RSPO CERTIFICATION ASSESSMENT PUBLIC SUMMARY … · This certification assessment is on Langga...

Public Summary Report PT. Tapian Nadenggan –Langga Payung Mill Page 1

Making our world safer

RSPO CERTIFICATION ASSESSMENT PUBLIC SUMMARY REPORT

Date of assessment 04 to 08.07.2011

PT. TUVNORD Indonesia System Certification Management

Has assessed

PT. Tapian Nadenggan

Palm Oil Mill and Supply Base for Compliance to RSPO Principles and Criteria for

Sustainable Palm Oil Production

Langga Payung POM and Supply Base CPO 36,906.99 t & PK 9,492.28 t

Revision 3

Report prepared by

Wieke Savitri


TABLE OF CONTENTS

Summary

3

Abbreviations Used

3

1. SCOPE OF THE CERTIFICATION ASSESSMENT 4 1.1 National Interpretations 4 1.2 Scope of Certification 4 1.3 Location 5 1.4 1. Areas of estates

2.Description of Supply Base 77

3 Company Background and Ownership History 7 1.5 Dates of Planting and Replanting Cycle 9 1.6 Other Certifications Held 9 1.7 Time-Bound Plan for Other Certification Units 10 1.8 Approximate Tonnages Certified 11 1.9 Date Certification Issued and Scope of Certificate 11

2. ASSESSMENT PROCESS 11 2.1 Certification Body 11 2.2 Assessment Methodology 12 2.3 Certification assessment checklist of principles and criteria 13 2.4 Review of documents 13 2.5 On-site and Follow-up interviews 13

2.6 Resolution of Corrective actions 14 2.7 Qualifications of lead assessor and assessment team 14 2.8 Outline of how stakeholders were interviewed 16 2.9 List of stakeholders 16 2.10 Questions posed in interviews with stakeholders 17 2.11 Date of next surveillance visit 17

3. ASSESSMENT FINDINGS 15 3.1 Summary of findings 18 3.2 Detailed Non-Conformity Report, Corrective Actions taken and Auditors’

Conclusions 36

3.3 1.Noteworthy positive components 46 2. Some Recommendations for Improvement to the Mill and Estates 46 3.4 Issues raised by stakeholders and findings of the assessment team 47 3.5 Certified organization’s acknowledgement of internal responsibility 48 3.6 Formal sign-off of assessment findings 49

ANNEXES A Report SCCS-Langga Payung Mill 50 B Draft RSPO Certificate 53 C Certification Assessment Plan 55


Summary

PT. TÜVNORD Indonesia (TNI) – Certification Body is a member of the worldwide German TÜV NORD group. TNI has performed a comprehensive certification assessment of PT. Tapian Nadenggan, and concludes that its operations comply with the RSPO Principles and Criteria Indonesia National Interpretation (RSPO INA-NIWG) version May 2008. TNI therefore recommends that PT. Tapian Nadenggan be approved as a producer of RSPO Certified Sustainable Palm Oil.

This certification assessment is on Langga Payung Mill producing a total 36,906.99 t/year CPO and 9,492.28 t/year PK*.

(*January-December 2010) Abbreviations Used AMDAL Analisis Mengenai Dampak Lingkungan (Environmental Impact Study Report)

ANDAL Analisis Dampak Lingkungan (Environmental Impact Analysis Report)

Bapedalda Badan Pengendalian Dampak Lingkungan Daerah (Regional Environmental Impact Control Agency )

B3 Bahan Berbahaya dan Beracun (Toxic and Hazardous Materials

BOD Biological Oxygen Demand

BPN Badan Pertanahan Nasional (National Land Agency)

CDM Clean Development Mechanism (Mekanisme Pembangunan Bersih )

COD Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

DAR Deutscher Akkreditierungs Rat (German Accreditation Body)

Deperindag RI Departemen Perindustrian dan Perdagangan (Department of Industry and Commerce of the Republic of Indonesia)

EFB Empty Fruit Bunch(es)

FFA Free Fatty Acid(s)

FFB Fresh Fruit Bunch(es)

GPS Global Positioning System

ha Hectare(s)

HCV High Conservation Value

HGU Hak Guna Usaha (Land UseTitle)

HSE Health Safety Environment (Kesehatan, Keselamatan dan Lingkungan)

IPM Integrated Pest Management

JAMSOSTEK Jaminan Sosial Tenaga Kerja (Labour Social Insurance)

K3 Keselamatan dan Kesehatan Kerja (Occupational Safety and Health)

KAN Komite Akreditasi Nasional (The Indonesian Accreditation Committee)

KLH Kementrian Lingkungan Hidup (Ministry of Environment)


KUD Koperasi Unit Desa (Village Cooperative)

LCC Legume Cover Crop

LD50 Lethal Dosage (50% mortality of tested population)

LSM Lembaga Swadaya Masyarakat (NGO(s))

MSDS Material Safety Data Sheet(s)

OER Oil Extraction Rate

P2K3 Panitia Pembina Keselamatan dan Kesehatan Kerja (Guiding Committee of Occupational Safety and Heath)

P3K Pertolongan Pertama Pada Kecelakaan (First Aid Emergency)

Permenaker RI Peraturan Menteri Tenaga Kerja (Regulation(s) of the Ministry of Labour of Republic of Indonesia)

PK Palm Kernel

PKO Palm Kernel Oil

PMA Penanaman Modal Asing (Foreign Investment)

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

PTTN PT. Tapian Nadenggan

PTSKU PT. Satya Kisma Usaha

RKL-RPL Rencana Kelola Lingkungan dan Rencana Pemantauan Lingkungan (Environmental Management Plan – Environmental Monitoring Plan)

SMK3 Sistim Manajemen – Keselamatan dan Kesehatan Kerja (Management System of Occupational Safety and Health)

SOP Standard Operating Procedure(s)

SPSI Serikat Pekerja Seluruh Indonesia (Worker Union)

TNI PT. TÜV Nord Indonesia

UKL/UPL Upaya Kelola Lingkungan/Upaya Pemantauan Lingkungan (Environmental Management Efforts and Environmental Monitoring Efforts)

1. SCOPE OF THE CERTIFICATION ASSESSMENT 1.1 National Interpretation The standard requirements of the Indonesian National Interpretation of RSPO Principles and Criteria (RSPO INA-NIWG) version May 2008 were used to assess the operations of the Palm Oil Mill and the supply base of FFB for PT. Tapian Nadenggan. 1.2 Scope of Certification

The scope of certification is the production from 1 (one) mill supplied by 3 (three) company-owned estates. The mill also processes outgrower FFB, but they are not included in the claimed certification.


1.3 Locations PT. Tapian Nadenggan – Langga Payung Mill (PTTN) is offering 1 (one) mill and 3 (three) estates, 2 estates are located in Kabupaten Padang Lawas Utara, and 1 (one) estate Normark Estate under PT. Satya Kisma Usaha (PTSKU) is located in Kabupaten Labuhanbatu Selatan, Province of North Sumatra, Indonesia for certification. The locations of the mill and estates are shown in Figures A-1 with their GPS coordinates (The readings for the estates are for their offices).

Table 1: GPS Coordinates for Mill and Estates of Tapian Nadenggan (North Sumatra area) (Estate

coordinates are for their offices)

Code Unit

Location

GPS coordinates

Longitude (E) Latitude (S)

LPYM Langga Payung POM

Ds . Huta Baru Nangka, Halongonan, Padang Lawas Utara, Sumatra Utara

99º 53' 13'' E 1º 39' 16'' N

LPYE Langga Payung Estate

Ds . Huta Baru Nangka, Halongonan, Padang Lawas Utara, Sumatra Utara

99º 53' 22'' E

1º 38' 55'' N

PBNE Paya Baung Estate Ds. Huta Baringin, Simangambat, Padang Lawas Utara, Sumatra Utara

99º 58' 31'' E 1º 37' 12'' N

NRME Normark Estate Ds. Normark, Kota Pinang, Labuhanbatu Selatan, Sumatra Utara

99º 59' 53'' E 1º 50' 57'' N

Figure 1a. Map of Langga Payung Mill and Estates Location


Figure 1b. Overlay Map of Langga Payung Estate, Paya Baung Estates, and Normark Estate


1.4.1 Areas of Estates Three (3) estates are included in this certification assessment. Their land use data are given in Table 2. Table 2: Land use data for PT. Tapian Nadenggan – Langga Payung Mill ( June 2011)

Langga Payung

Estate Paya Baung

Estate Normark Estate

Total area

Planted (ha)

4,961.04

2,507.39

1,900.89 9,369.32 Others (building, public facilitiy) (ha)

347.49 143.70 294.21 785.40

HGU (ha) 5,308.53 2,651.09 2,195.10 10,154.72

HCV (ha) (included in planted area) 229.45 27.7 226.83 483.98

1.4.2. Description of Supply Base

FFB for the mill are sourced from 3 (three) company-owned estates and also independent smallholders/ outgrowers. PTTN manages ± 10,154.72 ha of its own estates, and also receives FFB from independent smallholders. The smallholders are, however, independent, not beholden in any way to sell their fruits only to PTTN. The total independent smallholders/ outgrowers FFB received in 2010 (January – December) was 86,671.37 t (33.89%) of the total processed by Langga Payung Palm Oil Mill. The respective volumes of FFB processed from the own-estates and independent smallholders are given in Table 3.

Table 3: Sources of FFB processed by Langga Payung Palm Oil Mill (January – December 2010)

Source of FFB FFB (t)

Percentage (%)

Langga Payung Estate 88,661.98 34.66

Paya Baung Estate 47,943.19 18.74 Normark Estate 32,503.61 12.71

Total PTTN-Owned Estates 169,108.78 66.11 Independent Smallholders 86,671.37 33.89

Third party suppliers 0 0 Total smallholders and third party 86,671.37 33.89

Total FFB processed 255,780.15 100.00

The smallholders was developed as part of PTTN’s commitment to help the local community development by advising them on how to plant oil palm. PTTN is committed to fully support smallholders develop their plots in a sustainable manner in compliance with the RSPO Principles and Criteria. However, their production is not within the scope of this current RSPO certification.

1.4.3. Company Background and Ownership History PTTN is a subsidiary of Sinar Mas Agro Resources and Technology Tbk or known as PT.SMART Tbk Group. PT SMART Tbk is one of the largest, publicly-listed, integrated palm-based consumer companies in Indonesia which is committed to sustainable palm oil production. Founded in 1962, SMART's palm plantations have a total coverage area of approximately 137,500 hectares (including small holders). SMART also operates 15 mills, four kernel crushing plants and four refineries. SMART listed its shares on the Indonesia Stock Exchange in 1992. SMART is a subsidiary of Golden Agri-Resources Ltd ("GAR"), which is one of the largest palm-based


companies in the world which is listed on the Singapore Exchange. SMART also manages all of GAR's oil palm plantations, which has a total planted area of 445,100 hectares (including small holders) in Indonesia, as at 31 March 2011.

SMART's primary activities are cultivating and harvesting of palm trees, processing of fresh fruit bunches into crude palm oil ("CPO") and palm kernel, and refining CPO into value-added products such as cooking oil, margarine and shortening. Besides bulk and industrial oil, SMART's refined products are also marketed under several brands such as Filma and Kunci Mas. Today, these brands have been recognised for their high quality and command significant market share in their respective segment in Indonesia.

As a part of SMART Group, PTTN aim to be the leader in sustainable palm oil production by adopting the best industry practices and standards, managing the environment responsibly and empowering the communities where we operate while delivering shareholder value. PTTN sustainability strategy is implementing the best practices holistically in all dimensions of sustainability (the environment, community, market place and work place), benchmarking our practices against the Roundtable on Sustainable Palm Oil ("RSPO") and the United Nations Global Compact ("UNGC"), and engaging stakeholders proactively.

PTTN has been established in 1979, and join with SMART since 1989 PTTN operations in Kabupaten Padang Lawas Utara and Kabupaten Labuhanbatu Selatan, Province of North Sumatera, consist of one mill and three estates : Langga Payung POM, Langga Payung Estate, Paya Baung Estate and Normark Estate The acquisition of lands has done in 1992 -1999 for Langga Payung Estate and Paya Baung Estate, and in 2005 for Normark Estate with total area 10,154.72 ha..

The summary of legal permist are shown in a table below : Company Unit Land Use Title /

Hak Guna Usaha (HGU)

Site Permit/ Izin Lokasi

Plantation Operation Permit /

Izin Usaha Perkebunan

PT. Tapian Nadenggan

Langga Payung Mill/ Estate

23/HGU/DA/82

23/HGU/DA/82/A/68

14/HGU/1989

No. 593/40/K/ BKPMD/1988, dated on 16.07.1988 by Decree from Governor North Sumatra Province.

