RA SAAS Diagnostic Audit Report Tea Estate Tobasari 2010 Without Buyers' Details

Sustainable Farm Certification International, Ltda contributes to the improvement of social and environmental best practices through high quality, transparent certification in accordance with the Sustainable

Agriculture Network’s standards.

Rainforest Alliance Certified™ Farm Diagnostic Audit Report Tobasari Tea Estate – PTPN IV

Country: Indonesia Crop: Tea Date of Report Submission: Date of the Audit: 29 July 2010 Auditors: Agung Prawoto, Thomas Irawan Sihombing

Sustainable Agriculture Auditing Services

Farm Diagnostic Audit Report: Tobasari Tea Estate – PTPN IV

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Sustainable Farm Certification International, Ltda. Page 2 of 19

CONTENT

1 Introduction................................................................................................................3

2 Audit summary ...........................................................................................................3

2.1 Summary of farm scores .................................................................................................. 3

2.2 Conclusion of the audit team ........................................................................................... 3

3 Farm description ........................................................................................................4

3.1 General information......................................................................................................... 4

3.2 Certification experience ................................................................................................... 5

3.3 Relevant farm management aspects ............................................................................... 5

3.4 Production for certification ............................................................................................. 6

3.5 Traceability [not identified].............................................................................................. 6

4 Audit ...........................................................................................................................7

4.1 Scope .................................................................................................................................. 7

4.2 Standards used.................................................................................................................. 7

4.3 Farm certification requirements ..................................................................................... 7

4.4 Evaluation and scoring system ........................................................................................ 7

4.5 Audit team......................................................................................................................... 8

4.6 Confidentiality agreement ............................................................................................... 8

4.7 Information gathering methods ...................................................................................... 8

5 Audit results................................................................................................................9

5.1 Score obtained................................................................................................................... 9

6 Findings ................................................................................................................... 10

6.1 Major and minor non-conformities .............................................................................. 10

6.2 Non-conformities with critical criteria ......................................................................... 15

6.3 List of criteria under a “Not Applicable” category ..................................................... 16

6.4 Observations ................................................................................................................... 17

7 Annexes .................................................................................................................... 17

7.1 Monitoring and Evaluation Form................................................................................. 17


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1 Introduction

This report shows the results of the diagnostic audit carried out for farm Tobasari Tea Estate of the company PTPN IV. The audit was conducted by group of specialists on behalf of SAAS. SAAS is the Inspection Body for countries where there currently is no SAN-partner. SAAS is an independent unit of Rainforest Alliance's Sustainable Agriculture program.

The purpose of the audits is to analyze the performance of the farms with respect to the good practices of social and environmental management indicated in the Sustainable Agriculture Standard, Sustainable Agriculture Network, April 2009.

2 Audit summary

2.1 Summary of farm scores

Farm Name: Tobasari Tea Estate – PTPN IV

Minor (mnc): 14

Major (MNC): 13 Total number of non-conformities

Critical Criteria: 2.1; 4.5; 4.7; 6.13

Overall compliance by principle: < 50% ≥ 50%

Overall compliance percentage: 81.5%

2.2 Conclusion of the audit team

The audit team of SAAS concludes that Tobasari Tea Estate – PTPN IV, does not comply with SAN’s certification requirements. The farm has non-conformances with four critical criteria (2.1; 4.5; 4.7; 6.13) see section 6.2 below for details.


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3 Farm description

3.1 General information

Name of company: Tobasari Tea Estate – PTPN IV

Type of legal organization:

Company (with shareholders)

Government farm

Family farm

Cooperative

Leased farm

Other. Specify:

Name of farm: Tobasari Tea Estate – PTPN IV

Total area (hectares): 1,282.58 Ha. Production area (hectares):

899.77 Ha

Country: Indonesia Town or city: Pematang Siantar Municipality: Simalungun District: -

Farm location:

Province or Department: North Sumatra

Latitude: (eg 44.63166955) 2.837167 Coordinates (decimal degrees): Longitude:(eg-110.49717093) 98.859089

Name: Khairil Anwar

Position: Accounting and Financial Assistant

Phone: +6285262605777

Email: [email protected] Contact person for certification:

Mailing address:

PT. Perkebunan Nusantara IV (Persero) Unit Usaha Tobasari Kecamatan Sidamanik – Kabupaten Simalungun

Name of Agreement signer: Ir. Eko Sujatmiko

Mailing address (physical address, no PO Box):

PT. Perkebunan Nusantara IV (Persero) Unit Usaha Tobasari Kecamatan Sidamanik – Kabupaten Simalungun

Position: Estate Manager

Information to be included in the Certification Agreement:

Number of hectares to be included (sum of area under production with crops that are being certified):

1,282.58 Ha

Name: Khairil Anwar Position: Accounting & Financial Assistant Phone: +6285262605777 Sales representative:

Email: [email protected]


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3.2 Certification experience

The farm had been certified SNI for tea manufacture, ISO 9001: 2008 and occupational health and safety management system since 2007.

