, Natural Sciences,);

iii) Engineering, Process Technology;

iv) Energy Management, Quality Management;

v) Social Sciences and/or Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Diploma and Advance Diploma in Tourism Management

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process.

More than 8 years in sustainable related field







Requirement Qualifications

(e.g., sustainability, palm oil management; agriculture, ecology; social science)

Attended the MS 2530 series of standards training

Attended the MS 2530 internal training and successfully completed RSPO P & C LA, SCC, RSPO Next and ISCC-EU training.

Conducted at least three (3) MSPO or equivalent sustainability certification audits as Lead Auditor-in-training with a minimum of fifteen (15) man-days under the supervision of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes within the last two (2) years.

Has conducted 3 MSPO and equivalent sustainability certification (RSPO ) as lead auditor in training.

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Able to communicate in Bahasa Malaysia, English, and Chinese languages.

Field working experience in the palm oil sector, or demonstrable equivalent

1 year as Certifier and Reviewer for RSPO P&C and SCC schemes

1 year as Wildlife (Biodiversity) and Ecotourism Consultant (EMS &HCV)

3 years as Wildlife Guide (Licensed issued by Ministry of Tourism, Malaysia)

6 months as Field Technician for University of Montana on HCV

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

1 year auditor for RSPO and MSPO schemes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System


Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes

Successfully completed SA 8000 Basic training and 1 year auditor for RSPO and MSPO schemes

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)


Good Milling Practices for example palm oil milling working experience or demonstrate equivalent.

Trainee auditor for RSPO and ISCC in refinery and mill.

Qualification of Team Members







Requirement Assessor Qualification Compliance

Post-secondary education, college or university diploma / degree in one of the following

i) Agriculture;

ii) Science & Technology (e.g.

Environmental Sciences, Life

Sciences, Geological Sciences,

Natural Sciences,);

iii) Engineering, Process

Technology;

iv) Energy Management, Quality

Management;

v) Social Sciences and/or

Anthropology;

vi) Business Management; or

vii) Other relevant related fields

Leong Sak Kuan Bachelor of Science (Physic) Carleton University, Ottawa,

Canada

Yes

Mohamad Norhisham Bin Mohd Salleh

Bachelor of Applied Science Majoring in Agrobiology from Universiti Sains Malaysia, Malaysia.

Yes

At least five (5) years of work experience in the oil palm sector or related field in consultancy / auditing of similar industry or equivalent related to and as necessary for the certification process. (e.g., sustainability, palm oil management; agriculture, ecology; social science)

Leong Sak Kuan More than 6 years as quality manager for ISO 14001 schemes.

Yes


5 years working experience in estate and operation management

Yes

Attended the MS 2530 series of standards training

Leong Sak Kuan Attending MSPO in house training

Yes


Attending MSPO in house training

Yes

Conducted a minimum six (6) on-site audits for a total of at least 20 man-days of audit experience as an auditor-in-training under the direction and guidance of a qualified Lead Auditor for MSPO or equivalent sustainability certification schemes.

Leong Sak Kuan Qualified as auditor base on audit log

Yes


Qualified as training auditor base on audit log

Yes

A good knowledge in handling and evaluating sources of information and data. Able to communicate in Bahasa Malaysia or any other local language.

Leong Sak Kuan Bahasa Malaysia, English and Mandarin

Yes


Bahasa Malaysia and English.

Yes

Field working experience in the palm oil sector, or demonstrable equivalent

Leong Sak Kuan Working experience as auditor for RSPO and MSPO scheme.

Yes


Working experience in plantation

Yes







Requirement Assessor Qualification Compliance

Good Agricultural Practices (GAP), and Integrated Pest Management (IPM), pesticide and fertilizer use

Leong Sak Kuan 3 years in RSPO P&C related to GAP and IPM

Yes


5 years in estate operation

Yes

Health and safety auditing on the farm and in processing facilities, for example OHSAS 18001 or Occupational, Health & Safety Assurance System

Leong Sak Kuan Successfully completed OHSAS 18001 training and Working experience as auditor for ISO 14001 and ISO 9001

Yes


Involve in RSPO P & C auditing

Yes

Worker welfare issues and social auditing experience, for example with SA8000 or related social or ethical accountability codes

Leong Sak Kuan Working experience as auditor for RSPO and MSPO scheme

Yes


Successfully completed SA 8000 training

Yes

Environmental and ecological auditing, for example experience with organic agriculture, ISO 14001 or Environmental Management Systems (EMS) or High Conservation Value (HCV)

Leong Sak Kuan Successfully completed ISO 14001 training and auditing experiences

Yes


Successfully completed ISO 14001 training

Yes

Good Milling Practices for example palm oil milling working experience or demonstrate equivalent.

