FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD. KKS Panching Grouping PLANTATION MANAGEMENT UNIT. Kuantan, Pahang Darul Makmur, Malaysia

Transcription

1 FELDA GLOBAL VENTURES PLANTATIONS (MALAYSIA) SDN BHD RSPO Membership No: PLANTATION MANAGEMENT UNIT KKS Panching Grouping Kuantan, Pahang Darul Makmur, 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 Panching Grouping Kuantan, Pahang, Malaysia Certificate No: RSPO Issued date: 17 December 2014 Expiry date: 16 December 2019 Assessment Type Assessment Dates Pre Assessment - Initial Certification (Main Assessment) Sep 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 Panching Grouping 57 APPENDICES Appendix A Qualifications of the Lead Assessor and Assessment Team 58 Appendix B Assessment Plan Appendix C Maps of location Mill, Estates, Conservation and HCV areas Appendix D Photographs of Assessment findings at KKS Panching 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 Panching Grouping of Felda Global Ventures Plantations (Malaysia) Sdn Bhd (hereafter abbreviated as FGVPM), from Sep 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 Apr 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 all 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 Panching Grouping consists of one (1) palm oil mill, namely Panching Mill and three (3) 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 3 estates (viz., FELDA/FTP Panching Utara estate, FELDA/FTP Panching Selatan estate and FELDA/FTP Panching Timur 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 Panching POM (Capacity:45 MT/hr) FELDA/FTP Panching Utara estate FELDA/FTP Panching Selatan estate FELDA/FTP Panching Timur estate Address Kilang Sawit Panching, Peti Surat 257, Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Panching Utara,26250 Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Pancing Selatan, Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Pancing Timur, Peti Surat 124, Kuantan, Pahang Darul Makmur, Malaysia GPS Reference Latitude Longitude 3 49'34.00"N 103 9'58.00"E 3 50'19.00"N 103 9'32.00"E 3 47'36.25"N '01'' E 3 49'6.00"N '56.00"E

5 Page 5 of Description of supply base (fruit sources) The supply base, i.e. FFB sources to the POM at KKS Panching Grouping PMU are from the abovementioned 3 estates of this PMU and FFB from Outside Crop Producers (OCP). Details of the planted hectarage for the FFB supply for Panching Grouping are as shown in Table 2 below. Table 2: Estate Area Summary as at Aug 2014 Estate Certified Area Area Summary (ha) as at Aug 2014 Planted Area Oil Palm FELDA/FTP Panching Utara estate 1, , FELDA/FTP Panching Selatan estate 1, , FELDA/FTP Panching Timur estate 1, , Notes: Total: 4, , 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 3 estates have been developed beginning from 1969 and are now in the 2 nd cycle of planting. Replanting for the estates is only due in 6 years time (year 2020). 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 Mature OP (ha) Above 3 years Immature OP (ha) 3 years & below FELDA/FTP Panching Utara estate FELDA/FTP Panching Selatan estate FELDA/FTP Panching Timur estate nd 1, nd 1, , nd 1, Total 4,

6 Page 6 of Summary of Conservation and HCV Areas The summary of Conservation and HCV Areas as identified in KKS Panching 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 4, Immature 0 2 Conservation Area (ha) - comprising buffer zones along small streams, hilly areas, swampy and unplantable areas 75 3 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 to 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 Page 7 of Tonnages Verified for Certification The breakdown of all the suppliers and their tonnages of FFB supplied to the POM at KKS Panching 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: FELDA/FTP Panching Utara estate FTP Smallholders FELDA/FTP Panching Utara estate FELDA Smallholders FELDA/FTP Panching Selatan estate FTP Smallholders FELDA/FTP Panching Selatan estate FELDA Smallholders FELDA/FTP Panching Timur estate FTP Smallholders FELDA/FTP Panching Timur estate FELDA Smallholders Outside Crop Producers (OCP): 19, KKS Panching 9, KKS Panching 16, KKS Panching 6, KKS Panching 23, KKS Panching 3, KKS Panching Sub-total from PMU estates: 79, KKS Panching 7. Tai Ichi Entp. Sdn Bhd 74, Kim Ma Oil Palm (Transport) Sdn Bhd 56, Ekstrapalm Sdn Bhd 4, Wonderful Horizon Sdn Bhd 1, Fatimah binti Haji Hussain Hu Ah Lek Mohd Idrus bin Awang Sitawan Holdings Sdn Bhd Sub-total from OCP: 137, Grand total 216, Total annual volumes / tonnages of FFB supplied from the supply base to KKS Panching Grouping POM during the previous period, current Main Assessment period and projected period are as follows: Estate / Supplier Certifiable FFB from Panching 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 % 79, , , Non-certifiable FFB from OCP 137, , , Total 216, , , SCCS Model for POM MB MB MB

8 Page 8 of 66 The annual certifiable tonnages of CPO and PK production by KKS Panching 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 79, ,000 83,000 16,446 % OER: 16,933 % OER: 17,164 % OER: ,255 % KER: % KER: % KER: 4,395 4, 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.

9 Page 9 of Abbreviations Used 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 Page 10 of ASSESSMENT PROCESS 2.1 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 Panching Grouping regarding the environmental, biodiversity, community development and other relevant issues. From Sep 2014, the Assessment team of Intertek conducted the Main Assessment in which two estates (viz., FELDA/FTP Panching Utara estate and FELDA/FTP Panching Timur estate) of KKS Panching 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 Sample size 2 nd Level of sampling of estates Sample FELDA/FTP Panching Utara estate Table 8 Sampling Plan of Estates and Smallholders FELDA/FTP Panching Selatan estate FELDA/FTP Panching Timur estate - No. of FTPS No. of FS No. of FTPS No. of FS No. of FTPS No. of FS 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 954. 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 Panching 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 Page 11 of Date of next scheduled visit 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 SCC, ISCC, Marine Sustainability Chain-of-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. 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 Sembilan 32. Center for Orang Asli Concerns COAC 61. National Council of Welfare & Social Development Malaysia -

12 Page 12 of 66 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 Page 13 of ASSESSMENT FINDINGS 3.1 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 records of 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 for both the POM and estates was carried out on 11/09/2014. Public notification was made by the PMU to the stakeholders at least one month prior to the stakeholders consultation. Stakeholders feedback (positive and negative) and management action plan recorded in the Stakeholders Booklet 2014 Survey questionnaire from 38 stakeholders were properly filed. Analysis or summary of the stakeholders feedback with 4 issues identified. 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. Contract between Scheme Manager (FTP) and participants (settlers) as seen in application form for FTP scheme. Evidence of training in IPM and safe use of agrochemicals for smallholders. Application made by Outside Crop Producers to supply FFB to the POM was supported by the General Manager (Operation) and approved by Executive Director. Contracts between foreign workers and FTP are available. Following documents provided for smallholders:

14 Page 14 of 66 Criterion 1.2 Health and safety plan. 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 FTP, FELDA and Smallholders held regularly. Meetings between POM and smallholders representatives on oil extraction rate, quality of FFB and value. 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. Land title for POM land of ha issued on 29/06/1998 with 66 years lease expiry on 28/06/2064. Land title of smallholders with 99 years lease expiry on 05/12/2093. FELDA and 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 Plans include the establishment and implementation of CHRA, medical surveillance, Emergency Preparedness (ERP),

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). Fire Drill training, First Aid training, PPE training. POM certified to OSHA Safety Committee meetings held twice a year. Environmental aspect and impact assessment conducted for the POM and estates in the PMU on 06/03/2014 and its action plan documented and implemented. Social Impact Assessment carried out. Positive and negative impacts and action plan documented in the Stakeholders Booklet Procedure Guidelines ML-1A/L3-GPS (0) for identification of HCV. HCV Identification Survey conducted on the PMU estates by Jabatan PSQM of FGVPM and report dated 12/09/2014. No significant HCV area found in the PMU. 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 did not receive any complaints from any 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 Panching Timur estate, two complaints both dated 25/08/2014 by settlers concerning house repair and rearing of chicken. For Panching Utara estate, there were 4 entries for year Mostly relating to repairs to housing and roads. No complaints for POM. 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 2014 to 2016 (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 ( Polisi Hak Asasi Manusia ) 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. Criterion 1.3 Growers and millers commit to ethical conduct in all business operations and transactions.

16 Page 16 of 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 has 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. 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): 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 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

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 A system for tracking any changes in the law shall be implemented. Criterion 2.2 meetings to be conducted at quarterly intervals. Noise Monitoring Report is available. The POM is certified by SIRIM for its Quality, Environment and Safety & Health Management Systems. Legal documents (work permits, passports) of foreign workers (Indonesian, Bangladesh) in the estates. Insurance for foreign workers in estates under AXA Insurance. There are no foreign workers in POM. 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 26/08/2014 and 11/03/2014 respectively. 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 Legal boundaries shall be clearly demarcated and visibly maintained. 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. 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 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

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). several boundary stones and pole markers verified to be within the boundary parameters of the estates. 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. 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). 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. 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. No evidence that the palm oil operations have instigated violence in maintaining peace and order in their current and planned operations. Major / Minor (TBF) 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 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 with legal requirements and does not infringe on any legal rights

19 Page 19 of 66 informed 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. 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. Not applicable 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) This process is not applicable for verification. 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 (2014 to 2016) 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;

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. (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 (2014 to 2016) 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. FTP and FELDA have a documented 3 years management plan for the smallholders. Replanting for the estates is only due in 6 years time (year 2020). 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

21 Page 21 of 66 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 / 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 to be 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 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. There is a mechanism to check the implementation of the SOPs. 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. Records of monitoring and actions taken had been maintained for more than 12 months for the mill and estates. These records verified to be satisfactory The mill shall record the origins of all third-party sourced Fresh Fruit Bunches (FFB). The POM maintained records 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.

22 Page 22 of 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 yield, where possible. GAP for minimization of soil erosion and maintenance of soil fertility is maintained via the frond stacking and fertilizer application as per the recommendation provided by the Agronomist from FASSB. These had been verified through the records for fertilizer application and observation during field visit 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 FTP Smallholders verified to be in order. However, there were no monitoring and records of application of fertilizers by the FELDA Smallholders and hence it is not possible to determine whether there is the implementation of best practice (according to agronomist s recommendations) to maintain or improve soil fertility to ensure optimal and sustained yield. A Minor Non-conformance was raised. Leaf and soil sampling and analysis had been carried out annually to determine the nutrient levels. Fertilizer recommendations by the Agronomist for identified estate blocks to sustain the long term soil fertility and nutrient efficiency. Records of the sampling and analysis had been verified to be satisfactory. There is no POME application in the estates for this PMU. EFB mulching had been carried out in mature area along the inter-row, and around the circle in the immature palms. However, during the field visit to FELDA/FTP Panching Timur estate, EFB application along the inter-rows of mature palm was found to be to 3 to 4 layers. This is contrary to the SOP for best practice which states that EFB should be spread in one layer along the inter-rows to prevent breeding of Rhinoceros beetle. This was also the case of palm fronds found to be disorderly placed. A Minor Non-conformance was raised. Criteria 4.3 Practices minimise and control erosion and degradation of soils. Minor NC # OCL-01 Minor NC # OCL 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 the Lambak Rengam, Lambak Colluvium, Lambak and Rengam 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. No replanting in all the estates until year 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. The PMU has a SOP (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

23 Page 23 of 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. programme verified to be established and implemented. 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 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. Criteria 4.4 Practices maintain the quality and availability of surface and ground water 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 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. Water samples were taken at monthly interval at the final discharge point of the palm oil mill effluent pond, and at sixmonthly interval for 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 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. However, at the foreign workers housing, water for drinking, cooking and washing was obtained from two underground sources (see Indicator where a minor non-conformance was raised because there was no sampling and testing of water from this supply source to ensure fitness for human consumption). Rainfall data found to be monitored as part of the water management plan. There are buffer zones on both sides of rivers/streams in the estates as verified during on-site field inspection. No evidence of spraying around palms at the boundary of the buffer zones. There was no construction of bunds/ weirs/dams across the main rivers or waterways passing through the estates. See Indicators and where minor non-conformances were raised. 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 Refer to Minor NC # CBK-02 Refer to Minor NC # SH-01 and Minor NC # SH-03

24 Page 24 of 66 discharge quality, shall be in compliance with national regulations (Criteria 2.1 and 5.6). Nitrogen and Total Nitrogen.. Analysis results meet the DOE requirements. BOD levels are in the range of 24 to 50 ppm over the period Jan to Aug The limit specified by DOE Pahang is < 100 ppm. Stack emission monitoring by CEMS Refer to Mill water use per tonne of Fresh Fruit Bunches (FFB) (see Criterion 5.6) shall be monitored. Water usage in the mill ranged from 0.80 to 1.13 m 3 /tonne FFB over the period Jan to Aug 2014 with an average of 0.92 m 3 /tonne FFB. The level of water usage is within the industrial 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 Training of those involved in IPM implementation shall be demonstrated. IPM Plan includes the planting of beneficial plants and control of damage by rodents. FASSB Agronomist Report dated 01/07/2013 recommended 1 ha with one point planted (one point measuring 10 m length x 3 m x 3 m). Beneficial plants such as Turnera subulata and Cassia cobanensis are grown in the estates. One campaign of rat baiting had been carried out on 28/02/2014 to control the damage by rodents. No reported infestation by other pests (bagworms and rhinoceros beetle). Training records for staff on IPM implementation were available and was verified on-site to be satisfactory during field assessment. Training also conducted by FELDA and FTP for all smallholders. Criteria 4.6 Pesticides are used in ways that do not endanger health or the environment 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 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 Manual Lestari 1A Doc. No. ML-1A/L3-GP 1 (0) dated Mar 2012 Guidance Procedure for written justification in the use of agrochemicals had been 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 15 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. 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 Non-conformance was raised. It had been the policy of the estates to minimize the use of pesticides in accordance with IPM plan. The pesticide reduction program is monitored on usage per hectare basis. Overall, it has shown a decline on a year to year Major NC # OCL-01