No.763/Menhutbun/VII-2000, dated on 29.06.2000 by Decree from Ministry of Forestry Republic of Indonesia.

Paya Baung Estate

PT. Satya Kisma Usaha

Normark Estate 5/HGU/BPN/2005

No.948/Menhutbun/VII-2000, dated on 08.08.2000 by Decree from Ministry of Forestry Republic of Indonesia.

HGU Decree HGU Number

Area (ha) Location Issued of HGU

Validity of HGU

23/HGU/DA/82 1 1,209.15 Desa Batang Nadenggan

18/12/1992 31/12/2072

23/HGU/DA/82/A/68 1 1,765.47 Desa Sihopuk Baru

24/12/1992 31/12/2037

14/HGU/1989 1 4,985.00 Desa Huta Baringin dan

Desa Ujung Batu Julu 30/08/1999 31/12/2024

5/HGU/BPN/2005 1 2,195.10 Desa Perkebunan

Normark 25/02/2005 31/12/2029

Total HGU area 10,154.72


1.5 Dates of Planting and Replanting Cycle

In general, oil palm is replanted after 25 years, but possibly shorter / longer depending on the economics and status of the crop. The summary of planted oil palms is given in Table 4 and the detailed age profile of planted palms and total area is given in Table 5. Table 4: Area Summary of planted oil palms in Langga Payung Estate, Paya Baung Estate and Normark

Estate for this certification assessment (as at June 2011)

Estate Location

Area Summary (ha) * Planted Oil

Palm Mature Immature

Langga Payung Kec. Halongonan. Kab. Padang Lawas Utara, Sumatera Utara

4,961.04 3.918,61 1,042.43

Paya Baung Kec. Simangambat. Kab. Padang Lawas Utara, Sumatera Utara

2,507.39 2.507,39 0

Normark Kec. Kota Pinang, Kab. Labuhan Batu Selatan, Sumatera Utara

1,900.89 1.667.03 233.86

Total 9,369.32 8,093.03 1,276.29

Table 5 : Area statistics of planted oil palms in Langga Payung Estate, Paya Baung Estate and Normark Estate for this certification assessment (as at June 2011)

Estates 0 - 5 % 6 - 10 % 11 - 15 % 16 – 20 % 21 - 30 % Total

Langga Payung

1,228.39 24.76 0 0 0 0 0 0 3,732.65 75.24 4,961.04

Paya Baung 0 0 0 0 21.02 0.84 0 0 2,486.37 99.16 2,507.39

Normark 570.55 30.01 836.76 44.02 239.55 12.60 - 254.03 13.36 1,900.89

Total 1,798.94 836.76 260.57 6,473.05 9,369.32

1.6 Other Certifications Held PTTN has been certified to:

ISO 9001:2008, Quality Management System for Langga Payung Mill by SAI Global since 2002

SMK3, based on Permenaker No. 5 Tahun 2005 by the Ministry of Labor of the Republic of Indonesia since 2000 ;

Organizational Information/ Contact Person

All information in respect of this certification assessment for RSPO should be addressed to: Contact Person Mr. Ismu Zulfikar Position Head of Environment Department Organization name PT. TAPIAN NADENGGAN Address BII Plaza Tower 2, 10th Floor

Jl. MH. Thamrin Mo.51

Postal code, city 10350, Jakarta Pusat Country Indonesia Telephone Nr +6021-3181388 Fax Nr +6221-3181389 Email [email protected]


1.7 Time-Bound Plan for Other Certification Units PTTN as a subsidiary of PT. SMART Tbk has commitment to obtain the RSPO certification for 1 (one) mill and its supply base in North Sumatra this year and for other 3 (three) mills and its supply base in Kalimantan as the others companies under PT. SMART Tbk Group. PTTN also has future plans to provide training and awareness about the RSPO certification process to smallholders / out growers for the mill that receive the fruit from the plasma farmers/ outgrowers. The Bukit Subur KKPA in East Kalimantan will be proposed to get RSPO certification in 2012. The time-bound plan for doing so is set out in the table below: Time bound plan for mills and estates under PT. Tapian Nadenggan:

No Name of Mill Supply Base Company of

Mill Location

Proposed Time for Certification

1 Hanau Mill Hanau Estate Tasik Mas Estate Tanjung Paring Estate Langadang Estate Medang Sari Estate

PT Tapian Nadenggan

Central Kalimantan

2010* (Delayed due to grievance panel)

2 Semilar Mill Semilar Estate Sei Rindu Estate Mandang Estate Puri Estate

PT Tapian Nadenggan

Central Kalimantan

2012

3 Jak Luay Mill Pantun Mas Estate Pantun Mas KKPA Jak Luay Estate Jak Luay KKPA Long Buluh Estate Bukit Subur Estate Bukit Subur KKPA

PT Tapian Nadenggan

East Kalimantan

2012

Time bound plan for mills and estates under others companies (SMART Group)

No Name of Mill Supply Base Company of

Mill Location

Proposed Time for Certification

1 Padang Halaban Mill

Padang Halaban Estate Pernantian Estate Adipati Estate Kanopan Ulu Estate

PT SMART Tbk North

Sumatera

2010* (has been assessed)

2 Batu Ampar Mill

Batu Ampar Estate Batu Mulia Estate Sungai Panci Estate Sungai Panci KKPA

PT SMART Tbk South

Kalimantan


3 Tanah Laut Mill Tanah Laut Estate Kintapura Estate PT SMART Tbk

South Kalimantan


5 Leidong West Mill

Leidong West Utara Estate Leidong West Selatan Estate Bukit Intan Estate Bukit Mas Estate

PT Leidong West Indonesia

Bangka 2011

8 Gunung Kombeng Mill / Muara Wahau Mill

Gunung Kombeng EstateGunung Kombeng KKPAMuara Wahau Estate Rantau Panjang Estate Rantau Panjang KKPA

PT Kresna Duta Agroindo

East Kalimantan

2012

9 Jelatang Mill Batang Merangin Estate Kubang Ujo Plasma Pamenang Plasma


Jambi 2012

10 Pelakar Mill Pelakar Estate Tiga Serumpun Estate Bukit Bungkul KKPA


Jambi 2012


11 Langling Mill Bangko Inti Estate Bangko Plasma


Jambi 2012

12 Sungai Bengkal Mill

Sungai Bengkal Estate Batang Gading Estate Sungai Bengkal KKPA Batang Gading KKPA Kilis Estate Kilis KKPA

PT Satya Kisma Usaha

Jambi 2012

13 Bukit Kapur Mill Sungai Cantung Estate Bukit Kapur Estate

PT SMART Tbk South

Kalimantan 2014

1.8 Approximate Tonnages Certified All FFB produced from the company’s 3 (three) estates are processed by Langga Payung POM which has milling capacity 60 t FFB/ hour. The production from smallholders/ outgrowers FFB is not included within the scope of this assessment at this time. The volumes claimed for certification by Langga Payung POM are shown in Table 6: Table 6: Palm oil / palm kernel volumes claimed for certification

Note : The volumes are the actual production from January to December 2010, OER = 21.82%,

1.9 Date Certification Issued and Scope Certificate

The scope of the certificate to be issued covers the production from 1 (one) palm oil mill and 3 (three) estates. The date of issuance of the certificate will depend on approval of this Assessment Report by the RSPO Secretariat. A draft certificate is shown in Annex B.

2. ASSESSMENT PROCESS

2.1 Certification Body

PT. TÜV NORD Indonesia is a subsidiary of the German TÜV NORD Group. Our company is a market leader in Indonesia for inspection, testing and certification services. Through more than 600 clients, we offer not just a high added-value service but also the trust and confidence embedded in our issued certificates / reports. We satisfy not only our direct customers but also other stakeholders, like regulators and interested society, including NGOs, through our competent auditors, inspectors and analysts.

PT. TÜV NORD Indonesia, through its HQ in Germany, is a member of International Accreditation Forum (IAF) and accredited by DAR–German and locally by the Indonesian Accreditation Committee (KAN). Services provided by the Strategic Business Unit Systems Certifications are: Food Safety Management System ISO 22000, Information Security Management System ISO 27001, Social Accountability SA 8000, Food Hygiene HACCP, Medical Device Directive MDD, ISO 13485, Occupational Health and Safety OHSAS 18001, Product Certification: GS-Mark, CE-Mark, SNI Mark, Inspection for ISPS Code, Clean Development Mechanism (CDM) Validation & Verification, British Retail Consortium, BRC Issue 5.

Mill Estates Annual Production from company estates (t)

CPO

PKO

PK

Langga Payung POM

Langga Payung 19,349.95 0 4,976.70 Paya Baung 10,463.32 0 2,691.11 Normark 7,093.72 0 1,824.47

TOTAL 36,906.99 0 9,492.28


The offices of PT. TÜV NORD Indonesia are at: Head office System Certification Management Perkantoran Hijau Arkadia Tower F, 7th Floor Suite 706 Jl. Let. Jend. TB Simatupang Kav. 88 Jakarta 12520 – Indonesia Tel : +6221 7883 7338 Fax : +6221 7883 7336 Branch office Graha Pangeran 7-H1 Floor Jl. Jend. A Yani 286 Surabaya 60234 – Indonesia Tel : +6231 8292602 Fax : +6231 8292723

Laboratory Division Jl. Jababeka XVII E Blok U No. 27B Kawasan Industri Jababeka I Cikarang Bekasi 17530 – Indonesia President Director: Mr. Robert Napitupulu Email: [email protected] Website : www.tuev-nord.de

2.2 Assessment Methodology

The certification assessment of PTTN, Langga Payung Mill and its supply base at North Sumatera was carried out from July 4 to 8, 2011. A pre audit also conducted in February 2011 to confirm the scope of certification and the preparedness of the organization before certification asessment. The assessment comprised four phases: A desk audit (document check) with a customised RSPO audit checklist according to the RSPO

manual, procedures and palm oil mill and estate working instructions;

Review results of consultation with stakeholders prior to certification assessment. The detailed method is given in Point 2.8;

Background investigations (published disputes, public comments on preliminary announcement), followed by interviews with RSPO management, employees and other stakeholders (associated people, NGOs, land regulators, social watchers, labour union); and

Verification of proposed corrective actions followed by review of the assessment report by internal veto persons (Senior Manager of PT. TÜV NORD Indonesia).

The summary public report of this certification assessment includes Corrective Action Requests, Corrective Actions Taken, Verification of Corrective Actions Taken and Progress in Implementation of Corrective Actions to be checked in the Surveillance Audit.

The Non Conformities are broadly due to:

Major Non Conformities:

- mistakes in interpretation of RSPO P&C by PTTN directly affecting the certification assessment;

- requirements of some RSPO P & C not met or, in other words, non-compliance to the P&C on a major indicator(s);

These raise doubt on the capability of PTTN to achieve the desired results.

Minor Non Conformities:

Where information is insufficient, unclear or insufficiently transparent to establish whether a requirement is met, or non-compliance to the requirements of the RSPO P & C on a minor indicator(s);


Potential for Improvement

Conditions and factors in PTTN that will allow it to better satisfy the requirements of the relevant standards;

Strengths, weaknesses, opportunities and threats of PTTN

The final certification assessment was made after issuance of the Corrective Actions Taken statement by PTTN. The auditors have assessed the corrective actions taken and are satisfied that the results comply with the required standards. Based on the compliance effected, this certification assessment report is forwarded to RSPO for its consideration for approval.

2.3. Certification Assessment Checklist of Principles and Criteria

To systematically consider all the relevant RSPO P & C in the assessment, a checklist was used. The checklist has all the P & C against which the means employed by the management to satisfy them are noted. It serves the following purposes:

- Organizes, details and clarifies the criteria that the management is expected to meet;

- Ensures transparency in the certification process - whether the criteria have been satisfied by the management.

The checklist was drawn up against the Indonesian National Interpretation of the RSPO P & C. 2.4. Review of documents The PTTN documentation was submitted in June 2011 and its adequacy / completeness reviewed against the certification assessment checklist.

2.5. Onsite and Follow-up interviews The audit team collected all the information on PTTN management for evidence of conformity to the RSPO P & C on a random sampling basis.

Interviews with the respective staff, workers and some stakeholders in charge were carried out to ascertain the manner and circumstances in which the PTTN management system is implemented within the organization.

The certification assessment was carried out from 04 to 08 July 2011. TÜV NORD Indonesia conducted on-site interviews with PTTN management, and palm oil mill / estate personnel to verify some information and resolve issues arising from reviews of the documents and PTTN management.