Leong Sak Kuan Has involved in auditing for RSPO P & C with SCC element.

Yes


Has involved in auditing for RSPO SCC standard.

Yes







2. METHODOLOGY

The audit approach consists of the following steps:

Contract review;

Appointment of team members and technical reviewer;

Contact client for relevant documentation according to the applicable MSPO standards;

Audit planning;

Background investigation, desk review of submitted documents;

On-Site assessment, inspections, interviews with operational personnel, stakeholders and its contractors; review of documentation;

On-site reporting

Resolution of non-conformance (NC) (if any)

Draft audit reporting

Technical review

Final audit reporting

Peer review

Address Peer Review Comments (if any)

Final approval and issuance of certificate.

Stage 1:

Stage 1 was conducted on 1/03 to 02/03/2017 that covers desk review activities:

Background investigation

Review of documentation established but not limited to below

o Group Operating Policies

o Estate maps

o Land titles

o Standard Operating Procedures including Agricultural Manual

o Work Flow Charts

o Operating licenses and approvals

o Operating records

o Training records

o Applicable Legislation Documents

Interviews of relevant operation personnel

Assessment reporting

Stage 2 – Certification Audit:

Stage 2 certification audit was conducted on 11/07 to 12/07/2017 covers the following activities but not limited to below:







Onsite visit, observations and inspections of estate facilities and field activities;

Interview operation personnel and field workers for understanding for the work assigned;

Reviewed revised and updated documentation established and implemented;

Operating records;

Training records;

Reports established;

Work plans established;

Stakeholders consultation meeting;

Review and closed out of non-conformance raised during stage 1 audit;

Assessment reporting;

For list of all reviewed documents refer to chapter 7, Table 7-1.

For list of personnel participated in the audits refer attendance sheet and Table 7-3.

On-site Assessment

The audit of the estates was conducted according to the MSPO 2530-3:2013 Part 3 for Plantation and Organised Smallholders.

The methodology for collection of objective evidence included physical site inspections, observation of tasks and processes, interviews of stakeholders, communities, staff, workers and their families, review of documentation and data. Checklists and questionnaires were used to guide the collection of information. The comments made by external stakeholders were also taken into account in the assessment.

For the stage 2, the selected estates was based on the formula S = 0.8√n where S = sample size and n = number of estates which is in accordance to MSPO certification procedure.

Based on the formula, the sample size for the estate S = 1, therefore round up to the next integral of 1estates.Thus, a total of 1estateswereselectedfor the onsite assessment and inspection as listed in Table 2-1 below:

Table 2-1: List Of Estates Selected

Name of Estate Coordinates

Pelipikan Estate 6°21'37"N; 116°48’04”E

Non-conformance:

On the basis of the desk review, evidences presented during the audits as well as from the onsite visits non-conformance (NC) as well as Observations (OBS) may be raised during the audit.

Non-conformance shall be addressed and responded with 60 days from date of audit and OBS will be reviewed and verified during the next audit.







3. ORGANISATION INFORMATION

The certified estates are owned by Hap Seng Sdn.Bhd. located at Kota Marudu area, Sabah.

The details of the Pelipikan estates as below:

3.1. Production volume

*includes productive and non-productive area (infrastructures, conservation, HCV, housing & office compound use, set aside area etc.)