25 Page 25 of 66 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) 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 basis. No prophylactic use of pesticides had been carried out at the estates for the period concerned. It is the policy of the group to reduce the use of paraquat gradually and achieve zero usage by the end of Records on the usage of paraquat by FTP Smallholders 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 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. - A valid permit for storage of hazardous waste was sighted. There were no monitoring and records of application of pesticides by the FELDA Smallholders and hence it is not possible to determine whether there is any usage of paraquat in the PMU for the purpose of minimizing or eliminating the use of this highly toxic pesticide. A Minor non-conformance was raised. 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. Material Safety Data Sheets (MSDS) are available in the store. The MSDS are in English and Bahasa Malaysia (understood by the workers). Used chemical containers were disposed by DOE licensed waste Minor NC # OCL-03

26 Page 26 of 66 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) Proper disposal of waste material, according to procedures that are fully understood by workers and managers shall be demonstrated (see Criterion 5.3) Specific annual medical surveillance for pesticide operators, and documented action to treat related health conditions, shall be demonstrated. 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. Programme and training records had been verified to be satisfactory. It s not the policy of the company to carry out 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 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. Pesticides application carried out by foreign workers (mostly Indonesian). Annual medical surveillance for individual pesticide operators had been implemented. Medical surveillance reports of individual sprayers were available and details checked. The medical reports showed that there was no case of low blood cholinesterase levels. Besides the annual medical surveillance, clinical records are also monitored. 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 Pesticide operators in the PMU are all males. shall be undertaken by pregnant or breast-feeding Verified from records, field inspections and interviews that no women. 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 OSH Policy found to be clearly displayed at POM and in the

27 Page 27 of 66 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. 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 carried out on operations where health and safety is an issue in order to determine the significant hazards. Significant hazards determined and documented include noise exposure, pesticides/chemicals exposure, accident, fire. Procedures and actions implemented to mitigate the hazards. However, it was found that the harvesting operation was not identified as a high risk operation with significant hazards. An observation was raised. There was an assessment of noise levels in the POM and the work areas with high noise levels identified are the 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. Also, annual audiometric test conducted for all mill staff and workers. The employees checked did not suffer significant hearing disabilities as seen from the audiometric test reports. 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, overalls, 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. Obs # OCL-01

28 Page 28 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 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, 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. 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. Appropriate PPE had been provided to FELDA and FTP staff and workers at the place of work to cover all potentially hazardous operations. However, there were no records of appropriate PPE being used by or provided to FELDA Smallholders (or their workers) to cover all potentially hazardous operations such as pesticide application and harvesting. A Major Non-conformance was raised. The responsible person (usually the Mandore or Headman) 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. 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). Major NC # OCL-02

29 Page 29 of 66 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. 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 AXA Insurance. 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. Principle 5: Environmental responsibility and conservation of natural resources and biodiversity 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 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 above documents. Impacts such as smoke emissions, noise levels, POME and EFB management were verified at the Panching POM. HCV and other environmentally sensitive areas were documented and inspected on site.

30 Page 30 of 66 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. Visits made to Panching Utara and Panching Timur showed that action plan to mitigate negative effects were not fully adhered to. 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 PMU. For instance at the FELDA/FTP Panching Utara estate, although the buffer zone signage was placed at the Sungai Ah Tong, the extent of the boundary for the buffer is not clearly demarcated. Signage on buffer and signage on the prohibited activities along all the buffer zones were found to be insufficiently placed for the FELDA/FTP Panching Utara estate. A Minor Non-conformance 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. 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 Minor NC # SH-01 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 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). HCV assessment was conducted by the Felda PQSM HQ and documented in a report dated12 Sep The assessment was done in collaboration and meetings with other agencies such as Jabatan Perhutanan, Jabatan Perhilitan, Jabatan Alam Sekitar, Felda Officer, smallholders and also the local communities. The exercise 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 Panching Utara and Panching Timur estates are surrounded by palm oil estates. There are no neighbouring forest reserves near the PMU. Based on the review, there was no significant HCV area in the PMU. Although no HCVs identified, conservation areas/environmentally sensitive areas, i.e. buffer zones along the stretches of Sungai Ah Tong which pass through the Panching Utara estate had been identified and being monitored. The FELDA/FTP Panching Utara estate and FELDA/FTP Panching Timur estate have identified an area (Kawasan Bukit Berhutan) which is considered not productive for the production of oil palm. Therefore a separate management regime should be implemented for the preservation of the area. An observation was raised. Obs # SH Where rare, threatened or endangered (RTE) species, or HCVs, are present or are affected by plantation or mill operations, appropriate Regular patrols within the POM and estates were carried out and findings recorded by the respective Estate Executives to monitor the conservation / buffer zone areas.

31 Page 31 of 66 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 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, there shall be evidence of a negotiated agreement that optimally safeguards both the HCVs and these rights. Monitoring and control of any illegal hunting, fishing or collecting activities was also implemented. Signage that prohibit hunting, fishing and water polluting activities were verified on-site at all PMUs visited i.e. Panching Utara and Panching Timur 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 rare, threatened and endangered (RTE) species were inadequately disseminated to the workers, FTP Smallholders and FELDA Smallholders. The program for awareness on this subject matter could be further enhanced. A Minor Non-conformance was raised. Management plans were established and monitoring outcomes were reviewed by the Estate managers. There are no HCV or reported RTE in all the estates, as reported in the PQSM Report. Verification was also made during on-site assessment and found to be satisfactory. The overall management plan on the status of HCV/RTE of the Panching plantation group is collated, reviewed and monitored by the HQ sustainability team and is ongoing. The management, maintenance and monitoring of the waterways, especially Sungai Ah Tong in FELDA/FTP Panching Utara estate have to be effective to ensure the smooth flow of water. Steps have been taken in water management but however, it was found that there were plantation debris (fronds, wood waste, etc.) impeding the flow of water. A Minor Non-conformance was raised. There has been no instance of HCV set-aside that conflicts with the rights of local communities in the PMU. Thus negotiated agreement of such nature is not applicable. Minor NC # SH-02 Minor NC # SH-03 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 estates 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 containers/drums (SW 409), used filters (SW 410), clinical waste (SW 404) and used batteries (SW 102). Records on the usage and disposal were well recorded and

