Jakarta 12950,Indonesia Tel: +62 21 57944579 Fax: +62 21 57944575
www.tuv.com/id
TABLE OF CONTENTS
1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT 3
1.1 Executive Summary and Scope of Assessment 3 1.2 Certification Details 3 1.3 Organisational Information / Contact Person 3 1.4 Actual production volumes and projected outputs. 4 1.5 Summary of Previous Assessment 5
2.0 ASSESSMENT PROCESS 6
2.1 Certification Body 6 2.2 Qualifications of Lead Assessor and Assessment Team 6 2.3 Assessment Methodology & Agenda 6
3.0 ASSESSMENT FINDINGS 8
3.1 Description of Supply Chain Management System 8 3.2 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions 18 3.3 Conclusion and Recommendation for RSPO Supply Chain Certification 20
4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL
RESPONSIBILITY 21
4.1 Date of Next Surveillance Visit 21 4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client 21
APPENDICES 22
Appendix 1: Details of Supply Chain Certification Certificate 22 Appendix 2: List of Abbreviations 24 Appendix 3: Observations and Opportunities for Improvement 24 Appendix 4: Supply Chain Certification Audit Closing Meeting Summary 26 Appendix 5: List of Certified List of Suppliers and Buyers 27
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1.0 SCOPE OF SUPPLY CHAIN CERTIFICATION ASSESSMENT
1.1 Executive Summary and Scope of Assessment
The operations of FELDA IFFCO Oil Products Sdn. Bhd. were assessed against Module B and Module C of the RSPO Supply Chain Certification Systems (SCCS) document (November 2014). The scope of the Supply Chain Certification System assessment covers the implementation of the Segregation and Mass Balance supply chain model of FELDA IFFCO Oil Products Sdn. Bhd. This is not a multi-site certification. The 2nd surveillance aduit was carried out on March 30 to 31, 2015 and a total of 6 non-conformities were found.
1.2 Certification Details The details of RSPO certification of FELDA IFFCO Oil Product Sdn. Bhd. are as per the table below Table 1: RSPO Certification details of FELDA IFFCO Oil products Sdn. Bhd.
Refer to Appendix 1 for further details of the RSPO Supply Chain certificate.
1.3 Organisational Information / Contact Person
Contacts details of the company are as follows:
RSPO Membership no.: 2-0142-10-000-00
RSPO Certificate no.: 824 503 14005
Date of RSPO certificate & validity: 28/05/2013 – 27/05/2018
Date of RSPO certification audit: March 13 & 14, 20 13
Company Name: FELDA IFFCO Oil Products Sdn. Bhd.
Address: Lot 82 Jalan Besi 2, Pasir Gudang Industrial Estate, 81700, Pasir Gudang, Johor, Malaysia
1.4 Actual production volumes and projected outputs .
Table 3: Certified tonnages claimed, certified tonn ages purchased or sold, total and projected from FELDA IFFCO for period of March 2014 to March 2015.
*Data f
Table 4: Records of Certified Material Recived/ Pu rchased for Period of March 2014 to March 2015
Certified tonnage sold under (Green Palm and UTZ System)
4067.76
Certified tonnages purchased 6978.98
Actual Production 398,596
Actual Certified Product Producton 6978.98
Projected total output for year 2015 400,000
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1.5 Summary of Previous Assessment
The first surveillance audit was conducted on March 13 & 14, 2014. During the 1st surveillance audit the implementation of RSPO supply chain certification was well. There was no non conformities were raised during 1st surveillance audit. The company could demonstate the system has fulfilled the RSPO require-ments and was recommended as SCCS certified company.
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2.0 ASSESSMENT PROCESS
2.1 Certification Body PT TUV Rheinland Indonesia is member of Group TÜV Rheinland Group, a global leader in independent testing and assessment services. The TÜV Rheinland Group was established in 1872 with offices located in over 500 locations in 65 countries on all five continents. PT TUV Rheinland Indonesia offers certifica-tion for a wide range of management systems according to established international standards including ISO 9001, ISO 14001, OHSAS 18001, SA 8000, RSPO (RSPO-ACC-013 dated on June 06, 2014) and ISPO (LS-P&K-005-ISPO dated on May 10, 2012). PT TUV Rheinland Indonesia’s office is located in Ja-karta, Indonesia.