**Immature + Mature Area

3.2. Planting Program for Each Estate

Year / estate 1999 2000 2001 2003 2005 2006 2010 2011

Pelipikan Estate

101.80 314.10 91.80 56.20 208.50 21.50 372.00 322.50

Total Mature 101.80 314.10 91.80 56.20 208.50 21.50 372.00 322.50

Total Immature

- - - - - - - -

Total Oil Palm 101.80 314.10 91.80 56.20 208.50 21.50 372.00 322.50

3.3. Replanting program for each estate

Year of replanting

Planted area (ha) in each estate Total area to be replanted

(ha)

No planned replanting for the next few years. The palms are below 20 years old. See 3.2

TOTAL

3.4. Maps of Company Location, Plantations and Organised Smallholders

Name of Estate Location Coordinates

Pelipikan Estate Jalan Marak Parak, Simpang Kampung Sunsui, Kota Marudu, Sabah

6°21'37"N 116°48’04”E

Name of Estate Area (Ha) Projected FFB Production (mt)

(July 2017 to June 2018) Total* Production**

Pelipikan Estate 2,091.61 1,488.40 20,257.78

Total FFB



















4. CERTIFICATIONASSESSMENT

4.1. Stage 1:

The Stage 1 audit was conducted on 1/03 to 02/03 2017 at Pelipikan Estate.

The objective of the Stage 1 is to assess the readiness of the documentation established and implemented in accordance to MSPO 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

According to the Certification Scheme, an initial due-diligence audit for operators which are entering into the MSPO system, and which

do not have any certification or

those having management system certification e.g. ISO, COP.

These organizations shall undergo both Stage I and II audit

The audit team has applied the Malaysian Sustainable Palm Oil Part 3: General principles for oil palm plantations and organized smallholders audit guidance to assess the established documents against the Principles and Criteria of the standard.

The Stage I audit was conducted on 01/03 to 02/03/10`7 at Pelipikan Estate covering the following activities:

Onsite interviews and inspections;

Review of documentation for compliance to relevant P & C requirements for plantation and mill;

Reporting of issues concern during Stage I audit;

4.1.1. Stage 2 – Certification audit:

The Stage II audit was conducted on 12/03 to 13/03/2017 covering Pelipikan Estate since there is only estate in the company.

During the Stage 1 audit, 25 findings were raised. The evidences submitted for the closed out of the non-conformances were by means of desk review prior to the stage 2 audit. The effectiveness of the implementation was further verified during this audit.

Prior to the onsite stakeholder consultation, a desk review was conducted by means of web search at relevant NGOs or media website do not show any adverse practice which could have impact to the certification. There is no complaint raise or detected through the web search. 3 aspects have been reviewed in the desk reviewed including social, environmental include HCV and other matter including conflict. Other issue detected during the stakeholder consultation have been captured below.

4.2. Stakeholders’ Consultation

A stakeholders’ consultation meeting was conducted on 12/03/2017 to gather information from the local communities in accordance to Certification Scheme and Stakeholder Consultation requirements.

The topics of discussion are as below:

1. Introduction of Hap Seng – Pelipikan Estate applying for MSPO certification.

2. Development of oil palm plantations by Hap Seng – Pelipikan Estate

3. Community service and support provided by Hap Seng – Pelipikan Estate

4. Wildlife management and wildlife corridor established by Hap Seng – Pelipikan Estate

5. Type of wildlife sighted at Hap Seng – Pelipikan Estate plantations and wildlife corridor.







6. Local communities’ development.

The following relevant Principles & Criteria of the applied standard have discussed during the stakeholders’ consultation:

1. Principle 2 Criteria 2 Indicator 1: Consultation and Communication with stakeholders:

The stakeholders could confirm they have attended meetings with Pelipikan personnel on MSPO certification.

2. Principle 4 Criteria 2 Indicator 3 & 4: A complaint form should be made available at the premises, where employees and affected stakeholders can make a complaint

The stakeholders’ advice they have been informed a logbook and form is available to lodge any complaints or suggestions is available at the office.

3. Principle 4 Criteria 3 Indicator 1: Contribute to local development in consultation with the local communities.

The stakeholders could confirm the company has provided assistance and support to communities.

4. Principle 6 Criteria 4 Indicator 1: Where contractors are engaged, they shall understand the MSPO requirements and shall provide the required documentation and information

The stakeholder who provides maintenance and service could confirm briefing on MSPO requirements have been provided.

There are issues raised during the stakeholder’s consultation in terms of tenure and/or use rights, social or environmental aspects of management and operations that need to be addressed by the company. It can be concluded the relevant Principles and Criteria clauses of the applied standard are in compliance.

