MY02023 Summary Report against RSPO MYNI Requirement for Sime Darby Plantation Sdn Bhd, SOU 23 Ulu Remis Page 1 1 OILPALM PLANTATION MANAGEMENT CERTIFICATION REPORT Certificate Nr: SGS-RSPO/PM-00722 Project Nr: MY01827 Validity Period: 11/04/2011 – 10/04/2016 Report Ref #: MY02023-05 Ulu Remis Public Summary Report Client: Sime Darby Plantation Sdn Bhd RSPO membership #: SPO 537872 Web Page: http://plantation.simedarby.com/ Address: Head office: Wisma Guthrie 21 Jalan Gelenggang Bukit Damansara 50490 Kuala Lumpur Contact: Norazam Abdul Hameed Asst Vice President 1 PS-RSPO Unit – TQEM Tel: +603-2093 2140 Email: [email protected]Country: Malaysia Plantation Unit being Evaluated SOU 23, Ulu Remis, Layang-layang, Johor. Total Plantation Area 12,947 Hectare Company Contact Person: Mr. Chandrasegaran Ettikkan SOU Chairman Address: Ladang Ulu Remis, P.O Box 103, 81850 Layang-Layang, Johor Tel: +6077527107 Fax +6077526353 Email: [email protected][email protected]Evaluation dates: Main Evaluation 12 – 16 January 2009 Surveillance 1 Surveillance 2
3. OTHER OIL PLAM PLANTATIONS OWNED BY THE COMPANY AND PLAN FOR CERTIFICATION UNDER RSPO P&C.......................................................................................... 10
4. PREPARATION FOR THE EVALUATION ............................................................................. 11
8. DETAIL OBSERVATION AND FINDINGS UNDER EACH OF THE RSPO- MY NWIG 5 INDICATORS................................................................................................................................ 29
PRINCIPLE 1: Commitment to transparency....................................................................... 29
PRINCIPLE 2: Compliance with applicable laws and regulation.......................................... 29
PRINCIPLE 3: Commitment to long term economic and financial viability ........................... 31
PRINCIPLE 4: Use of appropriate best practices by growers and millers: ........................... 31
PRINCIPLE 5: Environmental responsibility and conservation of natural resources and biodiversity 36
PRINCIPLE 6: Responsible consideration of employees and of individuals and communities affected by growers and mills................................................................................................. 39
PRINCIPLE 7: Responsible development of new plantings ................................................. 41
PRINCIPLE 8: Commitment to continuous improvement in key areas of activity ................. 42
10. ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS............................................................................................................ 44
APPENDIX 1: RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS ......................... 45
APPENDIX 2: RECORD OF Corrective Action Requests (CAR) Issued........................................ 46
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List of Tables
Table 1: Summary of CPO and PK production by Ulu Remis mill ................................................... 7
Table 2: Summary of production area and annual production of Fresh Fruit Bunches (FFB) by Estates............................................................................................................................................ 7
Table 3: Legal land ownership of SOU 23...................................................................................... 8
Table 4: Summary of team member’s experience ........................................................................ 11
Table 6: Production and 'footprint' area of SOU23 component units.............................................. 14
Table 7: Age profile of the estates under SOU 23 ......................................................................... 14
Table 8: Household changes at state, district and mukim from 1980 to 2000. ............................... 16
List of Figures
Figure 1: Rainfall and evapo-transpiration at SOU23. ................................................................... 19
List of Maps
Map 1: Component units and mill at SOU23, Ulu Remis ............................................................... 15
Map 2: Landuse in the region around SOU23, 2002...................................................................... 16
Map 3: landform, original habitat, reserves and local mukims. ...................................................... 17
Map 4: Regional slope and drainage model (30m resolution)........................................................ 18
Map 5: Major and minor streams in SOU23 .................................................................................. 27
List of Photos
Photo 1: SOPs posted at the mill .................................................................................................. 22
Photo 2: Workers used basic PPEs but improvements in various aspects are required ................ 23
Photo 3: Old, uncollected fruit. No transparent mechanism for capturing direct production losses and improvements due to better labour management. .................................................................. 23
Photo 4: Stream siltation as evidence of soil erosion from fields. .................................................. 24
Photo 5: Nutrient loss through soil water and run-off discharging to streams ................................ 25
Photo 6: Another crown lost to fungal damage.............................................................................. 25
Photo 7: Example of management of waste disposal to land. Note un-separated wastes. ............ 25
Photo 8: Disposal to land excavated sediments from water-borne mill waste. ............................... 26
Photo 9: Streams disturbed by excessive sediments loose biological capacity to attenuate pollutants. ..................................................................................................................................... 27
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LIST OF ABBREVIATIONS
CAR Corrective Action Request CHRA Chemical Health Risk Assessment CPO Crude Palm Oil DID Department of Drainage and Irrigation, Malaysia DOE Department of Environment, Malaysia EFB Empty Fruit Bunch EIA Environment Impact Assessment EMS Environmental Management System EQA Environmental Quality Act ERT Endangered, Rare and Threatened species ESA Environmentally Sensitive Area FFA Free Fatty Acids FFB Fresh Fruit Bunches FR Forest Reserve Ha Hectare HCV High Conservation Value HDPE High Density Polyethylene IPM Integrated Pest Management ISO International Organisation for Standardisation IUCN International Union for Conservation of Nature and Natural Resources JCC Joint Consultative Committee JUPEM Jabatan Ukur dan Pemetaan Malaysia (Department of Survey and Mapping
Malaysia) K Potassium kW Kilowatt M Meter Mg Magnesium Mm Millimeter Mt Metric ton MYNI Malaysia National Interpretation N Nitrogen NGO Non Governmental Organisation OA Orang Asli (Indigenous People) OER Oil Extraction Rate OSH Occupational Safety & Health P Phosphate P & C Principles and Criteria PK Palm Kernel POME Palm Oil Mill Effluent PPE Personal Protective Equipment PT Pejabat Tanah (Coding for Pahang Land Office) SOP Standard Operating Procedures Sdn Bhd Sendirian Berhad (Private Limited) SEIA Social and Environment Impact Assessment Sg Sungai
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SGS Societe Generale de Surveillance SOP Standard Operating Procedures SPC Senior Plantation Controller USECHH Use and Standards of Exposure of Chemicals Hazardous to Health WHO World Health Organisation yr Year
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INTRODUCTION
The purpose of this exercise was to evaluate the operations of Sime Darby Plantation Sdn Bhd’s SOU 23, Ulu Remis, Layang-layang, Johor, Malaysia, against the requirements of the QUALIPALM Programme, the SGS Group’s certification programme for compliance to Roundtable on Sustainable Palm Oil (RSPO) P&C as prescribed under the Malaysia National Interpretation (2008) requirements.
1. SCOPE OF CERTIFICATION
The details of the Crude Palm Oil (CPO) mill and the oil palm plantations included in the scope of this assessment are presented in Table 1 and 2.
Table 1: Summary of CPO and PK production by Ulu Remis mill (July 2007 – June 2008)
Table 2: Summary of production area and annual production of Fresh Fruit Bunches (FFB) by Estates (July 2007 – June 2008)
The yield from the supply base estates were considered low based on the fact that close to 40% of the planted palms are below 8 years old which is under category of immature and young mature.
The Ulu Remis mill sourced FFB from the above mentioned group estates and a few other estates belongs to the Sime Darby Group which undergoing certification as well. Likewise, the estates sometime supply FFB to other oil mills within the Group.
2. COMPANY BACKGROUND
2.1 Ownership
SOU 23 estates are owned and operated by Sime Darby Plantation Sdn Bhd, among the largest player in oil palm industry in Malaysia.
Plantation area Name of estate Location
Production (ha)
Conservation (ha)
Average annual production of FFB
(mt)
Tun Dr Ismail Estate Rengam 2,332 6.8 31,240 Ulu Remis Estate Layang-layang 2,442 53.3 39,742 Pekan/Pekan Ropel Estate
Legal ownership of the land area within the scope of this assessment as follows:
Table 3: Legal land ownership of SOU 23
Estate Land Title # Registered owner Area (ha) Legal Purpose
Tun Dr Ismail Estate
5 Sime Plantation Sdn Bhd 2,405.93 Oil palm
Ulu Remis Estate
8 Kumpulan Temiang Sdn Bhd
2,598.38 Oil palm
Sembrong Estate
6 Sime Darby Plantation Sdn Bhd
1,791.78 Agriculture
Pekan/Pekan Ropel Estate
10 Pekan Plantation Sdn Bhd 3,237.60 Oil palm
Bukit Badak Estate
6 Kumpulan Linggi Sdn Bhd 3,245.14 Oil palm
2.2 Company History
The recent merger of Sime Darby Berhad, Golden Hope Plantations Berhad and Kumpulan Guthrie Berhad which was completed on November 27, 2007, establishes Sime Darby Plantation Sdn Bhd. Sime Darby Plantation Sdn Bhd represents one of the five core Divisions of Sime Darby Group and is involved in the following:-
� Oil palm cultivation
� Agribusiness & Food
� Research & Development
The Plantation Division spans across Peninsular Malaysia, Sabah and Sarawak in Malaysia and Kalimantan, Sumatera and Sulawesi in Indonesia representing a total of 524,626 hectares of planted oil palm.
The operations involve the management of 208 estates and 65 mills.
The Division’s downstream operations are represented in 15 countries namely: Malaysia, Singapore, Thailand, Vietnam, Japan, China, Germany, United Kingdom, Bangladesh, South Africa, United Arab Emirates, The Netherlands, Brazil, Canada and the United States of America.
Its business activities include the following:
� Edible oil refining
� Production of oils and fats products
� Oleochemicals
� Biodiesel
Alongside oil palm, the Division is also involved in agri-business activities and cultivation of rubber.
As an integrated oil palm company, Sime Darby Plantation’s business activities cover the whole spectrum of the value chain. Committed to sustainable development, the Company’s Upstream and Downstream activities adhere strictly to industry-proven Best Agricultural Practices.
In keeping with the aspiration of making a sustainable future real for everyone, Sime Darby Plantation Sdn Bhd claims to makes a conscious and concerted effort towards conservation and protection of the environment, the rehabilitation of forests, protection of wildlife and promotion of the well-being of the communities in which it operates.
