RSPO audit ReportRSPO Principles & Criteria Main Assessment Report Report Number CU820565...

RSPO Principles & Criteria Main Assessment Report

Report Number CU820565

RSPOPC-MAREPORT.F01 EN (02) MAY012 Page 1 of 46

Control Union Certifications Meeuwenlaan 4-6, 8011 BZ Zwolle, P.O. Box 161, 8000 AD Zwolle, Netherlands

Tel: +31 (0)38 - 426 0100, Fax: +31 (0)38 - 423 7040, E-mail: [email protected]

RSPO Main Assessment Report PUBLIC SUMMARY

Palm Oil Mill

Pangkatan POM MP Evans Group PLC, PT Evans Indonesia,

Kabupaten Labuhan Batu, North Sumatera

This public summary has been prepared in accordance with RSPO requirements and the information included is the result of a full RSPO assessment of the Mills and supply base as included in the scope

of the certificate.

Report prepared by: David Ogg FICFor. (Lead Assessor)

Certification decision by: Gerben Stegman (Certifier)

Control Union Certifications (Head office) Meeuwenlaan 4-6,

P.O. Box 161. 8000 AD Zwolle. The Netherlands.

[email protected] Phone: 0031 38436 0100

Local Office Control Union (Malaysia) S/B

Persiaran Raja Muda Musa,Off Jalan Sg Berith, Teluk Gadong, 41100, Klang,

Selangor. Malaysia. Phone 03-3377 1600 / 1700

[email protected]

Control Union (Indonesia) JlKramat 3A,CilandakTimur

Jakarta Selatan 12560 Phone: 062-21-7884 2016

[email protected]

Control Union Certifications is a member of the Control Union World Group - an international

inspection and certification body. CU performs assessments and certification in many agricultural

based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic

Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP.

CUC is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN

45011 for the inspection and certification of CUC Organic program (according to the EU regulation

2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be

obtained from CUC.

www.controlunion.com

mailto:[email protected]



http://www.controlunion.com/






Table of Contents

PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT ........................................................ 4

1.1 COMPANY AND CONTACT DETAILS ................................................................................................. 4 1.2 NATIONAL INTERPRETATION OR LOCAL INDICATORS USED .................................................................. 4 1.3 RSPO MEMBERSHIP DETAILS ........................................................................................................ 4 1.4 MAIN ASSESSMENT DETAILS ......................................................................................................... 4 1.5 ASSESSMENT TYPE (MILL AND SUPPLY BASE) ................................................................................... 4 1.6 LOCATION OF THE PALM OIL MILL .................................................................................................. 4

1.6.1 Approximate tonnages certified and Capacity ....................................................................... 4 1.7 GENERAL DESCRIPTION OF SUPPLY BASE ......................................................................................... 5

1.7.1 Location of the Supply Base .......................................................................................... 5 1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per Year .......... 5 1.7.3 Area of Planted Oil Palm by Age Range ........................................................................ 5 1.7.4 Percentage of Planted Oil Palm by different Age Ranges ............................................ 6

1.8 LOCATION MAP FOR THE CERTIFICATION UNIT .................................................................. 6

PART 2: PARTIAL CERTIFICATION ............................................................................................................ 8

2.1 MANAGEMENT STRUCTURE ........................................................................................................... 8 2.2 NON-COMPLIANCE IDENTIFIED WITH 2.1 ABOVE ............................................................................... 9 2.3 SUMMARY OF THE TIME BOUND PLAN ............................................................................................ 9 2.4 UN-CERTIFIED UNITS OR HOLDINGS .................................................................................. 10 2.5 SUMMARY OF THE FINDINGS FOR PARTIAL CERTIFICATION ................................................................ 12 2.6 PARTIAL CERTIFICATION AUDIT AGENDA ....................................................................................... 12

PART 3: AUDIT PROCESS ........................................................................................................................ 12

3.1 ABOUT THE CERTIFICATION BODY ................................................................................................. 12 3.2 AUDIT TEAM............................................................................................................................. 13

3.2.1 Qualifications of the Lead Auditor ....................................................................................... 13 3.2.1 Qualifications of the assessment team ................................................................................ 13

3.3 AUDIT METHODOLOGY ............................................................................................................... 14 3.3.1 General Overview ........................................................................................................ 14 3.3.2 Audit Agenda ............................................................................................................... 15

3.4 STAKEHOLDER CONSULTATION ..................................................................................................... 16 3.4.1 Summary of how the Stakeholder Consultation was organized ................................ 16 3.4.2 List of the National and International stakeholders contacted .................................. 17 3.4.3 Issues raised during stakeholder consultation and company responses ................... 17

3.5 DATE OF THE FIRST SURVEILLANCE VISIT ........................................................................................ 19

PART 4 ASSESSMENT FINDINGS............................................................................................................. 20

4.1 LEAD ASSESSOR’S SUMMARY AND RECOMMENDATION FOR CERTIFICATION ........................................ 20 4.2 SUMMARY OF THE FINDINGS BY PRINCIPLE AND A SAMPLE OF THE CRITERIA ......................................... 21

Principle 1: Commitment to Transparency ................................................................................... 21 Principle 2: Compliance with applicable laws and regulations ................................................... 21 Principle 3: Commitment to long-term economic and financial viability ..................................... 25 Principle 4: Use of appropriate best practices by growers and mills ........................................... 25 Principle 5: Environmental responsibility and conservation of natural resources and biodiversity

...................................................................................................................................................... 32 Principle 6: Responsible consideration of employees and of individuals and communities affected

by growers and mills ..................................................................................................................... 35 Principle 7: Responsible development of new plantings ............................................................... 40 Principle 8: Commitment to continual improvement in key areas of activity ............................... 40

4.3 NON-CONFORMITY REGISTER ...................................................................................................... 41 4.4.1 Audit NC Summary ............................................................................................................... 41 4.4.2 Status of non-conformities raised (both Minor and Major) ................................................ 41






PART 5: RSPO SUPPLY CHAIN CERTIFICATION ..................................................................................... 43

PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY ............ 44

6.1 DATE OF NEXT ANNUAL SURVEILLANCE AUDIT. ............................................................................... 44 6.2 DATE FOR CLOSURE OF NON-CONFORMITIES .................................................................................. 44 6.3 SIGNING BY THE CLIENT .............................................................................................................. 44 6.4 SIGNING BY THE LEAD AUDITOR ................................................................................................... 44 6.5 SIGNING BY THE CERTIFIER .......................................................................................................... 44

PART 7: APPENDICIES ............................................................................................................................ 45

APPENDIX 1: LOCATION MAP FOR THIS CERTIFICATION UNIT (SEE 1.8 ABOVE) ................................................. 45 APPENDIX 2: LIST OF ABBREVIATIONS ........................................................................................................ 45






PART 1: SCOPE OF THE CERTIFICATION ASSESSMENT

1.1 Company and Contact Details

Company name: PT Evans Indonesia

Business address: Gedung Graha Aktive Suite 1001, Jln. HR Rasuna said Kav 03, Blok X-1, Kuningan, Jakarta Selatan, Indonesia

Group name if applicable: MP Evans Group PLC.

Office telephone: +621-529 20 338

Contact person: Mr. Gunasekaran Uthiradam

Fax: (021) 52920338, (021) 52920339

e-mail: [email protected]

Web site: www.mpevans.co.uk

1.2 National Interpretation or Local Indicators Used

The management of the Palm Oil Mill and supply basewere assessed for compliance against the International

RSPO criteria as interpreted and endorsed for Indonesia.

1.3 RSPO Membership Details

RSPO membership number: 1-0027-06-000-00

Parent company as applicable: MP Evans Group PLC

Date of certification: TBD

Certificate number: C820565CU-RSPO-05-2012

Date of last audit: N/A

1.4 Main Assessment Details

Dates of this audit: May 14th

and 15th

, 2012

1.5 Assessment Type (Mill and Supply Base)

The RSPO P&C certification of 1 Palm Oil Mill and it’s supply base owned by PT Evans Indonesia.

1.6 Location of the Palm Oil Mill

Palm Oil Mill (POM) Location Address

GPS Reference

Name Longitude Latitude

Desa Perkebunan Pangkatan

Kecamatan Pangkatan, Kabupaten

Labuhan Batu, North Sumatera,

Indonesia.

99°56’44” E 02°06’44”S

1.6.1 Approximate tonnages certified and Capacity

The 12 month output is the average over any 12 month period and the actual production for the 12 months

from the date of certification will be included in the first annual summary. These figures exclude any output

product from non-certified suppliers.

Annual Output MT OER Mill Capacity

CPO 35,000 23.23% 40 MT/Hours

PK 8,250 5.68%


http://www.mpevans.co.uk/






1.7 General Description of Supply Base

The MP Evans Group PLC owns 5 estates in North Sumatra. The 3 estates included in the scope of this audit have

been plantations for almost 100 years with Pangkatan Estate being established circa 1900. MP Evans re-

acquired the property in 1982 and currently employs 372 local workers.

The Palm Oil Mill is located at Pangkatan estate and employs 88local workers.Bilah Estate was acquired in 1983

and employs 369 workers.Sennah estate was acquired in 2002 and employs 275 workers.

There is no outside crop and so the POM exclusively processes FFB from the 3 estates mentioned above.

1.7.1 Location of the Supply Base

Oil Palm Plantation (OPP) Location address GPS reference

CU Code Name Longitude Latitude

OPP 1 PT. Pangkatan Indonesia Desa Perkebunan Pangkatan, Kecamatan Pangkatan, Kabupaten Labuhan Batu, North Sumatera, Indonesia

99°55”07”- 99°58”09” E

02°04’13”- 02°07’’54 S

OPP 2 PT. BilahPlantindo Desa Perkebunan Bilah, Kecamatan Bilah Hilir, Kabupaten Labuhan Batu, North Sumatera, Indonesia

100°05”25”- 100°07”30” E

02°18’23”- 02°12’’01” S

OPP 3 PT. SembadaSennahMaju Desa Perkebunan Sennah, Kecamatan Bilah Hilir, Kabupaten Labuhan Batu, North Sumatera, Indonesia

100°02”44”- 100°04”17” E

02°18’31”- 02°12’57” S

1.7.2 Statistics of the Supply Base and Estimated Tonnes of FFB produced per Year

CU Code Name Area of oil palm (ha) EstTonnes

FFB/yr

Planting years Cycle (years)

Total area Mature area

OPP 1 PT. Pangkatan Indonesia

2,586 2,427 56,696 (23.08mt /

ha)

1977 - 2008 25

OPP 2 PT. BilahPlantindo

2,961 2,548 57,404 (24.17 mt /

ha)

1986 - 2011 25

OPP 3 PT. SembadaSennahMaju

1,813 1,485 35,175 (24.04 mt /

ha)

1995 - 2009 25

The 25 year cycle will be fully established over the next 3 years during which time the oil palm which is older than 25 years will be re-planted.