The list of stakeholders who attended the meeting refer to Table 7-3

Items Subject discussed Audit team findings Company response and proposed action to be

taken

1 Any information from Company in regards to the MSPO/RSPO audit?

During the interview with the stakeholders, they are aware of MSPO and aware of Pelipikan involvement in the certification.

Positive comment

2 Land Conflict Kampung Talas and Kampung Pelipikan have raised up on the context of land dispute between the villages and the company.

As for this It was confirmed that the law suit between Kampung Talas and Hap Seng Plantation have been resolved. The court ruled in favour of Hap Seng.

Kampung Pelipikan however have confirmed that the company has mention to them they will return the dispute area to the them. The disputed area was later found to be within the village boundaries and this have communicated to the village

Since meeting took place in year 2017 prior to the audit, Hap Seng Holding may considered additional meeting for more clear information to be provided and consider participatory mapping on the process.








taken

head and confirmed in the consultation

2 issues raised by the Pelipikan villages

1. A proper documentation of

the handover of the area

back to the villagers.

2. Since Pelipikan Estate have

been harvesting FFBs from

the dispute area, the

villagers hope the road to

that area could be repaired

as it have been on ongoing

for 8 years.

3 Understanding of “NCR Land”?

Local villagers consist of both NT land and leased land.

Refer above for the land dispute. Both villagers have admitted their situation. In term of land cutting into forest reserve the issue have been acknowledged. Since Hap Seng is a RSPO member they are in the process of remediation and compensation

No action

4 Economy / livelihood

Is there any impact on livelihood after the introduction of MSPO/RSPO?

The villagers have confirmed that livelihood have been improved since involved in the palm oil plantation. They also acknowledged improvement in income.

Positive Comment

5 HCV and environmental understanding

Representative from villagers i.e.. Kampung Piso, Kampung Pelipikan and Kampung Sunsui confirmed that they were informed and have been provided information on the HCV and RTE by Pelipikan estate. They confirmed that the estate has provided information on the legal requirement on the Wildlife and prohibition of poaching in the area.

Positive Comment

6 Awareness towards species, habitats, and high conservation values?

7 Are there any plantation or mill management

Happy plantation has informed that the subcontractor on the FFB transportation refuse to

Required Action. Hap Seng may provide communication on this matter.








taken

practices that affect you?

provide services and contract due to differences in practice. This however was only communicated between the transporter and Happy plantation.

8 Do you have any suggestions for management?

The smallholders hoped more communication and respond form the estate to be improved.

Required Action

9 New Practices prior information to local villages

It was mention by both local villages and Happy Plantation that they are less aware of new installation including new guards post. However, there is no restriction for them to move around. The local prefer if the practice can be consulted with them prior to the implementation.

Happy plantation mentions some time at night when they require to make telephone communication, the guard is not around for emergency case where they may need to pass the guarded area.

Point of information

10 Improvement from the company

All stakeholders wish that the Pelipikan Estate can assist in road maintenance.

Kampung Sunsui estate has acknowledged that Pelipikan Plantation is taking proactive action in assisting them. Pelipikan has provide transportation for their children to school. However, the road they use will pass a stream, the road was nearly washed out. Their concerns are on the children safety.

Pelipikan Plantation has make effort to have security guard patrol the area to ensure that all the appointed guards are in the respective area.

For the stream crossing issue, Pelipikan will investigate the area and will take necessary action.

11 Public announcement Public announcements have been placed in the website of TUV NORD and relevant notice board in the estate. As of closing meeting, there is no comment received from the member of public.

The public announcement duration was one month prior to the date of audit starts.







4.3. Status of Non-Conformities Previously Identified

X The stage 1 audit findings of this system have been reviewed, in particular to assure appropriate correction and corrective action HAS implemented to address identified audit findings. Details of the follow up action taken on stage 1 audit findings were recorded in the Stage 1 audit report.

The last audit results of this system have been reviewed, in particular to assure appropriate correction and corrective action HAS implemented to address any nonconformity identified.

The last audit results of this system have been reviewed, in particular to assure appropriate correction and corrective action HAS NOT been implemented effectively. Non-conformity will be re-raised.

