RSPO CERTIFICATION ASSESSMENT SMM rg final_0.pdf · RSPO Certification Assessment – Public...

RSPO CERTIFICATION ASSESSMENT

PUBLIC SUMMARY REPORT

Date of assessment

07 to 11.12.2009

PT. TUVNORD Indonesia

System Certification Management

Has assessed

PT. SAHABAT MEWAH dan MAKMUR

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

Sustainable Palm Oil Production

Jangkang Mill and Supply Base CPO 65,518 t & PK 13,977 t

Report Prepared by

Hasnop Putra

Email: [email protected]

Revision 03

mailto:[email protected]

RSPO Certification Assessment – Public Summary Report for PT. Sahabat Mewah dan Makmur (SMM) Page 2

TABLE OF CONTENTS Page

Summary 3

Abbreviations Used 3

1. SCOPE OF THE CERTIFICATION ASSESSMENT 4

1.1. National Interpretation Used 4

1.2. Scope of Certification 4

1.3. Location 4

1.4. 1. Description of Supply Base 4

2. Company Background and Ownership History 5

1.5. Date of Planting and Replanting Cycles 5

1.6. Other Certification Held 5

1.7. Time Bound Plan for Other Certification Units 6

1.8. Area of Plantation 7

1.9. Approximate Tonnages Certified 7

1.10. Date Certification Issued and Scope Certificate 7

2. ASSESSMENT PROCESS 7

2.1. Certification Body 7

2.2. Assessment Methodology 8

2.3. Certification assessment checklist of principles and criteria 9

2.4. Review of documents 9

2.5. Onsite and Follow-up interviews 9

2.6. Resolution of Corrective action 10

2.7. Qualification of the lead assessor and assessment team 11

2.8. Outline of how stakeholders interviewed 12

2.9. List of stakeholders interviewed 13

2.10. Questions asked during interview of stakeholders 14

2.11. Date of next surveillance visit 14

3 ASSESSMENT FINDINGS 14

3.1 Summary of findings 14

3.2 Detailed Non-Conformity Report, Corrective Action taken and Auditor’s Conclusion 29

3.3Noteworthy positive components 30

3.3.1 Some Recommendations for Improvement to the Mill and Estates 32

3.4 Issues raised by stakeholders and findings of the assessment team 32

3.4.1 Attendance list of stakeholders meeting on February 12,2009 at Balok Estate 36

3.4.2 Attendance list of stakeholders meeting on February 25,2009 at Ladang Jaya Estate/ Jangkang Mill 37

3.4.3 Attendance list of stakeholders meeting on May 14 at Clubhouse PT. SMM 38

3.5 Certified organization’s acknowledgement of internal responsibility 39

3.6 Formal sign-off of assessment findings 39

Annex : A -Figure Maps of SMM Mill and Estates 40

Annex : B : Draft of RSPO Certificate 45

Annex C : Certification Assessment Plan 47

Certification Assessment – Public Summary Report for PT. Sahabat Mewah dan Makmur (SMM) Page 3

Summary

PT. TÜVNORD Indonesia (TNI) – Certification Body is a member of the German worldwide TÜV NORD

group. TNI has performed a comprehensive certification assessment of PT. Sahabat Mewah dan Makmur

(SMM) and concludes that PT. Sahabat Mewah dan Makmur (SMM) operations comply with the Indonesia

National Interpretation of the RSPO Principles and Criteria (RSPO INA-NIWG) version May 2008. TNI

therefore recommends PT. Sahabat Mewah dan Makmur (SMM) be approved as a producer of RSPO Certified

Sustainable Palm Oil.

Scope of the certification assessment is at Jangkang Mill producing products of 65,518 tonnes CPO/year* and

13,977 tonne PK/year*

*) Data source: January-December 2009

Abbreviations Used

AMDAL Analisis Mengenai Dampak Lingkungan (Environmental Impact Assessment Report)

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

B3

BOD

Bahan Berbahaya dan Beracun (Toxic and Hazardous Materials)

Biological Oxygen Demand

CDM

COD

Clean Development Mechanism (Mekanisme Pembangunan Bersih )

Chemical Oxygen Demand

CPO Crude Palm Oil

CSR Corporate Social Responsibility

DAR Deutscher Akkreditierungs Rat (German Accreditation Body)

DeperindagRI Departemen Perindustrian dan Perdagangan (Department of Industry and Commerce of the Republic of

Indonesia)

EFB Empty Fruit Bunch

FFA Free Fatty Acid

FFB Fresh Fruit Bunch

GPS Global Positioning System

Ha

HCV

Hectare

High Conservation Value

HGU Hak Guna Usaha (Land Use Permit)

HSE Health Safety Environment (Kesehatan, Keselamatan dan Lingkungan)

IPM Integrated Pest Management

JAMSOSTEK Jaminan Sosial Tenaga Kerja (Labour Social Insurance)

KAN Komite Akreditasi Nasional (The Indonesian Accreditation Committee)

KLH

KUD

Kementrian Lingkungan Hidup (Ministry of Environment)

Koperasi Unit Desa (Village Cooperative Unit)

LCC Legume Cover Crop

LD50

LSM

Lethal Dosage (for50% of the tested population to be killed)

Lembaga Swadaya Masyarakat (NGO)

MSDS Material Safety Data Sheet

Permenaker RI

PIR

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

Perkebunan Inti Rakyat (Peoples Core Estate)

PK Palm Kernel

PKO

PMA

Palm Kernel Oil

Penanaman Modal Asing (Foreign Investment)

POME Palm Oil Mill Effluent

PPE Personal Protective Equipment

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)

SMM

SOP

SPSI

PT. Sahabat Mewah dan Makmur

Standard operating procedure

Serikat Pekerja Seluruh Indonesia (Indonesian Labour Union)

TNI PT. TÜV NORD Indonesia

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

Environmental Monitoring Efforts)

UNFCCC United Nations Framework Convention on Climate Change


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 was used to assess the operation of the Palm Oil Mill and the supply base of

FFB.

1.2 Scope of certification

The scope of certification is the production from Jangking Mill and 5 (five) company owned plantations. The

Jangkang Mill produced a total of 65,518 tonnes CPO/year and 13,977 tonne PK/year. The supply of FFB

from smallholders for the period January – December 2009 was only 0.86% of the total production.

1.3 Location

SMM has 1 (one) mill and 5 (five) company-owned plantations.The smallholders, are located in Kabupaten

of East Belitung, and Province of Kepulauan Riau, Indonesia. The following is the location of the mill and 5

(five) plantations with their GPS identification. Locations by map are also shown on figure A – 1 & figure A

– 2. The GPS readings were taken in the estates and plantation office. The GPS source data is taken from Citra

Lansat 7 ETM+Band 542 Patch 122 Row 62 dated 06 August 2009, and Trimble GPS GARMIN type 12 CX.

Table 1: Mill GPS Location & Plantations GPS locations for Plantation/Estate Office (inside the

plantation/estate areas)

Code Units GPS Reference

Longitude (E) Latitude (S)

JKM Jangkang Mill 107° 52' 30.4" 02° 59' 55.2"

JKE Jangkang Estate 107° 52' 28,1" 02° 59' 45.0"

BLE BalokEstate 107° 54' 53.9" 03° 02' 00.8"

LJE Ladang Jaya

Estate 107° 53' 00.2" 02° 36' 43.3"

SBE Sari Bunga Estate 107° 52' 11.3" 02° 55' 16.0"

ARE Air Ruak Estate 107° 56' 03.8" 02° 59' 59.9"

1.4.1. Description of Supply Base

The FFB for the Jangkang Mill is sourced from the 5 (five) company-owned plantations and the smallholders.

The FFB from smallholders was 2,367.69 t (approximately 0.86%) of the total FFB processed by Jangkang

Mill during period January – December 2009. The FFB production from company owned estates and

outgrowers/smallholders is listed in Table 2.Table 2 shows the FFB capacity supplied from each estate

location.

Table 2: FFB production capacity (source: January – December 2009)

Estates and location FFB (t) In percentage

(%)

Jangkang Estate, Desa Jangkang 58,571.69 21.27%

Balok Estate, Desa Balok 59,904.81 21.76%

Ladang Jaya Estate, Desa Jangkang 45,052.65 16.36%

Sari Bunga Estate, Desa Nyuruk 38,451.47 13.96%

Air Ruak Estate, Desa Air Ruak 71,009.69 25.79%

Total Owned SMM Plantation 272,990.30 99.14%

Total Outgrower/Smallholders FFB Supplied 2,367.69 0.86%

Total FFB 275,357.99 100.00%


The smallholder scheme was developed as a condition for the approval of SMM’s project and as part of the

SMM managements high commitment and aspirations to contribute towards plantation technology and

education, as well as providing technical and plantation advice on breeding techniques, nursery, planting,

harvesting, economic viability and benefits from palm oil cultivation for smallholders.

The smallholder scheme originated from a government transmigration project (PIR Trans Scheme) at

Kabupaten of East Belitung, and Province of Kepulauan Riau, Indonesia. The oil palm smallholder scheme

was set up in the early 2003 with full support from SMM staff to train the smallholders to have a regular

source of income. SMM has explained and communicated the importance of RSPO certification assessment

and its implementation to a sample of smallholders..

The TNI audit team concluded that during audit the operations of smallholders met the standard requirements

of the Indonesian National Interpretation of RSPO Principles and Criteria and RSPO Certification

requirements. The SMM management has committed to develop and to fully support smallholders to be able

to operate their plantation in a sustainable manner, within the framework of RSPO Principles and Criteria.

However, the production from the smallholders scheme is not included within the scope of the RSPO

certificate.

Therefore, Principle and Criteria 7 of the RSPO National Interpretation of the Republic of Indonesia (RSPO

INA-NIWG) is not applicable.

1.4.2. Company Background and Ownership History

PT Sahabat Mewah dan Makmur (SMM) established in 1980, is owned by a consortium between a local

family business group represented by W.Mustika, and Mansour Holdings. In the year 2002 the status of the

company changed from Non Foreign Investment (Non Penanaman Modal Asing) into Foreign Investment

(PMA, Penanaman Modal Asing). Then in the year 2003, this company (SMM) was taken over by Austindo

Nusantara Jaya (Holdings) and Verdaine Limited.

The company(SMM) became fully owned by Austindo Group in the year of 2004 when shares of Verdaine

Limited were taken over by Eka Pendawa Sakti, one of Austindo Group’s subsidiary involved in the

plantation business. In the year of 2005, Eka Pendawa Sakti was renamed PT ANJ Agri and the current

shareholders of this company are PT Austindo Nusantara Jaya (holding) and PT ANJ Agri, while the name of

the company(SMM) remains the same.

