FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD. KKS Sg. Tengi Grouping PLANTATION MANAGEMENT UNIT. Kuala Kubu Baharu, Selangor, Malaysia

Transcription

1 FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Sg. Tengi Grouping Kuala Kubu Baharu, Selangor, Malaysia

2 Page 2 of 66 MAIN ASSESSMENT REPORT ON RSPO CERTIFICATION FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD ( V) RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Sg. Tengi Grouping Kuala Kubu Baharu, Selangor, Malaysia Certificate No: RSPO Issued date: 4 December 2014 Expiry date: 3 December 2019 Assessment Type Assessment Dates Pre Assessment - Initial Certification (Main Assessment) 29 Sep 02 Oct 2014 Annual Surveillance Assessment (ASA-01) Annual Surveillance Assessment (ASA-02) Annual Surveillance Assessment (ASA-03) Annual Surveillance Assessment (ASA-04) Re-Certification Intertek Certification International Sdn Bhd (formerly known as Moody International Certification (Malaysia) Sdn Bhd) 6-L12-01, Level 12, Tower 2, Menara PGRM No. 6 & 8 Jalan Pudu Ulu, Cheras, Kuala Lumpur, Malaysia. Tel: +00 (603) Fax: +00 (603) ia.mysbaenquiry@intertek.com Website:

3 Page 3 of 66 TABLE OF CONTENTS Section Content Page No 1.0 SCOPE OF MAIN ASSESSMENT Introduction Location (address, GPS and map) of palm oil mill and estates Description of supply base (fruit sources) Year of plantings and cycle Summary of Land Use Conservation and HCV Areas Other certifications held and Use of RSPO Trademarks Organizational information/contact person Tonnages Verified for Certification Time Bound Plan Abbreviations Used ASSESSMENT PROCESS Assessment Methodology, Plan & Site Visits Date of next scheduled visit Qualifications of the Lead Assessor and Assessment Team Certification Body Process of Stakeholder consultation ASSESSMENT FINDINGS Summary of findings Status of Identified Noncompliance and Corrective Actions, Observations and Identified Positive Elements Summary of Feedback Received from Stakeholders and Findings ASSESSMENT CONCLUSION AND RECOMMENDATION Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings Intertek RSPO Certification Details for KKS Sg. Tengi Grouping 56 APPENDICES Appendix A Qualifications of the Lead Assessor and Assessment Team 57 Appendix B Assessment Plan Appendix C Maps of location Mill, Estates, Conservation and HCV areas Appendix D Photographs of Assessment findings at KKS Sg. Tengi Grouping 65 Appendix E Time Bound Plan for Other Plantation Management Units 66

4 Page 4 of SCOPE OF MAIN ASSESSMENT 1.1 Introduction This Main Assessment was conducted on the Plantation Management Unit (PMU) KKS Sg. Tengi Grouping of Felda Global Ventures Plantations (Malaysia) Sdn Bhd (hereafter abbreviated as FGVPM), from 29 Sep to 02 Oct 2014, to assess if the organization s operations of the mill and its supply bases were in compliance against the RSPO Principles and Criteria (Apr 2013), Malaysian National Interpretation (Nov 2010) and the RSPO Supply Chain Certification Standard (Nov 2011) for Palm Oil Mill. This assessment also includes a review of the changes made by the PMU to comply with the requirements of the ratified new RSPO Principles and Criteria (effective 25 April 2013). It was found that the PMU is aware of the new RSPO Principles and Criteria and the transition period for compliance but has not yet make the necessary changes required. The plantation management unit (PMU) or management unit is equivalent to a certification unit as defined in the RSPO Certification Systems Document. Each PMU consists of one mill and its supply bases which are made up of estates owned/managed by Felda Global Ventures Plantations (Malaysia) Sdn Bhd. 1.2 Location (address, GPS and map) of palm oil mill and estates KKS Sg. Tengi Grouping consists of one (1) palm oil mill, namely Sg. Tengi Mill and four (4) estates as indicated in Table 1 below, which includes the addresses and GPS locations of the mill and estates. The location maps are provided in Appendix C. All the 4 estates (viz., FELDA/FTP Gedangsa estate, FELDA/FTP Soeharto estate, FELDA/FTP Sg Tengi Selatan and FELDA/FTP Sg. Tengi estate consist of smallholders (FELDA settlers), each with a land title for an approximate area of 4.0 ha. In this PMU, the smallholders may be categorized as FTP Smallholders or FELDA Smallholders. The FTP Smallholders are those smallholders who applied for their planted area to be managed by Felda Technoplant Sdn. Bhd. (FTP). The FELDA Smallholders are those smallholders who choose to manage their own planted area within the FELDA Settlers Scheme. The sampling of estates and sampled number of FTP Smallholders and FELDA Smallholders are as indicated in Table 8 (section 2.1). The palm oil mill is operated by FGVPM. Table 1: Address of Palm Oil Mill, Estates and GPS Location Name Sg. Tengi Mill - POM (Capacity:54 MT/hour) FELDA/FTP Gedangsa estate FELDA/FTP Soeharto estate FELDA/FTP Sg Tengi Selatan estate FELDA/FTP Sg Tengi estate Address Kilang Sawit Sungai Tengi, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Gedangsa, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Soeharto, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Sg. Tengi Selatan, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Sg. Tengi, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia GPS Reference Latitude Longitude 3 35'9.93"N '56.17"E 3 35'17.31"N '15.31"E 3 40'54.00"N '18.00"E 3 37'9.00"N '30.00"E 3 37'11.00"N '5.77"E

5 Page 5 of Description of supply base (fruit sources) The supply base i.e. FFB sources to the POM at KKS Sg. Tengi Grouping PMU are from the abovementioned 4 estates of this PMU and FFB from Outside Crop Producers (OCP). Details of the planted hectarage for the FFB supply for Sg. Tengi Grouping are as shown in Table 2 below. Estate Table 2: Estate Area Summary as at Aug 2014 Certified Area Area Summary (ha) as at Aug 2014 Planted Area Oil Palm FELDA/FTP Gedangsa estate 2, , FELDA/FTP Soeharto estate 3, , FELDA/FTP Sg Tengi Selatan estate FELDA/FTP Sg Tengi estate 2, , Notes: Total: 9, , This Main Assessment covered the overall land use for oil palm plantation areas, and the identified Conservation areas including HCV areas (if any) marked out at the estates. 2. The estates sampled for this Main Assessment have been selected based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. 1.4 Summary of plantings and cycle The 4 estates have been developed beginning from FELDA/FTP Sg Tengi Selatan estate had been completely replanted while part of FELDA/FTP Gedangsa estate had been replanted (2 nd cycle). FELDA/FTP Soeharto and FELDA/FTP Sg Tengi estates are still in the 1 st cycle of planting. The age profile is as shown in Table 3. Table 3: Age Profile of Planted Oil Palm as at Aug 2014 Estate Name Year of Planting Cycle of Planting FELDA/FTP Gedangsa estate FELDA/FTP Soeharto estate FELDA/FTP Sg Tengi Selatan estate FELDA/FTP Sg Tengi estate 1993, 1995, 1997, 2001, 2006, 2007, , 2012, , 1992, 1993, 1996, 2001, st 2 nd Mature OP (ha) Above 3 years 2, Immature OP (ha) 3 years & below st 3, , nd , 1994, st 2, Total 7,

6 1.5 Summary of Conservation and HCV Areas Page 6 of 66 The summary of Conservation and HCV Areas as identified in KKS Sg. Tengi Grouping during this Main Assessment in 2014 is as shown in Table 4 below: Table 4: Conservation and HCV Areas # Statement of Land Use (Ha) Jan Dec Planted Area (ha) Oil Palm (Main Assessment) Hectarage Ha - Mature 7, Immature Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and unplantable areas HCV Area (ha) - comprising buffer zones near forest reserves, water catchments, burial & religious sites Other certifications held and Use of RSPO Trademarks The POM is certified for ISO 9001:2008, ISO 14001:2004 and OHSAS 18001:2007. The RSPO s trademarks and logo are not being used by the PMU audited. Instructions for use were provided and acknowledged by the PMU through a signed Memorandum of commitment agreeing to adhere to the latest RSPO Rules on Communications & Claims. 1.7 Organizational information / Contact Person Name: Norazam Abdul Hameed Designation: General Manager, Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations (Malaysia) Sdn Bhd, Tingkat 8, Balai Felda, Jalan Gurney Satu, Kuala Lumpur Malaysia. Tel: ext 5348 or ext 5349 Fax: norazam.ah@feldaglobal.com Name: Anthonius Sani Designation: Sustainability Manager, Plantation Sustainability and Quality Management (PSQM) Department Full Address: Plantation Sustainability and Quality Management (PSQM) Department, Felda Global Ventures Plantations Malaysia Sdn Bhd, 3 rd Floor, Balai Felda, Jalan Gurney Satu, Kuala Lumpur, Malaysia. Tel: ext 5348 or ext 5349 Fax: anthonius.sani@feldaglobal.com

7 1.8 Tonnages Verified for Certification Page 7 of 66 The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Sg. Tengi Grouping based on the reporting period for Jan Dec 2013 are as follows: Table 5: FFB Supply Base Tonnages # Estate /Supplier FFB Processed (MT) Main Receiving Mill PMU Estates (certified): FELDA/FTP Gedangsa estate FTP Smallholders FELDA/FTP Gedangsa estate FELDA Smallholders FELDA/FTP Soeharto estate FTP Smallholders FELDA/FTP Soeharto estate FELDA Smallholders FELDA/FTP Sg Tengi Selatan estate FTP Smallholders FELDA/FTP Sg Tengi Selatan estate FELDA Smallholders FELDA/FTP Sg Tengi estate FTP Smallholders FELDA/FTP Sg Tengi estate FELDA Smallholders Sub-total from PMU estates: 116, Outside Crop Producers (OCP) (noncertified): 9. Tai Ichi Entprise Sdn Bhd 34, Sern Lee Enterprise Sdn Bhd 22, RAH Properties Corporation Sdn Bhd 14, Delloyd Plantation Sdn Bhd 9, Lim Ah Cheu & Sons Trading Sdn Bhd 8, Kim Ma Oil Palm (Transport) Sdn Bhd 8, JKKR Felda Sg. Tengi 6, Besout 06 4, Koperasi Peneroka Sg. Tengi 2, PKC & Sons Sdn Bhd 1, Pertubuhan Peladang KWS Ulu Selangor 1, Timah Jaharah bt. Abdul Ghani 1, Risda Plantation Sdn Bhd 1, Others , KKS Sg. Tengi KKS Sg. Tengi 8, KKS Sg. Tengi 30, KKS Sg. Tengi 11, KKS Sg. Tengi 0 KKS Sg. Tengi 15, KKS Sg. Tengi 22, KKS Sg. Tengi Sub-total from OCP: 118, Grand total 234,869.43

8 Page 8 of 66 Total annual volumes / tonnages of FFB supplied from the supply base to KKS Sg. Tengi Grouping POM during the previous period, current Main Assessment period and projected period are as follows: Estate / Supplier Certifiable FFB from Sg. Tengi PMU estates Table 6: Annual Tonnages of FFB FFB Processed in Jan Dec Actual FFB Processed in Jan Dec Actual + Projected FFB Processed for Jan Dec Projected MT % MT % MT % 116, , , Non-certifiable FFB from OCP 118, , , Total 234, , , SCCS Model for POM MB MB MB The annual certifiable tonnages of CPO and PK production by KKS Sg. Tengi Grouping from the supply base / suppliers as assessed and verified during the current Main Assessment (based on Jan - Dec 2013 data) are detailed as follows: Table 7: Annual Certifiable Tonnages of CPO and PK POM Total Certifiable FFB Processed (MT) Total Certifiable CPO Production (MT) Total Certifiable PK Production (MT) Jan Dec Actual Jan Dec Actual + Projected Jan Dec Projected 116, , , ,354 % OER: 25,400 % OER: % OER: 25, ,599 % KER: % KER: % KER: 7,151 7, Note: Currently, the POM has established and maintained procedures for the book keeping and monitoring requirements for the CPO at the mill and was verified to be adopting the Mass Balance MB model in accordance with the RSPO Supply Chain Certification Standard (SCCS) requirements. Verified activities and checked items for the SCCS of the POM are reported in section Time Bound Plan for Other Plantation Management Units FGVPM Group operates 70 palm oil mills and 416 oil palm estates and schemes throughout Malaysia. The organization is a member of RSPO since 2004 and has been taking an active role in the RSPO certification. Currently, a significant number of its Certification Units is undergoing the RSPO certifying process in accordance with its time bound plan to achieve RSPO certification for all its plantation certification units by Based on the due diligence conducted on FGVPM there were no significant land conflicts, no replacement of primary forest or any area containing HCVs since Nov 2005, no labour disputes that are not being resolved through an agreed process and no evidence of non-compliance with law in any of the non-certified holdings. FGVPM Group had declared that there was no new planting and new acquisition of plantation lands and the progress of the said activities are ongoing. These have been reviewed and updated in the Time Bound Plan as submitted by FGVPM. Details of the status of the Time Bound Plan as submitted by FGVPM are referred to in Appendix E (Part 2 of Assessment report).

9 1.10 Abbreviations Used Page 9 of 66 BOMBA Fire Services Department ISCC International Sustainability & Carbon Certification CB Certification Body IUCN International Union for Conservation of Nature CHRA Chemical Health & Risk Assessment JAS Jabatan Alam Sekitar CPO Crude Palm Oil JKKP Jabatan Kesihatan dan Keselamatan Pekerja CSDS Chemical Safety Data Sheets KER Kernel Extraction Rate CSPO Certified Sustainable Palm Oil LTA Lost Time Accidents CSPK Certified Sustainable Palm Kernel MPOB Malaysia Palm Oil Board DOE Department of Environment MSDS Material Safety Data Sheets DOSH Department of Occupational Safety and Health MTCS Malaysia Timber Certification Scheme EFB Empty Fruit Bunch NCR Non-Conformance Report EHS Environmental Health & Safety NGO Non-Government Organization EIA Environmental Impact Assessment OCP Outside Crop Producers ETP Effluent Treatment Plant OER Oil Extraction Rate FASSB Felda Agricultural Service Sdn Bhd OHS Occupational Health & Safety FELDA Federal Land Development Authority PEFC Programme for the Endorsement of Forest Certification FFB Fresh Fruit Bunch PK Palm Kernel FGVPM Felda Global Ventures Plantations (Malaysia) Sdn Bhd PMU FTP Felda Technoplant Sdn Bhd POM Palm Oil Mill Plantation Management Unit GAP Good Agriculture Practice POME Palm Oil Mill Effluent HCV High Conservation Values PPE Personal Protective Equipment Intertek Intertek Certification International Sdn Bhd SCCS Supply Chain Certification Standard IPM Integrated Pest Management SOP Standard Operating Procedure

10 2.0 ASSESSMENT PROCESS Page 10 of Assessment Methodology, Plan and Site Visits Since 17 Jul 2014, Intertek has initiated public communications and notifications and invited the relevant stakeholders before the assessment to provide feedback and comments on their concern (if any) on KKS Sg. Tengi Grouping regarding the environmental, biodiversity, community development and other relevant issues. From 29 Sep to 02 Oct 2014, the Assessment team of Intertek conducted the Main Assessment in which two estates (viz., FELDA/FTP Gedangsa estate and FELDA/FTP Sg. Tengi Selatan estate) of KKS Sg. Tengi Grouping as well as the palm oil mill were assessed for compliance against the RSPO requirements. The number of estates sampled was based on a minimum sample of 0.8 y where y is the number of estates and the selection was made based on their potential risks on social, environmental and biodiversity issues such as their proximity to forest reserves, hill sides, riparian zones and high conservation value areas. Since the PMU consists of FTP Smallholders and FELDA Smallholders, a second level of sampling of smallholders was carried out for assessment as shown in Table 8 below in addition to the first level of sampling for the estates. The assessment carried out included a combination of field inspections and interviews of the sampled FTP and FELDA Smallholders. 1 st Level of sampling of estates Table 8 Sampling Plan of Estates and Smallholders FELDA/FTP Gedangsa estate FELDA/FTP Soeharto estate FELDA/FTP Sg. Tengi Selatan estate FELDA/FTP Sg. Tengi estate Sample size nd Level of sampling of estates No. of FTPS 575 No. of FS 6 No. of FTPS 575 No. of FS 78 No. of FTPS 139 No. of FS 0 No. of FTPS 324 No. of FS 232 Sample size Legend: FTPS = FTP Smallholders (managed by FTP) FS = FELDA Smallholders (smallholders managing their own plots within the FELDA Settlers Scheme) Note: Total no. of Smallholders in the PMU is During the on-site assessment, relevant documents and records, including Standard Operating Procedures (SOP), management plans, hectarage development, FFB, CPO and PK production, oil palm age profile, operational controls and measures, operational data and records, training records, etc. were reviewed and verified for compliance. The Assessment team using the process approach auditing technique covered the palm oil mill and estate operations, agricultural practices, pest management, pesticide and fertilizer application, occupational health and safety, social accountability, environment and other requirements. Stakeholders interviews were conducted during the assessment and feedback obtained as part of information and evidence gathering. (See section 2.5 Process of stakeholder consultation). KKS Sg. Tengi Grouping POM was also assessed against the requirements for the Mass Balance Module as specified in RSPO Supply Chain Certification Standard for CPO mill. This part of the assessment covered the verification of implementation of documented procedures and availability of records to demonstrate compliance against all the elements for Segregation requirements. These include documented procedure, purchasing and goods in, record keeping, sales and goods out, processing, monitoring and traceability of the CSPO and CSPK quantities, training for staff and claims. After completion of the on-site field assessment, Intertek also performed the evaluation of conformity against the RSPO Certification System requirements for CB. The assessment report, findings and associated documents were evaluated through an independent review by the Intertek Internal Technical Reviewer/Panel which was subsequently validated by an External Peer Reviewer prior to the certification decision and approval of this report/certification by Intertek. The details of the Assessment Plan (actual on-site) are provided in Appendix B.