2.2 Qualifications of Lead Assessor and Assessment Team
Name Position Qualifications / Experience
Dian Su-santy Soeminta
Lead Audi-tor
Education: Bachelors Degree in Forestry - Bogor Agriculture Institute. Indonesia, (1990 to 1995). Trainings attended : ISO 9001:2000 lead assessor course 1996 - Ne-ville Clark; ISO 14001 lead assessor course - PE International; OSHAS: 2007 training, Sustainable Forest Management (SFM) - For-est Stewardship Council (FSC) system training; Chain of Custody training for FSC System. RSPO lead Auditor training year 2010 by Pro Forest and Wild Asia. SCCS training by David Ogg Consulting. ISPO Lead Auditor training Working experience: Professional forester since 1995 to 2000. Lead Auditor for Forest Stewardship Council (FSC), Sustainable Forest Cer-tification (SFC) and Chain of Custody (COC) Certification. Lead audi-tor for Environmental Management System (EMS) and Quality Man-agement System (QMS) audits. Conducted sustainable forest man-agement certification audits on FSC and Indonesian Ecolabel Institute (Lembaga Ecolabel Indonesia - LEI) standards for 20 companies, 50 COC FSC/LEI audits, and EMS and QMS audits at more than hundred companies for TUV Rheinland Indonesia. Instrumental in the prepara-tion of TUV Rheinland Indonesia for Sustainable Forest Management Certification System and TUV Rheinland Malaysia for RSPO Certifica-tion. Member of Task Force for Indonesian National Interpretation (Guidance on scheme smallholder RSPO certification). Developed TUV Rheinland RSPO Gap Assessment Checklist and report template.
2.3 Assessment Methodology & Agenda The supply chain 2nd surveillance audit was conducted between 30 & 31 March 2015 as per the assess-ment program below. The assessment was carried out in accordance with PT TUV Rheinland Indonesia’s RSPO audit procedure as well as the RSPO Supply Chain Certification document. An on-site assessment was conducted and the assessment team carried out field and document as-sessments of compliance to RSPO Supply Chain Certification System requirements. The company proposed the correction and corrective action for all identified non conformities raised to the certification body 30 days after the closing meeting. Verification of closure of non-conformances was conducted 1 months after the closing meeting of the 2nd surveillance audit. The 2nd surveillance agenda is as explained below.
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2nd Surveillance audit Agenda.
Date Location/ Main sites Main activities March 30, 2015 Pasir Gudang Opening Meeting
Company Profile Presentation regarding company current situation Verification on previous audit findings. Document check for SCCS System Lunch and break
Refinery, Fractiona-tion Hydrogenation
Plant Tour Incoming material Product Processing Finished Good Packing
Sales Department Sales and Export Document March 31, 2015 FELDA Johor Bulker
Sdn. Bhd Outsourcing company for material or product storage
Purchasing Depart-ment
Purchasing document
HRD Training Meeting room Preparation of closing meeting
Cloisng Meeting End of 2nd surveillance audit
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3.0 ASSESSMENT FINDINGS Felda Iffco Oil Products Sdn. Bhd. (FIOP) is a joint venture company with 37.45% shares owned by Felda Palm Industries Sdn. Bhd., 37.45% owned by Felda Iffco Sdn. Bhd., 17.1 % owned by Mitsui and Co. Ltd and 8 % owned by Asahi Denka Kogyo K.k. The company was incorporated on 27 October 1975 under the name Felda Oil Products Sdn. Bhd. with Manufacturing License no. 000626 dated 8 March 1977 for production of cooking oil for other oil derivatives. The company's name was changed to Felda Iffco Oil Products Sdn. Bhd. as per the approval certificate from the Companies Commission of Malaysia dated 24 December 2010. FELDA IFFCO Oil Products Sdn Bhd is mainly involved in refining and fractionating of palm oil leading to the production of its core products such as refined, bleached, deodorized (RBD) palm oil, RBD palm olein, palm mid fractions, rbd palm stearin, soft stearin and palm fatty acid distillate. The facility has received numerous accreditations such as ISO 9001:2008, HACCP, OSHAS 18001 and and Halal certifications. FIOP’s day-to-day operation is run and managed by more than 101 employees and professionals. The company produces the following certified products: - RBDPO (Refined Bleached Deodorized) - RBDPL (Refined Bleached Olein) - RBDPS (Refined Bleached Sterin) - RBDOL IV 63 (Refined Bleached Olein IV 63) - RBSST IV II (Refined Bleached Stearin IV II) - PMF IV 45 (Palm Mid Fraction IV 45)
3.1 Description of Supply Chain Management System The following is a description of the findings pertaining to the company’s supply chain management sys-tem according to the RSPO SCCS requirements, including status of compliance of the company and their outsourced third parties to RSPO SCCS requirements:
Section 5: General Chain of Custody System Requirements for the Supply Chain
5.1. Applicability of the General Chain of Custody System Requirements for the supply chain
Findings: The company still maintains their supply chain management system integrated with the implemen-tation of quality management systems at ISO 9001:2008 that has been certified by independent certification bodies. Considering the nature of incoming material, company decide to implement Segregation (SG) and Mass Balance system (Module B &C). The company decided to implement non physical segregation for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives then sold under mass balance To support implementation of RSPO supply chain, company has established their quality manual to include all RSPO SCCS requirements i.e. RSPO Manual/SM-001. Relevant procedure was estab-lished, e.g. -Purchasing and Incoming certified material (CPO and RBDPO) -Receiving certified material (CPO and RBDPO) -Certified product processing Certified product discharge -Training procedure -Non conforming product -etc. Some procedures related to the new requirements of RSPO SCCS 2014 have not been estab-lished yet such as, grievance and Panel Procedure and Management review procedure. This was raised as non conformities related to this requirement.