1.5 Date of Planting and Replanting Cycles

In general, the oil palm trees should be replanted after 25 years. However, the period may be lesser or longer

based on reasonable and economical crop production and FFB price. The planting age profile of oil palm is

shown in the table 3.

Table 3: Age profile of planted palms in 5 areas

Estates Planting Year Plan for Replanting (year)

Jangkang Estate 1990 – 2005 2016 – 2031

Balok Estate 1990 – 2004 2016 – 2030

Ladang Jaya Eestate 1990 – 1998 2016 – 2024

Sari Bunga Estate 1991 – 2006 2017 – 2032

Air Ruak Estate 1992 – 2006 2018 – 2032

1.6 Other Certifications Held

SMM has committed to implement integrated management system of ISO 14001 and ISO 9001 to be

achieved in 2010;


Implementing SMK3 based on Permenaker No. 5 Tahun 2005 Certified by The Ministry of Labor of the

Republic of Indonesia;

Award for the best coach of women labor union is given by The Ministry of Labor of Republic of

Indonesia in 2004, 2005, and 2008;

Gold Awarded from the Ministry of Labor of Republic of Indonesia for Safety Excellence in 2008;

Zero accident awarded to the Company by the Ministry of Labor of Republic of Indonesia in 2007;

AANE Belitung Biogas Recovery from Palm Oil Mill Effluent (POME) Ponds and Biogas Flaring

Utilization, a Clean Development Mechanism project registered by UNFCCC in 2009.

Organizational Information/Contact Person

All information in respect to certification assessment of RSPO may be addressed to:

Contact Person : Mr. Ho Chew An

Position : General Manager (GM) Business and Development

Organization name : PT. Sahabat Mewah dan Makmur (PT. SMM)

Address : Wisma BII Lt. 7 Jl. Diponegoro No.18

Postal code, city : 20152 Medan, Sumatera Utara

Country : Indonesia

Telephone Nr : +62 61 4537480

Fax Nr : +62 61 4538366

Email : [email protected]

1.7 Time Bound Plan for Other Certification Units

The whole of SMM Oil Palm Plantations are currently located in Belitung Island. SMM has no other oil palm

plantation located out of Belitung Island. The total oil palm plantation addressed as shown on table 2.

However,the SMM management has committed to develop and to fully support smallholders to be able to

operate their plantation in a sustainable manner, within the framework of the standard requirements of the

Indonesian National Interpretation and RSPO Principles and Criteria, and commitment to sustainability,

social responsibility and community development.

The management of SMM manages 16,276.87 Ha of own plantation supplying Fresh Fruit Bunch (FFB) to

the Mill (Jangkang Mill) and also receives FFB from outgrowers/smallholders through 5 (five) cooperative

bodies or small scale entities. These smallholders are independent. They are not bound or obliged to sell to

SMM only. They are free and have the right to sell their FFB product to other Mills. The total FFB supplied

by independent small holders currently amounts to 2,367.69 t / year (0,86% from total processed FFB in

SMM Palm Oil Mill for the period January – December 2009).

SMM policy for Petani Sawit Mandiri (smallholders) is part of SMM Corporate Social Responsibility and

SMM commitment to local community development. These smallholders play an important role in

developing the local economy.

mailto:[email protected]


1.8 Area of Plantation

5 plantations are included in the certification assessment.

Table 4: Statistics on total oil palm planted and mature planting (Data source: Nov-Dec 2009)

Estates Location

Area Summary

Total

(Ha)

Planted

with Oil

Palm

(Ha)

Mature

(Ha)

Immature

(Ha)

Jangkang Estate Desa Jangkang 3,678.21 3,058.14 3,058.14 -

Balok Estate Desa Balok 3,157.20 2,894.94 2,894.94 -

Ladang Jaya

Eestate Desa Jangkang 2,157.88 2,117.91 2,117.91 -

Sari Bunga Estate Desa Nyuruk 2,397.50 2,167.61 2,167.61 -

Air Ruak Estate Desa Air Ruak 4,886.08 4,064.83 4,064.83 -

Total 16,276.87 14,303.43 14,303.43

1.9 Approximate Tonnages Certified

All FFB is processed by one mill and supplied from the company’s 5 (five) estates. The production from the

smallholders scheme is not included within the scope of the RSPO certification.(see para 1.4)

The approximate tonnage for the certification assessment is confirmed for 1 mill shown in table 5:

Table 5: Palm oil tonnage claimed for certification

The tonnage production is based on data for the period January 2009 to December 2009

1.10 Date Certification Issued and Scope Certificate

Scope of certificate covers the production from the 1 (one) palm oil mill and the 5 (five) plantations. The

issuing date of certificate will depend on approval of the Assessment Report by the RSPO secretariat. Draft of

the certificate is available on the annex.

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 are

offering not just a high added value services but also a trust and confidence embedded on our issued

certificates / reports.

We are satisfying not only our direct customers but also the other stake holders like regulators, surrounding

society including NGOs through our competent auditors, inspectors and analysts.

Mill Location

Annual Outputs

CPO

tonne/year

PKO

tonne/year

PK

tonne/year

Jangkang Mill Desa

Jangkang 65.518 - 13.977

TOTAL 65.518 13.977


PT. TÜV NORD Indonesia, through its HQ in Germany, is a member of International Accreditation Forum

(IAF) and accredited by the DAR – German and locally by the Indonesian Accreditation Committee (KAN).

Services that are 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.

The offices of PT. TÜV NORD Indonesia are

located as follows;

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 the sustainable management; PT. Sahabat Mewah dan Makmur was carried

out from December 07 to 11, 2009. The certification assessments consist of four phases:

A desk audit (document check) of the SMM management system documentation and supporting

documents with the use of a customised RSPO audit checklist according to RSPO manual, procedures

and palm oil mill and plantation working instructions;

Certification Body reviews the results of the consultation process (stakeholder meeting) prior to

certification assessment . The detailed method is given in point 2.8.

Back ground investigations (published dispute, public comment on preliminary announcement) and

followed by interviews with personnel of the organization RSPO management, employees and the

stakeholders (people surrounding, NGO representatives, land regulators, social watchers, labour union).

Verification of proposed corrective action continued by review of the assessment report by the internal

veto persons (board of directors of PT. TÜV NORD Indonesia)

The summary public report of certification assessment includes Corrective Action Requests, Corrective

Action Taken Plan, Verification of Corrective Action Taken, and Progress on implementation of Corrective

Action will be checked during the Surveillance Audit.

Request for Corrective Action to close Non Conformity outlined below

Major Non Conformity:

- mistakes have been made in the assumptions of SMM on the requirements of the RSPO Principles and

Criteria, which will directly influence the certification assessment results;

- the requirements of certain RSPO Principles and Criteria indicators have not been met or, in other words

there has been non-compliance of the requirements of the RSPO Principles and Criteria on major

indicators;

http://www.tuev-nord.de/


These give rise to considerable doubts as to the capability of the SMM management system to achieve

the desired results;

Minor Non Conformity:

Where information is insufficient, unclear or not transparent enough to establish whether a

requirement is met, or Non-compliance of requirements of the RSPO Principles and Criteria on

minor indicator has existed;

Potential for Improvement

- Conditions and factors prevalent in SMM management that would enable the organization to meet

the requirements of the relevant standards;

- Strengths, weaknesses, opportunities and threats of SMM

The final certification assessment started after the issuance of the proposed Corrective Action Taken Plan

of SMM management. The auditor has assessed the proposed Corrective Action Taken Plan and is satisfied

with the action taken to comply with the required standards. Based on the compliance this certification

assessment report is forwarded to RSPO for consideration.

2.3 Certification Assessment Checklist of Principles and Criteria

In order to ensure consideration of all relevant assessment of RSPO principles and criteria, a certification

assessment checklist was used.

The checklist shows in a transparent manner, the Principles and Criteria, and the means employed by SPO

management system and the results of the certification of the identified criteria. The certification assessment

checklist serves the following purposes:

- It organizes, details and clarifies the Principles and Criteria that a certification assessment is expected to

meet;

- It ensures a transparency in the certification process where principles and criteria have been applied

within the organization of SMM management.

The certification assessment checklist consists of National Interpretation of RSPO Principles and Criteria.

2.4 Review of documents

SMM documentation and supporting documents were submitted in September 2009 and the related SMM

management system had been reviewed in accordance with certification assessment checklist.

2.5 Onsite and Follow-up interviews

The audit team collected all information related to SMM management system to find evidence of conformity

of its implementation objectively on a random sampling audit basis.

Interview of the respective staffs, workers and some stakeholders in charge was carried out in a manner and

circumstances where the SMM management system was implemented within the organization.

The certification assessment was completed on the following dates, namely 07 to 11 December 2009.


The TÜV NORD Indonesia performed the on-site interviews with the organization of SMM management, and

palm oil mill operating personnel to confirm selected information and to resolve issues identified in the

document review and SMM management implementation.

The key points with respect to and concerned with the main topics of the interviews is 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 usage

Approval documentation and status; Legal aspects related to SMM management

Management Policy and Quality, SM-K3 and Environmental Management System.

Involved personnel and responsibilities

Justification of RSPO principles and criteria

Monitoring and measurement of environmental performance for waste water treatment plant operation

Identification of environmental aspects and Environmental 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 employee’s housing complex

environment

License, operation & maintenance authority and responsibility

IPM (Integrated Pest Management)

The HCV’s identification

Mill operation including Inspection of receiving of FFB, Transportation of FFB, Road maintenance, and

Workshops for heavy truck, loader etc

Interviewed Persons & Interview topics for Stakeholders including NGO’s

Environmental protection within the estate(s) and mill(s) include using of pesticides, waste and effluent

management; Company approach to community development.

Environmental protection within the estate(s) and mill(s) include use of pesticides, waste and effluent

management; 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 of earning fair wages, overtime and piece-rated work.

2.6 Resolution of Corrective action

In order to remedy any mistakes, problems or any other outstanding issues, which needed to be clarified for

positive conclusion, the required corrective actions were discussed. The management of SMM was required

to resolve or close out issues by providing the corresponding response to the Non Conformity Report and by

submission of the documentation of the SMM manual or procedures and working instructions as well as

supporting documents that have been implemented.

In this certification full report, the audit team has raised 1 non-conformity report and some improvements that

are required.

During the first day of the assessment process, the auditors raised some minor issues, that arose from a lack

of data which were not available on site at the time. However the issues had been settled before the close of

the meeting on the last day of audit.

The non conformity reports and required improvements, as output results of the certification process have

been documented completely in this certification assessment report.