11 2.2 Date of next scheduled visit Page 11 of 66 The next scheduled visit will be the Surveillance Assessment which will be carried out within a 12-month period after the certification decision and approval of this report/certification. 2.3 Qualifications of the Lead Assessor and Assessment Team Competency details of the Lead Assessor and Assessment Team are given in Appendix A. 2.4 Certification Body Intertek Certification International Sdn Bhd [formerly known as Moody International Certification (Malaysia) Sdn Bhd] is part of the Intertek Group, which is a worldwide technical services organization dedicated to reducing clients' risks by providing technical inspection services, management system certification in quality, environmental, occupational safety & health and product certification, RSPO P&C, RSPO SCC, ISCC, Marine Sustainability Chainof-Custody, MTCS and PEFC Chain-of Custody certification in applicable industry sectors including the agricultural and forestry sectors. Intertek operates globally providing clients with a wide-ranging technical inspection expertise and access to thousands of skilled specialists worldwide. Intertek Group s certification business is ranked in the top 10 worldwide, and is available globally offering certification across a wide range of industries. 2.5 Process of stakeholder consultation Stakeholder consultations began with notification of the upcoming assessment through the websites of RSPO, PGVPM and Intertek. Date of public notification of the main assessment of the PMU was made on 17 Jul s, facsimiles and letters of the same were sent to applicable stakeholders including government agencies, NGOs and local communities. Telephone enquiries were made prior to the actual assessment and stakeholder s response and feedback received were followed up accordingly. During the assessment, stakeholders were interviewed and their feedbacks were recorded. Among the stakeholders consulted were workers, trade union leaders, women representatives; local community leaders, representatives of government departments / agencies and NGOs; external FFB suppliers, fertilizer suppliers and contractors. Details on stakeholders feedback, PMU response and Intertek verification / comments are provided in section 3.3. Among the list of key stakeholders consulted was the following: Government Agencies (by s) 1. Department of Lands And Mines 10. Environment Protection Department Sabah 2. Department of Environment 11. Department of Forestry Sabah 3. Department of Forestry Peninsular Malaysia 12. Department of Immigration Sabah 4. Department of Immigration 13. Department of Irrigation & Drainage Sabah 5. Department of Irrigation & Drainage 14. Department of Labour Sabah 6. Department of Labour 15. Department of Occupational Safety & Health Sabah 7. Department of Occupational Safety & Health 16. Sabah Wildlife Department Sabah 8. Department of Orang Asli Affairs 17. Land and Mines Office Sabah 9. Department of Wildlife & National Parks Statutory Bodies (by s) 18. Malaysian Palm Oil Board (MPOB) 23. Malaysian Palm Oil Board (MPOB) - Sarawak Region 19. Malaysian Palm Oil Board (MPOB) Northern Region 24. Malaysian Palm Oil Board (MPOB) - Sabah Region 20. Malaysian Palm Oil Board (MPOB) - Central Region 25. Malaysia Palm Oil Association (MPOA) 21. Malaysian Palm Oil Board (MPOB) Southern Region 26. Malaysia Palm Oil Association Sabah (MPOA) 22. Malaysian Palm Oil Board (MPOB) - Eastern Region NGOs (by s) 27. All Women s Action Society (AWAM) 56. Malaysian Nature Society Pulau Pinang 28. BCSDM - Business Council for Sustainable Development in Malaysia 57. Malaysian Nature Society Sabah 29. Borneo Child Aid Society (Humana) 58. Malaysian Nature Society Terengganu 30. Borneo Resources Institute Malaysia (BRIMAS) 59. Malaysian Plant Protection Society (MAPPS) 31. Borneo Rhino Alliance (BORA) 60. Mountaineering and Outdoor Pursuits Association of Negeri

12 Page 12 of 66 Sembilan 32. Center for Orang Asli Concerns COAC 61. National Council of Welfare & Social Development Malaysia - NCWSDM 33. Centre for Environment, Technology and Development, Malaysia - CETDEM 62. National Union of Plantation Workers (NUPW) 34. Consumers Association Of Penang - CAP 63. Partners of Community Organisations (PACOS) 35. EcoKnights 64. Penang Institute previously known as Socio-Economic & Environmental Research Institute (SERI) 36. Environmental Management and Research Association of Malaysia (ENSEARCH) 65. Pesticide Action Network Asia and the Pacific (PAN AP) 37. Environmental Protection Society Malaysia (EPSM) 66. Proforest - South East Asia Regional Office 38. Friends of the Earth, Malaysia 67. R.E.A.C.H. - Regional Environmental Awareness Cameron Highlands 39. Future in Our Hands Society, Malaysia 68. Sabah Wetlands Conservation Society (SWCS) 40. Global Environment Centre 69. SEPA - Sabah Environmental Protection Association 41. HUTAN - Kinabatangan Orang-utan Conservation Programme 70. SUARAM - Suara Rakyat Malaysia 42. Institute of Foresters, Malaysia (IRIM) 71. SUHAKAM - National Human Rights Society - Persatuan Kebangsaan Hak Asasi Manusia 43. JUST - International Movement for a Just World 72. Sustainable Development Network Malaysia (SUSDEN) 44. Malaysian CropLife & Public Health Association (MCPA) 73. Tenaganita Sdn Bhd 45. Malaysian Environmental NGOs - MENGO 74. The Malaysian Forum of Environmental Journalist (MFEJ) 46. Malaysian National Animal Welfare Foundation - MNAWF 75. TRAFFIC Southeast Asia - Wildlife trade & trafficking monitoring programme 47. Malaysian Nature Society (MNS) Kuala Lumpur 76. Transparency International - Malaysian Chapter 48. Malaysian Nature Society Johor 77. Treat Every Environment Special Sdn Bhd. (TrEES) 49. Malaysian Nature Society Kedah 78. United Nations Development Programme - UNDP Malaysia 50. Malaysian Nature Society Kelantan 79. UNION - AMESU 51. Malaysian Nature Society Kuching 80. Water Watch Penang (WWP) 52. Malaysian Nature Society Melaka/Negeri Sembilan 81. Wetlands International (Malaysia) 53. Malaysian Nature Society Miri 82. Wild Asia Sdn Bhd 54. Malaysian Nature Society Pahang 83. World Wide Fund for Nature (WWF) Malaysia 55. Malaysian Nature Society Perak 84. World Wide Fund of Nature (WWF) Sabah Local community (On-site interviews) Gender representatives Workers representatives Suppliers / Contractors Village Heads

13 3.0 ASSESSMENT FINDINGS Page 13 of Summary of findings Principle 1: Commitment to transparency Criterion 1.1 Growers and millers provide adequate information to relevant stakeholders on environmental, social and legal issues relevant to RSPO Criteria, in appropriate languages and forms to allow for effective participation in decision making There shall be evidence that growers and millers provide adequate information on (environmental, social and/or legal) issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making Records of requests for information and responses shall be maintained. Major / Minor - TBF The PMU has established and implemented a documented procedure ML-1A/L2-PR3 (0) dated Mar 2012 for providing adequate information on environmental, social and legal issues relevant to RSPO Criteria to relevant stakeholders for effective participation in decision making. The procedure includes handling responses and requests from stakeholders. This was evident from following records: 1. Requests from universities for undergraduates training attachments, 2. Request for documents by contractors, 3. Visits, inspections and correspondence with stakeholders such as DOSH (JKKP), DOE (JAS), BOMBA, MPOB and Energy Commission ( Suruhanjaya Tenaga ). Date of public notification of the main assessment of the PMU was made on 17 Jul No request for information from stakeholders for this PMU. The PMU maintained an updated list (ML-1A/L4-F31 (0)) of internal stakeholders, external stakeholders, government departments/ agencies, consultants, contractors, suppliers, transporters. A Stakeholders Consultation with external stakeholders for the PMU was carried out on 08/08/2014. Public notification was made by the PMU to the stakeholders at least one month prior to the stakeholders consultation. Survey questionnaire from this stakeholders consultation were properly filed and summary of positive and negative feedback compiled in the Stakeholders Booklet Two negative feedback, viz., concerning easy access by hunters through the estates into the forest reserve and the need for FELDA/FTP to increase productivity for improving the economy of the settlers and reducing their debt. The POM and estates also conducted Stakeholders Consultation with internal stakeholders. Summary of the stakeholders feedback compiled from the completed survey questionnaire and action plans identified for implementation. The smallholders in the FELDA Settlers Scheme have agreements with FELDA. Up-to-date records of debts and repayments, charges and fees for smallholders. Copies of land title of smallholders with user rights verified to be in order in Gedangsa estate. Land titles in progress for smallholders in Sg. Tengi Selatan estate. Evidence of training in IPM and safe use of agrochemicals for smallholders. Following documents provided for smallholders: Health and safety plan.

14 Criterion 1.2 Plans and impact assessments relating to environmental and social impacts Pollution prevention plans. Details of complaints and grievances Negotiation procedures. Procedure for calculating prices, and for grading, FFB Continuous improvement plan Meetings between FELDA/ FTP and smallholders. Contracts between FTP and foreign workers are available. Meetings between POM and scheme smallholders representatives on oil extraction rate, quality of FFB and value. OCP applied to POM for approval to supply FFB to the mill. Page 14 of 66 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 Publicly available documents shall include, but are not necessarily limited to: Land titles/user rights (Criterion 2.2); Occupational health and safety plans (Criterion 4.7); The organization s policies declared that upon request, the following types of mandatory documents are available to the public: land titles/user rights, occupational health and safety plan, plans and impact assessments relating to environment and social impacts, pollution prevention plans, details of complaints & grievances, negotiation procedures continuous improvement plan Public summary of certification assessment report. These publicly available documents include key indicators of performance like waste management and disposal plans for the mill and estates. Also, Continual Improvement Action Plans include targets for waste reduction and pollution prevention. Copies of all land titles were available and have been maintained at the POM and Estates. HQ kept the original copies. FELDA/FTP have put in place the mechanism for the smallholders to comply with the following: - legal ownership of the land, - social and environmental requirements, - organizational and social activities, - documented management plans Occupational Safety and Health Plan 2014 documented and implemented. Policy and HIRADC documented for both mill and estates. OSHA Plan include the establishment and implementation of CHRA, medical surveillance, Fire Drill training, First Aid training, PPE training. POM certified to OSHA POM has conducted Emergency Preparedness (ERP). Safety Committee meetings held twice a year.

15 Page 15 of 66 Plans and impact assessments relating to environmental and social impacts (Criteria 5.1, 6.1, 7.1 and 7.8); HCV documentation (Criteria 5.2 and 7.3); Pollution prevention and reduction plans (Criterion 5.6); Details of complaints and grievances (Criterion 6.3); Negotiation procedures (Criterion 6.4); Continual improvement plans (Criterion 8.1); Public summary of certification assessment report; Human Rights Policy (Criterion 6.13). Criterion 1.3 Environmental aspect and impact assessment conducted for the POM and estates and its action plan documented and implemented. Social Impact Assessment carried out. Positive and negative impacts and action plan documented. Procedure Guidelines ML-1A/L3-GPS (0) for identification of HCV. HCV Identification Survey conducted on the PMU estates by Jabatan PSQM of FGVPM on 06/08/2014. No significant HCV area found in the PMU except for the part of the boundary of Gedangsa, Soeharto and Sg. Tengi estates bordering the Ulu Bernam Forest Reserve. Conservation areas are the streams/rivers Sungai Rambai and Sungai Dusun in Sg. Tengi and Soeharto estates respectively. Management Plan and Action Plan documented for HCV area and biodiversity in all the estates with specific actions to be taken by the Estate Manager / Assistant Manager. Inventory of RTE species on annual basis. Documented pollution prevention and reduction plans include measures for pollution control (smoke emission, POME / effluent discharge), pesticides reduction, schedule wastes (chemicals, used PPE, hydraulic oil) and domestic wastes disposal, reuse and recycling (paper, glass, scrap iron). The PMU has established and implemented a documented procedure ML-1A/L2-PR4 (0) dated Mar 2012 for complaints and grievances. As to date, the PMU has not received any complaints from external stakeholders. There is also Complaints Box provided in the mill and estates with a Complaints and Grievances Form for recording any complaints/ grievances. A Complaint Book ( Buku Aduan ) is also maintained in the POM and estates. For POM, one entry dated 28/08/2014 concerning grading of FFB. For Gedangsa estate, one entry dated 03/09/2014 from the nearby Sri Maha Mariaman temple. For Sg. Tengi Selatan estate, there was one entry dated 20/08/2014 from one smallholder concerning increasing the FFB yield. The PMU has established a documented negotiation procedure ML-1A/L2-PR1 (0) dated Mar No case of land claims in the PMU. The PMU has identified, documented and implemented Continuous Improvement Plans over the period 2013 to 2015 (ML-1A/L2-PR11 (0), dated Mar 2012). Public summary of certification assessment reports are available from the company upon request. The Human Rights Policy has been documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates.