3.3 Relevant farm management aspects

General description:

Social and environmental management system:

Tobasari Tea Estate is one of three tea estates managed by plantation state-owned company “PT Perkebunan Nusantara IV [hereinafter called as PTPN IV]”.

The farm does not have a social and environmental management system. However, the farm implements social and working conditions according to legal requirements. Meanwhile the farm has a program for replanting woody trees in the farm as required by the government program “one man for one tree”.

The farm had been certified for occupational health and safety management system since 2007 but unfortunately the system is run inconsistently. Clear signs for wearing appropriate personnel protective equipments (PPEs) for applicable workers and signs for giving priority for occupational safety and health were established in anywhere in factory, office and the farm area, but they have a lack of control/monitoring to implement the use of PPEs.

Ecosystem and biodiversity conservation:

The farm is located at an elevation of 950 - 1,100 m above sea level and surrounded by villages. Observation during the audit showed that the farm has insufficient woody trees for shading and as wind breaks. In addition, on a steep slope area alongside the river, coffee trees were planted by people who have been living in the surroundings of the farms for years. The coffee trees were planted without shade trees but established bench terrace.

Perennial water source is in Kampung Said Buntu. Woody trees surrounding the watersource were cut down to be planted coffee plants by people surrounding the farm. The water source is used for Tobasari and Sidamanik factories and people surrounding the farm. In addition, water consumption for factory and settlements had not identified yet by farm.

Social and working conditions:

As an estate under a state-owned company, the farm implements social and working conditions according to legal requirements. The farm has 583 workers [i.e.469 males, 114 females] and pays monthly wages for permanent workers. Workers get free houses, water, schools, child care and medical facilities, incentive for electricity, holiday allowance, annual bonus and insurance. School bus and scholarship for student achievers, allowance for workers’ children who study out of town are also provided by the farm.


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The farm has a working agreement with workers association on working condition in PTPN IV.

Crop management:

Tobasari tea estate used to as part of Sidamanik tea estate and then was separated in 1978 with new factory. In general the farm still relies on agrochemicals input for production, but doesn’t apply pesticides which are prohibited according to the SAN list.

The farm has a production plan for each plot of the farm. Records about the use of agrochemicals were available and identified the amounts of agrochemicals consumed.

Infrastructure, processing and packing:

The farm has offices, a plant nursery, an agrochemicals warehouse, a workshop for vehicles and machines, gasoline and diesel storage, houses in some settlements and a factory.

3.4 Production for certification

The following table includes information on the production of crops included in the certification at the time of the audit:

Production

Crop and variety Product quality

Harvest period Kg/

hectare

Total production

(kg)

Tea, Assamica Black Tea 21 days (plucking

machine)

2,672.77 Kg

tea / Ha

11,859,943

Kg Tea

3.5 Traceability [not identified]

List of buyers of tea product

Name Location (Country,

City) Contact

(Name, email) Annual quantity

(tons)


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4 Audit

4.1 Scope

This diagnostic audit covers the evaluation of the social and environmental performance of Tobasari Tea Estate against the Sustainable Agriculture Standard – Sustainable Agriculture Network, April 2009. The areas and crops included in the scope of the diagnostic audit are indicated in the following chart:

Area Extension (ha)

Tea production 899.77 Ha

Protected areas -

Conservation areas [steep slope area: ravine, riverside area]

26.40 Ha

Infrastructure [office, factory, settlement, warehouse, schools, etc]

53.08 Ha

Other 303.33 Ha

TOTAL 1,282.58 Ha

4.2 Standards used

The audit team based the audit on the following documents: � Farm Certification Policy Rainforest Alliance Certified™ (version April 2009) � Sustainable Agriculture Standard of the Sustainable Agriculture Network (v. April 2009) � List of prohibited pesticides, SAN (version September 2009) � Criteria 2.2 of the Addendum (version April 2009)

4.3 Farm certification requirements

A diagnostic audit cannot result in certification but provides feedback only how close a farm is in meeting requirements. Below the requirements for certification are highlighted: 1. An overall compliance of 80% based on the criteria of the Sustainable Agriculture Standard – Sustainable Agriculture Network, April 2009, and criteria 2.2 of the Addendum (SAN, 2009).