1.7.3 Area of Planted Oil Palm by Age Range

CU Code

1977-1980

1981-1985

1986-1991 1992-1995 1996-2001 2002-2006 2007-2011 Total

OPP 01 379 60 161 0 468 1,150 209 2,427

OPP 02 - - 1,011 549 148 464 684 2,856

OPP 03 - - - 209 306 767 399 1,681

Total 379 60 1,172 758 922 2,381 1,292 6,964

Note: There has been no new planting since 2005. The age structure reflects the periods of re-planting.






1.7.4 Percentage of Planted Oil Palm by different Age Ranges

CU Code

1977-1980

1981-1985

1986-1991 1992-1995 1996-2001 2002-2006 2007-2011 Total

OPP 01 16% 2% 7% - 19% 47% 9% 100%

OPP 02 - - 35% 20% 5% 16% 24% 100%

OPP 03 - - - 12% 18% 46% 24% 100%

Total 5% 1% 17% 11% 13% 34% 19% 100%

1.8 Location Map for the Certification Unit

Map 1: Map showing the location of estates in Sumatera






Map 2.Map showing the location of estates in neighbouring enities

PT. PANGKATAN INDONESIA

PT. SEMBADA SENNAH MAJU

PT. BILAH PLANTINDO






PART 2: PARTIAL CERTIFICATION

The rules for partial certification allow organizations that have a majority holding in and / or management control of more than one autonomous company growing oil palm to certify individual management units and / or subsidiary companies subject to certain rules.

2.1 Management Structure The holding company is MP Evans who is a member of the RSPO. The company has Oil Palm operations in Sumatra and East Kalimantan. This main assessment audit covers 1 palm oil mill and its 3 supply base estates in Sumatra. The partial certification audit covers the remaining operations. A summary of its management and operation structure is listed below: East Kalimantan Operations

Is divided into 2 PTs as follows: o PT Prima Mitrajaya Mandiri o PT Teguh Jayaprima Abadi

There is PLASMA in every estate amounting to some 3,686 ha (as at May 2012) and representing 28% of total area.

Approximately 1,400 ha’s of land is dedicated to conservation.

The management carries out socialisation and training of workers, contractors and locals on conservation.

Status and Approvals for both PTs:

PT Prima Mitrajaya Mandiri

Ijin Lokasi No. 47/DPN.K/IL-46/VI-2007, 26th

June 2007.

Ijin Usaha Perkebunan No. 503/50/SK-Disbun Kukar/VII/2007, 26th

July 2007.

Kadastral No.18/PB-64.200/V/2011, 3rd

May 2011 Kadastral map of HGU shows the exclusion of the forest areas which are logged over / degraded forests and amount to about 762 ha. These areas are included in the Ijin Lokasi map but excluded from HGU.

PT Teguh Jayaprima Abadi

Ijin Lokasi No. 100/DPN.K/IL-100/X-2008 and No. 101/DPN.K/IL-101/X-2008, 27th October 2008.

Ijin Usaha Perkebunan No. 503/53/SK-Disbun Kukar/VII/2007, 27th

July 2007 and No. 503/64/SK-Disbun Kukar/XII/2007, 4

th Dec 2007.

Pra-Kadastral map as above. Sumatra Operations

Is divided into 2 PTs as follows: o PT Simpang Kiri Plantation Indonesia o PT Gunung Pelawan Lestari

Status and Approvals for both PTs:

PT Simpang Kiri Plantation Indonesia

1 estate with 2,654 ha.

UKL/UPL: 660/198/UKL-UPL/2010.

HGU: 37/HGU/DA/1988 1,504 ha.

HGU: 83/HGU/BPN/1997 1,150 Ha.

PT Gunung Pelawan Lestari

4,500 ha planted since 2006.

The balance will be planted over the next 3 years and the palm oil mill is due to be commissioned in 2015.

Ijin Usaha Perkebunan. 188.45/118/1-TNH/2004. 20th

September 2004.

AMDAL. 188.44/195 A/BAPEDALDA/2008. A checklist was used to determine compliance with the rules for partial certification and the results are summarised below.






Section Criteria Yes/No If “Yes”. If “No”.

2.1.1 Is the certified operation (POM and supply base as detailed above) a stand-alone operation and there are no other plantations or mills owned by the same company?

No Section 2 is N/A.

Go to 2.1.2

2.1.2 Is the certified operation part of a simple structure of operations owned by one company?

Yes Go to 2.1.5 Go to 2.1.3

2.1.3 Are there statements of the ultimate controlling shareholders and directors in the managing agency company/companies:

a. Explaining the legal relationship and the management arrangements with the subsidiary companies and / or with any operating groups?

Yes Go to 2.1.4

Go to 2.2.1

2.1.4 b. A statement of commitment to complying with the spirit of the RSPO for all companies and subsidiaries involved with the growing of oil palm and for the production of palm oil?

Yes Go to 2.3 Go to 2.2.2

2.1.5 Is there a time bound plan in place for all subsidiaries, estates and palm oil mills?

- Go to 2.3 2.2.3

2.1.6 Is the parent company or one of its majority owned and / or managed subsidiaries a member of RSPO.

Yes

2.2 Non-compliance Identified with 2.1 Above

Section Non-compliance findings NC raised Category

2.2.1 There is no explanation as to the company’s structure and therefore it Is not possible to conduct an effective audit against the rules for partial certification.

- Major

2.2.2 There is no statement of commitment to complying with the spirit of the RSPO for all companies within the company structure.

- Major

2.2.3 There is no time bound plan in place for the certification for all subsidiaries, estates and mills.

- Major

2.2.4 No applicable membership of the RSPO. - Major

2.3 Summary of the Time Bound Plan

Section Requirement Findings and any action required Compliance

2.3.1 Does the plan include all subsidiaries, estates and mills?

Yes. See table below. Yes

Company name Location Comments Date for RSPO

PT TeguhJayaprimaAbadi Kaltim A pre-assessment is scheduled for mid-2012 2014

PT Prima MitrajayaMandiri Kaltim 2014

PT SimpangKiri Plantation Indonesia.

Aceh This is an independent estate in the sense that it sells its FFB to a POM not owned by MP Evans. It is therefore unclear if the estate can be certified if the POM does not become certified.

2015

PT GunungPelawan Lestari Banka Tuing Mill will be commissioned in 2014. 2015

Section Requirement Findings and any action required Compliance

2.3.2 Is the time bound plan challenging? Age of plantations. Location. Mill development.

A time-bound plan is in place and was fully

discussed with the managers. It is both

realistic and challenging.

Yes






Infrastructure. Compliance with applicable law.

2.3.3 Have there been any changes since the last audit? Are they justified?

Not applicable as this is the main assessment audit.

N/A

2.3.4 If there have been changes, what circumstances have occurred?


N/A

2.3.5 Have there been any stakeholder comments?

Yes, see under PART 4 below on Stakeholder Consultation.

Yes

2.3.6 Have there been any newly acquired subsidiaries?

No N/A

2.3.7 Have there been any isolated lapses in the implementation of the plan?


N/A

2.3.8 Has there been any systematic failure to proceed with the implementation of the plan?


N/A

2.3.9 General statement as to progress made since the last audit:


N/A

2.4 Un-Certified Units or Holdings

NOTE: Companies may demonstrate compliance by clear evidence of a self-audit (i.e. an internal audit for all subsidiaries, estates and palm oil mills.

Section Requirement Findings and any action required

2.4.1 Did the company conduct an internal audit? If so, has a positive assurance statement been produced?

Yes, the company have completed all legal requirements for the new plantings such as i) Legal: • Land titles/user rights (Site Permit Izin Lokasi), • Plantation Operation Permit (Izin Usaha Perkebunan). • Land Use Title (Hak Guna Usaha). ii) Environmental: • Environmental and social impact Assessment (AMDAL / UKL-UPL) and environmental management and monitoring reports. (Laporan RKL-RPL) iii) Social: • Documentation of social activities and community programs. • Health and Safety Plan. • Continuous improvement plan.

2.4.2 No replacement after dates defined in NIs Criterion 7.3 of:

Primary forest.

Any area identified as containing High Conservation Values (HCVs).

Any area required to maintain or enhance HCVs in accordance with RSPO criterion 7.3.

The Environmental and Social Impact assessment reports

and (AMDAL) for the estates were reviewed and the

following noted:

East Kalimantan:

KAKK/27/AMDAL/KELAPA SAWIT/2008.

KAKK/08/AMDAL/KELAPA SAWIT/2009.

AMDAL for the mill.

KAKK/33/ANDAL/PABRIK, TANGKI DAN DERMAGA

KHUSUS/XII/2010.

HCV assessments.

An environmental and Social impact assessment was

conducted in East Kalimantan in 2007 prior to land being

opened up. The following are taken from that report:






“The development area does not contain any Primary

Forest although HCVs were considered to be present at

Riparian Forest and Residual Swamp Forest near the

Mahakam River. PT Evans Indonesia has indicated that

these areas will be set aside for conservation”.

HCV assessments were conducted in 2011 and HCV was confirmed in areas already retained as conservation areas by the company which included the Riparian Forest and Residual Swamp forest areas previously identified.

2.4.3 Any new plantings since January 1st

2010 must comply with the RSPO New Plantings Procedure.

There is no new planting since 2005.

2.4.4 Any Land conflicts are being resolved through a mutually agreed process, e.g. RSPO Grievance procedure or Dispute Settlement Facility, in accordance with RSPO criteria 6.4, 7.5 and 7.6.

The following was noted:

Kalimantan:

Interviews with local villagers and a review of the legal

documents indicate that there are no significant land

conflicts.