The key points with respect to and concerned with the main topics of the interviews are summarised below: Interviewed Persons & Interview topics for Manager, Staff, Workers General aspects of the certification and the certification boundary; Chemical stores, Water management, Details on reduction of paraquat use; Approval documentation and status, Legal aspects related to PTTN management; Management Policy and Quality, SM-K3 and Environmental Management System; Involved personnel and their responsibilities; Justification of RSPO P & C;


Monitoring and measurement of environmental performance for waste water treatment;

Identification of environmental aspects and impacts; Flora, fauna, ecology and biodiversity; Land and conversion planting, Replanting inspection and handling of chemical packaging

wastes, Zero burning; Socio economic impacts on local population, Sanitary and hygiene of employees’ housing

complexes; Licenses, operation & maintenance authority and responsibility; IPM (Integrated Pest Management); HCV identification; Mill operation, including Inspection of FFB received, Transport of FFB, Road maintenance and

Workshops for heavy trucks, loaders, etc. Interviewed Persons & Interview topics for Stakeholders Environmental protection within the estates and mill including use of pesticides, wastes and

effluent management, Company approach to community development; Provision of housing, sanitation, amenities and educational support; Biodiversity conservation within the estate(s) and surroundings (where possibly impacted by the

estate / mill operations), Opportunities for earning fair wages, overtime and piece-rate work. 2.6. Resolution of Non-Compliances For remedying any non-compliances, the required corrective actions were discussed. PTTN was required to close out the outstanding any major issue(s) by responding to the Non Conformity Report by describing, with evidence, the corrective action(s) taken.

In this certification assessment, the auditing team raised 4 major non-conformities and 6 minor non-conformities and noted some improvements to be made. The non conformities and suggested improvements are all documented in this report. 2.7. Qualifications of the lead assessor and assessment team

Lead Assessor : Sudarmadji

He has a background in electrical engineering; and qualified in environmental auditing with sustainability management system such as EMS. He has completed training as Lead Auditor ISO 14001, ISO 900, Occupational Health & Safety management system and CDM certification. He has completed training as Lead Assessor / Internal Assessor Sustainable Palm Oil by Indonesia Palm Oil Board and KAN (National Accreditation Committee). He is an experienced auditor in several audits palm oil manufacturers assessment based on ISO 14001, with a total minimum 15 days of audit. As team member involved in RSPO certification assessment for PT. PP London Sumatra Indonesia, Tbk (North Sumatera Province) in October – November 2008; and PT. Sahabat Mewah dan Makmur in December 2009.

Public Summary Report PT. Tapian Nadenggan‐Langga Payung Mill Page 15

Assessor : Wieke Savitri

Graduated from Agriculture Faculty in Bogor Agricultural University, then, consultant at Perkumpulan Untuk Peningkatan Usaha Kecil supporting by GTZ, a foundation to promote small scale enterprises by offering training and consultation in business management, human resources, marketing and IT. Before joining TUV NORD Indonesia, she spent 7 years working for Danone–Aqua, a beverage company, in which she held various positions, such as Quality Control Manager at Pandaan factory in East Java before her last position as Quality Assurance Manager at Klaten factory in Central Java. Her passion for environmental and social issues had led her to join Aqua Foundation even while working in Danone-Aqua - to develop community development programs for people living around her factory. She also attended a Workshop for Community-based Environmental Educators by the United Nations of Environmental Program in Bangkok. Finally,joined PT. TUV NORD Indonesia in September 2006 as QMS auditor, and appointed Surabaya Branch Manager. She is an experienced auditor in palm oil manufacturing and oil palm estates. Attended DOEN RSPO auditors training in 2008. As team member involved in RSPO P &C certification assessment in PT. Perkebunan Nusantara IV, PT. Aek Tarum- Sampoerna Agro, PT. PP. London Sumatra Tbk, Musi Banyuasin Region and North Sumatra. She is also team member for RSPO Supply Chain Certification System in PT. Multimas Nabati Asahan, PT. Mustika Sembuluh, PT. Kerry Sawit Indonesia and PT. Sinar Alam Permai (Wilmar Group).

Assessor : Anita Masduki

She has a bachelor degree in Chemical Engineering from Institute Technology Bandung (ITB), and holds diploma in Biological Treatment from Hiroshima University, Japan, besides holds diploma in Environmental Management from Institute Environmental Management and Assesment in UK. She attended trainings such as Ozone Depleting Substance Program; Indonesia Cleaner Industrial Program.. She is an experienced auditor in quality management system ISO 9001, environmental management system ISO 14001 and OHSAS 18001 in various organization. Before joining TUV NORD Indonesia in 2011, she has a long time job as a consultant for 17 years in management system. She attended RSPO lead assessor training in 2011. Technical Expert : Dr. Hariyadi

He holds a doctorate in Agriculture Environment from Bogor Agricultural University (IPB), and has a strong background and experience in the socio-environment aspects of agriculture as a lecturer in Agriculture and Socio-environment. Assisted in socio-environmental impact assessments and did research in Green Giant NPK fertilizer effects on immature oil palm growth. Has extensive experience in research in plant water and nutrient requirements, irrigation and fertilizer application, seedling selection and Integrated Pest Management. Qualified in biodiversity assessment and biodiversity science. Underwent auditor training in oil palm estates and palm oil mill in EMS and RSPO P & C. Completed training in EMS course for ISO 14001:2004 and has experience in oil palm estate waste management, disposal of EFB and fertilizer packaging and environmental impact on employees’ housing complexes. Member of the team in RSPO certification assessment of PT. London Sumatra Indonesia Tbk in 2008, PT. Perkebunan Nusantara IV and PT. Aek Tarum –Sampoerna Agro.

Technical Expert : Ir. Basita Ginting, M.A, Ph.D

He has bachelor degree in Agriculture Socio-economics from Bogor Agricultural University (IPB), and holds a doctorate in Community Development from University of The Philippines. He has a strong background and experience in the Evaluation for Social Impact Assessment and aspects of agriculture as a lecturer for Villager Sociology in Human Ecology Faculty, IPB. Has extensive experience in researches and consultation for more than 15 years such as Landownership structures and levels of living settlers in the transmigration areas; Community participation in the family welfare movement, etc.


2.8. Outline of how stakeholders were interviewed

Stakeholder consultations began with notification of the upcoming assessment in the websites of RSPO and PTTN. Telephone calls, e-mails, facsimiles or letters were sent to the applicable stakeholders. PTTN has held regular meetings with its stakeholders in accordance with its communication procedure “SOP Komunikasi dan Konsultasi dengan Stakeholder No. PT.TN-LPYM/RSPO-SOP/03 dated on 01.07.2010 “. Before the assessment proper, the audit team trawled the proceedings of all the meetings to update itself on the current situation and issues involved. The stakeholders were then invited to discuss critical issues in community development, including the latest progress plans for community development and the targets to be achieved. Some of the items on the agenda for the stakeholders’ meeting were the maintenance of infrastructure - roads, irrigation and drainage network, bridges and schools. In addition, to provide financial support, scholarships, welfare, sanitation and improved hygiene for the people living near the employees’ housing complexes, palm oil mill and supply bases. The discussion with stakeholders was well organized. The audit team then visited some of them for interviews for both positive / negative information on any issue in connection with the operations of the PTTN palm oil mill and supply bases. The stakeholders meeting conducted by assessor team and interviews without the presence of the company personnel/staff to obtain more comprehensive feedback. 2.9. List of Stakeholders The table below lists the stakeholders involved:

Statutory Body Contact Person(if applicable and address)

Location Phone

Kabagtapem Pemkab LaBuSel Zulkifli Kota Pinang 08126265418 Asisten 1 Pemkab Paluta Amas Hasibuan Gunung Tua 08126569707

Camat Halongonan Pangaribuan Dalimunthe Sipaho 082166735400

Camat Sei Kanan Igani S.Sos Langga Payung 08126007320

Kapolsek Sei Kanan H.A. Siregar Langga Payung 081361900838 Kapolsek Gunung Tua M.Sijabat Gunung Tua 081363205666 Danramil Pd.Bolak Chaidir Harahap Gunung Tua 081376629919 Danramil Sei Kanan Hotman Langga Payung 081376809990 DisHutBun Labuhan Batu Erwin Rantau Prapat 081376006244 KaDisHutBun Paluta Marataib Harahap Gunung Tua 08127604281 PPL DisHutBun Paluta Suwito Hutaimbaru 081362011819 PPL DisHutBun Labusel Wahidin Ranto Jiur 081370568420

Kasubbidwasnaker Disnaker Labuhan Batu

I Ngarak Karo karo Rantau Prapat 081361590714

Disnaker Padang Lawas Utara Olopon Simbolon Gunung Tua 081376252160

Kasie Sengketa BPN Labuhan Batu

Sujono Rantau Prapat 081361333656

Kasie Sengketa BPN Pd Sidempuan

Adi Irwansyah P.Sidempuan 081397549515

Kades Situmbaga Faisal Situmbaga 081265568868 Kades Huta Baru Nangka Saur Harahap Huta Baru Nangka 081397002196Kades Bt. Nadenggan Yahya Harahap Tapian 081375535550Kades Ujung Gading Abdul Hakim Ujung Gading 081362443310Kades Sihopuk Baru Rohman Sihopuk Baru 081263639096Kades Sihopuk Lama Sanaran Harahap Sihopul Lama 081397810180 Kades Siancimun Parlaungan Harahap Siancimun 081396252259 Kades Rondaman Alpian Harahap Rondaman 081396996075


Smallholders / Outgrowers Contact Name(if applicable and address)

Phone E mail

H. Repelita 081361445500 H. Dahyar 08126381123 H. Daham 081370674461 H. Pandu Husin 081370999977

Independent supplier of materials and services

Contact Name(if applicable and address)

Location Phone

PT.Altrak Bp.T.Mulja Tirto Medan 061-8449978 PT.United Traktor Bp.Joseph Tarigan Medan 061-7865133 PT.Traktor Nusantara Bp. Ilham S.Nasution Medan 061-7874455 PT.Trakindo Bp.M.Ridwan Medan 061-7865311

Worker Organization Contact Name(if applicable and address)

Location Phone

Ketua SPSI Resman Purba Pondok Ry II LPYE 085270098025Ketua Kop Kar Tapian Makmur Ismail Pondok Div.1

LPYE081265657266

NGO Contact Name(if applicable and address)

Location Phone

Khatulistiwa Parulian Sihopuk Baru 082166048466Koran Lokal "Dinamika Rakyat" Sutan Parbonuan Hrp Hutaimbaru 081260649588

2.10. Questions posed in interviews with stakeholders Does PTTN provide information on the RSPO certification exercise including plans for safety and

health to the public and stakeholders?

Does PTTN hold regular meetings on community development?

Does PTTN respond well to complaints in respect of RSPO P & C implementation?

Is there a clear grievance and complaints procedure in the company?

Are there any complaints on land acquired by PTTN for planting oil palm?

Is there any environment impact caused by the operations of PTTN?

Is there a procedure for settlement of conflicts communicated to the local community?

Does PTTN meet with stakeholders regularly to discuss issues on community development?

Are the workers paid in accordance with government regulations?

Is there a system to disseminate information quickly in emergencies to the local communities around the palm oil mill and supply bases?

All the responses / comments, whether positive or negative, were recorded by the audit team by hand. It then verified the information by the standard operating procedure. . 2.11. Date of next surveillance visit The next surveillance audit has to be within 12 months from the date of RSPO approval of the Initial Certification. The surveillance audit has to be conducted yearly for a 5-years period.


3. ASSESSMENT FINDING 3.1 Summary of findings

Objective evidence was obtained separately for each of the indicators for the mill / estates in the certification assessment. The information was comprehensively asked from the 1 (one) mill and 3 (three) estates, and outgrowers.

The results for each indicator from the different operational areas were aggregated to assess the overall conformance of the Company's operations to it. A finding is made for each indicator.

Nonconformities were raised against 4 (four) Major Indicators, and 6 (six ) Minor Indicators with some opportunities for improvement noted. Where a nonconformity / observation is assigned, reference is made at the end of the text of the Indicator to which it refers.

PTTN has prepared a Corrective Active Plan and submitted evidence which has been accepted by TNI. The effectiveness of the corrective actions for the minor nonconformities will be checked on the next surveillance but the major non-compliance has to be closed within 60 days and on-site verification is taken on September 6, 2011.