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2.3 Organisational Structure
Organisation and management structure of the Sime Darby group and SOU 23, Ulu Remis are shown in Chart 1 and 2 below:
Chart 1: Organisation structure of the Sime Darby Plantation Sdn Bhd which shows that SOU 23 is under the management of South Johor Zone
Chart 2: Organisation structure of SOU 23 headed by a SOU Chairman
Head of Plantation (Upstream)
Head of Region South Peninsular
Tn. Hj. Mohd Ramlan
Executive Vice President
Head of Region North Peninsular
Head of Region Sabah/Sarawak
Head of Zone N. Sembilan
Head of Zone
South Johor Tn. Hj. Adahudinsa Munei
Head of Zone
North Johor
SOU 23
SSOOUU –– SSttrraatteeggiicc OOppeerraattiinngg Unit
SOU 22 SOU 24
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3. OTHER OIL PLAM PLANTATIONS OWNED BY THE COMPANY AND PLAN FOR CERTIFICATION UNDER RSPO P&C
The current verification exercise is undertaken only for SOU 23, Ulu Remis, Layang-layang, Johor. Sime Darby owns and operates 65 palm oil mills for processing FFB from its 208 oil palm estates located in Malaysia and Indonesia. The company has divided the estates and mills into Strategic Operation Units (SOU) as part of its approach towards meeting the requirements for certification under RSPO. In total, the company manages 65 SOUs.
Up to date, at least 5 SOUs have been certified under RSPO and several SOUs are at various stages of certification processes. The company’s time-bound plan for certification is summarised as follows:
Time line Name of SOU Certification status 2008 Jan – June)
SOU 28, 29, 30, 30b SOU 26
Certified Certified
2008 July – December
8 SOUs in Malaysia 4 SOUs in Indonesia
Undergoing assessment processes
2009 January – December
16 SOUs in Malaysia 7 SOUs in Indonesia
A number of SOUs are undergoing assessment
2010 January – December
13 SOUs in Malaysia 7 SOUs in Indonesia
2011 January – June
5 SOUs in Indonesia
The plan developed by Sime Darby is very challenging but the company has made good progress where a number of SOUs have been certified and several more are at various stages of certification process. The company has good infrastructure and resources as well as commitment from the top management to make the plan a reality. SGS is in the opinion that the plan made is reasonable and achievable.
The company has identified potential hurdles for certification of their SOUs in Indonesia where RSPO secretariat has been duly advised. The issue since has been resolved.
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4. PREPARATION FOR THE EVALUATION
4.1 Schedule
Following RSPO standard procedures, the assessment of SOU 23 was preceded by a public announcement and stakeholder consultation at least 4 weeks prior to field assessment. At least 38 key stakeholders were identified and contacted by SGS for their comments on the assessment to be carried out.
4.2 Team
Table 4 below provides the details of the audit members involved in the main evaluation.
Table 4: Summary of team member’s experience
Evaluation Team Notes
Team Leader
Environment and Social
Salahudin Yaacob has postgraduate degree in Environment and Natural Resources management currently head Natural Resources certification programme in SGS Malaysia. Trained as a botanist, the team leader has gathered more than 10 years of auditing especially in the forestry sector. As a lead auditor in forest management and chain of custody of forest products, he is well versed in certification process and management of certification scheme. Has participated RSPO Lead Auditor Training Course and conducted a number of RSPO audits in Malaysia.
Lead Auditor / Plantation Expert
Tunku Nazim Tunku Yaacob is a graduate in Ecology with more than 30 years experience in ecology and wildlife management. Tunku is a trained ISO 14000 lead auditor and expert in land use and management planning. Has gathered many years experience of auditing in forest management and other natural resources sector at national and international levels. Has attended RSPO Lead Auditor Training Course and conducted a number of RSPO relevant audits in Malaysia and Indonesia.
5. THE EVALUATION
The Main Evaluation was conducted in the steps outlined below.
5.1 Opening Meeting
An opening meeting was held at the conference room in Ulu Remis mill at Ulu Remis Estate. The scope of the evaluation was explained and schedules were determined. Records were kept of all persons that attended this meeting.
5.2 Document Review
A review of the main plantation management documentation was conducted to evaluate the adequacy of coverage of the QUALIPALM Programme requirements. This involved detailed examination of policies, management plans, systems, procedures, instructions and controls.
5.3 Sampling and Evaluation Approach
During the 4 days field evaluation, the audit team covered all five estates and the CPO mill within the scope of this assessment. Management documents both at the group as well as at the estate levels were reviewed. Standard operation procedures documented for the estate and the mill operations were also reviewed. Records of production, report, training etc were inspected.
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The audit team visited various sites where operations included: replanting, manuring, pesticide application, harvesting, environmental sampling, etc.
Discussions were held with the top estate managers as well as ground staff. Interviews were also held with workers and local communities living in and around the area.
5.4 Field Assessments
Field assessments aimed to determine how closely activities in the field complied with documented management systems and QUALIPALM 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.
As part of effort to cover more areas, the verification team sometimes split and worked independently. The areas visited on daily basis are provided in Table 5 below.
Table 5: Assessment schedule
Date Area visited Notes
12 Jan, 2009 Document review Documents for review were made available.
Opening meeting
Briefing on each estate and each mill were given by the respective manager.
Visit to KKS Ulu Remis
Mill design, OSH aspects, POME treatment, Environmental monitoring records, Licensing, traceability of CPO produced
13 Jan, 2009 Ulu Remis Estate
Sembrong Estate
Meeting with DID, Johor Bharu
Areas covered include harvesting area, chemical storage and spraying, workshop, line site waste management system, KTM land area, nursery etc. Interview with stakeholders and meeting with authority
14 Jan, 2009 TDI Estate
Bukit Badak Estate
Areas covered include boundary demarcation, harvest area, chemical spraying, HCVF, IPM, bufferzone, landfill and steep areas, replanting, line site and interviews with stakeholders.
Closing meeting Preliminary results of the assessment exercise were presented to the SOU 23 management.
5.5 Summing Up and Closing Meeting
At the conclusion of the field evaluation, preliminary findings were presented to company management at a closing meeting. Any areas of non-conformance with the RSPO requirement 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 before the following surveillance, otherwise they would be raised as a Major.
A record was kept of persons that attended this meeting.
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6. STAKEHOLDERS NOTIFICATION & CONSULTATION
A wide range of stakeholders was contacted 4 weeks before the planned evaluation to inform them of the evaluation and ask for their views on relevant oil palm plantation management issues. These included environmental and social interest groups, local government agencies and authorities as well as workers’ unions.
During the assessment meetings and discussions were also held with relevant stakeholders including workers’ union leaders, local community leaders, surrounding small holders, contractors as well as relevant authorities. Records of stakeholder comments received and SGS responds are as tabulated in Appendix 1.
The list of stakeholders who were contacted and interviewed is as follows:
1. Contractors/vendors/suppliers
Sanjev Engineering
Awan Timur Kluang
Kenanga Ikatan
Sabilah Holdings Sdn Bhd
Sykt New Kian seng
Tan Khoon Hup
Emtech Sdn Bhd
Base Wei Industrial Supplier Sdn Bhd
Proskima Sdn Bhd
Lien Yew Hardware
Sumber Sari Sdn Bhd
Gan Tyres Batteries
Oxygen Holding Sdn Bhd
Zincon Multi Trading
Advanced Business Computing
Layang Vista Sdn Bhd
Oceanic Chemicals & Instruments Sdn Bhd
Malayan Parts Sdn Bhd
Nalco Industrial Services
Apex Uniparts Sdn Bhd
Sykt Central Enginering Works Sdn Bhd
Scott & English Sdn Bhd
2. Local Community Head
UMNO Cawangan Ladang Pekan
Penghulu Layang-layang
Ketua Kampung – Kampung Paya
Ketua Kampung – Kampung Tengah
Ketua UMNO Cawangan Tun Dr Ismail
Imam Masjid Kampung Sahri
3. Authorities
4. Non governmental organisations
Jabatan Alam Sekitar – Kluang, Johor
Pusat Kesihatan Kecil – Layang-layang
Balai Polis Layang-layang
Jabatan Keselamatan dan Kesihatan Pekerjaan – Johor Bharu
Pertubuhan Keselamatan Sosial Negeri Johor
Lembaga Hasil Dalam Negeri Johor
Sekolah Rendah Kebangasaan Tamil Ladang TDI
Jabatan Pengairan dan Saliran Negeri Johor
WWF Malaysia Malaysian Nature Society
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7. BACKGROUND INFORMATION OF SOU 23
7.1 Introduction
This field inspection took place from the 12th to the 15
th, January, 2009 and covered all estates and
the mill in SOU23 Ulu Remis. The estates with their given production areas and gross areas as measured from maps derived from the satellite image are given in Table 6 below.
Table 6: Production and 'footprint' area of SOU23 component units
Estates in SOU23 Given planted area (ha)
Gross ‘foot print’ area taken from satellite image (ha)
Tun Dr Ismail Estate (TDI) 2,332 2,443.60
Ulu Remis Estate 2,442 2,678.57
Sembrong Estate 1,770 1,815.49
Pekan Estate 3,203 3,362.74
Bukit Badak Estate 3,195 3,244.58
SOU 23 total 12,942 13,545.00
The planted area is the area of concern for monitoring crop production while the gross area represents the ‘foot print’ of SOU23 and the area that would be of interest for this audit. Map 1 below illustrates the layout of the estates and the position of the mill at Ulu Remis in the main block with TDI Estate separated by the smallholdings around Kg. Bahru and Kg.Tengah.
Table 7: Age profile of the estates under SOU 23
Age category (year)
Ulu Remis (ha)
Bukit Badak (ha)
Sembrong (ha)
Pekan (ha)
TDI (ha) Total (ha)
0 – 3 0 499 0 404 0 904
4 – 8 605 844 228 1827 450 3,954
9 – 14 453 757 651 972 680 3,513
15 – 18 356 338 348 0 368 1,410
19 – 25 757 549 543 0 560 2,409
> 25 271 209 0 0 274 754
Total 2,442 3,195 1,770 3,203 2,332 12,942
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Map 1: Component units and mill at SOU23, Ulu Remis
Visits were made to the mill at Ulu Remis on the 12th. However, at the time of the visit, the mill was
not in operation as work was being done on the boilers. On the 13th, the estates at Ulu Remis and
Sembrong were inspected, followed by Tun Dr.Ismail and Bukit Badak on the 14th, and Pekan on the
15th. The estates at Simpang Rengam and Benut also send their crop to the Ulu Remis Mill, but
were NOT a part of this assessment exercise.
7.2 Landscape setting and considerations for sustainability
7.2.1 Landuse
In Map 2 below, the gross extent of the SOU23 estates is illustrated with regional land use dated 2002. SOU23 is a part of one of the larger contiguous areas of oil palm in the Peninsular. To the west of TDI Estate around Kg Batu Tuguh and FELCRA Simpang Rengam, there were still large areas of contiguous rubber in 2002, but for most of the areas surrounding the eastern block of SOU23 are now cultivated with oil palm. The only remaining forest to border SOU23 was in the hilly area to the north of Sembrong Estate. This used to be a mix of forest with rubber and market garden. The site is now been planted with dragon fruit and durian, with only a small, heavily disturbed forest patch remaining on the hilltop.
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Map 2: Landuse in the region around SOU23, 2002.
The nearest major area of natural vegetation is the Tambahan Hutan Rizab Kluang which is 5 km to the north and east of Pekan Estate. This forest area is also overlapped by the Rizab PERHILITAN Endau-Kota Tinggi - a protected area. This forest acts as the catchment for the Linggi Dam.