2.7 Qualification of the lead assessor and assessment team

Lead Assessor : Hasnop Putra

A minimum of post high school (post secondary school) training in, and either agriculture/forestry,

environmental science or social science;

Mr. Hasnop Putra has S1 (Ir, Engineer) degree in Mechanical Engineering at University of Jayabaya in

1994-1997; A. Md (Ahli Madya) degree in Mechanical Engineering at Polytechnic of University of

Indonesia in 1988-1991; CDM training course – Essen, Germany in June 2008; Environmental Rules &

Regulations and Implementation by BAPEDAL in April 2000; Practical Course on Environmental

Management System, Environmental aspect and impact assessment, documentation establishment and

internal audit by Japan Audit and Certification (JACO) in December 1998; The Environmental

Management Law and the Environmental Policy by EX-CORPORATION - BAPEDAL in December

1997; The Big Challenge Biodiversity Course for Certification Body, June 2009 sponsored by RSPO,

IFC, RESCUE, Wild Asia; Green House Gas (Global Warming) Training - CDM & VCS project for

validation and verification at TÜVNORD Group, ESSEN- Germany 2008.

At least 5 years experience in area of work relevant with the audit (e.g., palm oil management;

agriculture, ecology; social science);

Well performed in the business of management system certification as Project Engineer, Assistant

Manager SBU 1.6 to PT. TÜV International Indonesia (TÜV Rheinland Group) from February 2001 to

May 2004; PT. TÜV SUD PSB Certification (Formerly PT. PSB Certification) from May 2004 to

November 2004; and PT. TÜV NORD Indonesia (TÜV NORD Group) from November 2004 up to now

incumbent as System Certification Manager.

Qualified personnel in auditing experiences since 2001 at all sectors of non palm oil and oil plantation

manufacturer and state-owned and private companies of oil palm plantation and palm oil mill as follows,

State-Owned Enterprises (Perkebunan Nusantara), Private Company Palm Oil and Palm Plantations;

Auditing product and process of crude palm oil to be dried oil at Wilmar Group;

Involved auditing SA 8000 standard for textile and garment industries, and shoes manufacturing as well

as toys manufacturing since 2007 up to now;

Involved in Green House Gas for CDM and VCD projects of validation at some companies in Indonesia

since 2008 – 2009.

Well performed as team leader of RSPO certification assessment for PT. London Sumatra Indonesia, Tbk

in 2008;

Training in the practical application of the RSPO criteria, and RSPO Certification System;

Training Lead Assessor / Internal Assessor Sustainable Palm Oil by Indonesia Palm Oil Board and KAN

(National Accreditation Committee) in March 2008 to April 2008;

Successful completion of an ISO 9000/19011 lead auditor course;

PE International - ISO 9000:2000 Series Auditor/ Lead Auditor Training Course - Certificate Number

LA 072 in June 2001;

PE International - ISO 14001:2004 IEMA Advanced EMS Auditor Training Course - Certificate No.

IQR/EMS4/00102, England and Wales in March 2001;

A supervised period of training in practical auditing against the RSPO Criteria or similar sustainability

standard, with a minimum of 15 days audit experience in last audit in different organizations;

Extensive experience in sustainable management system certification in the palm oil industry and oil

palm plantation industry by conducting in several oil palm and plantation companies with more than 30

days auditing the following State-Owned Enterprises (Perkebunan Nusantara); Sampoerna Agro Palm Oil

Mills and Palm Plantations, London Sumatra Indonesia Palm Oil Mills and Palm Plantation;


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 9001 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

palm oil manufacturing based on ISO 14001, with a total of 15 days of audit. He has experience as Lead

Auditor in Occupational Health & Safety Management Systems. Was a member of the team involved in

RSPO certification assessment for PT. London Sumatra Indonesia, Tbk in 2008.

Technical Expert : DR. Hariyadi

He holds a Doctoral degree (S3) in Agriculture Environment from Bogor Agriculture Institute (IPB). He has

a strong background and experience in the socio – environment aspect of agriculture and he is also a lecturer

in Agriculture Studies and Socio – environment aspect studies. He has assisted in conducting socio –

environment impact assessment and was a researcher on Green Giant NPK fertilizer effects on immature oil

palm growth. He has extensive experience in the research of water and nutrient requirements, irrigation and

fertilizer application planning, seedling selection and Integrated Pest Management. He is also qualified in the

assessment of biodiversity and biodiversity science. He was involved as auditor training in oil palm

plantations and palm oil mills in EMS and the RSPO Principles and Criteria. He has completed training in

EMS course for ISO 14001:2004 and has experience in oil palm plantation waste management, disposal of

EFB and fertilizer packaging and environmental impact on employees’ housing complex. He was a member

of the team involved in RSPO certification assessment for PT. London Sumatra Indonesia, Tbk in 2008.

Ujang Sehabudin (Technical Expert)

He holds a BSc degree (S1)in Agronomy from Bogor Agriculture Institute (IPB) and has a strong background

and experienced in the socio – economic aspects. He is a researcher and member of Impact Study of Area

Development Program; Member of Indonesian Agribusiness and Agro industry Community. He has assisted

in conducting socio – economic assessment such as CSR assessment of oil palm company over the past 3

years. He has assisted in conducting audits of oil palm and plantation company against ISO 14001:2004

version and was involved as auditor training in oil palm and plantation company against the RSPO Principles

and Criteria. He has a good experience in design and identification of water resources project on farm area in

west of Java over past 2 years. . He was a member of the team involved in RSPO certification assessment for

PT. London Sumatra Indonesia, Tbk in 2008.

2.8 Outline of how stakeholders were interviewed

Stakeholder consultations began with notification of upcoming assessment through websites of RSPO,

SMM and TNI. Telephone calls, e-mails, facsimiles or letters were sent to applicable stakeholders.

Mechanisms for consultation with stakeholders was carried out regularly in accordance with external

communication procedure, which is integrated with SM-K3 procedures. Before proceeding with the

assessment, the audit team checked the complete proceedings of the stakeholder meeting conducted

previously to ensure all information of the meeting results could be followed up.

The stakeholders were invited to discuss critical issues regarding community development, including the

latest progress of plans for community development and the targets to be achieved. Some of the items on the

agenda for the stakeholders meeting were: to maintain infrastructure of churches, mosques, roads, irrigation

and drainage, kindergarten play yard and schools. In addition, to provide financial support, scholarships,

welfare, sanitary and improvement of hygiene of people living near employee’s housing complex, palm oil

mill and supply base. The discussion with stakeholders was well organized. The audit team visited some


stakeholders to interview and obtain positive and negative information or any issue in connection with the

operations of SMM palm oil mill and supply base. Stakeholder meeting proceedings were well recorded in a

proper manner to verify with the SMM management, and these interview results will be incorporated into the

assessment findings.

2.9 List of stakeholders contacted

Table 6: List of stakeholders

No Stakeholders contacted (consulted, attended the

stakeholder meeting or interviewed) Remarks

1 Kades Dendang, Belitung (Chief of

DendangVillage)

Head of Local Community

2 Kades Jangkang, Belitung (Chief of

JangkangVillage)

Head of Local Community

3 Kades Balok, Belitung (Chief of BalokVillage) Head of Local Community

4 Kades Nyuruk (Chief of BalokVillage) Head of Local Community

5 Kades Air Ruak (Chief of Air Ruak Village) Head of Local Community

6 Representative people of Dendang Village Local Community

7 Representative people of Jangkang Village Local Community

8 Representative people of Balok Village Local Community

9 Representative people of Nyuruk Village Local Community

10 Representative people of Air Ruak Village Local Community

11

3 Muspika : Camat Gantung, Belitung (Chief of

Kecamatan Gantung), Kapolsek Gantung, Danramil

Local Authority : District Head Officer,

District Police Officer and District

Military Officer

12 Head Master of local Elementary School Local Community

13 LSM Peduli Lingkungan Hidup, Belitung Local NGO

14 LSM Warna Indonesia Local NGO

15 Mechanical Contractor Contractor

16 FFB Transportation, Belitung Contractor

17 KUD Karya (FFB Supplier), Belitung. Cooperative

18 PUK SPSI KEP. Migas dan Umum, Belitung. Head of Worker Organization

19 PUK SPSI - PT. SMM, Belitung Worker Organization

20 3 women workers Gender representative

There is no indigenous people living around PT. SMM based on secondary data from demographic profile

and consultation with local community. The definition or criteria of indigenous people is as follows: Indigenous

Peoples can be identified, in particular geographical areas, by the presence, in varying degrees, of the

following characteristics: a) close attachment to ancestral territories and to the natural resources in these areas;

b) self-identification and identification by others as members of a distinct cultural group; c) an indigenous language,

often different from the national language; d) presence of customary social and political institutions; and e)

primarily subsistence-oriented production.

Source: World Bank (operational directive 4.20, 1991):

The definition of indigenous people in Bahasa is: masyarakat asli or masyarakat adat, as termed by the Ministry of

Social Affairs of the Republic of Indonesia, and none of those people living in this area are categorized as

indigenous people. The “dukun” (natural / traditional healer) represent local community but not considered as

indigenous people.

Some non-staff women workers has been interviewed confidentially considering gender representative and TNI has

committed not to disclose their identities to assure trustworthy response. The detailed minutes of stakeholder meeting

are presented in section 3.4.


2.10 Questions asked during interview of stakeholders

Did SMM Management provide information on the RSPO certification exercise including plans for

safety and health to the public and stakeholders?

Does the SMM management conduct meetings regularly regarding community development?

Does the SMM management have a proper system to inform people living around the mill and supply

base?

Does the SMM management respond well to the complaints in respect of RSPO implementation?

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

Are there still any complaints regarding land acquired for palm plantation?

Is there any environment impact arising from the operations of SMM management?

Are there any conflicts not solved satisfactorily?

Is there a procedure for the settlement of conflicts which has been communicated to the local

community?

Does the SMM management invite stakeholders regularly for discussions on issues related to community

development?

Are the workers receiving wages in accordance with government regulations?

Is there a system for dissemination of information on emergencies to the local community living around

the palm oil mill and supply base?

The audit team used the above questions during interview of stakeholders to collect sufficient information

from stakeholders on issues relevant to the certification assessment. All responses and comments both

positive and negative from stakeholders were recorded by the audit team in the auditor’s hand written notes.

In addition, the audit team verified the information against relevant procedures and standard operating

procedures. The procedures relating to stakeholders communication is defined in Standard Operating

Procedures established in September 2009.

2.11 Date of next surveillance visit

The next surveillance visit audit is planned on 11 December 2010. Surveillance audit is conducted once a year

during a 5-year period.

3. ASSESSMENT FINDING

3.1 Summary of findings

Objective evidence was obtained separately for each of the indicators for the mill and the estates.

As mentioned in section 2.2, the objective evidence was obtained during the certification assessment. The information was comprehensively asked in accordance with the RSPO indicators for 1 (one) mill and each of the 5 (five) plantations, and outgrowers/smallholders. The results for each indicator from each of these operational areas have been aggregated to provide an assessment of overall conformance of the Company's operations with each Criterion. A statement is provided for each Indicator to support the findings of the assessment team.