The following is a summary of the findings for compliance with the RSPO Principles & Criteria. 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. PTTN has a procedure for communicating with stakeholders as decribed in “SOP Komunikasi dan Konsultasi dengan Stakeholder No. PT.TN-LPYM/RSPO-SOP/03 dated on 01.07.2010 All the heads in the mill / estates are required to provide adequate information as required by the RSPO criteria. There was no specific form, but PTTN provide information boxes placed in front of estate/ mill office and checked regularly every week. Stakeholders requests, especially on donation will be considered under the CSR program, or immedeately if the amount is reasonable, for example : request from Police Office Padang Lawas Utara about 31 flag poles dated on April 29, 2011, had been replied promptly on May 4, 2011, and fulfilled on July 9, 2011. Mechanisme to perform the CSR was conducted through the SOP No. 014/SOP.CSR/05/2011, dated 1 July 2011. The requests and responses for information are recorded in the „ Buku Komunikasi Konsultasi dan Tanggapan. (1.1.1). The response(s) are within one week after the request had been received whether they are approved or not. (1.1.2). The records of requests / responses will be kept for 5 (five) years as stated in “SOP Pengendalian dan Masa Simpan Dokumen No.PT.TN-LPYM/RSPO-SOP/04 dated on 01.07.2010. (1.1.3). Compliance Status : Full.

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. Management documents on legal, environmental, health safety and social issues are publicly available upon request or regular reports are submitted to related stakeholders according to “SOP Daftar Informasi dan Stakeholder Terkait” or List of Information and Related Stakeholders (Form PTTN IUS dated on 01.07.2010). The legal documents are reported to Dinas Perkebunan (Agriculture Agency), BPN (Land Agency) such as: Izin Lokasi (Site Permit), Izin Usaha Perkebunan (Plantation Operation Permit) HGU (Land Use Title).


HGU signboard also publicly available at the entrance gate of estate, as seen in Figure 2. In accordance with environmental issue, PTTN has prepared Environmental and Social Impact Assessment (AMDAL / UKL-UPL) and Environmental Management And Monitoring Reports (Laporan RKL-RPL), for Semester 2 in 2010 and submitted to BLH (Environmental Agency). Area of planting and production and fertilizers implementation documents are ubmitted to Agriculture Agency. Since PTTN is a labour-intensive company, it is required to comply with the mandatory SMK3 (Occupational Health and Safety Management System). Progress on the Health and Safety Program (K3 program) is reported regularly to the Ministry of Labour of Republic of Indonesia. Social and financial documents such as list of number of employees and list of employee’s salary are submitted regularly to Dinas Tenaga Kerja & Transmigrasi (Labour & Transmigration Ministry in Regency & Province) and to JAMSOSTEK. Taxes documents are submitted to Regency and Province Goverment also to Local House of Representative (DPRD) . Besides the regular reports to related stakeholders, some documents are available upon request such as CSR program and social impact assessment for social base NGO, report of RKL/RPL for environmental base NGO. The stakeholder should ask the documents/ information officially according to “SOP Komunikasi dan Konsultasi dengan Stakeholder No. PT.TN-LPYM/RSPO-SOP/03” dated on 01.07.2010 , the organization will respond to the request of information within one week whether it will be approved or not depending on the urgency. The top management is the the responsible person to decide it. (1.2.1). All the records are properly kept for the proper periods as stated in ““SOP Pengendalian dan Masa Simpan Dokumen No.PT.TN-LPYM/RSPO-SOP/04 dated on 01.07. e.g., safety, health and

environment and social records 5 years and legal records indefinitely (1.2.2). Notwithstanding this,

environmental and social data are presented during the yearly public consultation with stakeholders as part of its CSR program. Compliance Status : Full.

Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations PTTN keeps copies of all the legislations / regulations applicable to it from the applicable regulation list in “SOP Evaluasi Pemenuhan peraturan dan Persyaratan Lain (P. TN-LPYM/RSPO-SOP/06 dated

Figure 2. Sign board of HGU (Land Use Title) at the entrance gate of estates


on 01.07.2010. Evaluation is done regulary every six month by RSPO Officers in each unit which has to keep track of its (PTTN’s) legal requirements and make sure that they are complied with. Since PTTN has SM-K3 certification by Ministry of Labor of Republic Indonesia, the RSPO Officer has to make sure that the responsible personnel – engineers, boiler men, electricians, have the necessary qualifications, and the equipments – boilers and diesel generators – have the necessary certifications and the permits are still valid. The evidence of evaluation is recorded in “Form evaluasi kepatuhan kepada Peraturan, Perundangan dan Persyaratan lainnya (02/ENVD-EK-LH/X/2010)”, the last evaluation was done on 24.01.2011. All the documents were checked and mostly found to be in legal compliance. However, compliance for some regulations at regency (Kabupaten) level was outstanding due to the division of Kabupaten Tapanuli Selatan into Kabupaten Padang Lawas Utara and Labuhanbaru Selatan. Nevertheless, PTTN has taken the required steps to fulfill the outstanding regulation compliance as it needs time for the regency government to process them. Compliance Status : Full.

Criterion 2.2 The right to use the land can be demonstrated and is not legitimately contested by local communities with demonstrable rights

Currently, there are no claims on PTTN-Langga Payung Mill by anyone based on interview with local communities and other stakeholders during public consultation. SMART Tbk took over the land from established company PT. Tapian Nadenggan in 1989, not directly from the local community. The mill / estate managers have ensured proper registration of their HGU certificates in register. (2.2.1). The boundaries of PTTN land were easily identified being demarcated by T-0 pillars, their identification numbers corresponding with points in the maps in HGU (Land Use Title) (2.2.2). There is mechanism to monitor and maintain the boundary stones periodically as shown in “Data Monitoring dan Perawatan Patok Batas BPN Report ”, which conducted every 6 month by HCV Officer, acknowledged by Estate Manager. The maintenance include cleaning and repainting the boundaries stones, and sometimes repairing the damaged boundaries stones or repositioning using GPS if the boundaries stones are relocated or missed. There is procedure for resolving any conflict over land refers to “Pedoman Teknis Persiapan Lahan SMART No. SOP/NP/SMART/XII/MCAR001, Chapter XII,. Penanganan Keluhan dan Ketidakpuasan” dated on 1 July 2010 and “SOP Penanganan Keluh Kesah dan Ketidakpuasan No. PT. TN-LPYM/RSPO-SOP/02, (2.2.3). Compliance Status : Full. Criterion 2.3 Use of land for oil palm does not diminish the legal rights or customary rights of other users, without their free, prior and informed consent

As far as could be ascertained, there is no customary right of other users, according to HCV assessment report there was no indigenous people around the mill and estates. Compliance Status : Full.

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

PTTN has long term projection (2010 – 2020) for its crop, including key performance data for its mill and estates as part of its long term economic planning for all corporate of SMART Tbk Group, including mill allocation, production of FFB (tonnage) FFB/ ha (yield); OER, by predicting inflation rate; exchange rate; interest rate; portion cash; dividen; non deductible expenses; working hours; turnover; % allowance for doubtful accounts, age of asset; price of FFB purchase. During the projection period the mill capacity is 60 FFB/ hour and no plan to increase the mill capacity.

Compliance Status : Full.


PTTN has developed projected annual replanting program until 2017 as seen in this table below:

Unit Replanting a r e a (Ha)

2011 2012 2013 2014 2015 2016 2017

LPYE 737 289 559 161 730 639 953

PBNE 228 262 304 523

NRME 254

TOTAL 737 543 559 389 992 943 1476

Criterion 4.1 Operating Procedures are appropriately documented and consistently implemented and monitored

PTTN has Standard Operating Procedures with the best practices for its mill and estates operations. The mill have been certified to QMS ISO 9001 and HSE management SMK3 by the Ministry of Labour of Indonesia. Most of the Standard Operation Procedures are incorporated in the SM-K3 management

The following procedures applicable and implemented within sustainable palm oil, such as :

a. SOP for Oil Palm (containing aspects from nursery, land preparation, planting, upkeep, harvesting, waste management, HCV, emergency preparedness and response, and environmental monitoring).

b. SOP for Palm Oil Mill (containing stages of process, boiler, power generation, water treatment, land application, electrical system, quality (inc monitoring of CPO parameters), dispatch and laboratory).

c. Manual and SOP for Environment Management System, Health & Safety and SPO (containing application of pesticides, use of PPE , emergency preparadness) .

Operational inspection for harvesting, maintenance, fertilizing, workshops, and other farming operations by the Vice President of Agronomy (VPA) and Regional Controler (RC) which is performed

every 3 months. However, not all the procedures established are adequate or properly implemented.

It was found that in Standard Operating Procedure for replanting doesn’t explain the timetable to plant legume cover crops. A Major non-compliance was issued. There was not clear which operating working instruction (WI) implemented in weeding, spraying and harvesting process, as there were two IK available: IK-12, IK-20, IK-21 (Rev 00, dated 02.07 2011) or IKPBNE/01, 02, 04 (Rev.00, dated 01.07 2011). A Major non-compliance was issued. Compliance Status : Not Compliant (See NCR T-01.07/2011 and T-04.07/2011) Criterion 4.2 Practices maintain soil fertility at, or where possible improve soil fertility, to a level that ensures optimal and sustained yield SMARTRI, a corporate owned Research Institute has laboratory services to provide annual fertilizer recommendations based on soil sampling and analysis which are carried out once in 3 years while leaf sampling and analysis are regularly performed on yearly basis. For soil fertility and nutrient uptake correlation purpose, soil sampling units are arranged to coincide with the leaf sampling units. Parameters analyzed for soil samples consist of physical analysis ( texture), pH, organic carbon, total N, P and K, available P and Cation Exchange Capacity. Soil sampling is conducted in accordance with existing standard operating procedures (Soil Sampling Unit (SSU) Work Instruction)

There are some agronomic practice to improve and maintain soil fertility implemented in PTTN : 1. Using organic fertilizer 2. Plant Legume Cover Crops 3. Pruning and frond stacking 4. Weeding,


The application of POME as organic fertilizer in Langga Payung Estate based on land application research by Lembaga Penelitian Universitas Sumatera Utara, the last record refered to No. 01 – 03/H5.2.3.1/PPM/K5/2011 dated on 07.01.2011. The test result of BOD range of the applied POME in three ponds are between 1,264 – 1,516 mg/l, still below the maximum standard 5,000 mg/l as required by “PerMenLH No.29/2009” The application of EFB in Langga Payung Estate in Division area II, IV, V and VI with the dosage 30 t/ha. Fertilizing program developed by SMARTRI covers time of application and type and dosage of fertilizer. Combination application of EFB and POME in Langga Payung Estates in recent years show that usage of chemical fertilizer was being reduced. Compliance Status : Full.. Criterion 4.3 Practices minimise and control erosion and degradation of soils PTTN has soil maps for each estate (Langga Payung Estate, Paya Baung Estate, and Normark Estate) which categorize the classes of land suitability based on parameters of slope, texture and soil limiting factors. There are no fragile or problem soils being classified on all the 3 soil maps. PTTN has established management strategy to minimize and control erosion and degradation of soils by planting Legume Cover Crops, terracing on undulating to steep areas, pruning and frond stacking besides having routine road maintenance program. Roadmaintenance is carried out bysandstone (sirtu) gravelling to make the road surface hard and compact. PTTN established procedure for land preparation for replanting, however , it was found during the field visit that the replanting area in Division 1 (LPYE11B21) with slope 16 - 40 % was not appropriately covered by Muccuna brachteata. A Minor non-compliance was issued. (See NCR T-02.07/2011) Compliance Status : Not Compliant

Figure 3 Soil map in Normark Estate


Criterion 4.4 Practices maintain the quality and availability of surface and ground water PTTN has an implemented water management plan, such as : reuse condensate water from Cooling turbine into Water Treatment, using condensate from steam boiler as water dilution mixing in CPO processing, minimize water leakages from water pipes in the mill and estates, using dust conveyor instead of using water for dust collector boiler, installing float switch to all bathrooms. Record of water using per ton FFB is available, there is reduction from 1.24 m3 water/ t FFB in 2008 to 1.15m3 water/ t FFB in 2010.. BOD Analysis of surface water is tested regularly by SMARTRI laboratory, the last record dated on 01. 06.2011. The BOD levels and other parameters such as pH must comply with the local requirements in the Liquid Waste regulations in environmental decree by Province of North Sumatra . The BOD data are submitted six-monthly in RKL/ RPL to BAPEDALDA (Regional Environmental Monitoring Body). Checks on records show that all the data complied with regulation. The auditor team checked that there were installation of chemical traps and oil traps in the mill to avoid water and soil contamination around the mill. To avoid the contamination of river water, HCV or riparian zones are in the process of being restored along the river banks. There are several sign boards of HCV 4.1 to warn people for not hunting and fishing and to remind workers for not applying fertilizer and pesticides to the palms in the riparian zones – a 50 meter belt along the river banks on both sides. Palms with red x markings within the riparian zones will not be maintained. No new palms will be planted in the riparian zones during replanting. SOP HCV monitoring in the riparian zone has been established and the records is well maintained. PTTN also established SOP agro-chemicals mixing to avoid mixing of agro-chemicals in proximity of water courses, interview with spraying workers confirmed that they understood the both of the SOPs well. Compliance Status : Full.