16 Page 16 of 66 Growers and millers commit to ethical conduct in all business operations and transactions There shall be a written policy committing to a code of ethical conduct and integrity in all operations and transactions, which shall be documented and communicated to all levels of the workforce and operations. Major / Minor (TBF) The Policy of commitment to a Code of Ethical Conduct and Integrity has been documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates. There is a booklet containing details of Service Terms and Conditions and Code of Ethical Conduct and Integrity for Employees of Felda Group of Companies. Principle 2: Compliance with applicable laws and regulations Criterion 2.1 There is compliance with all applicable local, national and ratified international laws and regulations Evidence of compliance with relevant legal requirements shall be available. A Register of Legal and Other Requirements covering the applicable local and international laws and regulations had been compiled for the mill and estates. A Compliance Checklist is used by the mill and estates for verification of compliance with legal requirements. The relevant laws and legislations identified and listed cover safety and health, environment, pollution management, chemical handling, usage & storage, schedule waste management, labour laws, Unions, EPF, SOCSO, Housing and Amenities. There were no cases of any violation or actions imposed by relevant authorities. Statutory returns to relevant authorities found to be in compliance. Based on the site observations, interviews and records checking at the POM and estates, there were evidences of compliance with the relevant laws, regulations, local and international laws. Licenses and permits (License for Foreign Workers Employment, Workers Wages Deduction Permit, License for Controlled Items Diesel and Fertilizer, MPOB license, DOSH Certificate, DOE license, BOMBA Fire Certificate, Energy Commission License, etc.) were monitored for their expiry dates and found to be renewed and valid. Legal documents (work permits, passports) of foreign workers (Indonesian, Bangladesh). Insurance for foreign workers in estates under AXA Insurance. No foreign workers in POM. Environmental Quality Act 1974 and Environmental Quality (Scheduled Wastes) Regulations 2005: Scheduled wastes such as hydraulic and used motor oils, rags, empty chemical and lubricants containers collected at six monthly intervals by DOE licensed contractor (Alivirgo Sdn Bhd). Weight and Measures Act 1972, regulations 16, 28A, 45): The two weighbridges were duly calibrated. Factory and Machinery Act 1967, Regulations 1970: Steam engineers (Grade 1 and 2), boilermen and electricians were noted to be with valid certificates from relevant authorities (DOSH and Energy Commission). Valid certificates of fitness

17 Page 17 of A documented system, which includes written information on legal requirements, shall be maintained A mechanism for ensuring compliance shall be implemented. for boilers, sterilizers, air receivers, thermal deaerator, steam separator, vacuum oil dryer, etc. issued by DOSH. Valid license for diesel generators issued by Energy Commission ( Suruhanjaya Tenaga ). Valid licenses for authorized gas tester (ACT), authorized entrant and standby by person for confined space activities in POM. Occupational Health and Safety Act 1994: Safety and health meetings conducted at quarterly intervals. Noise Monitoring Report is available. The POM is certified by SIRIM for its Quality, Environment and Safety & Health Management Systems. FELDA and FTP have informed the smallholders concerning the relevant legal requirements and monitored their activities for continuing compliance with the relevant legal requirements. The PMU has established and implemented a documented procedure ML-1A/L2-PR2 (0) dated Mar 2012 for identifying, determining, reviewing and updating applicable legal and other requirements. It included the listing of laws and regulations that were being monitored for changes and reference. The procedure includes a monitoring mechanism of a regular check and evaluation for compliance against the applicable laws in the Legal Register. POM and estates have carried out the evaluation for ensuring compliance by completion of the Compliance Checklist on 25/09/2014 and 18/08/2014 respectively A system for tracking any changes in the law shall be implemented. Criterion 2.2 Tracking of changes in the relevant laws are communicated and received from HQ. Monitoring of changes to the applicable laws and regulations carried out through periodical review in accordance with the documented procedure ML-1A/L2-PR2 (0) dated Mar Latest update of laws and regulations in the Legal Register carried out on 31/07/2014. The right to use the land is demonstrated, and is not legitimately contested by local people who can demonstrate that they have legal, customary or user rights Documents showing legal ownership or lease, history of land tenure and the actual legal use of the land shall be available. Copies of the land titles of the mill and estates were maintained and found to be in proper order. Records are available to show that the land lease comply with legal requirements and does not infringe on any legal rights that require free, prior and informed consent (FPIC). The original copies are maintained by the Corporate Head office. The legal use of the land confirmed to be for cultivation of oil palm and agricultural use. FELDA and FTP have provided evidence of legal ownership of the land of the smallholders Legal boundaries shall be clearly demarcated and visibly maintained. It was verified that there has been no change to the stated land titles and designated use for cultivation of oil palm and agricultural use. Legal boundary markers were sighted and maintained along the perimeters of estate lands which were mapped with a 1-meter

18 Page 18 of Where there are or have been disputes, additional proof of legal acquisition of title and evidence that fair compensation has been made to previous owners and occupants shall be available, and that these have been accepted with free, prior and informed consent (FPIC). Major / Minor (TBF) There shall be an absence of significant land conflict, unless requirements for acceptable conflict resolution processes (see Criteria 6.3 and 6.4) are implemented and accepted by the parties involved. Major / Minor (TBF) For any conflict or dispute over the land, the extent of the disputed area shall be mapped out in a participatory way with involvement of affected parties (including neighbouring communities where applicable). Major / Minor (TBF) To avoid escalation of conflict, there shall be no evidence that palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Major / Minor (TBF) differential Global Positioning System (GPS). Land survey maps with boundaries of each settler marked on the map. Locations of boundary stones / markers identified. Locations of several boundary stones and pole markers verified to be within the boundary parameters of the estates. However, the maps provided by all the estates are of poor quality and did not show clearly the latitude and longitude. A Major Nonconformance was raised. There has been no dispute on the land rights in the PMU. As such, the process of fair compensation and FPIC is currently not applied. There is a documented procedure ML-1A/L2-PR 12 (0) dated Mar 2012 for handling and response to land disputes and customary rights. Procedure ML-1A/L2-PR 13 (0) dated Mar 2012 documented for calculation and distribution of compensation. Procedure ML-1A/L2-PR 1 (0) dated Mar 2012 documented for negotiation. No land disputes in the PMU. As such the process of participatory mapping is not applicable for verification of implementation. No evidence that the palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Major NC# OCL-01 Criterion 2.3 Use of the land for oil palm does not diminish the legal, customary or user rights of other users without their free, prior and informed consent Maps of an appropriate scale showing the extent of recognised legal, customary or user rights (Criteria 2.2, 7.5 and 7.6) shall be developed through participatory mapping involving affected parties (including neighbouring communities where applicable, and relevant authorities) Copies of negotiated agreements detailing the process of free, prior and informed Land title for POM land and smallholders verified to be in order. The lands are not encumbered by any customary lands or user rights and therefore the process of participatory mapping is not required. The smallholders lands are for oil palm cultivation or agriculture use. Records are available to show that the land lease comply

19 Page 19 of 66 consent (FPIC) (Criteria 2.2, 7.5 and 7.6) shall be available and shall include: a) Evidence that a plan has been developed through consultation and discussion with all affected groups in the communities, and that information has been provided to all affected groups, including information on the steps that shall be taken to involve them in decision making; b) Evidence that the company has respected communities decisions to give or withhold their consent to the operation at the time that this decision was taken; c) Evidence that the legal, economic, environmental and social implications for permitting operations on their land have been understood and accepted by affected communities, including the implications for the legal status of their land at the expiry of the company s title, concession or lease on the land All relevant information shall be available in appropriate forms and languages, including assessments of impacts, proposed benefit sharing, and legal arrangements. Major / Minor (TBF) Evidence shall be available to show that communities are represented through institutions or representatives of their own choosing, including legal counsel. Major / Minor (TBF) with legal requirements and does not infringe on any legal rights that require free, prior and informed consent (FPIC). No cases of land claims in this PMU. As such this process is not applicable for verification. This process is not applicable for verification. Not applicable Not applicable Principle 3: Commitment to long-term Economic & Financial Viability Criterion 3.1 There is an implemented management plan that aims to achieve long-term economic and financial viability A business or management plan (minimum three years) shall be documented that includes, where appropriate, a business case for scheme smallholders. Palm Oil Mill has documented a 3 years (2015 to 2017) Management Plan with details of budget and costs of operation that include the following: (1) Mill extraction rates = OER and KER trends; (2) Cost of Production = Cost/MT CPO trends; (3) Forecast prices; (4) Financial indicators = Cost of labour & services, cost of supplies and equipment, depreciation costs, salary costs, management costs, cost of materials, etc.). The estates have documented a 3 years (2015 to 2017)

20 Page 20 of An annual replanting programme projected for a minimum of five years (but longer where necessary to reflect the management of fragile soils, see Criterion 4.3), with yearly review, shall be available. Management Plan with details of budget and costs of operation that include the following: (1) Replanting program (planting materials DxP seedling and cloned seedling) not yet applicable; (2) Crop projection = FFB yield/ha trends; (3) Cost of Production = Cost/MT FFB trends; (4) Forecast prices; (5) Financial indicators = Cost of labour, cost of facilities, cost of materials, etc.). Crop and operation budget cover weeding, manuring, harvesting, collection and transporting, pruning, drains and roads. The budgets also include provisions for sustainability efforts and improvement programmes (environmental aspects on road maintenance, domestic waste collection, maintenance of buffer zones). Mill and Estate Managers monitor the operational performance against Key Performance Indications and targets (costs, FFB yields, quality, productivity, pesticides usage, fertilizers usage, etc). There is evidence of monitoring of costs against budget to achieve specified targets. Performances are discussed in the monthly meetings held at the PMU and issues and actions needed are recorded for follow up in the next monthly meeting. The records of these meetings were available and verified during the audit. Monthly, quarterly, half-yearly and yearly reports are submitted to the GM of Zone/Wilayah. FELDA and FTP have a documented two years management plan for the smallholders. Replanting Program for Gedangsa estate sighted. Only an area of ha to be replanted in year Evidence of the replanting program planned, reviewed and on-going implementation carried out. No replanting due for Sg. Tengi Selatan estate until year Principle 4: Use of appropriate best practices by growers and millers Criteria 4.1 Operating procedures are appropriately documented, consistently implemented and monitored Standard Operating Procedures (SOPs) for estates and mills shall be documented. POM has the following SOPs: 1. Palm Oil Mill Operation Manual (08/04/2010 and amendments) covering every station from the security gate for reception of FFB until the delivery of processed oil and POME management. 2. Laboratory Operation Manual (28/04/2011 and amendments). 3. Quality, Environmental and Occupational Health & Safety Manual and Procedures of Palm Oil Mill (24/02/210 and amendments). The SOP for pollution prevention includes measuring and monitoring mill effluents and waste disposal /.

21 recycling. 4. Procedure for Safe Work and Management of Safety and Health for Workers (14/07/2010 and amendments). The SOP for safe working practices in the POM includes hazards identification, risk assessment and control measures. The hazards include noise, chemicals, heat, fire, fuel spillage, working at heights, working in enclosed space, hot work, lightning, electrocution, machinery, etc. Control measures include the use of PPE, fire drill training, first aid training, etc.) and permit to work system for the mill. Records of Permit to Work including gas entry and stand-by permits issued by NIOSH to the competent personnel at the POM was verified to be maintained and found in order. 5. Supply Chain Procedure Doc No. FGVPM-RSPO SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill RSPO Supply Chain Certification System using the Mass Balance (MB) module. Page 21 of A mechanism to check consistent implementation of procedures shall be in place Records of monitoring and any actions taken shall be maintained and available, as appropriate. The estates have the following SOPs: 1. Sustainable Oil Palm Estate Operation Manual issued by FELDA Agricultural Services Sdn Bhd (FASSB) on 01/06/2012. The manual describes operational procedure of nursery practices, land preparation, planting practices, ground cover maintenance, roads, immature stage, harvesting, collection of bunches, manuring, pesticide application, pests & diseases control. The SOP for pesticides specifies safe working practices and application of pesticides. It includes annual medical surveillance for pesticides operators. 2. SOP for riparian zone management with specified buffer zones. Relevant Key Performance Indicators (KPIs) specified for quality, environment, safety and cost control. The mechanism to check the implementation of SOPs was available. Records had been kept by the staff concerned for each operation to monitor the procedure and progress of work and these records would be checked by the Assistant Manager and the Manager regularly. These records had been verified to indicate satisfactory implementation during the visit. The records of monitoring and the actions taken had been maintained for more than 12 months on the mill and estates concerned. These records had been verified to be satisfactory The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). The mill maintained record on the origins of all third-party sourced Fresh Fruit Bunches (FFB), and it had been verified to be satisfactory.. Criteria 4.2 Practices maintain soil fertility at, or where possible improve soil fertility to, a level that ensures optimal and sustained yield There shall be evidence that good agriculture practices, as contained in Standard Operating Procedures (SOPs), are followed to manage soil fertility to a level that ensures optimal and sustained GAP for minimization of soil erosion and maintenance of soil fertility is maintained via the frond stacking and fertilizer application as per the recommendation by the Agronomist from FELDA Agricultural Services Sdn. Bhd. These had been verified through the records for fertilizer.

22 yield, where possible. application and observation during field visit. Page 22 of Records of fertiliser inputs shall be maintained There shall be evidence of periodic tissue and soil sampling to monitor changes in nutrient status A nutrient recycling strategy shall be in place, and may include use of Empty Fruit Bunches (EFB), Palm Oil Mill Effluent (POME), and palm residues after replanting. Records of fertilizer application for both FTP Smallholders and FELDA Smallholders verified to be in order. Leaf and soil sampling and analysis had been carried out annually to determine the nutrient levels for fertilizer recommendations that aimed to sustain the long term soil fertility and nutrient efficiency. Records of the sampling and analysis had been verified to be satisfactory. Criteria 4.3 Practices minimise and control erosion and degradation of soils. At Sg. Tengi Selatan estate, EFB mulching had been carried out in mature area along the inter-row and around the circle in the immature palms. Records verified to be satisfactory. No EFB mulching at Gedangsa estate. There is no application of POME in the estates. The mill has installed a biogas plant that will be operational at end 2014 to produce methane gas from POME. The methane gas will be used for the generation of electricity or be bottled for sale Maps of any fragile/marginal soils shall be available A management strategy shall be in place for plantings on slopes between 9 and 25 degrees unless specified otherwise by the company s SOP A road maintenance programme shall be in place. Based on the soil maps, there was no fragile/marginal soil on the estates. Soils in the estates are bungor, gambut and colluviums series. Changes in soil nutrient status monitored on an annual basis through foliar and soil sampling and analysis. The Agronomist determines the annual fertilizer recommendations and there is evidence of implementation. The lands in the estates are mostly flat with only small areas of gentle slopes. Planting terraces constructed on land with slope more than 6 o. Leguminous cover also planted. Refer to on Replanting Program. The PMU implemented the Best Management Practices for erosion control during replanting or any activities involving earth disturbance. Steps taken for erosion control are soil stabilization, run-off control and sediment trapping to mitigate the disturbed earth entering waterways. The main roads leading to the estates are maintained by the Public Works Department (Government Department). The estates roads are in good overall condition. Road maintenance programme verified to be established and implemented Subsidence of peat soils shall be minimised and monitored. A documented water and ground cover management programme shall be in place Drainability assessments where necessary will be conducted prior to replanting on peat to determine the long-term viability of the necessary drainage for oil palm growing. Based on the estate soil maps, there was no peat soil on the estates as confirmed by auditor s on-site assessment Based on the estate soil maps, there was no peat soil on the estates as confirmed by auditor s on-site assessment...

23 4.3.6 A management strategy shall be in place for other fragile and problem soils (e.g. podzols and acid sulphate soils). Based on the estate soil maps and visit to the estates, there were no other fragile and problematic soils on these estates. There are records and monitoring of the areas where EFB was applied. Replanted areas also monitored. Criteria 4.4 Practices maintain the quality and availability of surface and ground water. Page 23 of An implemented water management plan shall be in place Protection of water courses and wetlands, including maintaining and restoring appropriate riparian and other buffer zones (refer to national best practice and national guidelines) shall be demonstrated Appropriate treatment of mill effluent to required levels and regular monitoring of discharge quality, shall be in compliance with national regulations (Criteria 2.1 and 5.6) Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored. Documented water management plan verified to be in place for the palm oil mill and estates. The plan includes steps such as soil stabilization, run-off control and sediment trapping to mitigate the disturbed earth entering waterways (streams/rivers in Sg. Tengi and Soeharto estates). There are no streams/rivers in Sg. Tengi Selatan and Gedangsa estates. Water samples were taken at six-monthly interval at the final discharge point of the palm oil mill effluent pond, and at upstream and downstream of waterways. Tests conducted for ph, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Analysis results meet the DOE requirements. The water supply for domestic use to staff, smallholders and workers housing is solely piped water from the water treatment plant operated by the water utility company. It is a requirement for the water utility company to ensure that tests are carried out on parameters to meet the Ministry of Health Specification for Drinking Water Quality. Rainfall data found to be monitored as part of the water management plan. Buffer zones had been maintained on both sides of rivers/streams in the estates as verified during on-site field inspection. No evidence of spraying around palms marked as boundary for the buffer zones. There was no construction of bunds/ weirs/dams across the main rivers or waterways passing through the estates. The water at the final discharge point of the palm oil mill effluent pond was analyzed at monthly intervals for ph, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. Analysis results meet the DOE requirements. BOD levels over the period Jan 2013 to Aug 2014 are below the limit specified by DOE, which is < 100 ppm. Water usage in the mill averaged at 1.01 m 3 /tonne FFB. The level of water usage is within the industry norm..... Criteria 4.5 Pests, diseases, weeds and invasive introduced species are effectively managed using appropriate Integrated Pest Management techniques Implementation of Integrated Pest Management (IPM) plans shall be monitored. IPM Plan includes the planting of beneficial plants and control of damage by rodents. Beneficial plants such as Turnera subulata are grown in the estates. Records of planting of new areas and maintenance of existing areas of beneficial plants and location maps are available. Records of rat baiting and barn owl census are available. No.