The detailed description of Non-Conformity Report is given in section 3.2.

Nonconformities were raised against One (1) Minor Compliance Indicator and some opportunities for improvement.. Where a nonconformity/observation is assigned, reference is made at the end of the text of the Indicator to which it refers. Details of the Nonconformities are given in Section 3.2 (Pages 26 &27).

SMM has prepared a Corrective Active Plan and the date for its implementation which has been reviewed and accepted by PT. TUVNORD Indonesia. The effectiveness of the implementation of corrective action on next surveillance audit will be checked for minor nonconformity findings.

The audit team has issued this certification assessment in compliance with the implementation within the

criterion of the RSPO principles and criteria with 1 (one) minor non-conformity and some opportunities for


improvements. The major findings should be closed within 60 days. The assessment of SMM management

operations comprise 1 (one) palm oil mill and, 5 (five) oil palm plantations, smallholders, facilities and

infrastructure as well as supporting services. The audit team has conducted the assessment of PT. Sahabat

Mewah dan Makmur operations and concludes SMM complies with requirements of RSPO Principles and

Criteria, and National Interpretation of May 2008. Thus, PT. TUVNORD Indonesia recommends that PT.

Sahabat Mewah dan Makmur, be approved as a producer of RSPO Certified Sustainable Palm Oil.

The following is a summary of findings for the criteria listed in 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.

SMM has established comprehensively a procedure for conducting sufficient communication with

stakeholders. The system requests all heads of mills and heads of plantations to communicate with local

communities and stakeholders as insufficient evidence is found. Copies of requests for information are held in

hard copy files at the General Affairs Department under the control of external relationships manager. The

review of records confirmed that General Affairs Department also stores copies of responses to requests for

information. All information requested by stakeholders is recorded in “Stakeholders Request Log Book”. The

log book is kept well in a suitable room. Retention time of records concerning local community and

stakeholders is for 5 (five) years. The assessor checked the files and confirmed that SMM has responded

appropriately to requests for information in accordance with external communication procedure.

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.

The management of SMM ensures documents are available upon request and in accordance with Government

regulations. Information on land titles and user rights documents are available to stakeholders. SMM has a

system to monitor and to measure environmental impact and social impact, which is documented in AMDAL

that was approved by local environmental agency of Belitung. RKL/RPL and UKL/UPL documentations and

also HGU are available to the public. All the estates have identified the total land use occupied by SMM and

is well informed and displayed on HGU boards made available at the entrance gate of each estate. The Health

and Safety Plan and Training Program provided to all workers and the local community who also receive a

medical program that is performed every month e.g.; medical checks free for both children living in

employee’s housing complex or children outside of employee’s housing complex. A report also is available

on staff and workers’ voluntary participation in a community service program involving projects such as

fogging, socialization of health and safety, and environmental procedure/or instruction and recent

construction of classrooms for an elementary school located at one of the estates. UPL Monitoring reports are

forwarded six‐monthly to Government. Inspection confirmed copies are available, e.g. most recent report

January–June 2009 and July – December 2009 is in progress. Retention time of records is determined by

SMM based on relative importance, and filed in List of Records.


Criterion 2.1

There is compliance with all applicable local, national and ratified international laws and regulations

SMM management keeps all applicable legislations and other regulations, which are registered in applicable

regulation list, in a manner that the SMM management complies with applicable regulation and which is in

accordance with general procedures of evaluation of legal compliance “PRS-SCL-001”. The Head of mills

and head of plantations have to apply themselves to applicable legal and other requirements including license

and permits based on their activities. The updating of regulations is the responsibility of HSE manager and

team, and monitored consistently.

The Assessor inspected and checked records of legal compliance achievement “DOC-CLS-003 of November

2009. Most of the applicable documents are in compliance with legal and regulation requirements. Otherwise,

remaining applicable legal requirements that are not compliant have been evaluated and still in progress to

meet the requirements not later than November 2010. The continuous improvement program has been

planned to fulfill all the legal requirements. The SMM management has committed to obtain an ISO 14001

certification in 2010 by establishing environment and SM-K3 policy since January 2009, and this is a part of

the commitment of SMM management to implement environmental management system. The HSE manager

is responsible for keeping Estates and Mills operations under national legislation and regulation up to date

with any changes. SMM has documented legal requirements and this includes a list of the legislation,

regulations and licenses, together with a description of the compliance requirements.

Criterion 2.2

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

with demonstrable rights

Within the operation of SMM management, land use for palm oil is identified and marked by T-0 pillars on

boundaries. GPS coordinates can be seen on the photograph below

Figure 1: Identification of an occupied land by a pillar

The General Affairs Department and the Legal Department are responsible to resolve any conflict over land

acquired. Currently there is no land claimed by the people who live around the mill and plantations. The Mill

Manager and the Plantation Managers have ensured proper registration for the HGU certificate in the

acquired land register list.


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 observed in the certification assessment of RSPO Principles and Criteria implementation within SMM

operation, there is no customary right of other users.

Criterion 3.1

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

viability

SMM has 3 years 2010 - 2012 of crop projection that includes key performance data for mill and estates and

has a long term program to attain economic and financial viability of the company. SMM has also a business

plan to increase FFB production capacity in accordance with long term projections. The long term program

includes the long term projected replanting program, long term crop projection, and long term financial

forecast.

The long term replanting program is a 20 year projection of the planted yielding hectare in SMM. The

yielding hectare will vary because palms will be replanted based on the economic lifespan of the palms.

Extremely tall palms and older palms of more than 25 years will be replanted due to difficulty in harvesting,

and the lower density of palms arising from natural death of old palms in the fields. The percentage of palms

replanted in any one year is maintained at below 5% to ensure minimal impact on crop production.

Replanting also has the benefit of better planting materials in terms of yield and general characteristics. SMM

has a replanting program commencing 2016, which will replace the oldest fieldplanted in 1991.

The long term crop projection anticipates higher crop production for the next 20 years. This is based on the

long term replanting program and the actual current and anticipated yields based on the potential of clones

planted.

The long term financial forecast is a 5 year financial projection to work out the anticipated profits taking into

consideration the latest yield estimates, projected CPO prices and projected budgeted operational costs.

Criterion 4.1

Operating Procedures are appropriately documented and consistently implemented and monitored

HSE department, RSPO SMM team and supported by respective departments have prepared and established

Standard Operating Procedures that incorporate best practices for all areas of the mill and plantation

operations. Most of the Standard Operation Procedures are integrated with SM-K3 management system. More

than 15 Standard Operating Procedures on mill operations have been established. The following procedures

are implemented within sustainable palm oil parameters:

a. SOP for Oil Palm (containing aspects from nursery, land preparation, planting, upkeep, harvesting,

waste management, HCV, emergency preparedness and response, and management of hazardous

waste of used agrochemicals).

b. SOP for Palm Oil Mill [containing stages of process, boiler operations, power generation, water

treatment, land application, electrical systems, quality (including monitoring of CPO parameters),

dispatch and laboratory inspection of incoming fresh fruit bunches.

c. Manual and SOP for Health & Safety (SM-K3).


Updated Standard Operating Procedures will be sent to the respective Section Heads of the Mill and

Plantations whenever there are changes or revisions to the SOP’s. The Standard Operating Procedures are

and consistently implemented to monitor FFA parameters and moisture of CPO during processing and before

delivery to end users. Monitoring Records of inspection are kept properly in a laboratory cabinet with proper

identification.

The performance of each mill work station is monitored on a shift basis and recorded daily on a

Production/Record Log sheet. General inspections are carried out monthly and reported to the General

Manager. Quality Inspection records of CPO processing from FFB reception until CPO dispatch were

inspected during the audit it was confirmed that log sheets at mill work stations were filled in accurately and

consistently.

The General Manager and Senior Manager carry out inspections of field conditions and practices. The

Technical Services Department in conjunction with the Estate Managers and HSE Department monitors the

operations and the implementation of Health and Safety initiatives monthly.

Criterion 4.2

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

optimal and sustained yield

SMM has carried out and made an annual fertilizer application regime as recommended by credible -

internationally proven oil palm research experts from PT. Sarana Inti Pratama (SIP). Foliar samples are taken

from approximately 1% of the palms; samples are taken on each block of 30 Ha at Air Ruak Estate for

division 14, division 15, division 16, division 17 and division 18.The sample is taken from frond number 17

and sent to the laboratory (SIP) to analyze for minor and major nutrient status of elements N, P, K, Ca, Mg,

Zn and B. After due analysis, recommendations are made and SMM will fertilize the blocks as per

recommendations. The soil analysis test is carried out every 7 years.

The soil was analyzed and tested initially in 2003, and the next inspection will be in 2010 as recommended by

the SMM agronomist. The Soil Analysis for SMM is carried out again by an independent and proven oil palm

research institution i.e. PT PP London Sumatra Indonesia Tbk. The results of the soil analysis and the leaf

analysis will be considered to formulate fertilizer recommendations. The SMM agronomist visits annually to

check and to monitor palm growth and vigour, occurrences of pest attacks and diseases and any other

abnormalities.

SMM management monitors the yield performance of all blocks (30 Ha) in SMM using a method of the “red

black monitoring system.” Monthly reports are computed whereby the yields of all blocks are monitored

against the potential site yields of the same cultivar of palms of the same age. Action Plans are drawn up

and monitored monthly.SMM has in place many Best Practices to ensure fertility and sustained yields,

amongst them the planting of legume cover crops (LCC) such as Mucuna brachteata, Calopogonium

caeruleum and Pueraria javanica, and the planting of Nephrolepis in open areas to protect soil erosion

during abnormal rainfall conditions, as well as to add nutrients and to prevent growth of weeds.

Further best practices include; recycling empty fruit bunches and application of palm oil mill effluent to the

fields to optimize organic matter and to fertilize the soil; application of organic fertilizers in marginal areas;

production and application of household waste as compost; construction of contour silt pits in hilly areas to

prevent excessive erosion; construction of aeration drains in hard pan marginal areas; and planting of

Legumes to improve Nitrogen uptake.


Criterion 4.3

Practices minimise and control erosion and degradation of soils

The management of SMM has committed to make efforts to minimize and to control soil degradation at the

plantations.

The general topography of SMM plantations is flat to gently rolling. Approximately 5 % of the planted

hectarage in SMM is of hilly terrain of more than 25 degree slope.

The SMM Management applies certain techniques to reduce soil erosion, especially during land preparation

for replanting/conversion, such as planting LCC (legume cover crops e.g.,: Mucuna brachteata sp),

terracing/platforms, frond stacking, digging burrow pits and windrowing. Erosion monitoring plots were

constructed in some areas in order to get information on the erosion levels based on soil types, slope and

ground covers. This started from the planting or conversion area until the canopy of the palm oil leaves are

touching each other.