7.2.2 Household growth
Small holders have settled the land in the Hulu Benut area to the west, and around Layang Layang and the Sg. Sayong in the mukims of Rengam and Layang-layang to the south. The other neighbouring land holdings are mostly held by other commercial plantations. By 2000, statistical records indicate that the household growth in mukim of Rengam was increasing at above the rate for the district and state, but in mukim of Layang-layang, the population has reduced, indicating net out-migration. These are the mukims that contain SOU23. The rapid growth Ulu Benut and Ulu Sg. Johor up to the 90’s has not been sustained. The long-term population and settlement trend is a decline in rural households, with growth in urban areas. See Table 8 below.
Table 8: Population changes at state, district and mukim from 1980 to 2000.
Population.
1980 1991 2000 80-90 90-00
Johor 1,580,423 2,074,297 2,584,997 31.2% 24.6%
Kluang 179,791 224,950 255,601 25.1% 13.6%
Layang-Layang 12,071 12,731 12,544 5.5% -1.5%
Rengam 22,590 29,478 47,510 30.5% 61.2%
Ulu Benut 8,716 12,819 10,900 47.1% -15.0%
Kota Tinggi 114,267 174,188 192,336 52.4% 10.4%
Ulu Sungai Johor 21,525 30,457 34,808 41.5% 14.3%
Decade change
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7.2.3 The physical and biological environment.
Map 3: landform, original habitat, reserves and local mukims.
Map 3 above gives contours, rivers and model habitat types to illustrate the physical landform and ecology in the region around SOU23. Note the contours are drawn as quantile classes and not at equal intervals as this better illustrates the landform within each estate. By using the map model for original habitat, general regional information on soils and geology are captured.
7.2.3.1 Physical landform
SOU23 covers lowland hills with rolling hills. Most of the area is on mineral soils between 20 and 40 metres above sea level, with a few hilltops exceeding 100m. From Map 3: above, it can be seen that the eastern part of Pekan Estate and southern part of Ulu Remis Estate have potential for organic soil development in the flood plain areas of the Sg. Remis and Sg. Pengilli. The rest of the estates would be on Red and Yellow latosols derived from acid igneous parent material. Most of the SOU23 area has a slope below 5°. See Map 4 below.
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Map 4: Regional slope and drainage model (30m resolution).
Most of Ulu Remis and Pekan Estates are effectively flat with slopes that probably do not exceed 10°. At TDI Estate, the western draining areas have some slopes with local potential to exceed 25°. Sembrong and Bukit Badak Estates have proportionately more slopes exceeding 10° and with the potential to exceed 25°. Should Simpang Rengam and Benut estates be added to SOU23, the management of their slopes would need to be assessed.
7.2.3.2 Water and drainage
Maps 3 and 5 illustrate the local streams that drain SOU23. Only the western part of TDI Estate has streams that drain to the west into the Ulu Benut catchment. For the rest of SOU23, the streams drain south and eastwards into the Sg. Sayong and onto the Sg. Johor. TDI Estate is part of the headwaters for the Sg. Sayong. The main block of SOU23 is drained by 3 tributaries of the Sg.Sayong – the Sg. Remis, the Sg. Beliung and the Sg. Pengilli. Sg. Remis enters Sembrong estate from the north, and flows out through Ulu Remis. The Sg. Belitung rises in the FELDA estate to the north of Sembrong Estate before flowing out through Sg. Remis Estate. Pekan Estate covers part of the western headwaters of the Sg. Pengilli. These tributaries have relatively short steep sections that are cutting through the valleys in the estates. In the area where they meet the Sg Sayong, sediments accumulate building up the banks and slowing down river flow.
In Fig 1 below, the rainfall averages for various periods leading up to1990 are taken from Ladang Pekan (which considers as representing SOU 23 estates) and compared to evapo-transpiration averages up to 1990 from Kluang.
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Figure 1: Rainfall and evapo-transpiration at SOU23.
Rainfall is normally in surplus over the whole year apart from the Pekan and Bukit Badak estates to the east of the main SOU23 block. These can experience some short periods of drying during February and June.
7.2.3.3 Biological diversity and conservation
Map 3 indicates that SOU23 covers 2 original ‘habitats’ or model ecological types. These were ‘Lowland Forest’ and the ‘Riverine Forest’ that grows along the lower courses of rivers. The region also had peat swamp forest to the immediate west of TDI estate, hill forest about 5 km to the east of Pekan Estate and some lowland forest on more acid sandstone soils to the east. Most of the regional peat swamp forest has been cleared, drained and settled for agriculture while the samples of the local lowland forest, hill forests and lowland forest on sandstone have been protected as part of the Kluang Forest Reserve and the Rizab PERHILITAN Endau-Kota Tinggi. The regional ecological type that has had little protection or conservation management would be the forests patches and wetland areas of the former riverine alluvial forest areas.
7.2.4 Landscape level issues to be considered
7.2.4.1 Local community
With a household population growing at less than the state and national average, long-term and local competition with SOU23 for land and environmental goods and services is not anticipated to be a significant issue. However, it is noted that local community land holdings share boundaries with part of SOU23, and water draining from the estates does flow into areas occupied by the local community.
Limited availability of local labour is expected to be an issue for production management.
7.2.4.2 Physical environment
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Soil issues
SOU23 for the most part is on undulating terrain with few steep slopes. It was noted in 2.3.1 above that slopes exceeding 25° were probable in small areas of Sembrong, Bukit Badak and TDI where local soil erosion risk is expected to be high. Though the Reconnaissance Soil Map indicates the main SOU23 block has physically stable Rengam Jerangau series soils, local site variations are expected to lead to varying risk of erosion.
Most of the area is on Class 1 soils – Rengam Jerangau, with Class 2 Telemong Akob local alluvium soils in the riverine areas and Class 3 Batang Melakka Tavy soils dominating TDI estate. These soils types and terrain classes are understood to be suited to oil palm cultivation.
The mineral soils above flood risk areas are anticipated to be offer suitable sites for use as non-scheduled local waste disposal.
Water management
During dry periods in February and June, some of the higher and steeper areas in Sembrong and Ulu Remis could experience moisture stress and soil moisture conservation measures would be expected. And, parts of Ulu Remis and Pekan are on terrain class 1 areas and have rivers fed by streams from adjacent terrain class 3 areas. There is expected to be a high chance of local flooding in these areas following periods of prolonged rainfall when the Sg.Sayong is at maximum discharge.
Reliable year-round rain in the Sg.Remis catchment is expected to provide sufficient water for mill use.
Water from the majority of SOU23 area drains into the Sg. Sayong which joins with the Sg.Johor. Much of this catchment is also used for oil palm cultivation and contains palm oil mills. This catchment provides raw water for south Johor and Singapore. The quality of water discharged into such an important catchment would be a major concern.
Air quality
There are no areas of high settlement around the mill at SOU23 apart from those in Sembrong, and nuisance over population centres from the smoke stacks at the mills is not expected to be a major issue. It is understood that the company has a ‘Zero-burning’ policy in place.
7.2.4.3 Ecology and biodiversity
Most of the area around the railway and main trunk road were in cultivation before the country’s independence (1957), when those transport routes were first opened up. Elephants, large cats and other ERT species were reported from further east when those areas where opened in the 1970’s. Recent information from the Jabatan PERHILITAN suggests that the nearest populations of forest dependant ERTS such as Tapir, Tiger and Elephant would be in the Endau-Kota Tinggi Reserve 5 km to the east. The lack of forest cover in the vicinity of SOU23 makes the area unsuitable as a habitat for other terrestrial forest species.
At the ecosystems level, it can be seen that similar lowland forest types that occupied the SOU23 site before agricultural development took place, have been protected in the PERHILITAN reserve to the east. However, the swamp forests and alluvial forest ecotypes were not well protected. Though original vegetation cover from these wetland areas has been cleared, swamp conditions still remain in places and where streams have not experienced irreversible damage, some of their original aquatic fauna and flora is likely to remain.
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7.3 General findings from site inspections of SOU 23
The sites identified for assessment for SOU23 and the dates visited were:
• KKS Ulu Remis, mill 60 mt hr-1
, 12thJanuary, afternoon
• Ulu Remis Estate, 2,442 ha, 13th January, morning
• Sembrong Estate, 1,770 ha, 13th January, afternoon
• Tun Dr.Ismail Estate, 2,332 ha, 14th January, morning
• Bukit Badak Estate, 3,195 ha, 14th January, afternoon
• Pekan Estate, 3,203 ha, 15th January, morning.
The procedure at each of the sites visited was broadly similar. Following a meeting and presentation by the mill or estate staff, the timetable for the visit were discussed, selected documents inspected, stakeholders who had come to meet the assessment team were interviewed and then as time allowed, selected aspects of estate operations were inspected in the field. Our general approach was to ensure that each RSPO criteria was verified by inspecting documents and practices associated with each criteria from at least two different sites. The field inspection time was initially focused on issues identified from the desk-top study at the landscape level (see section 7.2 above), as well as areas of relative weakness suggested by our review of the documents and opportunistic observations while travelling through the estate. Relatively little time could be spent on observing areas of operational strength.
Generally, it was found that a broadly uniform approach with a consistent standard had been made to meet the principles and criteria of the RSPO at the mill and estates of SOU23. An adequate foundation had been made to support RSPO principles. In this section, the findings from: an inspection of the documents, visits to the mill and estate fields, together with impressions gained from interviews with stakeholders, are discussed. Since it was found that activities at SOU23 were in general in compliance with RSPO principles 1 to 6, this discussion focuses on RSPO Principle 8, the capacity to address making continuous improvement on sustainability issues, and the system for managing compliance with RSPO P&C. More detailed discussion on the findings for each of the RSPO principles and criteria follows in the next section.
7.3.1 Documentation
There was a functional system in place to maintain the documents. The staff responsible had a working knowledge of how the individual documents related to RSPO principles and criteria, and demonstrated they were capable of retrieving information from the documents when requested. Considerable effort had clearly been made to ensure the documents had been kept up-to-date.
It is understood that SOU23 is still at the early stage of implementation for RSPO compliance. Documentation is currently focused on providing the physical evidence for compliance. The mill and estates each has its own set of documents based on a standard list of documents, and with minor local variations. These record how each of the activities are planned, implemented and the items monitored. The current strength is that there is a system that captures at least in outline,
• plans of what, when and at what costs, the work the unit intends to do, • SOPs on how these activities are to be done, • records of the progress and completion of planned actions, • policies and records on internal and external communications, • statements on meetings and discussions, and their outcomes,
and, there is competent staff to maintain and manage those documents.
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Current weakness can be separated into:
• those which could be considered as technical non-support of RSPO – for example: the absence of documents such as copies of contracts or SOPs in the ‘mother-tongue’ of foreign workers;
• insufficient information to support decision making for plans – for example: biodiversity and soil information,
• a deterministic approach to sustainable management - planning documents that provide support for a set of future actions but do not identify measurable objectives or mechanisms for monitoring progress;
• and poor participation by staff for continuous improvement - records of discussions at meetings rather than the issues discussed.