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The company has completely established the required standard operation procedure as RSPO SCCS requirement needed stated on below section. FELDA IFFCO Oil Products Sdn. Bhd. is RSPO member with membership number 2-0142-10-000-00. Compliance status: Non Compliance, see NCR No 201 5-01 of 06 to NCR 2015-06 of 06
5.2. Supply Chain Model
Findings: The company decide to implement both SG and MB as their SCCS models. For period of year 2014, the company decided to implement non-physical segregation for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives which are then sold under mass balance (MB) model. Even though the company has prepared a mechanism and procedures for physical segregation, however this is only on standby in case of any inquiry for SG claim. The company has so far only claimed products under MB and not sold any products claimed as SG. For the period of March 2014 to March 2015 the company purchased 6978.98Mt of certified material with SG claim and then sold 4067.76 Mt under MB claim. Compliance status: Full Compliance
5.3.Documented procedures
Findings: There are small changes on company’s SCCS manual revision 03, dated March, 2015 to cover all RSPO SCCS requirements and as follow up action from the previous SCC certification audit done in year 2014. Standard operation procedures for incoming material CPO and RBDPO, product processing until product dispatch for each product still exist, while incoming order procedure is handling by trading department in Felda Iffco head office Port Klang Kuala Lumpur. FELDA IFFCO Oil Products Sdn. Bhd. provides quality management system as a part of compliance to this stand-ard as seen from their documents. The mill has identified all processes needed. Their application, interaction and sequence are also determined. There are several existing standard operation procedures such as explained on FELDA IFFCO Oil Products Sdn. Bhd. manual of operation and procedures. However FELDA IFFCO has no esta-bished grievance and complaint procedure and no mechanism for management review as required by new RSPO SCCS requirement year 2014. This was raised as a non-conformity. The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements still not changes is Mr. Zulkafli has formally assigned. There is an appointment letter to Mr. Zulkafli as RSPO Management Repre-sentative by 18/03/2013. The Letter no. (69) A/2/11/224 dated March 18, 2013 signed by Plant Man-ager. The letter decided to appointed the Product Head as Management Representative for establish-ing, documentation, implementing and maintain RSPO supply chain in FELDA IFFCO Oil Products Sdn. Bhd. The letter also determines all jobs description for RSPO SCCS Management Representa-tive. The letter is maintained by the HR department.
Compliance status: Non Compliance, see NCR 2015-04 of 06
5.4. Purchasing and goods in
Findings: FELDA IFFCO Oil Products Sdn. Bhd. produce certified products such as oils and fats with palm and lauric oil or its admixtures and fractions as main component in shortenings, margarine, special-ity oils and fats, ghee, cooking oils and bulk oils from certified CPO and RBDPO. Most of certified CPO come from SCCS certified palm oil mill under FELDA group such as Lepar Utara Mill and Jengka 21 Mill some of certified supplier still not included on the list such as FELDA Jengka 8 and
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FELDA Jengka 18 (this is raised as a non conformity), purchased from other certified mills such Kekayaan Palm Oil Mill while certified RBDPO come from others certified processor outside FELDA group such as Kek Seng Berhad. Purchasing department is the section which is responsible to source for certified material from cer-tified supplier. According to the company’s certified material purchasing procedure, all purchased orders for certified material shall indicate the claimed supply chain model of the certified material to be purchase, whether it is Identify Preserved or Segregation material, which will be processed as certified product under the Segregation (SG) mechanism, while material with Mass Balance claim will be processed for certified product under the company’s Mass Balance mechanism. The mechanism for receiving certified material has also still not changed. To know the quantity or volume of incoming certified material, the road tanker will stop at the weighbridge, and the operator will check relevant documents and issue a weigh bridge ticket. The document to be verified from certified sources include delivery note stamped at the origin estate, as well as certificate code in-cluding selected SCC Model. All certified products will be transferred to assigned material storage tank, for Mass Balance material will be transfer to storage tank No. 101A, 101B and 101D while certified segregated material will be transferred to storage tank 101C. The operator will indicate in-formation regarding storage tank location on each weigh bridge ticket according to the relevant claim. For the period of March 2014 to March 2015, FELDA IFFCO purchased 7501.01 mt of CPO under SG claim from listed RSPO certified suppliers. There were 7 purchasing contracts with several consignments by road tankers. The company has clear mechanism to check the validity of the Supply Chain Certification of sup-pliers and period to update supplier information. It was sighted during the 2nd surveillance audit, the company revised RSPO Manual SM-001 version 4 dated March 2015, section 11, it has been stated regarding the company’s mechanism to check validity of Supply Chain certification of sup-pliers. It is stated that the company will verify the validity of SCC of suppliers every six (6) month and check updates in the RSPO supplier list through RSPO website for current list of supply chain certified companies (http://www.rspo.org/en/supply_chain_certification). However, at time of audit, information about current validity status for all certified suppliers was not included on the list of cer-tified suppliers. This was raised as a non-conformity. The company then provided a new list of cer-tified supliers during the audit. FELDA IFFCO Oil Products Sdn. Bhd. Now, has mechanism in place for handling non-conforming material/documents or to take appropriate steps when the Supply Chain certification of a supplier is found to be invalid. The company has defined non-conforming products for finished goods and ac-tions taken for next step. The company provide revised RSPO SCCS Manual version 04, dated March, 2015, in section 10. The manual has determined a mechanism for handling non-conforming material/documents. This mechanism has explained the steps to be taken when the Supply Chain certification of a supplier is found to be invalid. The company has been defined non-conforming product for finished goods and actions to be taken for next step in the new RSPO SCCS Manual. The company has been established mechanism to inform CB immediately if there is a projected overproduction. Compliance status: Non Compliance NCR 2015-01 of 06 There some certified suppliers are not included on the List of Suppliers and Buyers, such as:
- FELDA Jengka 8
- FELDA Jengka 18 (Seroja Palm Oil Mill) In addition, one buyer with company name Atlantic is still not listed as certified buyer. NCR 2015-02 of 06 Information about current validity status for all certified suppliers is not included on the list of certi-fied supplier instead of validity of certificate.