2. An overall compliance of at least 50% of the criteria for each of the ten principles of the Sustainable Agriculture Standard –Sustainable Agriculture Network, April 2009, and criteria 2.2 of the Addendum (SAN, 2009).

3. No non-conformities are found with critical criteria.

4.4 Evaluation and scoring system

A scoring system is used to quantify the level of compliance with the Sustainable Agriculture Standard –Sustainable Agriculture Network, April 2009


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% Compliance by criterion Finding category

Less than 50% compliance Major non-conformity (MNC)

Compliance equal to or greater than 50% but less than 100%

Minor non-conformity (mnc)

100% No finding

The critical criteria do not impose additional weight in the score of the farm; however, the requirement for certification is that the farm complied with all the critical criteria of the Standard for Sustainable Agriculture – Sustainable Agriculture Network and the additional criteria of the Addendum. An observation indicates areas that would benefit from continuous improvement or matters that could become non-conformities with just a slight deterioration in performance. An observation does not affect the score of the farm.

4.5 Audit team

Agung Prawoto

Lead Auditor. Working for BIOCert, an Indonesian based organic certification body, as director.

Organic inspector both for BIOCert and foreign based organic certification bodies e.g. NASAA [Australia], Naturland [Germany] for ACT Control [Thailand] scheme. Verifier for Starbucks C.A.F.E. Practices Program and 4C [Common Code for Coffee Community] Association in Indonesia, Papua New Guinea and East Timor.

Thomas Irawan Sihombing

Auditor in training. Working for BIOCert as organic auditor.

In addition, he works for a conservation and community development NGO in West Kalimatan “KABAN” for assisting local people in national park of lake Sentarum West Kalimatan Indonesia. He has experience to develop Internal Control System for forest honey collectors groups in national park of lake Sentarum.

4.6 Confidentiality agreement

The audit team of SAAS hereby agrees before Tobasari Tea Estate to maintain strict confidentiality regarding management and use of the information on the farm collected in the course of the audit. SAAS keeps in its office copies of the confidentiality statements signed by the members of the audit team. One key buyer is exempted from this confidentiality except table 3.5.

4.7 Information gathering methods

In the course of the audit, the audit team has applied several techniques to gather, verify and analyze the information and to evaluate the farm’s performance in terms of certification standards.


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These techniques include interviews, field observations and document revision. Upon completion of the field audit, the audit team analyzed the findings with farm representatives and explained the nature of the findings to allow the representatives to provide additional information in the closing meeting. It should be noted that the various types of evidence found are always “triangulated” or cross referenced by the audit team. For example, the team checks the documentation related to the workers, observes their field activities, and interviews workers in connection with the issues revealed through documentation or by observation. Any inconsistencies between the revisions, the observations and the interviews will lead to further investigation, and even non-conformities, should the evidence show that conditions persist throughout the farm.

5 Audit results

5.1 Score obtained

Name of farm: Tobasari Tea Estate – PTPN IV

Total number of non-conformities

Principle Minor

(mnc)

Major

(MNC)

Critical Criteria

Compliance %

1. Social and environmental management system

3 1 - 77.3

2. Ecosystem conservation 2 1 2.1 80.0

3. Wildlife protection 1 - - 91.7

4. Water conservation 6 0 4.5

4.7 66.7

5. Fair treatment and good working conditions

- - - 100

6. Occupational health and safety

2 7 6.13 61.9

7. Community relations - - - 100

8. Integrated crop management - 1 - 87.5

9. Soil management and conservation

- - - 100

10. Integrated waste management

- 3 - 50.0


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Total: Non-conformities 14 13 4

Overall compliance (%) 81.5 %

6 Findings

6.1 Major and minor non-conformities

Criterion: 1.1

Non-conformity category Major (MNC) minor (mnc)

Place / Department: Farm Management

Description of finding / Objective evidence

Observed in the field actually the farm has been implementing social program for workers and

community surrounding the farm by providing free houses, health clinic, schools and other benefit

for workers, however the farm doesn’t have social and environmental management system

according to its size and complexity of its operations that contains the necessary policies, programs

and procedures that prove compliance with this standard and respective national legislation binding

for environmental aspects on farms.

Criterion: 1.3




In general the farm management commits to comply against standard and certification

requirements. It is showed by following certification program of occupational safety and health

management system. But observed during audit showed the management system run inconsistently.