Sumatra: No issues raised during the stake-holder meeting and no issues were raised from an outside organisations. Other notes: Prior to this audit, back in 2011, there was a stakeholder complaint which directly involved the company’s local minority share partner. The complaint was lodged to RSPO, local authorities and the police by the local partner. The complaint highlights that the company’s East Kalimantan operations (PT Prima Mitrajaya Mandiri) was planted on forest area, impacting approximately 762 Ha’s. Subsequent to the complaint in 2011, MP Evans carried out an investigation which revealed that the documents furnished to support the sale had discrepancies and were inaccurate. During the RSPO pre-assessment exercise, it was observed that the required izin (permit) furnished at the time MP Evans bought over majority share, lands acquired in East Kalimantan did not fall into forest area and AMDAL was obtained which was facilitated and borne by the local partner. The local partner was not present during stakeholder consultation meeting for this main assessment. Although the izin (permit) provided did not fall into forest






category, MP Evans has taken the 762 ha’s in question out of their application for HGU and is not part of PT Prima Mitrajaya Mandiri. The Kadastral map of HGU for PT Prima Mitrajaya Mandiri shows the exclusion of the forest areas which are logged over / degraded forests and amounts to about 762 ha’s. Again, this area although included in the Ijin Lokasi map but has been excluded from HGU. It was concluded that this isolated incident has no major implications towards partial certification and is currently being handled through established legal channels. This will be monitored regularly by the company and the audit team will follow up the outcome during the 1

st annual

surveillance audit, which is set to take place in Q2, 2013.

2.4.5 Any Labour disputes are being resolved through a mutually agreed process, in accordance with RSPO criterion 6.3.

No labour disputes noted.

2.4.6 Any Legal non-compliance is being resolved in accordance with the legal requirements, with reference to RSPO criteria 2.1 and 2.2.

No legal non-compliance found.

2.5 Summary of the findings for Partial Certification The audit team assessed compliance with the above requirements during this audit. Failure to address any non-compliance identified may lead to certification suspension.

The company has taken a very responsible approach to all of their plantation development with particular regard to conservation and social issues. With all legal steps taken for the development of the plantations.

2.6 Partial Certification Audit Agenda

Date Location Agenda 11/05 Loleng estate.

PT Mitrajaya Mandiri, East Kalimantan

Review of maps and discussion of the planting programme.

Review of all legal documents relating to the land development.

Interviews with workers and local village.

On-site inspection of conservation areas and plantation development.

15/05 Pangkatan Estate, North Sumatra

Review of the documentation associated with Sumatra plantations.

Open stake-holder meeting.

PART 3: AUDIT PROCESS

3.1 About the Certification Body

Control Union Certifications is a member of the Control Union World Group - an international inspection and certification body. CU performs Audits and certification in many agricultural based fields such as FSC, RSPO, and Organic production, Sustainable Textile Production, Organic Exchange, GLOBALGAP, HACCP, BRC, GMP and GTP. CU is accredited by the Dutch Council of Accreditation (RVA) on the European quality standard EN 45011 for the inspection and certification of CU Organic program (according to the EU regulation 2092/91) and EUREPGAP program. When requested a copy of the accreditation certificate can be obtained from CU.






3.2 Audit Team

Lead auditor: David Ogg FICFor.

Team member: Haeruddin

3.2.1 Qualifications of the Lead Auditor

Requirement Qualifications

A minimum of post high school (post-secondary

school) training in either agriculture/forestry,

environmental science or social sciences;

OND Forestry and Fellow of the Institute of Chartered

Foresters. (FICFor).

At least 5 years professional experience in area of

work relevant to the assessment (e.g., palm oil

management; agriculture/forestry; ecology; social

science);

Forestry management for 20 years.

Training in the practical application of the RSPO

criteria, and RSPO certification systems;

Development of systems for CUC and extensive audit

experience in Oil Palm since 2006.

Successfully completion of an ISO 9000:19011 lead

assessors course;

September 2007.

Training in the practical application of RSPO

certification systems.

RSPO lead auditor course 2011.

A supervised period of training in practical auditing

against the RSPO criteria or similar sustainability

standards, with a minimum of 15 days assessment

experience and at least 3 assessments at different

organisations.

FSC. PEFC. RSPO.

RSPO endorsed lead auditors course. September 2011.

Signed code of conduct. On file

General knowledge of:

RSPO P&C standards. Detailed knowledge.

CUC organizational structure. Detailed knowledge.

CUC quality systems. Detailed knowledge.

Lead auditor role. Detailed knowledge.

Report writing. Detailed knowledge.

Stakeholder consultation. Detailed knowledge.

Certification decision process. Detailed knowledge.

RSPO SCCS program manual. Detailed knowledge.

CUC filing systems. Detailed knowledge.

Correct use of RSPO trademarks. Detailed knowledge.

History and objectives of RSPO. Detailed knowledge.

CV available. Yes

Completion of CUC RSPO lead auditor training. Yes.

3.2.1 Qualifications of the assessment team

RSPO REQUIREMENT Team

member

QUALIFICATIONS

Fluent in main local languages

and English.

Haeruddin. Native language speaker.

Field working experience in the David Ogg A professional forester. Sat and passed the examinations






palm oil sector, or a

demonstrable equivalent.

necessary to be accepted as a member of the Institute of

Chartered Foresters in 1987. He was promoted to a Fellow of

the in 2004.

Haeruddin. Professional forester and oil palm plantation since 1995. Experience in RSPO, 4C, Global Gap, FSC, UTZ certified, and

Organic farming auditing.

Good agricultural practices

(GAP), integrated pest

management (IPM), pesticide

and fertilizer use.

David Ogg Management of private forestry estates in UK from 1981 to

2006.

6 years of auditing and observations in oil palm.

Haeruddin. Professional forester and oil palm plantation since 1995. Experience in audit RSPO, 4C, Global Gap, FSC, UTZ certified,

and Organic farming auditing.

Health and Safety auditing on

the farm and in processing

facilities. (For example OHSAS

18001 or occupational. Health

and safety assurance system).

David Ogg Professional forester involved with H&S of all contractors.

FSC group manager from 1998 to 2006. Auditing members for

Health and Safety. Auditing oil palm since 2006.



Workers welfare issues and

social auditing experience. (For

example with SA8000 or

related social or ethical

accountability codes).

David Ogg Professional forester and auditing oil palm since 2006.



Environmental and ecological

assessmenting. (For example

experience with organic

agriculture, ISO 14001 or

environmental management

systems).

David Ogg HCV assessments as a professional forester. Preparation of

management plans. Auditing oil palm since 2006.

Haeruddin. Professional forester and oil palm plantation since 1995.

Experience in audit FSC, 4C, FSC, UTZ certified, Global Gap,

Organic farming auditing.

Completely ISO 14001-EMS lead auditor training in December

2010.

Economic issues. David Ogg Managing director of previous company. Full financial control

and responsibility to share-holders.

3.3 Audit Methodology

3.3.1 General Overview

The Audit was carried out in conformity with the procedures as laid down in the CUC Procedure Manual and the RSPO Program Manual for the assessors and Certifier. During the Audit the qualified CUC assessors used the RSPO standard as endorsed for the country in which the Audit took place and recorded their findings. For each estate identified to be included in the sample for this audit, the original main Audit checklist was used, which includes any updates from previous main audit. Workers and local communities were interviewed and evidence sought to confirm ongoing compliance to include:

Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas. PPE. Ventilation. Security.

Field inspections. Herbicide application programmes. Harvesting sites and efficiency. Fertilising operations. SOP’s. Soil maps. Land preparation. Ground cover. IPM. First aiders and boxes. Ground cover. Soil erosion. Field observations of all operations.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Child labour. First aid. Awareness.






Re-planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact Assessments. Implementation.

Riparian zones. Width. Current and future management. Non maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Audits.

Local communities. Contributions made. Employment opportunities. Social impacts. Complaints procedures.

Workshops. Oil traps. Safe working environment. PPE. Diesel tanks. Environmentalwaste management.

Line sites. Interviews with householders. Inspection of water discharge points. Water improvement plans. Waste disposal.

Documentation review. Palm Oil Mill audits include:

Mill and workshop inspections. Documentation. Worker interviews.

Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs. EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE. Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

Full document review. Completion of the checklist. Review and documentation of evidence.All aspects of RSPO P&C’s applicable.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay and contracts. Verification: Verification of implementation was done through field observations, workshop and chemical store inspections, worker and community interviews and mill inspections as summarised above.

3.3.2 Audit Agenda

Date

2012

Location /main

sites

Main activities

14th May PangkatanEstate Opening meeting. Introduction by team leader. Introduction of

team members and assessment agenda.

Presentation of estates by respective managers.

Presentation by Oil Mill.

Source of FFB by respective managers.

Pangkatan Estate.

Sennah Estate

Chemical stores. Storage. MSDS leaflets. Herbicide mixing areas.

PPE. Ventilation. Security.

Field inspections. Herbicide application programmes. Harvesting

sites and efficiency. Fertilising operations. SOP’s. Soil maps. Land

preparation. Ground cover. IPM. First aiders and boxes. Ground

cover. Soil erosion. Field observations of all operations.

Worker interviews. OSH. Sexual, religious, racial harassment. Pay

and contracts. Child labour. First aid. Awareness.

New planting sites. Zero burn.

HCV’s. Identification. Management plans. Environmental Impact

Assessments. Implementation.

Riparian zones. Width. Current and future management. Non

maintenance regimes.

Water management. Water courses. Water monitoring.

Road maintenance. Run off.

Social amenities. Social Impact Assessments.

Local communities. Contributions made. Employment






opportunities. Social impacts. Complaints procedures.

Work shops. Oil traps. Safe working environment. PPE. Diesel tanks.

Environmental waste management.

Line sites. Interviews with householders. Inspection of water

discharge points. Water improvement plans. Waste disposal.

Document inspection and assessment.

Pangkatan estate. Open stake holder meeting.

15th

May Palm oil mill. Mill and workshop inspection. Documentation. Worker interviews.

Mill. SOP’s. Safe working environment. Gen sets. Walk ways. Signs.

EFB. POME treatment. Emissions. Mass balance. Diesel tanks. PPE.

Fire extinguishers. First aiders and boxes. Fuel and water usage.

OSH. Training. Management structure. First aiders.

Full document review. Completion of the checklist. Review and

documentation of evidence. All aspects of RSPO P&C’s.

Worker interviews.

OSH. Sexual, religious, racial harassment. Pay and contracts.

Document inspection and assessment.

Bilah Estate. Site specific audit.

15th

May. Pangkatan estate. Closing meeting. Chaired by the assessment team leader.

Welcome and introduction by the team leader.

Presentation of findings by the assessment team.

Questions and answers.

Final summary by team leader.

Number of assessors participating: 2

Number of days spent for the assessment on site: 2

Total number of person days used for the assessment on site: 4.

A full pre-assessment was conducted in December 2011.