Not applicable. No non-conformity raised in previous audit.

Note 1: If a minor non-conformity raised in last audit, is not closed out, then this finding will be re-raised to a Major non-conformity.

Note 2: All minor NCs raise in last audit are required to capture in this report together with the closing of the non-compliance.







5. CONCLUSION

Hap Seng Sdn. Bhd. has commissioned TUV NORD (Malaysia) Sdn. Bhd. to conduct Stage 2 audit for its Pelipikan estate according to MSPO 2530-3:2013 Part 3 General principles for Plantations and Organised Smallholders.

Detail of Audit Findings Identified During This Audit

This section gives an overview of the non-conformities raised during this audit.

AUDIT OUTCOME

MAJOR Non-Conformities 7

MINOR Non-Conformities 0

OBSERVATION 3

Non Conformity Number <01>

MSPO – Certification Stage 2

Location Pelipikan Estate

Description of Finding / Objective Evidence:

Clause 4.1.2.2 – Root causes and corrective actions were not recorded in the verification report for internal audit.

Classification Major Minor Observation

Deadline for

implementation 11/09/2017

Root Cause Analysis (by company):

Lack of understanding by Internal Audit or (MSPO) on the correct format that shall be established in the verification report of internal audit.

Correction (by company):

To immediately insert the root cause and corrective actions into the verification report for internal audit report.

(Attachment 1.1)

Corrective Action (by company)

To ensure the independent Sustainability Team to cross-check the compliance on MSPO principle 4.1.2.2 at 6-monthly interval.

Review of Correction / Corrective Action

2nd Internal audit by Agronomy department to check the preparation have been reviewed.

2 Major 1 minor have been raised in the internal audit. The new template has included the detail of root cause, correction and corrective action plan. Example as in below

Finding: Training on RTE was not conducted yet

Root Cause: Missed out for RTE training

Correction: To immediately conducted the RTE training to all workers

Corrective action plan: To regularly educate the workers at yearly basis as per training program and during muster.

Closed: Yes No Site verification : Yes No








Name of Auditor:

Leong Sak Kuan

Date of Closure:

02/08/2017

Review of Implementation for Major NC (where applicable)

Closed: Yes No

Name of Lead Auditor / Auditor:

Date of Closure:





Clause 4.4.5.1 - Hap Seng have practices keeping passport of their worker as safe keeping. However, passports keeping are without official self-declaration of willingness by workers to allow the estate to hold their passport. There is no evidence that the passport is hold by management on workers own willingness.

The estate unable to demonstrate the right of their worker to choose is respected


Deadline for



Estate is practising verbal communication on willingness of workers to allow company for safe keeping of the passport.


Estate is immediately practising written concern on workers for willingness to allow company for safe keeping their passport.

(Attachment 2.1, 2.1 A, 2.1 B, 2.1 C, 2.1 D, 2.1 E, 2.1 F, 2.1 G, 2.1 H, 2.1 I, 2.1 J, 2.1 K, 2.1 L, 2.1 M, 2.1 N, 2.1 O, 2.1 P, 2.1 Q, 2.1 R, 2.1 S, 2.1 T, 2.1 U, 2.1 V, 2.1 W, 2.1 X, 2.1 Y, 2.1 Z, 2.1.1 A, 2.1.1 B, 2.1.1 C, 21.1 D, 2.1.1 E, 2.1.1 F, 2.1.1 G, 2.1.1 H, 2.1.1 I, 2.1.1 J, 2.1.1 K, 2.1.1 L, 2.1.1 M, 2.1.1 N, 2.1.1 O, 2.1.1 P, 2.1.1 Q, 2.1.1 R, 2.1.1 S, 2.1.1 T, 2.1.1 U, 2.1.1 V, 2.1.1 W, 2.1.1 X, 2.1.1 Y, 2.1.1 Z, 2.1.2 A, 2.1.2 B, 2.1.2 C, 2.1.2 D, 2.1.2 E, 2.1.2 F, 2.1.2 G, 2.1.2 H, 2.1.2 I, 2.1.2 J, 2.1.2 K, 2.1.2 L.