Criterion: 1.4




As stated in point 1.1 above the farm doesn’t have social and environmental management system

and all personnel didn’t realize this certification requirements

Criterion: 1.6



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The farm doesn’t evaluate the potential social and environmental impact of new works or activities.

Criterion: 2.6


Place / Department: Farm


People surrounding the farm applied herbicide in erosion prone slope area alongside river and cut down bamboo trees in block 68-69 to be planted coffee plants.

Criterion: 2.7


Place / Department: Farm and human activity area [school, road, settlements]


Observation in the farm showed herbicide application was applied close to area of human activity e.g. public road. Confirmation from the management that the farm applies herbicide until the edge of farm since esthetic reason. Meanwhile the farm has insufficient vegetative barrier to minimize any negative visual impacts and reduce the drift of agrochemicals from the farm to area of human activity.

Criterion: 3.1


Place / Department: Farm management


The farm has not identified yet on wildlife and wildlife habitats found on the farm.

Criterion: 4.1


Place / Department: Farm management, water source Kampung Said Buntu


The farm doesn’t have a water conservation program. Woody trees surrounding watersource in Kampung Said Buntu were cut down to be planted coffee plants by people surrounding the farm. The water source is used for Tobasari and Sidamanik factories and people surrounding the farm. In addition, water consumption for factory and settlements had not identified yet by farm.


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Criterion: 4.4


Place / Department: Factory


Factory has insufficient waste water treatment. Wastewater from factory origin from cleaning machine and floor in the afternoon and oil spill. Water brings tea dust and flowing through ditch into water body.

Criterion: 4.6




As stated in point 4.4 above the factory has insufficient wastewater treatment so that the factory wastewater and organic deposit could contaminate the water body. The factory hasn’t program to establish water quality monitoring and analysis program periodically.

Criterion: 4.9




As stated in point 4.6 above, the factory hasn’t program to establish water quality monitoring and analysis program periodically.

Criterion: 6.3


Place / Department: Farm management, worker who applying agrochemicals


The workers who applied agrochemicals stated insufficient training on good and safety handling and applying agrochemicals. Confirmed from related workers, the training is not carried out periodically and just gets a brief instruction from their foreman before the first trial on this issue.

Criterion: 6.5





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The medicals check up records showed there is a women worker working to handle and apply agrochemicals. Confirmed to management that farm has inbalance requirement ratio of worker with job in the farm so that women workers can work for handling and applying agrochemicals.

Criterion: 6.6




Workers who handling and applying agrochemicals were given masks and boots by farm. However most of workers didn’t wear masks during handling and applying agrochemicals. Monitoring and controlling to implement the management system was insufficient.

Observation in the farm, workers who handling and applying agrochemicals have insufficient facility to wash hand before they get lunch.

In addition confirmation from workers that the farm doesn’t provide gloves or work cloth. They made apron from rice/fertilizer sacks by themselves as working cloth. Some aprons were insufficient to protect them during applying agrochemicals.

Meanwhile there were many unprotected rotate belt machines in the factory.

Criterion: 6.9


Place / Department: Central fertilizer warehouse


In central fertilizer warehouse was observed that pile of fertilizer sacks were reclining in the wall with no free space between the wall and the fertilizer sacks. The warehouse has insufficient air ventilation.

Criterion: 6.14




The farm has insufficient safety measures to protect workers that applying agrochemicals in the field. As showed during audit, workers who applying agrochemicals didn’t wear protective equipments i.e masks and gloves but no warning or sanction was imposed to pertinent workers from the management although supervisor was seeing this practice.

Farm manager confirmed that it is difficult to ask them for wearing masks or gloves during agrochemicals application since habit reason and the sanction can’t be imposed to pertinent workers since corporate culture.


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Criterion: 6.15




As stated in point 6.14 above, the management can’t force the implementation of occupational safety and health management program on the ground.

Criterion: 6.16




The farm doesn’t provide showers and changing rooms for workers that apply or come in contact with agrochemicals. Those workers wear their own working clothes and bring them back to be washed at home.

Criterion: 6.17




As stated in point 6.16 above, Workers that apply or come in contact with agrochemicals wear their own clothes during applying agrochemicals and bring them back to be washed at home.

Criterion: 6.20


Place / Department: Farm management, farm


Farm has insufficient shelter for shade and protection from extreme weather conditions, such as heavy rain and lightning and rest of workers in the farm.