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5.5. Outsourcing activities
Findings: FELDA IFFCO still outsources storage of a certain volume of products at Felda Johor Bulkers Sdn. Bhd. The products are stored in 9 tanks with total capacity of all tanks adding up to 12,300 MT. As explained by management, all tanks are cleaned and inspected by FELDA IFFCO Oil Products Sdn. Bhd. before transferring in new material and there will be no mixing of segregated and mass balance material in same tanks. Implementation will be confirmed during next surveillance audit. Transportation of palm olein 63, and palm mill fraction (PMF) 45 is also subcontracted. The tanks are inspected before filling and in case it is found to be not adequately clean, the tank will be re-jected. Records of tank inspections are maintained by lab assistants or analysts. The company has a contract with their outsourced companies. The company provides addendum contract with their outsourced companies i.e. Felda Johor Bulkers (FJB) Sdn. Bhd. and the transporter company, i.e. Yogeswary Agency Sdn Bhd. The contract between FELDA IFFCO and two outsourcing companies (Bulking and product tanker) has been renewed, however declaration about commitment to RSPO requirement RSPO SCCS 5.5.2 b, c & d were not included on the new contracts. This was raised as non conformity. There are declarations of approval from the outsourced company regarding commitment to comply RSPO Supply Chain Certification System dated February 14, 2013 signed by representative of Yogeswari Agency. Compliance status: Non Compliance NCR 2015-03 of 06 The contract between FELDA IFFCO and two outsourcing companies (Bulking and product tanker) has been renewed, however declaration about commitment to RSPO requirement RSPO SCCS 5.5.2 b, c & d were not included on the new contracts. FJB as FELDA IFFCO’s subcontractor for product storage has no copy of agreement stating specific conditions for RSPO requirements to which they must comply.
5.6. Sales and goods out
Findings: The sales and goods out mechanism of the company are described in their procedure of sales of palm oil. There are two mechanisms for sales of out-going finished goods and products in FELDA IFFCO Oil Products Sdn. Bhd., i.e. by road tanker and vessel. Certified product from dedicated storage tank will be dispatched through dispatch pipe directly to the truck tank, while if the product will be transported using vessel, certified product from dedicated storage will be pumped using pipe line to bulker at Pasir Gudang Port then to the Vessel. Information for outgoing certified product will be recorded in several type of records depend on the transfer method used, such as: - Vessel: Trade confirmation; Shipping Instruction (SI); tanker Bill of lading (B/L); Certificate of
Analysis; Commercial invoice; Custom form No.02; Tanker Form No.02; Packing List; Survey Report (Certifying Suitability and Cleaning); certificate of weight/analysis. Specification of Poram. Commercial invoice /Sales Contract/Shipment Tender/Bill of Lading/Certificate of Origin/Surveyor report/Certificate of Analysis/Custom Declaration are also part of sales docu-ments has been indicate FELDA IFFCO SCCS selected model.
- Road tanker: Commercial Invoice, Malaysian Palm Oil Board Format L.3 (MPOB Borang L.3) Weight Bridge Ticket and delivery Note.
- Container or ISO Tank: Packing list, Bill of Lading (B/L), Certificate of Analysis (F-WINA/QA/011); Weighbridge Ticket.