Essentially the strength is that there is a document management system and the weakness is concerned with how effectively that system captures progress in meeting the sustainability objectives of RSPO, especially for Principle 8, continuous improvement. Since documentation provides a convenient mechanism to strengthen institutional memory, especially when there is a turnover in decision-makers among the staff, the contents of the documents should be used to inform the unit staff of their extent of institutional knowledge as well as knowledge gaps, and the operating capacity of the unit.
7.3.2 Training
Photo 1: SOPs posted at the mill
With the change in estate labour over the past two decades from a labour force that was predominantly local and ‘born’ into estate culture, training has had to become more systematic. It is understood that new workers whether local, from Indonesia or Bangladesh are put through training sessions, evaluated and training repeated as necessary until their assigned task can be performed at the desired standard. Records are maintained of training events and the attendees. Observations in the field suggest workers can perform at the required standard with the current training input.
And with enforcement, peer support and information notices, they were observed to accept and practice the operating methods as required. This approach is suitable for work that repetitive and requires no evaluation for variation or reference to SOPs. In theory, SOPs are available for consultation and are at working stations at workshops, the mill, etc. Though the SOP quality is good, it is not yet available in the mother tongue for Indonesian and Bangladeshi workers. For non-local labour, training is given through an employee with recognised skills as a translator. The amount each trainee internalises from their training is evaluated by their ability to repeat the task being explained. (This could be considered to be conditioning rather than training.) Comment expressed by estate management that should SOPs is available in the mother tongue of the trainees, and then those who were illiterate would still not have access to SOPs. It was noted that no literacy support programmes in any language or script are offered to labour and staff in SOU23 to ensure they can access the SOPs currently available.
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7.3.3 Safety
SOU23 is understood to be addressing safety issues in preparation to meet the requirements of ISO18000, and have implemented safety considerations equal to best industry practices. Observations in the field suggest staff, labour and contractors are aware of their personal obligations to observe safety requirements. Information on safety issues is posted at workstations, PPE is issued and safety trainings were evidently given.
Photo 2: Workers used basic PPEs but improvements in various aspects are required
Lost time and safety reports are good by industry standards. And at least one round of safety meetings has been held. What has yet to be captured in documentation is the effectiveness of current safety provisions and the capacity and ability of the workforce to make constructive input from their working experience. The gaps that may exist, in the capacity of the workforce to understand safety issues and think about options for improvement, are not known. Capacity building of the workforce is an issue of importance for principle 8.
7.3.4 Production
Though crop yields may not be of exceptional concern, estate records and reports from the PA suggest some estate are not currently meeting their full the production potential. There are three concerns here:
• ensuring the optimal level of the current crop is harvested and transported to the mill;
• ensuring the most effective use of resource inputs –labour, energy, nutrients, and water, in the production process, and minimising wastage of these resources; and
• Maintaining the potential of the land to support future planting.
Photo 3: Old, uncollected fruit. No transparent mechanism for capturing direct production losses and improvements due to better labour management.
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7.3.4.1 Crop
To optimise crop production and recovery, the variables that have an impact on production can be separated into planning issues and operating issues. For planning issues – such as high density planting that has caused etiolation, not much can be done apart from thinning. Principle 8 would require experience gained from such issues be captured as advice for improvement for future planting, but it is not clear how this could be documented. Operating issues require much shorter cycles of observation, decision-making, action and monitoring. For these short management cycle issues, the issues addressed include: resolving labour issues to shorten harvest rounds, improving loose fruit collection, resolving constraints from the reliability of prime movers, revising fertiliser treatments, field sanitation and water management, etc. Currently it is not clear how the effect of these individual issues and their management responses are monitored, their impact on production quantified, and incorporated into fore-caste of future production. Modelling future production from planning data alone is acceptable for new planting, but at present there is no transparent mechanism for capturing proportionate losses by individual production issues, monitoring the effectiveness of their respective treatments and incorporating the effects into crop forecasts.
7.3.4.2 Using inputs efficiently
RSPO requires the effective use of resources. An example in the field would include the use of chemicals and fertilisers and at the mill this would include the use of energy and water. SOU23 demonstrates effective use of chemicals and through their IPM plan, make use of alternatives to chemical for the control of pests. And where possible, mechanisation is used to reduce labour requirements for fruit evacuation.
At the mill, examples of efforts for efficient use of resources include: reduction in the requirement for chemical additives to raw water through better water flow design at the holding pond, more efficient use of water and reduced demand for fossil fuels.
But making further improvements to efficiency could be difficult without the supporting monitoring data on resource use. This point can be illustrated from the mill where the mass of renewable fuel used is not directly monitored either on a spot or on continuous basis. Only estimates are made from mass balance. Without such baseline data it is difficult to plan for, and monitor, improvements in use of renewable energy as a part of recycling.
7.3.4.3 Sustain potential of the land
The terms of tenure for the site gives current owners perpetual rights to the land, so investment in long-term sustainability would be in their self-interest. Roads, bridges, drains, etc were observed to be well maintained; terraces made; and slope and drain cutting appropriate for the mechanical strength of local soils. However, streams are observed to be silted. It is understood that there has recently been unusually heavy rains with flood damage. But, silting is a recurring comment in PA reports. The areas of soil loss have not been identified, and rate of loss of local soils is not monitored.
Photo 4: Stream siltation as evidence of soil erosion from fields.
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It should be noted that in the areas above silted streams, contour stacking was often not practiced. (‘C’ shaped stacking was being implemented in some slopes.) And nutrient loss from fields was not monitored. This can be seen as eutrophication to streams as well as algal growth where soil water is discharged to streams. Soil and nutrient conservation are practices that sustain potential for future production. So too is field sanitation. SOU23 experiences chronic production loss from fungal infection, where treatment focuses on prolonging palm productive life or physical destruction of the fungal colony after it has started to produce fruiting bodies.
Photo 5: Nutrient loss through soil water and run-off discharging to streams
Monitoring records do not indicate the effectiveness of treatment, long-term trends in the rate of infection nor the rate of reinfection at the infected planting points for new planting. At present production losses appear to be within acceptable limits, and there is no management concern captured in the documents on long-term trends for infection and the impact on future production potential. Though management response to fungal attack such as Ganoderma is in line with current SOPs, the absence of monitoring data and discussion is not considered to be in support criteria for environmental impacts of RSPO principle 8 for continuous improvement.
Photo 6: Another crown lost to fungal damage.
7.3.5 Environment
Photo 7: Example of management of waste disposal to land. Note un-separated wastes.
Records and observations indicate the mill and estate is in effective compliance with environmental plans, regulatory requirements and good management practices. Use of environmental resources is mentioned in 3.4 above and impacts on biological targets in 3.6 below.
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7.3.5.1 Soil
SOU23 have implemented strategies to manage scheduled and non-scheduled wastes. Scheduled wastes are managed according to regulations. Procedurally, non-scheduled wastes are separated at collection. Currently, with low prices for recyclable materials from waste, and relatively long transport hauls from the site, there is little commercial demand for some materials. Recyclable materials are stored at various sites in SOU23. Current storage is observed as adequate. But if the current situation persists, a more active management solution would be needed for final disposal of separated wastes.
Domestic wastes are disposed at land site. Photo 7 illustrates a typical disposal site where a mix of domestic, garden as well as process wastes – plastic sacks, broken wheelbarrow, etc. are mixed in an excavated disposal pit. This was a result of the problem mentioned earlier. Without group-level guidelines, training and monitoring for quality, it will be difficult to make future improvements on efficient use of land for disposal and ground water quality.
At the mill, current production wastes are either consumed a fuel, treated as slurry with POME or sold to outside parties. However, de-silting of POME ponds is on going, and there are still areas where old production wastes and sludge have accumulated on the ground. These historical wastes have the potential to produce leachates that could contaminate local water. At present they can be considered as
being in storage pending treatment and disposal as a stable end product.
See Photo 8 below.
Photo 8: Disposal to land excavated sediments from water-borne mill waste.
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7.3.5.2 Water
Photo 9: Streams disturbed by excessive sediments loose biological capacity to attenuate pollutants.
Water samples taken as spot samples at the exit point from the estates suggest out-flowing quality water is acceptable. The streams that flow through SOU23 rise and flow through other estates before they join the Sg. Sayong. Documentation does not indicate any attempt to coordinate with neighbouring landholders on managing water quality in the individual catchment areas. This is an important consideration considering the Sg. Sayong drains into the Sg. Johor – a major source of water for supply to urban southern Johor and Singapore. Because of current water quality compliance, it is assumed that eutrophication from agricultural chemicals can be attenuated. However, there is no information available on the absolute capacity of these streams for biological, chemical and physical attenuation or the impact of increased siltation on attenuation capacity. See Photo 9. The major streams, flowing through SOU23 have been identified for protection with riverine buffers. These include the Sg. Sayong, Sg. Remis and Sg. Belitung.
But the natural streams that rise within the estates and feed larger streams have not been given any protection from unintended eutrophication from fertilisers and other agricultural chemicals. See Map 5 below.
Map 5: Major and minor streams in SOU23
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7.3.5.3 Air
Emissions to air are monitored as required by regulations and equipment for continuous recording of emission quality is understood to be being installed at the single mill stack. This will allow absolute monitoring of emissions to air, giving SOU23 the ability to monitor production of green house gases (GHG) from the boilers. Potentially, SOU23 will be able to develop measured baselines for GHG production and monitor improvements to emissions as well as gains in efficiency in renewable and fossil fuel use.
7.3.6 Biodiversity
With an absence of charismatic endangered, rare or threatened species (ERTS) from current wildlife records, it is understandable that the baseline HCV assessment survey declared that SOU23 is unencumbered with HCV 1 and 2 areas. However, the SOU23 still contains areas of significance for biodiversity at the ecosystems level. These include wetland areas and the streams that feed into them as HCV3. Map 3 above shows that nearby protected areas do not give protect to local wetlands. Though most of the major streams in SOU23 have been affected by siltation, some of the feeder streams, especially in the low-lying areas of Ulu Remis remain clear and populated by local fish species. Once ecological conditions in the main streams are improved through effective buffer zone management in SOU23, then recolonisation could be supported by aquatic life that has taken refuge in the smaller side streams.
The current baseline HCV assessment does not adequately review HCV3 issues. It does not include: a biological survey of the wetland areas to assess their potential contribution to conservation of this threatened ecological type. There is no document to integrate management planning for: stream conservation and management of aquatic biodiversity; management of waste effluent to streams; management for soil conservation and silt control; drainage and flood control; etc. Essentially biodiversity has been separated from good estate practices, and is not used as an indicator for monitoring water quality.
Steep and flood prone areas of the estates have been identified as marginal for production use but have not been assessed for their potential to support a richer local biodiversity and support for IMP if conserved as HCV4 and HCV3 functions.