The repair of roads like grading, compacting and cambering are carried out to ensure there is no delay in

transporting FFB to the mill. Surface run off is reduced by having a systematic road upkeep and

maintenance program. Total length of road upkeep for all estates within SMM is around 38 Km. Roads are

cambered and graded periodically to ensure proper channeling of rain water.SMM has highly protected

wetlands within the whole areas of the estates. The audit team did not find any wetland within the whole

company owned estates. The strategy for fragile and problem soils such as sandy, low organic matter acid

sulphate soils, have been managed and well monitored as indicated on” the Red Black Explanation Summary”

at Air Ruak Estate.

The various methods implemented to prevent land erosion are as outlined below :

1. Control measures taken in hilly terrain are:

a. Construction of Continuous Silt Pits. These pits are constructed dissecting the water flow and thus

trapping surface run off (Photo 1).

b. Planting Platforms are constructed to lessen leaching losses and surface run off (Photo 2).

c. Fronds cut during pruning or harvesting are placed criss-cross against the slope to slow down or

break water runoff velocity (Photo 3).

d. Cover crops and natural greenery are encouraged and blanket spraying is prohibited in areas prone

to erosion (Photo 4).


Photo4 : Planting of Mucuna brachteata legume (cover Frond stacking

along the contour

Photo 3 : Frond stacking along the contour

Photo 2. Platform construction Photo.1 : Silt Pits


2. SMM has conserved hilly areas deemed too steep to plant: some of these areas are in Semalar and Bukit

Sari Bunga. These areas with their natural flora are another indication of SMM’ s concern for the

environment (Picture 5)

3. Vertiver and King grass are planted in culverts, bridges and areas prone to erosion as these grass acts to

bind the soil to prevent erosion (Picture.6,7)

Photo6 : Planting vertiver and kinggrass to prevent erosion

Photo5 : Bukit Semalar and Bukit Sari Bunga

Photo 7 : Planting bamboo to reduce erosion


A summary of erosion control methods implemented in each estate are presented as follows ;

Erosion Control methods Estates

JKE BLE LJE SBE ARE

Planting of Mucuna brachteata (ha) 5 5.3 61.15

Planting of Bamboo (plant) 127

Planting of Vetiver (meter) 1840 3565 40

Planting king grass (meter) 7190 3565

Making Silt pit (Ha) 1

Making Contour terracing (Ha) 6.52

Criterion 4.4

Practices maintain the quality and availability of surface and ground water

SMM management has facilitated provision of water in storage tanks that are provided to mill and estates and

employee’s housing. The water for industrial use is supplied from some of the rivers e.g.:Sungai Belas, and

Sungai Balok, and for household/domestic use is from other water sources located in HCV 4.

The SMM management policy is to maintain the water sources as HCV 4; protect the existing riparian strips

as stated in their procedure for riparian strips; a 50m wide buffer zone has been maintained along

Sungai Belas, the main river that runs through the estates. The SMM management policy also states that the

use of herbicide is prohibited along the buffer zone area. There are monitoring systems along riparian buffer

zones to protect the area from erosion and degradation of water quality.

However, this criterion is not effectively implemented to manage water resources. The daily data is missing to

monitor accurately water for daily consumption. Most of the water usage is for the purpose of cleaning dirty

areas in the mills and water consumption for the employees housing complex. Therefore, minor indicator as

nonconformity issued. See Non-Conformity Report T01.12/09.

Criterion 4.5

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

Integrated Pest Management (IPM) techniques

SMM has identified and documented an Integrated Management System Program (2009) on “Conservation

Report and Activity”. The main pests attacking the oil palms in the plantations are leaf eating insects and rats

that eat the palm fruits. Plantation Manager assigned a pest engineer (from head office quality assurance,

SMM group) to monitor regularly the population of pests at each estate,e.g.: At Ladang Jaya estate, a method

known as early warning census has been initiated. The IPM techniques and natural control were noted on all

plantations inspected. Monitoring of the quantity of herbicides used is recorded in each of the plantations

and displayed by the plantation manager.

Uncontrolled usage of herbicide can severely endanger health of spray operators, and also damage the palm

fruits from LD 50 toxicity. The LD 50 criterion was observed for all plantation activities. Information

pertaining to monitoring the usage of chemicals based on LD 50 of per tonne of FFB was implemented to

indicate that a reduction in usage and the influence of the LD 50 are progressively implemented . Record of

monitoring using the affected LD 50 of per tonne FFB was inspected and shown (2009) in the “Monitoring of

Attacks by Pests Report No. 16/QA/XI/2009”.

SMM management also cultivates beneficial weeds to reduce the use of chemicals in controlling pests, such

as Turnera subulata (bunga pukul delapan)over 1600 Ha, Antigonon leptopus (air mata pengantin)planted

over 90 ha,and Cassia cobanersis over 30 Ha at Division 4 – Division 7. SSM had also been promoting the


barn owl (burung hantu) as one of its IPM practices to control the rat attacks. Recent census data at Ladang

Jaya estate, revealed the total number of barn owls (burung hantu) Tyto alba in the estate is approximately

52 (fifty two) couples.

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

SMM Management documents its policy on the wearing of PPE while using agro-chemicals, in SOP – Guide

to the Safe Use of Pesticides. The SOP lists the justification of chemicals use, the conditions and application

rates for individual chemicals ,information and requirements on storage safety precautions, solution

preparation and application, pesticide waste disposal, first aid and a list of pesticides allowed by the

regulations. The Auditor confirmed that agrochemicals used are in accordance with relevant SOP, applied by

trained personnel, stored in secured area and empty containers were disposed in B3 (hazardous and toxic

material) waste warehouse area before removal by a licensed contractor. All the records are well maintained.

There is regular medical checkup for workers who apply agrochemicals.

Criterion 4.7

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

The SMM management has established a safety, health and environment policy and it is comprehensively

implemented. Explanation and communication of the policy is the responsibility of the safety engineer (SM-

P2K3). The policy is available at the mills and the plantations; and communicated to all subcontractors. A

safety engineer monitors and inspects all facilities in the mill operations relating to emergency conditions on

a daily basis. Records of mill operations and facilities are kept properly, identified and retrievable in the

safety engineer’s room. If there is an accident in the mill caused by the workers violating a working procedure

or other instructions, an investigation of the accident is conducted and the findings forwarded to the mill

manager for inclusion in the agenda of the Safety Meeting. The Auditor found the implementation of the

Occupational Health and Safety Plan as acceptable.

Criterion 4.8

All staff, workers, smallholders and contractors are appropriately trained

Mill managers and Plantation managers identify training needs for safety training program annually for

workers especially chemical sprayer operators. Some contractors are included in training programs in respect

of safety concerns conducted by safety engineers. The small holders have received training in emergency

procedures. Evaluation of training effectiveness is conducted regularly to ensure all staffs and workers are

updated with sufficient training. All training records were checked. during audit.

Criterion 5.1

Aspects of plantation 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

Identification of aspects of plantation, mill management and replanting that have environmental impacts are

in place and monitoring of plans to mitigate environmental impacts were satisfactory. Assessment is also

carried out in environmental management efforts and environmental monitoring efforts (UKL/UPL).SMM


has documented environmental impact assessment as a part of environmental management system and is

committed to obtain an ISO 14001 certification in 2010. Six- monthly reports of UKL/UPL are submitted to

Bapedalda (local environmental controlling body). A documented procedure has been established to revise

environmental documentation if there is any change in company activities.

Criterion 5.2

The status of rare, threatened or endangered species and high conservation value habitats, if any, that

exist in the plantation or that could be affected by plantation or mill management, shall be identified

and their conservation taken into account in management plans and operations.

The SPO management has prepared and developed all information on HCV including for flora and fauna in

preparation for the certification. The flora and fauna are comprehensively identified in “Executive Summary

of High Conservation Value Report 2009”. The HCV areas are recognized with HCV 4.1, 4.2, and 6, with

most of HCV available in all the plantations. The HCV areas at the field level are well identified with

sufficient signboards.

Criterion 5.3

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

manner

Suitable methods are established such as environmental aspects identification and environmental impacts

assessment to control all sources of significant environmental impact including management of wastes. The

wastes of used agrochemical jars are disposed in a chemical store permanent area which is kept away from

rain. Prior to being stored in the chemical permanent area, the wastes are crushed in a manner so as not to be

re-used. Some wastes have economical values for metal scraps generated from workshop waste. Most of

metal scraps were sold to recycling outlets. In addition, the EFB wastes are used as composting for several

plantations and it is well implemented. Discharge of liquid wastes to waste treatment plant for BOD, COD

and pH are regularly measured to ensure that the parameters are under control in accordance with waste water

regulations.

Criterion 5.4

Efficiency of energy use and use of renewable energy is maximized

SMM management applies the efficiency program for energy, which is known as the renewable energy

program. Boilers use fibre and palm kernel shell as fuel (environmentally friendly) to heat water in boilers to

generate high pressure steam. High pressure steam drives turbines connected to generators to produce

electricity. The electricity generated meets the electricity needs of the factory, employee housing, public

facilities, schools, places of worship, etc.This is SMM management’s commitment to reduce consumption of

fossil fuel.

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 whole SMM management and staffs have high commitment to a zero burning policy. This zero burning

policy is fully supported by the managing director of the SMM management. The audit team has checked to

confirm zero burning policy on the whole of the SPO management is well implemented. The wastes that are

generated by mill and plantations activities are treated properly within the SPO management operation.


Criterion 5.6

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

monitored

The prevention of pollution is a part of the SMM Management’s Policies on Health, Safety; and Environment.

Monitoring and measurement on emission parameters are planned and implemented in accordance with

emission regulations. On a 12 monthly basis, the emission from boilers and vehicles for transportation of FFB

are tested by an external independent laboratory. Results of emissions are reported to the Environment

Manager to ensure that necessary action is taken. The result of emission monitoring and management is also

reported to the local Environment Agency (Bapedalda) as part of RKL-RPL (Environment Management and

Monitoring) Semester Report.

Criterion 6.1

Aspects of plantation and mill management including replanting that have social impacts are identified

in a participatory way, and plans to mitigate the negative impacts and promote the positive ones are

made, implemented and monitored to demonstrate continuous improvement

SMM management has developed and has a method to monitor all information due to social aspects of people

who are living in the neighborhood and within the employee’s housing complex. All information related to

social aspects are identified and assessed using appropriate methods such as environmental aspects and

impacts assessment. Results of the assessment for social aspects is reported to the Environment Manager and

distributed to respective concerned parties such as environmental impact-controlling agency at least once a

year.