The independent Sustainability Team to cross – check the compliance of estate on workers passport keeping at 6 monthly intervals.


Corrective action reviewed and accepted. Foreign workers have bene consulted and sign the acknowledgement. Scan copy of the agreement sighted and reviewed.

Corrective action on compliance check within 6 month interval will be evaluated in the next assessment









Name of Lead Auditor:

Terence Ang

Date of Closure:

02/08/2017


Closed: Yes No


Date of Closure:

Non Conformity Number <03 >




Clause 4.4.6.2 - There are no training records detected for Rickson Bin Majon, workshop attendant and Shergius Mathias, mechanics for their respective works.


Deadline for

implementation 11 September 2017


Management missed out workshop attendant and mechanics to be included for the training program.


To immediately conduct training for workshop attendant and mechanics.

(Attachment 3.1)


Management to establish plan that include targeted person for each training planned and 6 monthly cross – checked by independent Sustainability Team.


Training for workshop workers has been conducted. Training programme for six month onwards has been established and reviewed.

Corrective action on implementation of training programme within 6 month will be evaluated in the next assessment.


Name of Auditor:

Ang Wai Sheng

Date of Closure:

04/08/2017








Non Conformity Number <03 >

Closed: Yes No


Date of Closure:





Clause 4.5.1.1 - Recycling activities were not carried out for domestic and office waste as stated in the Environment Impact Assessment Plan.


Deadline for



Lack of training to staff and workers regarding the 3R activities.


Estate to conduct 3R training for staff and workers immediately.

(Attachment 4.1 & 4.1 A)


To include the 3R training plan and 6-monthly cross-checked by independent Sustainability Team.


The corrective action for the training as a correction is accepted and closed.

The corrective action will be reviewed in the next assessment. Therefore this NC is considered closed.


Name of Auditor:

Leong Sak Kuan

Date of Closure:

02/08/2017


Closed: Yes No


Date of Closure:












Clause 4.5.1.5 – A training programme for environmental management and improvement plan was not established


Deadline for



Lack of understanding by estate on the requirement of training program for environmental management and improvement plan.


Estates immediately establish the training program for environmental management and improvement plan.

(Attachment 5.1)


The independent Sustainability Team to cross – check the implementation of required training program at 6 monthly interval.


Environmental Impact Assessment-Management Plan and Improvement Plan Training was reviewed for the next six months. All planned August training have been conducted and training record have been reviewed.

4 training scheduled in August have been conducted are EIA training for Harvesting, Spraying, Manuring and Pest infestation control.

Corrective action on implementation of training programme within 6 month will be evaluated in the next assessment.


Name of Auditor:

Leong Sak Kuan

Date of Closure:

04/08/2017


Closed: Yes No


Date of Closure:












Clause 4.5.6.1 - A HCV assessment has been conducted. However, the report does not show evidence of classification and no evidence of proper identification. River was included and made as riparian zone. However, areas bordering with forest reserved has not been included in the assessment. Similar to other site of the plantation. Weekly evaluation book was reviewed and records for bird species observed. It is considered to be insufficient to ensure classification and identifying of a HCV site.

The estate has failed to include the aspect of “relevant wider landscape consideration” during the assessment.

The management planning shall be updated after reassessment have been conducted under clause 4.5.6.2


Deadline for



Lack of understanding on the evidence to be shown in the HCV report for classification and identification a HCV site.


The evidence of classification and identification a HCV site was immediately included in the HCV report of Pelipikan Estate

(Attachment 6.1)


The independent Sustainability Team to cross-check the implementation of requirement to include evidence of classification and identifying at HCV site


Action plan and correction has been reviewed. A plan to ensure all sites will be surveyed within the next 6 months’ time have been demonstrated. New sites have been included for the assessment. HCV classification has been identified for Sg Natu and Sg Pelipikan. The NC is considered to be closed.

The effectiveness of the implementation will be reviewed in the next surveillance.



Terence Ang

Date of Closure:

02/08/2017


Closed: Yes No


Date of Closure:












Clause 4.6.1.1 - Chemical mixing records were not available to determine whether the chemicals were mixed according to the formula and surfactant was not used for circle and paths spraying as required in the Oil Palm Agricultural Policy.