32 5.3.2 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. documented. Appropriate secondary containment for the diesel skid tanks, chemical and scheduled waste storage areas was verified to be maintained at the POM. Segregation of wastes i.e. 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. 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 estates and disposal was done by scheduled waste disposal contractors (Hip Huat Chemicals Sdn Bhd, Famous Phase Sdn Bhd and Alivirgo Sdn Bhd.) authorized and licensed by Department of Environment. At the FELDA/FTP Panching Utara estate and FELDA/FTP Panching Timur estate, 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 all over the places, mostly in plantations managed by the FELDA Smallholders/settlers. Action plan for the disposal of this waste was not available. 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. A dumpsite for the disposal of domestic waste was provided at Blok 1, Peringkat 1 for FELDA/FTP Panching Utara estate. However, there was no route signage placed at strategic locations leading to the dumpsite. In addition, there was no signage at the dumpsite itself. The effluent pond operated by the mill also lacks a signage to prohibit activities such as fishing, swimming, boating, camping, etc. in the area. A Minor Non-conformance was raised. Criteria 5.4 Efficiency of fossil fuel use and the use of renewable energy is optimised. Page 32 of 66 Major NC # SH-01 Minor NC # SH-04

33 Page 33 of A plan for improving efficiency of the use of fossil fuels and to optimise renewable energy shall be in place and monitored. The use of energy in palm oil mill and line site 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. Monthly records of energy consumption of non-renewable and renewable fuel per metric tonne of palm product at the POM were available. The placement and condition of all signages for use in the mill can be further improved. An observation was raised. Obs # SH-02 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. The Group policy of Zero open burning is enforced since July Both the POM and estates of Panching Group had observed the policy of Zero open burning for replanting. Field inspections made showed no evidence of open burning 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 PMU has a zero burning policy for replanting at the estates. During the audit, there were no replanting activities carried out. 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 Panching Utara and Panching Timur estates. The area is located far away from the villages 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 emissions and effluent (see Criterion 4.4). 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 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 were monitored, maintained and adhered to 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 HIRADC table, PPE use and audiometric examination used as control measures to prevent hearing loss of mill workers.

34 Page 34 of 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. 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 POM and PMU. However the plans to further reduce or minimise GHG emissions are still yet to be established and implemented. Further monitoring plans for reduction of GHG emissions at the PMU 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 Both the Continuous Environment Monitoring System and the Ringlemann Chart Recorder were not functioning at the time of the audit. A Minor Non-conformance was raised. Water samples were regularly taken every month 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. Minor NC # SH-05 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 There shall be evidence that the assessment has been done with the participation of affected parties. Information was obtained from various stakeholders through consultation meetings and through feedback form. The stakeholder lists had included contractors, villagers, workers, teachers, police, fire department and rural clinic personnel etc. Records maintained are attendance lists, survey questionnaire ( Borang Soal Selidik ), Stakeholders Social Impacts Assessment Form ( Borang Penilaian Impak Sosial ) and management action plans. The information gathered from the stakeholders was analyzed and summarized as management action plans. Lists of the participants at the assessments were maintained as records 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 The management action plans for avoidance or mitigation of negative impacts and promotion of the positive ones that was established had included time schedule and person responsible for implementation. However, during the social impact assessment exercise conducted by the Management of FELDA/FTP Panching Utara estate on 01 Aug 2014, the information gathered was only from two stakeholders (settlers). The summary dated 11 Sep 2014, Major NC #

35 Page 35 of 66 implementation 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 Particular attention shall be paid to the impacts of smallholder schemes (where the plantation includes such a scheme). generated from this information had no sufficient focus on specific issues of positive or negative impacts. As a result, the plan for mitigation of negative impacts or promotion of positive impacts had not been established and documented for implementation. A Major Non-compliance was raised. The action plans had not been reviewed yet as the Management considered that the practices had just been newly implemented since Mar Positive impacts such as increased work opportunities, increased income and improved living standards were identified. CBK-01 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 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. Documented policies and procedures for internal and external consultation and communication had been established: Polisi Komunikasi Dengan Stakeholder Peringkat Projek ML-1A/L2- P06(0), Polisi Komunikasi, Prosedur Komunikasi, Penglibatan Dan Rundingan ML-1A/L2-PR3(0) and Tanggungjawab Terhadap Pekerja & Komuniti were documented and were available for implementation. Appointment records sighted show evidence the existence of a management official for these issues. Interviews with estate managers verified the understanding of their roles and responsibilities. The nominated persons were from appropriate level and were responsible for communication with the stakeholders. The organization has a list of stakeholders including local authorities, government departments, suppliers and contractors. However, there was no record that a management official had been nominated for consultation and communication of social issues to stakeholders at the Panching Palm Oil Mill. A Major Non-compliance was raised. The lists of stakeholders included consists government departments, schools, suppliers, service providers and settlers. There were open and transparent communications and consultations, taking into consideration the local conditions including migrant workers and job opportunities for local people. Consultations with various stakeholders had been held through meetings. The minutes of meetings had noted actions taken in response to input from stakeholders. Minor NC # CBK-01

36 Page 36 of 66 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 resolved and the outcome shall be available. The PMU had established policy and procedures for dealing with complaints and grievances such as Polisi Pemberian Maklumat (Whistle Blowing) ML-1A/L2-PO12(0) and documented procedure Prosedur Menangani Aduan Dan Rungutan (ML-1A/L2-PR4(0) and guideline Tanggungjawab Terhadap Pekerja & Komuniti. Complaints and grievances were received and recorded. These were investigated and resolved in a timely manner. The nature of the complaints, the investigations, actions taken and the resolutions were documented in records such as: - Complaints Book ( Buku Aduan Peneroka Felda ), - Work Inspection Checklist with Block Representative ( Semakan Lawatan Kerja Bersama Wakil Blok ), - Complaint Form for House Damages ( Borang Aduan Kerosakan Rumah ) - Complaints and Problems Book ( Buku Aduan Dan Masaalah. 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) ]. The PMU has borders adjacent to villages and other land owners. However, there was no case that required any negotiation or compensation pertaining to these criteria. 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. 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 There had been no dispute by any parties relating to legal, customary or user rights at the PMU. Therefore the process and outcome of compensation could not be observed.

37 Page 37 of 66 documented, with evidence of the participation of affected parties, and made publicly available. 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 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. Labour policy was documented and publicly available. Labour policy addressed migrant workers who mostly come from Indonesia. Employment conditions met legal requirement. Employment agreements, stating all statutory fringe benefits and eligible incentives are available. Stated conditions in the employment agreement includes working hours, overtime, leave and medical benefits, maternity leave for women, insurance coverage, deductions, resignation notice period, company rules, etc., which are in compliance with applicable legal requirements. The payment slip was easy to understand. Foreign workers are legally employed and work permits were available and verified to be satisfactory. The PMU has implemented the Minimum Wage Order 2012 for all its employees. Offer letter, employment agreements with applicable terms and conditions and accompanying appendices conditions are documented in Bahasa Malaysia and have been explained to and understood by the employees. The PMU also provides free housing, piped water supply, free electricity, medical benefits, mosques, church and welfare amenities that in overall constitutes a decent living for the employees. The documented pay and conditions are verified to be satisfactorily implemented. Pay and conditions documented in the employment contract. Documented employment contract verified for migrant workers had covered all issue such as working hours, deductions, overtime, sickness, holiday entitlement, maternity leave, and reasons for dismissal, period of notice made available in Bahasa Malaysia which is understood by the workers (local and foreign workers) 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 The estate management was noted to have complied with Workers Minimum Standard of Housing and Amenities Act 1990 (Act 446). Housing, electricity and water supply Workers were given a small patch of land to grow vegetables and keep poultry around their houses in order to reduce the cost of living. The workers staying in the estate were provided with electricity supply from 4.30 am to 6.00 am and from 7.00pm to 11.00pm. Executives and above were supplied with 24 hours