3.4 Stakeholder Consultation

3.4.1 Summary of how the Stakeholder Consultation was organized

Number of stakeholders included in the companies application form to CUC and who were

included in the stakeholder consultation process:

26

Number of additional National and International stakeholders identified by the company and

by CUC and who were also included in the stakeholder consultation process:

11

Number of responses received: 0

Notification of the planned assessment was also posted on the CUC and RSPO web sites in accordance with the

RSPO requirements.

All stakeholders were sent a letter which included full details of the company to be assessed, the names and

addresses of all the mills and supply base, the dates of the assessment and the date time and place of an open

stakeholder meeting. They were invited to make any comments and given the following bullet points to assist

them.

1. Do you have any remarks on the RSPO standard?

2. What is your relation with the applicant?

3. Are there any plantation or mill management practices that affect you?

4. Do you consider any management is in conflict with the RSPO principles and criteria?

5. Do you have any suggestions for management?

6. Are you aware of any HCV in the plantations or in adjacent land?






7. Are you aware of any endangered or rare species?

8. Are there any adverse (or positive) effects on local communities?

9. Additional comments.

10. Are you likely to attend the open stakeholder meeting?

11. Do you have any comments about the assessment team and would you like to meet with them?

12. Do you have any comments of the applicants management of any other plantations?

Number of persons who attended the open stakeholder meeting: 27

Subsequently to the stakeholder meeting, the audit team discussed the issues raised with management

representatives of the company and follow up visits to specific sites were conducted. (See 3.3 below)

3.4.2 List of the National and International stakeholders contacted

WWF Agriculture Department

Sawit Watch Labour Department

Scale Up National Land Department

LSM Duta Sampit Police

Save Our Borneo Local Traditional Community Leaders

RSPO

3.4.3 Issues raised during stakeholder consultation and company responses

The subjects raised and responses by the company will be reviewed at the first annual surveillance assessment

Subject raised Company response and proposed

action to be taken

Assessment team

findings

All stakeholders: (Head of sub-district Bilah and Pangkatan, Head of village Pangkatan, Sidodadi, Bilah, Negeri Lama, and Kampung Padang, Comunity leader of Bilah village, LSM Roda Transparansi, Social contributions to all areas have been adequate and company’s responsiveness has been sufficient among the other palm plantation/mill located within the area

Positive findings.

Head of villages Sennah, Sidodadi, Bilah, Sidomulyo, Negeri Lama, and kampung Padang: Request for company’s contribution on: 1. Installment of potable water

equipment (Sennah village) 2. Prepare land and build the village’s

office (Bilah village) 3. Dredging of the ditch to prevent

flood in rainy season (Bilah village) 4. Hire of security for student across

the road, constructed of toilet, fence and water tank for school, as well as allowance for voluntary teachers (Pangkatan state Elementary school).

5. Constructed of toilet and artesian well for religion school and dredging ditch to prevent flood in

These requests will go through due

process. There is an annual budget

and the company can only do what

they can.

Positive response and action

taken to be reviewed at ASA1.






rainy season. (Sidomulyo village) 6. Construction of artesian well and

road access between 2 villages. (Negeri Lama village)

Head of Village Sidodadi Equal job opportunity is demonstrated well, information on the job vacancies are spread with announcement surrounding villages, but recruitment of workers from surrounding villages is not seen significantly.

Job vacancies are well advertised

and there is no intent not to

employ from surrounding villages.

Positive response and action

taken to be reviewed at ASA1.

Is there any land conflict or tenure found starting the establishment of PT Evans Indonesia in its current location? No land conflict or tenure was verified

No conflicts found.

CUC Q: Is there any issues of Gender? A: No any gender issues has been raised yet (Gender committee)

No action. No action.

CUC Q: Is there any labour dispute? A: No any labour issues has been

raised (Labour union)

No action. No action.

Stakeholder comments from pre-assessment:

All stakeholders: (Head of sub-district Bilah, Head of village Pangkatan, Head of Village Sidorukun, Head of Village Sidodadi, Head of Village Pondok Batu, Head of Village Bilah Hilir, LSM Roda Transparansi, Head of Sub-district Pangkatan, Head of Village Bilah) Social contributions to all areas have been adequate and company’s responsiveness has been sufficient among the other palm plantation/mill located within the area

Positive findings

Head of sub-district Bilah & Pangkatan, head of village Suka Mulia Request for company’s contribution on: 1. Maintenance’s on the office of the

head of village 2. Intangible program such as the

establishment of cooperative to build micro-economy or guidance program on local school as role model for good practices establishment

3. Maintenance on public road

Requests received from this meeting will be processed in accordance to management plan

Response from company is adequate

Head of Village Sidodadi Equal job opportunity is not demonstrated – information on the job vacancies are spread only word-by-mouth. No communication made to the representative of the villager.

So far the mechanism communication information regarding job vacancy has been spread through word-by-mouth. Improvement shall be made by using written announcement to nearby villages to ensure equal job

Change in the mechanism used in the process of worker’s selection and recruitment is found to be adequate to ensure equal job opportunity in the future.






opportunity

Representative NGO Roda Transparansi Clean water shortage in the state junior highschool (SMP 1 Pangkatan) – health concern due to non-hygienic condition

Construction for well has been made – Oct 2011

Company’s responsiveness to community’s needs is clearly demonstrated

Head of Village Suka Mulia Request for public road maintenance, especially in wet season prone to accidents

Consultation with the head of village has been made. Company will process such request when written proposal is received. Alternative road is also available and in better condition.

Company has demonstrated its responsiveness to community’s needs.

Head of Village Kampung Bilah Construction of the trenches surrounding the areas -> disturb road access

Trenches are constructed as safety measures to ensure no illegal activities take place. Explanation of the purpose of the trenches has been communicated in the stakeholder meeting

Company has responded to such issue through the use of stakeholder meeting. Efforts could be improved in the future to have better communication lines and relationship with the local community.

Is there any land conflict or tenure found starting the establishment of PT Evans Indonesia in its current location? No land conflict or tenure was verified

Positive findings

3.5 Date of the First Surveillance Visit

Projected Date: 9 to 12 months after main assessment certification. Tentatively: July 2013.






PART 4 ASSESSMENT FINDINGS

4.1 Lead Assessor’s Summary and Recommendation for Certification

The 3 estates included in the scope of this audit were the subject of a pre-assessment in late 2011 and the areas

of non-compliance found at that time have been fully addressed by the company. These estates are well

managed with particular attention to micro-management which has resulted in a small but steady rise in both

the yields per ha of FFB and the OER. Having been established for many decades, there are no land disputes or

customary rights still being practiced and the open stake-holder meeting was well attended and positive feed-

back was given to the audit team.

OSH has been well thought out and the use of herbicides and pesticides is carried out in accordance with best

practice. Environmental and social impact assessments are in place and management plans have been prepared

as a result of those assessments. HCVs are identified and protected. All labour is from local communities with

about 20% living in their villages adjacent to the plantations. Housing is provided for the majority of the workers

and a program of house improvements is underway.

The audit against the rules for partial certification did not reveal any non-compliance.

The company is applauded for their very positive attitude toward RSPO certification and it is noted that they

have decided to put into place the necessary systems and practices to demonstrate compliance to the RSPO

P&Cs for corporate reasons only as there is currently no demand for their CPO or PK to be RSPO certified.

One minor NC is raised and two observations were made during this audit.

It is therefore the recommendation of the lead auditor that:

A certificate of compliance is awarded.

Signed:

Name: David OggFICFor.

Date: 15th

May 2012.






4.2 Summary of the findings by principle and a sample of the Criteria

Principle 1: Commitment to Transparency

Summary of the findings for principle 1:

The company has an open door policy and access is afforded to anyone who requires information regarding

aspects of estate management. This policy extends to the processing of any complaints.

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 and forms to allow for

effective participation in decision making.

Summary of the findings for 1.1:

The open door policy is confirmed through an inspection of records and interviews. Non-commercially sensitive

information is available and records of all visitors are maintained.

Findings Comments Compliance

Records of all requests for information are

maintained.

Records of responses to those requests are

maintained and the action taken, dates and

persons involved.

The above records are maintained for a minimum

period as defined by the company.

Records of Information request are kept in the “BukuPermintaanInformasi” is available in estates and mill. The action taken in response to any request is also recorded. The retention date is described in SOP: PI/SOP/Umum-08, dated 2 May 2011 Rev.00 to be 10 years. The record keeping for such information begun in 2011.

Yes

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.


All management documents are publicly available. With the exception of any that are commercially sensitive.


Public documents are available and include legal,

social and environmental documents and current

and past FFB prices.

Commercially sensitive documents are not

available as verified by the audit team.

For example: All legal permits: HGU (land title), Surat Pendaftaran Usaha Perkebunan – SPUP/IUP (Plantation Operatioal Permit), Aktependirianperusahaan (Establish permit), TDP (Company Register permit), NPWP, UKL-UPL (Environmental and Social Impact Assessment), izinberhubungandenganketenagakerjaan, perijinan(Permits related labour) and assessment of social (health & safety plan, social contribution) are available upon public request.

Yes

Principle 2: Compliance with applicable laws and regulations


The company has a comprehensive system for ensuring all estate and mill managers are up to date with the

applicable laws and they have an internal monitoring system to ensure compliance.

Criterion 2.1: There is compliance with all applicable local, national and ratified international laws and

regulations


Evidence of compliance was found with all legal indicators.







Clear compliance with the law in all areas

sampled.

Good systems in place to track and implement

changes in the law.

The laws affecting the oil palm industry are listed

and available to all managers.

Prescribed in SOP PI/SOP/Umum-01 Effective date 2 May 2011 Rev 00. The procedure described the process starts with the Legal/HR dept of HO (Medan) responsible to check and evaluate any changes in regulation. Such changes will be forwarded to representative officer in each estate and revision shall be made accordingly. Written confirmation or response from estate back to HO to report the level of compliance. Mill: There is a list from the Government body which states all the laws that are applicable. The company also has a legal department and form Human Resource Dpt.

Examples:

1. IMB (Building permit) no 503.648/461/PEM/2003 from District Head of Labuhan Batu Nov 2003.

2. Surat Izin Usaha Industri (Mills operational permit) No 503/465/HUKUM/2003. from District Head of Labuhan Batu 6 Nov 2003.

3. Izin Prinsip Lokasi (Mill location permit) No 593/464/Hukum/2003, dated 6 November 2003.

4. NPWP (Tax permit) No. 01.001.796.0-058.000 valid 14 December 2013.

5. SK. Pengesahan P2K3 (OHS Approval from Labour Department of Labuhan Batu District, no..137/P2K3/D6TKT-4/2011, dated 1 November 2010.