24 4.5.2 Training of those involved in IPM implementation shall be demonstrated. reported infestation by other pests (bagworms and rhinoceros beetle). Training records for staff on IPM implementation were available and verified to be satisfactory during on-site assessment. Training also conducted by FELDA/FTP for all smallholders. Criteria 4.6 Pesticides are used in ways that do not endanger health or the environment. Page 24 of Justification of all pesticides used shall be demonstrated. The use of selective products that are specific to the target pest, weed or disease and which have minimal effect on non-target species shall be used where available. Manual Lestari 1A Doc. No. ML-1A/L3-GP 1 (0) dated Mar 2012 Guidance Procedure for written justification in the use of agrochemicals was reviewed and found acceptable. The PMU has an Approved List of Pesticides registered under the Pesticide Board of Malaysia. The types of chemicals used are as follows: (1) Glyphosate isopropyl amine (41% a.i.) - Ecomax (2) Metsulfuron methyl (20% a.i.) Juru 20F (3) Paraquat dichloride (13% a.i.) - Paraquat (4) Triclopyr butoxy ethyl ester (32.1% a.i.) - Garlon (5) Glufosinate ammonium (13.5% a.i.) Basta Records of pesticides use (including active ingredients used and their LD50, area treated, amount of active ingredients applied per ha and number of applications) shall be provided Any use of pesticides shall be minimised as part of a plan, and in accordance with Integrated Pest Management (IPM) plans. There shall be no prophylactic use of pesticides, except in specific situations identified in industry s Best Practice Pesticides that are categorised as World Health Organisation Class 1A or 1B, or that are listed by the Stockholm or Rotterdam Conventions, and paraquat, are not used, except in specific situations identified in industry s Best Practice. The use of such pesticides shall be minimised and eliminated as part of a plan, and shall only be used in exceptional circumstances. Pesticides selected for use are those officially registered under the Pesticides Act 1974 (Act 149) and the relevant provision (Section 53A); and in accordance with USECHH Regulations (2000). Records of pesticides use (including active ingredients used and their LD 50, area treated, amount of a.i. applied per ha and number of applications) had been maintained and kept by FTP for the FTP Smallholders for a minimum of 5 years (2009 to 2014). However, there were no monitoring and records of application of pesticides by the FELDA Smallholders and hence it is not possible to determine the effectiveness of best practice in Integrated Pest Management. A Major Nonconformance was raised. It is the policy to minimize the use of pesticides in accordance with IPM plan. No prophylactic use of pesticides had been carried out at the estates for the period concerned. The pesticide reduction program is monitored on usage per hectare basis. Overall, it has shown a slight decline. Paraquat is still being used in the PMU. However, it is the policy of the FELDA Group to reduce the use of paraquat gradually and achieve zero usage by the end of Records on the usage of paraquat over 5 years were examined and it was found that there has been a decline in the amount used. The use of Highly Toxic Pesticides (HTP) such as paraquat was verified for compliance to Regulation 9 of the Pesticides Act 1974 as follows: - Paraquat found to be kept in a secured store room under lock and key as required. - Records of issuance of paraquat to pesticides operators were maintained and the hours worked by each worker using paraquat were monitored and recorded in Form II for HTP. - First Aid Kits found to be issued to all Mandores and Supervisors as per requirements of the 4 th Schedule of the Major NC # OCL-02..

25 Regulations. Field visits confirmed the availability of the First Aid Kits during pesticides spraying in the fields. - During field visits, portable signage boards noted to be displayed at areas of spraying activity as per requirements of Part II of the 5 th Schedule of the Regulations. Page 25 of Pesticides shall only be handled, used or applied by persons who have completed the necessary training and shall always be applied in accordance with the product label. Appropriate safety and application equipment shall be provided and used. All precautions attached to the products shall be properly observed, applied, and understood by workers (see Criterion 4.7) Storage of all pesticides shall be according to recognised best practices. All pesticide containers shall be properly disposed of and not used for other purposes (see Criterion 5.3). Pesticides shall be stored in accordance to the Occupational Safety and Health Act 1994 (Act 514) and Regulations and Orders, Pesticides Act 1974 (Act 149) and Regulations Application of pesticides shall be by proven methods that minimise risk and impacts Pesticides shall be applied aerially only where there is documented justification. Communities shall be informed of impending aerial pesticide applications with all relevant information within reasonable time prior to application Evidence of continual training to enhance knowledge and skills of employees and associated smallholders on pesticide handling shall be demonstrated or made available. (see Criterion 4.8). A valid permit for storage of hazardous waste was sighted. All pesticide operators (including the contractor s workers and smallholders) have attended training on the safe handling and application of pesticides in compliance with Regulation 22 of the Pesticides Act The appropriate safety and application equipment (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves, ear, overalls) had been provided and used by the pesticides operators. All precautions attached to the pesticides (MSDS) had been observed, applied and understood by the workers. Duration of work with paraquat recorded in Form II. The training programme and records had been verified to be satisfactory. The training include spraying technique, precautions and symptoms of symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems. The PMU has adequate facilities for mixing of pesticides and cleaning up after work. There are suitable storage areas for PPE. Storage of pesticides found to be kept under lock and key and its use in accordance with the Occupational Safety and Health Laws and Regulation 9 of the Pesticides Act Emergency shower and eye wash are available near the pesticides store in case of accidents. Used chemical containers were disposed by DOE licensed waste contractor. Material Safety Data Sheets (MSDS) are available in the store. The MSDS are in English and Bahasa Malaysia (understood by the workers). First Aid Kit was issued to all Mandores and Supervisors as per requirements of the 4 th Schedule of the Regulations. Pesticides had been applied using the Best Management Practices that minimize risk and impacts. The pesticide operators found to understand the use of the right nozzle, spray drift, spray quality and run-off. It is the policy of the company not to carry out any aerial application of pesticides. This policy has been followed by the PMU. The Annual Training Plan includes training on pesticides handling. All new pesticides operators were trained before being assigned to work with pesticides. In addition, based upon training needs, the existing pesticide operators (including the contractor s workers and smallholders) attended continual training to enhance their knowledge and skills on pesticides.....

26 Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3). handling. Information and safety precautions on the pesticides displayed on the notice board and next to the pesticides in the store. Scheduled waste of palm oil mill had been disposed of through a DOE licensed scheduled waste contractor. Records of scheduled waste collection at the mill verified to be satisfactory. Empty pesticide containers are triple rinsed and pierced for disposal as scheduled waste. Page 26 of Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demonstrated. At the Sg. Tengi Selatan estate, the pesticide operation is carried out by subcontractor s workers. There were no records of medical surveillance for these pesticide operators. Therefore, it is not possible to determine whether any of these workers have medical disorders or symptoms of toxic reaction and thus not fit for work with pesticides. A major Nonconformance was raised. Major NC # OCL-03 Pesticides operators were interviewed during field visits and feedback received that they do not have any symptoms of toxic reactions such as skin disorders, rashes, mouth and throat pain, breathing difficulties or nail problems No work with pesticides shall be undertaken by pregnant or breast-feeding women. Pesticide operators in the estates are all males. Verified from records, field inspections and interviews that no pregnant or breast-feeding woman had been offered work as pesticide operator. Criteria 4.7 An occupational health and safety plan is documented, effectively communicated and implemented.. The occupational health and safety plan shall cover the following: An occupational health and safety policy shall be in place. An occupational health and safety plan covering all activities shall be documented and implemented, and its effectiveness monitored All operations where health and safety is an issue shall be risk assessed, and procedures and actions shall be documented and implemented to address the identified issues. All precautions attached to products shall be properly observed and applied to the workers. OSH Policy found to be clearly displayed at POM and in the estates office. Adequate posters, regulations, newsletters were prominently displayed on notice boards. Interviewed workers demonstrated awareness towards occupational safety and health. Occupational Safety and Health (OSH) Plan in compliance with OSH Act and Factory Machinery Act had been documented and implemented. The Safety & Health Officer is in charge of safety and health planning, operation & coordination. Mill/Assistant Mill Managers and Estate Managers / Assistant Estate Managers are also directly involved. Risk assessment had been carried out on all operations where health and safety is an issue. Significant hazards determined and documented include noise exposure, pesticides/chemicals exposure, accident, fire. Procedures and actions implemented to mitigate the hazards. There was an assessment of noise levels in the POM conducted by NIOSH. The report dated 12 Aug 2024 identified the work areas with high noise levels, viz., boiler station, engine room and sterilization unit where noise level exceeded 85 db. Mill management have taken steps to reduce the noise levels by more frequent lubrication of machinery, reducing the exposure time to high noise and mandatory use of ear plugs and ear mufflers and ear plugs. Confirmed that annual audiometric test conducted for all mill.

27 Page 27 of All workers involved in the operation shall be adequately trained in safe working practices (see Criterion 4.8). Adequate and appropriate protective equipment shall be available to all workers at the place of work to cover all potentially hazardous operations, such as pesticide application, machine operations, and land preparation, harvesting and, if it is used, burning. staff and workers. Records were maintained. The workers checked did not suffer significant hearing disabilities. Baseline audiogram and occupational and medical history records of workers maintained. The latest audiogram was carried out in Jun Monitoring carried out by the Safety & Health Officer for any significant hearing loss. The employees exposed to high noise levels were interviewed. The workers are aware of the danger of hearing loss due to prolonged exposure to high noise. The workers knew about the complaints process and mechanism available. Permit to work system applied at the POM. Staff and workers have been trained and certified by NIOSH for gas entrant and stand-by involving work in confined space. It was verified that the mill and estates have provided the appropriate PPE (safety boots, safety helmets, rubber boots, cartridge masks, safety goggles, gloves, ear plugs, ear mufflers) and the associated training to address safety and health issues. An audit for determining compliance with the minimum standards had been conducted on all types of PPE used. Adequate fire extinguishers and hose reels found to be located at strategic locations, operational and maintained in good conditions. Location map of fire extinguishers is available. First Aid equipment was available at POM, estates and at worksites. Samples of First Aid box was checked and contents found to be complete and in usable order during field visit. Training for workers in First Aid was carried out in the mill and estates and records maintained. The POM and estates have established their accident reporting KPI and incident monitoring implemented. Training programme planned for year 2014 was consistently implemented. The programme includes training for all categories of workers. Evidence of adequate and appropriate training on safe working practices provided to: - workers exposed to machinery and high noise levels, - workers working in confined space, - harvesters - pesticides operators - manurers Training also provided on use of fire extinguishers and fire drill, awareness and understanding of MSDS/CSDS and first aid. Employees interviewed confirmed to be provided with safety training relating to their work at least once a year by the qualified Safety & Health Officer and training records are available. Evaluation carried out on each training programme to determine its effectiveness. The training content was revised periodically for improvement. The safety and health training on exposure to noise levels conducted by the qualified Safety & Health Officer complied with the requirements of the Factories and Machinery (Noise Exposure) Regulations. All staff and mill employees attended the training as indicated in the records maintained. The content of the training include the said provisions of the regulations, purpose and explanation of audiometric test, proper usage of ear plugs and ear mufflers, and consequence of hearing loss. Appropriate PPE had been provided to all workers at the place.

28 of work to cover all potentially hazardous operations. Page 28 of The responsible person/persons shall be identified. There shall be records of regular meetings between the responsible person/s and workers. Concerns of all parties about health, safety and welfare shall be discussed at these meetings, and any issues raised shall be recorded Accident and emergency procedures shall exist and instructions shall be clearly understood by all workers. Accident procedures shall be available in the appropriate language of the workforce. Assigned operatives trained in First Aid should be present in both field and other operations, and first aid equipment shall be available at worksites. Records of all accidents shall be kept and periodically reviewed All workers shall be provided with medical care, and covered by accident insurance Occupational injuries shall be recorded using Lost Time Accident (LTA) metrics. There are warning signs to use PPE (this includes helmet, safety boots, ear plugs, ear mufflers, etc.) displayed at appropriate work areas for the protection of safety and health. The responsible person (usually the Mandore) had been identified. Records of regular meetings between the responsible person and workers to discuss about health and safety had been verified to be satisfactory. Accident and emergency procedures had been written and briefed to staff, workers, contractors and visitors. Workers trained in First Aid were present in the mill and field operations. First Aid Kits were available at the worksites. Records on all accidents had been verified to be maintained satisfactorily. Quarterly review on accident cases had been carried out during quarterly meeting of Environment, Safety & Health (ESH). Medical care had been provided to all the workers. Local workers are covered by SOCSO, whereas foreign workers are covered by Foreign Workers Compensation Scheme with RHB Insurance (in Gedangsa estate) and Zurich Insurance (in Sg. Tengi Selatan estate). Records on Lost Time Accident (LTA) metrics had been verified to be satisfactory... Criteria 4.8 All staff, workers, smallholders and contract workers are appropriately trained A formal training programme shall be in place that covers all aspects of the RSPO Principles and Criteria, and that includes regular assessments of training needs and documentation of the programme Records of training for each employee shall be maintained. A formal Training Plan 2014 documented and implemented. This annual training plan was established based upon the training needs identified for various categories of staff and workers and their work functions. Trainings conducted include a formal training programme on all aspects of RSPO Principles and Criteria and the Supply Chain Certification System. The various trainings conducted and the training records maintained to be acceptable (also refer to 4.7.3). Records of training for each employee are available in POM and estates..

29 Principle 5: Environmental responsibility and conservation of natural resources and biodiversity Page 29 of 66 Criteria 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 continual improvement An environmental impact assessment (EIA) shall be documented Where the identification of impacts requires changes in current practices, in order to mitigate negative effects, a timetable for change shall be developed and implemented within a comprehensive action plan. The action plan shall identify the responsible person/persons This plan shall incorporate a monitoring protocol, adaptive to operational changes, which shall be implemented to monitor the effectiveness of the mitigation measures. The plan shall be reviewed as a minimum every two years to reflect the results of monitoring and where there are operational changes that may have positive and negative environmental impacts. The Environmental Aspect and Impacts Assessment were conducted and well documented. The assessment documents had included the identification of aspects from field activities that includes fertilizing, spraying, transportation of FFB, garbage disposal and also road maintenance. The report had also included the action plans and recommendations to mitigate the negative effects and to promote the positive ones such as construction of sewage and landfills, together with other conservation activities applicable to the PMU. The assessment has also included the participation from the smallholders under the FELDA Settlers schemes. There were no major changes to the identified impacts since the establishment of the documents above. Impacts such as smoke emissions, noise levels, POME and EFB management were verified at the POM. The Management plan for mitigation of environmental impacts, timeframe for action and responsible persons were not adequately followed up by the Estate managers. At the Sg. Tengi Selatan estate, no signage was placed at the swamp area identified and also the extent of the swamp area was not clearly demarcated. Also, there was no signage at the pond located near the village area to show the prohibited activities. At Felda Gedangsa estate, no demarcation of riparian zone for the conservation areas identified (such areas are not suitable for planting and left in its natural condition/state). At the palm oil mill, no signage was observed at the pond area located just outside the mill. A Minor Nonconformance was raised. The monitoring of the documented environmental improvement plans is ongoing. Implementation and monitoring of the documented environmental improvement plans will be reviewed on an annual basis scheduled at the 1 st quarter of the following year. The review will take into consideration the mitigation of negative impacts and promotion of positive ones such as the proper demarcation of buffer zone, clearing of overgrown natural vegetation and debris along the streams At both Sg. Tengi Selatan and Gedangsa estates, it was discovered that the disposal of plantation waste materials was not properly monitored and recorded. The waste materials, mostly fertilizer bags and plastics, were strewn everywhere. Monitoring and implementation of the environmental improvement plan were not adhered to. A Minor Nonconformance was raised. Minor NC # SH-01 Minor NC # SH-02 Criteria 5.2 The status of rare, threatened or endangered species and other 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 operations managed to best ensure that they are maintained and/or enhanced.