38 Page 38 of 66 public facilities are available or accessible (not applicable to smallholders) Growers and millers shall make demonstrable efforts to monitor and where able, improve workers access to adequate, sufficient and affordable food. electricity supply from Tenaga Nasional Berhad and treated water from Pengurusan Air Pahang Bhd. In all the estates, household wastes were disposed of in dumpsites. Schools The workers children attended schools within or near the estates. Migrant workers are of single status and there are no children of migrant workers in the PMU. Sundry shops The availability of sundry shops within the estates which helped the staff and workers get their sundries nearby. From interviews with the workers in the PMU, it was found that most household sundries, including frozen foodstuffs were available on sale. Medical clinics There are rural health clinics in the estates which are manned by nurses. A panel of doctors was available for workers who needed medical attention. Site visits to workers homes and interviews with their dependents revealed their general satisfaction with their housing conditions and amenities. It was noted that water for drinking, cooking and washing at Asrama TKA, Block 3, Peringkat 3, Sg. Panching Timur was obtained from two underground sources. The emerging points of the underground sources were near to areas of agricultural and human activities. This raw water was supplied directly for use by the workers at the Asrama. However, the water quality had not been tested to determine whether it is fit for human consumption. A Minor Non-Compliance was raised. Food for the workers provided through sundry shops in each of the PMU estates verified to be adequate and affordable Minor NC # CBK-02 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 policy ( Polisi Hak Kebebasan Bersuara & Menganggotai Kesatuan ) which recognized the employee s freedom of association, was found to be available and widely displayed in all notice boards of the PMU. Notices and minutes of meetings of the workers union ( Kesatuankesatuan Pekerja ) were maintained There shall be documentary evidence that The PMU had the policy ( Polisi Pekerjaan Kanak-kanak ) of not employing child labor, i.e. persons below 18 years old in

39 Page 39 of 66 minimum age requirements are met. accordance with Employment Act 265. This policy was displayed at strategic public places. The birth date in the Identification card and birth certificate of new employees were used as the verification for age. The implementation was verified through checks on employees particulars ( Maklumat Kaki Tangan ) and updated particulars of foreign workers ( Maklumat Terkini Tenaga Kerja Asing Ladang ). The POM does not employ any foreign workers. Foreign workers were employed in the estates. School going children of smallholders are not allowed by the management to assist in plantation work. No child was seen working in the field during visit to the estates. 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 Evidence shall be provided that employees and groups including local communities, women, and migrant workers have not been discriminated against 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. The PMU has a publicly displayed documented policy on equal opportunities ( Polisi Kesetaraan Peluang ). This policy stressed on non-discrimination based on race, caste, nationality, religion, gender, sexual orientation, disability/handicap and union/political affiliations. Positive discrimination for the benefit of certain society groups may be allowed after consultation. There is a documented policy on employment of foreign workers ( Polisi Pengambilan Pekerja Asing ). It was publicly displayed along with other policies at strategic places. Compliance to relevant regulatory requirements such as Employment Act 1955, Immigration Act 1959/63 and Workmen s Compensation Act 1952 were observed when recruiting workers from Indonesia. The employment of foreign workers was implemented without affecting the opportunities for local communities. Local workers are covered under SOCSO scheme and the migrant workers are covered under Foreign Workers Compensation Scheme (FWCS). Depending on the nature of work positions, the PMU management took into considerations the needs for technical qualifications/experience and related skills in recruitment selection, hiring and promotion exercises. It was verified that there was no recruitment for the year 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 ) had been established. There are procedures for dealing with complaints of such nature through the mechanism of complaints to Women Committee ( Mekanisma Aduan/Jawatankuasa Wanita and handling of complaints by Gender Committees ( Prosedur menangani Aduan Oleh Gender Committee ). The procedures are publicly displayed. Interviews with staff and workers reflected communication on harassment issue, general understanding of sexual harassment in the workplace and the mechanism to report an alleged sexual

40 Page 40 of A policy to protect the reproductive rights of all, especially of women, shall be implemented and communicated to all levels of the workforce A specific grievance mechanism which respects anonymity and protects complainants where requested shall be established, implemented, and communicated to all levels of the workforce. harassment or violence. 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 following policies: - Policy to Prevent Sexual Harassment and Violence ( Polisi Gangguan Seksual dan Keganasan serta Hak Kebebasan Reproduksi ), - Policy on Reproductive Rights ( Polisi Hak Kebebasan Mengandung ). Local female staff is fully aware that they are entitled for two months paid maternity leave. Female workers were issued letters informing them that they were not allowed to handle agrochemicals as soon as pregnancy is confirmed or breastfeeding is planned. The reminder letter stated that alternative job that did not require agrochemical handling would be offered. The PMU confirmed that there was no pregnant or breastfeeding woman worker among all the women agrochemical handlers. Complaint and grievance procedures Polisi Gangguan Seksual Dan Keganasan serta Hak Kebebasan Reproduksi, Mekanisma Aduan/Jawatankuasa Wanita, Prosedur Menangani Aduan Oleh Gender Committee and Polisi Pemberian Maklumat /Whistle Blowing were available to manage grievances and complaints from internal and external stakeholders. On-site audits verified that the complaint and grievance procedure and whistle blowing procedure were displayed outside staff offices and notice boards. It was verified with office bearers of the Gender Committee that so far there had 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 Current and past prices paid for Fresh Fruit Bunches (FFB) shall be publicly available. On-site audit verified that the current and past prices paid for FFB pricing were displayed at the Mill 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. FFB prices were displayed at the POM office external Notice Board and available in mill office records. The POM has given fair treatment to out-growers and other local businesses. Pricing mechanism for FFB is fair and transparent and was set based on MPOB specification and market price. Current and past prices paid for FFB were publicly available and verified through interviews. Mechanisms are available to the public upon request. Stakeholders confirmed that they understood the contractual agreements (such as terms and payment) they entered into with the PMU. They also considered the business transactions as fair and transparent. Agreed payments are made promptly. Through interviews with the settlers and suppliers, there was no evidence to suggest of any unfair business practices with the local businesses.