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All product dispatched to buyer for every certified product delivered has information about: Refer-ence Number, date of issuance, Delivery Order number, Contract Number, buyer name including the address of buyer, the quantity of the products delivered and reference to related transport doc-umentation. Information about the name and address of the seller has been attached on every de-livery documents e.g. letter head and information inside documents, including information about loading/delivery date. The company has implemented this system for their regular products while the company will in-clude certified product claim and SCC certificate number on each delivery document i.e. “Mass Balance (MB)” or Segregation (SG) as selected product module. It was clearly stated on RSPO SCCS Manual, that company will use certification number in all doc-uments once certified by TUV Rheinland. The evidence of implementation was sighted during this surveillance audit, as it was verified that the company uses a wet stamp which states the RSPO Certification number 824 503 14005 and SCCS selected model (SG or MB) and company’s regis-tration number 24499-V. All sales documents for certified product have been stamped. During period of March 2014 to March 2015, FELDA IFFCO has sold 6978.98 tonnes certified product to several companies, as seen on the table 3 above. Compliance status: Full Compliance
5.7. Registration & Transaction
Findings: FELDA IFFCO Oil Products Sdn. Bhd. is producing derivative products from CPO and RBDPO, company has established a specific SOP for registration of every transaction to RSPO E-Trace as required by the RSPO-SCC standard. The SOP was sighted and is well implementation. Since April 2014 to March 2015 at the time of this 2nd surveillance audit, FELDA IFFCO has 46 recorded eTrace transactions, 26 confirmed transactions consist of 11 transaction for purchasing certified material and15 transaction for sales certified product, and 2 transactions under announcement. The summary of eTrace transactions is stated in the Annex below. Compliance status: Full Compliance
5.8. Training
Findings: FIOP conducted a training on how to used rubber stamp to stamp all RSPO relevant logsheets, such as for weighbridge operator, incoming material storage operator, product dispatch operator. The train-ing focused on how to control certified material and non certified material if the company decides to use SG or MB. The training was conducted for 3 participants on March 14, 2014 regarding certified material handling. RSPO E Trace transaction training also has been conducted through online train-ing; the participants were the RSPO SCCS management representative on September 18, 2013 and document controller on March 06, 2013.
There was an additional training done for the weigh bridge officer. Training plan for year 2015 has been established and some of training plan has been done in well and training records were sighted by auditor during the time of audit regarding training about “social issues in RSPO P & C implementa-tion”. Compliance status: Full Compliance
5.9. Records Keeping
Findings: As stated in the RSPO Manual the company stated the retention time of records related SCCS RSPO implementation shall be at least five (5) years. The storage and maintenance of documents is the responsibility of the respective departments. The company has developed a procedure to trace the source of certified materials received, as de-fined in document name “Process Flow of RSPO Oil document dated November 7th 2012 Doc. No
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RS 002, and also developed related documentation to apply the procedure. This procedure and documentation will be applied after the company get SCCS certificate and produces certified prod-uct. The company will clearly indicate the supply chain model used with trade names in relevant docu-ments, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Compliance status: Full Compliance
5.10. Conversion Factor
Findings: FELDA IFFCO implements non-physical segregation for incoming purchased SG material and use it to match the sales of equal volumes of palm product derivatives then sold under mass balance (MB) claim. The company decided to use RSPO rules to set their own conversion rates i.e. 100% or match. The volume of purchased certified SG material are used it to match the sales of equal volumes of palm product derivatives, which is then is sold under mass balance.
Compliance status: Full Compliance
5.11. Claims
Findings: The company has an SOP for making claims certified product according RSPO communication and claims. The implementation of SOP has been consistent and complies with RSPO SCCS require-ment, such as claim for purchased SG material with non physical processing claimed as MB certi-fied products and already indicated on sales documents and export documents. While for incoming MB material processed for MB product also, it has been indicated in all incoming certified material documents. Compliance status: Full compliance
5.12. Complaints
Findings: The organization has not established and maintain documented procedures for collecting and re-solving stakeholder complaints.This is raised as non conformity. Compliance status: Non Compliance NCR 2015-04 of 06 FIOP has no documented procedure for collecting and resolving complaints from stakeholders.
5.13. Management review
Findings: The company has no establish and implement management reviews at planned intervals appropri-ate. This was raised as a non-conformity. Compliance status: Non Compliance
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NCR 2015-05 of 06 FIOP has not conducted management reviews at planned intervals.