7.3.7 Society
With a decline in local labour employed by commercial estates, and movement from rural to urban areas, social issues demand less management attention than they did a generation ago. From the interviews arranged by the estates with local stakeholders, the unions and staff representatives, no major issues were brought up, that would be beyond existing mechanisms to address. Despite a decline in the permanent population associated with the estates, schools, places of worship, recreational facilities and other amenities are still supported. Religious, cultural and social occasions are supported which include consideration of the preferences of foreign labour. Currently, cadastral surveys are in progresses that are marking the boundary between the estates and their neighbours.
From the time available for observation, it was concluded that major social issues with the local community would not be expected.
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8. DETAIL OBSERVATION AND FINDINGS UNDER EACH OF THE RSPO- MY NWIG 5 INDICATORS
The summary of the evaluation findings relevant to indicators listed in MYNI 2008 are provided in this section. The raising of CARs are highlighted under the respective criteria and summarised as tabulated in Appendix 2.
PRINCIPLE 1: Commitment to transparency
Criterion 1.1 Oil palm growers and millers provide adequate information to other stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages & forms to allow for effective participation on decision making.
Findings There is a mechanism to ensure that documents are publicly available, as stipulated in the individual management plans. Website provides adequate information. Records of recent communications are maintained in file QSHE/08/5.53. The period covered varies with each unit, but all estates have records that cover the previous year at least.
However, there is no standard approach among each of the components of SOU23 for sorting how communications with stakeholders are recorded. Communications are filed as loose leaves and thus it is no way to confirm that any pages were missing. There is no periodic account of the numbers of communications made in any period. If none had been received in that period, there are no records that none had been received.
Criterion 1.2 Management documents are publicly available, except where this is prevented by commercial confidentiality or where disclosure of information would result in negative environmental or social outcomes.
Findings SOP for external communications lists the documents that are considered to be confidential and states that all other documents can be made available to the general public. These included:
� Land title - available in QSHE/04/5.2.4 � Safety and health plan - available in QSHE/07/5.5 � Impact assessment and pollution prevention plans - available in
EMS/01/5.4.3 � Complaints and negotiation procedures - Carta Aliran Pengendalian in
QSHE/08/5.5.3
� Continuous improvement plan - available in QSHE/10.5.6
Pro-active declaration of documents available to the public, and clearly identify those that are not. Plans and procedures are transparent and in place. Plans and procedures are relatively recent and have not yet been reviewed for their effectiveness.
PRINCIPLE 2: Compliance with applicable laws and regulation
Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations.
Findings As evidence of compliance, all necessary renewable permits pertaining to crop production and milling are in place and displayed in the form of certificates in the group offices and mill. Legal requirements for machinery maintenance and power generation have also been complied with. Workers health requirements and
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pesticide regulations have also been fulfilled.
Register of legal documents is available – QSHE/04/5.2.4 and copy of laws immediately relevant to estate and mill operations were on hand at the unit offices. However, none of the units at SOU23 had been provided with information on international laws or conventions ratified by the Malaysian Government - Convention on Biological Diversity, UN FCC, Montreal protocol, etc., which may have been relevant to their operations (Minor CAR-01).
Sime Darby has developed procedures for tracking any changes in laws. Document SOM 5.2(5.2.4a) assigns responsibility for observing legal compliance. .The company also subscribes to service for updated law books from publishers, and receives information on relevant legal amendments from Malaysian Agricultural Plantation Association.
A possible weakness in the system is that the work inspection items in QSH/04/4.5.1 are not cross-referenced to laws and thus any gaps in compliance may not be immediately traced.
Criterion 2.2 The right to use the land can be demonstrated, and is not legitimately contested by local communities with demonstrable rights.
Findings The component estates of SOU23 comprise of many separate land titles. The Group is in the process of changing the land titles to Sime Plantations. Copies of the relevant cadastral documents are available at each estate. As evidence of compliance with the terms of the land title, records of annual payment of the tax etc. are kept by each estate. In a few cases, conditions for land use may specify cultivation of another crop (Observation 1) however, in such instances; documents show on-going efforts to resolve land-use issues with the state land authority. For example, conversion of land use from rubber to oil palms cultivation.
The company is also undergoing process for transferring the land title to the current company.
As described in many sections of this report, estate maps are available which clearly show the boundary with the adjacent lots. Cadastral plans are available which indicate the position of original boundary markers. Some of these markers have been located, but not all. Reports of the recent partial surveys and plans for future boundary surveys are available. The company needs to complete the survey and placement of boundary stone, and plan for their maintenance (Observation 2).
No current boundary disputes are reported within the SOU 23. However, the company has over planted in a 7.2 ha area of a KTMB reserve land adjacent to Ulu Remis Estate. There was no formal permission obtained by the company for planting activity in that area (Observation 03). It is reported that KTMB has no interest in the area itself. Recent correspondence gives no indication when the issue will be resolved. The Group however is communicating with the landowner to find solution to the issue either by withdrawing or getting formal permission to continue to occupy the land.
Procedures for handling boundary dispute are described in Appendix 3 of the Sustainable Plantation Management System (SPMS).
Criterion 2.3 Use of the land for oil palm does not diminish the legal rights, or customary rights, of other users, without their free, prior and informed consent.
Findings Located in the estates are cemeteries and places of worship that once served a more diverse estate community. The cemeteries hold remains of people whose families may no longer be resident on the estates. Local temple sites are used for periodic faith-based festivals for communities from outside the estates. While the estate management is clearly aware of the existent of such areas and supports the
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maintenance and activities of those sites, the status on use of estate land for cemeteries and places of worship is not clear.
PRINCIPLE 3: Commitment to long term economic and financial viability
Criterion 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability.
Findings Annual budget with replanting programmes are available for each estate, extending to 2012. The document provides budget allocation for future costs including those for work to support sustainability. The budget also projects income from crop based on area planted and age, using generic yield potential tables for the planting material and the environmental category of the site. However, some fields have been routinely underperforming and it is not clear how future crop projections have been re-evaluated to take actual underperformance into account. The mechanism for projecting future crop (calculating the annual budget projection of FFB/ha etc) is not completely fully transparent (Observation 4).
Long range replanting programme for each estate covering the next 10 years is available and supported by budget allocation.
Plantation management plan also exists in the form of maps for each component estate of SOU23. The maps indicate the boundary of the estates as well as the blocks or the compartment. The rivers and streams within the estates were marked together with the access road. However, there are no planning documents at SOU level that compile management strategies at the certification unit level (Observation 5).
PRINCIPLE 4: Use of appropriate best practices by growers and millers:
Criterion 4.1 Operating procedures are appropriately documented and consistently implemented and monitored
Findings Standard Operating Procedures Version 1:2008 was prepared by ‘Total Quality Estate Management’ (TQEM) and viewed at each component estate and the mill at SOU23. These copies were marked as the ‘Control Copy’. Separate copies are reported to be accessible by estate staff. Copies of relevant sections were seen posted at workstations. The SOPs are currently available in English, with some sections available in Bahasa Malaysia.
SOPs cover most of the aspects of operations, with strengths related to health and safety issues, regulatory compliance, efficient use of materials and equipment. It is reported that the ‘Standards and Compliance Team’ have been informed that the SOPs may not be available in languages appropriate for the Bangladeshi and Indonesian workforce, and the issue noted for continuous improvement.
Significant effort is placed on initial training and competency assessment for the workforce. This builds their working potential. But there is no recorded evidence that SOPs are being systematically monitored in the work place (Minor CAR-02). Where occasional lapses are noted, warnings are given which are recorded in the ‘Buku Amaran’ and if a ‘stop work order’ is given, this is recorded as ‘Arahan Berhenti Kerja’. KPI is also monitored for the output of selected staff, but not for the actual compliance with procedures to deliver those outputs.
Training and evaluation is given to build potential for adherence to SOP, and ad hoc observations of individuals for compliance with SOPs, is made.
Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to a level that ensures optimal and sustained yield.
Findings Application of fertiliser recommendation is made in the ‘Agronomic and Fertiliser Recommendation Report’ – every 2 years. For each field, the type, date and frequency of application is given for fertiliser treatments. Progress with fertilising is
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monitored through records of applications, and the types and amounts of fertilisers used can be crosschecked against records at the store. Leaf sampling has been carried out by Sime Darby Research Centre or Guthrie Research, Chemara Extension Service depending on the history of the estate unit. The reports from sampling provide information on N, P, K, Mg and B in the leaf sample. The periodic sampling reports noted where conditions remained satisfactory, improved, etc., and contributed to recommendation for fertiliser application. Records viewed showed historical proposals for sampling. However, no soil sampling has been carried out in any of the estate to monitor changes in nutrient status of soils (Minor CAR-03). No periodic sampling undertaken to monitor changes in nutrient status in the different soil types, slopes at risk from erosion or soils with drainage problems. POMEs are applied in various blocks at Ulu Remis estate mainly in areas in the vicinity of the mill. Records on the amount (volume) application are adequately maintained. Similarly, EFB is applied in various blocks, where record of application in each block (Monthly EFB Mulching/Disposal) is available. Application is carried out based on recommendation made by Plantation Adviser (PA) and decision made by the Estate Manager. Zero-burning policy applies to the whole of SOU23. Monitoring for compliance with the policy is made on a continuous basis. Use of fire to sterilise fields at replanting is no longer done. Currently, old palms are felled, chipped and then buried in a trench between the new planting rows. At present, there is no evidence of monitoring for microbial health. This would include monitoring for the presence of Ganoderma in soils at the time of replanting that in former practice would have been controlled by open burning.
Criterion 4.3 Practices minimise and control erosion and degradation of soils.
Findings The issue of minimising and controlling soil erosion is described in the EMP. Staff appear to have knowledge of the location of steep areas in their estates. Contour maps have recently been made available that indicate steep slope and sensitive areas; but the maps contain errors that have not yet been rectified through ground truthing (Observation 6). Soil maps are available that identify soils with management concerns.
In some sensitive areas, terracing was implemented at the last replanting. However, other slopes neither have terraces nor have been planned for contour stacking and collection paths. Silted streams in these areas suggest uncontrolled soil loss from surface erosion. There is no documented evidence that the siltation has been monitored, that the source of the erosion has been identified and that practices have been put into place to minimise future soil erosion. Plantation Advisor reports mention constructing ‘pits’ to trap run-off water and the sediments they carry. Application of cover crop in open area followed procedures described by ‘Agricultural Reference Manual’. SOPs guide practices to mitigate for soil erosion and planning documents for implementation. Use of cover crop is covered by SOP and observed to be implemented in the field. Soft weeds are tolerated in fields and along river buffers
In a few areas, the audit team observed no adequate rehabilitation plans or programmes for areas cleared including those with slopes >25°, but in compliance with company policy, have not planned for replanting (Minor CAR-04).. . And recent flood damage has left eroded streams banks exposed.