41 Page 41 of 66 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 resources have been allocated to improve smallholder productivity. Criteria 6.12 No forms of forced or trafficked labour are used. The PMU s contribution towards local communities had been evidenced in several social areas and verified during on site visit as follows: Provide maintenance of public buildings whenever requested. Provided land for the building of the Dewan Orang Ramai Sg. Panching Timur. Fund for surgical procedure as requested by the community. Education skill development incentives for settlers children. It was verified that smallholders were given incentives that relate to production of FFB 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. It was verified through employment records such as work permits in the estate offices that all migrant workers were recruited through legal means and according to the regulatory requirements. It was verified through interviews with migrant workers that there were no forced or trafficked labors. There was no evidence of contract substitution and this was verified from interviews with workers and relevant stakeholders. The special Policy on Recruitment of Foreign Workers ( Polisi Pengambilan Pekerja Asing ) and Equal Opportunities Policy ( Polisi Kesetaraan Peluang ) are established and the implementations are 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 ( Polisi Hak Asasi Manusia ) 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 As long as children of plantation workers of Sabah and Sarawak are not secured a right to go to government school, the plantation companies should engage in a process to secure the children of the plantation workers access to education as a Not applicable to this PMU. Not Applicable

42 Page 42 of 66 moral obligation. Principle 7: Responsible development of new plantings KKS Panching 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. 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. The POM has identified and implemented the following Continual Improvement Action Plans for the period 2014 to 2016 as required: 1. Reduction in the usage of diesel for generator. 2. Scheduled wastes (hydraulic oil, lubricants, oil filters, used batteries, etc.) disposal by a licensed contractor, 3. Recycling and reduction of waste (recycle scrap iron, plastic, paper, glass, tyres, EFB, sludge, bunch ash, mesocarp fiber, shell). 4. Control and prevention of pollution with the installation of Continuous Emission Monitoring System (CEMS) for stack emission and POME treated to DOE requirements and effluent water at final discharge with BOD < 100 ppm. Reduce BOD level at final discharge. 5. Working on the upgrading of a biogas facility.. 6. To achieve OER > 21.0% and KER > 5.4%, 7. To achieve zero accident at the mill, 8. Repair and repainting of workers houses/ quarters and playgrounds, 9. Free tuition class for employees school children. Evidence of results was available for the above continuous improvement action plans. The estates have identified and implemented the following Continual Improvement Action Plans for the period 2014 to 2016 as required: 1. Reduce the usage of pesticides by combining the operation with manual weeding of unwanted growth. 2. Planting of more cover crops along steep slopes and streams. 3. Increase the no. cows and buffalo / grazing acreage. 4. Increase the acreage for beneficial plants (tumera subulata and cassia cobanensis). 5. Increased recycling (used fertilizer bags, scrap iron, paper, plastic, glass). Fertilizer bags are to be recycled and empty pesticide containers to be returned to supplier. In addition, waste will also be segregated accordingly to the plastic and organic materials. 6. Increase the area of subsoil fertilized. 7. Build badminton courts for employees. 8. Repair and repainting of workers houses/ quarters. 9. Provision for repair of Mosque and Literary Class next to GPW

43 Page 43 of 66 approved by the management: letter (64) 1031/ dated 10/7/2014. Now in tendering process. 10. Free tuition class for employees school children. 11. Reduce the delivery time of FFB to POM. 12. Increase FFB quality and yield Supply Chain Certification Standards Findings - on CPO Mill The Supply Chain model applied at KKS Panching 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 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 A documented 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 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. 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 Noradnan bin Masoud 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 Yusof Mat Nasir, 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.

44 Page 44 of 66 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. 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 (KCP) at Semambu Industrial Estate, Kuantan. The two weighbridges at the Mill are duly calibrated and calibration certificates found to be in order. 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. 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 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 There is no outsourced activity at this POM.

45 Page 45 of 66 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 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 delivered; e) Reference to related transport documentation. E.5 Training CPO is sold only to a Felda subsidiary company, Felda Vegetable Oil Products Sdn Bhd at Kuantan Port. 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 Services. 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 26/06/2014 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 Panching 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.

46 Page 46 of 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 (4 Major & 10 Minor) Year 2014: Main Assessment (4 MAJOR NCRs) NCR # MAJOR OCL-01 MYNI Indicator Date issued: 20 Sep 2014 Details of NCR Non-conformance: 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: Management had overlooked the matter. Actions taken: Prepare a Record Book for Pesticide Usage for all Felda smallholders. Felda Officer shall monitor and update the Record Book on a monthly basis. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # MAJOR OCL-02 MYNI Indicator Date issued: 20 Sep 2014 Details of NCR Non-conformance: There were no records of appropriate PPE being used by or provided to FELDA Smallholders (or their workers) to cover all potentially hazardous operations such as pesticide application and harvesting. Root Cause and Corrective Action: Estate managers overlooked the matter. Actions taken: A Record Book for use of PPE for all Felda smallholders. Felda Officer to monitor and update the Record Book on a monthly basis.

47 Page 47 of 66 Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # MAJOR SH-01 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR At the FELDA/FTP Panching Utara estate and FELDA/FTP Panching Timur estate, 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 all over the places, mostly in plantations managed by the FELDA Smallholders/settlers. Action plan for the disposal of this waste was not available. Root Cause and Corrective Action: The management overlooked the requirement to develop the action plan for the disposal of waste. Actions taken: Memo to Felda smallholders. Maintain a record of returned empty fertilizer bags and a record of empty pesticide containers A management plan for disposal of plantation waste materials, Responsible Officer shall check the above record books every 6 months. Responsible Officer shall monitor the implementation of the waste disposal plan. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # MAJOR CBK-01 MYNI Indicator Date issued: 20 Sep 2014 Details of NCR Non-conformance: During the social impact assessment exercise conducted by the Management of FELDA/FTP Panching Utara estate on 01 Aug 2014, the information gathered was only from two stakeholders (settlers). The summary dated 11 Sep 2014, generated from this information had no sufficient focus on specific issues of positive or negative impacts. As a result, the plan for mitigation of negative impacts or promotion of positive impacts had not been established and documented for implementation.

48 Page 48 of 66 Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: SIA conducted and information obtained from 150 stakeholders of various categories. SIA report prepared and analysis of feedback completed. Management action plans for the positive and negative impacts. Examples of identified actions on the negative impacts are: - Public transport from estate to town. - Expedite the completion of the public hall - Repair of damaged roads due to water piping works. Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): Year 2014: Main Assessment (10 Minor NCRs) NCR # Minor OCL-01 MYNI Indicator Date issued: 20 Sep 2014 Details of NCR Non-conformance: There were no monitoring and records of application of fertilizers by the FELDA Smallholders and hence it is not possible to determine whether there is the implementation of best practice (according to agronomist s recommendations) to maintain or improve soil fertility to ensure optimal and sustained yield. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Prepare a Record Book for Fertilizers Usage for all Felda smallholders. Responsible Officer shall monitor that the Record Book is updated. Responsible Officer shall check the Record Book every 6 months. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # MYNI Indicator Minor Date issued: 20 Sep 2014 Details of NCR