Criterion: 8.3


Place / Department: Farm management, field and factory


Farm implements occupational safety and health program inconsistently and has lack of monitoring to implement it. Observation in the farm, workers who were mixing and applying


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agrochemicals wore inappropriate personnel protective equipments. They were wearing own clothes or plastic apron made from rice/fertilizer sacks as working cloths. In addition, most of those workers didn’t wear masks and gloves during applying agrochemicals.

Criterion: 10.1




The farm doesn’t have an integrated waste management program for the waste products it generates.

Organic deposit of tea dust accumulates in factory yard, but there is no program to deal with the

waste.

A hole is in front of fertilizer warehouse for collecting dangerous and toxic wastes, but no

further follow up to deal with those wastes.

Deposit of oil mud are collected in some barrels surrounding fuel tank, but no further follow up

to deal with those oil mud.

Criterion: 10.5


Place / Department: Farm, settlement, factory


Tea dust was found in and around the factory [in roof, floor and yard of factory]. Plastic waste deposit was found surrounding settlements.

6.2 Non-conformities with critical criteria

Criterion: 2.1

Critical non-conformity category Major (MNC) minor (mnc)



The farm has no conservation program and has not identified yet on all existing natural ecosystems, both aquatic and terrestrial in the farm area.

Criterion: 4.5


Place / Department: Fuel storage, electricity station,



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Farm has insufficient waste water treatment for waste water from washing agrochemicals

equipments and working cloths of workers who handling and applying agrochemicals so that could

contaminate water body.

Diesel spill surounding diesel station and close to electricity station was flowing to ditch during

raining and going into water body.

Criterion: 4.7


Place / Department: Wastewater treatment in factory


As stated in point 4.4 above, factory has insufficient waste water treatment. Wastewater from factory origin from cleaning machine and floor in the afternoon and oil spill. Water brings tea dust and flowing through ditch into water body so that could contaminate the water body.

Criterion: 6.13


Place / Department: Farm and factory management, workers who handling and applying agrochemicals


The farm had been certified for occupational safety and health management system since 2007 but it is not implemented consistently. Monitoring to implement the management system was not working well.

Workers who handling and applying agrochemicals was given masks and boots by the farm. However most of them were not wearing masks during handling and applying agrochemicals. Confirmation from workers that they got the last mask in 2007 without change any mask filter.

In addition confirmation from workers that the farm doesn’t provide gloves or working cloth. They made apron from rice/fertilizer sacks by themselves as working cloth. Some aprons were insufficient to protect them during applying agrochemicals.

6.3 List of criteria under a “Not Applicable” category

Principle “Not applicable” criteria

1. Social and environmental management system

-

2. Ecosystem conservation -

3. Wildlife protection -


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4. Water conservation -

5. Fair treatment and good working conditions for workers

-

6. Occupational health and safety -

7. Community relations -

8. Integrated crop management 8.8

9. Soil conservation and management -

10. Integrated waste management -

6.4 Observations

The objective of this section is to denote points of attention as potential non conformities to the standards in the future. They are established in sequential order according to standards. Observations do not affect the score.

N° Criterion Description of observation

1 -

2

Last Line

7 Annexes

7.1 Monitoring and Evaluation Form

1. General Information

Irrigation Processing 1

Average water consumption in regular operations (liters): - 3.000 Liters/day

2 Waste water treated in regular operations (liters):

-

Class I Class II Other

3 Agrochemicals bought annually (Kg): [not identified]

[not identified]

[not identified]

4 Total number of protected hectares: -

5 Total number of hectares under 26.40 Ha.


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conservation:

6 N° of species identified in the farms (optional):

[not identified] Flora [not identified] Fauna

7 Total meters of water channels or bodies of water under per anent protection:

[not identified]

8 N° of total permanent national workers: 469 Men 114 Women

9 N° of total permanent foreign workers: Men Women

10 N° of total temporary nation local workers: 80 Men 25 Women

11 N° of total temporary foreign workers: Men Women

12 N° of under age children who benefit from education assistance:

[not identified]

13 Do worker have access to drinking water at thei work sites?

YES NO

14 Is the workers w ge over $2 per day for a full working day?

YES NO

15 N° of serious accidents in the past year: None

16 Current certified prod ction (Kg): 17 Production sold as certified (Kg):

National International 18

Percentage of sales of certified products in markets: % %

Date: 27 July 2010

7.2 Photos


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Photograph N° 1. No wearing gloves and appropriate working cloths during handling

agrochemicals [criteria 6.13]

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RA SAAS Diagnostic Audit Report Tea Estate Tobasari 2010 Without Buyers' Details

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