30 5.2.1 Information shall be collated in a High Conservation Value (HCV) assessment that includes both the planted area itself and relevant wider landscape-level considerations (such as wildlife corridors) Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate measures that are expected to maintain and/or enhance them shall be implemented through an action plan There shall be a programme to regularly educate the workforce about the status of these RTE species, and appropriate disciplinary measures shall be instituted in accordance with company rules and national law if any individual working for the company is found to capture, harm, collect or kill these species. HCV assessment was conducted by the Felda Sustainability Department HQ and documented in a report dated 06 Aug The assessment was done in collaboration and meetings with other agencies such as Jabatan Perhutanan, Jabatan Perhilitan, Jabatan Alam Sekitar, Felda Officer, Peneroka and also the local communities. There was no significant HCV area in the PMU. The HCV assessment has taken into consideration all aspects of environmentally sensitive areas such as ponds, streams, wildlife boundaries and was documented. Visits to site confirmed that the Sg. Tengi and Sg. Tengi Selatan estates are surrounded by palm oil estates. Part of Felda Gedangsa, Soeharto and Sg. Tengi estates border the Ulu Bernam Forest Reserve. Although no HCV areas found inside the PMU area, conservation areas/environmentally sensitive areas had been identified and being monitored. Conservation areas are the streams/rivers Sungai Rambai and Sungai Dusun in Sg. Tengi and Soeharto estates respectively. Management Plan and Action Plan documented for HCV area and biodiversity in all the estates with specific actions to be taken by the Estate Manager / Assistant Manager. The environmentally sensitive areas were documented and inspected on site. Regular patrols within the PMU were being carried out and findings recorded by the respective Estate Executives to monitor the conservation / buffer zone areas. Monitoring and control of any illegal hunting, fishing or collecting activities was also implemented. In addition, signage that prohibits hunting, fishing and water polluting activities were verified on-site at all the estates visited and found to have been satisfactorily maintained. The program to regularly educate the workforce and community about the status of these RTE species are also established with ongoing consultation with the relevant authorities. There is evidence of commitment to discourage any illegal or inappropriate hunting, fishing or collecting activities via the signage erected around the affected areas which prohibit such activities. However, Information on the rare, threatened and endangered species was inadequately disseminated to the workers and local communities at both Felda Sg. Tengi Selatan and Gedangsa estates. A Minor Nonconformance was raised. Page 30 of 66 Minor NC # SH Where an action plan has been created there shall be ongoing monitoring: The status of HCV and RTE species that are affected by plantation or mill operations shall be documented and reported; Outcomes of monitoring shall be fed back into the action plan Where HCV set-asides with existing rights of local communities have been identified, Management plans were established and monitoring outcomes were reviewed by the Estate Managers. There are no significant HCV or reported RTE at the Sg. Tengi Selatan and Gedangsa estates, as reported in the PQSM Report. Verification were also made during on-site assessment and found to be satisfactory. The overall management plan on the status of HCV/RTE of the Sg. Tengi plantation group was collated, reviewed and monitored by the HQ sustainability team and is ongoing. Verified that HCV set-aside is not applicable for this PMU. Not applicable

31 Page 31 of 66 there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. Criteria 5.3 Waste is reduced, recycled, re-used and disposed of in an environmentally and socially responsible manner All waste products and sources of pollution shall be identified and documented. Visits made to POM and PMU Sg. Tengi Selatan and Gedangsa estate showed that all waste products and sources of pollution were identified and documented. The documentation and identification of all the waste products such as scheduled waste, domestic waste, clinical waste and recyclable waste such as metal, plastic, mill waste and polluting materials e g. EFB, POME, stack emissions and boiler ashes were maintained and monitored at the POM. Scheduled Waste identified included spent hydraulic oil (SW 305), spent lubricant oil (SW 306), used chemical drums / containers (SW 409), used filters (SW 410), clinical waste (SW 404) and used batteries (SW 102) All chemicals and their containers shall be disposed of responsibly A waste management and disposal plan to avoid or reduce pollution shall be documented and implemented. At the mill, the disposal of used chemicals and containers were done in accordance with their schedule on waste management as planned. Stores for scheduled waste were inspected and audited at the POM and disposal was done by scheduled waste disposal company authorized and licensed by Department of Environment. Records on the disposal were well recorded and documented. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained at the POM. The mill and estates have established and documented waste management and disposal plans to avoid or reduce pollution. These operational plans covered the waste products and sources of pollution identified in the mill and estates. Recycling of crop residues / biomass i.e. EFB and POME had been implemented. EFB application plans and progress reports were verified to be satisfactory. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained. Segregation of wastes, i.e. domestic waste, general wastes and scheduled wastes was verified to be satisfactory. Proper storage areas were identified for the storage of the recyclable wastes at the mill and estates. Recycling bins of three different colour codes for specific recycle waste were available in the mill and estates and were used for solid waste segregation and recycling. Sewage from the staff, workers and smallholders housing goes to the sewage facility. Programme initiated to segregate organic waste from general waste. Organic waste is collected by the local authority. Scheduled waste disposal at the mill was done by an appointed contractor that is licensed by the Department of Environment. The solid waste management and disposal plan using

32 landfill were available at both the mill and estates. However, it was found to be poorly implemented and monitored. At the mill, there was no signage on safety and waste disposal placed at the area. The effluent pond operated by the mill also lack signage to indicate the prohibited activities in the area. Also, a heap of waste materials was found near the entrance to the mill. At both Sg. Tengi Selatan and Gedangsa estates, it was found that the wastes were scattered all over the places at the dumpsite and no proper segregation into organic and inorganic waste. A Minor Nonconformance was raised. Criteria 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised. Page 32 of 66 Minor NC # SH A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored. Monthly records of energy consumption of non-renewable and renewable fuel per metric tonne of palm product at the POM were available. It was verified that energy usage are being monitored at the POM for better control and comparison of trends. Apart from use of diesel for electricity, palm fiber was also used to generate electricity through steam turbine and boiler. The use of energy in the mill was monitored monthly to compare the energy usage against the production of CPO. Electricity generation was through steam turbine and boiler where palm fiber and PK shells were used as renewable energy/fuel on a 70:30 ratio basis. Criteria 5.5 Use of fire for preparing land or replanting is avoided, except in specific situations as identified in the ASEAN guidelines or other regional best practice There shall be no land preparation by burning, other than in specific situations as identified in the Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions Where fire has been used for preparing land for replanting, there shall be evidence of prior approval of the controlled burning as specified in Guidelines for the Implementation of the ASEAN Policy on Zero Burning 2003, or comparable guidelines in other regions. The Group policy of Zero open burning is enforced since July The estates had observed the policy of Zero open burning for replanting. Field inspections made at Sg. Tengi Selatan and Gedangsa estates showed no evidence of open burning. The PMU has adhered to the zero burning policy for replanting at the estates. During the audit, there were no replanting activities carried out in the Sg. Tengi plantation group. Also, there was no evidence of any burning of domestic waste at the housing line sites and at the sanitary landfills of the estates during on site field assessment. Sanitary landfill was located at both Sg. Tengi Selatan and Gedangsa estates. The area is located far away from the village and water sources. Criteria 5.6 Plans to reduce pollution and emissions, including greenhouse gases, are developed, implemented and monitored An assessment of all polluting activities shall be conducted, including gaseous emissions, particulate/soot The PMU had carried out an environmental impact assessment and identified the potential polluting activities at the POM and estates that include discharge to waterways, gaseous emissions

33 Page 33 of 66 emissions and effluent (see Criterion 4.4) Significant pollutants and greenhouse gas (GHG) emissions shall be identified, and plans to reduce or minimise them implemented A monitoring system shall be in place, with regular reporting on progress for these significant pollutants and emissions from estate and mill operations, using appropriate tools. to air and contamination on land. Monitoring of mill dust particulates and gas emissions is being done online using the Continuous Emissions Monitoring System (CEMS) and supported by the Ringlemann Smoke Chart. Report showed evident that the emission is within the permissible limits of DOE as verified by documents made available during the on site visit to the mill. POME treatment, monitoring and land application is monitored, maintained and adhered to the DOE regulations. Monitoring of noise levels at the mill has been carried out. Noise levels at the boiler station and the sterilization unit were identified to be above 85 db. Ear mufflers have been issued and seen to be worn by workers at those locations As documented in the HIRAC table, PPE use and audiometric examination used as control measures to prevent hearing loss of mill workers. Identification of significant pollutants and greenhouse gas (GHG) emissions has been done. e.g. POME, diesel / fuel and fertilizer. Their usage have been recorded and documented at both the PMU. However the plans to further reduce or minimise GHG emissions are still yet to be established and implemented. This will be followed up during the next surveillance Monitoring and reporting of the significant pollutants to water, gaseous emissions to air and contamination on land are in place. Tools and systems used include the DOE online CEMS monitoring for air emissions, water quality at discharge points as per DID regulations and SW disposal were adhering to DOE requirements Water samples were regularly taken every six months and tested by mill environment officer in charge and analyzed to ensure compliance to DOE requirements at the final discharge point of the palm oil mill effluent pond and at upstream and downstream of waterways. The water samples were sent to Felda Analytical Laboratory for analysis. Test reports were maintained and results verified to have met the permissible regulatory limits for ph, BOD, COD, Total Solids, Suspended Solids, Oil & Grease, Ammoniacal Nitrogen and Total Nitrogen. New requirement of RSPO P&C (2013) - Follow up action at next ASA. Principle 6: Responsible consideration of employees and of individuals and communities affected by growers and millers Criteria 6.1 Aspects of plantation and mill management that have social impacts, including replanting, 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 continual improvement A social impact assessment (SIA) including records of meetings shall be documented. The Social Impact Assessment (SIA) based on an external stakeholder consultation dated 8 Aug held at Dewan Orang Ramai Sungai Tengi for the whole PMU was verified. At individual estate and POM levels management plan and

34 6.1.2 There shall be evidence that the assessment has been done with the participation of affected parties Plans for avoidance or mitigation of negative impacts and promotion of the positive ones, and monitoring of impacts identified, shall be developed in consultation with the affected parties, documented and timetabled, including responsibilities for implementation. Major / Minor - TBF The plans shall be reviewed as a minimum once every two years and updated as necessary, in those cases where the review has concluded that changes should be made to current practices. There shall be evidence that the review includes the participation of affected parties. continuous improvement plans were prepared based on internal survey activities. For example, such plans were verified at Sg. Tengi Selatan estate dated 13 Jan signed by Shahari Abd. Rahman, Manager and in Gedangsa estate dated 19 Jul signed by Mokhtaudin Ismail, Manager. The participation of both internal and external stakeholders which was evident with the list of participants recorded. Minutes of meetings as appended to the SIA Report were maintained as records. List of stakeholders were verified and included Felda scheme smallholders, Orang Asli communities, school teachers, auxiliary police, government bodies, neighbouring estates and small holders, management staff and workers (including representative of migrant workers, i.e. Indonesians), contractors/suppliers and health clinic staff. Total participants at the external stakeholder consultation held on 9 Jan was 29 people. Questionnaire of internal survey activities conducted by each audited estate were also verified. For example in Gedangsa estate, around 50 participants have completed the questionnaire mentioned above. The social documents had plans for avoidance or mitigation of negative impacts, such as continued monitoring of the level of smoke emission from the mill, lack of suitable work opportunities for Felda second generation through KESIDANG. The plans also promoting the positive ones such as targeting higher education achievement of school children. The management of estates and mill also monitored the impacts identified, developed in consultation with the affected parties, especially Felda settlers. Estate managers are the person identified to ensure proper monitoring of these activities. The plans developed by the estates audited are their first plans and the PMU has planned to review these plans every year for follow-up and updating to current practices. Such review will include the participation of affected parties. Page 34 of Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). Positive impacts such as increased work opportunities, increased income and improved living standards were identified. Criteria 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 Consultation and communication procedures shall be documented. Policy on internal and external communication and consultation, i.e, Polisi Komunikasi dated 1 Jun and signed by Datuk Faizoul Ahmad,, is available. In the estates, where there are Felda Scheme Smallholders, at least 3 different meetings conducted every month between the Felda management office and the Scheme Smallholders. Channels of communications between the management and affected or interested parties include the Joint Consultative

35 Page 35 of A management official responsible for these issues shall be nominated A list of stakeholders, records of all communication, including confirmation of receipt and that efforts are made to ensure understanding by affected parties, and records of actions taken in response to input from stakeholders, shall be maintained. Committee (JCC), gathering with Felda Scheme Smallholders, Jawatankuasa Kemajuan dan Keselamatan Kampung/Rancangan (JKKR), Gerakan Persatuan Wanita (GPW), monthly roll call, Wednesday visit. All of these meetings and gatherings were conducted frequently. For example, latest JCC meeting was conducted on 4 Sep 2014, monthly settlers roll call was last conducted on 8 Sep 2014 and latest Wednesday visit in Sg. Tengi Selatan estate (Blok 5/Peringkat 2 involving 8 houses) were conducted on 25 Sep Other than meetings and gatherings, smallholders and affected parties also have access to workplace inspections, suggestion boxes, housing maintenance request forms to raise their concerns. Estate managers are the nominated persons responsible for communication with the stakeholders. The organization has a list of stakeholders including local authorities, government departments, suppliers and contractors. Organisation charts show that different responsible persons are nominated to communicate with different sectors of stakeholders, e.g. Abd. Hatta Hj. Nawi at the Sg.Tengi Selatan estate with appointment letters dated 2 Jan signed by Shahari Abd. Rahman, Manager. Nik Junainah Nik Aziz, ASDO, Gedangsa estate with appointment letter dated 9 June 2014 signed by Mokhtaudin Ismalil Manager. Interviews with mill and estate managers verified the understanding of their roles and responsibilities. List of stakeholders sighted and properly filed. Copies of these stakeholders lists were also filed at regional office. Internal stakeholders may raise their concerns through different communication channels as mentioned in External stakeholders may specifically raise their concerns through suggestion boxes and complaint form, i.e. Rekod Pertanyaan Dan Maklumbalas provided by the PMU. There were records sighted where external stakeholders communicated with the PMU with some specific requests, e.g. donations. All these requests were responded and records maintained properly. Criteria 6.3 There is a mutually agreed and documented system for dealing with complaints and grievances, which is implemented and accepted by all affected parties The system, open to all affected parties, shall resolve disputes in an effective, timely and appropriate manner, ensuring anonymity of complainants and whistleblowers, where requested Documentation of both the process by which a dispute was The PMU has an established and documented system for dealing with complaints and grievances and it was implemented through Manual Lestari 1A [ML-1A/L2-PR4(0)]. There were no cases reported in Respect of anonymity and protection of complainants is provided through Polisi Pemberian Maklumat [Whistleblowing] dated 1 Aug signed by Tajuddin Carrim, Pengarah Eksekutif Kanan, Human Resources. The records in the Complaints and Grievances Book showed that the mill and estates showed that this process is still active in recording complaints/requests made by employees and Scheme Smallholders. For example latest entries were on 20 Aug in Sungai Tengi Selatan estate from Mahmud Mansur and on 3 Sept in Gedangsa estate nearby Sri Maha Mariaman temple. Complaints and grievances are handled by respective

36 resolved and the outcome shall be available. responsible persons. Outcomes from the actions taken were recorded in different ways, e.g. meeting minutes, payment vouchers to contractors, discussions and explanation to affected parties. Page 36 of 66 Criteria 6.4 Any negotiations concerning compensation for loss of legal, customary or user rights are dealt with through a documented system that enables indigenous peoples, local communities and other stakeholders to express their views through their own representative institutions A procedure for identifying legal, customary or user rights, and a procedure for identifying people entitled to compensation, shall be in place A procedure for calculating and distributing fair compensation (monetary or otherwise) shall be established and implemented, monitored and evaluated in a participatory way, and corrective actions taken as a result of this evaluation. This procedure shall take into account: gender differences in the power to claim rights, ownership and access to land; differences of transmigrants and long-established communities; and differences in ethnic groups proof of legal versus communal ownership of land. The PMU had documented the procedure for handling and response to land disputes and customary rights and for identifying people entitled to compensation [ Prosedur Mengenalpasti Hak Adat (ML-1A/L2-PR12 (0) ]. No cases requiring any negotiation or compensation pertaining to these criteria. There have been no changes in this status as at the period of verification on site. Procedure ML-1A/L2-PR 13 (0) dated Mar 2012 documented for calculation and distribution of compensation and Procedure ML- 1A/L2-PR 1 (0) dated Mar 2012 documented for negotiation. There were no borders which were directly adjacent to any villages or native land with the FELDA Scheme Smallholders. The FELDA Scheme Smallholders operations are based on approval from federal government. To date, there had been no dispute by any parties relating to legal, customary or user rights The process and outcome of any negotiated agreements and compensation claims shall be documented, with evidence of the participation of affected parties, and made publicly available. There had been no dispute by any parties relating to legal, customary or user rights at the PMU. There have been no changes in this status as at the period of verification on site. Criteria 6.5 Pay and conditions for employees and for contract workers always meet at least legal or industry minimum standards and are sufficient to provide decent living wages Documentation of pay and conditions shall be available. Only local workers are hired at the Sungai Tengi POM and in all the estates offices. However, FTP and other contractors providing agricultural services to the Scheme Smallholders hired both local and foreign workers. Documentation and conditions of pay for foreign workers at the FTP and for local workers at the estates offices are available for verification. Employment agreement with foreign workers, who are mostly from Indonesia, stated all statutory fringe benefits and eligible incentives, e.g. working hours, overtime, leave and medical benefits, maternity leave for women, insurance coverage, deductions, resignation notice period, company rules. The payment slips for foreign workers at the FTP sighted are easy to understand. However, interviewed foreign workers