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There is no peat soil in SOU 23. Only some areas with organic soils in former freshwater swamp areas.
The company has soil, contour etc. maps for each estate but no effort has been made to systematically identify sensitive and problem areas despite some sign such as erosion and siltation in the stream (Minor CAR-05).
In general, efforts to address soil erosion are taking place in all the estates evaluated. The following are observed being implemented:
a. In replanting areas the old stand is felled, chipped, and buried in trenches dug between rows. After replanting, Legume Cover Crop (LCC) is established to reduce soil exposure to rain.
b. In mature areas, frond heap were stacked accordingly to slow down surface runoffs. No blanket spray is carried out allowing soft weed to grow in between rows providing ground cover minimising exposed extent of soil.
c. EFB mulching both in replanting and mature areas also act as erosion control measures. Non-competitive “soft weeds are also maintained in bare areas as a form of erosion control.
d. In areas having greater than 15˚slopes, contour terracing has been implemented where possible and frond stacking along the contour terrace edges makes erosion control more effective. Silt pit were dug with the intention to trap the silt from surface run-off, preventing it flowing into natural waterways.
Criterion 4.4 Practices maintain the quality and availability of surface and ground water
Findings Observed that the buffer area is marked with blue paint and at least one row of palm (depending on the size of stream involved) is spared where no pesticides and fertiliser application will be carried in such area. However the procedure has been implemented only in limited areas not throughout the SOU23 (Minor CAR-06). At the next replanting, old palms within the buffer area will not be felled. The area will be left untouched and left to re-grow naturally.
No evidence of bunding or damning of river/stream passing through SOU23. Part of the flow of the Sg.Remis is diverted to a retention pond where intake for the mill and estate’s water supply is located
The Ulu Remis Estate carried out water sampling at three locations along Sg Air Busuk (running through Div 2). Located upstream of the river is an oil palm mill (not belongs to the Sime Darby group). Water quality sampling points are located at the upstream (at the border), middle (the bridge located between Block 08 and Block 04 and downstream. Bukit Badak Estate has recently carried out its first water sampling exercise at 15 points along 3 rivers running within the estate. A monitoring plan is in place where stream water sampling will be carried out on quarterly basis.
The Ulu Remis oil mill carry out quarterly water quality sampling as part of meeting the requirement of the Environmental Quality Act where monitoring report are being submitted to the Department of Environment.
Spot sampling data provides sufficient information to demonstrate regulatory compliance, but this data does not provide the information on short-term trends and cyclic patterns in water quality that can be related to estate management issues – flood and erosion control, spraying, fertilising, felling & replanting, earth works, etc.
Rainfall data is collected at estate level. Analysis on the total rainfall and number of rain days are done. Monitoring of water usage is being carried out at the mill. Water book daily record is available that can be used to calculate the tonnage of water use compared to tonne of FFB processed and volume of CPO produced. There is a
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programme to calibrate and service monitoring equipment.
Water management planning is addressed in EMP. The mill has water consumption records going back more than 3 years. 40 % is used by the mill, the remaining 60 % is consumed by domestic users and operations at the estate. Plans are in place to use SAJ water for domestic use ensuring adequate supply for mill use. Efforts to conserve and improve water usage are evident. ‘Grey’ and ‘brown’ effluent water are treated prior to discharge. Water supply to the nursery is secure and efforts are being made to conserve soil water on slopes. A weaknesses observed is that there was no management of leachates from domestic waste disposal sites, as well as old storage areas for mill wastes and excavated sludges, and its impact on water quality. .
Criterion 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques.
Findings IPM system is documented in the Agricultural Reference Manual (ARM). In all the estates evaluated, elements of IPM have been observed. Pest and weed infestation is recorded as minimal in these estates. The introduction of biological control is being promoted and the use of Barn Owls for rat control is also being investigated. Some attempt has been made to establish beneficial predator and parasitoid host plants e.g. Tunera subulata, Cassia cobannensis and Antigonon leptopus.
Monitoring for bagworm occurrence and planting of beneficial plants in such area. Rat poisons used in new planting areas, but replaced with non-chemical controls once the young palms has reached certain heights allowing effective use of barn owls.
Census is undertaken for crop pests and disease according to SOP. Observation of a reduction in attack by insects as recorded in the ‘Plantation Adviser Audit Report’. Bagworm records mapped and used to plan areas for beneficial plants.
Record on areas where pesticides is applied is maintained. The record can be found in the
� Chemical stock book � Daily store issue record � Check-roll record
� Daily muster chit
Data for pesticide usage is available in all estates. However, there is no evidence that the data is utilised to monitor effectiveness and control for all pesticide use (Observation 7).
No major outbreaks of pests and disease have been recorded, however, there is a. low level and chronic problems with Ganoderma which suggest the current set of prescribed IPM treatments may not be effective.
Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World Health Organisation Type 1A or 1B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.
Findings Justification for agrochemical used is described in the ARM. SOP for chemical use is described in the ‘Standard Operation Procedure for Oil Palm Estates’ dated 1 Nov 2008. The company maintains an up-to-date list of chemical used in each estate and observation in the storage area and screening of the application record shows no evident of use of prohibited chemicals in SOU 23 operation. The estates maintain historical records of chemical used, amounts applied, dates, and areas of application. Chemical mixing and application is thoroughly supervised. The mixing is done by
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estate supervisory management staff and transported to the field for application. Sprayers are not allowed to mix chemicals in the field. The sprayers are briefed on safety and spraying techniques before beginning any task and are appropriately protected and are knowledgeable of emergency response procedures. Knapsack sprayers are used with appropriate nozzle size to ensure effective ground level spraying. Proper storage that clearly identified chemicals based on WHO classification was observed in all the estates. The storage area has proper containment and tools for handling possible spillage. Systematic approach is being used in all subject areas associated with pesticide storage and handling from preparation for use, transport, application and handling to disposal of storage vessels. The estates mostly hired foreign worker for labour intensive works include spraying. Currently all information on the chemical and its active ingredients and SOPs are clearly available in English and Bahasa Malaysia. To ensure effective understanding and implementation of the instruction, there is a need to have SOPs and instruction and other H&S documents be translated to appropriate language use by the workers (e.g Bangladesh or Bahasa Indonesia) (Observation -08). Nevertheless, training is evidently provided to the workers, and the trainees are assessed on their ability to demonstrate that they have internalised training. Following regulation, generic CHRA report has been produced for the mill and estates and is still valid. Medical screening of the sprayers is done on monthly basis by the Hospital Attendance (HA) and yearly by a medical doctor. Evidence of documentation and submission of OSH ‘Use and Standard of Exposure of Chemicals Hazardous to Health’ (USECHH) on individual sprayer employed by the estate is available. Annual medical surveillance system that ensures routine medical surveillance undertaken for spraying staff. Improvement may be required to ensure that a CHRA checklist, specific to the area (not generic CHRA) is used centred on the selection of actual chemicals applied and equipment used, or the personal medical condition of the workers. Procedures prohibiting pregnant and breast-feeding women from working with chemical is described in the ‘Manual on Implementation of the Gender Policy’ undated. There is no evidence to suggest that this procedure is not being implemented. In all estates, records show that sprayers are all male. No evidence of use of prohibited type of chemicals. No aerial application of chemicals made other than by hand-held equipment from the ground.
Criterion 4.7 An occupational health and safety plan is documented, effectively communicated and implemented.
Findings Sime Darby has adequately documented the occupational health and safety plan, which includes a health and safety policy, work procedures, training and monitoring system. The implementation of health and safety policy and procedures are considered adequate. Accident records are adequately maintained.
Workers have been adequately trained in safe working practices and PPE supplied for all workers, both in the estates and mills. There is a daily briefing by the supervisors during the morning call for workers prior to commencing work, during which workers are reminded of OSH requirements and their PPE checked.
All local workers are covered by SOCSO with contributions from each worker deducted from their monthly salary. Foreign workers are covered under Workmen Compensation Scheme (WCS) insurance as per the Workmen Compensation Act 1952, which includes repatriation expenses and personal accident coverage (accidental death, permanent total disablement, temporary disablement and medical
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expenses).
Criterion 4.8 All staff, workers, smallholders and contractors are appropriately trained
Findings Annual training calendar is available that includes the following elements: � Chemical & spraying � Safety � First aid � Environmental and biodiversity � Scheduled waste management � Harvesting � Driving.
Assessment on the training needs is done by the OSH Supervisor based on assessment done through the available record but not all estates are implementing it yet. Sime Darby, as the largest plantation company has good infrastructure and resources to satisfy training need of the workers. Training materials are readily available produced either by the estate management or by the headquarters. Training records are maintained in:
� Kad Program & Latihan Tahunan OSHA � attendance sheet / form signed by the trainee and the trainer
Building on earlier practices, a uniform training system is now under implementation. Improvement maybe necessary to ensure availability of training support materials in languages used by the trainees especially for the foreign workers
PRINCIPLE 5: Environmental responsibility and conservation of natural resources and biodiversity
Criterion 5.1 Aspects of plantation and mill management that have environmental impacts are identified, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.
Findings Environmental aspects and impacts are identified at mill and estate level for each activity. The document is reviewed annually. Environmental impact evaluation forms for each activity contain a matrix evaluation and rating on potential non-compliance with environmental regulation. Plan for periodical review and update of the register of aspects and impacts for risk assessment is in place. The register of aspects and impacts has focused on the output from each production stage, its effect and immediate impacts. The weaknesses observed was that the scoping for aspects and impacts does not take into account the general landscape issues (that should included surrounding areas).
Environmental Improvement Plan/Pollution Prevention Plan for each estate is available. The document recommended mitigation measures to be adopted for each issue identified, the person responsible for implementing, the time frame as well the estimated cost to be involved
General observations made during the assessment suggest that environmental conditions at the mill, workshops, fields, housing and amenity areas are well maintained.
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Criterion 5.2 The status of rare, threatened or endangered species (ERTs) and high conservation value habitats, if any, that exist in the plantation or that could be affected by plantation or mill management, shall be identified and their conservation taken into account in management plans and operations
Findings As described in many sections of this report, oil palm plantation in SOU23 area were established in 1960s and 1970s and now there were no natural areas among the surrounding landholdings. All the land in the vicinity is oil palm plantation, other agricultural area or settlements. Nevertheless, to comply with RSPO requirement, the company has produced a ‘Biodiversity Baseline Assessment Report for SOU 23’ dated January 2008 that described the methods used in the assessment and identified the possible HCV areas within the SOU. The study concludes that there are HCV 4 and HCV 6 within the unit. Management of the HCVs identified were evidently being incorporated into mainstream estate management activity. However, ecosystems issues were not considered, possible HCV3 areas were not assessed, nor the wildlife populations they support. This could include swamp and aquatic ecosystems that are otherwise under-represented in local protected areas. There is no evidence of consultation has been made with recognised HCV experts and relevant stakeholders with interests in ecosystem (Minor CAR -07). The method for identification and assessment of HCV habitats has not been undertaken through adequate stakeholder consultation As its is now, the plan is preliminary in nature and requires a review for management capacity gaps, and training and support to address HCV management needs (Minor CAR-08). No management planning consideration given for potential HCV3 areas in swamp and aquatic areas. The SOU is implementing the company’s global policy of no hunting or fishing within the area where signs have been erected in many locations in buffers areas and other locations within SOU23. There was no evident to suggest hunting activities within the estates.