Section 2: Modular Requirements: Module B Segregation
B.2 Supply Chain Requirement
Findings: FELDA IFFCO has established a set of standard operation procedures to implement Segregation approach which requires that the RSPO certified oil palm products from certified es-tates/plantations is kept separate from material from non-RSPO certified estates/plantations at eve-ry stage of production, processing, refining and manufacturing throughout the supply chain. As de-termined on the procedure company will not allow the mixing of RSPO certified palm oil and its de-rivatives with non certified material. However for actual implementation to date, the company has only implemented non-physical processing for SG material and has claimed all producted sold as MB only, not SG. Compliance status: Full Compliance
B.3.Processing
Findings: FELDA IFFCO has documented procedures to process RSPO certified oil palm product and distin-gusih them from non-RSPO certified products, covering incoming material, processing, storage and transport. The objective is for 100% segregated material to be reached. However management has so far decided to implement non physical proceses. All SG material has been processed with out-put as 100% MB product. The mill receives certified and non-certified material, management decided to implement mass bal-ance for their certified product. The mill has established a clear system and standard operation procedures including record system to ensure that the supply chain model implemented by the fa-cility shall be the same as the model used by their supplier or a less strict system. The mill also has mechanism to prove that the certified product can be traced back to only certified material. The organization has established a mechanism for control and maintenance of the data and docu-ments used in production process i.e. Flow Process of RSPO Oil with document number RS002 is the mechanism to produce certified product from certified CPO material. The process/mechaniam to produce certified product from RBDPO is in accordance with document RS003-Process Flow of RSPO Oil. The mill has records and balances of all receipts of RSPO certified material and non certified mate-rial and deliveries of RSPO certified product on daily basis. All volumes of product that are deliv-ered are deducted from the material accounting system according to actual daily conversion ratios. The material balance can show delivered product sales from a positive stock within the past three months, such as records from March to June 2014; June to September 2014; October to December 2014 and January to March 2015. The company has identified all locations and/or process categorized as critical controlled point (CCP), this is applicable if the company produce certified product with SG claim. According to Risk Identification of mixing CSCPO-SG/CSRBDPO-SGwith CSCPO-MB or CSRBDPO-MB or Non RSPO Material, there are two location categorized as CCP i.e : 1. CPO and RBDPO unloading bay , because there is tendency of mishandling the RSPO SG materials supply from RSPO SG certified mill/refinery to FELDA IFFCO, contamination be-tween certified material and non certified material might happen during unloading from tankers to
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dedicated RSPO SG tank. If any mishandling or equipment had broken, the certified materi-al/product will be downgraded to non certified material/product. 2. Feed tank to Pre Treatment Plant The RSPO dedicated tank for segregated (SG) material is VE 101C. Contamination might be hap-pen during feeding the CPO from RSPO dedicated tank to the Pre treatment plant if there is any valve leaking or mishandling during changeover the feed tank. For both potential CCP areas, the company has defined counter measure such as provide training to operator relevant to the process. Pipeline will be activated to blow with air to clear the line be-fore receiving certified material to avoid contamination. The operator will check for any abnormali-ties during the process and this will be verified by project engineer. All plants must run segregated material to avoid contamination. Project engineer will verify the pro-cess line. Compliance status: Full Compliance
Section 2: Modular Requirements: Module C Mass Balance
C.1 Definition
Findings: FELDA IFFCO implements the mass balance system for incoming MB material, and currently also for SG material since to date, the company has decided not to carry out any physical separation. For Mass Balance (MB) supply chain model administration, FELDA IFFCO monitors the trade of RSPO certified oil palm products throughout the entire supply chain, as a driver for mainstream trade in sustainable palm oil. Compliance status: Full Compliance
C.2. Record keeping
Findings: As stated in their RSPO Manual, the company stated the retention time of records related SCCS RSPO implementation shall be at least five (5) years. The storage and maintenance of documents is the responsibility of the respective departments. The company has developed a procedure to trace the source of certified materials received, as de-fined in document name “Process Flow of RSPO Oil document dated November 7th 2012 Doc. No. RS 002, and also developed related documentation to apply the procedure. This procedure and documentation has been applied by the company since obtaining their SCCS certificate and pro-ducing certified products. The company has been indicating the supply chain model used clearly with trade names in relevant documents for their certified products, e.g. purchase and sales contracts with *product name*/ “SG” Segregation or “MB” Mass Balance. Compliance status: Full Compliance
C.3. Processing
Findings: FELDA IFFCO has a monitoring system to ensure that the quantity of physical RSPO mass bal-ance material inputs and outputs (volume or weight) are processed following the standard opera-