37 Page 37 of 66 commented that the payment slips lack some details, especially number of days they really worked in a month versus number of days offered by the management as stated in the payment slips. The estate management advised that workers who have this issue should come to the office to obtain further clarification. Payments are made latest by 7 th of each month and consistent with Minimum Wage Order 2012 as well as MAPA-NUPW collective agreement. Five local and foreign workers found to receive less than RM in Gedangsa estate in Aug 2014 due to non-attendance for work. The local workers are given warning letter for non-attendance dated 29 Aug and the foreign workers are new intakes. Holidays entitlements as required by the laws are satisfactorily fulfilled, e.g. annual leaves, public holidays and maternity leaves for local female workers. Payments for unused annual leaves in Dec 2013 were sighted at FTP office Labour laws, union agreements or direct contracts of employment detailing payments and conditions of employment (e.g. working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice, etc.) shall be available in the languages understood by the workers or explained carefully to them by a management official. Offer letters and signed Pengakuan Penerimaan Syarat-syarat Perkhidmatan Petugas Syarikat Kumpulan Felda & Kod Etika dan Tatalaku Petugas Syarikat Kumpulan Felda yang berkuatkuasa Mulai 1 Jani 2010 for local workers were sighted. Documented employment contracts, i.e. Surat Perjanjian Pekerjaan diantara Felda Global Ventures Plantations (M) Sdn. Bhd. ( H) dengan Pekerja Asing Indonesia for foreign workers hired by FTP were sighted during the audit. The contract document covers all issues such as working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, reasons for dismissal, period of notice and was made available in Bahasa Malaysia, which is understood by the workers. However, the policies relating to annual leave for the FGVPM and FTP staff are not in compliance with national law as explained below: 1. According to policy, POM and Felda TechnoPlant staff are allowed to carry forward a maximum of seven days of unused annual leave to the following year. Any extra unused annual leave is considered forfeited. 2. According to policy, all allowable unused annual leave carried forward by POM and Felda TechnoPlant staff to the following year must be utilized before end of March of that year. The above policies are not in compliance to the Employment Act 1955, 62E (2) where it is stated that workers are allowed to carry forward unlimited number of days of annual leave to the following year and valid until end of December of that year. A Major Nonconformance was raised. Contracts awarded to contractors did not specifically mention that all workers hired enter and work in the country legally. Assessment manual of contractors during tender period also did not specifically mention that status of the workers hired by the contractors must be legal. An observation was raised. Major NC # JMD-02 Obs # JMD-01

38 Page 38 of Growers and millers shall provide adequate housing, water supplies, medical, educational and welfare amenities to national standards or above, in accordance with Workers Minimum Standard of Housing and Amenities Act 1990 (Act 446) or above, where no such public facilities are available or accessible (not applicable to smallholders). Site visits to FTP workers quarters as well as the Scheme Smallholders housing and interviews with their dependents revealed their general satisfaction with their housing conditions and amenities. Housing, electricity and water supply All Felda staff and Scheme Smallholders are provided with proper housing and sufficient pay-per-use 24-hour electricity and water supply. Foreign workers hired by FTP in Gedangsa estate are accommodated in cabin quarters but plan has been made to upgrade the cabin into a proper housing. Electricity and water supply at the FTP foreign workers cabin quarters are provided free. The water supply to the workers accommodation is piped water from the treatment plant maintained by the water utility company. Rubbish at Felda staff quarters and Scheme Smallholders are collected twice a week. In Sugnai Tengi Selatan, rubbish at FTP foreign workers cabin quarters is managed by the foreign workers themselves by collecting and transporting the rubbish to the landfill daily. However, it was found in both Felda Sg. Tengi Selatan and Gedangsa estates, the records of weekly workers housing inspection were not maintained. Maintenance of this record is stipulated under Workers Minimum Standards of Housing And Amenities Act 1990 [Act 446], 23(2). A Major Nonconformance was raised. Major NC # JMD-03 Schools For local children, includes children of Felda staff and Scheme Smallholders, there are government primary, secondary and religious schools in the vicinity of the PMU. Sundry shops Sundry shops and other facilities are available in the vicinity of the PMU, e.g. fresh market, night market, restaurants and other eating places. Furthermore, small towns, such as Tanjung Malim, are only half an hour drive from the estates. Crèche ( Rumah Asuhan Kanak-kanak) Government managed kindergartens, i.e. Tadika KEMAS, are available in all estates visited for pre-school children Growers and millers shall make demonstrable efforts to monitor and where able, improve workers access to adequate, sufficient and affordable food. Medical clinics A government managed clinic is available at the vicinity of the PMU. Medical allowance limit for married Felda staff is RM400/year and bachelor staff is RM200/year. FTP foreign workers are entitled for RM200/year of medical allowance. Transport to and from the clinics are provided free for Felda staff and FTP foreign workers. FTP foreign workers are covered by insurance underwritten by Zurich Insurance. Currently all application and renewal processes are managed by FTP Trading on behalf of the estates. Food for the Felda staff, Scheme Smallholder and FTP foreign workers provided through sundry shops at the vicinity of the PMU. Most of the sundry shops are operated by the Scheme Smallholders. Furthermore, small towns, such as Tanjung Malim which are only half an hour drive from the estates.

39 Page 39 of 66 Criteria 6.6 The employer respects the rights 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 A published statement in local languages recognising freedom of association shall be available Minutes of meetings with main trade unions or workers representatives shall be documented. Criteria 6.7 Children are not employed or exploited. The published statement of policy Kebebasan Menganggotai Kesatuan/Khidmat Sukarela, dated 28 Jun 2011 signed by Dato Dzulkifli Abd. Wahab, Pengarah Besar Felda, that recognises the employee s freedom of association, was found to be available and widely displayed in all notice boards of the PMU. This policy is available in Bahasa Malaysia which can be understood by majority of the workers. All non-executive Felda staff are members of Kesatuan Pekerja-Pekerja Felda Palm Industries Sdn. Bhd. and all executives staff are members of Persatuan Kakitangan Kanan Felda [PKKF]. Membership fees are between RM5-10 through monthly salary deduction. Currently no workers union for foreign workers nor any foreign workers having membership with National Union of Plantation Workers [NUPW]. Any grievances from the foreign workers are communicated directly to their immediate supervisors. Both unions mentioned above meet annually. Last record of Kesatuan Pekerja-Pekerja Felda Palm Industries Sdn. Bhd. meeting was on 17 Jun 2014 for Persatuan Kakitangan Kanan Felda [PKKF] There shall be documentary evidence that minimum age requirements are met. The PMU has a policy of not employing child labour, i.e. persons below 18 years old in accordance with Employment Act 265 as evidenced in Polisi Pekerja Kanak-Kanak, dated 20 Dec signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. This policy is displayed at strategic public places. Employees and workers profile were examined during the audit. No underage workers found. This fact was further verified through interviews with staff and workers in the PMU. The school going children of smallholders are not allowed to assist in plantation work and this was verified during field visits. Criteria 6.8 Any form of discrimination based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, or age, is prohibited A publicly available equal opportunities policy including identification of relevant/affected groups in the local environment shall be documented. The PMU has a publicly displayed documented policy on equal opportunities, i.e. Polisi Kesetaraan Peluang, dated 20 Dec 2010, signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. The policy stressed on non-discrimination based on race, caste, nationality, religion, gender, sexual orientation, disability/handicap, and union/political affiliations. However, positive discrimination for the benefit of certain society groups may be allowed after consultation. During the audit, second generation of the original Scheme Smallholders found managing some of their parents plots of lands. None of them found to be underage. Passports of the foreign workers were also checked to verify

40 Page 40 of Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against. that all workers are of the allowed working age and this was found to be in compliance. Felda has followed the Polisi Pengambilan Pekerja Asing 1 Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. The employment of foreign workers was implemented without affecting the opportunities for local communities. FTP provides agricultural services to Scheme Smallholders and hired foreign workers legally. Local workers at Sungai Tengi Selatan POM and the Felda estate offices are covered under SOCSO scheme, whilst, migrant workers working for FTP are covered under Foreign Workers Compensation scheme (FWCS) underwritten by Zurich Insurance. Insurance covers sighted are still validity at least until May It shall be demonstrated that recruitment selection, hiring and promotion where relevant are based on skills, capabilities, qualities, and medical fitness necessary for the jobs available. Interviews with FTP foreign workers revealed satisfaction with the PMU for job opportunities and they enjoy all common welfare amenities like free housing, free water and electricity supplies and medical care. They are aware that their grievances can be raised through various channels, especially the regular roll call meetings they are attending every morning. Depending on the nature of work positions, the PMU management takes into considerations the needs for technical qualifications/experience and related skills in recruitment selection, hiring and promotion exercises. It was verified that the promotions to higher position at the estates and POM were based on evaluations which considered the skill, capabilities, qualities and medical fitness of the employees. Criteria 6.9 There is no harassment or abuse in the work place, and reproductive rights are protected A policy to prevent sexual and all other forms of harassment and violence shall be implemented and communicated to all levels of the workforce. A documented policy to prevent sexual harassment and violence Polisi Gangguan Seksual dan Keganasan is available and publicly displayed, i.e. Polisi Gangguan Seksual Dan Keganasan, dated 1 Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah Besar Felda. Gender committees or equivalent were formed, i.e. Kelab Keluarga Dayabudi [KKD] in the POM and Gerakan Persatuan Wanita [GPW] at the estate level. At the group level, Jawatankuasa Bertindak Wanita was formed. All committee members are aware of the policy and its complaints procedures A policy to protect the reproductive rights of all, especially of women, shall be implemented and communicated to all levels of the workforce. Briefing sessions on sexual harassment issues were only delivered to committee members such as KKD, GPW and Jawatankuasa Bertindak Wanita. These briefing sessions did not include all the relevant parties such as male workers, contractors, settlers and youths. A Major Nonconformance was raised. The PMU s commitment to protect the reproductive rights and rights to have a family of the workers especially women is evidently stated in the policy to prevent sexual harassment and violence, i.e. Polisi Gangguan Seksual Dan Keganasan, dated 1 Jun 2014 signed by Datuk Faizoul Ahmad, Pengarah Besar Major NC # JMD-01

41 6.9.3 A specific grievance mechanism which respects anonymity and protects complainants where requested shall be established, implemented, and communicated to all levels of the workforce. Felda. Local female staff is fully aware that they are entitled for two months paid maternity leave. However, there was no female Felda staff eligible for maternity leave in year 2013 and Complaint and grievance procedures Prosedur Menangani Aduan dan Rungutan dan Polisi Pemberian Maklumat / whistle blowing are available to manage grievances and complaints from internal and external stakeholders. Management confirmed that so far there has been no report of sexual harassment in the PMU. Criteria 6.10 Growers and millers deal fairly and transparently with smallholders and other local businesses. Page 41 of Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available Evidence shall be available that growers/millers have explained FFB pricing, and pricing mechanisms for FFB and inputs/services shall be documented (where these are under the control of the mill or plantation) Evidence shall be available that all parties understand the contractual agreements they enter into, and that contracts are fair, legal and transparent Agreed payments shall be made in a timely manner. Onsite audit verified that the current and past prices paid for FFB pricing were displayed at the Mill and Estate offices. FFB price paid per delivery is also stated in each truck delivery slip issued by the mill as reference for the smallholders. Pricing mechanism for FFB is fair and transparent. Price of FFB was set based on MPOB approved price. FFB was also graded by licensed graders based on MPOB specification. Training attended and results of the test taken by the licensed graders, e.g. Zabil B. Lebai Saaban and Anhar B. Ahmad attended the training in 2012 and Mohd.Azmi Anuar attended the training in 2010, were verified to be in order. Stakeholder interviews conducted during this assessment with suppliers, contractors, and relevant parties including local and foreign workers confirmed that they understand the contractual agreements (such as terms and payment) entered into with the PMU. They also considered the business transactions as fair and transparent. Agreed payments are made promptly within the 30 th day of the following month. Through interviews made, there is no evidence to suggest of any unfair business practices with the local businesses. This was also verified with the stakeholders who attended the consultation conducted during the audit. Criteria 6.11 Growers and millers contribute to local sustainable development where appropriate Contributions to local development that are based on the results of consultation with local communities shall be demonstrated Where there are scheme smallholders, there shall be evidence that efforts and/or The PMU s contribution towards local communities had been evidenced in several social areas and verified during on site visit as follows: Free tuition and quran reciting lesson for children of Felda staff and smallholders Allocation for educational budget to schools in the vicinity of the PMU as incentives for high achievers At the time of the audit, over 20 KESIDANG applications have been received from second generation of Felda Sg. Tengi Selatan and Felda Sg. Tengi. Felda through its subsidiary, FTP, has taken steps and making more efforts to improve the productivity of the smallholders

42 resources have been allocated to improve smallholder productivity. Criteria 6.12 No forms of forced or trafficked labour are used. while adhering to RSPO P&C. It was noted that there are smallholders, who opted to manage their plots of lands on their own especially after the land titles have been transferred into their individual names. Page 42 of There shall be evidence that no forms of forced or trafficked labour are used Where applicable, it shall be demonstrated that no contract substitution has occurred Where temporary or foreign workers are employed, a special labour policy and procedures shall be established and implemented. Criteria 6.13 Growers and millers respect human rights. Audit of employment records such as work permits in the estate offices confirmed that all migrant workers were recruited through legal means and according to the regulatory requirements. Unit Tenaga Kerja, FELDA Global Ventures [FGV] is the main unit organising recruitment of new foreign workers in collaboration with private recruitment agencies in the country of origin. The PMU is responsible to allocate each foreign worker with suitable accommodation and offer them sufficient work each month. There was no evidence of contract substitution and this was confirmed from interviews with workers and relevant stakeholders. The special policy on recruitment of foreign workers Polisi Pengambilan Pekerja Asing and equal opportunities Polisi Kesetaraan Peluang are established and their implementations verified to be satisfactory. Review on employment contracts of foreign workers also confirmed that the policies, including minimum wages have also been duly implemented A policy to respect human rights shall be documented and communicated to all levels of the workforce and operations (see Criteria 1.2 and 2.1). The Human Rights Policy has been documented and signed by the President and CEO of Felda Global Ventures on 01/06/2014 and communicated to all levels of the workforce and operations. Copies of the policy found to be displayed at prominent locations in the POM and estates. Principle 7: Responsible development of new plantings KKS Sg. Tengi PMU has documented procedures for this development but to date has not carried any new plantings after Nov Therefore, the requirements of Principle 7 are not applicable during this assessment. Principle 8: Commitment to continuous improvement in key areas of activity Criterion 8.1 Growers and millers regularly monitor and review their activities, and develop and implement action plans that allow demonstrable continual improvement in key operations The action plan for continual improvement shall be implemented, based on a consideration of the main social and environmental impacts and opportunities of the grower/mill, and shall include a range of Indicators covered by these Principles and Criteria. The POM has identified and implemented the following Continual Improvement Action Plans for the period 2014 to 2016 as required: 1. Biogas Plant to be operational at end 2014 to produce methane gas from POME for generation of electricity. 2. Reduce the consumption of diesel to < 1.2 litres/mt CPO throughout year 2014.