Criterion 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management (IPM) techniques

PTTN has formulated an Integrated Pest Management (IPM) as recorded in “Laporan Sensus”,. PTTN practiced incorporating cultural, biological, mechanical or physical methods, by :

1. Identification of pests, diseases and weeds before it become an outbreak of maximum level 2. Introducing of beneficial plants for hosts of pests. 3. Introduction Barn Owl (Tyto alba) 4. Planting LCC 5. Frond stacking 6. Minimise use of agrochemicals. The use of pesticides is minimized through selective spraying instead of blanket spraying for cases of severe infestation of weeds.. Oil Palm Leaf Eater Control includes detection, cencus, examination, treatments, evaluation, monitoring and organisation. Checks on records confirmed there was no outbreak during the last 5 years. Planting beneficial plants, such as Bunga pukul delapan (Turnera

Figure 4. Sign board of HCV area along the river bank. No fertilizer and pesticide applications for marked palms within the limit zone.

Public Summary Report PT.Tapian Nadenggan –Langga Payung Mill Page 24

subulata) and air mata pengantin (Antigonom leptosus) to harbour predators of the crop pests. PTTN provide maps shows the planting area of beneficial plants, for example in Paya Baung Estate as seen in Figure 2a. The barn owl or Burung hantu (Tyto alba) is protected and encouraged as a natural predator of rats, as PTTN have not used rodenticide anymore since 2009. There is a maps shows the location of barn owl boxes as seen in Figure 2b. Census of Tyto Alba is conducted monthly using PVC stick and lenses as ‘”periscope”, for example, during July 2011 there were 28 barn owl boxes occupied by couples of birds and their chicks in Paya Baung Estate”. The existence of the birds observed by detecting the feathers, faeces, sound and bones of preys. .. Pesticide toxicity units (a.i. / LD 50 / FFB tonnage) are monitored to herbicides such as :Glyphosate, Methyl metsulfuron, Paraquat, Triclopyr TEA salt, Fluroxypir; insecticides such as:Deltramethrin; Fungicides such as :Benomyl. The records were well maintained. Compliance Status : Full.

Figure 5a. Maps of beneficial plants in Paya Baung Estate

Figure 5b. Maps of Tyto alba boxes in Paya Baung Estate

Figure 5c. Cencus of Tyto alba using PVC stick and lenses as”periscope”


Criterion 4.6 Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylactic use of pesticides, except in specific situations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised by the World Health Organization as Types 1 A or 1 B, or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives and this is documented.

There is a List of pesticides used and pesticides stocks is listed in the”Balance Stock Agrochemical in 2008, 2009, 2010”., such as : Ally 20 WDG (active ingredient : Metil metsulfuron), Roll Up 480 SL (Isopropil amina glyphosat), those can be bought for application are in accordance with the Permentan No 1/2001, WHO and Rotterdam convention, are issued and distributed to Procurement division. Only procurement division can buy and supply the materials. PTTN has a procedure on how to apply agrochemicals, refers to Peraturan Menteri Pertanian No. 07/Permentan /SR.140/ /2007, or Regulation No. 07/ Permentan /SR.140/ 2/2007 Ministry of Agriculture Republic of Indonesia.. All the agrochemicals used are registered and approved by Pusat Perizinan dan Investasi Sekretariat Jenderal Departemen Pertanian 2008, or Invesation and Permit Center, Agriculture Department, Republic of Indonesia. Checks on records show that the pesticide use (including active ingredients used, area treated, amount applied per ha and number of applications) is appropriate for the target species, given at correct dosage and applied by trained personnel in accordance with the product label and related SOP/ Working Instruction. PTTN has established procedure to handling hazardous agrochemicals, and provide facilities and proper PPE for workers who have contact with agrochemicals, including field sprayers, fertilizer applicators, warehouse helper and chemical mixer. However, it was found that MSDS of Rollixone in Agrochemical Warehouse at Payabaung Estate, and also for other MSDS, indicated that there must be shower water and soap available if emergency situation happened. The shower water was available, but it didn’t work and there was no soap available in place. The facility doesn’t provide bin for hazardous wastes, sand, and fabric cotton waste as required by SOP/PBNE/LBH (Rev.00, dated 01.07.2011. A Major non-compliance was issued. (See NCR T-08.07/2011).

PTTN also established procedure for handling hazardous agrochemicals spills and only trained persons for pesticide application technique are permitted and instructed for pesticides application in the field. However, it was found Working instruction regarding handling of hazardous agrochemicals spill (SOP /PBE/LBH (Rev,00, 1 Juli 2010) was not available in Agrochemical Warehouse of Payabaung Estate. MSDS for agrochemicals are translated into Bahasa Indonesia, however, the warehouse helper didn’t understand the meaning. Symbol of hazardous chemicals was not in apropriate manner and the person in charge who handle agrochemicals found has not enough competence in his job, i.e MSDS, symbol, and working instruction. A Major non-compliance was issued. (See NCR T-09.07/2011).

Waste material from agrochemicals including pesticides containers were collected by licensed contractor and the records of hazardous waste manifest were well maintained. PTTN has a plan to return the waste container to the vendor and the mutual agreement has been signed. Checks on the records of agrochemicals used found that they complied with the regulation. Usage of paraquat in 2008, 2009, and 2010 is reduced. Regular training/ socialization for chemical sprayers was conducted. There was evidence of regular medical check-ups for workers involved in handling hazardous chemicals. PTTN has policy that pregnant and breast-feeding women are prohibited from working with pesticides, and there are records of socialization of the policy to the female workers. Compliance Status : Not Compliant..


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

PTTN has established a safety, health and environment policy and certified SMK3. The organisation structure of Panitia Pembina Keselamatan dan Kesehatan Kerja (P2K3), or Guiding Committee on Occupational Health and Safety, has been established. Explanation and communication of the policy is the responsibility of the safety engineer (SM-P2K3) who daily monitors and inspects all facilities in the mill and estates for emergencies. There are regular monthly meetings between the management and workers on health and safety issues. All the permanent employees and contract workers are insured under JAMSOSTEK A record of JAMSOSTEK payment installment was sighted. All employees, especially those in high risk work, undergo an annual health examination with the results submitted to Dinas Tenaga Kerja – Balai Hiperkes Dan Keselamatan Kerja Provinsi Sumatera Utara (Department of Labor, Province of North Sumatra). PTTN provide 3 company clinics and 1 central clinic and there are 2 company physicians, nurses and midwives to serve the employees and their dependents in estates. However, there was no record or evidence that clinical weighing scale and

stethoscope in Payabaung clinic in good condition. A Minor non-compliance was issued. (See NCR T-05.07/2011).

The physicians visit the clinic twice a week. During their absence, the daily operations are conducted by the nurses, sometimes include giving prescription to the patients. However, it was found that there was no working instruction for nurses to prescribe medicine for patients, especially antibiotic.. A Minor non-compliance was issued. (See NCR T-06.07/2011)

Medical waste from Payabaung clinic, periode April-June was kept not in appropriate manner, such as no labelled of waste, and not kept in appropriate place. A Minor non-compliance was issued. All the operations have been risk assessed for obtaining SMK3 certification. The P2K3 team identified and analysed the risks for all routine and non-routine activities in Langga Payung POM, Langga Payung Estate, Paya Baung Estate and Normark Estate. However, it was found that none of harvesting workers wear safety helmet in Langga Payung Estate, Paya Baung Estate and Normark Estate because the company doesn’t provide it for workers. The risk assessment and related SOP do not emphasize the need to wear appropriate PPE against the risk of being hit by harvested FFB fallen from palms. A Minor non-compliance was issued. (See NCR T-03.07/2011)

The P2K3 team responsible to assured that all P2K3 and K3 equipment, such as fire extinguishers, PPE, hydrants, P3K tool kits (medical box) are available on worksites by regular checking in the mill and estates. However, it was found that one of the operators was not wearing appropriate safety shoes as required in “IK12 rev00, dated 02.07.2010” while uprooting woody growths (Dongkel Anak Kayu) in Block 26. A Minor non-compliance was issued. (See NCR T-10.07/2011)

PTTN has developed procedures for accidents and emergency preparadness The effectiveness of this procedure is tested every year. Workers in hazardous areas are provided training to minimize their risk in an annual training program on safety and health issues including training for K3 regulations and legislations of the Republic of Indonesia, first aid training and emergency drills. Records of work accidents were compiled every month and cases of accidents being fully investigated by the company physician which had been trained Hyperkes and assigned as P2K3 officer as required in SMK3 report, the records are kept 5 years and regularly submitted to DISNAKER, the Regional Labor Department, and JAMSOSTEK for insurance claims. Compliance Status : Not Compliant. Criterion 4.8 All staff, workers, smallholders and contractors are appropriately trained

Mill / estate managers have identified the training needs in each section / department to organize an annual training program. Records of training for each employee in the mill and plantations such as attendance sheets, documented training plans/ programs and records of training sessions held,


documented evidence of evaluation for staff/workers trained being kept. The training program in 2010 - 2011 include RSPO P & C, SMK3, MSDS, First aid, PPE, Waste handling, SOP for mill and estates, emergency preparadness, training for nurses and midwives. The training also covers contractors and smallholders (independent farmers). Compliance Status : Full.

Figure 6a. Emergency drills Figure 6b. Training for nurses and midwives

Figure 6c. Restricted pesticides training by Pesticide Committee from Plantation Agency

Figure 6d. Sprayer training by SMARTRI

Figure 6e. MSDS training by RSPO Coordinator Figure 6f. Welding training by Labor Agency


Criterion 5.1 Aspects of estate and mill management, including replanting, 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

PTTN has conducted the assessment of environmental impacts that has been mentioned in Environmental Impact Assessment (AMDAL and RKL-RPL). This document has been approved by the Regional Environmental Impact Control Agency (BAPEDALDA) and every 6 months PTTN shall submit the progress reports, namely Monitoring Report of RKL-RPL to the agency. Last records of Semester II, July-December 2010, was sent to the Environmental Protection Agency of Padang Lawas District, North Sumatera Province, on February 10,2011. It was confirmed that the PTTN done this obligation, and kept the record of submission letter properly. The environmental parameters reported in all mill and estates are such as: Liquid wastes, recorded monthly Water quality in the observation well, recorded every 6 months Gaseous emissions are recorded every 6 months Soil fertility is analysed yearly Hazardous wastes, recorded every three months. There is replanting program for all 3 estates, and PTTN has identified aspects of the replanting in AMDAL document. Until now, there is no correction from BAPEDALDA regarding the report since the test result complied with the regulation. PTTN will revise the AMDAL documents and the consultation will be held with relevant stakeholders if there were change in their operation as required by regulation, for example : POME (palm oil mill effluent) has been permitted to be used as land application after the research conducted by University of North Sumatera. Any adverse impacts identified will be studied for mitigation. Mitigation plans for land application such as : regular flatbeds monitoring for POME application to avoid leakage of POME into the drains and

rivers the last two or three fladbeds remained empty to avoid uncontrollable flow. PTTN also conduct water quality analysis from observation wells in communities housing complex

nearby the land application location Compliance Status : Full.