6. SK pengesahan Lembaga Kerjasama BIPARTIT (Labour union agreement) no 560/75/D5TKT-03/2011, approval from Labour Department of Labuhan Batu District)

7. Permits of compressor, Sterilizer, genset, turbine, and radio communication were kept in Legal Comprehensive LGC/4.1/0.

Bilah Estate: 1. Akte pendirian perusahaan

(Establish permit) No 6 thn 2011. 2. Akte Notaris (Approval establish

Yes






permit) according Surat Keputusan Menteri Kehakiman dan HAM RI No: C-27.HT.03.01-Th.2004 issued 2 March 2004 regarding Pernyataan Keputusan Para Pemegang Saham Perubahan Anggaran dasar,

3. Tanda Daftar Perusahaan (Company Register Permit) No 09.03.1.01.64966 issue 9 June 2010.

4. Surat Keputusan Penetapan UKL-UPL (Enviromental and social impact assessment) No 660/175/BLH-LB/AP/2009 issued 22 May 2009.

5. Surat Pendaftaran Usaha Perkebunan (SPUP/IUP), no. 212/Menhutbun-VII/2000 issued 30 Maret 2000.

6. Keputusan Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanam Modal No 448/T/Pertanian/1995 tentang Pemberian Izin Usaha Tetap.

7. HGU (land title) No 1, 1987 issued 2 April 1987 (North area 1,319.6 ha), Approval HGU no. 62/HGU/DA/86, renewal on 9 Dec 2011, no 31 thn 2011.

8. HGU (Land title) No. 1 thn 1988, dated 29 November 1988 (South area 1,641 ha), approval no. 62/HGU/DA/86.

Pengesahan Panitian P2K3 dan Bakortiba

(Labour approval) no 800/P2K3/DKST-

4/2011 issued on 11 Nov 2010.

Criterion 2.2: The right to use the land can be demonstrated and is not legitimately contested by local

communities with demonstrable rights


The estates have been plantations for many decades and the right to use the land is clearly demonstrated. No

customary rights (apart from HCV6) were noted.


Land titles / country leases for all properties in

accordance with the law of the land.

Legal boundaries are identified and confirmed

on site.

The company has mechanism for the resolution

of conflicts and where there have been

disputes; there is proof of progress in an

acceptable manner to all parties.

Land acquisition has been with free prior and

informed consent.

For example:

Bilah Estate: 1. Akta pendirian perusahaan (Establish

permit) No 6 thn 2011. 2. Akta Notaris (Approval establish

permit) according Surat Keputusan Menteri Kehakiman dan HAM RI No: C-27.HT.03.01-Th.2004 issued 2 March 2004 regarding Pernyataan Keputusan Para Pemegang Saham Perubahan Anggaran dasar,

3. Tanda Daftar Perusahaan (Company Register Permit) No 09.03.1.01.64966

Yes






issue 9 June 2010. 4. Surat Keputusan Penetapan UKL-UPL

(Enviromental and scoial impact assessment) No 660/175/BLH-LB/AP/2009 issued 22 May 2009.

5. Surat Pendaftaran Usaha Perkebunan (SPUP/IUP), no. 212/Menhutbun-VII/2000 issued 30 Maret 2000.

6. Keputusan Menteri Negara Penggerak Dana Investasi/Ketua Badan Koordinasi Penanam Modal No 448/T/Pertanian/1995 tentang Pemberian Izin Usaha Tetap.

7. HGU (land title) No 1, 1987 issued 2 April 1987 (North area 1,319.6 ha), Approval HGU no. 62/HGU/DA/86, renewal on 9 Dec 2011, no 31 thn 2011.

8. HGU (Land title) No. 1 thn 1988, dated 29 November 1988 (South area 1,641 ha), approval no. 62/HGU/DA/86.

Criterion 2.3: Use of land for oil palm does not diminish the legal or customary rights of other users without their

free, prior and informed consent.


No issues noted.


Due to the longevity of the establishment of the

plantations, any land disputes or customary

rights issues were resolved in the (distant) past.

No issues raised by stake-holders or workers.

Confirmed through interview and stake-

holder consultation.

Yes






Principle 3: Commitment to long-term economic and financial viability

Summary of the findings for Principle 3:

MP Evans Group PLC is committed to the long term economic and financial viability of the companies it owns.

Criterion 3.1: There is an implemented management plan that aims to achieve long-term economic and financial

viability.


There are projected budgets for up to 23 years and detailed implemented management plans for the current

year. The commitment is to long term financial viability whist ensuring proper social welfare and environmental

considerations.


The company has a documented working plan

that covers a minimum period of 3 years from

the date of the assessment. It includes crop

yield projections; OER trends; costs and income.

There is a replanting programme projected for a

minimum of 5 years.

Both of the above are updated on a rolling

annual basis.

Budget Plan for mill from 2011-2021. Projection of production FFB in tons, percentage of OER and KER in monthly scale; POM Processing and Maintenance yearly costs cost per kg products. Individual budgets for each year which take into account predicted variables. PKT: A projected cash flow is given until

the year 2035 and takes into account a list

of variables such as the price of CPO. The

OER is shown for CPO and PK and

projected re-planting is shown. FFB trends

per ha are given.

Annual replanting programme to re-adjust

the age structure of the plantations to

conform to a 25 year rotation.

Yes

Principle 4: Use of appropriate best practices by growers and mills


The company has a set of generic SOPs for the estates and mills and each estate and mill then produces its own

site specific work instructions as applicable. Risk assessments are conducted and the attention to OSH is high –

the result being a very low accident rate. Training is conducted for all workers and this includes contractors.

Criterion 4.1 Operating procedures are appropriately documented and consistently implemented and monitored.


SOPs are in place and field inspections confirmed that they are being implemented.


The company has generic SOP’s, which are up to

date and which cover all plantation and mill

activities from seedling to the despatch of CPO

and PK.

The company has comprehensive annual

monitoring records.

The records of operational results are covered

by the monitoring records.

SOP covering all stages from land preparation until harvesting and other supporting activities in estates are available and documented. SOP Agronomi. There are 14 sections for agronomy and 24 general work including committees. 16 sections on Health and Safety. BLH: SOP for estate activities: SOP /3.1/1 to 12

(from nursery to harvesting and

transportation).

Mill: SOP covering all stages of operation activities and other supporting activities in

Yes






mill are available and documented. There are work instructions specific to the mill based upon the SOPs. The SOP’s consist of 15 SOP (from receiving FFB until despacth CPO) were covered in SOP 4.1/1 – SOP 4.1/15 and 13 additional SOP’s for laboratory activities SOP/4.2/1 to 10 & SOP/4.1/1 to 5 and general activities SOP/UMUM/1-13. K3 SOP/K3-1 to 14.

Criterion 4.2: Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures

optimal and sustained yield


Good land preparation, the use of compost, water conservation terraces, ground cover and annual tissue

sampling all ensure soil fertility is improved. Micro-management is resulting in small but significant increases in

the yields per ha of FFB and of the OER. Target is 30 mt / yr FFB / ha.


The company has records of regular leaf and

visual analysis. Leaf analysis is conducted on an

annual basis to determine fertiliser regimes.

All fertiliser regimes are well planned;

implemented and recorded.

Legume cover is used.

Compost application to areas determined by

the foliar analysis.

POME is used for land irrigation.

Good monitoring of fertiliser inputs.

PKT: Annual foliar analysis by Sumatra Bioscience. Certain fields will have monthly analysis if the agronomist recommends that this is necessary. 8

th November 2011 analysis. Ref:

142/PGE/IX/2011. For each block there is an analysis by N, P, K, Mg and Ca. Efforts to increase the soil fertility using various programs such as fertilizer, legume cover crops, land application of POME based on the soil and leaf analysis result Legume crops are maintained in area with immature plants. Land application of POME is applied on areas based on the soil analysis; i.e application of fertilizer Mop on 15 March 2011 is verified for BI873F field F11 was in accordance with the recommended dose in Bilah estate. POME and FFB is composted and used for land application. In 2011, 26,497 mt were produced and applied over an area of almost 2,000ha

Yes

Criterion 4.3: Practices minimise and control erosion and degradation of soils.


There are no fragile soils and peat is only found at Bilah Estate. Management systems are in pace to minimise

erosion control and spray patterns and intensity are planned to ensure maximum ground cover retention.


Each estate has soil maps. No fragile soils.

SOP in place for plantings on steep slopes which

includes the use of terracing; Biomass recycling

(see above) fond placement and silt traps.

There is a comprehensive road maintenance

Erosion control program is implemented for area with higher risk of erosion and degradation of soil. Land terrain is categorized as flat terrain with slope between 2-6 degree (No management strategy is needed).

Yes






programme.

Peat soil management is in accordance with an

SOP which includes a documented water

management programme.

Pangkatan Estate (PKT): Nothing above 25

degrees. Moisture conservation terracing

on re-plant sites.

Record of road maintenance program annually is available, i.e: road maintenance/construction plan of Bilah estate in 2011. Road hardening program was realized 99.80% in July 2011. PKT: Month by month road maintenance

program which is for grading and rolling

and adding new material as necessary.

Bilah: Water monitoring level in Watergate area is performed and monitoring of the water level is recorded. PKT: No peatland.

Effort to regulate soil nutrients in peat soil is demonstrated through the use of Mop fertilizer. PKT: Compost is used and supplemented

with inorganic fertiliser. Frond stacking

and conservation terracing and trenches.

Criterion 4.4: Practices maintain the quality and availability of surface and ground water.


The riparian zones are identified and non-fertiliser / herbicide regimes are implemented. Water management

plans are in place and the use of water per tonne FFB processed is about 1:1. POME is analysed on a monthly

basis.


Watercourses (and wetlands) are identified on

maps and management plans are in place for

restoring riparian buffer zones.

Water management includes the monitoring of

all water courses as they enter and leave the

estate(s).

BOD levels of effluent are monitored on a

regular basis.

Good levels of water usage per tonne of FFB

processed.

No drainage into protected areas.

PKT: SeiKundur runs through the estate

and is classified as an Anak Sungai

requiring 50m riparian zones. The estate

has classified the riparian zone as HCV 1.3

and where there is existing natural cover,

this is being preserved. Where there is oil

plam, a 50 m zone is identified in which

there is a zero fertiliser and herbicide

policy and the planting of jungle trees

takes place. At time of re-plant, the oil

palms will be poisoned and more jungle

trees will be planted.