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

SMM has implemented an effective communication and consultation procedure between the growers, millers

and local communities. The SMM management has also drawn up an external communication procedure.

Consultation with stakeholders has been determined. List of stakeholders includes local community, NGO’s,

worker’s organizations, and the police. Some stakeholders have been contacted for the consultation. Adjacent

estate officers are responsible for communication with the respective parties on estate activities. The

Community Development Manager assumes responsibility for communication and consultations with

stakeholders and to ensure that community programs are run effectively.

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

SMM has established a complaints, grievance, and dispute procedure, which is integrated with the

communication procedure for SM-K3. This procedure has been communicated to all stakeholders at each mill

and plantation. The positive response from the stakeholders regarding this communication was inspected.

During the visit to the stakeholders, the audit team confirmed that there were no complaints, grievances and

disputes. One of SPO management system’s procedure has been established for customary rights of the land

(No 021/HR&GA/CP/06-09 regarding liberation of land).


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

Within the certification assessment, the audit team verified and inspected the whole information regarding

compensation. The evidence of compensation was found satisfactory and no legal action was raised. The

compensation procedures have been established and communicated to stakeholders.

Criterion 6.5

Pay and conditions for employees and for employees of contractors always meet at least legal or

industry minimum standards and are sufficient to provide decent living wages

List of pay and conditions of employees are described in detail according to level and rank of their position.

SMM management has committed to follow related legislation, which regulates working days, working time,

salary levels, regional minimum rate payments, and employees insurance. JAMSOSTEK.

HRD staff do inform the workers of salary adjustments whenever there are amendments to the regional

minimum rates.

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

SMM has entered into an agreement with workers and those in management level to establish labour unions

in accordance with national legislation, UU No. 13 2003. Memorandum of understanding that has been

approved by both parties, on time payment and safety for contract workers has been made with all contractors

who have projects with the SPO management.

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.

Records of personal data of employees like age of workers, status of employees, position and rank, location

of work, date of joining the mill and the plantations are maintained. It was confirmed that no worker under

the age of 16 years is employed. This is in compliance with the legislation of the Republic of Indonesia – UU

RI No. 13 Tahun 2003.

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.

SMM management has a policy on equal employment opportunities. Capable employees have opportunities

for career progression in the mill and the plantations. The Head of the General Affairs Department identifies


candidates for promotion and submits the names for selection by the General Manager. SMM is also

committed to providing job opportunities for the local community. Information on vacant positions is posted

in notice boards in the mill and estates. Information on job opportunities are also announced in the local

newspaper (Belitung Post).

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

SMM has a policy on prevention of sexual harassment which is displayed at various locations of the estate

and mill offices. The policy also contains rules for enforcement and is part of the Company’s Social

Responsibility approved by General Manager dated 01.12.2009. The External Relationship Manager on

behalf of General Affairs Department has developed the rules and it has been explained and communicated to

all workers to ensure they understand the rule well.

Prevention and eradication of sexual harassment was well communicated to all workers, management levels

and stakeholders. Records of the meetings to communicate the policy is kept and retrievable in the

appropriate place. The Committee on Sexual Harassment has been established in accordance to the letter of

General Manager No. 001/SK/GM/06-2009 date 23.06.2009.

The letters Procedures No.SOP-EHS-001 are established to ensure there is no sexual harassment and all other

forms of violence against women. Interviews with female workers confirmed that they understood the Policy

well.

Criterion 6.10

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

SMM has made agreements between suppliers/subcontractors and smallholders/out growers. A contract has

been inspected between SMM and one of the smallholders e.g.,: Cooperative of Anugrah (Koperasi Anugrah)

for contract No. 017/SMM-SPK/PKS/VIII/2009.

There were transactions and purchase contracts with smallholders or local business private companies

regarding the sales and purchase of FFB. Other contracts do exist for FFB transportation and for the service

or maintenance and repairs of mill equipments. The pricing of FFB is regulated by Pemerintahan Propinsi

(Local Government Province) Kepulauan Bangka Belitung, Sekda No. 525/80/Ass II/2009 dates 15.10.2009.

Criterion 6.11

Growers and millers contribute to local sustainable development wherever appropriate

Contibutions to local development is based on community needs and the company’s budget. The SMM

management’s contributions to community development included infrastructures (buildings, rehabilitation of

schools, mosques, church, roads, and local community assembly halls, and kindergarten yard) which are

documented at Government and Community Relations Annual Reports and distributed to each estate and mill.

The SMM management conducts meetings regularly with local communities in response to requests and

provides assistance. The Health and Safety Department of The SMM management provides free medical

treatment at the clinics to local communities who seek treatment. The evidence of SMM’s tax contribution

for Local Development is recorded in a letter No. 47/DPK-BT/XII/2008. This record is kept at the General

Affairs Department, and will be retained for a period of 5 (five) years.


Criterion 7.1 to 7.7

N/A

This requirement is not applicable as there has been no new planting since November 2005.

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.

SMM management has committed to continuous improvement through observing RSPO Principles and

Criteria. On the prevention of emission (release of carbon emission to environment generated from palm

plantation and methane capture by CDM program), the Environmental Impact Assessment was adopted to

ensure uncontrolled parameters were detected in emissions from vehicles and boilers. Reduced usage of

dangerous agrochemicals (paraquat) was inspected and they conformed to SMM Policy. The used

agrochemical jars or containers have been handled and stored in proper chemicals warehouse. Records of the

reducing consumption of paraquat (gramoxone) were inspected and the reduction is seen from the following

figures.

Year 2007 : (0.16 litre/Ha),

Year 2008 : (0.13 litre/Ha),

Year 2009 : (0.01029 liter/Ha).


3.2 Detailed Non-Conformity Report, Corrective Action Taken, and Auditors Conclusion

Non Conformity Report – T01.12/09

Date of issued 11.12.2009 NCR issued by : Hasnop Putra

Location Balok Estate Discussed with : Managers and staffs

RSPO – Criterion : 4.4

Practices maintain the quality and availability of surface and ground water.

Description of Finding:

Implementation of water management plan overall in the estates are not evident. There are no records

available on consumption of water, to ensure water management program is effective.

Classification Major Minor

Corrective Action Taken: Date of implementation: 31 January 2010

Establish Water Management Plan for all estates, which will include procedures to monitor water

quality and quantity;

A Water management Plan will be drawn up for all Estates which will monitor water usage and

quality;

Install water monitoring facility (flow meter) to ensure proper monitoring and recording;

Establish recording and periodic checks to quantity (m3/month), and water quality (lab test) based on

procedure (SOP-EHS-011) according with related regulation.

Auditee sign:

General Manager: Mr. Phillip Liu Senior Manager: Sukrisdianto

Auditor Comments:

Corrective action taken by the organization for the documentation submitted has been verified and

accepted.

Records monitoring of water per tonne of FFB and water management data have been submitted. The

effectiveness of the water management program and consumption of water per tonne of FFB will be

checked during the next surveillance audit. The verification of corrective action had been conducted in

TUVNORD Indonesia office

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:February 2010 Auditor(s) sign: Mr. Hasnop Putra


Table 7: Summary of findings by RSPO Criterion

Audit type Certification Assessment

Criterio

n

Audite

d Comply Major

Mino

r

No of

NC

1.1 Yes

1.2 Yes

2.1 Yes

2.2 Yes

2.3 Yes

3.1 Yes

4.1 Yes

4.2 Yes

4.3 Yes

4.4 No 1 1

4.5 Yes

4.6 Yes

4.7 Yes

4.8 Yes

5.1 Yes

5.2 Yes

5.3 Yes

5.4 Yes

Audit type Certification Assessment

Criterio

n

Audite

d Comply Major

Mino

r

No of

NC

5.5 Yes

5.6 Yes

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

7.0 N/A -

8.1 Yes

Total of

Nonconformities 1 1

3.3 Noteworthy positive components

SMM maintains a 100 M strip from the river as a reserve for conservation. The management of

SMM is highly committed to environmental regulations and have adopted a zero burning policy for

the prevention of fire in the plantations. Fire fighting facilities and equipment are provided for the fire

brigade team, and are always available together with water tank vehicles in response to any land

burning.

High Conservation Value identified and protected in all the estates. The RSPO management unit of

SMM has set a high priority on protection of all HCVs within the whole plantation and other locations

that have been identified,. Protection of the HCVs are clearly identified in Executive summary 2009

with identification and analysis of high conservation value (NKT), and the management and monitoring

for areas of value for high conservation (KBKT) as reference. The identification of HCV areas was

observed by an independent environmental group i.e. Focus Consulting Group (FCG) - Jakarta.

Organic wastes and land application: Empty fruit bunches were placed in palm plantations in such a

manner to enhance the organic matter and quality of the soil. Effluent from waste treatment plant is

discharged to the plantation as land applications; minimizing the use of chemicals. SMM is committed

to reducing use of chemicals and spraying of chemicals is vigilantly monitored;

The SMM’s IPM program has resulted in the reduction of chemicals use for pest control (rat control).

The Barn Owl (Tyto alba) population has been built up to a level where it now provides effective

control of rats. and reduction on the use of rodenticides.


Figure - 1: Pest control – The Barn Owl on the leaf of palm oil plantation

Estate managers allow every family to have vegetable gardens at the rear of their houses provided they

are kept neat and tidy. This is beneficial to the workers as it supplements family income and contributes

to family health.

The mill and the estates have documented safety guidelines and SOP’s as well as safety monitoring in

accordance with SM-K3 implementation. There is a Zero accident program in all areas of the estates and

mill. This commitment to zero accident has been communicated and explained to stakeholders.

The RSPO team of SMM management has set high priority on environment impact assessments and

provides sufficient training to increase awareness. The environment monitoring programs established

to monitor boiler emission, FFB transportation emission, and power generation by generator-set

operations help in developing sustainable management systems to meet with RSPO Principles and

Criteria.

The role of RSPO team of SMM management will be more effective when consideration is given by

SMM to Green House Gases (GHG) for CDM program. A CDM program is currently being prepared to

replace consumption of diesel fuel with biogas (methane capture) to run a generator to generate

electricity. There is also Biomass Gasification renewable energy initiative without CDM.

The management of SMM provides fresh water for employees’ housing complex. The water is sourced

from Sungai Lenggang (Lenggang River) and supplied to employees after purification. The facility was

installed for the employees as part of the company’s commitment to safety and health of employees and

the local community. Figure 3 below shows the water purifier installation.

Figure – 2: Water purifier installation and storage tank

Kindergarten yard is provided in all estates as playground for children who use it after school and

during holidays. The play yard for children is very clean and safe from emissions from vehicles, and

noise and dust pollution. Figure 4 below is the best kindergarten yard in Sari Bunga Estate.