49 Page 49 of 66 OCL-02 Non-conformance: EFB mulching had been carried out in mature area along the inter-row, and around the circle in the immature palms. However, during the field visit to FELDA/FTP Panching Timur estate, EFB application along the inter-rows of mature palm was found to be to 3 to 4 layers. This is contrary to the SOP for best practice which states that EFB should be spread in one layer along the inter-rows to prevent breeding of Rhinoceros beetle. This was also the case of palm fronds found to be disorderly placed. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Leveling of the EFB applied at the area concerned to a single layer. Estate Officer shall monitor future EFB applications carried out. Briefing given to workers on the correct method of EFB application and placing of palm fronds Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # Minor OCL-03 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: 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 whether there is any usage of paraquat in the PMU for the purpose of minimizing or eliminating the use of this highly toxic pesticide. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Prepare a Record Book for Pesticides Usage for all Felda smallholders. Responsible Officer shall monitor that the Record Book is updated. Responsible Officer shall check the Record Book every 6 months. Verification for closure: Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness):

50 Page 50 of 66 NCR # Minor SH-01 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR 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 PMU. For instance at the FELDA/FTP Panching Utara estate, although the buffer zone signage was placed at the Sungai Ah Tong, the extent of the boundary for the buffer is not clearly demarcated. Signage on buffer and signage on the prohibited activities along all the buffer zones were found to be insufficiently placed for the FELDA/FTP Panching Utara estate. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Letter issued to the Felda smallholders, whose plots are involved in the Sungai Ah Tong buffer zone. Blue and white paint applied at the oil palm trees and buffer zone signages erected. Buffer zone demarcation along the length of Sungai Ah Tong according to specification. Monitor the areas concerned to ensure that no there is no pesticides applied. Verification for closure: On site verification carried out. Verified that the appropriate documents, records and photos were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # Minor SH-02 MYNI Indicator Details of NCR Date issued: 20 Sep 2014 Non-conformance: Information on rare, threatened and endangered (RTE) species were inadequately disseminated to the workers, FTP Smallholders and FELDA Smallholders. The program for awareness on this subject matter could be further enhanced. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Awareness program and training on RTE to be conducted in Jan to Mar 2015 together with the Wildlife Department ( Jabatan Perhilitan ). Continuous monitoring and patrols for RTE and records of such actions. Verification for closure: Corrective Action Plan is acceptable. The Corrective Action has only been planned to be implemented in Jan 2015 and therefore verification for closure of Minor NC at the next surveillance.

51 NC status verified by auditor: Verification of implementation of corrective action at next surveillance Page 51 of 66 Date closed: Closure of Minor NC at next surveillance. Verification (for effectiveness): NCR # Minor SH-03 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR The management, maintenance and monitoring of the waterways, especially Sungai Ah Tong in FELDA/FTP Panching Utara estate have to be effective to ensure the smooth flow of water. Steps have been taken in water management but however, it was found that there were plantation debris (fronds, wood waste, etc.) impeding the flow of water. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Removal of the debris at the culvert that was impeding the flow of water. Removal of debris along the waterway. Estate Officer shall ensure upkeep of the waterway for smooth flow of water. Record Book on monitoring and maintenance of the waterway. Verification for closure: Corrective Action Plan is acceptable. Maintenance works carried out is at 60% completion along the entire length of the waterway (evidenced by photos and record book). 100% completion targeted for Jun The Corrective Action will only be fully implemented in Jun 2015 and therefore verification for closure of Minor NC at the next surveillance.. NC status verified by auditor: Closed by OCL Verification (for effectiveness): Date closed: Closure of Minor NC at next surveillance. NCR # Minor SH-04 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR A dumpsite for the disposal of domestic waste was provided at Blok 1, Peringkat 1 for FELDA/FTP Panching Utara estate. However, there was no route signage placed at strategic locations leading to the dumpsite. In addition, there was no signage at the dumpsite itself. The effluent pond operated by the mill also lacks a signage to prohibit activities such as fishing, swimming, boating, camping, etc. in the area.

52 Page 52 of 66 Root Cause and Corrective Action: The management overlooked the requirement to develop the action plan for the disposal of waste. Actions taken: Erection of signages at the road side leading to the dumpsites and at the dumpsites itself. Erection of signages at the effluent pond that indicated the prohibition of activities such as fishing, swimming, burning, etc. Verification for closure: On site verification carried out. Verified that the appropriate signages were erected. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # Minor SH-05 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR Both the Continuous Environment Monitoring System and the Ringlemann Chart Recorder were not functioning at the time of the audit. Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: CEM and Smoke Density Chart Recorder will be repaired immediately. All the charts conditions shall be monitored through the record book. Record book for smoke density chart must be issued by the Boiler House Team. Verification for closure: On site verification carried out. Verified that the CEMS and Smoke Density Recorder have been repaired and readings available for Nov 2014 to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # Minor CBK- 01 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR There was no record that a management official had been nominated for consultation and communication of social issues to stakeholders at the Panching Palm Oil Mill.

53 Page 53 of 66 Root Cause and Corrective Action: Management had overlooked the matter. Actions taken: Letter of appointment dated 20/10/2014 for two officers to be responsible for the consultation and communication of the social issues to stakeholders. The Officers concerned shall monitor the social issues that arise in the PMU. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): NCR # Minor CBK- 02 MYNI Indicator Date issued: 20 Sep 2014 Non-conformance: Details of NCR Water for drinking, cooking and washing at Asrama TKA, Block 3, Peringkat 3, Sg. Panching Timur was obtained from two underground sources. The emerging points of the underground sources were near to areas of agricultural and human activities. This raw water was supplied directly for use by the workers at the Asrama. However, the water quality had not been tested to determine whether it is fit for human consumption. Root Cause and Corrective Action: Estate managers were had overlooked the matter. The management does not know that the water sampling must be done. Actions taken: Application letter to the Health Department for the sampling ad analysis of the water from the underground sources. Results indicated that the water is safe for human consumption. Verification for closure: On site verification carried out. Verified that the appropriate documents and records were available to indicate implementation of the corrective actions. The corrective actions satisfactorily addressed the non-conformance. NC status verified by auditor: Closed by OCL Date closed: 02 Dec 2014 Verification (for effectiveness): Year 2014: Main Assessment (3 Observations) Ref No: RSPO P&C Indicator Location Details of Observation Opened date Status Closed date Remark, if any Obs # OCL FELDA/FTP Panching Risk assessment carried out on operations where health and 20 Sep 2014