Criterion 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner.
Findings There is a register of waste from current production sources in EMS/01/5.4.5 Waste Management Plan 2008-2009. This covers wastes which have regulated management requirements as well as wastes from general production activities in the estates and mill. A gap may still remain for identifying wastes from historical sources, which may not have become stable end products. This includes piles of old mill ash and sludge that have been stored on the ground in the past, but still remain as a potential source of leachates to local surface and ground water. There is no evidence those old stockpiles of mill ash and sludge have been assessed and found to be in a chemically or biologically stable state that is no longer a potential source of pollution. Similarly is true for the waste disposal sites Pollution reduction plan is in placed (see EMS/01/5.4.5 Waste Management Plan 2008-2009). Field observations indicate the plan is adequately being implemented where for example, at the mill, at the time of evaluation, there was only a single stack of EFB remains. The surplus biomass is sold or used in the field. Dry solid residue is collected. Wet wastes and suspended matter were collected and drained to the effluent ponds. Estate packaging and other waste materials are collected for
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disposal. Scheduled waste collections recorded. The current plan however expires in 2009 but no reviews of performance have been undertaken.
Criterion 5.4 Efficiency of energy use and use of renewable energy is maximised.
Findings Mill bi-products – fibre/shell are used as renewable energy fuel. The boilers have been renovated and steam usage improved. Estimate of FFB and shell produced is made through mass balance of proportions of FFB. The mill uses the weighbridge to measure the daily amount of FFB received, EFB sent out and fibre/shell sold as fuel to outside customers. All surplus shell/fibre is reported to be sold. No stockpiles were observed at the mill. However at the time of evaluation, there are no mechanism for direct monitoring of shell and fibre used to generate energy from renewable sources (Minor CAR-09). Using estimates based on mass balance and standard proportions cannot effectively monitor the efficiency of use of renewable energy and ensure that use is maximized.
All other energy consumption at the mill and in the estates is from non-renewable sources. The use of fossil fuel (diesel and petrol) is monitored as part of their budget control and efficiency of operation. Daily records summarised at monthly for each mill and estates are available.
Criterion 5.5 Use of fire for waste disposal and for preparing land for replanting is avoided except in specific situations, as identified in the ASEAN guidelines or other regional best practice.
Findings No evidence of open burning in the estate. Policy and regulation have been effectively translated into the estates’ and mill’s working practice and culture. Old palm felled are chipped and windrowed according to SOPs. Visits to newly planted areas in various estates suggest consistent application of the procedures.
Following procedures, domestic waste generated in the housing area and the office were collected and disposed in excavated cells on-site. Only one minor incidence of burning garden waste was observed at the line site in one of the estate.
Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored.
Findings The register of pollutants identifies and addresses issues which are regulated. Plans exist to mitigate some pollution creating activities, especially those that are regulated. However there was no mention made of reducing Greenhouse Gases (GHG) from the production activities on the estates and at the mill (Minor CAR-010). These would have included gases from combustion of fuels at the mill, for other power generation and transport; break down of POME, sewage and agricultural wastes in the field. A set of policies on pollution exist that could be used to identify objectives, and a baseline set of plans exist from which monitoring data has been recorded. With these in place, a performance review is possible. However, there has been no review of the plans to mitigate polluting activities, monitor and assess performance, identify gaps and make revisions based on the monitoring and assessment outcomes (Minor CAR-011).
There are no peat lands within SOU23. There are patches of low-lying swampy areas which either have been dried and utilised or left in its natural states in certain locations within a number of estates.
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PRINCIPLE 6: Responsible consideration of employees and of individuals and communities affected by growers and mills
Criterion 6.1 Aspects of plantation and mill management, including replanting, that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored, to demonstrate continuous improvement.
Findings Baseline Social Impact Assessment for Johor Zone SOU 23 is available in EM/02/5.4.3. The baseline assessment covering the mill and the 5 component estates identified the issues surrounding the contractors, workers and other stakeholders relevant to the operation. The demographic pattern of the site is described and the potential impacts on each group are identified. Recommendation on measures to mitigate the impacts is also tabulated. A social management plan that summarise the actions to be taken on periodic basis is tabulated. A systematic approach, including consultation with stakeholders was evidently undertaken, with actions clearly outlined.
There is a concern that consultations in planning cycle may not be in synchronized with labour intake cycles and thus may not necessarily incorporate the concerns of current migrant labour. Planning documents viewed shows designation of staff responsibility and a generic timetable for review (but not dated by year). The timetable tabulated in the social management plan however is insufficient as it does not include indicators for monitoring, and has no long term planning (Minor CAR-012).
Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or mills, local communities and other affected or interested parties.
Findings Procedure for consultation and external communications is in place (Doc. Ref. # QSHE/02/4.2.3), that includes a flow chart to illustrate the steps to be taken. At estate level a member of staff is nominated as responsible for communications. This deals with communications among the neighbouring estates and between the estates and their individual stakeholders. But there is no position at the SOU level to address collective issues. Concern that language issues may not make the system as accessible as it is designed to be. Responsible person to handle the communication and consultation with stakeholders at SOU level is not formally identified (Observation 8).
List of stakeholders at estate and mill level is available. These include local banks, contractors, vendors, local community heads, local authority services, government agencies, etc. But no contact information is given for neighbouring estates and mills, land holders, regional or national NGO’s etc. The list was not dated and there were no procedures for reviewing for gaps and updating handling stakeholder list in place (Observation - 09).
Criterion 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all parties.
Findings Protocols documented and records kept of the issues and their outcomes. The procedures for handling complaints and grievances are outlined in the QSHE/02/4.2.3. Meetings with external stakeholders and the grievance resolution books at individual estates have been initiated. These new mechanisms make it difficult to track the effectiveness of the SOU’s communications strategy.
So far however there were no records of any dispute within SOU 23. Recording is on loose leaves. There is no mechanism to record an absence of communications or disputes in any period such as a monthly summary in a bound book.
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Criterion 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.
Findings To date there were no cases of dispute with any parties that require payment of compensation by the SOU Manager. The individual estates recognised management by customary users and provide material support for the maintenance and upkeep of burial grounds, places of worship, etc which have been established within the boundaries of SOU23.
There is a ‘flow chart’ illustrating procedures for responding to communications on general social issues within the SOU. However, a specific procedure has yet to be developed, in consultation with the stakeholders (the customary users and relevant authorities) to identify legal and customary rights for current and future communities.
Existence of graveyard and place religious significant (HCV6) within the estates may require documentation of formal procedures for rights of access and use of such places (Observation 010).
Criterion 6.5 Pay and conditions for employees and for employees of contractors always meet at least legal or industry minimum standards and are sufficient to provide decent living wages.
Findings Discussion with workers and Union leaders revealed that the payments made to workers are above the industry norm. The workers are provided with a number of fringe benefits. Each worker received his/her pay slip that contains clear details of the salary paid and deductions made. The audit team viewed the staff and workers employment contracts which were found to be fair. For foreign labour, a point-by-point explanation of the contract is given on arrival, with translation by an established worker with recognized translation skills. This briefing explains the contract, why and how deductions are made, work regulations, leave, repatriation, access to health care, etc. The audit team viewed documents, contracts and agreements that outlined pay and conditions for staff, labour and workers in general. The concern is about copies of contract documents not being available in the language of workers.
Through experience, a procedure has been developed that meets the practical requirements for typical new staff for information on pay and conditions.
Housing of adequate quality is provided, with workers generally housed with two persons to a room. Houses have electricity, piped water, indoor washrooms, sewerage, waste collection service, etc. Medical facilities and services are provided. Education at primary level is supported for children from the estate as well as the surrounding area. Social, cultural and recreational activities and places of worship are supported. Public health services provided in housing areas. Physical amenities are provided, effectively operated and maintained to a standard equivalent to an urban authority.
Criterion 6.6 The employer respects the right of all personnel to form and join trade unions of their choice and to bargain collectively. Where the right to freedom of association and collective bargaining are restricted under law, the employer facilitates parallel means of independent and free association and bargaining for all such personnel.
Findings Company has a policy allowing workers to join trade union. Workers are reported to be members of NUPW. The audit team met with a number of union leaders in different estates where regular meeting with the management were evidently held. Minutes of such meetings are available. The Union also has held meetings where matters were discussed and actions were taken on issues that could not be resolved at estate or mill level. There are records to show that meetings are held by unions to
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discuss their internal issue and between union or worker representatives and estate management.
The documented minutes generally are limited to a summary of issues discussed, but with no confirmation that they represent a true record of events of the meeting.
The company’s public social policy (in Bahasa and English) clearly stated that the workers are free to join trade union of their choice and to bargain collectively.
Criterion 6.7 Children are not employed or exploited. Work by children is acceptable on family farms, under adult supervision, and when not interfering with education programmes. Children are nor exposed to hazardous working conditions.
Findings The mil and each estate maintain a complete register of workers with the individual details including date of birth. There was no evidence of under age (below 16 years) worker operating in the estates. Records maintained to confirm ages of workers. Youngest registered worker as 18 years old. Discussion with Union leaders also shows that no under-age workers are employed.
Criterion 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited.
Findings There is a social policy stating that the company provide equal opportunity for all. Observations indicate that the policy is put into practice.
Criterion 6.9 A policy to prevent sexual harassment and all other forms of violence against women and to protect their reproductive rights is developed and applied.
Findings A statement on preventing sexual harassment is described in the Social Policy statement. No evidence or practices that contradict this policy were observed. Discussion with the Women Union leader shows that the company provide fair and just treatment to women. Grievance mechanism for sexual harassment is in place.
Criterion 6.10 Growers and mills deal fairly and transparently with smallholders and other local businesses.
Findings The KKS Ulu Remis is not sourcing FFB from outside suppliers including smallholders.
Discussion with a number of contractors operating in the SOU shows that the contractors are fully aware of the contract agreement they have signed with the company to provide the service. The conditions for each service to be provided are spelt out clearly in the agreement. The agreements are fair and done on transparent manner. Payments were observed to be made in a timely manner.
Criterion 6.11 Growers and millers contribute to local sustainable development wherever appropriate.
Findings The SOU actively contributes to local community development where each estate has provides allocation for such activities.
For example, in 2008, Pekan Estate has carried out road upgrading works between Simpang Bandar Tenggara to Kg Seri Pekan. The 5 km road is used by the community residing in Kg Seri Pekan to commute to the main road as well as used by other oil palm estates to transport the fruits to the mill. FFB from Pekas Estate are not transported through the same road.