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tion procedure and RSPO SCCS requirement. All input material that processed are recorded on Material Balance Report every 3 months to en-sure that the output of RSPO mass balance material supplied to customers from the physical site does not exceed the input of RSPO certified material received at the physical site with 3 months in-ventory period. From April 2014 to March 2014 FELDA IFFCO had processed 6978.98 tonnes of SG level CPO, which final product claimed only as MB Up until this 2nd surveillance audit, Felda IFFCO has not purchased any certified palm kernel to produce their certified product, hence requirement C.3.5 is not applicable for FELDA IFFCO. Compliance status: Full Compliance C.4. Continuous accounting system Findings: During the period of April 2014 to March 2015 FELDA IFFCO recorded quantities of non-physical RSPO SG material inputs and become MB outputs, total processed material are are monitored on a real-time basis. The company implement a continuous accounting system is in operation, it was sighted that the material accounting system from period April 2014 to March 2015 is never overdrawn. The data has been recorded in the material accounting system. All volumes of palm oil that are delivered are deducted from the material accounting system according to actual daily conversion ratios. Accord-ing the latest material balance records, for period March 2014 to April 2015, the total input of certi-fied material is 6978.98 mt, processed material is 6978.98 mt to produce 4067.76 ton products i.e. Stearin 1808.11; Olein 1762.4 tonnes and Refined palm oil 497.25 tonnes. For period of December 2013 to end of February 2014, certified material carried forward from pre-vious period was 1038.386 mt plus incoming certified purchased between March 2014 to March 2015 are 6978.98 mt. The rest of certified CPO will be carried forward for the next three monthly period (April to June 2015 i.e. 2619 mt certified CPO. From the records it was sighted that the company can deliver sales from the positive stock. At the 2nd surveillance audit, the company sighted did not sell short any of their products. The com-pany will inform CB if facing condition to make sell short. All volumes of palm oil fractions and derivatives that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO, and the record are keep main-tained by the document controller. Compliance status: Full Compliance
C.5. Fixed Inventory Periods
Findings: FELDA IFFCO implements 3 monthly fixed inventory period is in operation, The company has rec-ords that the quantity of RSPO mass balance material inputs and outputs (volume or weight) are balanced within a fixed inventory period which does not exceed 3 (three) months. However it was found that information stated on material balance for period of March 2014 to March 2015 was not consistent with information about incoming CPO stated on FELDA weigh-bridge Report receive for period of April 2014 to March 2015. The material balance stated total in-coming CPO is 6731.44 MT while the summary of weighbridges ticket documents stated 6,152.220MT. This was raised as non conformity. Compliance status: Non Compliance NCR 2015-06 of 06 Information stated on material balance period March 2014 to March 2015 is not consistent with in-formation about incoming CPO stated on FELDA weighbridge report received for period of March 2014 to March 2015. Material balance stated total incoming CPO is 6731.44 Mt while the summary of weighbridges tick-et documents stated 6,152.220MT
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C.6. Conversion Ratios
Findings: During this 2nd surveillance audit, FELDA IFFCO could show that all volumes of palm oil fractions and derivatives that are delivered are deducted from the material accounting system according to conversion ratios as set out by RSPO. Since FELDA IFFCO implement non physical process for SG material, refining losses are neglected for the sake of simplicity in the Mass Balance system FELDA IFFCO purchase segregated sustainable palm and use it to match the sales of equal vol-umes of palm product derivatives that then carry a Mass Balance i.e. for example as determine by RSPO "Segregated to Mass Balance Supply Chain Model Yield Scheme (SG oil palm products : 1,000 mt to MB refined oil palm products : 1,000 mt) Compliance status: Full Compliance
C.7.Yield Scheme
Findings: As explained on the C.6. FELDA IFFCO implement non physical process for SG material, refining losses are neglected for the sake of simplicity in the Mass Balance system FELDA IFFCO purchase segregated sustainable palm and use it to match the sales of equal vol-umes of palm product derivatives that then carry a Mass Balance i.e. for example as determine by RSPO "Segregated to Mass Balance Supply Chain Model Yield Scheme (SG oil palm products : 1,000 mt to MB refined oil palm products : 1,000 m Compliance status: Full Compliance
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3.2 Identified Non-conformances against RSPO SCCS Requirements, Corrective Actions Taken and Auditors Conclusions
SCCS Non-conformance 2015-01of 06: req. 5.4.1 There some certified suppliers are not included on the List of Suppliers and Buyers, such as:
In addition, one buyer with company name Atlantic is still not listed as certified buyer. Correction The management representative (MR) has revised their list of supplier to include Felda Jengka 8 & Jengka 18 as seen from the RSPO Buyers and Suppliers List. Corrective Action To review the list of suppliers & buyers with RSPO team member and to update any changes Auditor Conclusions: Closed Date of closure: April 15, 2015 Verification result: The company provided a new RSPO Buyer and Suppliers List. It was sighted all suppliers including FELDA Jengka 8, FELDA Jengka 18 (Seroja Palm Oil Mill) and Atlantic had been included on the list. SCCS Non-conformance 2015-02 of 06: req. 5.4.1 Information about current validity status for all certified suppliers is not included on the list of certified supplier instead of validity of certificate. Correction The MR has revised the list of suppliers and buyers to include validity status of all certified suppliers as seen on RSPO buyer and supplier List Corrective Action To review all list of suppliers & buyers with RSPO team member and to update any changes on validity status during management meeting. Auditor Conclusions: Closed Date of closure: April 17, 2015 Verification Result: The company provided a new RSPO Buyer and Suppliers List. It was sighted that updated information about certification status for all supplier has been has been included in the list. SCCS Non-conformance 2015-03 of 06: req. 5.5.2 The contract between FELDA IFFCO and two outsourcing companies (Bulking and product tanker) has been renewed, however declaration about commitment to RSPO requirement RSPO SCCS 5.5.2 b, c & d were not included on the new contracts.