PKT: Water is collected from a deep well for domestic and office use. This is analysed each year but to date no treatment has been necessary. Water conservation in the plantations is linked to erosion control. There are two measurement points on the SeiKundur. Upstream and downstream. Every 6 months, samples are sent for analysis. Results from 30

th December 2011

Yes






show almost no changes to the water as it passes through the estate. The compost program is a closed loop

system with regard to rainwater and

effluent discharge. All liquids are pumped

into a holding pond before being used for

land irrigation.

The BOD and COD is monitored monthly in all ponds and shows a dramatic reduction from over 12,000 mg/l in the first pond to less than 2,000 mg/l in the last pond. The legal limit for land irrigation is 5,000 mg/l in Indonesia. Any run-off from the composting program is recycled and used for land application and a monthly analysis is carried out. March 28

th 2012. Ph 7.46. COD K2CR2O7:

4,110.16. BOD: 2,320 mg/l.

Criterion 4.5: Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate

integrated Pest Management (IPM) techniques


IPM starts with land preparation to eliminate Ganoderma and then includes a comprehensive range of

techniques.


Documented and implemented IPM system.

Monitoring of IPM used, which includes the

training of staff and workers.

Planting of beneficial plants.

Record of pesticide use per ha.

Monitoring of pesticide toxicity units.

PKT: IPM starts with the land preparation for re-planting. The old palms are chipped and the root mass is exposed to sunlight to kill Ganoderma species. The site is then ploughed and harrowed to minimise the inoculation of the new palms with the fungus Ganoderma. Biological controls such as pheromone traps, planting of Cassia cobanensisand Turnerasubulata and the rearing of barn owls. Records of all programs are available. The use of compost also has a beneficial effect on the soils for IPM control. Beneficial plants are planted at up to 10m per hectare. Records are maintained with photographic evidence and a planting program adhered to. Barn owl boxes are monitored. PKT: There are 37 boxes with occupancy of 12 in April 2012 and a map to show their location. Rat census for rats. Every 10

th row every 3

months once. Leaf pest monitoring is done if damage is noticed.

Yes






Pest Management training takes place and

this is recorded.

The pesticide toxicity is measured every

month and records are available.

Criterion 4.6: Agrochemicals are used in such a way that does not endanger health or the environment. There is

no prophylactic use, and 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.


Agro-chemicals are used in a responsible way and in accordance with best practice. No female workers are

employed for herbicide or pesticide application and all workers receive regular medical check-ups.


Written justification for all agrochemicals used.

All pesticides are officially registered.

Good records of all pesticides used in

accordance with RSPO requirements.

Records show that the agrochemicals used are

appropriate and in accordance with product

label recommendations for target species.

Well ventilated and secure chemical stores with

MSDS leaflets and first aid.

All workers are trained in the use of

agrochemicals and this training is recorded.

Used containers and other waste materials are

stored in a safe way and disposed of in

accordance with laws and regulations.

The use of WHO type 1a or 1b chemicals, such

as paraquat are being demonstrably reduced.

Annual medical checkups are conducted and

recorded.

Records and interviews confirm that no work

for breast feeding or pregnant woman is

allowed.

Paraquat is being replaced.

No female workers used with agrochemcials.

Based on

KeputusanMenteriPertanian(Approval of

Agriculture Ministry) No

517/Kpts/SR.140/9/2007 regarding

“PerubahanNamaFormulasi, Kadar

BahanAktifPestisida”, chemicals used in

the estate are all included in the

permitted list. Verified for Garlon,

Supretox, Supremo, and RatGone.

The amount of chemical used per hectare is budgeted for in the annual accounts and is in accordance with the agronomist requirements. A monthly summary is for all herbicide issued.

The agronomist report is used to decide

which herbicides are to be used and what

strength. Field observations confirmed

that the prescribed herbicide is used and

interviews with workers confirmed that

they know what the active ingredient is

and that they have been trained in

spraying techniques.

Empty containers are triple rinsed and then stored in a secure scheduled waste store. They are removed by a licensed party: CV Arum who are licensed by the Environmental Ministry no: B-1507/Dep.IV-2/LH/02/2011. Records show the total scheduled waste removed including waste material from agrochemicals. RatGone (category 1A) and Supretox (act. Ingredient paraquat) are currently still used. Memorandum is issued on 20 June

Yes






2011 by top management as commitment to reduce the amount of paraquat used starting in 2012.

A monthly check up is performed by the

hospital assistant and an annual medical

check-up performed by a specialist

company (Anugerah IBU) from Medan.

Last performed 10 Feb, 2011 with no

medical problems detected. Result of the

check-up verified for members of the

spraying team.

Criterion 4.7: An occupational health and safety plan is documented, effectively communicated and implemented


The company takes a systematic approach to Health and safety. Each estate manager and the mill manager are

chairmen of their respective OSH committees and Gender committees are also organised and active.

Risk assessments are conducted for all sites and stations and the findings are acted upon.


The company has an OSH plan, which is being

implemented in all estate offices and mill.

OSH committees are identified and responsible

persons for safety programs are included in

responsibility charts.

The company maintains records of all meetings

with workers and minutes show that health,

safety and welfare issues are included amongst

other matters.

Worker accident insurance is in place and up to

date.

Workers exposed to high risk are identified and

records show that regular health examination

takes place.

Risk assessments include all identified areas of

risk both in the plantations and mills with

preventative measures and responsibilities.

All workers have been trained in OHS and this is

regularly updated. Records include

photographic evidence and signed attendance

sheets.

Accident and emergency procedures are

included in the OHS plans and risk assessments.

Trained First aiders at all sites.

First aid kits at all places of work.

Training programmes.

Accident records are maintained and reviewed

at the OHS meetings. Further training and

OHS policy: issued on 2 Jan 2011 and signed by Top Management. Each estate manager is the Chairman of the OSH committee for their estate. There is a training program for all workers. Risk assessments are carried out and PPE specified and actions taken to avoid the risks identified. The POM has a safety committee of which

the mill manager is the chairman and

representatives from the workforce. There

is also a gender committee.

All workers are covered by Jamsostek

(health insurance coverage by govt.)

Records of payment by company is

available for review

(BuktiPembayaranJamsostek).

Monthly check-up performed for all workers in the estate’s clinic, verified for spraying workers. Records on the result of the check-up and the responses/aid given by the medical examiners are recorded. Mill: Once a month for all workers at the

clinic. Annual audiometric test for workers

in areas assessed as being above 85dbh.

Risk assessment is performed and

Yes

An

Observation

has been

raised below






preventative action is then considered and

implemented.

recorded as “AnalisaPenilaianResiko K3. Identification of dangers covers all estate activity. Procedure OHS is available SOP K3 Mill. All operations have been risk

assessed and on the basis of this, PPE is

issued as applicable. There is a

replacement program for PPE to ensure it

is up to date and not worn out. All

workers have special safety shoes.

Training is conducted in accordance with

the work. Some workers are trained 3

times a year and the minimum is once per

month. Every muster includes an OSH

briefing.

All mandors carry first aid boxes and first aid boxes are located strategically in all buildings. There is drinking water and clean water

for washing provided to the spraying

teams and emergency showers in the

chemical mixing areas.

First aiders are trained by the hospital

assistant and it was confirmed by

interview that first aid trained personnel

are available in both field and mill

operations.

The estates and mill produce a monthly

report on work related accidents.

OBSERVATION. Whilst there are records of

accidents, these are categorised as minor

and major and not all incidents such as

cuts and bruises are recorded. The

company could consider recording a wider

range of minor incidents.

Criterion 4.8: All staff, workers, smallholders and contractors are appropriately trained


Comprehensive training for all workers, including contractors.


Training plans and records are in place as

appropriate for all staff and workers.

Contractors are trained in accordance with

Training plans and reports of the realized training are available for review. Mill: Theoretical training is followed by

practical training on site and this is

Yes






company procedures. applicable for the contractors as well as

full time workers. Training is repeated

every year.

The estates and the mill have files for each individual worker and all training is recorded. This includes contractors.

Contractors are used for FFB transport and Land preparation. They are all given a safety briefing and all contractors are “approved” prior to work by the estate manager. Mill. All contractors are trained in the same way as the workers. Contractors are generally used for fabrication purposes. Their training includes the use of PPE and general safety and site layout as well as training required specific to their work.

Principle 5: Environmental responsibility and conservation of natural resources and biodiversity


All estates and the mill have AMDAL (AnalisisMengenaiDampakLingkunganHidup) consisting of 3 (three) main documents;

1) Environmental Impact Assessment, 2) Environmental Management Plan, and 3) Environmental Monitoring Plan.

In addition to this, they have all prepared generic management plans which include the identification of

environmental risks and mitigating action to be taken.

HCV assessments have also been conducted in addition to the AMDAL.

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


Documented impact assessments and positive work to reduce the impacts on the environment.


Documented and implemented impact

assessments in accordance with RSPO and legal

requirements.

Regular reports are prepared on environmental

management in accordance with relevant

regulations.

Estates: Assessment on environmental impacts is available as UKL-UPL. This is a document prepared by an independent consultant and includes a list of all impacts with action to be taken. Mill: UKL-UPL for the mill. As a result of this report, a management plan and monitoring report has been prepared for the mill which identifies all the impacts station by station. One of the major issues was the disposal

of the excess fire that is not used in the

boiler. It is now used as part of the

compost system.

Yes






Every 6 months a full report is prepared in

accordance with the law.

Criterion 5.2: The status of rare, threatened or endangered species 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


HCV assessments have been conducted and management plans prepared for each estate.


HCV assessments completed, which include the

identification of any protected, rare, threatened

or endangered species if present.

Measures to protect any HCV’s, including RTE

species and habitats are in place.

Measures taken to protect species and habitats

are in accordance with local relevant laws and

the company takes responsible (and

reasonable) action to control illegal and

inappropriate hunting, fishing or collecting

activities.

Posters and information regarding protected

species are visible in the appropriate places.

Local socialisation.

The company has identified, trained and

appointed an individual person, or persons for a

number of estates, who monitor plans

associated with HCV and RTE species.

An HCV assessment was conducted in

October 2011 by EnviroLogic Consulting

for all estates. HCV areas are identified

and management options are given.

Periodic HCV monitoring is performed by

trained assigned personnel and the record

of monitoring is available. For example.

Pangkatan Estate. 14th

November 2011.

An action plan was prepared with the

location of HCV identified and the duties

of the individual managers stated in

relation to HCV. The file includes

templates for monitoring and review of

action taken.

Yes

Criterion 5.3: Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible

manner.


Comprehensive identification of all waste but little in the way of recycling of household waste such as PET

bottles.