Figure 7a. Regular flatbeds monitoring Figure 7b. The last two flatbeds remained empty


Criterion 5.2 The status of rare, threatened or endangered species and high conservation value habitats, if any, that exist in the estate or that could be affected by estate or mill management, shall be identified and their conservation taken into account in management plans and operations. PTTN had a HCV assessment done on 7-10 August 2010 at Normark Estate and on 13-20 August 2010 for Langga Payung Estate and Paya Baung Estate by HCV Team from` Environmental Department that consists of RSPO approved HCV assessors, such as Norman FM, Nugroho Wahyu, Bambang Setyaji. which has identified HCV area that cover of total area 483.98 ha. The HCV’s areas are recognized with HCV’s 1.1, 1.2 and 4.1.. The peer review has been conducted by independent consultant, Ir. Siswo, M.Si Public consultation for HCV has been done on 3-4 Novemebr 2010. The HCV’s area was identified with sufficient signboards that contain warnings of what people should not do to the protected HCVs such as prohibition to practice land burning. hunt protected animsal, illegal fishing that can damaged the river/ body water (poisoning, using exploding materials, illegal logging and disturb protected flora. Identification of HCV’s was recorded in” List of Protected Species”of operating procedure SOP/PBNE/KPHCV, which identified of 6 aves, 2 mammals and 1 reptil and 2 protected flora according to CITES, IUCN or national regulation PP 7 Year 1999. Some sites of Bunga bangkai (Amorphopalus sp) were found during visit and protected by bamboo fences. There is HCV management plan and monitoring program developed by Environmental Department, while HCV monitoring is conducted by trained HCV officers in each estates. Compliance Status : Full. Criterion 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner PTTN has identified all waste and pollutions sources in the mill and estates and listed them in accordance with its related procedure that classified the wastes as office wastes, household wastes, mill wastes, workshop wastes and pesticide wastes. The records of actual wastes in the mill and estates are documented properly in Wastes Management Plan (5.3.1). Suitable methods have been established to minimize the production of wastes and to minimize their environmental impacts. EFB is used to mulch young palms in the field near mill in Langga Payung Estate Division II, IV, V and VI with the dosage 30 t/ha, liquid wastes treated as in Instalasi Pengolah Air Limbah /IPAL (waste water treatment) to reduce their BOD and COD, with their pH monitored to the requisite standards. Analyses of POME for BOD, COD and pH are done regularly to ensure the parameters meet the standards, the last report in Semester II 2010 ( 5.3.2 and 5.3.4) showing compliance. POME is used as land application in the field near mill in Langga Payung Estate instead of dispatching into rivers or body waters. The hazardous waste were collected by licensed contractor and the records of hazardous waste manifest were well maintained. PTTN has a plan to return the waste container to the vendor and the mutual agreement has been signed. (5.3.3). Compliance Status : Full. Criterion 5.4 Efficiency of energy use and use of renewable energy is maximized

PTTN has a renewable energy program in which it continually strives to improve energy efficiency and use more renewable vis-à-vis fossil fuels. The mill have energy use monitoring records in kilowatt hours per tonne of palm product, and has program to increase energy efficiency by reducing fossil fuel consumption, since the generator set is only used as backup to generate electricity when the main turbine is down. Regular maintenance of mill engines ( e.g: boiler, sterilizer, BPV, Steam separator, Motor Compressor, turbine) and motor vehicles also contribute to increase energy efficiency rate. Compliance Status : Full.


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 practices

The use of fire for any waste disposal is strictly prohibited such as in land preparation for new development and replanting. PTTN has a well implemented zero burning policy both in mill and estates. The wastes that are generated by mill and plantation activities are properly disposed off without burning. A notable achievement has been the total avoidance of use of fire for the disposal of garden wastes and packaging materials at the housing sites. Compliance Status : Full. Criterion 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored

PTTN has identified pollution and emission sources, which comes mainly from boilers, generator sets and motor vehicles (5.6.1). Monitoring of their exhaust emissions is done regularly by independent laboratory - the smoke opacity results are recorded as part of its RKL-RPL (Environment Management and Monitoring) Semester Report. The parameters tested for are SO2, NO2, H2S and particulates as per the Ministry of Environment, Republic of Indonesia, regulation Peraturan Menteri Lingkungan Hidup No. 07 Tahun 2007. A check on the reports found that the levels complied with the standards (5.6.2). PTTN has a pollution and emission reduction program in which is prohibited the burning of EFB and domestic wastes in the mill, estates and housing complex; The domestic wastes were collected by contractor.. (5.6.3). There is SOP to treat POME and the records of monitoring POME are kept properly and were sighted. Compliance Status : Full. Criterion 6.1 Aspects of estate and mill management including replanting that have social impacts are identified in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are made, implemented and monitored to demonstrate continuous improvement PTTN has a method to monitor social information from the locals and its employees through SOP on Communication SOP/PBNE/Kom Rev.00 issued 1 July, 2010. and also conducted . Stakeholders meeting regularly every year . Some of social issue from local communitiies that has been responded by PTTN : provide job vacancies and job opportunities for local communities by conducting open and transparent employee recruitment process. Monitoring report : data of local communities employees was well maintained. The information is assessed and the results reported to the Environment Manager and concerned parties, such as the environmental impact-controlling agency, as a part of RKL/ RPL. The RKL/ RPL report covered the classifying the activities into negative and positive impact. The positives impact such as labour vacancy, cover crop planting, planting of main crops, maintenance of immature and mature crops. The negative impact arised from land clearing issues, and potential land conflict. A social impact also assessed the impact of company activities on the local communities. Interviews with the stakeholders indicated that the practice has resulted in improved relationships with the local communities. Compliance Status : Full. Criterion 6.2 There are open and transparent methods for communication and consultation between growers and/or millers, local communities and other affected or interested parties

PTTN has an effective communication and consultation procedure with smallholders and its local communities. It has also drawn up an external communication procedure. Consultation with stakeholders is done at least yearly, and minutes of the meeting on 10.06.2011 at Langga Payung Mill Office were sighted. The feedback from stakeholder consultation meeting that approved by management will become CSR and Community Development program Adjacent estate officers are responsible for communication with the respective parties on estate activities, while the Environment and CSR Department assumes overall responsibility for communication and consultation with stakeholders and to ensure that community programs are run effectively. A list of PTTN stakeholders includes the local communities, NGOs, labour union, contractors and local government. Compliance Status : Full.


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

PTTN has a complaints, grievance and dispute procedure as stated in “SOP Penanganan Keluh Kesah dan Ketidakpuasan No. PT. TN-LPYM/RSPO-SOP/02, Internal complaints and grievances are also resolved according the Mutual Working Agreement (Perjanjian Kerja Bersama). These procedures have been communicated to all stakeholders at each mill / estates. Interviews during public consultation confirmed that they understood the procedure well. It was noted that the responses from stakeholders have been positive that the company respond to the complaint from stakeholders, such as to give priority for job vacancies to local communities than outsider. During visits to stakeholders, the audit team confirmed that there were no serious complaints, grievances and

disputes at the moment. Local communities and stakeholders obey and respect the company legal rights, reciprocated by the company’s respect for their traditional rights. Compliance Status : Full. Criterion 6.4 Any negotiations concerning compensation for loss of legal or customary rights are dealt with through a documented system that enables indigenous people, local communities and other stakeholders to express their views through their own representative institutions

PTTN has developed “Pedoman Teknis Persiapan Lahan SMART No. SOP/NP/SMART/XII/MCAR001 dated on 01.07.2010, Chapter XII to resolve land conflict. In this certification assessment, the audit team studied the whole compensation mechanism, and found it satisfactory with no legal action being taken by any party against another. The mechanism has been communicated to the stakeholders. Checks on the records and interviews with the local communities confirmed that there is no current claim on any land. Based on HCV studies and ANDAL report there is no customary rights of local community. Inteviews with the Chief of Local Community confirmed that they have no customary rights. Compliance Status : Full.

Figure 8. Stakeholders meeting at Langga Payung Mill Office on 10.06.2011


Criterion 6.5 Pay and conditions for employees and for employees of contractors always meet at least the legal or industry minimum standards and are sufficient to provide decent living wages

A policy on pay and working conditions in PTTN was established in Perjanjian Kerja Bersama or Mutual Working Agreement that dealt with BKS-PPSS (Badan Kerja Sama Perusahaan Perkebunan Sumatera). The salary scales and conditions of work are described in detail for all the positions of employment. PTTN follows all the legislations on working days, working time, salary levels, regional minimum pay and employee insurance, deductions, sickness, holiday entitlement, maternity leave, dismissal reasons, period of notice for termination . HRD staff inform the workers before-hand of their salary adjustments whenever any are in the offing. The policy about wages is also socialized in agreements with contractors, for example :agreeement with CV. Bintang Meriah mention that the contractor shall in compliance with relevant labor regulation and the contractor’s workers shall be covered by JAMSOSTEK.(6.5.1.and 6.5.4). Records were sighted that the pay complied with the regional minimum salary for North Sumatra in January 2011 as stated by Decree of Governor North Sumatera No.188.44/674/KPTS/2010. A daily permanent worker (Syarat Kerja Umum Harian or Pekerja Harian Tetap), will get Rp 1,090,425 a month, above regional minimum salary which was Rp 1,035,500,- Employees also provided with rice allowance, for head of family is 15 kg plus 9 kg for wife and 7.5 kg for each children (maximum 3 children). All PTTN permanent employees are insured under JAMSOSTEK. All workers, if heads of families, are provided with a housing unit type G2 (48 m2), equipped with electricty and piped clean water for washing and bath, however the test analysis of potable water using reverse osmosis method fulfill the requirements of potable water standard by PerMenkes/416/1990. There are 3 company clinics in housing site and one central clinic where sick employees / dependents get free treatment. The more serious cases are referred to the regional hospital. There are nearby state schools ( 1 kindergarten, 4 elementary schools, and 1 junior high school which have been donated by PTTN as CSR program (6.5.3). Compliance Status : Full. 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

PTTN has an agreement with the workers and management staff to allow them to establish a labour union in accordance with national legislation UU No. 13/ 2003. However, only non-staff employees can be Union officers to obviate any conflict of interest. The Union and management of PTTN negotiate the Perjanjian Kerja Bersama, or Mutual Working Agreement regularly. The minutes of some meetings were checked and the meetings found to be properly conducted. Union Worker also provided with the facility of room/ building and furniture. Compliance Status : Full. 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.

PTTN has a policy on child and female workers as stated in “Peraturan Perusahaan PT. Smart SE larangan mempekerjakan anak di bawah umur No. 002/SE-HRDV/03/09” dated on 13.01.2009 and socialized in agreements with suppliers / contractors (6.7.1). No one under 18 years of age is to be employed. Records of personal data of employees - age, marital status, position and rank, location of work, date of commencing employment - are kept. Checking the records of the last recruitment on 26.12.2010 confirmed that no one under 18 years old has been employed - in compliance with Indonesian national legislation UU RI No. 13 Tahun 2003, article 68 . (6.7.2). Compliance Status : Full.


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. A policy on equal rights regardless of race, caste, national origin, religion has been established as stated in “Peraturan Perusahaan PT. Smart Tbk pasal 5, SE No.146/CEO1-SE/04/2010” dated on 13.04.2010 and also socialized in agreements with suppliers/ contractors. PTTN is an equal opportunity employer, with promotion mainly based on merit. The company policy regarding equal opportunity employer can be seen on notice boards in estates and mill office and socialized through meetings, morning muster. Males and females with same qualification status receive the same pay for the same type or same nature of job, for example administration clerk (not staff), mandor (foremen/ forewomen) at estates, laboratory staff at mill. Interviews with workers and checks on records found it conformed. Compliance Status : Full. 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

PTTN has established a policy on prevention of sexual harassment and protection of reproductive rights of its female workers such as : maternity leave, menstruation leave, breastfeeding permit as stated in “Peraturan Perusahaan pasal 5 ayat 3, SE No.145/CEO1-SE/04/2010 tanggal 13 April 2010 perihal sosialisasi masalah sexual harassment“. The policy was socialized to the workers and contractors. There is gender committee establised to resolve if sexual harassment occurs. Interviews with female workers confirmed that they really understood the policy about sexual harassment and the reproductive rights. Compliance Status : Full.

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

PTTN has fair, legal and transparent agreements with its suppliers / contractors and independent smallholders/ outgrowers. There are transactions and purchase contracts with contractors and local companies on sale and purchase of FFB, FFB transport and service, maintenance and repair of mill equipment. The price for FFB is determined by the Head of Regional Plantation Section, Agriculture Department of Province North Sumatra via a mechanism based on the CPO price, kernel price (index K) from all palm oil producers and palm oil estates in North Sumatra. Interviews with some contractors confirmed that they understood the terms of their contracts well and thought them fair, legal and transparent andfound no grievance about the price. Payment to contractors and independent smallholders have always been on time as evidenced by their lack of complaints Compliance Status : Full.

Criterion 6.11 Growers and millers contribute to local sustainable development wherever appropriate

PTTN is committed to support sustainable development of the local communities through its Corporate Social Responsibility programs which are presented in its Stakeholder meeting. Identification of projects is based on community needs, the priorities of each mill / estates and the budget available. The CSR programs in 2010-2011 are :

Education: Repairs Junior High Schools “SMP Satu Atap” and religious school in Langga Payung Estate, Donation for Junior High School “SMP Satu Atap” in Langga Payung Estate to attend Science

Olympiad in Medan. Donation for Elementary School “SDN Mampang” and “SDN Normark” in Normark Estate.