54 Page 54 of 66 Obs # SH-01 Obs # SH-02 Timur estate FELDA/FTP Panching Utara estate FELDA/FTP Panching Timur estate FELDA/FTP Panching Utara estate safety is an issue in order to determine the significant hazards. However, it was found that the harvesting operation was not identified as a high risk operation with significant hazards. The FELDA/FTP Panching Utara estate and FELDA/FTP Panching Timur estate have identified an area (Kawasan Bukit Berhutan) which is considered not productive for the production of oil palm. Therefore a separate management regime should be implemented for the preservation of the area POM The placement and condition of all signages for use in the mill can be further improved. 20 Sep Sep Identified Positive Elements 1) The PMU has provided proper infrastructure such as roads, housing and badminton courts. 2) The PMU has contributed towards the local economy and has made significant financial contributions to the local communities. 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 Panching 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 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 There was no feedback / enquiries received from any government Agencies concerning the operations of the PMU. 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 Government Agencies concerning the PMU s operations. Verified during on-site assessment that there has been no issues from any NGO concerning the PMU s operations. Further action from PMU (if any) No further action needed. No further action needed. -

55 Page 55 of 66 Contractors Suppliers, Transporter, Local communities (Village Head, School & Clinics), Government agencies, etc. and also employees/ workers were interviewed during the on-site assessment. Concerns and issues raised include: Need for improvement of air and river water quality. Damaged public roads leading to the estates and estate roads to be repaired.. Road to POM is slippery suggest cleaning. FFB price fro smallholders is not attractive. More job opportunities for local residents.. The PMU will examine the concerns and issues raised and identify appropriate actions. To be followed up during the next Annual Surveillance Assessment. Positive comments include: Satisfied with the FELDA management 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.

56 Page 56 of ASSESSMENT CONCLUSION AND RECOMMENDATION Based on the findings above, Felda Global ventures Plantations (Malaysia) Sdn Bhd KKS Panching 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 Panching Grouping be approved. Signed for and on behalf of Intertek Certification International Sdn Bhd Dr. Ooi Cheng Lee Lead Assessor Date: 10 Dec 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: 11 Dec 2014

57 Page 57 of Intertek RSPO Certificate details for KKS Panching Grouping Certificate No: RSPO Issue date: 17 December 2014 Expiry date: 16 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 Panching Grouping Kilang Sawit Panching, Peti Surat No. 257, 25730, Kuantan, Pahang Darul Makmur, 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 Panching POM (Capacity:45 MT/hr) FELDA/FTP Panching Utara estate FELDA/FTP Panching Selatan estate FELDA/FTP Panching Timur estate Address Kilang Sawit Panching, Peti Surat 257, Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Panching Utara,26250 Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Pancing Selatan, Kuantan, Pahang Darul Makmur, Malaysia Felda Sg. Pancing Timur, Peti Surat 124, Kuantan, Pahang Darul Makmur, Malaysia GPS Reference Latitude Longitude 3 49'34.00"N 103 9'58.00"E 3 50'19.00"N 103 9'32.00"E 3 47'36.25"N '01'' E 3 49'6.00"N '56.00"E The annual certifiable tonnages of CPO and PK production by KKS Panching 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 Actual Jan Dec Actual + Projected Jan Dec Projected 79, ,000 83,000 16,446 % OER: 16,933 % OER: 17,164 % OER: ,255 % KER: % KER: % KER: 4,395 4,

58 Page 58 of 66 Appendix A: 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. He is a member of the RSPO CB Assessment team which audited several RSPO certified Plantation Management Units since Mar Mr. Chin Bit Kee (CBK) Assessor / Technical Expert (Good Agriculture Practice, Integrated Pest Management and Social) Degree in Food Technology from University of Reading, United Kingdom Mr. Chin Bit Kee has more than 5 years working experience in the oil palm plantation, agriculture & social (worker welfare) related field. He has successfully participated in RSPO training conducted internally by Intertek on 17 April 2014 and completed a supervised period of training in practical auditing in agriculture industry and related field, with more than 15 days audit experience in at least 3 audits at different organizations. He has adequate knowledge on Palm Oil sector such as industry fundamentals sustainability, social and OHS issues (e.g. worker welfare issues and social matters such as employment terms, gender issues, worker welfare etc,) environmental matters (e.g.pollution control, conservation of resources). He is a member of the RSPO CB Assessment team which audited several RSPO certified Plantation Management Units since Mar 2014.

59 Page 59 of 66 Date 17/09/2014 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 Appendix B: Assessment Plan (Actual) Assessors and Assessment Activity Asssessment Team Travel to KKS Panching grouping Palm Oil Mill (POM) Office Lunch Break Opening Meeting and Briefing at KKS Panching 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 CBK Site assessment at Palm Oil Mill P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Mill 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 18/09/ am OCL SH CBK 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 Panching Timur estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Estates P7 New Plantings Continue site assessment at FELDA/FTP Panching Timur estate Site assessment at FELDA/ FTP Panching Utara estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Lunch Break Continue site assessment at FELDA/ FTP Panching Utara estate Travel to Hotel & Break Team Meeting and Discussion Site assessment at FELDA/ FTP Panching Utara estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Continue site assessment at at FELDA/ FTP Panching Utara estate Date Time Assessors and Assessment Activity 19/09/ am OCL SH CBK Day am 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

60 Page 60 of 66 assessment am 3.00 pm 3.00 pm pm 5.00 pm 6.00 pm 6.00 pm 7.00 pm 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 P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Estates P8 Continual Improvement Supply Chain for POM (SCCS) Lunch Break Site assessment at FELDA/FTP Panching Timur estate P5 Environmental, Conservation, including HCV P8 Continual Improvement Travel to Hotel & Break Team Meeting and Discussion Site assessment at FELDA/FTP Panching Timur estate P6 Employees, Individuals & Communities incl. Gender Issues P8 Continual Improvement Date Time Assessors and Assessment Activity 20/09/ am OCL SH CBK Day pm pm 1.00 pm 1.00 pm 2.30 pm Site assessment at FELDA/FTP Panching Utara estate P1 Transparency P2 Laws & regulations P3 Economic & Financial Viability P4 Best Practices at Estates P7 New Plantings Continue Site assessment at Palm Oil Mill or estates as required Continue site assessment at FELDA/FTP Panching Timur estate Lunch Break Continue Site assessment at Palm Oil Mill or estates as required Continue site assessment at FELDA/FTP Panching Timur estate 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 Panching 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

61 Page 61 of 66 Appendix C-1: Location of Felda Gobal Ventures Plantations (Malaysia) Sdn Bhd (FGVPM) - KKS Panching Grouping, Kuantan, Pahang Darul Makmur, Malaysia KKS Panching Grouping

62 INTERTEK CERTIFICATION INTERNATIONAL SDN BHD Appendix C-2-1: Felda/FTP Panching Utara Estate Page 62 of 66

63 Page 63 of 66 Appendix C-2-2: Felda/FTP Panching Selatan Estate

64 Page 64 of 66 Appendix C-2-3: Felda/FTP Panching Timur Estate

65 Page 65 of 66 Appendix D: Photographs of Assessment findings at FGVPM KKS Panching Grouping Overview of the Panching POM EFB mulching at Block 1 Panching Timur estate Harvesting at Panching Timur estate Block 1. Fertilizer application at Panching Timur estate Block 8. Recycling bins at Panching Utara estate office. Secured fertilizer store at Panching Utara estate office.