Waste products have been identified and

documented.

Plans to avoid pollution are in place to include

careful mixing of agrochemicals, diesel tank

bunding, dedicated waste stores, concreted and

bunded workshops, oil traps and controlled

household waste disposal. Linesite discharge is

also included in the plans.

Hazardous waste is stored in a dedicated store

and disposed of by a licensed company in

accordance with product label and existing

regulation.

There are records of all disposals of waste.

There is a list of all locations with the waste and pollution associated detailed. There is also a map and diagram to show the physical location. Mill: For example: Genset emissions and

filters. Lubricants. Boiler. Clarification:

used rags and used oils. There is a detailed

diagram of the mill with the location of all

pollution and waste.

All estates have records of waste removed. The mill records all waste such as

batteries, oil and fuel filters etc. The waste

is stored at the mill and then transferred

Yes

An

Observation

has been

raised below






to the estate for disposal.

OBSERVATION: It is observed that waste

is Reduced, Re-used and disposed of….

However, there is little evidence of re-

cycling any household and office waste

such as PET bottles.

Criterion 5.4: Efficiency of energy use and use of renewable energy is maximised


It is in the commercial interest of the company to ensure efficient use of energy and efforts are made to reduce

the amount of diesel used for electricity generation as well as recycling fibre, shell and EFB in the mill.


All energy used in the mills is monitored.

Fossil fuel records are maintained and trends

shown.

Biogas collection is under consideration.

Renewable energy is used by the POM only. Recycling fibre and shell as fuel for the boilers and EFB and POME is used for compost. A feasibility study of using bio-gas will be

done in late 2012 after the bio-fuel project

in Kaltim is commissioned.

Records of all fossil fuels used are available for all estates. The records show a downward trend for litres used per tonne of FFB but this is dependent upon weather conditions, roads and lorry maintenance. Mill: Diesel use is recorded monthly. Jan 2012: 11,095 litres. 1.07 l per tonne

FFB. The trend in the use of diesel is

steady.

Yes

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


Zero burning policy.


The use of fire is not allowed for any land

preparation or for replanting.

Photographic records of zero burn.

The company has procedures in place to assist

in the event of land burning on neighbouring

land.

Zero burning statement is mentioned in various operational SOP. Mills, workshops and offices: Fire extinguishers noted in appropriate numbers. Inspections showed that they are all in date. Fire hydrants also in place.

Yes

Criterion 5.6: Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented

and monitored.


This criterion is closely linked to 5.3.1.


The mill(s) have identified the sources of Monitoring of air, water and waste Yes






pollution and emissions.

Various and regular measurements are taken of

the emissions and pollutants.

Measurements of emissions obtained are used

to develop strategies for improvement.

POME is treated and used in mixture with EFB

to produce compost. Land irrigation with run-

off. BOD levels in compliance with the law.

discharge is performed through quality analysis by independent laboratory. Mill: Boiler emissions are monitored

continuously and every 6 months the

Government Body conducts a stack

analysis. The emissions are monitored and

assessed against the legal maximum. For

example: 2nd

December 2011. Particles:

184.9 mg/cum (Legal limit 350). 8 other

parameters are measured and all are

within legal limits.

Monitoring of air, water and waste

discharge is performed through quality

analysis by independent laboratory. The

government electricity supply is used for

lighting to reduce the use of the genset. If

the bio-gas project goes ahead thre will be

a reduction in Methane GHG emissions

and diesel use will further drop.

Principle 6: Responsible consideration of employees and of individuals and communities affected by growers

and mills


A Social Impact Assessment was conducted in addition to the UKL-UPL and the findings are acted upon. Housing

is provided for up to 80% of the work force and is being improved in accordance with a program. No under-age

workers were observed and all pay is in accordance with the national minimum requirements.

The SOP on recruitment for the estates states that no new workers over the age of 45 should be employed. As

this is a form of discrimination, non-compliance has been raised.

Criterion 6.1: Aspects of plantation and mill management 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


There is an SEIA in addition to the UKL-UPL and positive management is taken.


Documented and implemented social impact

assessments prepared in participation with

affected parties, for plantations and mills.

Social impacts are both monitored and

managed with the participation of local

communities.

If the company’s operational scope changes,

then the EIA and SIA’s are revised and

documented.

The schedule for environmental management

monitoring and reporting is identified and

reports are prepared in accordance with this

schedule.

UKL-UPL report summarizes the assessment of environmental and social impact of the plantation on the surrounding area. Social impact assessment of the plantation is socialized to the local community in annual meeting, recorded as “Training, KonsultasidanSosialisasi SOP, Kebijakan, RSPO, LingkungandanSosialkepadaMasyarakatDesa di sekitarperusahaan”. A Social Impact Assessment was conducted by EnviroLogic Consulting in July 2011 and is complementary to the

Yes






UKL-UPL. This report clearly lists areas of weakness and the company has responded by producing a management plan. There is evidence that it was prepared

with the participation of affected and local

parties.

Report UKL-UPL is submitted to

governmental agency BLH

BadanPengelolahanLingkunganLabuhanBa

tu (Environmental Dept. LabuhanBatu).

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


The company was asked to invite stake-holders to an open stake-holder meeting and this is an indicator as to

how effective their communication is. 27 stake-holders attended the meeting and it was confirmed that the

company responds to local communities aspirations.


Clear and transparent systems of consultation

and communication with local stakeholders.

A list of stakeholders is maintained with names

and addresses.

Identified lines of communication.

The company maintains records of meetings

with local community representatives and

issues raised. The action taken in response to

those issues is also recorded.

The company has identified and appointed a

person who is the main point of contact and

who is responsible for communicating with local

communities and stakeholders.

Procedure is described in SOP

“TransparansiInformasi” (Information

Transparency) BP/SOP/Umum-02 effective

date 2 May 2011 Rev. 00. Record of the

annual communication/consultation with

the communities is in the form of Training,

KonsultasidanSosialisasi SOP, Kebijakan,

RSPO,

LingkungandanSosialkepadaMasyarakatDe

sa di sebitarperusahaan”.

List of stakeholders is kept consisting of

contact person from nearby villages,

police dept. hospital/clinic, governmental

bodies, NGOs, suppliers and contractor,

etc.

Information and aspirations from local

communities brought up in the annual

community meeting are recorded in the

“Training, KonsultasidanSosialisasi SOP,

Kebijakan, RSPO,

LingkungandanSosialkepadaMasyarakatDe

sa di sekitarperusahaan PT

BilahPlantindo”. Verified for the report of

the meeting held on Sept 2011. 3 issues

brought up from Desa Perkebunan Bilah

were all responded and actions plan

resulted are realized and recorded in

Yes






“Action Plan Konsultasi&Sosialisasi

Stakeholder”.

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


Complaints procedure is in place and explained to local communities through socialisation meetings.


There is a complaints and dispute resolution

procedures which is demonstrably accepted by

potentially affected parties.

There are good records of complaints which

includes the action taken, the outcome of the

action taken and any follow up requirements.

Procedure is fully available.

No customary rights or compensation needed

for loss of customary rights.

Procedure for receiving and resolving complaints is described in SOP “Komplain Internal danEksternal” BP/SOP/Umum-05 Rev 00 effective date 2 May 2011. This procedure was explained to local

people during socialisation meetings and

these meetings are recorded.

Record of all complaints received and the

responses of the issues is the form of

“BukuKomplain Internal danEksternal.

SHE/3.1/4.

Yes

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 stake holders to

express their views through their own representative institutions

Summary of the findings for 6,4:

Due to the length of time the estates have been plantations, all compensation was dealt with historically.


No customary rights or land disputes as the land

has been plantations for over 100 years.

Stake holder consultation took place as part of

the SIA and no issues were raised.

No further comments. Yes

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.


Payment records show that the minimum wage and above is paid. Housing is provided.


Contracts of pay and conditions are

documented and are in compliance with the

law.

Housing, water supplies, medical, educational

and welfare amenities supplied.

The written agreements with contractors

specify that contractors must abide by labour

laws.

Record of the worker’s payment (Slip Gaji)

are available. Copy of the payment is

given to the worker and inspection of

records show that all pay is above the

national minimum.

Housing facilities are available for portion

of the workers, constructions for more

housing facilities are in progress.

Adequate water supplies, clinic,

kindergarden, religious school are

provided. State elementary school is

found located in the estate to support

education programs of the worker’s

Yes






children. Bus transportation is provided

for junior and senior high schoolers to

travel to the nearest school. Monthly

medical check-up is provided by the

estates for all workers.

Agreement letter with contractor “Surat PerjanjianKerja No. PI/PGM/04/2011/0005” included statement in clause 6 statement that both parties are required to comply with applicable laws. BLH: Agreement letter with contractor “Surat PerjanjianKerja No. 001/HO-BIE/I/2011” included statement in clause 6 statement that both parties are required to comply with applicable laws. All contracts specify compliance with the

law.

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


The company recognises the requirements of this criterion.


Published statement recognizing freedom of

association.

Minutes of meetings with trade unions and

worker representatives.

Policy prepared on 2nd

January 2011

recognizing freedom of association and

registered with the labour department.

Meeting held whenever issues are

brought up by representative of labour

union. Meeting report is kept as record

Yes

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 not exposed to hazardous

working conditions.


Minimum age of employment is 18 and this was confirmed through document inspection, observations and

intrviews.


There is a documented and published company

policy on worker ages in accordance with

national laws.

The policy is being implemented.

No child labour. Child is defined as

younger than 18. Clear signs around the

estates, requirement about recruitment

process clearly state about minimum

worker age.

There is a register of all workers with their

photographs and dates of birth etc. An

Yes






inspection of all records show that no one

under the age of 18 is employed and site

observations and worker interviews

further confirmed this.

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.


Employment SOP states maximum age to be 45 for new employees. Non-compliance raised as this is

discrimination.


There is a publicly available equal opportunities

policy.

Sighted some discrimination in terms of

employment age. Efforts are made to ensure

workers are treated equally with regard to

working opportunities.

Company policy on equal opportunity is

documented dated 2nd

January 2011.

Jobs are advertised in local villages and

are open to all workers. There is a

procedure for engaging workers which

stipulates a maximum age of 45. This is

discrimination.

No

A Minor NC

has been

raised

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.


No harassment noted or raised through stake-holder consultation and interview.


Well displayed and clear policy on sexual

harassment and violence.

The company has a policy on the protection of

reproductive rights.

The sexual harassment policy is being

implemented.

The reproduction rights policy is being

implemented.

The company has set up a specific gender

committee to facilitate the grievance

mechanism.