Religious program:


Gifts/ packages for mosque’s administrators. Repairs mosques in Hutabaru Nangka and Sihopuk Baru Donation for islamic music instruments in Hutabaru Nangka. Donation for MTQ (Al Qur’an recital contest) in Sei Kanan, Halongonan and Padang Lawas

Utara Social Heavy equipments aid to repair road in Batang Gogar Village and Situmbaga Village. Bridge repair in Siancimun Village. Clean water supply for villagers. Bazaar/ cheap market for local community

Health Mass circumcision for moslem boys in Sei Kanan. Eye medication for students in Elementary School in SDN Sei Kanan Halongonan Nutrition supplements for infants and pregnant/ breastfeeding women in Sei Kanan

Compliance Status: Full.

Figure 9a. CSR social programs : road maintenance in Batang Gogar Village and Situmbaga Village .

Figure 9b: CSR for religion program : packages for mosque’s administrator and donation for Islamic music instruments

Criterion 7.1 A comprehensive and participatory independent social and environmental impact assessment is undertaken prior to establishing new plantings or operations,or expanding existing ones, and the results incorporated into planning, management and operations.

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.2 Soil surveys and topographic information are used for site planning in the establishment of new plantings, and the results are incorporated into plans and operations.

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.3

New plantings since November 2005, have not replaced primary forest or any area required to maintain or enhance one or more High Conservation Values

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.4 Extensive planting on steep terrain, and/or on marginal and fragile soils, is avoided.

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.5 No new plantings are established on local peoples’ land without their free, prior and informed consent, dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.6 Local people are compensated for any agreed land acquisitions and relinquishment of rights, subject to their free, prior and informed consent and negotiated agreement

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 7.7 Use of fire in the preparation of new plantings is avoided other than in specific situations, as identified in the ASEAN guidelines or other regional best practice.

There are no new plantings in PTTN supply base plantations , thus, this criterion is Not Applicable. Criterion 8.1 Growers and millers regularly monitor and review their activities and develop and implement action plans that allow demonstrable continuous improvement in key operations.

PTTN has committed to a process of continuous improvement by adopting the RSPO P & C and getting certified QMS ISO 9001 for and SMK3 for Langga Payung POM. An internal audit and management review is done at least yearly to evaluate the systems. Action plans have been developed for the next one to three years for continual improvement in key operations through quality objectives for the mill and also can be implemented in estates, The continual improvement program are typically similar for the mill and 3 estates, but the target date it depends on the estate capability and resources such as reducing fossil fuel consumption, reducing usage of agrochemicals especially paraquat, and has plan to return waste container to the vendor. Compliance Status : Full.


3.2. Detailed Non-Conformity Report, Corrective Actions Taken and Auditors’ Conclusions

Non Conformity Report – T01.07/11

Date of issued 07.07.2011 NCR issued by : Wieke Savitri

Location PT. Tapian Nadenggan (Langga Payung

Estate)

Discussed with : Managers and staffs

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

Description of Finding:

In Standard Operating Procedure for replanting doesn’t explain the timetable to plant legume cover crops.

Classification Major Minor

Corrective Action Taken:

Had revised the Working Instruction IK/LPYE/RPL/04 “Nursery, Planting and Maintenance of Legumes Cover Crops” dated on 15.07.2011 by defining the timetable to plant LCC 2 weeks after chipping process in flat area or 2 weeks after terracing process in undulating area.

Auditee sign:

Auditor Comments:

Auditor Comments and Conclusion

To check in next verification visit Appropriate action taken

Appropriate action not taken Corrective action in compliance with the requirement

Date of verification: 06.09.2011 Auditor(s) sign:




Location PT. Tapian Nadenggan (Langga Payung

Estate)


RSPO – Criterion : 4.3 Practices minimise and control erosion and degradation crisis.


It was found during the field visit that the replanting area in Division 1 (LPYE11B21) with slopes of 16-40% was not appropriately covered with Mucuna bracteata



Mucchuna brachteata has been planted in Division 1 (LPYE11B21) since July to August 2011 for total area 37.83 ha as required by Working Instruction IK/LPYE/RPL/04 dated on 15.07.2011 by monitoring the rainfall.

Auditee sign:

Auditor Comments:








Location PT. Tapian Nadenggan (Langga P ayung

Estate, Paya Baung Estate), Normark

Estate)


RSPO – Criterion : 4.7

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


None of harvesting workers wear safety helmet in Langga Payung Estate, Paya Baung Estate and Normark Estate because the company doesn’t provide it for workers. The risk assessment and related SOP do not emphasize the need to wear appropriate PPE against the risk of being hit by harvested FFB fallen from palms..



1. Had revised the “Hazard Identification Risk Assessment and Control (HIRAC) and WorkingInstruction of Fruit Harvesting IK/PBNE/PNN/01” by providing the appropriate PPE for workers

2. Had made Purchase Order and distributed safety helmets and goggles to the workers

Auditee sign:

Auditor Comments:




Date of verification:06.09.2011 Auditor(s) sign:



Date of issued 07.07.2010 NCR issued by : Anita Masduki

Location PT. Tapian Nadenggan

(Payabaung Estate)



Operating procedures are appropriately documented and consistently implemented and monitored


There was not clear which operating working instruction (WI) implemented in weeding, spraying and harvesting process, as there were two IK available: IK-12, IK-20, IK-21 (Rev 00, dated 02.07 2011) or IKPBNE/01, 02, 04 (Rev.00, dated 01.07 2011



1. Had revised the Working Instruction for weeding IK/PBNE/PNN/01; spraying IK/PBNE/TBM/03and harvesting process IK/PBNE/TBM/04 rev.01 dated on 15.07.

2. Had withdrawn all the obsolete documents and distributed those that had been currently revised.

Auditee sign:

Auditor Comments:









(Payabaung Estate)





There was no record or evidence that clinical weighing scale and stethoscope in Paya Baung clinic are in good condition.



1. Had carried out calibration for all weighing scales and rectification for stethoscopes 2. Had updated the status of the master list of equipment.

Auditee sign:

Auditor Comments:









(Payabaung Estate)





There was no working instruction for nurses to prescribe medicine for patients, especially antibiotic.



Had established Internal Memo regarding medicine labeling, i.e: prescription for medicine with red label should only be given under medical doctor’s supervision supervision.

Auditee sign:

Auditor Comments:









(Payabaung Estate)





Medical waste from Payabaung clinic, periode April-June was kept not in appropriate manner, such as no labelled of waste, and not kept in appropriate place.



1. Medical waste from period April – June 2011 had been sent to Medical Center Padang Halaban before it burned in incinerator at Rantau Parapat Hospital

2. Had established rain and leakage proof medical waste storage which is properly locked to avoid unintended usage..

Auditee sign:

Auditor Comments:




Date of verification: Auditor(s) sign:





(Payabaung Estate)



Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylatic use of pesticides, except in specific ituations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World health Organisation Type 1A or 1B,or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.


Working instruction regarding handlling of hazardous agrochemicals spill (SOP /PBE/LBH (Rev,00, 1 Juli 2010) was not found in Agrochemical Warehouse of Payabaung Estate. Symbol of hazardous chemicals was not in apropriate manner and the person in charge who handle agrochemicals found has not enough competence in his job, i.e MSDS, symbol, and working instruction.



1. Working Instruction regarding handing of hazardous agrochemicals spill has been placed in Agrochemical Warehouse.

2. Hazardous chemical symbols and MSDS have been positioned in proper place. 3. Had conducted refresher training for warehouse helpers on 18.07.2011.

Auditee sign:

Auditor Comments:









(Payabaung Estate)



Agrochemicals are used in a way that does not endanger health or the environment. There is no prophylatic use of pesticides, except in specific ituations identified in national Best Practice guidelines. Where agrochemicals are used that are categorised as World health Organisation Type 1A or 1B,or are listed by the Stockholm or Rotterdam Conventions, growers are actively seeking to identify alternatives, and this is documented.


MSDS of Rollixone in Agrochemical Warehouse at Payabaung Estate, and also for other MSDS, indicated that there must be shower water and soap available if emergency situation happened. The shower water was available, but it didn’t work and there was no soap available in place. The facility doesn’t provide bin for hazardous wastes, sand, and fabric cotton waste as required by SOP/PBNE/LBH (Rev.00, dated 01.07.2011.



1. Emergency shower has been equipped with soap and water tank which can always operate if emergency situation happened.

2. Had provided hazardous waste bin and fabric cotton as required under SOP/PBNE/LBH.

Auditee sign:

Auditor Comments:









(Payabaung Estate)



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


One of the operators was not wearing appropriate safety shoes as required in IK12 rev00, dated 02.07.2010 while uprooting woody growths (Dongkel Anak Kayu) in Block 26.



.

Had provided and distributed appropriate safety shoes for weeding workers as required under IK12.

Auditee sign:

Auditor Comments:






Table 7: Summary of findings by RSPO Criterion

Audit type Certification Assessment

Criterion Audited Compli-

ance Major NC

Minor NC

Total NC

1.1 Yes 1.2 Yes 2.1 Yes 2.2 Yes 2.3 Yes 3.1 Yes 4.1 No 2 2 4.2 Yes 4.3 No 1 1 4.4 Yes 4.5 Yes 4.6 No 2 2 4.7 No 5 5 4.8 Yes 5.1 Yes 5.2 No 5.3 Yes

5.4 Yes 5.5 Yes 5.6 Yes

Audit type Certification Assessment

Criterion AuditedCompli-

ance Major NC

Minor NC

Total NC

6.1 Yes 6.2 Yes 6.3 Yes 6.4 Yes 6.5 Yes 6.6 Yes 6.7 Yes 6.8 Yes 6.9 Yes 6.10 Yes 6.11 Yes 7.1 N/A 7.2 N/A 7.3 N/A 7.4 N/A 7.5 N/A 7.7 N/A 7.7 N/A 8.1 Yes

Total of Nonconformities 4 6 10

3.3.1. Noteworthy observations

There is no land conflict in this area, the relationship between PTTN and local communities and other stakeholders is in harmony.

The mill is certified to ISO 9001 and SMK3, making it easier for PTTN to progress to RSPO Certification;

The use of paraquat is being reduced;

PTTN maintains a 50 m riparian strip along its rivers as conservation area;

PTTN has a zero burning policy for pollution control in its estates;

EFB used for mulching young palms, besides, treated POME also applied to the fields as organic fertilizer

CSR programs have improved sustainable development of the local communities.

3.3.2. Some Recommendations for Improvement in the Mill and Estates: Langga Payung POM & Estate Correction factor should be considered in status label of monitoring devices to ensure that

the amount of deviation in a measurement that is accounted for in the calibration process. Data of dominant diseases should be classified between workers and family of workers to

identify work-related diseases/ disorder or common diseases. Medical waste bin should be covered.


Some records should be signed by authorized person. Waste pond should be bordered by fences. Agrochemical in warehouse should be placed on pallets or shelves not directly on the floor. The same documents/ procedures at mill and estates should be in line not overlapping.

Paya Baung Estate : Report of RKL-RPL should follow the Technical Manual of RKL-RPL issued by related

Ministry. A cheklist should be established to monitor FFB transporter equipped with safety net, ropes,

PPE as required by SPK No.PBNE/JKTO/01/11/001-ATBS dated onl 03.01.2011. Normark Estate

Benchmark for Normark Estate Office at coordinate 1°50'57" N, 99°59'53" should be

adjusted. . List of Fire Fighting Equipments should be provided with pump capacity data, e.g; Suction

head (M), L/second. CSR activities have been carried out in social, economical , educational and health sectors

partially not comprehensively to all surrounding villages, it should be better if it can be improved into Community Development Program by involving the community (PRA, Participative Rural Appraisal).

3.4. Issues raised by stakeholders and findings of the assessment team

The audit team did not receive any major complaints in the stakeholder meeting on environmental impacts and social performance of the mill and estate operations. Most of the stakeholders agreed that PTTN has had a positive influence in the area. Interviews were used to obtain feedback – whether positive or negative - from the stakeholders, for which the audit team had prepared some questions. The questions are given in Section 2.10.

A stakeholder meeting was held on June 10, 2011 by PTTN to obtain feedback - positive or negative – on its RSPO Certification Assessment. The minutes were taken along with PTTN responses to the queries made. Most of the stakeholder comments on RSPO certification were positive, and support RSPO certification for PTTN, under which were usually requests for help.

TUV NORD led Public consultation meeting with stakeholders on July 05, 2011. The stakeholders meeting conducted by assessor team without the presence of the company personnel/staff to obtain more comprehensive feedback. Some comments are given below:The CSR Program for Budgeting year 2012 and “ expectation of stakeholders” should be monitored, e.g : - Providing school buses - Donation for elder people - Scholarship for student in need - Build facility for public bath and wash - Building passing road to Normark

- Community Development for raising cattle.