43 Page 43 of 66 Major / Minor -TBF As a minimum, these shall include, but are not necessarily be limited to: Reduction in use of pesticides(criterion 4.6); Environmental impacts (Criteria 4.3, 5.1 and 5.2); Waste reduction (Criterion 5.3); Pollution and greenhouse gas (GHG) emissions (Criteria 5.6 and 7.8); Social impacts (Criterion 6.1); Optimising the yield of the supply base. 3. Recycling and reduction of waste (recycle scrap iron, palm fiber and shell as renewable fuel, shredded EFB to power plant) 4. Effective operation of the Continuous Emission Monitoring System (CEMS) for control and prevention of pollution from the stack emission. 5. To achieve zero accident at the mill, 6. Repair and repainting of workers houses/ quarters and playgrounds, 7. Free tuition class for employees school children. The estates have identified and implemented the following Continual Improvement Action Plans for the period 2014 to 2016 as required: 1. Reduce the consumption of pesticides, 2. Increase the acreage for beneficial plants (tumera subulata), 3. Increased recycling (used fertilizer bags, scrap iron, paper, plastic, glass), 4. Increase the area of subsoil fertilized. 5. Build badminton court for FTP workers - completion verified during the audit. 6. Repair and repainting of workers houses/ quarters. 7. Free tuition class for employees school children. 8. Reduce the delivery time of FFB to POM. 9. Increase FFB quality and yield. 10. Rebate for water consumption RM15/month and subsidy for electricity at RM2/person. 11. Allocation for educational budget to schools in the vicinity of the PMU as incentives for high achievers - Dasar Dana Kecemerlangan Pendidikan Felda [DKPF] continuously implemented in 2014 with four different schemes of incentives through a circular dated 14 Apr signed by Dato Hj. Ahmad Azmey Abu Talib, Pengarah, Jab. Pendidikan Menengah & Rendah, Felda. 12. Changing of underground water piping to improve the water supply around the Felda settlement. Most of the continual improvement activities implemented by the PMU commonly benefitted both the Scheme Smallholders and foreign workers. Evidence of results was available for the above continuous improvement action plans Supply Chain Certification Standards Findings - on CPO Mill The Supply Chain model applied at KKS Sg. Tengi POM during this Main Assessment is Module E CPO Mills: Mass Balance (MB). Details of findings are as follows: E.1 Documented procedures E.1.1 The facility shall have written A documented Supply Chain Procedure Doc No. FGVPM-RSPO SCCS Issue 1.0 Rev 2.0 (Effective 1 Dec 2012) SOP for Mill

44 procedures and/or work instructions to ensure the implementation of all the elements specified in these requirements. This shall include at minimum the following: a) Complete and up to date procedures covering the implementation of all the elements in these requirements RSPO Supply Chain Certification System has been established and implemented using the Mass Balance (MB) module. The SOP addressed the following requirements: Purchase, delivery, receipt, storage and processing of FFB from own PMU estates and other FFB suppliers (Outside Crop Producers), Production and storage of CPO, production data and capacity, Sales and dispatch of CPO, Document control, Record control with retention period of 10 years. Implementation complied with all the requirements. Page 44 of 66 b) The name of the person having overall responsibility for and authority over the implementation of these requirements and compliance with all applicable requirements. This person shall be able to demonstrate awareness of the facilities procedures for the implementation of this standard. E.1.2 The facility shall have documented procedures for receiving and processing certified and non-certified FFBs. The Mill Manager, Encik Muhammad Ikhwan Ismail has been appointed as the person responsible and with authority to implement RSPO Supply Chain requirements at the POM. He is assisted by the Assistant Mill Manager, Encik Ahmad Syakir bin Abdul Latif, who has the knowledge of the Supply Chain System. Organization Chart and job descriptions have been documented. The SOP covers the receiving of certifiable FFB supply from the estates of this PMU. There is also non-certifiable FFB from Outside Crop Producers. There are no FFB from the other PMUs of FGVPM. All supplies of FFB were subjected to verification of documents (delivery note) that indicates the origin of the fruit source and quantity check by weighbridge personnel and FFB quality check by the laboratory personnel. The four storage tanks (each of 1800 MT capacity) at the POM are designated for storage of Mass Balance (MB) CPO. E.2 Purchasing and goods in E.2.1 The facility shall verify and document the volumes of certified and non-certified FFBs received. E.2.2 The facility shall inform the CB immediately if there is a projected overproduction. E.3 Record keeping The weighbridge personnel verified the delivery note concerning the supply source of FFB received and records this information and the as weighed tonnages in the weighbridge ticket. All relevant FFB data are entered into the PGVPM computer system and/or daily reporting spreadsheet. Daily data may be extracted from the computer system. Weekly and monthly reports are submitted to the Regional Office and Kuala Lumpur Head Office through the Mill Performance Report (MPR) system. Production Report for Jan 2013 to Aug 2014 is verified to be Mass Balance CPO. Satisfactory performance of deliveries of FFB made by transport contractors hired by the estates. The POM has an internal monitoring and reporting mechanism for informing the CB of significant production variations. So far, there is no projected overproduction.

45 E.3.1 The facility shall maintain accurate, complete, up-to-date and accessible records and reports covering all aspects of these requirements. E.3.2 Retention times for all records and reports shall be at least five (5) years. E.3.3 The facility shall record and balance all receipts of RSPO certified FFB and deliveries of RSPO certified CPO, PKO and palm kernel meal on a threemonthly basis. Records and reports necessary for all aspects of the requirements were verified and confirmed to be available. The records and reports were updated daily/ regularly, properly filed and readily retrievable. The SOP specified that all records and reports shall be kept for a minimum of 10 years. The archived records and reports are retrievable. All receipts of certifiable FFB, FFB processed, CPO production, PK production and balance stocks were recorded by the Mill. Transaction documents and bookkeeping are available for CPO and PK. Monthly summary report of above information submitted to the Regional Office and Kuala Lumpur Head Office. There is no Palm Kernel mill for production of PKO at the POM. PK sold and delivered to the Kernel Crushing Plant at Port Klang. Page 45 of 66 E.3.4 The following trade names should be used and specified in relevant documents, e.g. purchase and sales contracts, e.g. *product name*/sg or Segregated. The supply chain model used should be clearly indicated. The two weighbridges at the Mill are duly calibrated and calibration certificates found to be in order. All deliveries of the MB sales of CPO are from positive stock. POM has prepared an appropriate stamp for the identification of RSPO certified CPO and PK. Documents to be stamped RSPO CPO or PK Mass Balance appropriately for CPO and PK products. Traceability verified from sampled records (FFB Delivery Note, Weighbridge Ticket, FFB & Truck Daily Summary, Production Report, CPO Storage Report and CPO Delivery Note or Shipping Instruction) for the period Jan 2013 to Aug E.3.5 In cases where a mill outsources activities to an independent palm kernel crush, the crush still falls under the responsibility of the mill and does not need to be separately certified. The mill has to ensure that the crush is covered through a signed and enforceable agreement. E.4 Sales and good out There is no outsourced activity at this POM. E.4.1 The facility shall ensure that all sales invoices issued for RSPO certified products delivered include the following information: a) The name and address of the buyer; b) The date on which the invoice was issued; c) A description of the product, including the applicable supply chain model (Segregated); d) The quantity of the products CPO is sold only to a Felda subsidiary company, Felda Iffco Sdn. Bhd. at Port Klang. Items (a) to (e) were included in the company s invoices, delivery note and other relevant documents to all CPO buyers as stipulated in the SOP for RSPO/MB module. Deliveries of CPO and PK made with Delivery Note or Shipping Instruction. Data entry into computer system or reporting spreadsheet. Delivery of CPO and PK checked to ensure that the authorized quantities are not exceeded. CPO and PK deliveries are made by contractor, Felda Transport

46 Page 46 of 66 delivered; e) Reference to related transport documentation. Services. E.5 Training E.5.1 The facility shall provide the training for all staff as required to implement the requirements of the Supply Chain Certification Systems. E.6 Claims Mill personnel have been trained in the Supply Chain Certification System with Mass Balance (MB) Module and RSPO Awareness on 25/06/2014 and training records are available. Interview with selected mill personnel confirmed their awareness and knowledge of the supply chain. The requirements of the Mass Balance Module have essentially been documented and implemented as evidenced from the documentation and records at the Palm Oil Mill. E.6.1 The facility shall only make claims regarding the use of or support of RSPO certified palm oil that are in compliance with the RSPO Rules for Communication and Claims. The SOP stated that the PMU will only make claims on certified CPO and PK from certified FFB using MB model according to "RSPO Rules on Market Communications and Claims" and "RSPO Trademark usage and Guidelines". So far, no claims made by the PMU Status on Supply Chain on POM: Based on the documents and records presented during the on-site verifications made, it is concluded that the FGV Plantations Sg. Tengi POM has been able to comply with the requirements of the RSPO SCCS under the MB module and is thus eligible for MB trading for its palm products for year 2014/ Status on Trading of Certified Palm Products by PMU: The PMU and POM has not commenced the trading of any of its certifiable palm products under the MB module. 3.2 Status of Identified Noncompliance and Corrective Actions, Observations and Positive Elements. The status of the Noncompliances (NCR) and Observations (OBS) identified against the MYNI Compliance Indicators is as per the details below: Assessment Type Year Noncompliance (NCR) Observations (OBS) Main Assessment (6 Major & 4 Minor) Year 2014: Main Assessment (6 MAJOR NCRs) NCR # MAJOR OCL-01 MYNI Indicator Date issued: 02 Oct 2014 Details of NCR Nonconformance: Maps provided by all the estates are of poor quality and did not show clearly the latitude and longitude.

47 Page 47 of 66 Root Cause and Corrective Action: Maps (E-GIS) of estates with latitude and longitude are in process of preparation by the HQ Land Unit. PSQM Department at HQ and the Felda Regional Office had obtained the maps from the Land Unit and submitted the maps to the Lead Auditor. Copies of these maps are then to be kept in the estates. Verification for closure: Maps submitted for all the estates in the PMU verified to be satisfactory. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MAJOR OCL-02 MYNI Indicator Date issued: 02 Oct 2014 Nonconformance: Details of NCR There were no monitoring and records of application of pesticides by the FELDA Smallholders and hence it is not possible to determine the effectiveness of best practice in Integrated Pest Management. Root Cause and Corrective Action: Lack of understanding by estate management regarding the requirement for monitoring the self managed FELDA smallholders. Also, lack of enforcement by the estate management concerning the storage and handling of pesticides and used pesticides containers. Training conducted on 12 Nov 2014 for the self managed FELDA smallholders concerning usage, handling and storage of pesticides and PPE. Photo and attendance list indicated the training attended by all pesticides operator. Records of application of pesticides and the usage per ha were available. Agriculture Officer and Safety & Health Officer will make inspection to check the records and the handling of pesticides and used pesticides containers. Verification for closure: On site verification carried out. Actions taken and evidence submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MYNI Indicator Details of NCR MAJOR Date issued: 02 Oct 2014

48 OCL-03 Page 48 of 66 Nonconformance: At the Sg. Tengi Selatan estate, the pesticide operation is carried out by subcontractor s workers. There were no records of medical surveillance for these pesticide operators. Therefore, it is not possible to determine whether any of these workers have medical disorders or symptoms of toxic reaction and thus not fit for work with pesticides. Root Cause and Corrective Action: Lack of understanding by estate management regarding the requirement for medical surveillance for contractor s pesticides operators. A list of mandore and pesticides operators was established. All of them were sent for medical surveillance as stated in CHRA. Agriculture Officer and Safety & Health Officer will make inspection checks to ensure that those concerned are sent for medical surveillance. Verification for closure: On site verification carried out. Medical reports indicated that the pesticeds operators are not showing any symptoms of toxic reactions due to work with pesticides. Actions taken and evidence submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MAJOR JMD-01 MYNI Indicator Date issued: 02 Oct 2014 Nonconformance: Details of NCR Briefing sessions on sexual harassment issues were only delivered to committee members such as KKD, GPW and Jawatankuasa Bertindak Wanita. These briefing sessions did not include all the relevant parties such as male workers, contractors, settlers and youths. Root Cause and Corrective Action: No enforcement by management due to non-involvement in the committee. Chairman of the Sg. Tengi Complex JCC appointed as the patron of the Gender Committee. A programme was carried out to explain to all workers (male and female), contractors, smallholders and youths regarding sexual and all forms of harassment and violence. Verification for closure: On site verification carried out. Actions taken and evidences ( Letter of appointment, List of attendees, photos for the programme conducted on 24 Oct 2014) submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MYNI Indicator MAJOR Date issued: 02 Oct 2014 Details of NCR

49 Page 49 of 66 JMD-02 Nonconformance: 1. According to policy, POM and Felda TechnoPlant staff are allowed to carry forward a maximum of seven days of unused annual leave to the following year. Any extra unused annual leave is considered forfeited. 2. According to policy, all allowable unused annual leave carried forward by POM and Felda TechnoPlant staff to the following year must be utilized before end of March of that year. The above policies are not in compliance to the Employment Act 1955, 62E (2) where it is stated that workers are allowed to carry forward unlimited number of days of annual leave to the following year and valid until end of December of that year. Root Cause and Corrective Action: The staff did not have clear information concerning the content of the Collective Agreement. All staff were given a copy of the Collective Agreement and Management Directive no. 31 allowing the carrying forward of 7 days of unused annual leave not taken for the year and to be used until end March of the following year. The Collective Agreement is not in conflict with the Employment Act Verification for closure: On site verification carried out. Actions taken and evidence submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MAJOR JMD-03 MYNI Indicator Date issued: 02 Oct 2014 Details of NCR Nonconformance: It was found in both Felda Sg. Tengi Selatan and Gedangsa estates, the records of weekly workers housing inspection were not maintained. Maintenance of this record is stipulated under Workers Minimum Standards of Housing And Amenities Act 1990 [Act 446], 23(2). Root Cause and Corrective Action: No officer was made to be responsible and lack of understanding by estate management concerning the requirement for inspection of the workers housing. An Officer had been appointed to conduct inspection of workers housing at least weekly. Records of the inspections maintained. Estate management checked on the records of inspections at a monthly basis. Verification for closure: On site verification carried out. Actions taken and evidence submitted (letter of appointment, records of inspection and checks by estate management) found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness):

50 3.2.2 Year 2014: Main Assessment (4 Minor NCRs) Page 50 of 66 NCR # MINOR SH-01 MYNI Indicator Date issued: 02 Oct 2014 Details of NCR Nonconformance: The Management plan for mitigation of environmental impacts, timeframe for action and responsible persons were not adequately followed up by the Estate managers. At the Sg. Tengi Selatan estate, no signage was placed at the swamp area identified and also the extent of the swamp area was not clearly demarcated. Also, there was no signage at the pond located near the village area to show the prohibited activities. At Felda Gedangsa estate, no demarcation of riparian zone for the conservation areas identified (such areas are not suitable for planting and left in its natural condition/state). At the palm oil mill, no signage was observed at the pond area located just outside the mill. Root Cause and Corrective Action: Budget allocation for RSPO activities was only approved recently. Preparation and installation of signages and demarcation of buffer zones still not fully completed. The POM and estates had made the necessary signages and erected them at the locations as required. Demarcation of buffer zones also carried out. Verification for closure: On site verification carried out. Actions taken and evidences (including photos) submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MINOR SH-02 MYNI Indicator Details of NCR Date issued: 02 Oct 2014 Nonconformance: At both Sg. Tengi Selatan and Gedangsa estates, it was discovered that the disposal of plantation waste materials was not properly monitored and recorded. The waste materials, mostly fertilizer bags and plastics, were strewn everywhere. Monitoring and implementation of the environmental improvement plan were not adhered to. Root Cause and Corrective Action: Lack of awareness among the smallholders and workers concerning the proper disposal of plantation wastes materials (fertilizer bags and plastic). Estate management had conducted training for all smallholders, workers and contractors concerning the proper disposal of plantation wastes and its enforcement. It has also issued a memo dated 24 Oct 2014 concerning the return of fertilizer bags after use and the recycling of plastic and other wastes. Attendance List and report of the training were available.

51 Page 51 of 66 Verification for closure: On site verification carried out. Actions taken and evidences (memo, attendance list, report of the training, photos and records of return of fertilizer bags) submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MINOR SH-03 MYNI Indicator Date issued: 02 Oct 2014 Nonconformance: Details of NCR Information on rare, threatened and endangered species were inadequately disseminated to the workers and settlers. Root Cause and Corrective Action: Lack of understanding by estate management regarding the requirement for an awareness programme on RTE for smallholders and workers. The regional management had sponsored the awareness programme on RTE for smallholders and workers. The programme was conducted by a senior Wildlife Officer from Jabatan Perhilitan on 06 Nov 2014 at the Public Hall, Felda Sg. Tengi Selatan. Verification for closure: On site verification carried out. Actions taken and evidences (attendance list, report of the programme and photos) submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): NCR # MINOR SH-04 MYNI Indicator Date issued: 02 Oct 2014 Nonconformance: Details of NCR The solid waste management and disposal plan using landfill were available at both the mill and estates. However, it was found to be poorly implemented and monitored. At the mill, there was no signage on safety and waste disposal placed at the area. The effluent pond operated by the mill also lack signage to indicate the prohibited activities in the area. Also, a heap of waste materials was found near the entrance to the mill. At both Sg. Tengi Selatan and Gedangsa estates, it was found that the wastes were scattered all over the places at the dumpsite and no proper segregation into organic and inorganic waste.