FJB as FELDA IFFCO’s subcontractor for product storage has no copy of agreement stating specific con-ditions for RSPO requirements to which they must comply. Correction: To include declaration about commitment to RSPO requirement from two outsourcing company (FJB and transporter), as seen on document Addendum Transporter and Bulking Agreement (FIOP)
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Corrective Action To include declaration from any other outsourcing company during contract review Auditor Conclusions: Closed Date of closure: April 17, 2015 Verification result: The company provided the copies of addendum contract for FJB and other transporter companies, in-cluding statement about requirement to give access to FIOP RSPO certification Body in relation to FIOP’s operation, system, and any other information in outsource location when it is notified in advance and subject to approval. SCCS Non-conformance 2015-04 of 06: req. 5.12 FIOP has no documented procedure for collecting and resolving complaints from stakeholders. Correction The MR has prepared a documented procedure for collecting and resolving complaint from stakehold-ers as determined on RSPO Manual SM003 & Flow Chart A. Corrective Action To review the document with RSPO team members and update any changes during management meeting Auditor Conclusions: Closed Date of closure: April 18, 2014 Verification result: The company provided a revised RSPO SM003, RSPO Manual and Flow chart that includes a mecha-nism for collecting and resolving complaints from stakeholder related to RSPO SCCS implementation in FIOP. SCCS Non-conformance 2015-05 of 06 : req. 5.13 FIOP has not conducted management reviews at planned intervals. Correction: The MR conducted management review as required as reported on RSPO report 2015 Corrective Action: To conduct management review on annual basis Auditor Conclusions: Closed. Date of closure: April 17, 2015 Verification Result: The company provided a copy of their management review report. Management review was conducted on April 13, 2015. SCCS Non-conformance 2015-06 of 06: req. C.5 Information stated on material balance period March 2014 to March 2015 is not consistent with infor-mation about incoming CPO stated on FELDA weighbridge report received for period of March 2014 to March 2015. Material balance stated total incoming CPO is 6731.44 Mt while the summary of weighbridges ticket documents stated 6,152.220MT
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Correction To review material balance period March 2014 to March 2015 C 5 BAL CPO SG OTHER SUPPLIER 2015 C5 CPO RSPO Report from Supply Chain Dept. Corrective Action To review RSPO material balance monthly and to tally with weighbridge report Auditor Conclusions: Closed Date of closure: April 17, 2015. Verification result: The company provided their revised material balance, actual material balance from April ‘14 to March‘15 = 6,977.06 mt
3.3 Conclusion and Recommendation for RSPO Supply C hain Certification The audit team has confirmed through the audit process that FELDA IFFCO Oil Products Sdn. Bhd. has established and maintains an effective system to ensure compliance with the RSPO Supply Chain Certifi-cation System requirements year 2014. It is also confirmed that the company’s annual volume of certified product sold/ purchased for the period of April 2014 until March 2015 has not exceeded the certified an-nual tonnages as claimed in the organization’s RSPO certificate no. 82450314005. PT TUV Rheinland Indonesia recommends that FELDA IFFCO to continue being certified to the RSPO Sup-ply Chain Certification requirements.
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4.0 CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INT ERNAL RESPONSIBILITY
4.1 Date of Next Surveillance Visit
The next surveillance visit is planned for March 01 to 02, 2016
4.2 Acknowledgements of Internal Responsibility and Formal Sign-Off by Client
It is acknowledged that the assessment visit was carried out as described in this report and we accept the assessment findings and report content. Signed on behalf of FELDA IFFCO Oil Products Sdn. Bhd.
Date: May 2015
Signed on behalf of PT TUV Rheinland Indo-nesia …………………………………………. Dian S. Soeminta Lead Auditor Date: May 18, 2015
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APPENDICES
Appendix 1: Details of Supply Chain Certification C ertificate
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Appendix 2: List of Abbreviations
B/L CPO COC CCP EMS FIOP FJB FSC
Bill Of Lading Crude Palm Oil Chain of Custody Critical Control Point Environmental Management System FELDA IFFCO Oil Product Felda Johor Bulkers Forest Stewardship Council
IP LEI MB MPOB P&C
Identity Preserved Lembaga Ecolabel Indonesia (Indonesian Ecolabel Institute) Mass Balance Malaysia Palm Oil Board Principles & Criteria
PKO Palm Kernel Oil S PMF IV 45
QMS RBDPO RBDPL RBDPS RBDOL IV 63 RBSST IV II SCCS SG SI SFMC
Palm Mid Fraction IV 45 Quality Management System
Refined Bleached Deodorized) Refined Bleached Olein Refined Bleached Sterin Refined Bleached Olein IV 63 Refined Bleached Sterin IV II)
Appendix 3: Observations and Opportunities for Impr ovement
A. Positive Observations
No. Clause Postive observation
1 - Good commitment to RSPO SCCS Implementation
2 - Good implementation of RSPO IT System
B. Negative Observations/ Potential For Improvement
No. Clause Negative observation/ Opportunity for Improvement
1 5.3.1 Several working instruction as guidance for worker not available, such as:
- Guidance for data input on the weighbridge in terms of RSPO certified material and product.
Guidance to operate RSPO IT System
2 5.6.1 No specific information on company’s data base regarding RSPO Stearin product.
3 5.7.1 No information about UTZ number for all listed certified suppliers and buyer.
4 5.7.2 There is no information on selection of supply chain model stated on the document is-sued by Felda Johor Bulker for certified products belonging to FELDA IFFCO
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5 C.5.4 Not all contract number are referred to in the material balance records.
6 5.7 Products sold information announced on RSPO IT System are difficult to be traced with in-formation stated on FIOP material balance document. Eg. -ID TR 10eOdfcc95c8 -ID TR a51e415279d7 etc
7 5.5.2 No specific guidance or working instruction for handling FELDA IFFCO certified product on the FJB site.
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Appendix 4: Supply Chain Certification Audit Closin g Meeting Summary
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Appendix 5: List of Certified List of Suppliers an d Buyers A) List of certified Suppliers