The company policy regarding protection

of reproductive rights is found. SOP

PerlindunganReproduksiManusia

(BP/SOP/Umum-09) includes statement

for maternity leave before and after birth,

menstruation leave 2 days with specific

condition, nursing mothers are given

required time to feed their babies. Period

for the permitted paid-leave is stated in

the PerjanjianKerjaBersama clause VIII

(reference made to legal regulation).

Verified for worker ID 1565 teacher

(Baridah) received full payment for Oct

2011 with 2 days leave (menstruation

leave) when compared with Augustus

2011 when leave is recorded.

The grievances are handled with the same

procedure for handling complaints SOP

“Komplain Internal danEksternal”

BP/SOP/Umum-05 Rev 00 effective date 2

May 2011.

Yes

Criterion 6.10: Growers and mills deal fairly and transparently with smallholders and other local businesses.







No outside crop is purchased.


No purchase of FFB from any outside growers.

Contractual agreements are signed by both

parties to indicate understanding and

acceptance. Contracts inspected were fair, legal

and transparent.

Suppliers of services are paid in a timely

manner.

Legal agreement is made containing

information of the condition of the

agreement. Verified for

SuratPerjanjianKerja No 001/HO-

BIE/I/2011/- Pembangunan

PerumahanKaryawan with CV Kurnia Jaya

Mandiri.

Yes

Criterion 6.11: Growers and mills contribute to local sustainable development wherever appropriate.


The company is supportive of a wide range of local initiatives.


The company makes contributions for local

development and records are maintained.

List of social activity conducted in 2011 is available “List BantuanTahun 2011”. Social contribution performed are such: 200 meter road rmaintenance in near by village (desaKampung Padang)8 May 2011 and contribution for school gate repair SDN Pangkatan 10 Oct 2011. Total contribution made Rp. 50,697,272 with 20 activities.Records of such activities realized are available. BLH: 13 activities during 2011 such as contribution building material for police station and donation for nearby villages DesaKp. Bilah, restoration river (sungaiKalundangDesaKampungBilah) with total Rp. 8,880,850. PKT: 2012 to date: Aprox USD1,000. Provision of chairs. Digging of drains. Cement for Mosque and for church and for different villages. Parking area in Mosque levelled and stoned. Lvelling road in a local village. 2011: USD 5,200 on 25 different projects.

Yes

Principle 7: Responsible development of new plantings


No new planting has taken place and so this Principle is Not Applicable.

Principle 8: Commitment to continual improvement in key areas of activity


The company is clearly committed to compliance with the RSPO and they have improvement plans for all esates.

Criterion 8.1: Growers and millers regularly monitor and review their activities and develop and implement

action plans that allow demonstrable continual improvement in key operations







As above.


Clear evidence of continual improvement in key

areas.

Reduction in the use of class 1a and class 1b

agrochemicals.

Environmental impacts.

Waste reduction.

Pollution emissions.

Social impacts.

Records are in place of follow up actions as a

result of both internal and RSPO audits.

Improvement plans for 2011 and their

realization is monitored as

“BuktiPemenuhan Program Peningkatan

2011”. Improvement programs in 2011

include increase in the frequency of

trainings, reduction in the amount of

paraquat usage, recycling used paper,

construction for bounding for high risk

areas such as chemical mixing and oil

storage warehouse, construction for traps

in the petroleum storage tank area,

application compost in replanting area

and, construction worker housing facility.

These improvements have been

demonstrably implemented.

Yes.

4.3 Non-conformity Register

This section gives an over view of non-conformities raised during this main assessment audit.

The company is given 12 months to close out all minor non-conformities before the 1st

annual surveillance audit

The company is given 60 days to close all major non-conformities

Observations may be noted and if not looked into, may lead to being raised as a non-conformity during future annual surveillances

4.4.1 Audit NC Summary

Date: May 15th

2012

Number settled: N/A

Number outstanding: 1

4.4.2 Status of non-conformities raised (both Minor and Major)

NC number: 01/2012

Client name: PT Evans Indonesia

Date raised: 15th

May 2012

Major or Minor: Minor

Raised by: David Ogg.

Aspect of standard:

6.8. Evidence of equal treatment in working opportunities for workers.

Evidence of non-conformity:

There is a procedure for engaging workers which stipulates a maximum age of 45.

Auditors signature:

Date: 15

th May 2012.






Observation

Client name: PT Evans Indonesia.

Date raised: 15th

May 2012.


Aspect of standard:

4.7 An occupational health and safety plan is documented, effectively communicated and implemented.

Whilst there are records of accidents, these are categorised as minor and major and not all incidents such as cuts

and bruises are recorded. The company could consider recording a wider range of minor incidents.

Auditors signature:

Date: 15

th May 2012

Observation

Client name: PT Evans Indonesia.

Date raised: 15th

May 2012.


Aspect of standard:

5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner

It is observed that waste is “Reduced, Re-used and disposed of…” However, there is little evidence of re-cycling

any household and office waste such as PET bottles.

Auditors signature:

Date: 15

th May 2012






PART 5: RSPO SUPPLY CHAIN CERTIFICATION

The palm mill mentioned in the scope of the audit was audited against the requirements of the following: RSPO Supply Chain Certification Systems. November 2011. RSPO Supply Chain Certification Standard. November 2011.

5.1 POM included in the scope of the audit

CU code: Name of facility Location address Supply Chain Model

POM Desa Perkebunan

Pangkatan

Kecamatan Pangkatan, Kabupaten

Labuhan Batu, North Sumatera, Indonesia. IP

5.2 Summary report including a brief description of the scope of certification

The palm oil mill only sources all its FFB from the 3 estates owned by PT Evans Indonesia that has been captured this main assessment (Please also see 1.7above). Actual quantities of FFB delivered to the mill, and the actual quantities of CPO and PK produced are tracked and monitored on a daily basis. A full RSPO SCCS certification audit was used during this main assessment and the findings support the certification based on IP supply chain model.

5.3 Confirmation of the company’s summary of annual certified volume of RSPO certified Palm Oil and Palm Kernel over a specified period

Product: CPO (MT) PK (MT) Specified 12 month period

CU Code

POM 35,000 8,250

The 12 month output is the average over any 12 month period and the actual production for the 12 months from the date of certification will be included in the first annual summary. See also 1.6.1 above.

5.4 Final certification decision by Control Union for the RSPO SCCS Audit

Recommendations made: Yes

Summary of non-compliances:

Full compliance was found.

Certification status of client: The POM included in the scope of this audit demonstrated full compliance with the RSPO SCCS. With effect from the certification date given in the RSPOPC certificate, this POM mentioned in the scope of this report is considered to be certified in accordance with the RSPO SCCS.






PART 6: CERTIFIED ORGANISATION’S ACKNOWLEDGEMENT OF INTERNAL RESPONSIBILITY

6.1 Date of next Annual Surveillance Audit.

The provisional date for the next ASA is: July 2013

6.2 Date for Closure of Non-Conformities

See sections above for details of NC’s, if any

All major NCs to be closed by: August28th

2012

All minor NCs to be closed by: Before or during the time of ASA1

6.3 Signing by the Client

I the undersigned, being the most senior relevant management representative of the operation seeking or holding certification, agree with the contents and audit findings as presented in this document . I also confirm:

Acceptance of liability in execution of the instructions given.

That this company was made aware that the findings of the audit team are tentative; pending review and decision making by the duly designated representatives of Control Union Certifications.

That during the closing meeting all agenda items was covered by the Lead Auditor.

Acknowledged by:

Name: Gunasekaran Uthiradam.

Position: Head of Operation Agronomy (SUMUT)

Date: 15th

May 2012 Signature

6.4 Signing by the Lead Auditor

I the undersigned, being the Lead Auditor, confirm that this report is an accurate record of the findings and of the closing meeting. I further confirm that the summary of the findings as presented in this report are a true representation of the actual findings of the audit team.

Acknowledged by:

Name: David Ogg FicFor.

Position: Lead Auditor

Date: 15th

May, 2012 Signature

6.5 Signing by the Certifier

I the undersigned, being the Certifier, confirm that the information and conclusions included in this report have been prepared in good faith and that the certification decision has been based upon this information.

Acknowledged by:

Name: Gerben Stegeman

Position: Certifier

Date: July 11th

2012 Signature






PART 7: APPENDICIES

Appendix 1: Location Map for this Certification Unit (see 1.8 above)

Appendix 2: List of Abbreviations

AMDAL Analisis Mengenai Dampak Lingkungan

BOD Biological Oxygen Demand

BRC British Retail Consortium

CHRA Chemical Health Risk Assessment

CoC Chain of Custody

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

CU Control Union

CUC Control Union Certifications

DOE Department of Environment

EFB Empty Fruit Bunch

EIA Environment Impact Assessment

ERT Endangered Rare or Threatened species

EU European Union

FFB Fresh Fruit Bunch

FSC Forest Stewardship Council

FSC COC Forest Stewardship Council Chain of Custody

FSC FM Forest Stewardship Council Forest Management

GGL Green Gold Label

GMP Good Manufacturing Practice

GOTS Global Organic Textile Standard

GTP Good Trading Practice

GPS Global Positioning System

HACCP Hazard Analysis and Critical Control Point

HCV High Conservation Value

HCVF High Conservation Value Forest

HGU Hak Guna Usaha

IPM Integrated Pest Management

JAS Japanese Agricultural Standard

MSDS Material Safety Data Sheet

NC Non Conformity

OE Organic Exchange

OER Oil Extraction Rate. (CPO as a % of the mass of FFB).

OSH Occupational Safety and Health

OSHAS Occupational Safety and Health Assessment Scheme

P&C Principle and Criteria

PEFC Programme for the Endorsement of Forest Certification

PET Polyethylene Terephthalate

PK Palm Kernel

POM Palm Oil Mill

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

RKL Rencana Pengelolaan Lingkungan Hidup

RPL Rencana Pemantauan Lingkungan Hidup

RSPO Roundtable on Sustainable Palm Oil

RSPO NI Roundtable on Sustainable Palm Oil National Interpretation

RTE Rare, Threatened, and Endangered






SA8000 Social Accountability 8000

SEIA Social Environmental Impact Assessment.

SIA Social Impact Assessment

SOCSO Social Security Organisation

SOP Standard Operating Procedure

UKL/UPL Upaya Pengelolaan lingkungan (UKL) / Upaya Pemantauan Lingkungan (UPL)

USDA/NOP United States Department of Agriculture – National Organic Program

MT Metric Tonnes

WHO World Health Organization

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