Public Summary Report PT. Tapian Nadenggan ‐Langga Payung Mill Page 48

3.5 Certified organization’s acknowledgement of internal responsibility Please sign on the certification assessment and confirm acceptance of this assessment report, including its findings. The company General Manager and Senior Manager will sign for the certification assessment report. The complete signatures can be seen in Section 3.6.


3.6 Formal sign-off of assessment findings

Medan,

Signed for and on behalf of PT. Tapian Nadenggan

September.2011 Head of Environment and CSR

Coordination

CEO PSM 1

Ismu Zulfikar

Antonius Costan

Jakarta,

Signed for and on behalf of PT. TÜV NORD Indonesia – System Certification Management

September.2011

Auditor : Wieke Savitri


ANNEX A :

RSPO SUPPLY CHAIN CHECKLIST FOR LANGGA PAYUNG MILL (MASS BALANCE MODUL)

PT. Tapian Nadenggan, Langga Payung POM is doing some efforts to comply with the supply chain system procedures as required in the RSPO certification. The company has set the supply chain system applied in L a n g g a P a y u n g POM called Mass Balance.

STANDARD SOP/Policy/Others Records/Evidence

.1.1

E.1.Documented Procedure

a) Complete and up to date procedures covering the implementation of all the elements in these requirements.

There is procedure SOP Supply Chain Declaraton 1

Declaration 2

The SOP is available on site.

b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard.

There is Decree letter assignment for SCCS Officer

The Decree letter is available on site.

1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs.

FFBs has been separated based on their sources, whether from PTTN own estates (sustainable product) and the FFB from supplier (Non-sustainable). List of documented procedures for receiving and processing certified and non- certified FFB are :

SOP Supply Chain SOP Receiving FFB SOP Dispatch CPO SOP FFB Processing WI Receiving FFP WI Dispatch CPO

The records of documented volumes of certified and non certified FFBs can be traced down in:

Laporan Penerimaan TBS Certified Tahun 2011 (Certified FFB Receiving Report 2011)

Laporan Penerimaan TBS Non Certified Tahun 2011(Non-certified FFB Receiving Report 2011)

Laporan Produksi CPO Certified Tahun 2011 (Certified CPO Production Report 2011)

Laporan Produksi CPO Non Certified Tahun 2011(Non-certified CPO Production Report)

Laporan Pengiriman CPO Certified Tahun 2011(Certified CPO Dispatch Report 2011)

Laporan Pengiriman Non CPO Certified Tahun 2011(Non-certified CPO Dispatch Report 2011)

E.2 Purchasing and goods in

2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received.

There is SOP Receiving FFB

The records of documented volumes of certified and non certified FFBs can be traced down in: Laporan Penerimaan TBS Certified

Tahun 2011 (Certified FFB Receiving Report 2011)

Laporan Penerimaan TBS Non Certified Tahun 2011(Non-certified FFB Receiving Report 2011)



2.2 The facility shall inform the CB immediately if there is a projected overproduction.

Can be traced down in Production Budget Report

E.3 Record keeping

3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements.

All documents and records have been in controlled according to SOP Pengendalian Dokumen dan Rekaman (SOP Document Control and Record Control)

The records have been checked.

3.2 Retention times for all records and reports shall be at least five (5) years.

Declaration 5

Retention times of all records have been determined in SOP Pengendalian Dokumen dan Rekaman (SOP Document Control and Record Control)

The records have been checked.

3.3 a) The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a three-monthly basis.

.

Can be trace down in CPO Production Report 3 Monthly Basis

b) All volumes of palm oil and palm kernel oil that are delivered are deducted from the material accounting system according to conversion ratios stated by RSPO.

Can be trace down in CPO Stock Report and in CPO Dispatch Report

c) The facility can only deliver Mass Balance sales from a positive stock. However, a facility is allowed to sell short.

Declaration 6 Can be trace down in CPO Stock Report and in CPO Dispatch Report

3.4 The following trade names should be used and specified in relevant documents, e.g. purchase

Can be trace down in Sales contract

E.4 Sales and good out

4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated) d) The quantity of the products delivered; e) Reference to related transport documentation.

Declaration 4 The available evidence is the invoice of oil delivery in form of Delivery Order (DO) document issued for every oil delivery. The information written on the Delivery Order document are: the invoice issue date, name and address of buyer, ordered product details, and the transportation system for product transportation.



E.5 Training

5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems.

Procedure for training is described in SOP Training Human Resources

Record of Training SCCS is available.

E.6 Claims

6.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims.

Declaration 7


Annex B :

D r a f t C E R T I F I C A T E

In accordance with TÜV NORD Indonesia procedures, a certificate is hereby awarded

PT. Tapian Nadenggan Head Office: Jl. A Plaza BII Tower 2, 10th floor, Jl. MH. Thamrin No.51 Kav. 22

Jakarta 10350 Indonesia

Langga Payung Palm Oil Mill Mill Location

GPS location Longitude (E) Latitude (N)

Ds . Huta Baru Nangka, Halongonan, Kabupaten Padang Lawas Utara, Nortth Sumatera

99º 53' 13'' E 1º 39' 16'' N

In recognition of the fact that it applies a Palm Oil Management System for Sustainable Palm Oil Production according with the 2008 National Interpretation of RSPO Principles and Criteria of the Republic of Indonesia for producing the following volumes of CPO and PK:

Production of Crude Palm Oil and Palm Kernel

CPO claimed 36,906.99 t / year

Palm Kernel claimed 9,492.28 t/ year

Certificate Registration No: TNI – RSPO – G - 1201 Audit Report No. P &C-G-122 Issued date of Certificate : RSPO approval date Valid Certificate : -

President Director

This certification was carried out in accordance with the TÜV NORD Indonesia auditing and certification procedures and is subject to regular surveillance audits. PT. TÜV NORD Indonesia is a subsidiary of TÜV NORD CERT GmbH Langemarckstrasse 20 D - 45141 Essen, Germany


Annex to Cer t i f icate – RSPO (Supply Base)

Certificate Registration No: TNI-RSPO-G-1201

T h e s c o p e o f c e r t i f i c a t i o n o f M i l l a n d S u p p l y b a s e c o v e r i s

Estate Location

FFB Production

(t)

GPS Coordinates

Longitude (E) Latitude (N)

Langga Payung Estate

Ds . Huta Baru Nangka, Halongonan, Kabupaten Padang Lawas Utara, North Sumatera

88,661.98

99º 53' 22'' E

1º 38' 55'' N

Paya Baung Estate

Ds. Huta Baringin, Simangambat Kabupaten Padang Lawas Utara, North Sumatera

47,943.19 99º 58' 31'' E 1º 37' 12'' N

Normark Estate

Ds. Normark, Kota Pinang, Kabupaten LabuhanbatuSelatan, North Sumatera

32,503.61 99º 59' 53'' E

1º 50' 57'' N


Annex C : Certification Assessment Plan

Client: PT. Tapian Nadenggan (SMART Tbk)

Address: Plaza BII Tower 2, 10th floor, Jl. MH. Thamrin No.51 Kav. 22 Jakarta 10350- Indonesia

MR Name, Pos.: Mr. Ismu Zulfikar

Number of Mills: 1 Number of estate(s): 3 Order No. - Business No. -

Mill(s), Location Estates, Locations

- Langga Payung POM, Kab. Padang Lawas Utara, Sumatera Utara;

1. Langga Payung Estate, Kab. Padang Lawas Utara, Sumatera Utara

2. Paya Baung Estate, Kab. Padang Lawas Utara, Sumatera Utara

3. Normark Estate, Kab. Labuhanb atu Selatan, Sumatera Utara

Standard: RSPO P&C (Principles & Criteria) May 2008;

Type of

Certification Audit Audit date: 4-8.07.2011

Lead Auditor:

Sudarmadji (SD) Expert: Hariyadi (HR), Basita Ginting (BG)

Auditor(s): Wieke Savitri (WS), Anita Masduki (AM)

Audit days on-site: 5 days (with traveling)

Date / Time1)

Site / Shift / Organizational Unit Auditor (Abbrev.)

Interview-

partner 2)

Requirements

Day – 1: 04.07.2011 Traveling to site location from Medan to Rantau Prapat

Day – 2: 05.07.2011 Langga Payung POM & Estate Office

08:00-08:30 Opening meeting SD, WS, AM, HR, BG

Introduction team and fine tune audit plan (if necessary)

08:30 – 12:00

- Sites: Langga Payung POM Office for all documents (legal, financial, production, environment, social) PT. Tapian Nadenggan (POM, estates : Langga Payung, Paya Baung and Normark Estate)

SD, WS,AM,

HR, BG

RSPO team

- General issues for RSPO certification assessment

- The SPO documentations and records

- Environmental Policy - Justification for RSPO principles

and criteria - Principle – 1: 1.1, 1.2 - Principle - 2: 2.1 - Principle – 3: 3.1

12:00 – 13:30 Break and lunch : Stakeholders contacted at Langga Payung Estate, Paya Baung Estate, Normark Estate

13:30 – 17:00

Langga Payung Office : SD, WS, AM, HR, BG

-RSPO team

- Consultation, Interviews stakeholders (Indigenoes people , NGO, Chief of village)

- Housing facilities - Public facilities - School, Health program, - Social Responsibility program - Workshop, Clinic

17:00: End of day assessment Mr. Sudarmadji and Mr. Basita Ginting travelling to Normark Estate Mrs. Anita to Paya Baung Estate


Date / Time1)

Site / Shift / Organizational

Unit Auditor

(Abbrev.) Interview-

partner 2)

Requirements

Days – 3: 06.07.2011 Langga Payung Estate

08:00 -12:00 Langga Payung :

Estate Operations WS, HR -RSPO team

- Flora, fauna, ecology and biodiversity

- Land and conversion planting - Decreased paraquat use - HCV identification - IPM (Integrated Pest Management) - Replanting and handling of

chemical packaging wastes - Zero burning - Principle - 4 : 4.1, 4.2, 4.3, 4.4,

4.5, 4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.5 - Principle – 6 : 6.1, 6.2, 6.3, 6.5,

6.6, 6.7, 6.8, 6.10, 6.11 - Principle – 7 - Principle – 8 : 8.1

12:00 – 13:00 Break and lunch

13:00-17:00 Langga Payung Mill:

Mill Operations WS, HR RSPO team

- Quality, SM-K3 and Environmental Management System.

- Involved personnel and responsibilities

- Chemical stores. - Monitoring and measurement of

environmental performance of waste water treatment plant.

- Mill operation including inspection of incoming FFB, FFB transport, road maintenance and workshops for heavy trucks, loaders, etc.

- Principle - 4 : 4.1, 4.4, 4.7, 4.8 - Principle – 5 : 5.4, 5.6 - Principle – 6 : 6.1, 6.2, 6.3, 6.5,

6.6, 6.8, 6.10, 6.11 - Principle – 8 : 8.1

17:00: End of day assessment


Date / Time1)

Site / Shift / Organizational Unit

Auditor (Abbrev.)

Interview-

partner 2)

Requirements

Days – 3: 06.07.2011 Normark Estate

08:00-12:00 Sites: Normark Estate office : Estate oprations

SD, BG RSPO team




4.5, 4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.5

12:00 -13:30 Break and lunch

13:30 – 17:00 Estate operations

SD, BG RSPO team

- Principle – 6 : 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.10, 6.11

- Principle – 7 - Principle – 8 : 8.1

17:00: End of day assessment Traveling to site location Langga Payung Estate

Date / Time1)

Site / Shift / Organizational Unit Auditor


partner 2)

Requirements

Days – 3: 06.07.2011 Paya Baung Estate

08:00-12:00 Sites: Payabaung Estate office AM RSPO team




4.5, 4.6, 4.7, 4.8 - Principle – 5 : 5.1, 5.2, 5.5


13:30 – 17:00 Estate operations

AM RSPO team

- Principle – 6 : 6.1, 6.2, 6.3, 6.5, 6.6, 6.7, 6.8, 6.10, 6.11

- Principle – 7 - Principle – 8 : 8.1

17:00: End of day assessments


Date / Time1)

Site / Shift / Organizational Unit Auditor


partner 2)

Requirements

Day- 4: 07.07.2011 Langga Payung Estate

09:00 – 12:00 Reporting and discussion

SD, WS, AM, HR, BG


13.30 -.15.00 Closing meeting and Presentation of audit finding

SD, WS, AM, HR, BG

RSPO team

End of day assessment

Day – 5: 08.07.2011 Traveling to Medan and back to Jakarta

End of Certification Assessment RSPO P & C Audit

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