Figure – 3: Kindergarten yard for children

3.3.1 Some Recommendations for Improvement to the Mill and Estates:

1. Polyclinics in the estates should clearly provide expiry dates on drugs. Some expired dugs have even

been found on the floor and should be disposed in accordance with the regulations.. The Maternity

Room (Ruang Kebidanan) should be clean and tidy. The condition of Blood Pressure Equipment

should be checked properly. The recommendation is to monitor these, including expiry date of drugs,

and to dispose of expired drugs to avoid usage. There should also be periodical checks on the condition

of all equipment.

2. Efficiency calculation of Genset 63KVA and 15 KVA should mention the average - load per month

(KVA) instead of just Lt/Hours. The data of average-load per month (KVA) must be monitored and

recorded.

3. The procedure, SOP-OPR-023 Rev.01 to be revised to record accurately the use of agrochemicals and

use/disposal of agrochemical containers.

4. Mapping of Integrated Pest Management (IPM) should indicate clearly areas of activities and should

include mapping of details of actual IPM projects in all estates.

5. Safety signs and posters should be available on all access roads to estates and the mill. Signs should also

be available to indicate areas where animal crossings occur to prevent accidents.

Speed limit signboards shall be erected at roadsides and speed breakers constructed in areas where

speeding occurs to prevent accidents.

6. The temporary hut for fuel, used oil, used small parts located in the middle of palm plantation, should

also provide for oil spill containment. SMM must erect proper secondary containment in all sheds

where generator sets (gen-sets) are housed.

7. The noise from generator sets operations in employees housing area has the potential of impairing the

hearing of residents in the housing areas. Information on noise levels of generator set operations is not

available. It is recommended to measure noise levels so that noise mufflers can be used to reduce

excessive noise levels.

8. Chimney smoke from exhausts of generator sets is ejected from a horizontal position. This is very

unsafe for children who may be playing around the gen-set houses, and may affect their breathing,

particularly in the future. The exhaust pipes of gen sets are to be repositioned to ensure that the exhaust

gasses are diverted upwards.

.

3.4 Issues raised by stakeholders and findings of the assessment team

The audit team did not receive any major issues and comments to be considered from the stakeholders

meeting on environmental impacts or social performance of the mill and the plantations operations. The

interview was used as a suitable method to obtain positive or negative comments from stakeholders. The


audit team had prepared some of the questions requiring feedback from stakeholders. The feedback refers to

section 2.10.

Figure – 4: Stakeholder meeting

The picture shows a stakeholders meeting to obtain positive or negative response in respect of RSPO

Certification Assessment for SMM. SMM has collected information comprehensively and documented the

minutes of stakeholders’ meeting that was carried out on May 14, 2009. The SMM management responded

to the feedback from the stakeholders. Most of the feedback from the meeting was positive in respect RSPO

certification and compliance of RSPO Principles and Criteria. The response of the stakeholders’ meeting is

shown below.

Camat Gantung (Local Community)

Camat requests SMM management to provide clear information of land acquired (HGU) for local

community.

Camat on behalf of local community Gantung requests SMM management to develop partnerships

between SMM management for smallholders of Gantung Village. We provide 50 Ha of free land to

be developed for palm oil plantation.

SMM Response

The management level of SMM is very concerned over the HGU information. The request will be

referred to the external relationship manager for early response.

SMM management provides training to smallholders on oil palm cultivation.

Chief of JangkangVillage

The spraying gang workers complained recently of breathing difficulties and coughing. It could

have occurred because of improper PPE use.

SMM Response

The SMM management is concerned with worker’s health and provides comprehensive medical

attention. The HSE officer will train and familiarize workers on the proper use of agrochemical

spray equipment and PPE. The training and familiarization is carried out regularly.

LSM Warna Indonesia (Environmnetal NGO)

The NGO did not raise any issues of concern to environmental and social impact. The company had proven

its commitment to empower the local community with education and partnerships to give them a better life.


FFB Transporter (Contractor)

The FFB Transport contractor has worked for more than12 years. They had not raised any negative issues to

PT. SMM.

Table 8 shows the result of an interview meeting with a stakeholder who is the Head of village Dendang – Local

community in Belitung.

Table 8: Feedback from one of stakeholders and SMM management comment

N

o Subjects Stakeholders’ feedback SMM management comments

1 Did SMM Management

provide information on

the RSPO certification

exercise including plans

for safety and health to

the public and

stakeholders?

Information and awareness about

RSPO are insufficiently understood by

stakeholders.

Conduct meetings regularly and

training properly. Provide

sufficient information about

RSPO Certification and safety

and health program to

stakeholder. Records of meeting

with stakeholder will be

followed by action plan and

monitoring of the achievement.

2 Does the SMM

management conduct

regular meetings

regarding community

development?

The meeting is carried out in such a

manner in order to obtain clear

information on the progress of

development of local community..

The meeting with stakeholders

will be carried out regularly and

effectively and will not be

restricted by time.

3 Does the SMM

management have a

proper system to inform

people living around the

mill and supply base?

Stakeholders were informed about the

system. The complaints and grievance

procedures were communicated to the

people.

No action needed to provide

evidence for correction,

corrective and even, preventive

actions as the community is

informed if there was a need for

revision.

4 Does the SMM

management respond

properly to the

complaints in respect of

RSPO implementation?

So far, we (stakeholders) have no

complaints regarding company’s

operations. Sometimes we need help

for our activities or we need donations

for repairing some facilities, or for

repairs to roads and other

infrastructures in our location.

Yes, any proposals to help

stakeholders is welcome.

5 Is there a clear

grievance and

complaints procedure in

the company?

Yes, we were very clear about this

concern. The company informed us

through some of stakeholders meeting

for grievance procedure clearly.

However, we have requests for some

help and financial support to renovate

school buildings and other

infrastructure

We communicated flow process

of grievance and complaints to

them.

The SMM management will

consider financial support for

renovation of school buildings

and infrastructure.

6 Is there still a complaint

regarding current land

acquired for palm

plantation?

The company acquired this plantation

from previous company. The whole

land acquired has HGU. This

information has been relayed to the

community through the external

relationship manager and lawyer.

We have no complaint on this issue.

None


7 Is there any

environment impact

arising from the

operations of SMM

management?

As long as the SMM management

maintains and consistently monitors

environmental impact, there has been

no impact on environment surrounding

stakeholders’ living areas. No water

quality changes noted and soil is not

contaminated, flora and fauna are still

found in their natural environment and

habitats.

We endeavor to maintain good

living conditions surrounding

stakeholders’ living area and

provide sufficient facilities. We

also monitor the prevention of

pollution, noise, odours, dust,

etc.

8 Is there any conflict

solved satisfactorily?

So far, we have not complained about

the company’s operations.

We have procedures in place in

the event of a complaint or

grievance.

9 Is there any procedure

for settling conflicts

which is communicated

with local community?

The company communicates the

procedures to the local community.

The SMM management has

communicated the conflict settlement

procedures to stakeholders.

We maintain an attendance list

of participants at the

familiarization meetings to

explain the procedures.

10 Does the SPO

management invite

stakeholders regularly

for the activities related

to community

development?

Yes. We are always invited by the

company to discuss general programs

for the local community in respect of

free medical services, donations for

some villages for road maintenance,

school renovation, preschool yard,

playing fields for children and public,

etc

The company will maintain this

effective communication

continuously with stakeholder.

12 Are the workers

receiving wages in

accordance with

government regulations?

No one below the age of 16 years is

employed at the company. The

company is very concerned about

workers welfare and has committed to

comply with labour regulation. So far,

there has been no major complaint

regarding salary issues from workers

including days of work, leave,

overtime, and remuneration.

As long as we work and live for

this business we shall comply

with labour regulations.

13 Is there a system on

emergency procedures

and has this been

communicated to the

local community living

around the mill and

supply base?

We have been trained in emergency

procedures, and how to use fire

equipment such as fire extinguishers,

other emergency-situation drills, and

evacuation.

HSE Department will

continuously train the local

community on emergency

procedures ,fire drills and

earthquake evacuation.