Discussion with local community leaders surrounding the estates within the SOU shows that the estates also provide other services such as water supply, contribution to mosques, temples, school etc. The estates also contribute in kind (e.g. transport etc) to community activities.
PRINCIPLE 7: Responsible development of new plantings
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Criterion 7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations, or expanding existing ones, and the results incorporated into planning, management and operations.
Findings This whole Principle is not applicable to this assessment as all SOU 23 have been planted with oil palm since 1960s and 1970s. There are no new plantings. The company is only involved in re-planting programme after felling of old palms and there is no plan for expansion.
Criterion 7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.
Findings Please see 7.1.
Criterion 7.3 New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values.
Findings Please see 7.1.
Criterion 7.4 Extensive planting (to be determined by SEIA) on steep terrain, and/or on marginal and fragile soils, is avoided.
Findings Please see 7.1.
Criterion 7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions.
Findings Please see 7.1.
Criterion 7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreement.
Findings Please see 7.1.
Criterion 7.7 Use of fire in the preparation of new plantings is avoided other than in specific cases as identified in the ASEAN Guidance or other regional best practice.
Findings Please see 7.1.
PRINCIPLE 8: Commitment to continuous improvement in key areas of activity
Criterion 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.
Findings As part of their effort to make continuous improvement in key areas, it is noted that action has been taken to minimise the use of pesticide in the estates. The alternative treatments employed have been shown to be a practical alternative. However, rat bait still required for areas with young palms and no evidence has yet been provided to explain why non-pesticide alternatives cannot be used to control rat population numbers in areas of replanting. No information has been presented to show that alternative practices are not effective.
For environmental impacts, there is a mechanism that assigns management responsibility and creates awareness of responsibility for those subjects that are regulated or whose effects are understood. A mechanism for environmental aspect and impacts evaluation review has been drafted, but not yet put into practice. However, many of the actions have no clear indicators for monitoring and evaluation of environmental management performance may prove to be difficult. There has been no action to build capacity among current staff to undertake environmental
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management review.
Procedures for minimising and recycling waste and by-products are in place at the mill and in the estates. Among the procedures in place are those to separate wastes and by-products at source. The separated items that are in demand are collected and removed from the site. The separated items not in demand are stored where there is current surplus storage capacity. No strategy has yet been developed to deal with separated waste items that have no local receiver and which are currently stored in limited storage space.
There is a register identifying potential pollutants and a plan has been drafted to manage the potential pollutants from estate and mill production. All processes that produce regulated wastes are effectively managed, and waste outputs monitored. For items that have been identified from a scoping exercise, there are management plans which are systematically undertaken, adequately funded and monitoring data collected where required by regulations. The continuous prevention improvement plans are in place for the estates for the potentially polluting items that have been identified, but these do not include GHGs (see Minor CAR-10 & 011under to 5.6.1). The current pollution prevention plans have gaps, and the there is no review mechanism to identify the nature and extent of management gaps. Current plans give no consideration to the potential of pollution from existing stockpiles of old mill wastes and excavated sludges and green house gases emission.
Discussion under Principles 5 and 6 suggest that SOU23 has planned for, and is undertaking numerous social and environmental management activities. As part of operations, monitoring data on natural resource use, the environment, and health and safety are collected for regulated activities to indicate compliance. For social issues, there is a mechanism to hold discussion with staff and local communities. Following normal estate practice, expenditure on these items is captured, and reports made on the progress and completion of planned activities. But there is no mechanism to capture social and environmental performance to address the principle of ‘Commitment to continuous improvement’ (Minor CAR-013), no commitment to build staff capacity for this task or develop programmes for implementation.
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9. ASSESSMENT DECISION
The assessment has resulted in the issuance of 13 Minor Corrective Action Requests. Details of the CAR and the objective evidence are as listed in Appendix 2. With no outstanding Major CAR, the Sime Darby Plantations Berhad’s management of SOU 23 Ulu Remis, Layang-Layang, Johor, is now recommended for the certification against the RSPO P&C MYNI requirements. The issues highlighted as Minor CARs must be adequately addressed and the adequacy of the actions taken need to be verified during the first surveillance visit to be
conducted within 12 months from the date of assessment.
10. ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY AND FORMAL SIGN-OFF OF ASSESSMENT FINDINGS
It is acknowledged that the assessments cited in this report have been carried out as stipulated and we confirm the acceptance of the assessment report contents including assessment findings.
END OF REPORT
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APPENDIX 1: RECORD OF STAKEHOLDER COMMENTS AND INTERVIEWS
As described in an earlier section of this report, letters were sent to stakeholders as part of audit process, informing them on of the planned assessment. This also gave the stakeholders the opportunity to raise issues, if any, and provided the mechanism for comments regarding the unit to be assessed. The comments received from the stakeholders and response from the audit team is summarised below.
Nr Comment Response
Main Evaluation
1 The company has good working relationship with the communities and provide employment opportunity for the villagers
Most of the local workers working in the estate and mill’s office originated from the surrounding area.
2 Truck drivers speeding while passing the road near the settlement area endangering other road users.
The company has set a 30 km/hr speed limit policy on all roads within the estate and the security personnel monitor its enforcement. All the drivers are given verbal instruction to slow down in housing areas. The management may build speed bump in such area to slow down the vehicle movement. Sign boards are also erected.
3 Request for the company to upgrade and maintain the access road up to Bandar Tenggara.
Despite the fact that the road is also used by other plantation companies, Sime Darby is the only one who has been maintaining the road on periodical basis. The road is actually under the responsibility of municipality / district office, however Sime Darby will continue to do maintenance of the road and possibly upgrading it.
4 Request for street light to be put up along the road down to the river since the road is used by children taking school bus in early morning
The estate management will look into the issue to make sure the area is safe for all.
5
MY02023
Summary Report against RSPO MYNI Requirement for
Sime Darby Plantation Sdn Bhd, SOU 23 Ulu Remis
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APPENDIX 2: RECORD OF CORRECTIVE ACTION REQUESTS (CAR) ISSUED
RECORD OF CORRECTIVE ACTION REQUESTS (CARS)
Organisation: Sime Darby Plantations Bhd
SOU 23 Ulu Remis Project Nr: MY02023
Assessment: Main Assessment Date: 12 – 15 Jan 09
Lead Assessor: Salahudin Yaacob, M.Phil Auditor Tunku Nazim Tunku Yaacob, M.Sc
CAR # Indicator CAR Detail
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Absence of information on relevant international conventions, treaties etc ratified by Malaysian government that may
Objective Evidence:
Register of laws, legislation and regulation is in place but does not include international conventions, treaties etc.
Close-out evidence:
01 2.1.4
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Lack of records of monitoring on implementation of the procedures.
Objective Evidence:
Standard operation procedures for each operation activity are documented and copies are available
in the mill and estates but there is record of implementation and effectiveness of the procedures.
Close-out evidence:
02 4.1.2
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
No soil samplings are carried out in any of the estate.
Objective Evidence:
Leaf sampling is carried out by Sime Darby Research Centre resulted in the recommendation for
fertiliser application but no soil sampling have been carried out.
Close-out evidence:
03 4.2.2
MY02023
Summary Report against RSPO MYNI Requirement for
Sime Darby Plantation Sdn Bhd, SOU 23 Ulu Remis
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CAR # Indicator CAR Detail
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Inadequate rehabilitation programme for abandoned areas (e.g in TDI) that is not going to be
planted.
Objective Evidence:
Areas above 25 degree have been determined through contour/slope map but need to be confirmed
using GIS system. The predetermined areas are now left abandoned eventhough yet to be ground
truth and demarcated.
Close-out evidence:
04 4.3.2
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Lack of identification of fragile and problem soil and no specific programme for soil
conservation.
Objective Evidence:
The company has soil, contour etc map for each estate but no effort has been made to
systematically identify sensitive and problem areas despite obvious sign such as erosion
and siltation in the stream.
Close-out evidence:
05 4.3.5
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Inconsistent implementation of procedure on identification and protection of riparian bufferzone.
Objective Evidence:
Bufferzone has been identified on the map and on the ground. Observed that the buffer area is marked with blue paint and at least one row of palm (depending on the size of stream involved) is spared where no pesticides and fertiliser application will be carried in such area. However, the procedure is not implemented in all estates.
Close-out evidence:
06 4.4.1
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
The method for identification and assessment of HCV habitats has not been undertaken through adequate stakeholder consultation.
07 5.2.1
Objective Evidence:
MY02023
Summary Report against RSPO MYNI Requirement for
Sime Darby Plantation Sdn Bhd, SOU 23 Ulu Remis
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CAR # Indicator CAR Detail
The company has documented a ‘Biodiversity Baseline Assessment Report for SOU 23’ dated January 2008 that described the method and identify the possible HCV areas within the SOU. The study concludes that there are HCV 4 and HCV 6 within the unit. However the assessment was done without consultation with local experts etc.
Close-out evidence:
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Biodiversity Action Management Plan is in adequate and does not include consultation with recognised HCV experts and relevant stakeholders.
Objective Evidence:
The ‘Biodiversity Baseline Assessment Report for SOU 23’ includes recommendation on the management of biodiversity area as well as a Biodiversity Action Plan that include time line for implementation however is preliminary in nature.
Close-out evidence:
08 5.2.2
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
There are no mechanism for direct monitoring of shell and fibre used to generate energy.
Objective Evidence:
Estimate of FFB and shell produced is available. The mill used the FFB for mulching in the field and sell out some of the shell. Significant portion of the shell and fibre are used for boiler operation but no record is being maintained.
Close-out evidence:
09 5.4.1
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
Identification of polluting activities is inadequate and does not address the emission of
GHGs.
Objective Evidence:
Plans to mitigate polluting activities in place but it does not identify activities that emit
GHGs.
Close-out evidence:
010 5.6.1
Date Recorded> 15 Jan 09 Due Date> Ist
surveillance Date Closed> dd MM yyyy
Non-Conformance:
No evidence of periodical review of pollution and emission reduction plans.
011 5.6.2
Objective Evidence:
MY02023
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Sime Darby Plantation Sdn Bhd, SOU 23 Ulu Remis
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CAR # Indicator CAR Detail
Pollution mitigation plan is yet to be implemented.
Close-out evidence:
Date Recorded> 15 Jan 09 Due Date> 1
st
surveillance Date Closed> dd MM yyyy
Non-Conformance:
The timetable tabulated in the social management plan is insufficient as it does not include
indicators for monitoring as well as it is not long term.
Objective Evidence:
The social management plan that summarise the actions to be taken on periodical basis is tabulated in the Social Baseline Study but yet to be reviewed and updated.
Close-out evidence:
12 6.1.3
Date Recorded> 15 Jan 09 Due Date> 1
st
surveillance Date Closed> dd MM yyyy
Non-Conformance:
No mechanism to capture the performance and expenditure in social and environment aspects.