52 Page 52 of 66 Root Cause and Corrective Action: Lack of understanding on the issues raised. The mill and estate management had taken actions to remove all the waste materials and dispose them in proper landfills. Also the areas concerned were cleaned up. Proper signages have been erected at the sites of the landfills. Verification for closure: On site verification carried out. Actions taken and evidence (photos) submitted found to satisfactorily address the nonconformance. NC status verified by auditor: Closed by OCL Date closed: 14 Nov 2014 Verification (for effectiveness): Year 2014: Main Assessment (1 Observation) Ref No: RSPO P&C Indicator Location Details of Observation Opened date Status Closed date Remark, if any OBS # JM Mill & Estates Contracts awarded to contractors did not specifically mention that all workers hired enter and work in the country legally. Assessment manual of contractors during tender period also did not specifically mention that status of the workers hired by the contractors must be legal. 02 Oct Identified Positive Elements 1) The PMU has provided proper infrastructure such as multi-purpose hall, roads, road maintenance, grocery shops and badminton courts. 2) The PMU has contributed towards the local economy and has made significant financial contributions to the local communities such as free tuition class. 3.3 Feedback Raised by Stakeholders and Findings Intertek had obtained some written and verbal feedback from the stakeholders on the environmental and social performance of KKS Sg. Tengi Grouping operations in the course of assessment and consultations. During the Main Assessment, all pertinent feedback issues were reviewed and followed up for verification and these had been accordingly incorporated into the report findings. See table below: Stakeholders Feedback PMU Response Intertek verification / comment on further action (if any) Government Agencies Comunication done via on 17 Jul See list under para 2.5. No feedback received. Non-Governmental There was no feedback / enquiries received from any government Agencies concerning the operations of the PMU. Verified during on-site assessment that there has been no issues from any Government Agencies concerning the PMU s operations. Further action from PMU (if any) No further action needed.

53 Organizations Comunication done via on 17 Jul See list under para 2.5. No feedback received. Local Communities On-site consultation and feedback sesssions were held during the assessment with various categories of stakeholders comprising of Contractors Suppliers, Transporter, Local communities (Village Heads, Schools & Clinics), Government agencies, etc. and also employees/ workers were interviewed during the on-site assessment. There was no feedback / enquiries received from any NGO concerning the operations of the PMU. Verified during on-site assessment that there has been no issues from any NGO concerning the PMU s operations. Page 53 of 66 No further action needed. - Concerns and issues raised include: Resolve the status of the land and houses for teachers (currently land owned by mill and houses ownede by Felda). Resolve the status of the land for school building. Felda to provide rubbish bins and to collect rubbish from the schools. Income of settlers is still low at RM1200 per month. Expected monthly income of RM4000 to RM5000. Hand over FFB yielding palm trees to FTP in year Closing account in year 2014 but settler still have a debt of RM15000 to Felda. Income per month only at RM1200 and therefore the debt is a problem. Gedangsa estate requires an ATM machine beacuse SH/LB/BDH are all credited into account of settlers. FFB from settlers should not be mixed with FFB from other sources this is a loss to the settlers. More opportunities for local residents especially the second generation settlers. Air and river water quality are not good. Estates roads are not in good condition and should be upgraded to facilitate The PMU will examine the concerns and issues raised and identify appropriate actions. To be followed up during the next Annual Surveillance Assessment.

54 delivery of FFB to the mill. Poor management of wastes. Control smoke emssion from palm oil mill and vehicles workshop. Immeditae action on the event of landslide. Page 54 of 66 Positive comments include: Contributions given to the local communities. No negative impacts on wildlife issues. Other Interested parties Stakeholders generally confirmed that the PMU has taken adequate positive measures on economic, environmental and social issues. Ongoing consultation, meetings and relationship building with interested parties will be maintained. Verified during on-site assessment that the PMU has management plan for the imporvement of social and environmental needs of the local community. No further action needed.

55 Page 55 of ASSESSMENT CONCLUSION AND RECOMMENDATION Based on the findings above, Felda Global ventures Plantations (Malaysia) Sdn Bhd KKS Sg. Tengi Grouping had been able to demonstrate its compliance with the RSPO Principles and Criteria (Apr 2013), Malaysian National Interpretation (MY-NI 2010) and the RSPO Supply Chain Certification Standard (Nov 2011) for Palm Oil Mill. The PMU is also aware of the new requirements of RSPO Principle and Criteria (Apr 2013) and actions needed for the subsequent assessment at the next surveillance assessment Therefore, it is recommended that the certification of Felda Global ventures Plantations (Malaysia) Sdn Bhd KKS Sg. Tengi Grouping be approved. Signed for and on behalf of Intertek Certification International Sdn Bhd Dr. Ooi Cheng Lee Lead Assessor Date: 14 Nov Acknowledgement of Internal Responsibility and Confirmation of Assessment Findings This is to acknowledge and confirm the assessment visits described in this report and the acceptance of the contents and findings in this assessment report. Signed for and on behalf of Felda Global Ventures Plantations (Malaysia) Sdn Bhd Mr. Norazam Abdul Hameed General Manager, Plantation Sustainability And Quality Management (PSQM) Department Date: 16 Nov 2014

56 Page 56 of Intertek RSPO Certificate details for KKS Sg. Tengi Grouping Certificate No: RSPO Issue date: 4 December 2014 Expiry date: 3 December 2019 Organization Address of Head Office: RSPO Membership No: Plantation Management Unit: Address of POM: Standards: Certification scope: Supply Chain model for CPO & PK: Felda Global Ventures Plantations (Malaysia) Sdn Bhd Felda Global Ventures Plantation (Malaysia) Sdn Bhd, PSQM Department, SPO Unit, 8th Floor Balai Felda, Jalan Gurney Satu, Kuala Lumpur KKS Sg. Tengi Grouping Kilang Sawit Sungai Tengi, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia RSPO Principles and Criteria (Apr 2013); Malaysian National Interpretation (November 2010); RSPO Supply Chain Certification Standards (November 2011) for the Palm Oil Mill. Production of Crude Palm Oil and Palm Kernels Mass Balance Details of the Mill and Supply bases covered by this certificate are: Name Sg. Tengi Mill - POM (Capacity:54 MT/hour) FELDA/FTP Gedangsa estate FELDA/FTP Soeharto estate FELDA/FTP Sg Tengi Selatan estate FELDA/FTP Sg Tengi estate Address Kilang Sawit Sungai Tengi, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Gedangsa, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Soeharto, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Sg. Tengi Selatan, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Sg. Tengi, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia GPS Reference Latitude Longitude 3 35'9.93"N '56.17"E 3 35'17.31"N '15.31"E 3 40'54.00"N '18.00"E 3 37'9.00"N '30.00"E 3 37'11.00"N '5.77"E The annual certifiable tonnages of CPO and PK production by KKS Sg. Tengi Grouping from the supply base/suppliers as assessed and verified during the current Main Assessment and projected year are detailed as follows: POM Total Certifiable FFB Processed (MT) Total Certifiable CPO Production (MT) Total Certifiable PK Production (MT) Jan Dec ,354 6,599 - Actual Jan Dec Actual + Projected Jan Dec Projected 116, , , % OER: % OER: 25, % KER: 7,151 % KER: ,750 7,375 % OER: % KER: 5.90

57 Appendix A: Page 57 of 66 Qualifications of Lead Assessor and Assessment Team Dr. Ooi Cheng Lee (OCL) Lead Assessor / Technical Expert (Palm Oil Mill, Environment, OHSAS, Social, HCV, Land Use and Supply Chain) - PhD in Welding, Cranfield University, UK - M.Sc. (Engineering) in Metallurgy, University of Birmingham, UK - B.App.Sc (Hons), Science University of Malaysia - Diploma in Translation for Science and Technology, Malaysia Translation Society Dr. Ooi Cheng Lee is an IRCA Lead Auditor and Lead Tutor for ISO He is also involved in auditing in other integrated management systems. He has successfully completed the RSPO Lead Assessor Course for Principles and Criteria (RSPO P&C) and the RSPO Supply Chain Certifications (RSPO SCC). He is currently involved in the management of all types of system and process/product certification in Intertek. He has more than 32 years work experience in product and process specifications, research & development, inspection and testing, quality assurance, engineering development, training, product certification, auditing and quality management system certification. He has conducted assessments of organizations in Malaysia, Singapore, Indonesia, Vietnam, Philippines, China, Myanmar, Cambodia and other regional countries. Assessments include those of rubber and oil palm plantations in Malaysia and Indonesia. His previous position as the General Manager of Lloyd s Register Quality Assurance (LRQA) Malaysia include the management of all types of systems certification, including that of environmental (ISO 14001), safety & health (OHSAS 18001) and Clean Development Mechanisms (CDM). He is currently the General Manager in Intertek Certification International Sdn. Bhd. He is a member of the Internal Review Panel for RSPO Assessment reports since May He was part of the RSPO Assessment team which audited several RSPO certified Plantation Management Units since Mr. Sazali Hasni Assessor / Technical Expert (Environment, Conservation and HCV area) - Bachelor of Science (Forestry) Mr. Sazali Hasni (SH) has over 25 years work experience in the forestry sector. He is an IRCA Auditor for ISO 9001 and auditor for the PEFC Chain-of-Custody Certification. He has successfully completed training in the Intertek In House RSPO P&C, MYNI. He was a member in the stakeholder consultation and development of the Malaysian Criteria & Indicators (MC&I) for Forest management Certification. He has been involved in the auditing of Forest Management Certification for the Perak State Forestry Department and Pahang State Forestry Department. He has also been involved with a German based company in testing their criteria for carbon tracing in an oil palm plantation in He had also acted as the regional consultant to International Tropical Timber Organization (ITTO) for the Asia Pacific region in the Evaluation and Monitoring of Projects funded by the organization from 1994 to Projects funded are mainly forestry related such as reforestation, conservation, community forestry apart from other research based projects. Mr. Jumat Majid Assessor Social Responsibility and Workers Welfare BSc (Social Science) Mr Jumat Majid (JM) has over 13 years work experience in the agriculture sector. He has successfully completed the IRCA accredited Lead Auditor course in ISO 9001:2008 and RSPO P&C MY-NI Lead Assessor course. He has also successfully completed training programs in Organic Agriculture Development and had performed organic agriculture inspections and assessments for more than 6 years. He has been involved in NGO work in the areas of social impact assessments within the South East Asia region. He was part of the RSPO Assessment team which audited a RSPO certified Plantation Management Unit in 2010.

58 Appendix B: Assessment Plan (Actual) Page 58 of 66 Date 29/09/2014 Day 1 Time (Note 3) 9.00 am pm pm pm 2.00 pm 2.30 pm 2.30 pm 5.00 pm 5.00 pm 6.00 pm 6.00 pm 7.00 pm Assessors and Assessment Activity Asssessment Team Travel to KKS Sg. Tengi grouping Palm Oil Mill (POM) Office Lunch Break Opening Meeting and Briefing at KKS Sg. Tengi grouping POM Office (to be attended by representatives from the Estates as well) Document Review and Assessment by all Assessors on respective RSPO P&C:1 to 8 at POM OCL SH JMD Site assessment at Palm Oil Mill P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Mill P7 New Plantings P8 Continual Improvement Site assessment at Palm Oil Mill P5 Environmental, Conservation P8 Continual Improvement Review of changes for compliance to revised P&C 2013 Review of Time Bound Plan Verification for compliance with rules on partial certification Travel to Hotel & Break Team Meeting and Discussion Site assessment at Palm Oil Mill P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Date Time Assessors and Assessment Activity 30/09/ am OCL SH JMD Day pm pm 1.30 pm 1.30 pm pm 5.00 pm 6.00 pm 6.00 pm 7.00 pm Site assessment at FELDA/FTP Gedangsa estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Estates P7 New Plantings Continue site assessment at FELDA/FTP Gedangsa estate Site assessment at FELDA/FTP Sg Tengi Selatan estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Lunch Break Continue site assessment at FELDA/FTP Sg Tengi Selatan estate Travel to Hotel & Break Team Meeting and Discussion Site assessment at FELDA/FTP Sg Tengi Selatan estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Continue site assessment at FELDA/FTP Sg Tengi Selatan estate Date Time Assessors and Assessment Activity 01/10/ am OCL SH JMD Day pm pm 1.30 pm Site assessment at FELDA/FTP Sg Tengi Selatan estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Estates P7 New Plantings Site assessment at FELDA/FTP Gedangsa estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Lunch Break Site assessment at FELDA/FTP Gedangsa estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement

59 1.30 pm pm 5.00 pm 6.00 pm 6.00 pm 7.00 pm Continue site assessment at FELDA/FTP Sg Tengi Selatan estate Continue site assessment at FELDA/FTP Gedangsa estate Travel to Hotel & Break Team Meeting and Discussion Page 59 of 66 Continue site assessment at FELDA/FTP Gedangsa estate Date Time Assessors and Assessment Activity 02/10/ am OCL SH JMD Day am Continue Site assessment at Palm Oil Mill P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Mill P7 New Plantings P8 Continual Improvement Supply Chain for POM (SCCS) Continue Site assessment at Palm Oil Mill P5 Environmental, Conservation P8 Continual Improvement am pm pm 1.30 pm 1.30 pm 2.30 pm Continue Site assessment at Palm Oil Mill P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Stakeholders Consultation on the following categories (see Notes 1 and 2 below): Contractors Suppliers Transporters NGOs Government Department / Agencies Local Community Settlers, in the case of independent and organized smallholders. Notes 1. It is mandatory for the PMU to inform Intertek and provide the information (as a minimum the no. of stakeholders in each applicable category and contact number) on the stakeholders prior to the assessment. 2. This will facilitate the random and impartial selection of stakeholders (including independent and organized smallholders, where applicable) and to meet the sample size requirement. Continue Site assessment at Palm Oil Mill or estates as required Lunch Break Continue Site assessment at Palm Oil Mill or estates as required Continue Site assessment at Palm Oil Mill or estates as required 2.30 pm Preparation for Closing Meeting 3.30 pm 3.30 pm - Team Meeting and Discussions with KKS Sg. Tengi grouping Management Representative 4.00 pm 4.00 pm Closing Meeting & Briefing at Palm Oil Mill Office 5.00 pm Note 3: Time allotted for the Assessment activities may vary whenever situation warrants. Also, the arrangements may change depending upon circumstances

60 Appendix C-1: Page 60 of 66 Location of Felda Gobal Ventures Plantations (Malaysia) Sdn Bhd (FGVPM) - KKS Sg. Tengi Grouping, Kuala Kubu Baharu, Selangor Darul Ehsan, Malaysia Felda Sg. Tengi

61 INTERTEK CERTIFICATION INTERNATIONAL SDN BHD Appendix C-2-1: FELDA/FTP Gedangsa Estate Page 61 of 66

62 INTERTEK CERTIFICATION INTERNATIONAL SDN BHD Appendix C-2-2: FELDA/FTP Soeharto Estate Page 62 of 66

63 Page 63 of 66 Appendix C-2-3: FELDA/FTP Sg. Tengi Selatan Estate

64 INTERTEK CERTIFICATION INTERNATIONAL SDN BHD Appendix C-2-4: FELDA/FTP Sg. Tengi Estate Page 64 of 66

65 Appendix D: Photographs of Assessment findings at FGVPM KKS Sg. Tengi Grouping Page 65 of 66 Overview of the Sg. Tengi POM with safety signages. Harvesting at FELDA/FTP Gedangsa Estate. Rubbish dumped (possibly by outsiders) at the roadside leading to the POM. Effluent pond at POM no signage to indicate prohibited activities. Rubbish dumpsite at FELDA/FTP Gedangsa Estate no proper landfill and signages. Fertilizer bags and plastics found scattered within the FELDA/FTP Gedangsa and Sg. Tengi Selatan estates.