3.4.1. Attendance list of stakeholders meeting on February 12,2009 at Balok Estate

No Name Position

1 Hendry Tjen PT. SMM/ / ANJ

2 Hafendi PT. SMM/ ANJ

3 Suwarsono PT. SMM/ ANJ

4 Erlin OB Sinaga PT. SMM/ ANJ

5 Hotlan Sirait PT. SMM/ ANJ

6 Baringin Marpaung PT. SMM/ ANJ

7 Bahiman Traditional healer of Air Nangka Village (representative local

people) 8 Sarmina Secretary of Desa Balok

9 Ardiansyah Representative of local people

10 Zulkarnaen Head of Dusun Air Nangka

11 Haryanto Head of Dusun Dendang

12 Hardiyanto Head of Dusun Balok


3.4.2. Attendance list of stakeholders meeting on February 25,2009 at Ladang Jaya Estate/ Jangkang Mill

No Name Position

1 Hendry Tjen PT. SMM/ ANJ

2 Sukrisdianto PT. SMM/ ANJ

3 Jadial Silalahi PT. SMM/ ANJ

4 Heri Gunawan Lindu PT. SMM/ ANJ

5 Kariman PT. SMM/ ANJ

6 Antoperis Tarigan PT. SMM/ ANJ

7 Andi Siswoyo PT. SMM/ ANJ

8 Robin Simamora PT. SMM/ANJ

9 Budi Purianto PT. SMM/ ANJ

10 Tongku Aman Hasibuan PT. SMM/ ANJ

11 Dadi Supriadi PT. SMM/ ANJ

12 Suryadi Head of West Jangkang Village

13 Hairil Anwar Head of Dusun Tungkup

14 Tamri Traditional healer of Village Air Asam (representative of local people)

15 Marsili Head of East Jangkang Village

16 Misran Traditional healer of Tungkup Village representative of local people)

17 Basri Head of Dusun Air Asam

18 Edi Hermawan Head of Nyuruk Village

19 Kurnadi Head of Nyuruk Village

20 Sabron Head of Pelulusan Village

21 Yusniar Head of Dusun Bentaian

22 Zaidin Secretary of Desa Jangkang


3.4.3. Attendance list of stakeholders meeting on May 14 at Clubhouse PT. SMM

No Name Position

1 Ho Che An PT. SMM/ ANJ (General Manager PT.ANJ Agri)

2 Sukrisdianto PT. SMM/ ANJ (General Manager PT. SMM)

3 Andi Esfandiari PT. SMM/ ANJ (Vice President Director PT. ANJ Agri)

4 M.Wiedhayaka PT. SMM/ ANJ

5 Sukrisdianto PT. SMM/ ANJ (Senior Manager PT. SMM)

6 Hendry Tjen PT. SMM/ ANJ (External Relation)

7 Supri Hantoro PT. SMM/ ANJ (Estate Manager PT. SMM)

8 Suwarsono PT. SMM/ ANJ (Estate Manager PT. SMM)

9 Purnawan PT. SMM/ ANJ (Estate Manager PT.SMM)

10 Isransani PT. SMM/ ANJ(Estate Manager PT.SMM)

11 Rotman PT. SMM/ ANJ(HRO PT. SMM)

12 Kariman PT. SMM/ ANJ (Mill Manager PT. SMM))

13 M. Reza PT. SMM/ ANJ (Civil Manager PT. SMM)

14 Rebo Pansuyadi PT. SMM/ ANJ (Tata Usaha PT. SMM)

15 M. Subri PT. SMM/ ANJ (EHS Manager PT. SMM)

16 ZarnyAbd PT. SMM/ANJ(staff)

17 A.Jumady PT.SMM/ANJ(staff)

18 Triyanti (woman) PT. SMM/ ANJ (staff)

19 Jedial Silalahi PT. SMM/ ANJ (staff)

20 Efendi Pandiangan PT. SMM/ ANJ (staff)

21 Erwin PT. SMM/ ANJ (staff)

22 Joni Nopiansyah PT. SMM/ ANJ (staff)

23 GurdiF Secretary ofDesaNyuruk

24 Syamsurizal LSM Warna Indonesia

25 Glenn Nelwan LSM Kelompok Peduli Lingkungan Belitung

26 Edy Aryanto Head Master of SDN 14 Dendang (School)

27 Sanan Lesmana Head of SPSI (Labour Union)

28 Hirya Dharma Camat Gantung

29 Khairil Anwar Camat Dendang

30 Erwin Head ofDesaDendang

31 Sandri Head of Desa Renggiang

32 Rolia Head of Desa Balok

33 Sarmania (Woman) People of Desa Balok

34 Lusi (Woman) People of Desa Balok

35 Dony Setiawan StafofCamat Dendang

36 Azwan People of Dusun Air Nangka

37 Arif StafofCamat Gantung

38 Untung StafofCamat Gantung

39 Zulman Head of Desa Jangkang

40 Khoirudin Kapolsek (Head of District Police)

41 Marmono Staf of District Police

42 Junaidi Contractor

43 Edy Libarki Kabid Pengawas Lingkungan Hidup (Head of Local Environmental

Controlling Body)

44 Trijaka Priyono Kabid Pertanian dan Kehutanan Distanhut (Head of local Agricultural and

Forestry Body)

45 Nofindra S StafDistanhut East Timur (Staf of local Agricultural and Forestry Body)

46 Ellys S Representative TUV NORD


3.5 Certified organization’s acknowledgement of internal responsibility

Please sign on the certification assessment and confirm the acceptance of the assessment report contents including assessment findings. The company General Manager

and Senior Manager will sign for the certification assessment report. Complete signatures are shown in section 3.6.

3.6 Formal sign-off of assessment findings

Belitung

Signed for and on behalf of

PT. Sahabat Mewah dan Makmur

17.05.2010 General Manager Senior Manager & RSPO Coordinator

Phillip Liu Sukrisdianto

Jakarta

Signed for and on behalf of

PT. TÜV NORD Indonesia – System Certification Management

17.05.2010 - Lead Auditor : Hasnop Putra

40

Annex – A : Figure Maps of SMM Mill & Estates

Figure A-1: Map of SMM and location FFB supply to Mill

41

42

Figure A-2: Map of FFB supplying to the mill by company owned estates

43

44


Annex – B : Draft of RSPO Certificate

C E R T I F I C A T E

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

PT. SAHABAT MEWAH dan MAKMUR Head Office: Wisma BII, Lt.7 Jl. Diponegoro No. 18 Medan 20152 – Indonesia

Jangkang Palm Oil Mill Mill Location

GPS location


Desa Jangkang , KecamatanDendang 33464,

Kabupaten Belitung Timur, Propinsi Bangka

Belitung - Indonesia

107° 52' 30.4" 02° 59' 55.2"

Applies a Sustainable Palm Oil Management System in line with 2008 National Interpretation of RSPO Principles and Criteria for Sustainable Palm Oil Production of Republic of Indonesia the following scope of certification

Production of Crude Palm Oil and Palm Kernel

CPO Tonnage Total Production 65,518 t

CPO Tonnage Claimed 65,518 t

Palm Kernel (PK) Tonnage Total Production 13,977 t

Palm Kernel (PK) Tonnage Claimed 13,977 t

Certificate Registration No: TNI –RSPO 005.2009 Audit Report No. SPO-ID09002 Issued date of Certificate : RSPO approval dateValid Certificate : -

President Director

This certification was carryout 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

46

Langemarckstrasse 20 D - 45141 Essen, Germany

-

Annex to Certif icate – RSPO (Supply Base)

Certificate Registration No: TNI-RSPO 005.2009

F o l l o w i n g s c ope o f c e r t i f i c a t i o n M i l l a n d S up p l y b as e c o ve r a re

Estate Location FFB

Production (tonnes)

GPS Location


Jangkang (JKE)

Desa Jangkang, Kecamatan 33464

Dendang, Kabupaten Belitung

Timur, Propinsi Bangka Belitung -

Indonesia

58,571.69 107° 52' 28,1" 02° 59' 45.0"

Balok (BLE)

Desa Balok, Kecamatan Dendang,

Kabupaten Belitung Timur, Propinsi

Bangka Belitung - Indonesia

59,904.81 107° 54' 53.9" 03° 02' 00.8"

Ladang Jaya (LJE)

Desa Jangkang, Kecamatan

Dendang, Kab. Belitung Timur,

Propinsi Bangka Belitung -

Indonesia

45,052.65 107° 53' 00.2" 02° 36' 43.3"

Sari Bunga (SBE)

Desa Nyuruk, Kecamatan Dendang,

Kabupaten Belitung Timur, Propinsi

Bangka Belitung - Indonesia

38,451.47 107° 52' 11.3" 02° 55' 16.0"

Air Ruak (ARE)

Desa Simpang Tiga Kecamatan

Simpang Renggiang, Kabupaten

Belitung Timur, Propinsi Bangka

Belitung - Indonesia

71,009.69 107° 56' 03.8" 02° 59' 59.9"

47

Annex – C : Certification Assessment Plan

Client: PT. SAHABAT MEWAH DAN MAKMUR (PT.SMM)

Address: Wisma BII 7th Floor Jl. Diponegoro No.18 Medan20152 – Sumatera Utara

MR Name, Pos.: Mr. Ho Chew An, General Manager; Mr. J. Silalahi, RSPO Team

Number of Mills: 1 Number of estate(s): 5 Order No. - Business No. -

Mill(s), Location Estates, Locations

- Jangkang Mill, Kec Jangkang, Belitung Timur - Jangkang Estate, Desa Jangkang

- Balok Estate, Desa Balok

- Ladang Jaya Estate, Desa Ladang Jaya

- Sari Bunga Estate, Desa Sari Bunga

- Air Ruak Estate, Desa Air Ruak

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

Type of audit: Initial Assessment Audit date: 07 to 11.12.2009

Lead Auditor: Hasnop Putra (HAP) Trainee/ Expert: DR. Haryadi (HA) ; Ir. Ujang Sehabudin (US)

Auditor(s): Sudarmadji (SD) Audit days on-site: 5 days

Date /

Time1)

Site / Shift /

Organizational Unit

Auditor

(Abbrev.)

Interview-

partner 2)

Requirements

Day – 1: 07.12.2009 Office and Jangkang Mill

10:00-10:15 Opening meeting Introduction team and fine tune audit plan (if

necessary)

10:15 – 12:00 - Sites: Office and Mill HAP, HA SMM-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

13:30 – 17:00 Mill Operations:

Jangkang Mill HAP, HA

SMM-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

Days – 1: 07.11.2009 Jangkang Estate

48

Date /

Time1)

Site / Shift /

Organizational Unit

Auditor

(Abbrev.)

Interview-

partner 2)

Requirements

09:00-12:00 Sites: Office and Estate SD, US SMM-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

Legal aspects related to SPO management


Socio economic impacts on the local

population

12:00 -13:30 Break

13:30 – 17:00 Estate operations: Jangkang

Estate SD, US

SMM-RSPO

team

Flora, fauna, ecology and biodiversity

Land and conversion planting

Decreased paraquat use

HCV identification


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, 6.4, 6.5, 6.6,

6.7, 6.8, 6.10, 6.11

Principle – 8 : 8.1

Days – 2: 08.12.2009 Sari Bunga Estate


team


assessment




criteria

Principle – 1: 1.1, 1.2

Principle - 2: 2.1





population

12:00 -13:00 Break

49

13:00 -17:30 Estate operations: Sari

Bunga Estate SD, US

SMM-RSPO

team




HCV identification



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


Days – 2: 08.12.2009 Air Ruak Estate

09:15-12:00 Sites: Office and Estate HAP, HA SMM-RSPO

team


assessment




criteria

Principle – 1: 1.1, 1.2

Principle - 2: 2.1





population

12:00 -13:00 Break

13:00 -17:30 Estate operations: Air

Ruak Estate HAP, HA

SMM-RSPO

team




HCV identification



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


Days –3 : 09.12.2009 Balok Estate

09:00-09:15 Opening meeting HAP, HA SMM-RSPO

team

Introduction team and fine tune audit plan (if

necessary)

50

09:15-12:00 Sites: Office and Estate HAP, HA SMM-RSPO

team


assessment




criteria

Principle – 1: 1.1, 1.2

Principle - 2: 2.1





population

12:00 -13:00 Break and pray

13:00 -17:30 Estate operations: Balok

Estate HAP, HA

SMM-RSPO

team




HCV identification



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


Days –3 : 09.12.2009 Ladang Jaya Estate


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

- Legal aspects related to SPO management

- Involved personnel and responsibilities

- Socio economic impacts on the local

population


13:00 -17:30 Estate operations: Jangkang

Estate SD, US

SMM-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 – 8 : 8.1

Days –4 : 10.12.2009

51

09:00-12:00 SMM operation SD, US, HAP,

HA

SMM-RSPO

team

- Consultation, Interviews stakeholders

(Indigoes people , NGO, Chief of village)

- Dormitory facilities

- Public facilities


13:00 -17:30 SMM operation SD, US, HAP,

HA

SMM-RSPO

team

- School, Health program,

- Social Responsibility program

- Workshop, Clinic

Days – 5 : 11.12.2009

09:00 -10:30 Preparation audit report on

site

HAP, SD, and

team

10:30 – 11:30 Reporting and presentation

audit finding

HAP, SD, and

team

SMM-RSPO

team Closing Meeting

11:30 Travelling to airport

End of Initial assessment RSPO Certification

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