Deadline for



Lack of understanding on the requirement of chemical mixing records formula at workplace of spraying activity in additional to the OPAP


The chemical usage quantity and chemical mixing formula as per OPAP were immediately made available in the spraying records and workplace (i.e premixing area respectively).

(Attachment 7.1)


The independent Sustainability Team to cross – check the improvement on the availability of chemical usage records and chemical mixing formula (as per OPAP) at 6-monthly interval


Chemical mixing records have been reviewed. This is considered sufficient to address rthe ecord to determine whether the chemicals were mixed according to the formula and surfactant was not used for circle and paths spraying as required in the Oil Palm Agricultural Policy. The evidence provided is considered sufficient to close the NC.

Actual implementation will be reviewed in the next surveillance.



Leong Sak Kuan

Date of Closure:

02/08/2017


Closed: Yes No


Date of Closure:

Non Conformity Number <OBS 1>




Clause 4.1.3.1 – The continuous suitability, adequacy and effectiveness of the requirements for effective implementation of MSPO and decision on any changes, improvement and modification could be reviewed in a single management meeting instead of several separate meetings.









Deadline for

implementation







Leong Sak Kuan

Date of Closure:


Closed: Yes No


Date of Closure:

Non Conformity Number < OBS 2>




Clause 4.2.2.1 - The procedure to established and communicate with relevant stakeholder are in place. The company have taken the action to include and invite all stakeholder in the list including NGO during their stakeholder meeting. During the process there is some group may not attend although reminder and follow up phone call have been made. As a result some category were not represented.

The company can consider allowing other mean of communication with the stakeholder and not restricted to telephone or face to face meet up in order to ensure all category of stakeholder are covered. As the stakeholder consultation just took place and the follow up is still in progress, this is raised as observation to check for full implementation in the next surveillance.








Non Conformity Number < OBS 2>

Deadline for

implementation






Name of Lead Auditor:

Terence Ang

Date of Closure:


Closed: Yes No


Date of Closure:





Clause 4.5.2.2 - Usage of diesel obtained from external sources by contractors could be included when monitoring consumption and energy efficiency.


Deadline for

implementation













Name of Auditor:

Leong Sak Kuan

Date of Closure:


Closed: Yes No


Date of Closure:

The 7 Major NCs raised was closed out successfully. Furthermore, no Minor NC and 3 Observations raised in this audit will be verified in the next surveillance audit.

From the review of the standard operating procedures, relevant forms, work flow charts established and implemented; the subsequent background investigation and interviews conducted during this surveillance audit have provided TUV NORD (Malaysia) with sufficient evidence on the fulfilment of the applied standard Principles & Criteria.

In conclusion the certified unit has been established, implemented and continued to improve in managing the estates are in line with the Principles & Criteria of the applied standards of MS 2530- 3:2013 Part 3.

In any audit is based on sampling within an organization’s management system and therefore is not a guarantee of 100 % conformity with the requirements.

As a result of this stage 2 certification audit for Pelipikan estate, the audit team confirms that:

Total certified number of estates: 1

Total certified production area: 2,091.6 Ha

Certified FFBs July 2016 to June 2017: 18,581.43 mt

Projected Certified FFBs July 2017 to June 2018: 20,257.78mt







6. RECOMMENDATION

The audit team conducted a process-based audit focussing on significant aspects/risks and objectives required by the standard(s). The audit methods used were interviews, observations, sampling of activities and review of documentation and records.

The structure of the audit was in accordance with the audit plan included in to this summary report as annex.

The audit team concludes that the organisation has established and maintained its management system in line with the requirements of the standard(s) and demonstrated the ability of the system to achieve requirements for products and/or services within the scope and the organisation’s policy and objectives.

Therefore the audit team recommends that, based on the results of this audit and the system’s demonstrated state of development and maturity that this management system certification be

X Recommended for Certification

Recommended for Continuity of Certification

Recommended for Suspension of Certification

Subang Jaya, 28/08/2017

Subang Jaya, 28/08/2017

Ang Wai Sheng (Terence)

TUV NORD Malaysia Sdn. Bhd.

Audit Team Leader

Cheong, Chun Yuen (Robert)

TUV NORD (Malaysia)Sdn. Bhd.

Technical Reviewer







7. REFERENCES

Table 7-1: Documents provided by Hap Seng

Client Reference Document

Sustainable Agriculture Policy dated 21 February 2017

Internal Audit Memo dated 4 January 2017

Internal Audit Report dated 30 January 2017

Social Impact Assessment dated 14 April 2017

Equal Opportunity Policy dated 22 March 2016

Freedom of Association and Collective Bargaining Policy

Occupational Safety and Health Policy dated 1 April 2015

Human Right Policy dated 1 October 2016

Standard Operational Procedure on CSFFB Traceability dated 2 January 2017

Carta Aliran Laporan Aduan Hap Seng Plantation Sdn. Bhd.

Organisational Safety and Health Meeting minutes dated 14 February 2017

Workers Employment Cards

Employment Contracts

Environmental Charter dated 2 April 2014

Environmental Improvement Assessment dated

Water Management Plan dated 14 April 2017

Hap Seng Plantation OPAP date January 2016







Client Reference Document

Contract Completion Certification

Pelipikan Estate Budget 2017

Agronomy Advisory Report 2016 dated 24 August 2016

List of Legal Register updated July 2013

HCV assessment Report dated 14 April 2017

Table 7-2: Background investigation and assessment documents

Reference Document

Malaysian Sustainable Palm Oil Part 4: General Principles for Palm Oil Mills Audit Guidance

MSPO Certification Scheme Doc. No: MPOB/MSPO/CS/01

Environmental Quality Act & Regulation –Act 127

Environmental Quality (Scheduled Wastes) Regulations 2005

Environmental Quality (Clean Air) Regulations1978

Factories and machinery Act,1967

Factories and machinery act with regulations – Act 139

Estate Hospital Assistance(registration)-Act 1965

Akta Keselamatan dan kesihatan Pekerjaan dan peraturan-peraturan-Akta 514

OSHA (Classification, labelling and Safety data Sheet of Hazardous Chemicals) Regulations 2013

Employment Act 1995

Employees Social Security Act 1969-Act 4 (Socso)

Land Ordinance 1972 (Cap.68)

Workers Minimum Standards of Housing & amenities Act 1990 Act 446







Reference Document

Malaysian Palm Oil Board Act 1997-Act 582

Minimum Wage Order 2016

Table 7-3: List Of Interviewed Persons And Stakeholders

No. Name Organisation / Function

1 Jubir Bin Mabaip Kg Piso representative

2 MettoMositoh Kg Pelipikan representative

3 Yip Choong Choy Happy Plantation

4 Ng ChiunCheh Happy Plantation

5 Joe Dokuyk Kampung Talas Representative

6 Law AikKok Happy Plantation

7 Juih B. Rasat Kampung Sunsui Representative

8 JumputTukameh Kampung Sunsui Representative

9 LamitSoligh Kampung Sunsui Representative

10 Mansus Sungai Perhilitan Kota Marudu







Distribution / Confidentiality / Rights of ownership / Limitations / Responsibilities / Audit Objectives

This report is sent to the certification body or bodies, the members of the audit team and the audit representative of the organisation. All documents (such as this report) regarding the certification procedure are treated confidentially by the audit team and the certification body. This audit report remains the property of the certification body.

An audit is a procedure based on the principle of random sampling and cannot cover each detail of the management system. Therefore nonconformities of weaknesses may still exist which were not expressly mentioned by the auditors in the final meeting or in the audit report.

The responsibility for continuous effective operation of the management system always rests solely with the audited and certified organisation. Salvo clause: The audit report will be left to the organisation at the end of the audit - subject to approval by the certification body. The independent release process may cause modifications or additions. In these cases a modified revision will be sent to the audited organisation.

The objective (goal) of the audit is to establish compliance of the management system of the aforementioned organization with the requirements of the aforementioned standard in order to achieve or maintain certification through an independent and accredited certification body. Identification of possibilities to improve the management system can also be a component of the audit and is considered simply to be an enhancement; it does not constitute consultancy or advice with regard to the management system.

Annex / Enclosures

Annex / corresponding audit documentation

P&C Audit Report / Checklist(s)

Audit Plan

Additional annexes, number

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